EANS-Adhoc: ams AG / ams reports strong growth for full year 2014 and positive fourth quarter 2014 results; expects sequential revenue growth in first quarter 2015

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annual result
03.02.2015

Financial information for fiscal year 2014 and fourth quarter 2014

Unterpremstaetten, Austria (3 February 2015) - ams (SIX: AMS), a
leading worldwide manufacturer of high performance sensor and analog
solutions, reports record results for 2014 with strong growth in
revenues and earnings. The success of ams' consumer solutions for
smartphones and mobile devices drove this positive development
resulting in the most successful year in company history. For the
first quarter 2015, ams expects further sequential growth contrary to
typical sector seasonality with expected revenues of EUR 145-150
million.

2014 full year revenues rose to EUR 464.4 million (USD 613.7
million), at the same time gross margin increased to 56% (excluding
acquisition-related amortization). The full year operating (EBIT)
margin also grew noticeably to 23%. Revenues for the fourth quarter
2014 were EUR 139.0 million, up 34% year-on-year and 5% higher
quarter-on-quarter. The gross margin for the fourth quarter 2014,
excluding acquisition-related amortization, reached 56% while the
operating (EBIT) margin was unchanged at 23% when compared to the
previous year.

Financials

Group revenues for 2014 were EUR 464.4 million (USD 613.7 million),
growing by 23% compared to EUR 377.8 million for 2013. In constant
currency, full year revenues increased by 22% compared to the
previous year. Revenues for the fourth quarter 2014 were EUR 139.0
million, growing by 34% from the EUR 103.5 million recorded a year
ago (26% in constant currency) and by 5% quarter-on-quarter.

Gross margin for the full year 2014 improved to 56%, excluding
acquisition-related amortization, and 55%, including
acquisition-related amortization, from 55% and 52% in 2013,
respectively. This positive result was mainly due to an improved
product mix, economies of scale and efficiency improvements. Gross
margin for the fourth quarter 2014 was 56%, excluding
acquisition-related amortization, and 54%, including
acquisition-related amortization, unchanged from 56% and 54% in the
same period 2013, respectively.

The result from operations (EBIT) for 2014 was EUR 105.4 million, or
23% of revenues, increasing by 65% from EUR 63.9 million, or 17% of
revenues, in 2013. Investments in research and development amounted
to EUR 77.0 million, or 17% of revenues, in 2014 and were driven by
an expansion of development activities to support high value
design-wins. The EBIT for the fourth quarter 2014 was EUR 31.4
million, or 23% of revenues, which is an increase of 30% compared to
EUR 24.2 million in the fourth quarter 2013.

Net income for 2014 was EUR 97.5 million, up 60% from EUR 60.8
million in 2013. Basic / diluted earnings per share for 2014 were CHF
1.74 / 1.67 or EUR 1.43 / 1.37 based on 68,022,953 / 71,010,831
shares (weighted average; 2013: CHF 1.11 / 1.07 or EUR 0.90 / 0.87
based on 67,241,566 / 69,956,124 shares, split adjusted weighted
average). Net income for the fourth quarter 2014 was EUR 28.8
million, increasing by 23% from EUR 23.3 million for the same period
2013. Basic / diluted earnings per share for the fourth quarter were
CHF 0.51 / 0.48 or EUR 0.42 / 0.40 based on 68,460,041 / 71,450,861
shares (weighted average; 2013: CHF 0.42 / 0.41 or EUR 0.35 / 0.33
based on 67,513,360 / 70,515,341 shares, split adjusted weighted
average).

Cash flow from operations was EUR 130.2 million in 2014, an increase
of 30% compared to EUR 100.2 million in 2013. Cash and short term
investments rose to EUR 229.6 million on Decem-ber 31, 2014 from EUR
104.3 million at year-end 2013, while net cash rose to EUR 45.0
million on December 31, 2014 (year-end 2013: EUR 44.2 million).
Capital expenditures for 2014 were EUR 70.1 million compared to EUR
47.1 million for 2013, particularly driven by investments to expand
wafer production capacity. The total backlog at December 31, 2014,
excluding consignment stock agreements, stood at a record level of
EUR 131.3 million (EUR 119.8 million on Septem-ber 30, 2014 and EUR
76.6 million at year-end 2013). The average number of group employees
was 1,637 for fiscal year 2014, compared to 1,394 for 2013, and 1,731
for the fourth quarter 2014.

Based on the company's cash dividend policy stipulating the
distribution of 25% of net earnings, ams will propose a dividend of
EUR 0.33 per outstanding share for 2014.

Business

ams' business developed very positively in 2014 and was characterized
by strong growth particularly in the second half of the year. The
significant increase in group revenues was mainly due to the success
of the company's consumer and communications business which comprised
about 64% of total revenues. A large number of high-value design-wins
in all business areas led to further strong growth in ams' project
pipeline. These successes highlight ams' leadership role in the
sensor and analog markets and offer an excellent basis for additional
meaningful growth in the coming years.

The company's Consumer & Communications business recorded impressive
growth in 2014 which was predominantly driven by high volume product
introductions for two leading global smartphone OEMs. On the back of
this success ams expanded its market position as a major supplier of
advanced sensor and analog solutions for smartphones, tablet PCs and
mobile device even further last year. Customer design activities for
ams products remained on a very high level throughout 2014 and to
date.

ams' light sensor product area recorded the largest share of group
revenues again last year as ams remained the worldwide market leader
in advanced light sensors. ams holds a particularly strong position
in the market for mobile devices and is a respected partner for
leading global smartphone and tablet PC vendors given its
technological edge.

The company's innovative gesture sensor solution combines high
advanced gesture sensing with RGB color sensing, proximity sensing,
and mobile coupon redemption in a very compact module. The solution
started shipping in high volumes at the end of the first quarter 2014
to consumer OEMs including a worldwide smartphone leader. With the
increasing market acceptance of gesture recognition ams sees further
attractive growth opportunities in this market going forward. ams
also shipped very high volumes of other ambient light and proximity
sensors for a wide variety of devices last year, including a growing
share of RGB color sensors for sophisticated display management.

ams' wireless business for RFID and NFC solutions developed into an
important growth driver for the company last year, in line with
expectations. ams' NFC antenna booster solution, which is currently
unrivalled, started shipping in very high volumes into a new global
smartphone platform for a worldwide leader in smartphones and tablet
PCs at the beginning of the third quarter 2014. The NFC booster
ensures reliable and simple NFC mobile payments for smartphones and
other devices and plays an important role in NFC implementations
setting new standards for performance and user experience. ams holds
a strong market position in NFC focusing on continuous innovation and
is convinced that the market success of its solutions will lead to
further significant growth of this product line in 2015 and the
coming years.

The MEMS microphone interface product area performed well in 2014
with very high unit shipments. As the clear market leader ams
concentrates on advanced audio solutions for mobile devices such as
smartphones and tablet PCs in a dynamic market environment. At the
same time, ams was able to attractively position its innovative power
management solutions for mobile devices in customer designs last year
and sees interesting growth opportunities in new applications besides
existing customers.

ams' industrial, medical and automotive business also developed
positively in 2014 and leveraged its wide range of end markets,
customers, and product lines to strengthen its market position.

In its industrial business ams saw solid growth in 2014 which was
mainly driven by an attractive demand environment in the industrial
end market. As a leading supplier of sensors and sensor interfaces,
ams benefitted from its top tier position in the markets for
industrial and factory automation, building control, and industrial
sensors which recorded growth in 2014. Based on its broad portfolio
of advanced sensor solutions for a variety of applications ams is a
valued partner to globally successful OEMs and regarded as a
technology specialist focused on innovation. As a result, ams was
able to expand its market position further last year.

ams' medical business showed a positive development in 2014 and
continued to demonstrate ams' impressive analog expertise through
highly advanced sensor and sensor interfaces. In the core area
Medical Imaging for computed tomography (CT), digital X-ray,
ultrasound and mammography, the company's high resolution imaging
sensors define the state-of-the-art offering significantly improved
diagnostics and additional advantages for patients and doctors. ams
expanded its medical business in Asia last year adding attractive
design-wins and new customers for specialty sensor solutions. ams'
long-term oriented medical business is characterized by strategic
partnerships with leading medical systems OEMs.

ams' automotive business recorded another year of robust growth in
2014 driven by healthy demand trends in the automotive market and new
vehicle platform launches. ams' high performance sensor and position
measurement solutions and innovative solutions for safety systems,
such as collision avoidance, and battery power management are
successful worldwide making ams a valued partner for leading system
suppliers. ams grew its extensive project pipeline last year and is
well positioned to benefit strongly from the continuous rise in
sensors and fast adoption of new sensor technologies in vehicles.
ams' dedicated specialty foundry business for analog and mixed-signal
ICs also performed well in 2014 and contributed attractively to the
company's results.

ams' in-house manufacturing capacity was fully utilized throughout
2014. To support growth and the future development of the company ams
took a significant investment in hand last year to expand its wafer
fabrication facility at the company's headquarters. The first part of
this capacity expansion was successfully completed and ramped in the
second half of 2014 while the second part of the expansion is already
underway and will be completed this year. Concurrent with the
capacity expansion, ams invested into the 180 nm technology node
which will be in production at the company's wafer fab this year. ams
has also started an expansion of its test facility in the Philippines
to prepare for expected growth in the future.

ams grew its global customer base once again last year adding a large
number of new customers particularly in Asia. Selective investments
into sales and technical support in Asia, Japan and the U.S. improved
market penetration in these important regions and buttressed ams'
growth strategy.

Outlook

Based on currently available information, ams expects its business to
develop positively in the current year and record further growth in
revenues and earnings.

With reference to the pre-announcement on the first quarter 2015
published January 19, 2015 ams expects revenues for the first quarter
2015 to show sequential growth in contrast to typical sector
seasonality and to reach EUR 145-150 million. At the same time, and
despite continued R&D investments for further growth, ams anticipates
strong profitability to continue with first quarter operating margin
expected to increase slightly from fourth quarter 2014.

Additional financial information for fiscal year 2014 and the fourth
quarter 2014 is available on the company website at
www.ams.com/eng/Investor/Financial-Reports

Further inquiry note:
Moritz M. Gmeiner
Director Investor Relations
Tel: +43 3136 500-31211
Fax: +43 3136 500-931211
Email: investor@ams.com

end of announcement euro adhoc
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issuer: ams AG
Tobelbader Strasse 30
A-8141 Unterpremstaetten
phone: +43 3136 500-0
FAX: +43 3136 500-931211
mail: investor@ams.com
WWW: www.ams.com
sector: Technology
ISIN: AT0000A18XM4
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language: English