EANS-News: AT & S Austria Technologie und Systemtechnik Aktiengesellschaft / Financial year 2016/17: AT&S with increased revenue in the first nine months and operational improvements at the ne

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9-month report

* Continued good demand in all key customer segments * In the core
business, AT&S increased relative profitability * Revenue 5.3% above
the strong prior-year level; third quarter was on record level *
EBITDA adjusted for the start-up effects from Chongqing rose by 8.5%
compared with the previous year, the adjusted EBITDA margin was
at 26.0%; the non-adjusted figures were still influenced by the
start-up effects from Chongqing * Further operational improvements in
the ramp-up of the new IC substrate plant in China

AT&S, one of the global technology leaders for high-end printed
circuit boards, records an increase in revenue and a clear plus in
earnings in the first nine months compared with the very high level
of the previous year and adjusted for the start-up effects in China.

Andreas Gerstenmayer, CEO of AT&S, commented: "The repositioning of
AT&S from a pure printed circuit board manufacturer to a much
broader-based provider of high-end connectivity solutions is
continuing. We achieved significant improvements in the operational
performance in the new IC substrate plant in China. Both production
volume and yield have increased considerably. We are still faced with
challenges because the transformation in the semiconductor industry,
the customer segment for IC substrates, with the related changes in
the product and technology cycles, also has an impact on AT&S. This
influences the product mix and the achievable price levels
significantly. The upgrade of parts of the Shanghai plant to the next
generation of technology for high-end printed circuit boards has
considerably progressed, and serial production is scheduled to start
in the second half of calendar year 2017. Both technology topics are
essential for the future positioning and the success of AT&S. In
contrast, the development in the core business is very satisfactory,
with very good demand and the usual seasonality."

Asset, financial and earnings position AT&S exceeded the very good
revenue figures of the previous year in the first nine months. At EUR
615.1 million, revenue was 5.3% higher than in the prior- year
period.

Based on the start-up effects of the Chongqing project (EUR 51.6
million), EBITDA decreased by EUR 38.1 million or -27.2% from EUR
140.2 million to EUR 102.1 million in the first nine months. Adjusted
for these start-up effects, EBITDA amounted to EUR 153.7 million, up
8.5% on the high prior-year value, based on running cost savings and
positive currency effects. The EBITDA margin was at 16.6%, down -7.4
percentage points on the very high prior-year level of 24.0%.
Adjusted for the Chongqing project, the margin, at 26.0%,
significantly exceeds the high adjusted level of 24.4% in the
previous year.

Depreciation of property, plant and equipment and amortisation of
intangible assets increased to EUR 90.3 million (prior-year period:
EUR 64.2 million) based on the Chongqing project. Consequently, EBIT
decreased by EUR 64.3 million from EUR 76.1 million to EUR 11.8
million. Adjusted for the Chongqing project, EBIT amounted to EUR
97.2 million, thus exceeding the adjusted prior-year value by EUR
13.4 million. The EBIT margin was 1.9% (prior-year period: 13.0%).
The adjusted margin amounted to 16.4%, and was 1.9 percentage points
higher than the adjusted prior-year level of 14.5%.

Finance costs dropped from EUR -2.7 million to EUR -18.6 million,
which was among other things due to higher gross interest expenses
and negative currency effects. The estimates for feasibility of
deferred taxes were adjusted and led to increased tax expenses of
total EUR 13.0 million in the first nine months of 2016/17.

The profit for the period decreased by EUR 79.9 million from EUR 60.2
million in the prior-year period to a loss for the period of EUR
-19.7 million due to the start-up effects of the Chongqing project
and the significantly higher negative financial result. This resulted
in a decline in earnings per share from EUR 1.55 in the prior-year
period to EUR -0.51.

Cash flow and statement of financial position Cash flow from
operating activities before changes in working capital amounted to
EUR 74.5 million vs EUR 123.4 million in the previous year. Cash flow
from investing activities - investments in the plants under
construction in Chongqing, technology investments in other locations
and investments in financial assets - amounted to EUR -108.7 million
(prior-year period: EUR - 175.7 million).

Equity decreased by 3.9% from EUR 568.9 million to EUR 546.8 million
due to the loss for the period and the dividend paid of EUR 14.0
million. The resulting equity ratio, at 38.1%, was -4.2 percentage
points lower than the value at 31 March 2016 as expected.

Net debt rose by EUR 188.6 million from EUR 263.2 million at 31 March
2016 to EUR 451.8 million. This expected increase resulted from the
high investment activities and the increase in working capital, which
cannot be financed from the cash flow from operating result.
Consequently, the net gearing ratio, at 82.6% at 31 December 2016,
was clearly higher than at 31 March 2016 (46.3%). In total, AT&S has
cash and cash equivalents of EUR 166.0 million available or available
in the short term to continue financing the start-up phase of the
Chongqing projects as well as other necessary investments in the
current financial year. In addition, AT&S has EUR 223.8 million of
unused credit lines as a financing reserve.

Key financials:

According to IFRS; Q1-3 2015/16 Q1-3 2016/17 Change
in EUR million 01.04.-31.12.2015 01.04.-31.12.2016
Revenue 584.3 615.1 5.3%
EBITDA 140.2 102.1 -27.2%
EBITDA margin (in 24.0 16.6 -
%)
EBITDA adjusted*) 141.6 153.7 8.5%
EBITDA margin 24.4 26.0 -
adjusted (in %)*)
EBIT 76.1 11.8 -84.4%
EBIT margin (in %) 13.0 1.9 -
EBIT adjusted*) 83.8 97.2 16.0%
EBIT marginadjusted 14.5 16.4 -
(in %)*)
Profit/loss for the 60.2 -19.7 > -100%
year
Cash flows from 123.4 74.5 -39.6%
operating
activities before
changes in working
capital
Net CAPEX 176.9 192.3 8.7%
Equity ratio 42.3**) 38.1 -
Net debt 263.2**) 451.8 71.7%
Earnings per 1.55 -0.51 > -100%
average number of
shares outstanding
(in EUR)

*) Adjusted for the Chongqing project.
**) At 31.03.2016.

Mobile Devices & Substrates segment with revenue growth; earnings
still influenced by Chongqing start-up effects Demand for high-end
printed circuit boards for mobile devices was very good in the first
nine months, but characterised by significantly stronger seasonality
in the first quarter compared with the same period of the previous
year. Revenue from IC substrates overcompensated this development.
Consequently, revenue amounted to EUR 438.6 million in the first nine
months of 2016/17, up 4.5% on the figure of the previous year,
slightly influenced by negative currency translation effects. Due to
the start-up effects of the Chongqing project and the significantly
increased price pressure for IC substrates, due to major technology
and product mix changes, EBITDA declined by EUR 53.0 million or -
48.6% compared with the prior-year period and amounted to EUR 56.1
million. Adjusted for the Chongqing effect, EBITDA amounted to EUR
103.7 million (prior- year period: EUR 111.5 million). This results
in an adjusted EBITDA margin of 25.0%, which is lower than the 26.7%
in the previous year.

Automotive, Industrial, Medical segment with increases in revenue and
earnings Revenue in this segment rose by 6.2% from EUR 246.7 million
to EUR 262.0 million. The main drivers were still revenues from
high-end printed circuit boards in the Automotive sector, which
reflects the trend towards more electronic components in vehicles,
and massively growing revenue in the Medical sector. Revenue in the
Industrial sector slightly exceeded the high level of the previous
year. EBITDA rose by 48.3% from EUR 24.9 million to EUR 37.0 million.
The EBITDA margin increased by 4.0 percentage points to 14.1%, thus
clearly exceeding the prior-year level. The segment's result also
benefited from the reversal of a provision for unused building space,
as this space is now used again. Adjusted for the share in the
start-up effects of the Chongqing project, EBITDA amounts to EUR 41.0
million and the adjusted EBITDA margin to 16.0% (prior-year period,
adjusted: 9.8%).

Status Chongqing: Operational improvements at the plant for IC
substrates; good progress at plant 2 for substrate-like printed
circuit boards As at 31 December 2016, AT&S invested EUR 428.0
million in the Chongqing project. The optimisation of the highly
complex production facilities for IC substrates still causes a
flatter ramp-up although there have been significant operational
improvements, which have led to a higher volume output and yield. The
ramp of the second production line started in December 2016. The
first production line for substrate-like printed circuit boards is
running at high capacity and good performance, the second production
line is in installation.

Outlook for the financial year 2016/17 AT&S expects the usual
seasonality for the fourth quarter of 2016/17. Based on the
developments in the raw material markets (copper, laminates), cost of
material is under pressure. Due to changes in product and technology
cycle in the semiconductor industry, price pressure for IC substrates
continues.

Provided that the macroeconomic environment remains stable, the
USD-EUR currency relation stays at a similar level as in the past
financial year 2015/16 and demand is stable in the core business,
AT&S expects an increase in revenue of 4-6% for the current
financial year 2016/17. The EBITDA margin should range between 15-16%
primarily based on the start-up costs for the plants in Chongqing.
However, the EBITDA margin in the core business should be at a
similar level as in the financial year 2015/16. Higher depreciation
and amortisation of an additional EUR 40 million for the Chongqing
project in the financial year 2016/17 will have a significant
influence on EBIT.

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Further inquiry note:
Elke Koch, Director Investor Relations & Communications
Tel: +43 3842 200-5925; Mobile: +43 676 8955 5925; e.koch@ats.net

Marina Konrad, Head of Corporate Communications
Tel: +43 3842 200-5423; Mobile: +43 676 8955 5423; m.konrad@ats.net

end of announcement euro adhoc
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company: AT & S Austria Technologie und Systemtechnik Aktiengesellschaft
Fabriksgasse 13
A-8700 Leoben
phone: 03842 200-0
mail: e.koch@ats.net
WWW: www.ats.net
sector: Technology
ISIN: AT0000969985
indexes: WBI, Prime Market, VÖNIX, ATX GP
stockmarkets: official market: Wien
language: English

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