EANS-News: AT & S Austria Technologie und Systemtechnik Aktiengesellschaft / AT&S presents preliminary results of the financial year 2016/17: Growth course continued, earnings negatively influ

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annual result

* Dynamic growth continues: revenue up 6.8%, thus outperforming the
market * Highly profitable core business with an EBITDA margin of
25.4%-despite price pressure and temporarily lower capacities *
EBITDA negatively influenced by Chongqing start-up effects and price
pressure on IC substrates * Outlook 2017/18: stronger revenue
growth than in 2016/17, profitability still influenced by start-up
effects and market developments

For AT&S, a global technology leader for high-end printed circuit
boards, the financial year 2016/17 was a year with a very positive
revenue development. At the bottom line, however, the year was
characterised by the longer start-up phase of the IC substrate plant
in China and price pressure in a highly competitive environment.

Andreas Gerstenmayer, CEO of AT&S, commented: "The financial year
2016/17 was challenging on our path to our new positioning - from a
high-end printed circuit board producer to a provider of high-end
connectivity solutions. We are quite satisfied with the development
of revenue: high capacity utilisation, continued stable demand in the
core business and the first contributions to revenue from Chongqing
helped us generate record revenue. Once again, we significantly
outperformed the entire market, which declined during the same
period. Profitability in the core business is still high, which shows
that we are positioned in the right markets with the right customers.
The partial upgrade of the Shanghai plant to the next technology
generation is proceeding well. However, the start-up of the IC
substrate plant in China kept us very busy: by the end of the
financial year, the plant for IC substrates had not yet reached the
planned output and efficiency level due to technical challenges with
the equipment. We have largely resolved the technical issues and
clearly improved operationally. Unfortunately, significant price
pressure in the area of IC substrates overcompensate this
development. The semiconductor industry, which we supply with IC
substrates, leaves technology generations in the market for longer
than in the past, and demand for the relevant applications such as
desktop computers and notebooks continued to decline. We are working
on appropriate solutions and are still convinced that this is the
right step for profitable growth of AT&S in the future."

Asset, financial and earnings position AT&S increased revenue by 6.8%
from EUR 762.9 million to EUR 814.9 million in the reporting period
as core business was still growing and first revenues were generated
with IC substrates, and thus slightly exceeds the forecast for the
year.

Based on the start-up effects for the Chongqing project (EUR 71.2
million) and continued price pressure, especially in the area of
mobile devices, EBITDA decreased from EUR 167.5 million to EUR 130.9
million. As the Chinese renminbi was lower, exchange rate effects had
a positive impact of EUR 26.0 million in EBIDTA. Adjusted* EBITDA
amounted to EUR 194.8 million, thus exceeding the high value of the
previous year by 8.1%. The EBITDA margin was at 16.1% and thus -5.9
percentage points below the very high prior-year level of 22.0%. The
adjusted margin, at 25.4%, clearly exceeded the high adjusted level
of 23.7% of the previous year.

Depreciation of property, plant and equipment and amortisation of
intangible assets amounted to EUR 124.7 million (previous year: EUR
87.4 million) and increased by EUR 37.3 million, primarily due to the
Chongqing project. Consequently, EBIT declined by EUR 70.4 million or
-91.4% to EUR 6.6 million. Adjusted* EBIT rose by 15.3% to EUR 119.0
million (previous year: EUR 103.2 million). The EBIT margin was 0.8%
(previous year: 10.1%). The adjusted* margin amounted to 15.5% and
thus exceeded the adjusted prior-year level of 13.6% by 1.9
percentage points.

Finance costs - net deteriorated from EUR -8.1 million to EUR -17.5
million, which was primarily attributable to exchange rate effects.
Tax expense remained constant at EUR 12.0 million (previous year: EUR
12.9 million).

The profit for the year dropped from EUR 56.0 million in the previous
year to a loss of EUR -22.9 million and earnings per share declined
from EUR 1.44 to EUR - 0.59.

Cash flow and statement of financial position Cash flow from
operating activities before changes in working capital amounted to
EUR 90.5 million vs EUR 145.9 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 -161.1 million
(previous year: EUR - 342.2 million.).

Equity decreased by 5.1% to EUR 540.1 million due to the loss for the
year and the dividend paid in the amount of EUR 14.0 million. The
resulting equity ratio, at 37.6% was -4.7 percentage points below the
value of March 31, 2016, as expected.

Net debt rose from EUR 263.2 million at 31 March 2016 to EUR 380.5
million. This expected increase resulted from the high investment
activities and the effects related to the start-up of the Chongqing
project. The net gearing ratio increased to 70.5% (previous year:
46.3%). AT&S has cash liquid funds totalling EUR 203.5 million
available (previous year: EUR 171.9 million). In addition, AT&S has
EUR 200.9 million of unused credit lines as a financing reserve.

Key financials:

According to IFRS; 2015/16 2016/17 Change
in EUR million 01.04.2015- 01.04.2016-
31.03.2016 31.03.2017
Revenue 762.9 814.9 6.8%
EBITDA 167.5 130.9 -21.9%
EBITDA margin (in 22.0 16.1 -
%)
EBITDA adjusted* 180.2 194.8 8.1%
EBITDA margin 23.7 25.4 -
adjusted (in %)*
EBIT 77.0 6.6 -91.4%
EBIT margin (in %) 10.1 0.8 -
EBIT adjusted* 103.2 119.0 15.3%
EBIT margin 13.6 15.5 -
adjusted (in %)*
Profit/loss for the 56.0 -22.9 > -100%
year
Cash flows from 145.9 90.5 -38.0%
operating

activities before
changes in working
capital

Net CAPEX 254.3 240.7 -5.3%
Equity ratio 42.3 37.6 -
Net debt 263.2 380.5 44.6%
Earnings per 1.44 -0.59 > -100%
average number of

shares outstanding
(in EUR)

Mobile Devices & Substrates segment with revenue growth; earnings
still influenced by Chongqing start-up effects The increase in
revenue by 6.2% to EUR 573.0 million in the Mobile Devices &
Substrates segment is primarily based on revenue from Chongqing.
Compared with the previous year, the segment's EBITDA declined by EUR
57.9 million or -45.8% to EUR 68.5 million due to start-up effects of
the Chongqing project, the substantial increase in price pressure on
IC substrates and the lost capacities in the fourth quarter resulting
from a partial upgrade of the Shanghai plant. The EBITDA margin
amounted to 12.0% (previous year: 23.4%). The adjusted* EBITDA was
EUR 135.7 million (previous year: EUR 139.6 million), resulting in an
adjusted* EBITDA margin of 25.9%, which is at the prior-year level of
26.0%.

Automotive, Industrial, Medical segment with increases in revenue and
earnings In the Automotive, Industrial, Medical segment, revenue was
up 7.6% to EUR 351.5 million. This positive development affected all
sectors, with Automotive and Industrial recording product-mix-related
revenue growth, while Medical grew in both qualitative and
quantitative terms. EBITDA rose by 71.1% to EUR 51.5 million, which
was a result of operational improvements and the release of
provisions for restructuring. The EBITDA margin thus amounted to
14.6% after 9.2% in the previous year. The adjusted* EBITDA was EUR
48.1 million, which corresponds to an EBITDA margin of 14.0%
(previous year, adjusted: 9.2%).

Status Chongqing As at 31 March 2017, AT&S invested EUR 455.3 million
in the Chongqing project. The significant operational improvements in
the IC substrate plant, which had already been achieved, were
overcompensated by price pressure. The second production line was
started in December 2016 and is running according to plan. Both lines
should reach the planned output and efficiency level in the second
half of 2017. In plant 2, the first production line is being
converted to the mSAP technology, while the second production line
for mSAP is undergoing qualification.

Outlook for the financial year 2017/18 AT&S is convinced to have
taken the right steps for a broader positioning in a changing supply
chain with its strategic focus on high-end technologies and
applications in the existing business as well as with the
establishment of an expanded technology portfolio based on IC
substrates and the next technology generation (mSAP).

The transformation from a high-end printed circuit board producer to
a high-end interconnect solutions provider is a prerequisite for
future profitable growth, since only through continuous technology
advancements and the corresponding investments will AT&S be able to
secure its position as tier-one supplier for technology and world
market leaders.

Effects of the financial year 2016/17 will continue and also
influence the business development in 2017/18: the market development
for IC substrates, based on the deceleration of Moore's Law, and
lower demand for computing applications (desktop computers,
notebooks) lead to continued price pressure on IC substrates. Serial
production for the next technology generation (mSAP) for mobile
devices will start in the second quarter of the financial year
2017/18; this technology is currently being installed in Shanghai and
in the second plant in Chongqing with the aim to continue to position
AT&S as a leading supplier for mobile devices. In its core business,
AT&S expects continuous demand in all customer segments in an
extremely competitive environment.

Provided that the macroeconomic environment remains stable and the
USD-EUR currency relation stays at a similar level as in the past
financial year, AT&S expects an increase in revenue of 10-16% for the
financial year 2017/18. The EBITDA margin should range between 16-18%
based on the market developments for IC substrates and the ramp of
the new technology generation (mSAP). Higher depreciation for mainly
new production lines of additional ~EUR 25 million in the financial
year 2017/18 will impact EBIT.

*Adjusted for Chongqing effects and release of provision for
restructuring

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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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Attachments with Announcement:
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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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