AT & S Austria Technologie & Systemtechnik Aktiengesellschaft | Fabriksgasse 13 | A-8700 Leoben Tel +43 (0) 3842 200-0
www.ats.net
AT&SFirst choice for advanced applications
Conference Call Q1 2018/19July 31, 2018
08.30 am CEST
Conference Call Presentation: Q1 2018/19 1
Table of Contents
Market Update and Summary Business Performance
Financials
Outlook
Annex
Conference Call Presentation: Q1 2018/19 2
PCB & IC substrates market – Overview
15.3 15.8
18.6 19.9
8.39.0
5.55.9
3.94.22.52.65.65.9
2018 2020
IC Substrates
Military/Aerospace
Industrial/Medical
Automotive
Consumer
Communication
Computing
3.0%
3.9%
4.3%
1.8%
3.5%
2.3%
59.763.4
Forecast for the total PCB & IC substrates marketuntil 2020: CAAGR of 3.1%
2.8%
USD in billions
2
Source: Prismark, February 2018; Yole, March 2018
IC substrates
− Rising demand for server processors with positive impact on IC substrates
− “System-in-Package” or “All-in-One” modules for the integration of functions are the growth drivers for the future
Industrial / Medical
− Driven by robotics, automation and Industry 4.0 activities
− High complexity in applications such as diagnostic and imaging devices, mobile devices on and in the human body
Automotive
− Main drivers are autonomous driving and e-mobility
Consumer
− Market trend is the interconnection of devices (“Connected Devices”, “Internet of Things” – “IoT”)
Communication
− 5G offers potential opportunities for further growth
Computer
− Slight increase forecast for servers in 2018, while tablet sales stagnate
Conference Call Presentation: Q1 2018/19 3
Highlights for the first quarter 2018/19
Successful start into the new fiscal year despite seasonality trends in the sector
Additional revenue and earnings contribution mainly from Chongqing
Revenue increase by 11.2% to € 222.1 million
IC substrates contributed to revenue growth
Good demand especially in Medical & Healthcare
EBITDA margin climbs to 23.4 % (PY: 14.9%)
One-time valuation effects, among others due to FX impact since April 2018
Issue of a promissory note loan of € 292.5 million successfully completed
Increase in reserves for planned growth with a revenue target of € 1.5 billion
Securing favourable conditions for the long term at the current average interest rate of 1.18%
Optimisation of the maturity profile and refinancing of promissory note loan issued in 2014
Investment in recent years is paying off
3
Conference Call Presentation: Q1 2018/19 4
Revenue and EBITDA development
€ in millions
4
Split revenue Q1 2018/19: Business Unit
Split revenue Q1 2018/19: Customer Region
4
62%
38%Mobile Devices & Substrates
Automotive, Industrial,Medical
61%23%
8%
8%
Americas
Germany/Austria
Asia
Other European countries
Revenue: YoY: +11.2%: additional revenue from Chongqing and higher demand for IC substrates EBITDA: YoY: +75.4%: higher contribution mainly from Chongqing and one-time valuation effects
199.6
286.0 280.2
225.9 222.1
29.7
74.785.9
35.752.0
Q1 2017/18 Q2 2017/18 Q3 2017/18 Q4 2017/18 Q1 2018/19Revenue EBITDA and margin
26.1% 30.7%14.9% 15.8% 23.4%
Conference Call Presentation: Q1 2018/19 5
Net CAPEX & Staff
Net CAPEX
€ in millions
69.7
25.329.6
17.1 17.1
Q1 2017/18 Q2 2017/18 Q3 2017/18 Q4 2017/18 Q1 2018/19
* incl. contractors, FTE, average for the period
Staff*Efficiency measures and seasonality reduced headcount
9,90110,159 10,057 9,807 9,598
Q1 2017/18 Q2 2017/18 Q3 2017/18 Q4 2017/18 Q1 2018/19
Conference Call Presentation: Q1 2018/19 6
Business Development – Mobile Devices & Substrates
113.6
197.6 199.6
137.2137.8
20.9
59.475.0
23.739.3
Q1 2017/18 Q2 2017/18 Q3 2017/18 Q4 2017/18 Q1 2018/19
Revenue EBITDA
Additional contribution to revenue mainly from Chongqing
Operational improvements and better product mix in IC substrates
EBITDA improvements as a result of higher contribution margin from Chongqing
€ in millions (unless otherwise indicated)
Q1 2017/18 Q1 2018/19 Change in %
Revenue 137.3 160.2 16.6%
Revenue with external customers 113.6 137.8 21.3%
EBITDA 20.9 39.3 88.0%
EBITDA margin 15.2% 24.5%
€ in millions; * Revenue with external customers
Revenue* and EBITDA
Conference Call Presentation: Q1 2018/19 7
85.0 87.379.3
87.7 83.3
9.7 13.2 9.314.5 12.0
Q1 2017/18 Q2 2017/18 Q3 2017/18 Q4 2017/18 Q1 2018/19
Revenue EBITDA
Business Development – Automotive, Industrial, Medical Good demand in the segment Automotive,
Industrial and Medical
Continued growth path especially in Medical
Autonomous driving and e-mobility offer further potential for revenue growth
EBITDA margin impacted by good mix and positive FX effects
€ in millions (unless otherwise indicated)
Q1 2017/18 Q1 2018/19 Change in %
Revenue 89.6 89.6 0.0%
Revenue with external customers 85.0 83.3 -2.0%
EBITDA 9.7 12.0 23.2%
EBITDA margin 10.9% 13.4%
Revenue* and EBITDA
€ in millions; * Revenue with external customers
Conference Call Presentation: Q1 2018/19 8
Table of Contents
Market Update and Summary Business Performance
Financials
Outlook
Annex
Conference Call Presentation: Q1 2018/19 9
€ in thousands (unless otherwise stated)Q1 2017/18 Q1 2018/19
Change
YoY
STATEMENT OF PROFIT OR LOSS
Revenue 199,636 222,081 11.2%
produced in Asia 81% 83% 2pp
produced in Europe 19% 17% (2pp)
EBITDA 29,651 51.996 75.4%
EBITDA margin 14.9% 23.4% 8.5pp
EBIT (3,408) 18,323 -
EBIT margin (1.7%) 8.3% -
Finance costs – net (2,217) 1,703 -
Income taxes (5,604) (6,477) 15.6%
Profit for the period (11,229) 13,549 -
Earnings per share (€ 0.29) € 0.30 -
Financials Q1 2018/19
Additional revenue contribution mainly from ChongqingNegatively impacted by USD development
Higher contributions to earnings from Chongqing Other result positively effected by FX valuation of accounts receivables
Lower gross interest expenses, higher interest income, positive FX effects
The slight increase in earnings can be attributed to the reduced tax scheme in Shanghai
Conference Call Presentation: Q1 2018/19 10
Financials Q1 2018/19
Profit for the period (+€ 13.5m) First-time adoption of IFRS 9 and 15 (+€ 10.4m) Positive FX effects (+€ 8.7m)
Seasonal increase and effects of first-time adoption of IFRS 15
€ in thousands (unless otherwise stated)31 Mar 2018 30 Jun 2018 Change
STATEMENT OF FINANCIAL
POSITION
Non-current assets 944,267 927,983 (1.7%)
Current assets 586,172 623,958 6.4%
Equity 711,391 743,604 4.5%
Non-current liabilities 515,276 520,427 1.0%
Current liabilities 303,772 287,910 (5.2%)
Total assets 1,530,439 1,551,941 1.4%
Net debt 209,237 214,076 2.3%
Net gearing 29.4% 28.8% (0.6pp)
Net working capital 72,437 127,320 75.8%
Net working capital per revenue 7.3% 14.3% 7.0pp
Equity ratio 46.5% 47.9% 1.4pp
Stable, despite seasonal increase of NWC, due to positive result
Conference Call Presentation: Q1 2018/19 11
Financials Q1 2018/19
Clearly higher EBIT and lower change in WC
Lower capex for equipment (previous year impacted by Chongqing)
€ in thousandsQ1 2017/18 Q1 2018/19
Change
YoY
STATEMENT OF CASH FLOWS
Operating result (EBIT) (3.408) 18.323 -
Paid/received interests (3.379) (1.752) 48,2%
Paid taxes (8.771) (7.160) 18,4%
Non cash bearing of profit or loss 33.079 29.016 (12,3%)
Cash flow from operating activities
before changes in working capital17.520 38.427 >100%
Changes in working capital (66.813) (33.842) 49,3%
Cash flow from operating activities (49.293) 4.585 -
Cash flow from investing activities (66.966) (21.614) 67,7%
Cash flow from financing activities (25.082) 1.230 -
Change in cash and cash equivalents (141.341) (15.799) 88,8%
Operating free cash flow1) (118.981) (12.497) 89,5%
Free cash flow2) (116.259) (17.029) 85,4%
1) Cash flow from operating activities minus Net CAPEX2) Cash flow from operating activities minus cash flow from investing activities
Nearly balanced due to improved operating cash flow and lower capex needs
Conference Call Presentation: Q1 2018/19 12
Table of Contents
Market Update and Summary Business Performance
Financials
Outlook
Annex
Conference Call Presentation: Q1 2018/19 13
Outlook for 2018/19
Revenue growth by up to 6% and EBITDA margin at 20 to 23%
At this stage, upper end of guidance expected, due to positive Q1 development
Maintenance investments and minor technology upgrades of roughly € 70 to 100 million
Investments in capacity and technology expansion by another € 100 million depending on market development
Technology expansion and capacity increase in the area of autonomous driving at the sites in Nanjangud (India) and Fehring (Austria) on track
Technology development projects in CHQ I as preparation of second phase in implementation
Further expansion in CHQ II depending on market development – next evaluation in mid FY 2018/2019
Conference Call Presentation: Q1 2018/19 14
Medium-term strategy – More than AT&S
AT&S outperformed a flat market in the past 6 years
by scaling high-end any-layer technology
by leveraging HDI technology to the Computer-, Consumer-, Automotive-, Industrial and Medical market
Positioning as a leading high-end interconnect provider
100.8 103.2 96.4 94.6 103.2
108.9123.1
140.8150.4
183.0
60
100
140
180
220
260
300
2012* 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022e
PCB & substrates market AT&S revenue
276.8
120.53.0% p.a.
8.6% p.a.
*Index (2012 = 100)2012: PCB & substrates market: USD 55.7bn; AT&S revenue: € 542mSource: AT&S, Prismark (February 2018), Yole (March 2018)
Path of value-added growth will be pursued consistently
Focus on leading position in terms of technology, quality and results
New revenue target of € 1.5 billion
EBITDA margin of 20 to 25%
Conference Call Presentation: Q1 2018/19 15
Questions & Answers
AT & S Austria Technologie & Systemtechnik Aktiengesellschaft | Fabriksgasse13 | A-8700 Leoben Tel +43 (0) 3842 200-0
www.ats.net
Conference Call Presentation: Q1 2018/19 16
Table of Contents
Market Update and Summary Business Performance
Financials
Outlook
Annex
Conference Call Presentation: Q1 2018/19 17
Investment highlights
AT&S among the top 10 PCB manufacturers*
Leading provider of new interconnect solutions / diversified business portfolio
Focus on high-end technologies and applications with an Innovation Revenue Rate of 40.4 % (FY 2017/18)
Technology advantage at mSAP due to timely extension of the IC substrates technology
Leading position in miniaturisation and modularisation – modules market with stronger growth than PCB market
Long-standing customer relationships with technology and market leaders
Market outperformance and high profitability
Above industry average EBITDA margin 20 – 25%
Strong cash flow generation and therefore improved internal financing capabilities
Successful industrialisation of leading-edge technologies combined with highest quality
Outstanding process know-how, productivity and efficiency
Solid balance sheet with strengthened equity ratio of 46.5% in 2017/18
Sustainable dividend policy
A world leading high-tech PCB & IC substrates company
*Source: N.T. Information Ltd (July 2018); for the calendar year 2017
Conference Call Presentation: Q1 2018/19 18
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