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30.10.2018 – 18:19

AT & S Austria Technologie & Systemtechnik Aktiengesellschaft

EANS-News: AT & S Austria Technologie & Systemtechnik Aktiengesellschaft
AT&S increases profitable growth in the first half-year 2018/19

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Leoben -
- Revenue at new record level of EUR 516.9 million
- EBITDA up 32.5% thanks to higher earnings from Chongqing
- Second expansion phase in Chongqing to secure technology leadership initiated
- Outlook for 2018/19: Revenue growth of 6 to 8% and EBITDA margin of 24 to 26%

In the first six months of the current financial year, AT&S recorded a very
positive revenue and earnings development compared with the prior-year period,
which also led to an upgrade of the outlook for the financial year 2018/19.

Revenue rose by 6.4% from EUR 485.7 million to EUR 516.9 million, thus reaching
the highest level to date. This increase resulted primarily from the additional
capacity at the plants in Chongqing, which were in part still in the start-up
phase in the comparative period of the previous year, and generally very strong
demand for IC substrates. In addition, a good development was recorded in the
Medical & Healthcare sector in particular. However, supply shortages for
important components are currently slowing down demand in the Automotive and
Industrial sectors. Moreover, stricter emission test procedures in the wake of
the diesel scandal imply a reduction in demand in the Automotive sector.

Exchange rate effects, especially due to the weaker US dollar, had a negative
impact of EUR 15.3 million or 3.1% on the development of revenue. The
application of the new accounting standard (IFRS 15) led to early revenue
realisation of EUR 6.3 million or 1.3% due to an early recognition of revenue
for some customers.

EBITDA improved by 32.5% to EUR 138.3 million (previous year: EUR 104.4
million). The increase results from significant improvements in earnings in
Chongqing. Chongqing was partially still in the start-up phase in the same
period of the previous year, resulting in the corresponding negative effects on
earnings. The current period already reflects measures to enhance efficiency and
improve productivity, which were successfully implemented in the past quarters.
The negative currency effects from revenue were nearly fully offset by positive
FX valuation effects in EBITDA. The EBITDA margin amounted to 26.8% in the first
six months, up by 5.3 percentage points on the prior-year level of 21.5%.

"The current business development confirms the strategy of AT&S. The
continuation of our growth strategy shows the successful positioning in the
markets served by AT&S. We can participate in the growing demand for IC
substrates, in particular in the high-end technology segment. The operating
performance at the plants is also developing very well. We are thus
strengthening our position as one of the global top 3 companies for high-end
interconnect solutions," Andreas Gerstenmayer, CEO of AT&S, commented the
development of the first half of the year.

EBIT rose by EUR 35.0 million from EUR 36.9 million to EUR 71.9 million. The
EBIT margin amounted to 13.9% (previous year: 7.6%).
Finance costs - net improved to EUR -0.1 million (previous year: EUR -5.6
million), which was predominantly attributable to positive exchange rate effects
and the optimisation of interest expenses. Tax expenses amounted to EUR 16.5
million in the first six months (previous year: EUR 15.9 million). Due to the
significantly improved operating result and the improvement in finance costs -
net, profit for the period was up by EUR 40.0 million from EUR 15.4 million to
EUR 55.4 million. As a result, earnings per share rose from EUR 0.40 EUR to EUR
1.32. Interest on hybrid capital of EUR 4.2 million (previous year: EUR 0.0
million) was deducted in the calculation of earnings per share.

Statement of financial position and cash flow
Based on the increase in equity and the higher total assets resulting from the
issue of the promissory note loan, the equity ratio, at 40.5%, was 6.0
percentage points lower than at 31 March 2018.

Net debt declined slightly from EUR 209.2 million to EUR 196.7 million. Cash
flow from operating activities amounted to EUR 58.0 million in the first six
months of 2018/19 (previous year: EUR 43.6 million). The significantly higher
net CAPEX in the prior-year period was attributable to the start-up phase in
Chongqing.

 ______________________________________________________________________________
|Acc. to IFRS; (in |    H1 2017/18     |    H1 2018/19     |      Change       |
|EUR_million)______|_01.04.-30.09.2017_|_01.04.-30.09.2018_|___________________|
|Revenue___________|______________485.7|______________516.9|_______________6.4%|
|EBITDA____________|______________104.4|______________138.3|______________32.5%|
|EBITDA margin (in |               21.5|               26.8|                   |
|%)________________|___________________|___________________|___________________|
|EBIT______________|_______________36.9|_______________71.9|______________95.1%|
|EBIT_margin_(in_%)|________________7.6|_______________13.9|___________________|
|Profit for the    |               15.4|               55.4|              >100%|
|period____________|___________________|___________________|___________________|
|Cash flow from    |                   |                   |                   |
|operating         |               43.6|               58.0|              33.0%|
|activities________|___________________|___________________|___________________|
|Net_CAPEX_________|_______________95.0|_______________37.9|_____________-60.1%|
|Equity ratio (in  |              46.5*|             40.5**|                  -|
|%)________________|___________________|___________________|___________________|
|Net_debt__________|_____________209.2*|____________196.7**|______________-6.0%|
|Earnings per      |                   |                   |                   |
|average number of |               0.40|               1.32|             > 100%|
|shares outstanding|                   |                   |                   |
|(in_EUR)__________|___________________|___________________|___________________|

*) At 31.03.2018 **) At 30.09.2018

Mobile Devices & Substrates segment with clear revenue growth
In the first half-year, the segment benefited from substantially higher revenue
and earnings from the plants in Chongqing. This gratifying development was
supported by a higher-value product portfolio of IC substrates (for example
server applications). Despite negative currency effects of roughly EUR 13
million, which are not fully reflected in the earnings number, the segment's
revenue increased by 9.1% from EUR 358.9 million to EUR 391.5 million.

EBITDA improved by 38.4% from EUR 80.3 million to EUR 111.2 million. In addition
to the absence of start-up costs for the Chongqing plant, the increase in
earnings results from the measures to enhance efficiency and to improve
productivity, which were successfully implemented in the past quarters. Overall,
this resulted in an EBITDA margin of 28.4%, which significantly exceeds the
prior-year level of 22.4%.


Automotive, Industrial, Medical segment slightly below previous year
The segment's revenue, at EUR 178.9 million, was slightly lower than in the
previous year. Strong demand was recorded especially in the Medical & Healthcare
sector in the first half of the year. The Automotive sector faced a decline in
demand due to the diesel scandal and the resulting drop in sales among car
manufacturers. In addition, supply shortages for important components slowed
down the demand for printed circuit boards in the Automotive and Industrial
sectors.

The segment's EBITDA, at EUR 24.4 million, exceeded the prior-year level of EUR
23.0 million. Earnings contribution from a better product mix and positive
currency effects offset the decline in volume. As a result, the EBITDA margin
rose from 12.4% to 13.6%.

Future-oriented investment in new technology development
In view of the current mega trends such as connected systems, autonomous driving
or artificial intelligence with higher data rates and volumes as well as high
performance density, the requirements for interconnect technology are also
increasing. AT&S benefits from this development as the growing data flows of
digitalisation place increasing requirements on the capability of components.

Due to the technological change, AT&S sees a good opportunity to take the next
step for the technology development, and hence the second expansion phase at
plant 1 in Chongqing. The plan is to gradually realise the technology
implementation in the next two to three years, which may lead to an investment
volume of up to EUR 160 million. With this strategically important step, AT&S is
setting another milestone in the area of high-performance applications along its
growth path to become one of the globally leading interconnect solution
providers.

Guidance for the financial year 2018/19 upgraded
On the basis of the business development in the first half of the current year,
the positive outlook for the coming months and taking into account seasonal
effects in the fourth quarter of the current financial year 2018/19, management
has increased its forecast for revenue and earnings. Based on stable exchange
rates, the management expects revenue growth of 6 to 8% (previously up to 6%)
and an EBITDA margin in the range of 24 to 26% (previously up to 23%) for the
financial year 2018/19.

In the current financial year, around EUR 140 to 160 million will be invested in
maintenance, technology upgrades for current business operations as well as for
capacity and technology expansions, with the capacity increase of high-frequency
printed circuit boards in the area of autonomous driving at the sites in
Nanjangud, India and Fehring, Austria already being implemented.



Further inquiry note:
Gerda Königstorfer, Director Investor Relations & Communications 
Tel: +43 3842 200-5925; Mobile: +43 676 8955 5925; g.koenigstorfer@ats.net

end of announcement                         euro adhoc
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