at&s company presentation november 2014
TRANSCRIPT
AT & S Austria Technologie & Systemtechnik Aktiengesellschaft | Fabriksgasse13 | A-8700 Leoben
Tel +43 (0) 3842 200-0 | E-Mail [email protected]
www.ats.net
AT&Sfirst choice for advanced applications
Company Presentation
November 2014
1
Trends & Growth Opportunities
Table of Contents
Company Overview
Annex
Market & Strategy
Financials
Vision and Mission
2
488 514 542 590
96 103 102 12747 42 31 54
2010/11 2011/12 2012/13 2013/14
Revenue EBITDA EBIT
3
AT&S at a glance
� Austrian based global technology group specialized in manufacturing high-end printed circuit boards
� AT&S industrializes leading-edge technology for the segments mobile devices, automotive & aviation, industrial electronics, medical &
healthcare and advanced packaging
� Trusted and long standing partner for numerous „blue chip“ global customers
� AT&S took the next step in evolving its high-tech strategy by entering the IC substrate business with start of production in 2016
� Close to the customer: 6 manufacturing sites and 5 technical sales centres in Austria, China, India, Korea, United States, Germany,
Taiwan, Japan
� Top holding company AT&S AG; registered in Austria; listed on the Vienna Stock Exchange (Prime Market) since 2008
Business Overview
Key Financials
+5 % +5 % +9 %
+20 % +20 % +19 % +22 %
EBITDA MarginSales growth
52%
48%
Mobile
Devices &
Substrates
Industrial &
Automotive
(incl. Medical)
Distribution revenue: Business Unit
27%
7%
19%
47%
Germany/Austria
Other European
countries
Asia
Americas
Distribution revenue: Customer Region
*Revenue H1 2014/15 *Revenue H1 2014/15
4
AT&S - investment highlights
WORLD LEADING PROVIDER OF HIGH-END
PRINTED CIRCUIT BOARDS
ENTERING THE HIGH END SUBSTRATE
BUSINESS
WELL POSITIONED IN ATTRACTIVE END
MARKETS WITH HIGH GROWTH
POTENTIAL
SOUND TOP-LINE GROWTH AND SOLID
MARGINS
PROVEN INTEGRATED BUSINESS MODEL
WITH DIVERSIFIED BUSINESS SEGMENTS
AND “BLUE CHIP” CUSTOMER BASE
• Technology leader in high-end PCB’s - specialised in the integration of density and miniaturisation
• One of the first manufacturers with a patented chip embedding technology (ECP®)
• Strong Asian production footprint for cost efficiency
• IC-substrates with start of production in 2016
• Joint-development approach with close customer proximity
• Anticipating and benefiting from upcoming market trends
• Established track-record and proven long term sector experience
• Well positioned in high volume low mix (e.g. Mobile Devices) as well as low volume high mix markets (e.g. Industry)
• Proprietary process know-how and flexible setup for customised high end products and variable volume production
• Sound top-line growth with potential to increase by app. 80% after full ramp-up of IC substrate plant
• Solid EBITDA margins of appr. 18 – 20 %
• Solid operating cash flow generation
• Diversified portfolio to balance cyclicity
• High leverage of technology between products for different industries
• Clear strategy to become first choice and quality leaders in each market segment
• Strong revenue quality due to largely blue-chip customers portfolio with strong recurring business
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A STRONG POSITION AS TECHNOLOGY LEADER, ACTIVE IN ATTRACTIVE END MARKETS WITH A PROVEN INTEGRATED BUSINESS MODEL, RESULTING IN A CONVINCING
FINANCIAL PROFILE WITH AN ESTABLISHED PLATFORM FOR FURTHER GROWTH
5
Global footprint
� Production facilities in Europe and Asia
� Headquarters in Leoben, Austria
� Procurement center in Hong Kong, China
� Design center in Düren, Germany
� Sales network spanning three continents
� About ~7,400 employees
BU IA
Plant Leoben, AustriaHeadquartersStaff: ~ 800
Customer Orientation:
9% Automotive
91% Industrial/Medical
BU IA
Plant Fehring, AustriaStaff: ~350
Customer Orientation:
44% Automotive
56% Industrial
BU MS
Plant Shanghai, ChinaStaff: ~4.250
Customer Orientation:
84% Mobile Devices
14% Automotive
2% Industrial
BU IA
Plant Ansan, KoreaStaff: ~250
Customer Orientation:
13% Automotive
47% Industrial/Medical
40% Mobile Devices
BU IA
Plant Nanjangud, IndiaStaff: ~1.100
Customer Orientation:
60% Automotive
40% Industrial
BU MS
Plant Chongqing, Chinaunder construction
Staff: ~400
AT&S AG
Headquarters
Leoben, Austria
BU MS
Headquarters
Hong Kong,
China
AT&S AG Headquarters
Sales Offices / Design centers / Representations
Business Unit Mobile Devices & Substrates (BU MS)
Business Unit Industrial & Automotive (BU IA)
6
HDI microvia printed
circuit boards
HDI any-layer printed
circuit boards
IMS printed
circuit boards
Multilayer
printed circuit boards
AT&S Product Portfolio
Double-sided printed
circuit boards
Flexible printed circuit
boards
Semiflexible printed
circuit boards
Rigid-flexible printed
circuit boards
Flexible printed circuit
boards on aluminium
HDI rigid-flex
printed circuit boards
► volatility due to seasonal effects
7
Business Segments
Characteristic ApplicationsSegmentRevenue
share*
*) Based on external revenues € in millions for H1 2014/15
Mobile Devices &
Substrates
Industrial & Automotive &
Medical
Advanced
Packaging
Target market diversification provides for superior earnings stability
and a close relationship with selected technology leaders in each market segment
Selected Market Leaders
Siemens
General Electric
EADS
Hella
Continental
Texas Instruments
TDK-EPCOS
Sony
LG
Motorola
Blackberry
Canon
Samsung
Nokia
Huawei
ZTE
Apple
►► stable business due to longer product life
time
� Includes the segment Advanced Packaging (still in the
process of being established) as well as group
management and financial activitiesOthers
(Revenue in million €)
(Revenue in million €)
52%
48%
74.5 90.1 87.7
69.0 68.0 88.7
Q1 13/14 Q2 13/14 Q3 13/14 Q4 13/14 Q1 14/15 Q2 14/15
66.4 66.3 62.9 69.7 72.6 71.7
Q1 13/14 Q2 13/14 Q3 13/14 Q4 13/14 Q1 14/15 Q2 14/15
8
Trends & Growth Opportunities
Table of Contents
Company Overview
Annex
Market & Strategy
Financials
PCB growth cycle
Global PCB turnover ($m)
� The PCB Market is a fast growing market
� We are at the beginning of a new growth cycle, started 2012
Source: Prismark; Forecast Prismark (August 2014)
9
$6,465$6,734
$7,437
$10,179$11,682
$11,071$12,348
$18,117$19,946
$20,185
$21,500
$18,974$18,212
$20,842
$22,837$26,375
$29,703$32,559
$34,288$36,058
$42,642
$33,237$32,109
$34,485
$38,753
$42,424
$47,626$50,269
$50,786
$44,155
$52,469
$55,400$55,040
$56,150$57,700
$59,640$61,170
$63,010$65,130
$0,000
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
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Technological leadership and quality focus
HDI PCB manufacturer ranking
Source: Prismark, August 2014
ATS – Ready for the next step
� Technology leader in the market for high-end
printed circuit boards
� Highly innovative solutions implemented with high
process quality on an industrial scale
Rank (2012) Supplier Revenue ($m)
1 Unimicron 682
2 Compeq 538
3 530
4 SEMCO 480
5 Ibiden 426
6 TTM 406
7 Zhen Ding 343
8 Tripod 305
9 DAP 279
10 Unitech 236
IC-Substrate growth cycle
Global IC-Substrate turnover ($m)
� The IC-Substrate Market is growing faster than the PCB Market
Source: JMS; IC Substrate Report 2014
11
$6.500$6.200
$7.615
$8.400 $8.535
$7.580$8.000
$8.365
$8.845$9.245
$9.620
$0
$1.000
$2.000
$3.000
$4.000
$5.000
$6.000
$7.000
$8.000
$9.000
$10.000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
12
Main difference
PCB commodity vs. HDI vs. IC-Substrate
Source: Prismark, August 2014 , company estimates, JMS: IC Substrate Report 2014
Market size
No. of competitors
Prod-cap. China [%]
Tech. Spec. (L/S)
Quality standards
Level of automation
Entry barriers
PCB Commodity HDI
28,087 M$2013 8,121 M$2013
> 2000 > 50
48% 45%
-40 µm 40 µm
high high
high high
low high
IC Substrate
7,580M$2013
< 20
5%
10-12 µm
very high
very high
very high
Level of complexity
13
Strategic Focus
� Increase revenue in selected market niches (medical,
automotive, etc.)
� AT&S to leverage its patented chip embedding
technology with a major industry player
� Continue growth strategy (High-end Smartphones,
Tablets, Ultrabooks, etc.)
� Improve GP-Margin (Portfolio management, Improve
plant utilization)
� Strategic partnership with MFLEX to produce HDI
rigid-flex PCBs for new applications and designs
� Enter the high-end IC
substrate market
New Business – IC-substratesCore Business – HDI PCBs
AT&S will further improve its technology portfolio to strengthen its market position & enter the IC substrate market to push
growth
� Investments in core activities planned to be in the € 20-
40m range per annum
� Planned investment of c. € 350m (excl. ramp-
up costs) in Chongqing in IC-substrates until
2016
CAPEX
(as of 30/09/2014)
Completion of
Infrastructure
Start Equipment Installation
Start Equipment
Characterisation
Certification
Start
Training
Start Equipment
Ordering
Plant Lay-out
Product-
Specification
Start of Production
�
14
*Additions to tangible fixed assets as of 30/09/2014
�
�
�
�
Q4 Q1 Q2 Q3
FY 2013/14
Q4 Q1 Q2 Q3
FY 2014/15
Q3FY 2012/13
Q4 Q1 Q2 Q3
FY 2015/16
Q4 Q1 Q2 Q3
FY 2016/17
Q4
� Investment as of 30/09/2014: € 163.1 million*
� Equipment for first line installed and internal
qualification process finished
� Characterisations and certification has started,
production of samples started
� Start of production is scheduled for 2016
Project Status IC Substrates plant Chongqing
15
Trends & Growth Opportunities
Table of Contents
Company Overview
Annex
Market & Strategy
Financials
Trends in Electronics..
Total connectivity
People, Machine 2 Machine, etc
Eco Impact
Shortage of resources
Miniaturization
Smaller; Faster; Smarter
Driving Trends in Electronic Industries
16
..require complex and high-quality solutions for PCB´s
HDI Microvia
ECP (Embedded Component Packaging)
17
Internet of Things (IoT) and Application Structures
� Healthcare
� Glasses
Wearable ElectronicsWearable Electronics
Smart Mobility Smart Mobility � Autonomous Driving
� Car2Car Communication
Smart CitySmart City � Smart Lighting
Smart BuildingsSmart Buildings � Home/Building Automatisation
� Energy Management
Smart Production/Industry 4.0Smart Production/Industry 4.0 � Automatisation/Robotics
� Production Control Systems
Smart HealthcareSmart Healthcare � Connectivity (e.g. online patient
monitoring)
Smart EnergySmart Energy � Smart Metering
AT&S anticipates and industrializes future trends and leading-edge technologies
18
Trends & Growth Opportunities
Table of Contents
Company Overview
Annex
Market & Strategy
Financials
19
Convincing Financials with sound top-line growth,
solid margins and increasing cash conversion
STRONG BUSINESS SETUP AS A BASE FOR SUSTAINABLE AND PROFITABLE FUTURE GROWTH
SELECTED KEY FINANCIALS (MILLION €)COMMENTS
2010/11 2011/12 2012/13 2013/14
REVENUE AND
Y-O-Y GROWTH
• AT&S has followed a continuous growth path till the full loading
of the existing facilities
• Revenue with products out of Asian production has been
continuously increased from 69% in 2010/11 to 76% in 2013/14
• Next significant step-up in growth with start of production of
IC-substrate plant in Chongqing in 2016
EBITDA
AND
EBITDA-MARGIN
OPERATING CASH
FLOW AND Y-O-Y
DEVELOPMENT
• EBITDA increase resulting from increase in loading of existing
facilities
• Continuous conversion of product mix to a more advanced
level
• High level of EBITDA margin can be achieved due to continuous
technology upgrade of existing plants
• EBITDA margin guidance: 18-20%
• Operating cash flow generation driven by strong EBITDA
performance
488 514 542 590
96 103 102 127
19,7% 20,0% 18,8%21,5%
7187
72
105
20
Staff and Capex
STAFF*The increased headcount is primarily based on
the Chongqing project. Decreased number of
staff in core business reflects improved
productivity.
CAPEX (€ in million)
CAPEX increase includes technology upgrades in
existing locations and investments in Chongqing
project.
Regular Business Employees Project ChongqingCAPEX end of reporting period FY
CAPEX end of reporting period H1
6,9877,417 7,321
7,0277,385
2010/11 2011/12 2012/13 2013/14 H1 2014/15
54 123455
* incl. leased personel, average for the period
115 113
40
90
40
89
2010/11 2011/12 2012/13 2013/14 H1
2013/14
H1
2014/15
Financials H1 2014/15
21
€ in thousands (unless otherwise
indicated)
01.04.2014- 30.09.2014 01.04.2013 – 30.09.2013
STATEMENT OF PROFIT OR LOSS
Revenue302,077 299,933
produced in Asia 76% 75%
produced in Europe24% 25%
EBITDA72,297 65,412
EBITDA margin23.9% 21.8%
EBIT39,928 30,567
EBIT margin13.2% 10.2%
Profit for the period28,445 21,957
Cash Earnings60,785 56,785
EPS (average number of shares
outstanding)1) 0.73 0.94
1) 2014/15: Lower result substantially due to issue of new shares and sale of own shares in Sept. and Oct. 2013
Same basis of number of shares than in comparison period would reflect EPS of € 1.21
Financials H1 2014/15
22
€ in thousands (unless otherwise
indicated) 30.09.2014 31.03.2014
STATEMENT OF FINANCIAL POSITION
Non-current assets 603,549 483,858
Currents assets 453,641 432,201
Equity 465,141 390,680
Non-current liabilities 398,701 370,336
Current liabilites 193,348 155,043
Total assets 1,057,190 916,059
Net debt 179,989 110,874
Net gearing 38.7% 28.4%
Net working capital 126,226 91,722
Net working capital per revenues 20.9% 15.6%
Equity ratio 44.0% 42.7%
Financials H1 2014/15
23
€ in thousands 01.04.2014 – 30.09.2014 01.04.2013 – 30.09.20131)
STATEMENT OF CASH FLOWS
Profit for the period 28,445 21,957
Non cash bearing of profit or loss 40,312 34,337
Changes in Working Capital (35,107) (15,967)
Net cash generated from operating
activities 33,650 40,327
Net cash used in investing activities (88,699) (40,079)
Net cash generated from financing
activities 12,618 24,246
Net increase/decrease in cash and cash
equivalents (42,431) 24,494
24
Overview Debt Portfolio Duration
Maturity
€ in millions < 1 Year 1-5 Years > 5 Years Total
Corporate Bond 4.3 99.6 - 103.9
Export Loans 32.0 - - 32.0
Public funds and other - 2.4 1.1 3.5
Bank Borrowings 13.2 200.4 49.1 262.7
Total 30/09/2014 49.5 302.4 50.2 402.1
Total 31/03/2014 46.0 282.9 43.0 371.9
AT&S - Stock Profile
Listing Vienna Stock Exchange, Prime Standard
Indices ATX Prime, WBI
Reuters RIC (A) ATSV.VI
Bloomberg (A) ATS AV
# of shares outstanding 38.85m
Avg. daily volume 55,000
YTD abs performance 26.5%
Relevant Multiples:* P/BV: 0.90, P/E: 12.53
Financial Calendar
3rd Quarter Results 2014/15 27 January 2015
Annual Results 2014/15 7 May 2015
21st Annual General Meeting 9 July 2015
25
YTD Price development/liquidity & Shareholder structure
*including direct and indirect holdings
*
*
ATX
AT&S
*as at 30 Sept. 2014
26
Outlook FY 2014/15
Based on the strong demand in the industry in the second half of the
calendar year 2014 – particularly in the mobile devices segment – and the
low visibility in respect to the first quarter of the calendar year 2015 we are
assuming that, provided the macro-economic environment remains stable
and considering todays foreign exchange rates, business development will
continue to be on a satisfactory level. For the full year 2014/15 we expect
revenues in line with prior year and an EBITDA margin on the upper level
of our target corridor of 18-20%.
27
Strategy, Market Trends & Growth Opportunities
Table of Contents
Company Overview
Annex
Market & Market Position
Financials
Management
28
Andreas Gerstenmayer, CEO
� Joined AT&S as CEO in 2010
� Previous positions include:
− 18 years of work experience at Siemens, including Managing Director with Siemens Transportation Systems
GmbH Austria and CEO of the Drive Technology business unit in Graz from 2003 to 2008
− Partner at FOCUSON Business Consulting GmbH after leaving Siemens
� Education and other positions:
− Member of the Research Council of Styria
− Degree in Production Engineering from Rosenheim University of Applied Sciences
Heinz Moitzi, COO
� COO since 2005; with AT&S since 1981*
� Previous positions include:
− Various management positions within AT&S
− Measurement engineer with Leoben University of Mining and Metallurgy
� Education:
− Degree from Higher Technical College of Electrical Engineering
− Studied electrical installation with Stadtwerke Judenburg (Judenburg municipal utility company)
Karl M. Asamer, CFO
� Joined AT&S as CFO in 2014
� Previous positions include:
− Managing Director of GEKA Group in Germany
− Managing Director of Sell GmbH in Germany
� Education:
− Degree: doctorate in business administration in Linz, Austria
*He was already with the founding company of AT&S
29
History
2013 � Collaboration agreement with leading semiconductor
manufacturer to enter IC substrate market
2011 � Acquisition of land and start of construction of a high-end
plant in Chongqing, China
2010 � Relocation of Group Headquarters from Vienna to Leoben
� Ramp-Up plant II in Nanjangud
2009 � Restructuring and reorientation of Leoben plant towards high-
value industrial business
� Focusing Shanghai on high-end mobile devices segment
2008 � Relisting on the Vienna Stock Exchange (Prime Market)
2006 � AT&S buys flexible plant in Korea
2002 � Start of production in new AT&S plant in Shanghai – one of the
world’s leading HDI* facilities
1999 � AT&S listed on the Neuer Markt at the Frankfurt Stock
Exchange
� AT&S buys PCB plant in India
1994 � Privatisation and acquisition by Hannes Androsch, Willibald
Dörflinger and Helmut Zoidl
1987 � Foundation of AT&S
* High Density Interconnect (laser-drilled printed circuit boards)
Five core dimensions of sustainability within AT&S
Energy and
carbon footprintWater
AT&S – a learning
organisationResourcesThinking ahead –
shaping the future
CSR gains importance in long term success
� Improving efficiency
� Motivated and qualified staff
CSR as a key to your sustainable business success
30
� The importance of sustainability is rising within:
� Authorities
(basis for securing operation licences)
� Customers
(relevant for placing orders)
AT&S saves CO2 and Water…
31
Sustainability – Figures and Fields of Action
AT&S aims to minimise its
environmental footprint by
reducing the CO2 emissions
per m2 PCB attributable to
production processes by 5%
a year.
AT&S aims to reduce
the Group‘s annual
fresh water
consumption per m2
PCB by 3%.
Visit: www.ats.net; Twitter @AT&S IR_PR; YouTube AtundS
32
AT&S – first choice for advanced applications
IR Contact:
Elke Koch
Fabriksgasse 13, A-8700
Leoben/Austria
Tel: +43 3842 200 5925
Mobile: +43 676 8955 5925
Fax: +43 3842 200 15909
www.ats.net
Disclaimer
33
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