Leoben – In a challenging market environment, AT&S continued its growth course and generated record revenues in the financial year 2022/23. 

AT&S reports record revenue in a challenging market environment

√ Revenue for FY 2022/23 increases by 13% to € 1,791 million (PY: € 1,590 Mio. €)

√ Adjusted EBITDA at € 470 million, up 24% on the previous year

√ Outlook for FY 2023/24: Revenue between € 1.7 and 1.9 billion,adjusted EBITDA margin of 25 to 29%

√ New reporting structure since April 1, 2023

√ Medium-term guidance for 2026/27 confirmed

Key figures

1) Adjusted for start-up costs

2) Incl. leased personnel, average. As at March 31, 2023: 14,504

Cost optimisation programmes initiated

In order to counter effects such as pressure on prices and inflation, which result from the currently difficult market situation, AT&S has significantly intensified and accelerated its previously initiated comprehensive cost optimisation and efficiency programmes. Along with market-based capacity adjustments, these cost optimisation programmes are a key focus topic in these challenging times. Compared with the financial year 2022/23, cost reductions totalling € 440 million are expected for the following two years.

Customer diversification successfully started

As part of its diversification strategy, AT&S succeeded in winning additional renowned IC substrate customers in the areas of computing/data processing. The new customers will be supplied from the plant in Leoben. The R&D centre in Leoben, which is currently under construction, will therefore be expanded to include real series production with the help of financial contributions from the new customers.

New reporting structure as of the first quarter of 2023/24

As of April 1, 2023, AT&S has reorganised the structure of its “Mobile Devices & Substrates” and “Automotive, Industrial & Medical” segments. The company’s new structure comprises the business units “Electronics Solutions” and “Microelectronics” going forward. Reporting will therefore be adjusted accordingly. Each business unit will be represented by a member of the Executive Board. Peter Schneider will be responsible for the “Electronics Solutions” segment and Ingolf Schröder for “Microelectronics”. “Electronics Solutions” will bundle the printed circuit board and module activities across the Group while “Microelectronics” will focus on IC substrates.

The change will primarily be made for two reasons. The new structure will support the strategic management of the company. In terms of content, the former “Mobile Devices” segment is more closely related to the former “Automotive, Industrial & Medical” business unit than to "Substrates", so that merging these segments will enhance synergy effects and strategic management. The company is also responding to the interests of the capital market. The new reporting format facilitates the comparison with competitors in the respective business areas as well as monitoring the company’s strategic development.

The company is aware that the results reported for “Microelectronics” will be particularly strongly affected by the current challenging market environment in the first quarters of the new reporting period. Nevertheless, the decision was made to implement the change now to offer the capital market maximum transparency regarding the current situation and the undoubtedly positive further development.

Also effective April 1, 2023, Peter Griehsnig took over the role of Chief Technology Officer, which was created to steer, coordinate and accelerate research and development. Peter Griehsnig joined AT&S in 2001 AT&S and worked for AT&S in Shanghai, China, since 2002.

Dividend proposal

The Management Board will propose a dividend of € 0.40 per share (PY: € 0.78 per share and a special dividend of € 0.12 per share) for the financial year 2022/23 to the Annual General meeting on July 6, 2023.

Tensions between China and the United States

The tensions between Mainland China and Taiwan as well as the United States of America increased significantly during the financial year 2022/23 and led to trade restrictions, in particular in the area of state-of-the-art semiconductors. AT&S has so far not been affected by these restrictions on the customer side, but monitors the current developments carefully and closely coordinates with its customers. AT&S had already decided in 2021 – before the tensions increased – to diversify its production geographically and establish new capacities in Kulim and Leoben.

Guidance 2023/24

Depending on the market development, AT&S will continue to push ahead the investment project in Kulim and the expansion of the site in Leoben and implement technology upgrades at other locations in the financial year 2023/24. In view of the highly volatile environment, the ongoing investment projects will be reviewed at frequent intervals and adapted to the respective current situation if required.

The expectations for AT&S’s segments are currently as follows: In the markets for IC substrates, demand for notebooks in 2023 is expected to be lower than in 2022. The negative impact on the supplier chain will be aggravated by high inventory levels. According to current forecasts, this will affect the first half of 2023 in particular, with a recovery of demand anticipated towards the end of the year. Demand for IC substrates for servers will benefit from the technology shift towards heterogeneous integration[1] in the medium term.

In the area of mobile devices, the 5G mobile communication standard as well as the module printed circuit board business will remain positive drivers. In the Automotive segment, the semiconductor shortage should continue to ease and the growth trend should consequently intensify as the share of electronics per vehicle continues to increase. In the Industrial and Medical segments, AT&S expects a continued positive development for the current financial year.

As part of the strategic projects, the management is planning investments totalling up € 800 million for the financial year 2023/24 depending on the market environment and progress of projects. Roughly € 100 million are budgeted for basic investments. Planned investments of approximately € 200 million in the financial year 2022/23 have been postponed to the financial year 2023/24. As a result, the planned investment volume totals up to € 1.1 billion.

AT&S expects the deterioration of the market environment in the second half of 2022/23, in particular in the market for IC substrates, to continue in the first half of 2023/24. Continued high inflation rates, rising interest rates, recession risks as well as geopolitical developments represent additional elements of uncertainty for the end markets. The company expects that inventories in the supply chains will have normalised by the second half of 2023/24 and that demand picks up again. This market forecast, combined with successful customer diversification and the company’s constant high innovative strength, opens up perspectives and opportunities that enable a positive development. In this challenging environment, AT&S expects revenue in the range of € 1.7 to 1.9 billion. Not including effects from the start-up of the new production capacities in Kulim and Leoben totalling approximately € 100 million, the adjusted EBITDA margin is expected to range between 25 and 29%.

Guidance 2026/27

The progress of the production capacity expansion in Kulim as well as the expansion of the site in Leoben is still positive despite the challenging global economic situation. The management is convinced that the major trends – digitalisation and electrification – are intact. Therefore, AT&S assumes that revenue of approximately € 3.5 billion will be generated in the financial year 2026/27 and expects an EBITDA margin in the range from 27 to 32%. The management monitors the currently tense geopolitical situation very carefully in order to be able to respond to developments at any time and to make strategic adaptations. With the projects in Kulim and Leoben, which were adopted in 2021, the company proved its vision and took an important step towards diversifying its value added structure.