par Siltronic AG (isin : DE000WAF3001)
Industry weakness impacts Siltronic's earnings in Q1 2023
EQS-News: Siltronic AG / Key word(s): Quarter Results
Industry weakness impacts Siltronic's earnings in Q1 2023
11.05.2023 / 07:00 CET/CEST
The issuer is solely responsible for the content of this announcement.
Press release
Siltronic AG
Einsteinstraße 172
81677 Munich
www.siltronic.com
Industry weakness impacts Siltronic's earnings in Q1 2023
- Wafer area sold lower q-o-q, as expected
- Sales decreased 14.3 percent to EUR 404.4 million q-o-q
- EBITDA declined from EUR 168.1 million to EUR 125.2 million q-o-q
- EBITDA margin at 31.0 percent in Q1 2023
- Construction of new fab in Singapore proceeding according to plan
- Guidance: Q2 sales at the level of Q1 2023, EBITDA margin between 27 and 31 percent, no recovery expected in H2 2023
Munich, Germany, May 11, 2023 – Siltronic AG (MDAX/TecDAX: WAF) reported a decline in sales of around 14 percent in Q1 2023 compared to Q4 2022. The decrease resulted from the lower wafer area sold and the stronger euro compared to the US dollar.
"After the record year 2022, demand for wafers was weaker in Q1 2023, as expected. Reasons for this development are the general economic slowdown, geopolitical uncertainties, and the consequences of inventory corrections at chip manufacturers and their customers," said Rainer Irle, CFO of Siltronic AG. "Nevertheless, we are convinced of the medium- and long-term growth of the industry. To accompany this, our focus is on the construction of the new 300 mm fab in Singapore, which is progressing with great strides and on schedule."
Business Development in Q1 2023
| Change | ||||||||
| Q1 2023 | Q4 2022 | Q1 2022 | Q1 to Q4 | Q1 to Q1 | ||||
| Sales | in EUR million | 404.4 | 472.1 | 417.0 | –67.7 | –12.6 | ||
| Cost of sales | in EUR million | –288.2 | –301.6 | –281.4 | 13.4 | –6.8 | ||
| Gross profit | in EUR million | 116.2 | 170.5 | 135.6 | –54.3 | –19.4 | ||
| Gross margin | in % | 28.7 | 36.1 | 32.5 | ||||
| EBITDA | in EUR million | 125.2 | 168.1 | 186.0 | –42.9 | –60.8 | ||
| EBITDA margin | in % | 31.0 | 35.6 | 44.6 | ||||
| Depreciation, amorization and impairment less reversals thereof | in EUR million | –47.4 | –43.3 | –42.3 | –4.1 | –5.1 | ||
| EBIT | in EUR million | 77.8 | 124.8 | 143.7 | –47.0 | –65.9 | ||
| EBIT margin | in % | 19.2 | 26.4 | 34.5 | ||||
| Financial result | in EUR million | 4.1 | –1.2 | –4.5 | 5.3 | 8.6 | ||
| Result before income taxes | in EUR million | 81.9 | 123.6 | 139.2 | –41.7 | –57.3 | ||
| Income taxes | in EUR million | –9.4 | –5.0 | –24.5 | –4.4 | 15.1 | ||
| Tax rate | in % | 11 | 4 | 18 | ||||
| Result for the period | in EUR million | 72.5 | 118.6 | 114.7 | –46.1 | –42.2 | ||
| Earnings per share | in EUR | 2.20 | 3.56 | 3.47 | –1.36 | –1.27 | ||
Siltronic generated sales of EUR 404.4 million in Q1 2023, a decrease of 14.3 percent versus Q4 2022. The decrease was primarily driven by the wafer area sold and secondarily by the strengthening of the euro against the US dollar. The euro to US dollar exchange rate averaged 1.07 in Q1 2023, a strengthening of 5.2 percent sequentially q-o-q (Q4 2022: 1.02).
The driver for the EUR 13.4 million lower cost of sales compared to the previous quarter was the lower wafer area sold. The associated cost savings were dampened by a disproportionately low decline in labor costs and by price increases for raw materials, supplies and energy.
The developments described above reduced the gross profit for Q1 2023 by EUR 54.3 million and EBITDA by EUR 42.9 million q-o-q. Foreign exchange hedging is the main reason why EBITDA developed better than the gross margin by EUR 11.4 million.
EBITDA in Q1 2023 was EUR 125.2 million, compared to EUR 168.1 million in Q4 2022. The EBITDA margin decreased from 35.6 percent to 31.0 percent.
When comparing EBIT in the reporting quarter with the previous quarter, it should be noted that Q4 2022 was positively influenced by the reversal of an impairment of a building in the amount of EUR 5.7 million. The write-up is recorded in other operating income. Additionally, it should be noted that Q1 2022 included a termination fee of EUR 50.0 million due to the failed tender offer by GlobalWafers. The termination fee was the reason for the higher tax rate in the same period of the previous year.
Rising market values of securities and interest effects had a positive impact on the financial result compared to the previous quarter and Q1 2022.
Although the semiconductor industry is currently in a weaker market phase, a remarkable profit for the period of EUR 72.5 million was achieved, compared to EUR 118.6 million in the previous quarter. Of this amount, EUR 66.1 million is attributable to Siltronic AG shareholders with earnings per share of EUR 2.20.
Development of equity, net cash flow and net financial assets
| In EUR million | Mar. 31, 2023 | Dec. 31, 2022 | Change | |
| Equity | 2,118.4 | 2,067.1 | 51.3 | |
| Pension provisions | 122.0 | 119.5 | 2.5 | |
| Customer prepayments | 520.1 | 503.7 | 16.4 | |
| Loan liabilities | 653.3 | 653.8 | –0.5 | |
| Lease liabilities | 105.4 | 106.7 | –1.3 | |
| Other provisions and liabillities | 73.3 | 74.1 | –0.8 | |
| Non-current liabilities | 1,474.1 | 1,457.8 | 16.3 |
With equity of EUR 2,118.4 million on March 31, 2023, Siltronic AG's equity ratio was 51.1 percent compared to 51.0 percent on December 31, 2022. The increase in equity is based on the net income for the quarter of EUR 72.5 million. There were offsetting effects mainly from the currency translation of the foreign subsidiaries.
Lower interest rates have led to a slight increase in pension provisions of EUR 2.5 million. The interest rate in Germany fell from 3.72 percent at the end of 2022 to 3.66 percent at the end of Q1 2023. In the US, the interest rate also decreased from 4.90 percent to 4.68 percent during this period.
| In EUR million | Q1 2023 | Q4 2022 | Change | |
| Cash flow from operating activities | 146.7 | 189.8 | –43.1 | |
| Proceeds/payments for capital expenditure including intangible assets | –230.5 | –337.0 | 106.5 | |
| Free cash flow | –83.8 | –147.2 | 63.4 | |
| Balance from increase (-) / decrease (+) of prepayments | –21.8 | –98.2 | 76.4 | |
| Net cash flow | –105.6 | –245.4 | 139.8 |
The decline in EBITDA of EUR 42.9 million is reflected in the cash flow from operating activities. Due to the continued very high cash outflows for capital expenditure including intangible assets, both the free cash flow at EUR -83.8 million and the net cash flow at EUR -105.6 million were negative in Q1 2023. In Q1 2023, customer prepayments of EUR 32.4 million were received.
| In EUR million | Mar. 31, 2023 | Dec. 31, 2022 | Change | |
| Cash and cash equivalents | 512.3 | 488.7 | 23.6 | |
| Securities and time deposits | 450.0 | 562.2 | –112.2 | |
| Restricted Funds | –2.0 | –1.9 | –0.1 | |
| Nominal value of loan liabilities including interest | –676.2 | –675.4 | –0.8 | |
| Net financial assets | 284.1 | 373.6 | –89.5 |
On March 31, 2023 the company had net financial assets of EUR 284.1 million after EUR 373.6 million on December 31, 2022.
Outlook
The start into 2023 was rather muted for Siltronic. Due to inventory corrections at chip manufacturers and their customers, Siltronic continues to expect temporary market weakness in the coming quarters. Customer postponements in delivery volumes will affect the entire year 2023.
In Q2 2023, we expect sales to be at the level of Q1 2023. The EBITDA margin is forecast to be between 27 and 31 percent (plan rate EUR/US dollar 1.10). We do not expect any recovery in the second half of the year.
Siltronic AG – Key figures Q1/2023
| Profit and Loss statement | |||||
| In EUR million | Q1 2023 | Q4 2022 | Q1 2022 | ||
| Sales | 404.4 | 472.1 | 417.0 | ||
| EBITDA | 125.2 | 168.1 | 186.0 | ||
| EBITDA margin | % | 31.0 | 35.6 | 44.6 | |
| EBIT | 77.8 | 124.8 | 143.7 | ||
| EBIT margin | % | 19.2 | 26.4 | 34.5 | |
| Result for the period | 72.5 | 118.6 | 114.7 | ||
| Earnings per share | EUR | 2.20 | 3.56 | 3.47 | |
| Capital expenditure and net cash flow | |||||
| Capital expenditure including intangible assets | 259.8 | 476.9 | 205.7 | ||
| Net cash flow | –105.6 | –245.4 | 36.9 | ||
Statement of financial position | ||||
| In EUR million | Mar. 31, 2023 | Dec. 31, 2022 | ||
| Total assets | 4,147.1 | 4,050.7 | ||
| Equity | 2,118.4 | 2,067.1 | ||
| Equity ratio | % | 51.1 | 51.0 | |
| Net financial assets | 284.1 | 373.6 | ||
Conference call for analysts and investors
The Executive Board of Siltronic AG will hold a conference call with analysts and investors (in English only) on May 11, 2023, at 10:00 am (CEST). This call will be streamed via the Internet. The audio webcast will be available live as well as on demand on Siltronic’s website.
The quarterly statement and the latest investor presentation are also published on the Siltronic website.
Other dates:
July 27, 2023 Interim Report 2023
October 26, 2023 Q3 2023 quarterly statement
Contact:
Verena Stütze
Head of Investor Relations & Communications
Telefon +49 89 8564 3133
investor.relations@siltronic.com
Company profile:
Siltronic AG is one of the world's leading producers of hyperpure silicon wafers and has been a partner to many major semiconductor manufacturers for decades. Siltronic is globally oriented and operates production facilities in Asia, Europe and the USA. Silicon wafers are the foundation of the modern semiconductor industry and the basis for chips in all electronic applications - from computers and smartphones to electric cars and wind turbines. The international company is highly customer-oriented and focused on quality, precision, innovation and growth. Siltronic AG employs around 4,500 people and has been a stock-listed company in Germany (Prime Standard) since 2015. The Siltronic AG stock is listed on both the MDAX and TecDAX.
Financial information – pursuant to IFRS, unaudited
Siltronic AG – Consolidated Statement of Profit or Loss
| In EUR million | Q1 2023 | Q4 2022 | Q1 2022 | |
| Sales | 404.4 | 472.1 | 417.0 | |
| Cost of sales | –288.2 | –301.6 | –281.4 | |
| Gross profit | 116.2 | 170.5 | 135.6 | |
| Selling expenses | –9.1 | –9.2 | –8.2 | |
| Research and development expenses | –22.4 | –23.0 | –22.0 | |
| General administration expenses | –8.9 | –8.0 | –8.7 | |
| Other operating income | 40.7 | 25.5 | 74.9 | |
| Other operating expenses | –38.7 | –31.0 | –27.9 | |
| Operating result | 77.8 | 124.8 | 143.7 | |
| Interest income | 7.4 | 7.9 | 0.9 | |
| Interest expenses | –2.8 | –3.9 | –0.7 | |
| Other financial result | –0.5 | –5.2 | –4.7 | |
| Financial result | 4.1 | –1.2 | –4.5 | |
| Result before income taxes | 81.9 | 123.6 | 139.2 | |
| Income taxes | –9.4 | –5.0 | –24.5 | |
| Result for the period | 72.5 | 118.6 | 114.7 | |
| of which | ||||
| attributable to Siltronic AG shareholders | 66.1 | 106.8 | 104.2 | |
| attributable to non-controlling interests | 6.4 | 11.8 | 10.5 | |
| Result per common share in EUR (basic/diluted) | 2.20 | 3.56 | 3.47 |
Siltronic AG - Consolidated Statement of Financial Position In EUR million | Mar. 31, 2023 | Dec. 31, 2022 | |
| Intangible assets | 21.8 | 21.7 | |
| Property, plant and equipment | 2,431.1 | 2,235.0 | |
| Right-of-use assets | 105.8 | 107.5 | |
| Securities and fixed-term deposits | 12.5 | 12.7 | |
| Other financial assets | 2.1 | 4.2 | |
| Other non-financial assets | 16.9 | 21.0 | |
| Deferred tax assets | 16.1 | 15.9 | |
| Non-current assets | 2,606.3 | 2,418.0 | |
| - | |||
| Inventories | 303.4 | 277.6 | |
| Trade receivables | 168.1 | 222.2 | |
| Contract assets | 15.3 | 14.6 | |
| Securities and fixed-term deposits | 437.5 | 549.5 | |
| Other financial assets | 28.8 | 23.2 | |
| Other non-financial assets | 73.4 | 55.8 | |
| Income tax receivables | 2.0 | 1.1 | |
| Cash and cash equivalents | 512.3 | 488.7 | |
| Current assets | 1,540.8 | 1,632.7 | |
| Total assets | 4,147.1 | 4,050.7 | |
| Subscribed capital | 120.0 | 120.0 | |
| Capital reserves | 974.6 | 974.6 | |
| Retained earnings and net Group result | 740.1 | 673.7 | |
| Other equity items | 97.3 | 116.7 | |
| Equity attributable to Siltronic AG shareholders | 1,932.0 | 1,885.0 | |
| Equity attributable to non-controlling interests | 186.4 | 182.1 | |
| Equity | 2,118.4 | 2,067.1 | |
| Pension provisions | 122.0 | 119.5 | |
| Other provisions | 52.9 | 53.2 | |
| Liabilities for income taxes | 3.8 | 3.8 | |
| Deferred tax liabilities | 3.4 | 2.9 | |
| Customer prepayments | 520.1 | 503.7 | |
| Loan liabilities | 653.3 | 653.8 | |
| Lease liabilities | 105.4 | 106.7 | |
| Other non-financial liabilities | 13.2 | 14.2 | |
| Non-current liabilities | 1,474.1 | 1,457.8 | |
| Other provisions | 9.3 | 10.0 | |
| Liabilities for income taxes | 38.5 | 35.4 | |
| Trade liabilities | 360.2 | 336.1 | |
| Customer prepayments | 55.4 | 58.6 | |
| Loan liabilities | 6.1 | 3.9 | |
| Lease liabilities | 6.4 | 6.1 | |
| Other financial liabilites | 3.4 | 8.6 | |
| Other non-financial liabilities | 75.3 | 67.1 | |
| Current liabilites | 554.6 | 525.8 | |
| Total liabilities | 2,028.7 | 1,983.6 | |
| Total equity and liabilities | 4,147.1 | 4,050.7 |
Siltronic AG - Consolidated Statement of Cash Flows
| In EUR million | Q1 2023 | Q4 2022 | Q1 2022 | |
| Result for the period | 72.5 | 118.6 | 114.7 | |
| Depreciation / amortization of non-current assets, including impairment losses and reversals thereof | 47.4 | 43.3 | 42.3 | |
| Other non-cash expenses and income | –4.1 | 3.5 | 9.4 | |
| Result from disposal of non-current assets | 0.6 | 0.5 | 0.5 | |
| Interest income | –4.7 | –4.0 | –0.2 | |
| Interest paid | –0.5 | –1.6 | –0.4 | |
| Interest received | 2.6 | 0.9 | 1.9 | |
| Tax expense | 9.4 | 5.0 | 24.5 | |
| Taxes paid | –7.8 | –20.0 | –4.0 | |
| Changes in inventories | –28.1 | –22.1 | –15.3 | |
| Changes in trade receivables | 49.2 | –31.5 | –21.0 | |
| Changes in contract assets | –0.9 | 3.8 | –5.0 | |
| Changes in other assets excluding prepayments made | –19.8 | –18.3 | –7.9 | |
| Changes in provisions | 2.9 | –7.4 | 2.6 | |
| Changes in trade liabilities | –0.6 | 18.8 | 14.0 | |
| Changes in other liabilities excluding prepayments received | 6.8 | 2.1 | 17.1 | |
| Changes in prepayments | 21.8 | 98.2 | 100.5 | |
| Cash flow from operating activities | 146.7 | 189.8 | 273.7 | |
| Payments for capital expenditure (including intangible assets) | –230.5 | –336.8 | –136.3 | |
| Proceeds from the disposal of property, plant and equipment | – | –0.2 | – | |
| Payments for securities and fixed-term deposits | –135.8 | –307.2 | –99.1 | |
| Proceeds from securities and fixed-term deposits | 246.8 | 341.6 | 50.7 | |
| Cash flow from financing activities | –119.5 | –302.6 | –184.7 | |
| Proceeds from loans | – | 301.3 | – | |
| Repayment portion of lease liability | –1.3 | –1.3 | –1.0 | |
| Cash flow from financing activities | –1.3 | 300.0 | –1.0 | |
| Changes due to exchange-rate fluctuations | –2.3 | –4.7 | 2.1 | |
| Changes in cash and cash equivalents | 23.6 | 182.5 | 90.1 | |
| at the beginning of the period | 488.7 | 306.2 | 424.4 | |
| at the end of the period | 512.3 | 488.7 | 514.5 |
Additional financial information
| In EUR million | Q1 2023 | Q4 2022 | Q1 2022 | |
| Cash flow from operating activities | 146.7 | 189.8 | 273.7 | |
| Cash-effective changes in customer prepayments | –21.8 | –98.2 | –100.5 | |
| Cash flow from investing activities | –230.5 | –337.0 | –136.3 | |
| Net cash flow | –105.6 | –245.4 | 36.9 |
Disclaimer
This press release contains forward-looking statements based on assumptions and estimates made by the Executive Board of Siltronic AG. These statements can be identified by wording such as "expect", "want", "anticipate", "intend", "plan", "believe", "strive", "estimate", and "will" or similar terms. Although we assume that the expectations contained in these forward-looking statements are realistic, we cannot guarantee that they will prove to be correct. These assumptions may contain risks and uncertainties that could cause the actual figures to differ considerably from the forward-looking statements. Factors that can cause such discrepancies include changes in the macroeconomic and business environment, changes in exchange rates and interest rates, the introduction of products that compete with our own products, a lack of acceptance of new products or services, and changes in corporate strategy. Siltronic does not intend to update these forward-looking statements, nor does it assume any responsibility to do so.
This press release includes supplementary financial indicators that either are or may be so-called alternative performance indicators that are not clearly defined in the relevant financial reporting framework. In assessing the financial position and performance of Siltronic, these supplementary financial indicators should not be used in isolation or as an alternative to those presented in the consolidated financial statements and determined in accordance with the relevant financial reporting framework. Other companies that present or report alternative performance indicators with similar names may calculate them differently. Explanations of the key financial figures used are available in the Annual Report of Siltronic AG.
Due to rounding, some of the figures presented in this press release as well as in other reports may not add up exactly to the stated totals and percentages presented may not accurately reflect the absolute values to which they relate.
This press release is a quarterly Group statement in accordance with Section 53 of the Exchange Rules for the Frankfurt Stock Exchange.
11.05.2023 CET/CEST Dissemination of a Corporate News, transmitted by EQS News - a service of EQS Group AG.
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| Language: | English |
| Company: | Siltronic AG |
| Einsteinstr. 172 | |
| 81677 Munich | |
| Germany | |
| Phone: | +49 89 8564 3133 |
| Fax: | +49 89 8564-3904 |
| E-mail: | investor.relations@siltronic.com |
| Internet: | www.siltronic.com |
| ISIN: | DE000WAF3001 |
| WKN: | WAF300 |
| Indices: | MDAX, TecDAX |
| Listed: | Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Stuttgart, Tradegate Exchange |
| EQS News ID: | 1629821 |
| End of News | EQS News Service |
1629821 11.05.2023 CET/CEST