AT&S, Austrian manufacturer of IC substrates and printed circuit boards, sees itself on the road to recovery in a persistently volatile market environment for the financial years 2023/24 and 2026/27 in the core businesses of IC substrates, mobile devices, automotive and aerospace, industrial and medical. "Although the economic environment has fundamentally changed, we were able to continue the recovery that was evident at the beginning of the financial year," says CEO Andreas Gertstenmayer.
Compared to the same period of the previous year, Group sales in the first half of 2023/24 fell by 24% (currency-adjusted: 21%) to € 814 million. The main reason for this development was the changed economic environment. However, a significant increase was achieved in two segments in the first half of the year: Sales in the Electronics Solutions segment rose by 30% and in the Microelectronics segment by 18% in Q2.
AT&S has initiated comprehensive cost optimization and efficiency programs to counteract current effects such as price pressure and inflation. Exchange rate fluctuations had a positive impact of € 15 million on earnings. Adjusted for the start-up costs in Kulim, Malaysia, and Leoben, Austria, EBITDA amounted to € 249 million, which corresponds to a decline of 26%. The Group result fell from € 224 million to € 49 million. The net assets and financial position in September 2023 continued to be characterized by investment activity. Total assets increased by 4% to € 4,317 million compared to March 2023.
In the markets for IC substrates, demand for notebooks is expected to be lower in 2023 than in 2022. There has been a slump in servers due to the economic situation; a rapid recovery is expected here. In the area of mobile devices, the business with module printed circuit boards remains a positive driver. Even though Automotive is showing a growth trend due to the increasing proportion of electronics per vehicle, the PCB market is under price pressure. A decline is expected for the industrial market this year.
AT&S expects the challenging market environment to continue in the second half of 2023/24. High inflation rates, rising interest rates, recession risks and geopolitical developments are factors of uncertainty. In this environment, AT&S expects annual revenue of between € 1.7 billion and € 1.9 billion. Excluding the effects from the start-up of production capacities in Kulim and Leoben amounting to around € 100 million, the adjusted EBITDA margin is expected to be between 25% and 29%.
