Intermediate declaration by the Board of Directors
Regulatory News:
Highlights for Q1 2018:
- Revenue of USD 143.5 million,at the upper end of the USD 138-144 million guidance, down 3% year-on-year and down 7% quarter-on-quarter.
- Core business automotive, industrial, and medical revenue up 25% year-on-year.
- EBITDA of USD 20.2 million, down 20% year-on-year and down 35% quarter-on-quarter; EBITDA margin of 14%, at the upper end of 12-14% guidance.
- EBIT of USD 5.8 million, down 49% year-on-year and down 65% quarter-on-quarter.
- Net profit of USD 13.6 million, up 21% year-on-year and down 58% quarter-on-quarter.
- Earnings per share of USD 0.10
Outlook:
- Management expects Q2 2018 revenue of USD 154-159 million and EBITDA margin of 18-20%. Guidance for 2018 remains unchanged and is based on an average exchange rate of 1.23 USD/Euro
In the first quarter, X-FAB's core business, namely automotive, industrial, and medical, grew by 25% year-on-year with a particularly strong contribution from the industrial segment, which increased by 36%. The automotive segment grew by 23% whereas the medical segment increased by only 4% due to an inventory correction of a larger account. CCC business dropped by 22% compared to the same quarter last year still suffering from the capacity limitations X-FAB faced during the year 2017.
The RF-SOI mobile applications manufactured at X-FAB France displayed typical lower Q1 revenue cyclicality, dropping by about USD 6 million compared to previous quarter. However, this year, the RF-SOI ramp up did set in a month later than previous years resulting in an expected slightly lower revenue. RF-SOI consumer sales are expected to pick up again in the second quarter.
Revenue Breakdown per Quarter
in millions of USD | Q1 2016 | Q2 2016 | Q3 2016 | Q4 2016 | Q1 2017 | Q2 2017 | Q3 2017 | Q4 2017 | Q1 2018 | ||||||||||
Automotive | 46.2 | 52.9 | 55.9 | 56.0 | 54.5 | 59.3 | 66.5 | 70.2 | 67.2 | ||||||||||
Industrial | 11.8 | 11.3 | 14.9 | 12.7 | 15.2 | 16.5 | 16.7 | 18.5 | 20.7 | ||||||||||
Medical | 2.7 | 2.6 | 4.1 | 3.5 | 4.6 | 4.5 | 6.6 | 6.9 | 4.8 | ||||||||||
Subtotal core business¹ | 60.6 | 66.8 | 74.8 | 72.2 | 74.3 | 80.3 | 89.8 | 95.6 | 92.8 | ||||||||||
56.9% | 56.4% | 58.2% | 45.3% | 50.2% | 57.6% | 64.0% | 62.0% | 64.6% | |||||||||||
CCC² | 24.8 | 25.5 | 29.8 | 30.5 | 30.9 | 24.4 | 18.8 | 24.2 | 23.9 | ||||||||||
Others | 0.7 | 0.7 | 0.3 | 0.7 | 0.7 | 0.5 | 0.8 | 0.9 | 0.4 | ||||||||||
Subtotal ¹ | 86.1 | 93.0 | 105.0 | 103.4 | 106.0 | 105.2 | 109.4 | 120.7 | 117.1 | ||||||||||
80.8% | 78.5% | 81.6% | 64.9% | 71.6% | 75.5% | 78.0% | 78.3% | 81.6% | |||||||||||
X-FAB France³ | 0.0 | 0.0 | 0.0 | 31.6 | 26.5 | 31.0 | 30.9 | 33.4 | 26.4 | ||||||||||
Subcontracted business | 20.4 | 25.5 | 23.6 | 24.3 | 15.4 | 3.2 | 0.0 | 0.0 | 0.0 | ||||||||||
Total revenues | 106.5 | 118.5 | 128.6 | 159.3 | 147.9 | 139.3 | 140.3 | 154.1 | 143.5 |
1 Without X-FAB France and Subcontracting Business
2 Consumer, Communications Computer
3 X-FAB France business is predominantly CCC with a small amount of Automotive and Industrial business
The weaker US-Dollar versus the Euro has continued to create a headwind for profitability. The average exchange rate for the first quarter 2018 deteriorated by more than 5 cents compared to the previous quarter and by more than 16 cents compared to the same quarter last year.
Despite a weaker average USD/Euro exchange rate of 1.23 in the first quarter compared to the expectation of 1.20, profitability is at the upper end of guidance due to a higher than expected increase of WIP (work in progress), which will be supporting the second quarter revenue increase.
In the first quarter of 2018, the share of revenue that is incurred in Euro increased to 19% compared to 13% in the same quarter last year, whilst about 40% of expenses incurred were denominated in Euro. In the future, X-FAB aims at further increasing the Euro share of its revenue to provide a natural hedge.
At a constant USD/Euro exchange rate of 1.065 experienced in Q1 2017, the EBITDA margin in Q1 2018 would have been 18-19%. The actual exchange rate for the first quarter of 2018 was 1.23, and the corresponding EBITDA margin 14%.
The positive net financial result of USD 5.8 million is mainly due to the translation effect of the portion of Euro cash into US-Dollar.
The capacity expansion of the Malaysian fab has been completed as scheduled. The additional capacity of 4,000 wafer starts per month, currently being ramped up, will help to alleviate the tight spare capacity at X-FAB Sarawak and will also contribute to the expected sales increase in the second quarter. After this expansion, X-FAB's total capacity is at 98,000 wafer starts per month (in 200mm equivalent wafers).
The transfer of X-FAB technologies to X-FAB France is progressing with high priority, and prototyping for new products is ongoing. As a result, the plan to start production of automotive products on X-FAB technologies in 2018 is on track. By comparison, in Q1 2018 about 10% of the output of X-FAB France was based on X-FAB technologies.
In the first quarter of 2018, the silicon carbide activities at X-FAB Texas continued to show good progress, with the SiC business being mainly driven by automotive applications for electric vehicles. First production is mainly used in electric vehicles in China, the world's largest market.
In the first quarter of 2018, prototyping revenues came in at USD 12.7 million, a decrease of 17% quarter-on-quarter and 4% year-on-year. This decline is due to a relatively higher base effect, first in Q4 2017 when main projects were kicked off, and for the whole of 2017 when the SiC business contributed strongly to prototyping revenues as all customers worked on preparing their production starts.
Commenting on the development of X-FAB's business, Rudi De Winter added: "We do see healthy demand in all markets that X-FAB is serving and expect increased volumes across all lines. With the progress made with the integration of X-FAB France as well as the additional capacity available at X-FAB Sarawak, we will be in a much better position to support the solid demand going forward. In all factories we are increasing output returning to strong revenue growth for the next quarter driven by the robust demand in our core markets as well as the prototyping pipeline gradually turning into volume production."
X-FAB Quarterly Conference Call
X-FAB's fourth quarter results will be discussed in a live conference call on Wednesday, May 2, 2018 at 6.30 pm CEST. The conference call will be in English. Please register in advance of the conference using the following link: http://emea.directeventreg.com/registration/1995928.
Upon registering, you will be provided with participant dial-in numbers, Direct Event passcode and a unique registrant ID. In the 10 minutes prior to the call, you will need to use the conference access information provided in the email received at the point of registering.
The conference call will be available for replay from May 2nd 9.30 pm CET until May 9th 9.30 pm CET. The replay number will be +44 (0)1452550000, conference ID 1995928.
The second quarter 2018 results will be communicated on July 31, 2018.
About X-FAB
X-FAB is the leading analog/mixed-signal and MEMS foundry group manufacturing silicon wafers for automotive, industrial, consumer, medical and other applications. Its customers worldwide benefit from the highest quality standards, manufacturing excellence and innovative solutions by using X-FAB's modular CMOS processes in geometries ranging from 1.0 to 0.13 µm, and its special BCD, SOI and MEMS long-lifetime processes. X-FAB's analog-digital integrated circuits (mixed-signal ICs), sensors and micro-electro-mechanical systems (MEMS) are manufactured at six production facilities in Germany, France, Malaysia and the U.S. X-FAB employs about 4,000 people worldwide.
For more information, please visit www.xfab.com.
Forward-looking information
This press release may include forward-looking statements. Forward-looking statements are statements regarding or based upon our management's current intentions, beliefs or expectations relating to, among other things, X-FAB's future results of operations, financial condition, liquidity, prospects, growth, strategies or developments in the industry in which we operate. By their nature, forward-looking statements are subject to risks, uncertainties and assumptions that could cause actual results or future events to differ materially from those expressed or implied thereby. These risks, uncertainties and assumptions could adversely affect the outcome and financial effects of the plans and events described herein.
Forward-looking statements contained in this press release regarding trends or current activities should not be taken as a report that such trends or activities will continue in the future. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on any such forward-looking statements, which speak only as of the date of this press release.
The information contained in this press release is subject to change without notice. No re-report or warranty, express or implied, is made as to the fairness, accuracy, reasonableness or completeness of the information contained herein and no reliance should be placed on it.
Condensed Consolidated Statement of Profit and Loss
in thousands of USD | Quarter ended 31 Mar 2018 unaudited | Quarter ended 31 Mar 2017 unaudited | Quarter ended 31 Dec 2017 unaudited | Year ended audited | |||||
Revenue | 143,530 | 147,942 | 154,118 | 581,687 | |||||
Revenues in USD in | 81 | 87 | 83 | 84 | |||||
Revenues in EUR in | 19 | 13 | 16 | 16 | |||||
Cost of sales | -119,228 | -118,633 | -119,826 | -465,948 | |||||
Gross Profit | 24,302 | 29,309 | 34,293 | 115,739 | |||||
Gross Profit margin in % | 16.9 | 19.8 | 22.3 | 19.9 | |||||
Research and development expenses | -8,191 | -7,503 | -7,130 | -28,326 | |||||
Selling expenses | -2,206 | -2,371 | -2,230 | -8,874 | |||||
General and administrative expenses | -7,964 | -7,768 | -8,607 | -30,306 | |||||
Rental income and expenses from investment properties | 570 | 56 | 514 | 2,152 | |||||
Other income and other expenses | -665 | -170 | 100 | 105 | |||||
Operating profit | 5,846 | 11,553 | 16,940 | 50,489 | |||||
Finance income | 14,805 | 712 | 10,273 | 55,208 | |||||
Finance costs | -8,971 | -947 | -5,179 | -26,109 | |||||
Net financial result | 5,835 | -235 | 5,095 | 29,099 | |||||
Profit before taxes | 11,681 | 11,318 | 22,035 | 79,588 | |||||
Income tax | 1,871 | -104 | 10,006 | 10,169 | |||||
Profit for the period | 13,552 | 11,214 | 32,041 | 89,758 | |||||
EBITDA | 20,172 | 25,088 | 31,139 | 106,114 | |||||
EBITDA margin in % | 14.1 | 17.0 | 20.2 | 18.2 | |||||
Earnings per share at the end of period | 0,10 | 0,11 | 0,25 | 0,73 | |||||
Weighted average number of shares | 130,631,921 | 99,381,921 | 130,631,921 | 122,412,473 | |||||
EUR/USD average exchange rate | 1.23032 | 1.06522 | 1.17748 | 1.12893 |
Condensed Consolidated Statement of Financial Position
in thousands of USD | Quarter ended 31 Mar 2018 unaudited | Quarter ended 31 Mar 2017 unaudited | Year ended audited |
ASSETS | |||
Non-current assets | |||
Property. plant and equipment | 319,598 | 274,645 | 315,856 |
Investment properties | 8,925 | 9,000 | 9,033 |
Intangible assets | 7,725 | 7,536 | 7,060 |
Non-current investments | 641 | 359 | 558 |
Other non-current assets | 14,096 | 48 | 10,809 |
Deferred tax assets | 35,490 | 20,438 | 32,959 |
Total non-current assets | 386,476 | 312,025 | 376,276 |
Current assets | |||
Inventories | 113,992 | 92,387 | 105,847 |
Trade and other receivables | 80,497 | 87,417 | 82,008 |
Other assets | 33,124 | 27,539 | 28,271 |
Cash and cash equivalents | 306,865 | 97,871 | 319,235 |
Total current assets | 534,478 | 305,214 | 535,361 |
TOTAL ASSETS | 920,954 | 617,239 | 911,637 |
EQUITY AND LIABILITIES | |||
Equity | |||
Share capital | 432,745 | 265,231 | 432,745 |
Share premium | 348,709 | 255,004 | 348,709 |
Retained earnings | -93,155 | -185,287 | -106,814 |
Cumulative translation adjustment | -786 | -740 | -493 |
Treasury shares | -770 | -770 | -770 |
Total equity attributable to equity holders of the parent | 686,743 | 333,439 | 673,377 |
Non-controlling interests | 336 | 384 | 357 |
Total equity | 687,079 | 333,823 | 673,734 |
Non-current liabilities | |||
Non-current loans and borrowings | 99,868 | 126,459 | 106,178 |
Other non-current liabilities and provisions | 8,944 | 8,234 | 8,872 |
Total non-current liabilities | 108,812 | 134,692 | 115,050 |
Current liabilities | |||
Trade payables | 29,123 | 43,537 | 36,684 |
Current loans and borrowings | 38,502 | 42,731 | 37,799 |
Other current liabilities and provisions | 57,437 | 62,456 | 48,370 |
Total current liabilities | 125,063 | 148,723 | 122,853 |
TOTAL EQUITY AND LIABILITIES | 920,954 | 617,239 | 911,637 |
Condensed Consolidated Statement of Cash Flow
in thousands of USD | Quarter ended 31 Mar 2018 unaudited | Quarter ended 31 Mar 2017 unaudited | Quarter ended 31 Dec 2017 unaudited | Year ended audited | |||||
Income before taxes | 11,681 | 11,318 | 22,035 | 79,588 | |||||
Reconciliation of net income to cash flow arising from operating activities: | 9,403 | 15,967 | 8,000 | 25,332 | |||||
Depreciation and amortization. before effect of grants and subsidies | 14,325 | 13,535 | 14,200 | 55,625 | |||||
Recognized investment grants and subsidies netted with depreciation and amortization | -837 | -915 | -868 | -3,622 | |||||
Interest income and expenses (net) | 593 | 833 | 483 | 2,935 | |||||
Loss/(gain) on the sale of plant. property. equipment (net) | 673 | 0 | 72 | 8 | |||||
Loss/(gain) on the change in fair value of derivatives (net) | 1,099 | -167 | -470 | -11,698 | |||||
Other non-cash transactions (net) | -6,451 | 2,681 | -5,417 | -17,916 | |||||
Changes in working capital: | -11,071 | -15,059 | -13,071 | -40,527 | |||||
Decrease/(increase) of trade receivables | 2,030 | -9,910 | -9,059 | -2,936 | |||||
Decrease/(increase) of other receivables prepaid expenses | -8,776 | -7,600 | -2,891 | -14,231 | |||||
Decrease/(increase) of inventories | -7,580 | -3,174 | -2,280 | -16,875 | |||||
(Decrease)/increase of trade payables | -4,814 | -7,393 | 10,649 | -11,281 | |||||
(Decrease)/increase of other liabilities | 8,069 | 13,018 | -9,489 | 4,797 | |||||
Income taxes (paid)/received | -62 | -204 | -283 | -1,153 | |||||
Cash Flow from operating activities | 9,951 | 12,022 | 16,681 | 63,240 | |||||
Cash Flow from investing activities: | |||||||||
Payments for property. plant. equipment intangible assets | -20,767 | -20,633 | -34,708 | -102,536 | |||||
Payments for investments | 0 | 0 | 0 | 0 | |||||
Acquisition of subsidiary. net of cash acquired | 0 | 0 | 0 | 0 | |||||
Payments for loan investments to related parties | -66 | -29 | -35 | -131 | |||||
Proceeds from loan investments related parties | 51 | 41 | 35 | 146 | |||||
Proceeds from sale of property. plant and equipment | 15 | 0 | 25 | 91 | |||||
Interest received | 534 | 314 | 609 | 1,901 | |||||
Cash Flow used in investing activities | -20,232 | -20,308 | -34,075 | -100,528 |
Condensed Consolidated Statement of Cash Flow con't
in thousands of USD | Quarter ended 31 Mar 2018 unaudited | Quarter ended 31 Mar 2017 unaudited | Quarter ended 31 Dec 2017 unaudited | Year ended audited | |||||
Cash Flow from (used in) financing activities: | |||||||||
Proceeds from loans and borrowings | 0 | 10,073 | 0 | 0 | |||||
Repayment of loans and borrowings | -8,747 | -6,955 | -8,826 | -32,008 | |||||
Receipts from sale leaseback arrangements | 0 | 0 | -8 | 0 | |||||
Payments of lease installments | -702 | -613 | -468 | -2,377 | |||||
Receipt of government grants and subsidies | 0 | 47 | 0 | 375 | |||||
Interest paid | -619 | -663 | -656 | -2,814 | |||||
Gross proceeds from capital increase | 0 | 0 | 0 | 266,575 | |||||
Direct cost related to capital increase | 0 | 0 | 0 | -7,389 | |||||
Payment of preference dividend | 0 | 0 | -3,095 | -3,095 | |||||
Distribution to non-controlling interests | -12 | -11 | 0 | -3,106 | |||||
Cash Flow from (used in) financing activities | -10,081 | 1,878 | -13,055 | 219,257 | |||||
Effect of changes in foreign currency exchange rates on cash | 7,991 | 121 | 6,296 | 33,109 | |||||
Increase/(decrease) of cash and cash equivalents | -20,362 | -6,408 | -30,449 | 181,968 | |||||
Cash and cash equivalents at the beginning of the period | 319,235 | 104,157 | 343,389 | 104,157 | |||||
Cash and cash equivalents at the end of the period | 306,865 | 97,871 | 319,235 | 319,235 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20180502005864/en/
Contacts:
X-FAB Press Contact
Uta Steinbrecher
Investor Relations
X-FAB Silicon Foundries
+49-361-427-6489
uta.steinbrecher@xfab.com