Intermediate declaration by the Board of Directors
Regulatory News:
(Paris:XFAB)
Highlights for Q1 2019:
- Revenue was USD 131.0 million, at the upper end of the guidance of USD 126-133 million, down 9% year-on-year and down 5% quarter-on-quarter
- EBITDA was USD 6.5 million, down 68% year-on-year and down 59% quarter-on-quarter
EBITDA margin of 5.0%, on the upper end of 2-5% guidance - EBIT was USD -10.3 million, down USD 16.1 million year-on-year and down USD 9.4 million quarter-on-quarter
- Net loss was USD 10.4 million, down USD 23.9 million year-on-year and down USD 5.8 million quarter-on-quarter
- Loss per share was USD 0.08
Outlook:
- Q2 2019 revenue is expected in the range of USD 128-135 million with an EBITDA margin in the range of 3% to 9%. Management remains confident to return to growth in the second half of 2019.
- Q2 2019 guidance is based on an average exchange rate of 1.15 USD/Euro.
Revenue breakdown per quarter:
in millions of USD | Q3 2017 | Q4 2017 | Q1 2018 | Q2 2018 | Q3 2018 | Q4 2018 | Q1 2019 | Q1 y-o-y growth | |||||||||
Automotive | 68.1 | 71.8 | 68.5 | 79.3 | 76.6 | 59.7 | 64.1 | -6% | |||||||||
Industrial | 18.4 | 20.7 | 23.2 | 25.0 | 23.8 | 24.3 | 24.1 | 4% | |||||||||
Medical | 6.6 | 6.9 | 4.8 | 5.6 | 6.3 | 7.3 | 6.8 | 40% | |||||||||
Subtotal core business | 93.1 | 99.3 | 96.5 | 109.8 | 106.7 | 91.3 | 95.0 | -2% | |||||||||
66.4% | 64.4% | 67.2% | 70.6% | 70.5% | 66.4% | 72.5% | |||||||||||
CCC1 | 46.4 | 53.9 | 46.5 | 45.3 | 44.4 | 45.9 | 35.8 | -23% | |||||||||
Others | 0.8 | 1.0 | 0.5 | 0.3 | 0.3 | 0.3 | 0.2 | n.m. | |||||||||
Total revenues | 140.3 | 154.1 | 143.5 | 155.5 | 151.4 | 137.4 | 131.0 | -9% |
1 Consumer, Communications Computer
Business development
In the first quarter, X-FAB recorded revenues of USD 131.0 million coming in at the upper end of the guidance range of USD 126-133 million. Year-on-year, revenues decreased by 9%, quarter-on-quarter revenues went down by 5%.
Revenues in X-FAB's core business, namely automotive, industrial and medical, came in at USD 95.0 million, and despite the weak automotive market, only decreased by 2% compared to the same quarter last year. Quarter-on-quarter the core business went up by 4%.
The automotive segment recorded a year-on-year decline of 6% whereas it grew by 7% quarter-on-quarter. The increase compared to the previous quarter is mainly due to business which customers had shifted from the fourth to the first quarter in a move to optimize their stock levels. The first quarter automotive business was still soft in light of the overall inventory corrections. Prototyping revenues in the automotive segment decreased by 6% compared to the same quarter last year.
Revenues in the industrial market segment recorded a year-on-year increase of 4%; prototyping revenues for industrial applications went up by 8% year-on-year. Main contributor to this growth was the silicon carbide (SiC) business generating a high share of its revenues in the industrial market.
Medical revenues of the first quarter went up by 40% compared to the same quarter last year. Production revenues recorded a growth of 61%, whereas medical prototyping revenues increased by 3% year-on-year. Main sources of medical revenue are applications for ultrasound and x-ray equipment as well as lab-on-a-chip applications with the latter recording the strongest year-on-year growth.
Consumer, communications computer business (CCC) decreased by 23% year-on-year, partly due to inventory corrections. Main contributors were lower sales in RF-SOI in line with the long-term plan, MEMS microphones, and end-of-life fingerprint-related products.
First quarter revenues of X-FAB France increased by 4% year-on-year. Revenues generated with the French site's legacy business are holding up well and in the first quarter had a share of 92%, which is the same level as in the first quarter of last year. The revenue realized in France based on X-FAB technologies was mainly for the CCC end market.
X-FAB group prototyping revenues came in at USD 13.7 million growing 7% year-on-year. Prototyping revenues are predominantly driven by new contracts, therefore adding up to the pipeline of new projects supporting future growth.
Operations update
In the first quarter, X-FAB progressed with its expansion and optimization projects across all sites aiming to increase output and productivity.
The silicon carbide business keeps progressing well benefiting from the overall trend towards electrification and renewable energies in the automotive and industrial segment. The driving range of electric vehicles equipped with SiC power electronics is up to 10% higher than that of electric cars with silicon power electronics. In the first quarter, X-FAB's silicon carbide business continued to pick up momentum with revenues more than quadrupling compared to the same quarter last year. Total SiC revenues came in at USD 4.7 million, thereof USD 3.3 million production revenues, a 27% increase compared to the previous quarter after two more customers moved into volume production. In the first quarter, X-FAB Texas also launched new SiC development projects for two further customers and completed the setup of the SiC epitaxy cleanroom ready for installation of equipment in the second quarter 2019.
The implementation of X-FAB's automotive technologies at X-FAB France moved forward. Automotive production is scheduled to start in the second quarter with first wafer deliveries in the second half of 2019.
In the first quarter, X-FAB capital expenditures amounted to USD 23.8 million up 15% compared to the same quarter of last year. Apart from capex that had already been initiated in 2018, capex was mainly spent for the capacity expansion project at X-FAB Dresden, the new office building at X-FAB Sarawak as well as the epi cleanroom at X-FAB Texas.
The lower research development expenses in the first quarter are based on several factors, such as higher subsidies, less external spending as well as other cost savings.
Profitability and FX volatility
The lower utilization rate resulting from the contraction of demand increases the proportion of fixed costs, and on top of that, the decrease of work in progress and finished goods inventory by USD 9.2 million had a negative effect. Both elements lead to a year-on-year increase in cost of goods sold amounting to USD 7.2 million while revenues dropped by USD 12.5 million.
The actual exchange rate for the first quarter of 2019 was 1.14 with a corresponding EBITDA margin of 5.0%. At a constant USD/Euro exchange rate of 1.23 experienced in the first quarter of last year, the EBITDA margin in Q1 2019 would have been at 3.0%.
In order to limit the effect of the US-Dollar/Euro exchange rate fluctuations, X-FAB aims at further increasing the share of Euro-denominated sales and managed to raise it to 23% in the first quarter of 2019, coming from a low of 11% in the fourth quarter of 2016. The aim is to achieve a 25% share of Euro-denominated sales by the end of 2019.
Management comments outlook
Commenting on the development of X-FAB's business, Rudi De Winter, CEO of X-FAB Group, said: "I am very excited about the business development and the design wins in our core markets. The electrification of cars will be the main driver for the silicon carbide business, and also our high voltage SOI technology platform is very well in demand because of its built-in robustness and the capability to handle high voltages required for electric vehicles. Our customers tell us that the forecasts are strong and business should go up. However, visibility in the short term remains weak. With reduced turnaround times in our factories, customers tend to postpone orders and further reduce inventories in the supply chain. I expect that this could reverse suddenly and therefore we continue to work on productivity improvements in our factories to be 100% prepared."
X-FAB Quarterly Conference Call
X-FAB's first quarter results will be discussed in a live conference call on Tuesday, April 30th, 2019 at 6.30 pm CET. The conference call will be in English. Please register in advance of the conference using the following link: http://emea.directeventreg.com/registration/2548246
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 April 30th 11.30 pm CET until May 7th 11.30 pm CET. The replay number will be +44 (0) 3333009785, conference ID 2548246.
The second quarter 2019 results will be communicated on July 30th, 2019.
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 silicon carbide 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, unless legally required. 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 unaudited | Quarter ended unaudited | Quarter ended unaudited | Year ended audited | |||||
Revenue | 131,005 | 143,530 | 137,424 | 587,899 | |||||
Revenues in USD in | 76 | 81 | 79 | 81 | |||||
Revenues in EUR in | 23 | 19 | 21 | 18 | |||||
Cost of sales | -126,477 | -119,228 | -120,305 | -483,892 | |||||
Gross Profit | 4,528 | 24,302 | 17,119 | 104,007 | |||||
Gross Profit margin in % | 3.5% | 16.9% | 12.5% | 17.7% | |||||
Research and development expenses | -5,407 | -8,191 | -7,830 | -31,237 | |||||
Selling expenses | -1,992 | -2,206 | -2,022 | -8,070 | |||||
General and administrative expenses | -7,785 | -7,964 | -7,797 | -31,499 | |||||
Rental income and expenses from investment properties | 174 | 570 | -454 | 1,021 | |||||
Other income and other expenses | 220 | -665 | 121 | -1,304 | |||||
Operating profit | -10,262 | 5,846 | -864 | 32,919 | |||||
Finance income | 3,556 | 14,805 | 3,978 | 21,296 | |||||
Finance costs | -2,622 | -8,971 | -4,763 | -28,603 | |||||
Net financial result | 934 | 5,835 | -784 | -7,307 | |||||
Profit before tax | -9,329 | 11,681 | -1,648 | 25,613 | |||||
Income tax | -1,036 | 1,871 | -2,906 | -3,059 | |||||
Profit for the period | -10,365 | 13,552 | -4,554 | 22,554 | |||||
Operating profit (EBIT) | -10,262 | 5,846 | -864 | 32,919 | |||||
Depreciation | 16,784 | 14,325 | 16,787 | 61,492 | |||||
EBITDA | 6,522 | 20,172 | 15,924 | 94,412 | |||||
EBITDA margin in % | 5.0% | 14.1% | 11.6% | 16.1% | |||||
Earnings per share at the end of period | -0.08 | 0.10 | -0.03 | 0.17 | |||||
Weighted average number of shares | 130,631,921 | 130,631,921 | 130,631,921 | 130,631,921 | |||||
EUR/USD average exchange rate | 1.13635 | 1.23032 | 1.14088 | 1.18183 |
Amounts in the financial tables provided in this press release are rounded to the nearest thousand except when otherwise indicated, Rounding differences may occur.
Condensed Consolidated Statement of Financial Position
in thousands of USD | Quarter ended 31 Mar 2019 unaudited | Quarter ended 31 Mar 2018 unaudited | Year ended 31 Dec 2018 audited | ||||
ASSETS | |||||||
Non-current assets | |||||||
Property, plant, and equipment | 368,974 | 319,598 | 345,626 | ||||
Investment properties | 9,266 | 8,925 | 9,415 | ||||
Intangible assets | 8,496 | 7,725 | 9,023 | ||||
Non-current investments | 524 | 641 | 381 | ||||
Other non-current assets | 23,594 | 14,096 | 20,594 | ||||
Deferred tax assets | 34,310 | 35,490 | 34,234 | ||||
Total non-current assets | 445,164 | 386,476 | 419,272 | ||||
Current assets | |||||||
Inventories | 151,280 | 113,992 | 147,150 | ||||
Trade and other receivables | 58,054 | 80,497 | 71,378 | ||||
Other assets | 29,179 | 33,124 | 26,699 | ||||
Cash and cash equivalents | 207,276 | 306,865 | 242,768 | ||||
Total current assets | 445,789 | 534,478 | 487,995 | ||||
TOTAL ASSETS | 890,953 | 920,954 | 907,268 | ||||
EQUITY AND LIABILITIES | |||||||
Equity | |||||||
Share capital | 432,745 | 432,745 | 432,745 | ||||
Share premium | 348,709 | 348,709 | 348,709 | ||||
Retained earnings | -95,159 | -93,155 | -84,782 | ||||
Cumulative translation adjustment | -473 | -786 | -539 | ||||
Treasury shares | -770 | -770 | -770 | ||||
Total equity attributable to equity holders of the parent | 685,052 | 686,743 | 695,363 | ||||
Non-controlling interests | 364 | 336 | 364 | ||||
Total equity | 685,417 | 687,079 | 695,726 | ||||
Non-current liabilities | |||||||
Non-current loans and borrowings | 88,078 | 99,868 | 72,328 | ||||
Other non-current liabilities and provisions | 7,441 | 8,944 | 7,446 | ||||
Total non-current liabilities | 95,519 | 108,812 | 79,774 | ||||
Current liabilities | |||||||
Trade payables | 31,259 | 29,123 | 45,889 | ||||
Current loans and borrowings | 27,785 | 38,502 | 31,632 | ||||
Other current liabilities and provisions | 50,974 | 57,437 | 54,246 | ||||
Total current liabilities | 110,017 | 125,063 | 131,767 | ||||
TOTAL EQUITY AND LIABILITIES | 890,953 | 920,954 | 907,268 |
Condensed Consolidated Statement of Cash Flow
in thousands of USD | Quarter ended unaudited | Quarter ended unaudited | Quarter ended unaudited | Year ended audited | |||||
Income before taxes | -9,329 | 11,681 | -1,648 | 25,613 | |||||
Reconciliation of net income to cash flow arising from operating activities: | 13,833 | 9,403 | 17,188 | 65,979 | |||||
Depreciation and amortization, before effect of grants and subsidies | 16,784 | 14,325 | 16,787 | 61,492 | |||||
Recognized investment grants and subsidies netted with depreciation and amortization | -745 | -837 | -398 | -2,820 | |||||
Interest income and expenses (net) | 419 | 593 | 254 | 1,019 | |||||
Loss/(gain) on the sale of plant, property, and equipment (net) | 0 | 673 | 171 | 900 | |||||
Loss/(gain) on the change in fair value of derivatives (net) and financial assets (net) | -143 | 1,099 | 616 | 4,033 | |||||
Other non-cash transactions (net) | -2,482 | -6,451 | -242 | 1,354 | |||||
Changes in working capital: | -7,943 | -11,071 | -24,144 | -41,469 | |||||
Decrease/(increase) of trade receivables | 13,406 | 2,030 | -2,350 | 10,387 | |||||
Decrease/(increase) of other receivables prepaid expenses | -6,082 | -8,776 | 9,017 | 7,992 | |||||
Decrease/(increase) of inventories | -4,129 | -7,580 | -16,011 | -41,304 | |||||
(Decrease)/increase of trade payables | -7,476 | -4,814 | -8,321 | -18,770 | |||||
(Decrease)/increase of other liabilities | -3,662 | 8,069 | -6,479 | 227 | |||||
Income taxes (paid)/received | -92 | -62 | -711 | -1,020 | |||||
Cash Flow from operating activities | -3,532 | 9,951 | -9,314 | 49,102 | |||||
Cash Flow from investing activities: | |||||||||
Payments for property, plant, equipment intangible assets | -23,815 | -20,767 | -23,327 | -85,102 | |||||
Payments for investments | -175 | 0 | -150 | -150 | |||||
Acquisition of subsidiary, net of cash acquired | 0 | 0 | 0 | 0 | |||||
Payments for loan investments to related parties | -101 | -66 | -43 | -199 | |||||
Proceeds from loan investments related parties | 94 | 51 | 37 | 178 | |||||
Proceeds from sale of property, plant, and equipment | 0 | 15 | 179 | 206 | |||||
Interest received | 663 | 534 | 903 | 3,156 | |||||
Cash Flow used in investing activities | -23,334 | -20,232 | -22,402 | -81,911 |
Condensed Consolidated Statement of Cash Flow con't
in thousands of USD | Quarter ended unaudited | Quarter ended unaudited | Quarter ended unaudited | Year ended audited | |||||
Cash Flow from (used in) financing activities: | |||||||||
Proceeds from loans and borrowings | 0 | 0 | 0 | 0 | |||||
Repayment of loans and borrowings | -7,500 | -8,747 | -9,466 | -34,703 | |||||
Receipts from sale leaseback arrangements | 0 | 0 | 0 | 0 | |||||
Payments of lease installments | -618 | -702 | -618 | -2,561 | |||||
Receipt of government grants and subsidies | 0 | 0 | 0 | 357 | |||||
Interest paid | -409 | -619 | -517 | -2,195 | |||||
Gross proceeds from capital increase | 0 | 0 | 0 | 0 | |||||
Direct cost related to capital increase | 0 | 0 | 0 | 0 | |||||
Payment of preference dividend | -1,000 | -1,000 | |||||||
Distribution to non-controlling interests | -11 | -12 | 0 | -12 | |||||
Cash Flow from (used in) financing activities | -8,539 | -10,081 | -11,602 | -40,114 | |||||
Effect of changes in foreign currency exchange rates on cash | -88 | 7,991 | -1,912 | -3,544 | |||||
Increase/(decrease) of cash and cash equivalents | -35,405 | -20,362 | -43,317 | -72,923 | |||||
Cash and cash equivalents at the beginning of the period | 242,768 | 319,235 | 287,998 | 319,235 | |||||
Cash and cash equivalents at the end of the period | 207,276 | 306,865 | 242,768 | 242,768 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20190430005736/en/
Contacts:
X-FAB Press Contact
Uta Steinbrecher
Investor Relations
X-FAB Silicon Foundries
+49-361-427-6489
uta.steinbrecher@xfab.com