Intermediate declaration by the Board of Directors
Regulatory News:
(Paris:XFAB)
Highlights Q2 2021:
› Revenue was USD 161.0 million, exceeding the guidance of USD 154-160 million, up 36% year-on-year (YoY) and up 4% quarter-on-quarter (QoQ)
› Bookings came in at USD 209.1 million remaining at a high level, up 110% YoY and flat QoQ
› EBITDA margin of 26.9%, clearly above the 17-21% guidance
› EBITDA was USD 43.3 million, up 173% YoY and up 22% QoQ
› EBIT was USD 24.6 million, up USD 27.4 million YoY and up USD 7.6 million QoQ
Outlook:
› Q3 2021 revenue is expected in the range of USD 162-170 million with an EBITDA margin in the range of 18-22%.
› Full year revenue guidance has been increased to USD 640-660 million (previously USD 610-630 million) with an EBITDA margin in the range of 21.5-23.5% (previously 18-21%)
› The guidance is based on an average exchange rate of 1.20 USD/Euro.
Revenue breakdown per quarter:
in millions of USD | Q3 2019 | Q4 2019 | Q1 2020 | Q2 2020 | Q3 2020 | Q4 2020 | Q1 2021 | Q2 2021 | Q2 y-o-y growth | |||||||||
Automotive | 60.5 | 56.7 | 68.3 | 61.6 | 40.8 | 65.4 | 83.5 | 82.8 | 35% | |||||||||
Industrial | 24.4 | 20.1 | 22.1 | 23.9 | 23.9 | 27.3 | 32.4 | 35.2 | 47% | |||||||||
Medical | 8.8 | 6.3 | 6.5 | 7.3 | 7.7 | 12.0 | 8.7 | 10.4 | 43% | |||||||||
Subtotal core business | 93.7 | 83.2 | 96.9 | 92.7 | 72.3 | 104.7 | 124.6 | 128.4 | 38% | |||||||||
71.8% | 73.3% | 76.4% | 78.1% | 75.2% | 77.1% | 80.1% | 79.8% | |||||||||||
CCC1 | 36.7 | 30.1 | 29.7 | 25.9 | 23.7 | 30.9 | 30.6 | 32.4 | 25% | |||||||||
Others | 0.0 | 0.1 | 0.3 | 0.2 | 0.1 | 0.3 | 0.3 | 0.1 | ||||||||||
Total revenues | 130.5 | 113.4 | 126.9 | 118.8 | 96.1 | 135.9 | 155.4 | 161.0 | 36% |
1 Consumer, Communications Computer
in millions of USD | Q3 2019 | Q4 2019 | Q1 2020 | Q2 2020 | Q3 2020 | Q4 2020 | Q1 2021 | Q2 2021 | Q2 y-o-y growth | |||||||||
CMOS | 114.4 | 98.1 | 112.8 | 103.4 | 81.1 | 115.0 | 135.9 | 137.5 | 33% | |||||||||
MEMS | 9.5 | 9.9 | 9.6 | 10.4 | 9.8 | 14.6 | 14.4 | 16.2 | 56% | |||||||||
Silicon carbide | 6.5 | 5.5 | 4.5 | 5.0 | 5.2 | 6.3 | 6.1 | 7.2 | 44% | |||||||||
Total revenues | 130.5 | 113.4 | 126.9 | 118.8 | 96.1 | 135.9 | 155.4 | 161.0 | 36% |
Business development
Business continued to grow strongly throughout the second quarter and across all end markets. Total quarterly revenues amounted to USD 161.0 million, exceeding the guided USD 154-160 million and recording an increase of 36% year-on-year and 4% quarter-on-quarter.
X-FAB's core business targeting the Automotive, Industrial and Medical markets recorded revenues of USD 128.4 million, up 38% year-on-year and 3% quarter-on-quarter. Quarterly CCC revenues (Consumer, Communications Computer) came in at USD 32.4 million, corresponding to a growth of 25% year-on-year and 6% quarter-on-quarter.
Bookings remained strong throughout the second quarter and came in at USD 209.1 million, up 110% year-on-year and roughly at the level of the previous quarter.
In the second quarter, demand continued to be driven by the ongoing volume recovery following the COVID-19-related weakness in 2020 but also by adding new customers and projects, and by transferring existing development projects into volume production. Interest in X-FAB's specialty technologies is strong as they enable smart solutions which are key to address today's societal challenges. These include climate change with the need for greener energy and transportation (SiC), the COVID-19 era and aging societies with the need for fast and reliable point-of-care diagnostics (lab-on-a-chip) or the globalized and increasingly connected world requiring all kinds of sensor applications.
Prototyping and production revenue per quarter and end market:
in millions of USD | Revenue | Q2 2020 | Q3 2020 | Q4 2020 | Q1 2021 | Q2 2021 | Q2 y-o-y growth | |||||||
Automotive | Prototyping | 2.3 | 2.6 | 3.6 | 3.2 | 3.0 | 31% | |||||||
Production | 59.3 | 38.2 | 61.8 | 80.4 | 79.8 | 35% | ||||||||
Industrial | Prototyping | 7.2 | 7.2 | 8.2 | 9.0 | 10.3 | 43% | |||||||
Production | 16.7 | 16.6 | 19.0 | 23.3 | 24.9 | 49% | ||||||||
Medical | Prototyping | 3.3 | 3.4 | 6.9 | 2.2 | 2.9 | -12% | |||||||
Production | 4.0 | 4.2 | 5.1 | 6.4 | 7.5 | 88% | ||||||||
CCC | Prototyping | 2.6 | 2.6 | 3.2 | 4.3 | 4.1 | 57% | |||||||
Production | 23.3 | 21.0 | 27.7 | 26.3 | 28.3 | 22% |
With the consistently strong order intake and factories running at high utilization levels, the allocation of capacity to customers had to be continued throughout the second quarter. X-FAB's first priority remains to ensure its customers receive minimum supply to avoid any disruptions in their supply chain. An important part of this effort is to move business to X-FAB France, where free capacities are still available. In the second quarter, the share of the French site's revenues based on X-FAB technologies went up to 20% and is expected to increase significantly during the second half of 2021.
The order backlog accumulated at the end of the second quarter remains at a high level and will contribute positively to business growth over the coming quarters.
Quarterly prototyping revenues totaled USD 20.4 million, up 31% year-on-year and 8% quarter-on-quarter, reflecting the strong interest in X-FAB's technology portfolio.
Operations update
In the second quarter, X-FAB's factories continued to run at high utilization rates and the focus on execution excellence and productivity improvements remained essential to ensure the best supply to X-FAB's customers. In light of the strong demand, X-FAB is making every effort to ensure operations run smoothly at all locations. This includes the hire of additional staff, activities to secure the raw material supply but also the strict compliance with the safety measures which are in place to prevent any COVID-19-related disruptions.
The silicon carbide (SiC) activities progressed well and X-FAB was able to further expand its SiC customer base and projects pipeline mainly driven by existing customers expanding their portfolio of offerings. Quarterly SiC bookings more than doubled year-on-year and SiC revenues in the second quarter came in at USD 7.2 million, up 44% year-on-year and up 19% quarter-on-quarter. Demand for X-FAB's in-house SiC epitaxy line is also strong. About half of X-FAB's SiC customers are either in the process of qualifying or already producing SiC epitaxy at X-FAB's in-house line. SiC epitaxy refers to the process of depositing a thin epitaxial layer on a SiC raw wafer, which is a significant value-add step in the overall process of manufacturing silicon carbide semiconductors.
Capital expenditures in the second quarter amounted to USD 14.2 million, up 90% compared to the same quarter last year. The growth in capex was mainly related to prepayments for new equipment which was part of the investment projects initiated in the first quarter. In the second quarter, X-FAB launched additional capex projects for the expansion of capacity that have a total value of USD 85 million, most of which will be due for payment in 2022.
Financial update
Second quarter EBITDA was USD 43.3 million with an EBITDA margin of 26.9%, clearly exceeding the guided 17-21%. The positive earnings development is mainly due to the strong revenue growth. Additionally, the inventory of unfinished and finished goods significantly increased by USD 5.3 million, also contributing positively to second quarter profitability.
In 2020 and in the context of a COVID-19 government support scheme, X-FAB Texas received a loan of USD 6.5 million to secure payroll and utility payments. Under the terms of the program, X-FAB Texas was able to apply for loan forgiveness after having fulfilled certain conditions regarding the retention of employees. This loan forgiveness was approved by the authorities in June 2021. Thus, the balance of the loan was released to income and offset against cost of sales, which also had a positive effect on the profitability of the second quarter. Excluding this one-off effect, EBITDA would still have been above guidance at 22.9%.
Based on the positive business development and an expected further increase in profitability, deferred tax assets from loss carry forwards increased by USD 2.9 million in the second quarter.
Cash and cash equivalents at the end of the second quarter were at USD 205.1 million, up 5% against the end of the first quarter.
In the second quarter, the share of Euro-denominated sales amounted to 33%, therefore limiting the impact of exchange rate fluctuations on profitability and ensuring a natural hedging of the business. X-FAB will continue its efforts to further increase the share of Euro-denominated sales up to a level of approximately 40%, which corresponds to the share of costs incurred in Euro.
The actual US-Dollar/Euro exchange rate for the second quarter of 2021 was 1.20 leading to an EBITDA margin of 26.9%. At a constant exchange rate of 1.10, as experienced in the second quarter of last year, the EBITDA margin would have been 27.8%.
Management comments outlook
Rudi De Winter, CEO of X-FAB Group, said: "It is a great pleasure to see the high level of interest in our technology offerings. All end markets we serve are performing very well and this is not only related to the ongoing recovery after the past two difficult years. Societies are in transformation, mainly driven by climate change and the COVID-19 pandemic, and while the outcome is still open, it is clear that smart technological solutions are essential to tackle the challenges ahead of us. We, as X-FAB, take pride in offering technologies which enable such smart solutions and I see X-FAB well positioned for future growth. In the short-term and in light of the challenges related to the extraordinary demand situation, all our customers can rest assured that their reliable supply is our first priority. Our teams across all X-FAB sites are working very hard to deliver excellent results and to further increase output."
Procedures of the independent auditor
The statutory auditor, KPMG Bedrijfsrevisoren Réviseurs d'Entreprises BV, represented by Jos Briers, has confirmed that their review procedures, which have been substantially completed, have not revealed any significant matters requiring adjustment of the condensed consolidated financial information included in this press release as of and for the six months ended June 30, 2021.
X-FAB Quarterly Conference Call
X-FAB's second quarter results will be discussed in a live conference call on Thursday, July 29, 2021, at 6.30 p.m. CET. The conference call will be in English. Please register in advance of the conference using the following link:
http://emea.directeventreg.com/registration/2492570.
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 July 29, 2021, 11.30 p.m. CET until August 5, 2021, 11.30 p.m. CET. The replay number will be +44 (0) 3333009785, conference ID 2492570.
The third quarter 2021 results will be communicated on October 28, 2021.
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 | Half-year ended unaudited | Half-year ended unaudited | ||||
Revenue | 160,955 | 118,756 | 155,420 | 316,375 | 245,650 | ||||
Revenues in USD in | 66 | 67 | 67 | 67 | 69 | ||||
Revenues in EUR in | 33 | 32 | 33 | 33 | 30 | ||||
Cost of sales | -119,230 | -107,942 | -120,419 | -239,649 | -220,361 | ||||
Gross Profit | 41,725 | 10,814 | 35,001 | 76,726 | 25,289 | ||||
Gross Profit margin in % | 25.9 | 9.1 | 22.5 | 24.3 | 10.3 | ||||
Research and development expenses | -8,692 | -5,891 | -8,482 | -17,174 | -11,791 | ||||
Selling expenses | -2,008 | -2,118 | -2,119 | -4,127 | -4,130 | ||||
General and administrative expenses | -7,649 | -6,992 | -8,150 | -15,800 | -14,648 | ||||
Rental income and expenses from investment properties | 668 | 183 | 627 | 1,295 | 223 | ||||
Other income and other expenses | 559 | 1,210 | 155 | 714 | 776 | ||||
Operating profit | 24,602 | -2,794 | 17,032 | 41,635 | -4,281 | ||||
Finance income | 3,470 | 3,410 | 4,283 | 7,753 | 6,909 | ||||
Finance costs | -3,104 | -5,260 | -7,167 | -10,271 | -13,695 | ||||
Net financial result | 366 | -1,850 | -2,884 | -2,518 | -6,786 | ||||
Profit before tax | 24,968 | -4,644 | 14,148 | 39,117 | -11,067 | ||||
Income tax | 1,769 | -1,243 | -1,374 | 395 | -1,544 | ||||
Profit for the period | 26,737 | -5,887 | 12,775 | 39,512 | -12,611 | ||||
Operating profit (EBIT) | 24,602 | -2,794 | 17,032 | 41,635 | -4,281 | ||||
Depreciation | 18,718 | 18,657 | 18,551 | 37,269 | 37,488 | ||||
EBITDA | 43,320 | 15,863 | 35,583 | 78,903 | 33,207 | ||||
EBITDA margin in % | 26.9 | 13.4 | 22.9 | 24.9 | 13.5 | ||||
Earnings per share at the end of period | 0.20 | -0.05 | 0.10 | 0.30 | -0.10 | ||||
Weighted average number of shares | 130,631,921 | 130,631,921 | 130,631,921 | 130,631,921 | 130,631,921 | ||||
EUR/USD average exchange rate | 1.20429 | 1.10006 | 1.20628 | 1.20528 | 1.10140 |
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 unaudited | Quarter ended 30 Jun 2020 unaudited | Year ended 31 Dec 2020 audited | |||
ASSETS | ||||||
Non-current assets | ||||||
Property, plant, and equipment | 325,812 | 350,156 | 336,848 | |||
Investment properties | 8,265 | 8,843 | 8,556 | |||
Intangible assets | 4,807 | 4,988 | 4,726 | |||
Other non-current assets | 48 | 7,729 | 68 | |||
Deferred tax assets | 33,223 | 33,248 | 30,392 | |||
Total non-current assets | 372,156 | 404,964 | 380,590 | |||
Current assets | ||||||
Inventories | 162,235 | 165,268 | 153,711 | |||
Trade and other receivables | 66,994 | 48,442 | 54,576 | |||
Other assets | 48,641 | 35,106 | 38,054 | |||
Cash and cash equivalents | 205,109 | 191,636 | 205,867 | |||
Total current assets | 482,979 | 440,451 | 452,208 | |||
TOTAL ASSETS | 855,135 | 845,415 | 832,798 | |||
EQUITY AND LIABILITIES | ||||||
Equity | ||||||
Share capital | 432,745 | 432,745 | 432,745 | |||
Share premium | 348,709 | 348,709 | 348,709 | |||
Retained earnings | -80,465 | -146,823 | -120,603 | |||
Cumulative translation adjustment | -594 | -582 | -747 | |||
Treasury shares | -770 | -770 | -770 | |||
Total equity attributable to equity holders of the parent | 699,626 | 633,279 | 659,334 | |||
Non-controlling interests | 341 | 365 | 344 | |||
Total equity | 699,967 | 633,644 | 659,677 | |||
Non-current liabilities | ||||||
Non-current loans and borrowings | 34,899 | 82,753 | 44,413 | |||
Other non-current liabilities and provisions | 4,241 | 7,407 | 4,371 | |||
Total non-current liabilities | 39,140 | 90,159 | 48,784 | |||
Current liabilities | ||||||
Trade payables | 26,809 | 27,778 | 27,882 | |||
Current loans and borrowings | 24,321 | 30,875 | 31,796 | |||
Other current liabilities and provisions | 64,898 | 62,958 | 64,658 | |||
Total current liabilities | 116,029 | 121,611 | 124,336 | |||
TOTAL EQUITY AND LIABILITIES | 855,135 | 845,415 | 832,798 |
Condensed Consolidated Statement of Cash Flow
in thousands of USD | Quarter ended unaudited | Quarter ended unaudited | Quarter ended unaudited | Half-year ended unaudited | Half-year ended unaudited | |||||
Income before taxes | 24,968 | -4,644 | 14,148 | 39,117 | -11,067 | |||||
Reconciliation of net income to cash flow arising from operating activities: | 12,079 | 18,427 | 21,592 | 33,670 | 44,649 | |||||
Depreciation and amortization, before effect of grants and subsidies | 18,718 | 18,657 | 18,551 | 37,269 | 37,488 | |||||
Recognized investment grants and subsidies netted with depreciation and amortization | -848 | -851 | -841 | -1,689 | -1,752 | |||||
Interest income and expenses (net) | -117 | 1,114 | -122 | -240 | 1,632 | |||||
Loss/(gain) on the sale of plant, property, and equipment (net) | -280 | -34 | -112 | -392 | -315 | |||||
Loss/(gain) on the change in fair value of derivatives (net) and financial assets (net) | 0 | 0 | 0 | 0 | -420 | |||||
Other non-cash transactions (net) | -5,393 | -458 | 4,116 | -1,277 | 8,016 | |||||
Changes in working capital: | -12,864 | 16,687 | -20,195 | -33,059 | 11,032 | |||||
Decrease/(increase) of trade receivables | -943 | 15,547 | -11,293 | -12,236 | 6,617 | |||||
Decrease/(increase) of other receivables prepaid expenses | -6,055 | 3,107 | -5,499 | -11,554 | 15,276 | |||||
Decrease/(increase) of inventories | -6,055 | -4,984 | -2,469 | -8,524 | -10,620 | |||||
(Decrease)/increase of trade payables | -126 | -4,950 | 526 | 400 | -8,499 | |||||
(Decrease)/increase of other liabilities | 316 | 7,967 | -1,460 | -1,144 | 8,257 | |||||
Income taxes (paid)/received | -14 | -92 | -1,733 | -1,747 | -720 | |||||
Cash Flow from operating activities | 24,169 | 30,379 | 13,812 | 37,981 | 43,895 | |||||
Cash Flow from investing activities: | ||||||||||
Payments for property, plant, equipment intangible assets | -14,216 | -7,492 | -9,702 | -23,917 | -17,094 | |||||
Proceeds from sale of financial assets | 0 | 0 | 0 | 0 | 1,156 | |||||
Payments for loan investments to related parties | -38 | -42 | -91 | -129 | -138 | |||||
Proceeds from loan investments related parties | 45 | 51 | 80 | 125 | 113 | |||||
Proceeds from sale of property, plant, and equipment | 285 | 40 | 117 | 402 | 318 | |||||
Interest received | 468 | 475 | 471 | 938 | 970 | |||||
Cash Flow used in investing activities | -13,456 | -6,967 | -9,125 | -22,582 | -14,674 |
Condensed Consolidated Statement of Cash Flow con't
in thousands of USD | Quarter ended unaudited | Quarter ended unaudited | Quarter ended unaudited | Half-year ended unaudited | Half-year ended unaudited | |||||
Cash Flow from (used in) financing activities: | ||||||||||
Proceeds from loans and borrowings | 4,479 | 8,813 | 0 | 4,479 | 8,813 | |||||
Repayment of loans and borrowings | -4,231 | -6,547 | -7,619 | -11,850 | -12,938 | |||||
Payments of lease installments | -1,529 | -1,453 | -1,174 | -2,702 | -2,811 | |||||
Receipt of government grants and subsidies | 0 | 0 | 0 | 0 | 696 | |||||
Interest paid | -350 | -260 | -348 | -698 | -442 | |||||
Distribution to non-controlling interests | 0 | 0 | -12 | -12 | -12 | |||||
Cash Flow from (used in) financing activities | -1,630 | 553 | -9,153 | -10,783 | -6,693 | |||||
Effect of changes in foreign currency exchange rates on cash | 217 | 1,084 | -5,591 | -5,374 | -4,102 | |||||
Increase/(decrease) of cash and cash equivalents | 9,083 | 23,965 | -4,466 | 4,617 | 22,527 | |||||
Cash and cash equivalents at the beginning of the period | 195,810 | 166,587 | 205,867 | 205,867 | 173,211 | |||||
Cash and cash equivalents at the end of the period | 205,109 | 191,636 | 195,810 | 205,109 | 191,636 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20210729005852/en/
Contacts:
X-FAB Press Contact
Uta Steinbrecher
Investor Relations
X-FAB Silicon Foundries
+49-361-427-6489
uta.steinbrecher@xfab.com