DGAP-News: Siltronic AG / Key word(s): Quarterly / Interim Statement/Half
Year Results
Siltronic AG: Siltronic's sales and earnings in Q2 2016 slightly better than
expected
28.07.2016 / 07:05
The issuer is solely responsible for the content of this announcement.
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Press release
Siltronic AG
Hanns-Seidel-Platz 4
81737 Munich
Germany
www.siltronic.com
Siltronic's sales and earnings in Q2 2016 slightly better than expected
- At EUR 229.6 million, sales 4 percent higher than in prior quarter (EUR
220.6 million), but below very strong Q2 2015 (EUR 246.7 million)
- At EUR 35.1 million, EBITDA significantly higher than Q1 2016 (EUR 23.6
million)
- Negative exchange rate effects from currency hedges down significantly in
H1 2016
- Outlook for fiscal year 2016 fundamentally confirmed
Munich, Germany, July 28, 2016 - Siltronic AG, the third-largest
manufacturer of hyperpure silicon wafers in the world, is overall satisfied
with the business development in Q2 2016.
"In a persistently challenging market environment within the semiconductor
industry, our sales developed slightly better than expected. Our product
mix improved slightly during both the first and second quarters of 2016,
although average selling prices were still substantially lower than the
level seen in the previous year. We were still faced with significant price
pressure in Q1 2016, which then lessened during Q2, causing average prices
to remain virtually unchanged. For Q3, we expect prices to stabilize.
However, average selling prices are overall still significantly lower than
in the previous year." said Dr. Christoph von Plotho, CEO of Siltronic AG.
At EUR 229.6 million, sales in Q2 2016 were 4.1 percent higher than in Q1
(EUR 220.6 million). Compared to the very strong Q2 2015 (EUR 246.7
million), however, sales fell by 6.9 percent. In H1 2016 sales added up to
EUR 450.1 million, 7.3 percent below H1 2015 (EUR 485.4 million). In
comparison to sales in H2 2015 (EUR 445.9 million), sales in H1 2016
increased by 0.9 percent.
Cost of sales in the period January to June 2016 were EUR 190.5 million,
equating to a decrease in production costs per wafer area year-on-year,
despite the reduction in wafer area sold.
The decrease in average selling prices compared to H1 2015 is reflected in
the gross profit, which was EUR 73.0 million in H1 2016 (H1 2015: EUR 86.3
million). In Q2 2016, Siltronic realized gross profit of EUR 39.3 million,
an increase of 16.6 percent over Q1 (EUR 33.7 million). Compared to the
prior-year quarter (Q2 2015: EUR 46.7 million) the figure decreased by 15.8
percent. The gross margin in Q2 2015 was 18.9 percent. Compared to Q1 2016,
the gross margin increased significantly from 15.3 percent to 17.1 percent
in Q2.
Other operating income and expenses continue to be affected by exchange
rate effects in 2016, particularly as a result of currency hedging.
Nevertheless, expenses have decreased significantly as expected this year.
The negative balance came down from EUR 19.7 million in H1 2015 to EUR 12.4
million in H1 2016.
"Approximately one quarter of our sales is based on Japanese yen. The
appreciation of the yen thus has a positive effect on our sales and gross
profit. A portion of this positive effect is offset by the contrasting
effects of hedging, which are recognized under Other operating income and
expenses. Overall, however, the positive effects outweigh the negative
ones," von Plotho explains.
At EUR 35.1 million, and with an EBITDA margin of 15.3 percent, EBITDA was
significantly higher than in the previous quarter (Q1 2016: EUR 23.6
million; 10.7 percent), and also above Q2 2015 (EUR 31.4 million; 12.7
percent). Year-on-year, Siltronic realized EBITDA of EUR 58.7 million in H1
2016 compared to EUR 71.5 million in H1 2015. The EBITDA margin was 13.0
percent in H1 2016 (H1 2015: 14.7 percent).
Excluding the effects of currency hedging, EBITDA in H1 2016 would have
been EUR 71.1 million (H1 2015: EUR 91.2 million), with an EBITDA margin of
15.8 percent (H1 2015: 18.8 percent).
At EUR 6.0 million, EBIT was positive in Q2 2016, and thus significantly
better than in Q2 2015 (EUR 0.2 million). In Q1 2016, EBIT was still
negative, at EUR -5.6 million. In H1 2016, EBIT reached EUR 0.3 million (H1
2015: EUR 8.5 million).
The decrease in EBIT resulted in a lower ROCE (return on capital employed),
which was positive in H1 2016, at 0.1 percent. The decline compared to the
prior-year figure is basically due to the decrease in EBIT. Compared to Q1
2016 (-3.3 percent), ROCE improved significantly to +2.9 percent in Q2.
The financial result, negative at EUR 6.2 million, was predominantly
affected by the discounting of pension provisions in H1 2016 (H1 2015:
negative EUR 5.3 million). Due to interest rate effects relating to
currency hedging, the financial result was better in Q2 (negative EUR 2.4
million) than in Q1 (negative EUR 3.8 million).
Income taxes were EUR 4.8 million in H1 2016, and thus significantly below
the prior-year figure of EUR 8.3 million.
The net result for the period improved considerably in Q2 2016, equating to
a profit of EUR 0.9 million, up from a loss of EUR 11.5 million in Q1 2016,
and a loss of EUR 7.0 million in Q2 2015. The loss for H1 2016 as a whole
was EUR 10.7 million, compared to a loss of EUR 5.1 million in H1 2015.
At EUR 0.07, the earnings per share were positive in Q2 2016, up from EUR
-0.34 in Q1.
Due to interest rate cuts in Germany and the US, pension provisions
increased significantly. This had a negative effect on equity, which
amounted to EUR 323.6 million as of June 30, 2016, corresponding to an
equity ratio of about 31 percent, compared to 48 percent as of December 31,
2015.
As a result of the current low-interest phase, Siltronic expects that
higher payments will be required in the future to cover the corporate
pension scheme. Contributions, that will be necessary either in 2016 or in
2017, will likely be in the range of EUR 10 million to EUR 15 million. The
contributions will only affect cash flow, however, and not the Company's
financial result.
In H1 2016, Siltronic invested nearly EUR 43 million in property, plant and
equipment and intangible assets. These capital expenditure allow Siltronic
to meet the increasingly more sophisticated specifications of customers and
to increase production efficiency. The further automation of production,
the construction of a new crystal pulling hall, and the replacement of
older with new, state-of-the-art crystal pullers are all fully on target.
Non-current liabilities increased to EUR 567.9 million in H1 2016 (December
31, 2015: EUR 396.0 million). The main reason for this increase was the
discount-related increase in pension provisions, as discount rates
decreased in both Germany and the US.
Free cash flow, at EUR -6.6 million, was affected by the net loss for the
period and by capital expenditure in H1 2016. Of that amount, EUR -6.7
million already related to Q1 2016. Free cash flow in 2016 is lower due to
EUR 52.2 million payments related to capital expenditure on property, plant
and equipment, which is significantly higher than the EUR 16 million
invested in H1 2015.
As a result of the negative free cash flow, net financial assets decreased
from EUR 155.9 million as of December 31, 2015, to EUR 150.9 million as of
June 30, 2016.
Outlook for fiscal year 2016 fundamentally confirmed, with a slight
adjustment concerning ROCE and the effects of currency hedging
Siltronic continues to anticipate wafer area on the level of the previous
year. Following better than expected sales in H1 2016, the Company does not
expect a further upturn in H2 2016. Average selling prices will stabilize
in Q3.
Siltronic maintains its forecast that sales will decline year-on-year in
the low to mid single-digit percentage range, and that the EBITDA margin
for 2016 as a whole will increase slightly compared to 2015.
Siltronic expects ROCE to be in the low to mid single-digit percentage
range (April 2016 forecast: mid single-digit percentage range).
In April, the cost of currency hedging, which is shown under Other
operating income and expenses, was estimated to be around EUR 10 million to
EUR 15 million. If the post-Brexit EUR/JPY exchange rate of about 115 will
prevail, however, the cost of hedging is likely to increase to
approximately EUR 20 million to EUR 25 million. The hedging losses will
still be considerably lower than in the previous year, when hedging costs
amounted to about EUR 43 million predominantly as a result of the
appreciation of the US dollar.
All other forecasts concerning KPIs remain unchanged compared to April
2016.
Siltronic AG - KPI overview
<pre>
EUR million 2016 2016 2015 2016 2015
Q2 Q1 Q2 H1 H1
Sales 229.6 220.6 246.7 450.1 485.4
EBITDA 35.1 23.6 31.4 58.7 71.5
EBITDA margin 15.3% 10.7% 12.7% 13.0% 14.7%
EBIT 6.0 -5.6 0.2 0.3 8.5
EBIT margin 2.6% -2.5% 0.1% 0.1% 1.8%
Financial result -2.4 -3.8 -3.2 -6.2 -5.3
Net result for the 0.9 -11.5 -7.0 -10.7 -5.1
period
Earnings per share 0.07 -0.34 -0.17 -0.27 -0.07
(EUR)
Capital expenditure -22.4 -20.4 -9.1 -42.8 -13.4
on property, plant
and equipment and
intangible assets
Free cash flow 0.1 -6.7 7.1 -6.6 46.8
June 30, 2016 December 31,
2015
Equity 323.6 497.3
Equity ratio 31% 48%
Net financial 150.9 155.9
assets
Total assets 1,037.0 1,040.8
Employees 3,817 3,894
</pre>
Conference call for analysts and investors
On July 28, 2016 at 3 p.m. (CEST), the Executive Board of Siltronic AG will
hold a conference call with analysts and investors (only in English). The
call will be broadcast live via the internet as an audio webcast, which
will also subsequently be available on-demand on the website of Siltronic
via the following link: http://www.siltronic.com/int/de/investor_relations/
reports/2016/quarterly_2016_2/quarterly_report_2016_2.jsp
Our current investor presentation (in English only), quarterly report,
press release, and an excel file with the most important KPIs are all also
published on Siltronic's website.
Key dates
October 27, 2016 Interim statement, Q3 2016
Contact:
Petra Müller
Director of Investor Relations & Communications
Tel: +49 (0)89 8564 3133
Email: investor.relations@siltronic.com
Company profile:
Siltronic is the third largest manufacturer of hyperpure silicon wafers
worldwide and partner of many leading semiconductor companies. The company
has a network of state-of-the-art production sites in Europe, Asia and the
USA. Siltronic develops and manufactures silicon wafers in diameters of up
to 300mm. Silicon wafers are the basis for modern microelectronics and
nanoelectronics. They are key components of e.g. computers, flat-screens,
navigation systems, control systems for the automotive industry and many
other applications.
Important notice
This press release contains forward-looking statements based on assumptions
and estimates of Siltronic's Executive Board. Although we assume the
expectations in these forwardlooking statements are realistic, we cannot
guarantee they will prove to be correct. The assumptions may harbor risks
and uncertainties that may cause the actual figures to differ considerably
from the forward-looking statements. Factors that may cause such
discrepancies include, among other things, changes in the economic and
business environment, variations in exchange and interest rates, the
introduction of competing products, lack of acceptance for new products or
services, and changes in corporate strategy. Siltronic does not plan to
update the forwardlooking statements, nor does it assume the obligation to
do so.
This press release is also available in German. If there are differences
between the two, the German version takes priority. Please note that slight
differences may arise as a result of the use of rounded amounts and
percentages.
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28.07.2016 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
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Language: English
Company: Siltronic AG
Hanns-Seidel-Platz 4
81737 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: TecDAX
Listed: Regulated Market in Frankfurt (Prime Standard); Regulated
Unofficial Market in Berlin, Dusseldorf, Stuttgart,
Tradegate Exchange
End of News DGAP News Service
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486585 28.07.2016
DGAP-News: Siltronic AG: Siltronic's sales and earnings in Q2 2016 slightly better than expected
| Source: EQS Group AG