Intermediate declaration by the Board of Directors
Regulatory News:
(Paris:XFAB)
Highlights for Q2 2019:
- Revenue was USD 131.6 million, within the guidance of USD
128-135 million, down 15% year-on-year and flat
quarter-on-quarter
- EBITDA was USD 11.8 million, down 59% year-on-year and up
80% quarter-on-quarter EBITDA margin of 8.9%, on the upper end of
3-9% guidance
- EBIT was USD -5.6 million, down USD 19.1 million
year-on-year and up USD 4.7 million quarter-on-quarter
- Net loss was USD 8.1 million, down USD 9.6 million
year-on-year and up USD 2.3 million quarter-on-quarter
- Loss per share was USD 0.06
Outlook:
- Q3 2019 revenue is expected in the range of USD 128-135
million with an EBITDA margin in the range of 4% to 10%. Due to the
continuing uncertainties in the market, visibility on the fourth
quarter remains limited.
- Q3 2019 guidance is based on an average exchange rate of
1.14 USD/Euro.
Revenue breakdown per quarter:
in millions of USD
Q4 2017
Q1 2018
Q2 2018
Q3 2018
Q4 2018
Q1 2019
Q2 2019
Q2 y-o-y growth
Automotive
71.8
68.5
79.3
76.6
59.7
64.1
62.5
-21%
Industrial
20.7
23.2
25.0
23.8
24.3
24.1
23.3
-7%
Medical
6.9
4.8
5.6
6.3
7.3
6.8
6.3
14%
Subtotal core business
99.3
96.5
109.8
106.7
91.3
95.0
92.1
-16%
64.4%
67.2%
70.6%
70.5%
66.4%
72.5%
70.0%
CCC1
53.9
46.5
45.3
44.4
45.9
35.8
39.1
-14%
Others
1.0
0.5
0.3
0.3
0.3
0.2
0.3
n.m.
Total revenues
154.1
143.5
155.5
151.4
137.4
131.0
131.6
-15%
1 Consumer, Communications & Computer
Business development
In the second quarter, X-FAB recorded revenues of USD 131.6
million coming in within the guidance range of USD 128-135 million.
Year-on-year, revenues decreased by 15%, quarter-on-quarter
revenues were almost flat with a slight increase of 0.4%.
Production revenues in the second quarter were mainly impacted by
the weak automotive market.
Revenues in X-FAB’s core business, namely automotive, industrial
and medical, came in at USD 92.1 million, a decrease by 16%
compared to the same quarter last year. Quarter-on-quarter the core
business went down by 3%. Uncertainties in the market continued
throughout the second quarter, driven by a mix of economic factors
as well as political conflicts in the world. Combined with the
limited visibility going forward customers remained very cautious
in their ordering behavior and carried on reducing their
inventories. This is still reflected in a low level of bookings,
although up 10% from the first quarter.
In the second quarter, automotive revenues decreased 21%
year-on-year in line with the ongoing weakness of the automotive
market. While production revenues dropped, prototyping revenues in
the automotive segment recorded a growth of 14% compared to the
same quarter last year.
Revenues in the industrial market segment declined 7%
year-on-year; prototyping revenues for industrial applications went
down by 12% year-on-year. The global economic weakness has led to
cut-backs in investments for equipment, in particular in China,
causing customers in the industrial segment to reduce their
inventories.
The medical business of the second quarter recorded a 14% growth
compared to the same quarter last year. Prototyping revenues were
flat year-on-year, whereas production revenues in the medical
segment increased by 20%. Lab-on-a-chip applications remained to be
the strongest growth driver.
Consumer, communications & computer business (CCC) went down
by 14% year-on-year. This was mainly due to a decrease of the
legacy business in X-FAB France, which is however in line with the
plan. The portion of revenues of the French site that is based on
X-FAB technologies reached 20% and was mainly for the CCC end
market.
In the second quarter, X-FAB group prototyping revenue came in
at USD 18.5 million, which is an increase of 30% year-on-year
including an IP sale amounting to USD 3 million. Excluding this
one-off effect, prototyping revenue increased by more than 9%
predominantly driven by new contracts adding up to the pipeline of
new projects supporting future growth.
Operations update
In the second quarter, further progress was made with the
implementation of X-FAB’s automotive technologies at X-FAB France
with the first production of automotive wafers being started. As of
July 2019, X-FAB’s most popular 180nm technology platform (XH018)
is available for automotive applications for supply out of France
expanding the capacity for this technology and enabling dual
sourcing for security of supply.
Silicon carbide (SiC) revenue in the second quarter almost
tripled compared to the same quarter last year coming in at USD 6.4
million. SiC revenues in the first half of the year achieved the
same level as for the total of 2018, in line with the company’s
growth targets. SiC prototyping revenue increased 46% year-on-year
and 88% quarter-on-quarter. Production revenue went up by 15%
quarter-on-quarter with another customer moving from prototyping
stage into volume production. The customer and projects pipeline
remained strong, and the preparations for offering in-house epi
capabilities are on track. First epi prototyping is scheduled for
delivery in the fourth quarter of 2019. Epi is short for epitaxy
and refers to the process of depositing a thin epitaxial layer on a
SiC raw wafer. This is a significant value-add step in the overall
process of manufacturing silicon carbide semiconductors.
All manufacturing sites continued with their expansion and
optimization activities aiming to increase output and productivity.
This includes actions to drive automation as well as optimization
projects, therewith taking advantage of the currently lower
utilization levels since many of these activities are only possible
while the fabs are not fully loaded.
Capital expenditures of the second quarter amounted to USD 20.9
million up 18% compared to the same quarter last year. Major
projects were the capacity expansion at X-FAB Dresden, the new
office building at X-FAB Sarawak as well as the activities to get
the French site ready for automotive production. In a move to
reduce capex spending as part of the ongoing cost-saving program,
non-critical investments were put on hold. This will however only
materialize at a later stage. Capital expenditures for the second
quarter mainly refer to investment projects, which had been
initiated in 2018 already.
Profitability and FX volatility
After profitability was negatively impacted by a significant
decrease of unfinished and finished goods inventory amounting to
USD 9.2 million in the first quarter of the year, an increase of
unfinished and finished goods inventory by USD 2.1 million in the
second quarter positively contributed to profitability. These
quarterly fluctuations are part of normal business.
The actual exchange rate for the second quarter of 2019 was 1.12
with a corresponding EBITDA margin of 8.9%. At a constant
US-Dollar/Euro exchange rate of 1.19 experienced in the second
quarter of last year, the EBITDA margin in Q2 2019 would have been
at 7.6%.
In order to limit the impact of US-Dollar/Euro exchange rate
fluctuations on profitability, X-FAB aims at achieving a 25% share
of Euro-denominated sales by the end of 2019 and managed to raise
this level to 24% in the second quarter of 2019, coming from a low
of 11% in the fourth quarter of 2016.
Management comments & outlook
Commenting on the development of X-FAB’s business, Rudi De
Winter, CEO of X-FAB Group, said: “Market conditions remained weak
throughout the second quarter. Uncertainties continued with ongoing
destocking on customer side and restrained demand. Visibility is
therefore still limited. Nevertheless, I am extremely excited about
the great interest we keep seeing for our technologies. In the
automotive segment, thanks to the synergies between our silicon
carbide and high-voltage CMOS offering as well as the inductive
isolators, we are excellently prepared to support the
electrification of cars. In the medical segment, lab-on-a-chip
applications continued to grow, and we haven’t even seen the real
start of this business yet. I am also pleased with the very
positive response received during our recent China roadshow to
increase awareness for X-FAB in this market. I am confident that
X-FAB is well positioned for solid growth as soon as the market
recovers.”
Procedures of the independent auditor
The statutory auditor, KPMG Bedrijfsrevisoren – Réviseurs
d’Entreprises CVBA, represented by Herwig Carmans, 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, 2019.
X-FAB Quarterly Conference Call
X-FAB’s second quarter results will be discussed in a live
conference call on Tuesday, July 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/7229215
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 30th
11.30 pm CET until August 6th 11.30 pm CET. The replay number will
be +44 (0) 3333009785, conference ID 7229215.
The third quarter 2019 results will be communicated on October
29th, 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 30 Jun 2019
unaudited
Quarter
ended 30 Jun 2018
unaudited
Quarter
ended 31 Mar 2019
unaudited
Half-year
ended 30 Jun 2019
unaudited
Half-year
ended 30 Jun 2018
unaudited
Revenue
131,560
155,497
131,005
262,565
299,027
Revenues in USD in %
75
83
76
76
82
Revenues in EUR in %
24
17
23
24
18
Cost of sales
-115,988
-124,616
-126,477
-242,466
-243,844
Gross Profit
15,571
30,882
4,528
20,100
55,184
Gross Profit margin in %
11.8%
19.9%
3.5%
7.7%
18.5%
Research and development expenses
-8,221
-7,935
-5,407
-13,628
-16,126
Selling expenses
-2,011
-1,942
-1,992
-4,003
-4,148
General and administrative expenses
-7,778
-7,439
-7,785
-15,563
-15,403
Rental income and expenses from investment
properties
-361
439
174
-187
1,009
Other income and other expenses
-2,797
-461
220
-2,577
-1,126
Operating profit
-5,596
13,544
-10,262
-15,858
19,390
Finance income
3,405
-290
3,556
6,961
14,515
Finance costs
-4,964
-10,120
-2,622
-7,586
-19,091
Net financial result
-1,559
-10,410
934
-625
-4,576
Profit before tax
-7,155
3,133
-9,329
-16,483
14,814
Income tax
-926
-1,652
-1,036
-1,962
219
Profit for the period
-8,081
1,481
-10,365
-18,445
15,033
Operating profit (EBIT)
-5,596
13,544
-10,262
-15,858
19,390
Depreciation
17,365
15,087
16,784
34,149
29,413
EBITDA
11,769
28,631
6,522
18,291
48,803
EBITDA margin in %
8.9
18.4
5.0
7.0
16.3
Earnings per share at the end of
period
-0.06
0.01
-0.08
-0.14
0.12
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
1.12324
1.19341
1.13635
1.12979
1.21187
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
Half-year ended 30 Jun 2019
unaudited
Half-year ended 30 Jun 2018
unaudited
Year ended 31 Dec 2018
audited
ASSETS
Non-current assets
Property, plant, and equipment
373,832
319,113
345,626
Investment properties
9,362
8,778
9,415
Intangible assets
8,462
8,317
9,023
Non-current investments
706
727
381
Other non-current assets
26,692
14,682
20,594
Deferred tax assets
34,328
35,665
34,234
Total non-current assets
453,381
387,282
419,272
Current assets
Inventories
157,959
118,943
147,150
Trade and other receivables
62,870
81,962
71,378
Other assets
31,057
19,846
26,699
Cash and cash equivalents
171,232
295,345
242,768
Total current assets
423,118
516,096
487,995
TOTAL ASSETS
876,499
903,378
907,268
EQUITY AND LIABILITIES
Equity
Share capital
432,745
432,745
432,745
Share premium
348,709
348,709
348,709
Retained earnings
-103,979
-91,794
-84,782
Cumulative translation adjustment
-483
-444
-539
Treasury shares
-770
-770
-770
Total equity attributable to equity
holders of the parent
676,222
688,446
695,363
Non-controlling interests
363
357
364
Total equity
676,585
688,803
695,726
Non-current liabilities
Non-current loans and borrowings
76,417
88,397
72,328
Other non-current liabilities and
provisions
7,441
8,370
7,446
Total non-current liabilities
83,858
96,767
79,774
Current liabilities
Trade payables
28,778
25,866
45,889
Current loans and borrowings
32,456
36,062
31,632
Other current liabilities and
provisions
54,822
55,879
54,246
Total current liabilities
116,056
117,808
131,767
TOTAL EQUITY AND LIABILITIES
876,499
903,378
907,268
Condensed Consolidated Statement of Cash Flow
in thousands of USD
Quarter
ended 30 Jun 2019
unaudited
Quarter
ended 30 Jun 2018
unaudited
Quarter
ended 31 Mar 2019
unaudited
Half-year
ended 30 Jun 2019
unaudited
Half-year
ended 30 Jun 2018
unaudited
Income before taxes
-7,155
3,133
-9,329
-16,483
14,814
Reconciliation of net income to cash
flow arising from operating activities:
19,807
22,493
13,833
33,639
31,897
Depreciation and amortization, before
effect of grants and subsidies
17,365
15,087
16,784
34,149
29,413
Recognized investment grants and subsidies
netted with depreciation and amortization
-742
-802
-745
-1,487
-1,639
Interest income and expenses (net)
424
60
419
842
654
Loss/(gain) on the sale of plant,
property, and equipment (net)
6
-2
0
6
671
Loss/(gain) on the change in fair value of
derivatives (net) and financial assets (net)
-182
2,107
-143
-325
3,206
Other non-cash transactions (net)
2,936
6,043
-2,482
454
-408
Changes in working capital:
-16,965
-3,167
-7,943
-24,908
-14,238
Decrease/(increase) of trade
receivables
-4,666
-1,167
13,406
8,740
863
Decrease/(increase) of other receivables
& prepaid expenses
-5,010
8,613
-6,082
-11,093
-163
Decrease/(increase) of inventories
-6,679
-5,516
-4,129
-10,808
-13,097
(Decrease)/increase of trade payables
-3,387
-2,242
-7,476
-10,863
-7,055
(Decrease)/increase of other
liabilities
2,777
-2,855
-3,662
-885
5,214
Income taxes (paid)/received
-417
-85
-92
-510
-148
Cash Flow from operating
activities
-4,730
22,374
-3,532
-8,262
32,325
Cash Flow from investing
activities:
Payments for property, plant, equipment
& intangible assets
-20,942
-17,730
-23,815
-44,756
-38,497
Payments for investments
-175
0
-175
-350
0
Acquisition of subsidiary, net of cash
acquired
0
0
0
0
0
Payments for loan investments to related
parties
-60
-61
-101
-161
-127
Proceeds from loan investments related
parties
40
44
94
133
96
Proceeds from sale of property, plant, and
equipment
40
2
0
40
18
Interest received
624
879
663
1,287
1,413
Cash Flow used in investing
activities
-20,473
-16,866
-23,334
-43,807
-37,098
Condensed Consolidated Statement of Cash Flow – con’t
in thousands of USD
Quarter
ended 30 Jun 2019
unaudited
Quarter
ended 30 Jun 2018
unaudited
Quarter
ended 31 Mar 2018
unaudited
Half-year
ended 30 Jun 2019
unaudited
Half-year
ended 30 Jun 2018
unaudited
Cash Flow from (used in) financing
activities:
Proceeds from loans and borrowings
0
0
0
0
0
Repayment of loans and borrowings
-7,083
-7,814
-7,500
-14,583
-16,562
Receipts from sale & leaseback
arrangements
0
0
0
0
0
Payments of lease installments
-2,156
-612
-618
-2,774
-1,314
Receipt of government grants and
subsidies
0
357
0
0
357
Interest paid
-401
-514
-409
-810
-1,133
Gross proceeds from capital increase
0
0
0
0
0
Direct cost related to capital
increase
0
0
0
0
0
Payment of preference dividend
0
0
0
0
0
Distribution to non-controlling
interests
0
0
-11
-11
-12
Cash Flow from (used in) financing
activities
-9,641
-8,583
-8,539
-18,180
-18,664
Effect of changes in foreign currency
exchange rates on cash
-1,200
-8,445
-88
-1,288
-454
Increase/(decrease) of cash and cash
equivalents
-34,844
-3,075
-35,405
-70,248
-23,437
Cash and cash equivalents at the beginning
of the period
207,276
306,865
242,768
242,768
319,235
Cash and cash equivalents at the end
of
the period
171,232
295,345
207,276
171,232
295,345
###
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version on businesswire.com: https://www.businesswire.com/news/home/20190730005713/en/
X-FAB Press Contact Uta Steinbrecher Investor Relations
X-FAB Silicon Foundries +49-361-427-6489
uta.steinbrecher@xfab.com
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