XFAB X-FAB Silicon Foundries SE

Intermediate declaration by the Board of Directors

Regulatory News:

X-FAB Silicon Foundries SE (BOURSE:XFAB):

Highlights Q1 2023:

› Revenue was USD 208.1 million, within the guided USD 205-220 million, up 16% year-on-year (YoY) and up 13% quarter-on-quarter (QoQ)

› Record revenues with strong 28% year-on-year growth across X-FAB’s key end markets automotive, industrial, and medical

› EBITDA at USD 58.0 million, up 41% YoY

› EBITDA margin of 27.9%, above the guided 22-26%

› EBIT was USD 37.4 million, up 68% YoY, with an EBIT margin of 18.0%

Outlook:

› Q2 2023 revenue is expected to come in at a range of USD 205-220 million with an EBITDA margin in the range of 23-27%. The guidance is based on an average exchange rate of 1.09 USD/Euro

Revenue breakdown per quarter:

in millions of USD

Q2 2021

Q3 2021

Q4 2021

Q1 2022

Q2 2022

Q3 2022

Q4 2022

Q1 2023

Q1 y-o-y growth

Automotive

82.8

81.5

83.8

89.7

98.3

96.9

104.4

120.9

35%

Industrial

35.2

38.3

39.7

41.4

42.5

46.7

42.3

46.9

13%

Medical

10.4

14.3

14.5

13.7

13.9

13.5

14.6

17.6

28%

Subtotal core business

128.4

134.1

138.0

144.9

154.7

157.0

161.3

185.4

28%

79.8%

79.3%

80.1%

81.1%

81.9%

83.4%

87.9%

89.1%

 

CCC*

32.4

34.7

34.0

32.5

33.6

30.7

21.6

22.5

-31%

Others

0.1

0.3

0.3

1.2

0.6

0.6

0.7

0.2

 

Total revenues

161.0

169.1

172.3

178.7

188.8

188.3

183.6

208.1

16%

* Consumer, Communications & Computer

in millions of USD

Q2 2021

Q3 2021

Q4 2021

Q1 2022

Q2 2022

Q3 2022

Q4 2022

Q1 2023

Q1 y-o-y growth

CMOS

137.5

141.8

144.2

148.6

156.3

152.6

151.9

172.8

16%

MEMS

16.2

17.4

17.5

17.9

19.8

18.4

19.5

22.2

24%

Silicon carbide

7.2

9.9

10.6

12.1

12.8

17.4

12.2

13.2

9%

Total revenues

161.0

169.1

172.3

178.7

188.8

188.3

183.6

208.1

16%

Business development

In the first quarter of 2023, X-FAB recorded revenues of USD 208.1 million, within the guided USD 205-220 million, up 16% year-on-year and 13% quarter-on-quarter. X-FAB’s core markets – automotive, industrial, and medical – accounted for USD 185.4 million, up 28% year-on-year, further increasing their share of total revenues to 89.1%. Each core market set a new quarterly revenue record.

Demand remained strong throughout the quarter with order intake amounting to USD 226.8 million and a book-to-bill ratio of 1.1. Backlog at the end of the first quarter came in at USD 508.3 million.

X-FAB's automotive business continued to grow strongly, reaching USD 120.9 million in the first quarter, up 35% year-on-year. The transition to climate-friendly mobility continues to drive demand for power semiconductors and supporting applications covered by X-FAB's comprehensive technology portfolio and expertise as an automotive supplier. In the first quarter, the share of automotive revenues went up to 58%, reflecting X-FAB's strong exposure to this market. The growth of X-FAB’s automotive business continues to be driven by the French site’s ongoing capacity conversion to X-FAB's automotive technologies. 89% of X-FAB France's first quarter revenues were based on X-FAB technologies.

Industrial revenue for the first quarter was USD 46.9 million, up 13% year-on-year. The electrification trend is also driving growth in X-FAB's industrial business, as the transition to renewable energy sources as well as the need to efficiently generate and store energy, requires more and more semiconductor technologies, including silicon carbide (SiC) applications and sensors.

X-FAB’s SiC revenues in the first quarter were USD 13.2 million, up 9% year-on-year. An increasing share of customers sourced their own SiC raw wafers, contributing to a lower total billing. However, this had no impact on the total value added provided by X-FAB to customers, which resulted in a higher profitability margin for the business. In the first quarter, customers provided the substrate for more than 70% of all SiC wafers produced by X-FAB while the total quantity of SiC wafers delivered increased by 56% year-on-year.

First quarter medical revenues came in at USD 17.6 million, up 28% year-on-year. Strong medical growth during this period was primarily driven by increased production volumes of a lab-on-a-chip device for DNA sequencing. Lab-on-a-chip applications are one of the key technologies driving advances in medicine, enabling reliable, fast and cost-effective testing and screening for a wide range of applications, and are expected to remain a major growth driver for X-FAB's medical business going forward.

In the first quarter, CCC (Consumer, Communication & Computer) revenues were USD 22.5 million, down 31% year-on-year. The first quarter still included a small amount of legacy CCC business produced at X-FAB France, which has now been reduced to zero. This is in line with the plan to convert the freed-up capacity at the French site to X-FAB's popular automotive technology platform. X-FAB’s CCC business has thus reached a more sustainable level and top line growth will no longer be impacted by the planned phase-out of the legacy business.

In the first quarter, prototyping revenues came in at USD 26.4 million, up 7% year-on-year and up 12% quarter-on-quarter.

Prototyping and production revenue per quarter and end market:

in millions

of USD

Revenue

Q1 2022

Q2 2022

Q3 2022

Q4 2022

Q1 2023

Automotive

Prototyping

5.0

4.1

3.3

4.7

3.5

Production

84.8

94.2

93.6

99.8

117.3

Industrial

Prototyping

11.0

9.2

11.1

11.2

14.2

Production

30.4

33.3

35.6

31.1

32.7

Medical

Prototyping

3.1

1.6

2.8

2.8

2.9

Production

10.7

12.4

10.7

11.8

14.7

CCC

Prototyping

4.3

5.0

5.0

4.6

5.7

Production

28.2

28.6

25.7

17.1

16.8

Operations update

Given the continued strong demand, all fabs operated at high capacity throughout the first quarter, focusing on smooth execution, productivity improvements and the implementation of ongoing capacity expansion projects. Equipment engineering teams at all sites have made good progress with the installation and qualification of new equipment, which is being delivered on a regular basis.

In the first quarter, capital expenditures came in at USD 48.9 million. With total capital expenditures expected to reach approximately USD 350 million in 2023, the first quarter capital expenditures were rather on the low side. However, X-FAB expects a significant increase in capital expenditures in the second half of the year in line with anticipated equipment deliveries, primarily related to the capacity conversion at X-FAB France, the expansion of SiC capacity at X-FAB Texas, and the building expansion at X-FAB Sarawak.

Financial update

First quarter EBITDA was USD 58.0 million with an EBITDA margin of 27.9%, above the guidance range of 22-26%. Volume growth and economies of scale positively impacted profitability. In addition, the price increases introduced in 2022 have taken effect, contributing to top-line growth and higher margins.

In the first quarter, deferred tax assets were increased, resulting in a tax benefit of USD 9.6 million. Due to the improved profitability, stable performance of the underlying entities, and positive outlook supported by the long-term agreements with customers, X-FAB is currently reviewing the valuation horizon for deferred tax assets in line with the better expected visibility of the business.

Since X-FAB’s business is naturally hedged, profitability remained unaffected by exchange rate fluctuations. At a constant USD/Euro exchange rate of 1.12 as experienced in the previous year’s quarter, the EBITDA margin would have been 0.1 percentage points higher.

Cash and cash equivalents at the end of the first quarter amounted to USD 350.3 million, down 5.2% compared to the previous quarter end. Cash flow from operating activities was USD 57.3 million.

Organizational update

Damien Macq has joined X-FAB’s executive management team as Chief Operations Officer of the X-FAB group, effective April 2023. Concurrently, Michael Woittennek has assumed the role of CEO of X-FAB Dresden, succeeding Rico Tillner, who will take on a new challenge at X-FAB Texas later this year.

Management comments

Rudi De Winter, CEO of the X-FAB Group, said: "The first quarter was marked by strong revenue growth of 28% in our core business and improved profitability that exceeded our guidance. I am very pleased to see the key elements of X-FAB's success coming to fruition: We offer a broad range of specialty technologies that are urgently needed to address the major challenges of our time, and we continue to see strong demand from our customers. With X-FAB's capacity expansion projects well underway, we are able to increase capacity at our existing sites, setting the stage for strong growth over the next three years. Last but not least, increased volumes, an improved product mix with higher value-added products and the ongoing turnaround of our French site continue to contribute to higher profitability. I am confident in X-FAB's long-term success, and we are fully focused on excellent execution in all parts of our business.”

X-FAB Quarterly Conference Call

X-FAB’s first quarter results will be discussed in a live conference call on Thursday, April 27, 2023, at 6.30 p.m. CEST. The conference call will be in English. Please register in advance of the conference using the following link: https://emportal.ink/3UR032n.

The conference call will be available for replay for ten days following the event. Please call +1-416-764-8692 and enter the following replay code: 270118#.

The second quarter 2023 results will be communicated on July 27, 2023.

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 approx. 4,200 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 31 Mar 2023

unaudited

Quarter

ended 31 Mar 2022

unaudited

Quarter

ended 31 Dec 2022

unaudited

Year

ended 31 Dec 2022

audited

Revenue

208,109

178,664

183,638

739,469

Revenues in USD in %

55

59

56

58

Revenues in EUR in %

45

40

44

42

Cost of sales

-150,912

-135,422

-142,791

-563,515

Gross Profit

57,197

43,241

40,847

175,954

Gross Profit margin in %

27.5

24.2

22.2

23.8

 

 

 

 

 

Research and development expenses

-10,922

-10,759

-10,208

-40,803

Selling expenses

-2,196

-2,149

-2,218

-8,179

General and administrative expenses

-10,501

-8,732

-9,400

-37,487

Rental income and expenses from investment properties

2,071

292

-448

-298

Other income and other expenses

1,743

331

2,458

-31,852

Operating profit

37,393

22,223

21,031

57,335

Finance income

8,538

7,092

10,635

36,531

Finance costs

-10,255

-8,490

-10,472

-56,804

Net financial result

-1,717

-1,398

163

-20,273

 

 

 

 

 

Profit before tax

35,676

20,825

21,194

37,062

Income tax

7,042

-1,450

20,025

15,429

Profit for the period

42,717

19,375

41,219

52,491

 

 

 

 

 

Operating profit (EBIT)

37,393

22,223

21,031

57,335

Depreciation

20,618

18,808

21,161

77,534

EBITDA

58,011

41,031

42,192

134,869

EBITDA margin in %

27.9

23.0

23.0

18.2

 

 

 

 

 

Earnings per share at the end of period

0.33

0.15

0.32

0.40

Weighted average number of shares

130,631,921

130,631,921

130,631,921

130,631,921

 

 

 

 

 

EUR/USD average exchange rate

1.07165

1.12344

1.01900

1.05431

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 2023

unaudited

Quarter ended

31 Mar 2022

unaudited

Year ended

31 Dec 2022

audited

ASSETS

 

 

 

Non-current assets

 

 

 

Property, plant, and equipment

486,499

368,674

460,126

Investment properties

7,539

8,158

7,675

Intangible assets

6,184

5,018

6,199

Other non-current assets

73

18

79

Deferred tax assets

77,577

45,528

67,977

Total non-current assets

577,872

427,397

542,056

 

 

 

 

Current assets

 

 

 

Inventories

233,322

195,362

214,435

Trade and other receivables

93,896

74,999

73,116

Other assets

53,231

48,654

56,024

Cash and cash equivalents

350,276

259,271

369,425

Total current assets

730,725

578,286

713,001

 

 

 

 

TOTAL ASSETS

1,308,597

1,005,683

1,255,057

 

 

 

 

EQUITY AND LIABILITIES

 

 

 

Equity

 

 

 

Share capital

432,745

432,745

432,745

Share premium

348,709

348,709

348,709

Retained earnings

59,227

-16,780

16,509

Cumulative translation adjustment

-297

-607

-226

Treasury shares

-770

-770

-770

Total equity attributable to equity holders of the parent

839,614

763,297

796,968

 

 

 

 

Non-controlling interests

0

355

0

 

 

 

 

Total equity

839,614

763,652

796,968

 

 

 

 

Non-current liabilities

 

 

 

Non-current loans and borrowings

59,143

36,877

63,433

Other non-current liabilities and provisions

4,023

5,685

4,024

Total non-current liabilities

63,165

42,562

67,456

 

 

 

 

Current liabilities

 

 

 

Trade payables

78,119

37,132

53,654

Current loans and borrowings

211,542

93,030

233,513

Other current liabilities and provisions

116,157

69,308

103,467

Total current liabilities

405,818

199,470

390,633

 

 

 

 

TOTAL EQUITY AND LIABILITIES

1,308,597

1,005,683

1,255,057

Condensed Consolidated Statement of Cash Flow

in thousands of USD

Quarter

ended 31 Mar 2023

unaudited

Quarter

ended 31 Mar 2022

unaudited

Quarter

ended 31 Dec 2022

unaudited

Year

ended 31 Dec 2022

audited

Income before taxes

35,676

20,825

21,194

37,062

 

 

 

 

 

Reconciliation of net income to cash flow arising from operating activities:

22,981

20,944

20,664

96,296

Depreciation and amortization, before effect of grants and subsidies

20,618

18,808

21,161

77,534

Recognized investment grants and subsidies netted with depreciation and amortization

-737

-874

-811

-3,346

Interest income and expenses (net)

1,445

183

3,242

17,407

Loss/(gain) on the sale of plant, property, and equipment (net)

-1,483

-158

-1,890

-3,889

Loss/(gain) on the change in fair value of derivatives and financial assets (net)

0

0

500

500

Other non-cash transactions (net)

3,138

2,985

-1,538

8,090

 

 

 

 

 

Changes in working capital:

-1,210

-32,183

12,564

-32,886

Decrease/(increase) of trade receivables

-21,001

-8,637

9,571

-6,661

Decrease/(increase) of other receivables & prepaid expenses

3,073

-5,799

-7,955

-12,759

Decrease/(increase) of inventories

-18,886

-14,349

-10,159

-33,422

(Decrease)/increase of trade payables

27,240

-2,014

6,563

-1,873

(Decrease)/increase of other liabilities

8,364

-1,384

14,544

21,828

 

 

 

 

 

Income taxes (paid)/received

-109

-107

77

-480

 

 

 

 

 

Cash Flow from operating activities

57,339

9,479

54,500

99,991

 

 

 

 

 

Cash Flow from investing activities:

 

 

 

 

Payments for property, plant, equipment & intangible assets

-48,895

-48,847

-54,056

-180,580

Payments for investments

0

0

0

-204

Payments for loan investments to related parties

-135

-114

-106

-299

Proceeds from loan investments related parties

120

98

54

284

Proceeds from sale of property, plant, and equipment

1,486

164

1,902

4,017

Interest received

1,014

237

895

1,801

 

 

 

 

 

Cash Flow used in investing activities

-46,411

-48,462

-51,311

-174,981

Condensed Consolidated Statement of Cash Flow – con’t

in thousands of USD

Quarter

ended 31 Mar 2023

unaudited

Quarter

ended 31 Mar 2022

unaudited

Quarter

ended 31 Dec 2022

unaudited

Year

ended 31 Dec 2022

audited

Cash Flow from (used in) financing activities:

 

 

 

 

Proceeds from loans and borrowings

9,213

7,261

32,002

184,272

Repayment of loans and borrowings

-35,931

-2,803

-5,358

-11,420

Receipts of sale & leaseback arrangements

0

7,723

0

7,723

Payments of lease installments

-1,513

-1,759

-1,283

-5,662

Receipt of government grants and subsidies

0

0

433

945

Interest paid

-3,258

-139

-3,738

-17,812

Distribution to non-controlling interests

0

-11

0

-11

 

 

 

 

 

Cash Flow from (used in) financing activities

-31,488

10,271

22,056

158,035

 

 

 

 

 

Effect of changes in foreign currency exchange rates on cash

1,411

-2,205

16,712

-3,808

Increase/(decrease) of cash and cash equivalents

-20,560

-28,712

25,245

83,046

Cash and cash equivalents at the beginning of the period

369,425

290,187

327,468

290,187

Cash and cash equivalents at the end of

the period

350,276

259,271

369,425

369,425

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230426006010/en/

X-FAB Press Uta Steinbrecher Investor Relations X-FAB Silicon Foundries +49-361-427-6489 uta.steinbrecher@xfab.com