XFAB X-FAB Silicon Foundries SE

Intermediate declaration by the Board of Directors

Regulatory News:

X-FAB Silicon Foundries SE (BOURSE:XFAB)

Highlights Q2 2023:

› Revenue was USD 227.1 million, up 20% year-on-year (YoY) and 9% quarter-on-quarter (QoQ); including USD 8.3 million of revenues recognized over time due to long-term customer contracts in accordance with IFRS 15

› Excluding this positive effect, revenues* would have been USD 218.9 million, within the guided USD 205-220 million

› Strong growth in X-FAB’s key end markets – automotive, industrial, and medical – up 28% YoY (excluding revenues recognized over time)

› EBITDA at USD 62.3 million, up 46.7% YoY

› EBITDA margin of 27.4%, slightly above the guided 23-27%

› EBIT was USD 40.8 million, up 69.9% YoY, with an EBIT margin of 18.0%

Outlook:

› Q3 2023 revenue is expected to come in within a range of USD 225-240 million with an EBITDA margin in the range of 24-28%. This guidance is based on an average exchange rate of 1.10 USD/Euro.

› The FY 2023 guidance gets reconfirmed.

Revenue* breakdown per quarter:

in millions of USD

Q3 2021

Q4 2021

Q1 2022

Q2 2022

Q3 2022

Q4 2022

Q1 2023

Q2 2023

Q2 y-o-y growth

Automotive

81.5

83.8

89.7

98.3

96.9

104.4

120.9

131.1

33%

Industrial

38.3

39.7

41.4

42.5

46.7

42.3

46.9

51.3

21%

Medical

14.3

14.5

13.7

13.9

13.5

14.6

17.6

16.2

16%

Subtotal core business

134.1

138.0

144.9

154.7

157.0

161.3

185.4

198.7

28%

79.3%

80.1%

81.1%

81.9%

83.4%

87.9%

89.1%

90.8%

 

CCC1

34.7

34.0

32.5

33.6

30.7

21.6

22.5

20.0

-40%

Others

0.3

0.3

1.2

0.6

0.6

0.7

0.2

0.2

 

Revenue*

169.1

172.3

178.7

188.8

188.3

183.6

208.1

218.9

16%

1Consumer, Communications & Computer

in millions of USD

Q3 2021

Q4 2021

Q1 2022

Q2 2022

Q3 2022

Q4 2022

Q1 2023

Q2 2023

Q2 y-o-y growth

CMOS

141.8

144.2

148.6

156.3

152.6

151.9

172.8

180.7

16%

Microsystems

17.4

17.5

17.9

19.8

18.4

19.5

22.2

20.8

5%

Silicon carbide

9.9

10.6

12.1

12.8

17.4

12.2

13.2

17.3

36%

Revenues*

169.1

172.3

178.7

188.8

188.3

183.6

208.1

218.9

16%

Business development

In the second quarter of 2023, X-FAB recorded total revenues of USD 227.1 million, up 20% year-on-year and up 9% quarter-on-quarter. A portion of USD 8.3 million is due to the recognition of revenues over time mainly related to long-term contracts with customers in accordance with IFRS 15. Excluding this effect, quarterly revenues* would have been at USD 218.9 million and in line with the guided USD 205-220 million.

In the second quarter, the volume of business based on long-term contracts reached a level that is material under IFRS 15. In line with the long-term nature of these contracts, X-FAB will from now on regularly recognize revenues over time.

X-FAB’s core markets – automotive, industrial, and medical – accounted for USD 198.7 million, up 28% year-on-year, representing a share of 90.8% of revenues*.

Demand remained strong and continued to exceed X-FAB’s available production capacity. Second quarter bookings came in at USD 220.9 million with a book-to-bill ratio of 1.01. Backlog at the end of the second quarter amounted to USD 507.0 million, compared to USD 508.3 million in the previous quarter.

In the second quarter, X-FAB’s automotive revenues* set a new record totaling USD 131.1 million. This represents a strong growth of 33% compared to the same quarter last year. The majority of this increase is directly attributable to X-FAB France. The site significantly increased its wafer shipments in X-FAB’s popular 180nm automotive process and now produces 92% of its quarterly revenues* based on X-FAB technologies, compared to 52% one year ago. The positive momentum from converting X-FAB France’s capacity to X-FAB’s automotive technologies is expected to continue in the coming quarters, helping to close the gaps between supply and demand from customers. X-FAB delivers into a great variety of car applications from comfort functions, such as interior lighting, to safety measures, including tire pressure monitoring systems, as well as battery management systems for hybrid and electric cars. The electrification of mobility is a key growth driver for X-FAB’s automotive business and demand for X-FAB’s specialty technologies for high-voltage CMOS as well as silicon carbide (SiC) applications remains high.

Industrial revenues* totaled USD 51.3 million in the second quarter, up 21% year-on-year. X-FAB’s comprehensive technology portfolio enables a wide range of industrial applications addressing major global trends such as smart manufacturing, smart buildings, smart cities, and the transition to renewable energy sources. Growth of X-FAB’s industrial business during the second quarter was primarily driven by strong demand for SiC technologies.

SiC revenues* in the second quarter were USD 17.3 million, up 36% year-on-year. The even stronger increase in SiC wafer shipment, up by 103% year-on-year, is not fully reflected in the top line due to a higher portion of customers that source their own SiC raw wafers and consign them to X-FAB. This results in a lower total billing but a stronger profitability, as the value added by X-FAB remains unaffected.

In the second quarter, X-FAB’s medical business recorded revenues* of USD 16.2 million, up 16% year-on-year with a strong contribution from an ultrasound probe application. Ultrasound is a medical imaging technique used as a primary diagnostic method during pregnancy which does not require radiation.

In the second quarter, CCC (Consumer, Communication & Computer) revenues* were USD 20.0 million, down 40% year-on-year. This reflects the planned decline in CCC legacy business, which until recently was produced at X-FAB France. While X-FAB France is in the process of converting the freed-up capacity to X-FAB’s popular 180nm automotive technology, CCC revenues* are now at a sustainable level and X-FAB’s top line growth is no longer impacted by the decreasing legacy business.

Prototyping revenues* in the second quarter came in at USD 27.7 million, up 35% year-on-year and up 5% quarter-on-quarter.

Prototyping and production revenue* per quarter and end market:

in millions

of USD

Revenue

Q2 2022

Q3 2022

Q4 2022

Q1 2023

Q2 2023

Automotive

Prototyping

4.1

3.3

4.7

3.5

3.9

Production

94.2

93.6

99.8

117.3

127.2

Industrial

Prototyping

9.2

11.1

11.2

14.2

16.6

Production

33.3

35.6

31.1

32.7

34.8

Medical

Prototyping

1.6

2.8

2.8

2.9

2.5

Production

12.4

10.7

11.8

14.7

13.7

CCC

Prototyping

5.0

5.0

4.6

5.7

4.5

Production

28.6

25.7

17.1

16.8

15.4

Operations update

The capacity utilization of X-FAB’s fabs remained high throughout the second quarter. All teams have been focused on ensuring smooth operations and increasing productivity and wafer output further. This gets supported by consistent clearing of production bottlenecks, automation projects and the execution of X-FAB’s capacity expansion program, which continues to progress well and on schedule.

In the second quarter, capital expenditures came in at USD 104.5 million, up 114% against the previous quarter, in line with expectations. Over the quarter and in the context of the ongoing capacity expansion projects, X-FAB has received several new tools and equipment at various sites, primarily related to the capacity conversion at X-FAB France and the expansion of SiC capacity at X-FAB Texas. The building extension at X-FAB Sarawak to provide additional cleanroom space is also progressing. Over the full year 2023, capital expenditures are expected to come in at USD 350 million.

Financial update

Second quarter EBITDA was USD 62.3 million with an EBITDA margin of 27.4%, slightly above the guidance range of 23-27%. Excluding the effect from the revenue recognition over time, the EBITDA margin would have been 27.0%.

Due to the long-term agreements (LTAs) with customers, which include a commitment to deliver and a commitment to buy certain wafer quantities, the IFRS 15 effect on overtime revenue recognition has become material during the second quarter. As a result, X-FAB has recognized over time revenue in the amount of USD 8.3 million in the second quarter.

X-FAB has achieved an all-time high gross profit in the second quarter amounting to USD 67.6 million with a gross profit margin of 29.8%, mainly due to volume growth, an improved product mix and good cost control.

Profitability was unaffected by exchange rate fluctuations thanks to the natural hedging of X-FAB’s business. At a constant USD/Euro exchange rate of 1.07 as experienced in the previous year’s quarter, the EBITDA margin would have been 0.1 percentage points lower.

Cash and cash equivalents at the end of the second quarter amounted to USD 441.8 million, up 26.1% compared to the end of the previous quarter. This increase is mainly due to prepayments received from customers with whom X-FAB has long-term agreements in place. This gets also reflected in the cash flow from operating activities, which totaled USD 203.5 million. The prepayments will be used to support capital expenditures in the next quarters.

Management comments

Rudi De Winter, CEO of the X-FAB Group, said: “I am proud that X-FAB has delivered another strong quarter with a new revenue record and in line with the guidance. We continue to see high demand, with the automotive end market being particularly strong, and reliable supply to our customers is key. We are fully focused on filling existing supply gaps and increasing our wafer production to match X-FAB’s positive growth prospects and to serve our customers. Our capacity expansion program is well underway, with new equipment coming online at various sites and on a regular basis. Our unique technology portfolio supports solutions in high-growth end markets, and I see X-FAB well on track to achieve its long-term financial and strategic goals.”

Procedures of the independent auditor

The statutory auditor, KPMG Bedrijfsrevisoren – Réviseurs d’Entreprises BV/SRL, represented by Herwig Carmans, has confirmed that the review procedures, which have been substantially completed, have not revealed any material misstatement in the accounting information included in this press release as of and for the six months ended June 30, 2023.

X-FAB Quarterly Conference Call

X-FAB’s second quarter results will be discussed in a live conference call/audiocast on Thursday, July 27, 2023, at 6.30 p.m. CEST. The conference call will be in English.

Please register here for the audiocast (listen only): https://channel.royalcast.com/x-fab/#!/x-fab/20230727_1

Please register here for the conference call (listen and ask questions): https://registrations.events/direct/INF61177

The third quarter 2023 results will be communicated on October 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 µm to 110 nm, 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 more than 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 30 Jun 2023

unaudited

Quarter

ended 30 Jun 2022

unaudited

Quarter

ended 31 Mar 2023

unaudited

Half-year

ended 30 Jun 2023

unaudited

Half-year

ended 30 Jun 2022

unaudited

Revenue*

218,870

188,832

208,109

426,979

367,495

Revenue recognized over time

8,261

0

0

8,261

0

Total revenue

227,131

188,832

208,109

435,240

367,495

Revenues in USD in %

56

58

55

56

59

Revenues in EUR in %

44

42

45

44

41

Cost of sales

-159,492

-142,870

-150,912

-310,404

-278,292

Gross Profit

67,639

45,962

57,197

124,836

89,203

Gross Profit margin in %

29.8

24.3

27.5

28.7

24.3

 

 

 

 

 

 

Research and development expenses

-12,905

-9,920

-10,922

-23,828

-20,679

Selling expenses

-2,112

-1,968

-2,196

-4,308

-4,117

General and administrative expenses

-11,961

-10,495

-10,501

-22,462

-19,226

Rental income and expenses from investment properties

390

187

2,071

2,462

478

Other income and other expenses

-231

257

1,743

1,512

588

Operating profit

40,820

24,023

37,393

78,213

46,247

Finance income

6,658

8,585

8,538

15,196

15,677

Finance costs

-8,229

-24,153

-10,255

-18,484

-32,643

Net financial result

-1,571

-15,567

-1,717

-3,288

-16,966

 

 

 

 

 

 

Profit before tax

39,249

8,456

35,676

74,925

29,281

Income tax

-548

-1,539

7,042

6,494

-2,988

Profit for the period

38,701

6,917

42,717

81,418

26,293

 

 

 

 

 

 

Operating profit (EBIT)

40,820

24,023

37,393

78,213

46,247

Depreciation

21,465

18,442

20,618

42,083

37,250

EBITDA

62,284

42,465

58,011

120,295

83,496

EBITDA margin in %

27.4

22.5

27.9

27.6

22.7

 

 

 

 

 

 

Earnings per share at the end of period

0.30

0.05

0.33

0.62

0.20

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

1.08946

1.06719

1.07165

1.08060

1.09491

Amounts in the financial tables provided in this press release are rounded to the nearest thousand except when otherwise indicated, rounding differences may occur.

*excluding revenues recognized over time in accordance with IFRS 15

Condensed Consolidated Statement of Financial Position

in thousands of USD

Quarter ended

30 Jun 2023

unaudited

Quarter ended

30 Jun 2022

unaudited

Year ended

31 Dec 2022

audited

ASSETS

 

 

 

Non-current assets

 

 

 

Property, plant, and equipment

568,926

397,012

460,126

Investment properties

7,403

8,070

7,675

Intangible assets

5,989

6,227

6,199

Other non-current assets

68

8

79

Deferred tax assets

79,082

45,143

67,977

Total non-current assets

661,467

456,459

542,056

 

 

 

 

Current assets

 

 

 

Inventories

247,912

198,427

214,435

Contract assets

15,667

0

0

Trade and other receivables

115,217

90,472

73,116

Other assets

61,322

49,473

56,025

Cash and cash equivalents

441,786

250,828

369,425

Total current assets

881,905

589,200

713,001

 

 

 

 

TOTAL ASSETS

1,543,372

1,045,659

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

100,230

-9,598

16,509

Cumulative translation adjustment

-243

123

-226

Treasury shares

-770

-770

-770

Total equity attributable to equity holders of the parent

880,672

771,209

796,967

 

 

 

 

Non-controlling interests

0

368

0

 

 

 

 

Total equity

880,672

771,576

796,967

 

 

 

 

Non-current liabilities

 

 

 

Non-current loans and borrowings

55,952

33,697

63,432

Other non-current liabilities and provisions

4,025

3,996

4,024

Total non-current liabilities

59,977

37,693

67,456

 

 

 

 

Current liabilities

 

 

 

Trade payables

67,764

43,157

53,654

Current loans and borrowings

204,948

105,040

233,513

Other current liabilities and provisions

330,011

88,192

103,467

Total current liabilities

602,723

236,389

390,634

 

 

 

 

TOTAL EQUITY AND LIABILITIES

1,543,372

1,045,659

1,255,057

Condensed Consolidated Statement of Cash Flow

in thousands of USD

Quarter

ended 30 Jun 2023

unaudited

Quarter

ended 30 Jun 2022

unaudited

Quarter

ended 31 Mar 2023

unaudited

Half-year

ended 30 Jun 2023

unaudited

Half-year

ended 30 Jun 2022

unaudited

Income before taxes

39,249

8,456

35,676

74,925

29,281

 

 

 

 

 

 

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

22,895

36,295

22,981

45,876

57,239

Depreciation and amortization, before effect of grants and subsidies

21,465

18,442

20,618

42,083

37,250

Recognized investment grants and subsidies netted with depreciation and amortization

-751

-841

-737

-1,488

-1,715

Interest income and expenses (net)

652

13,015

1,445

2,097

13,198

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

-137

-19

-1,483

-1,620

-177

Other non-cash transactions (net)

1,666

5,698

3,138

4,804

8,683

 

 

 

 

 

 

Changes in working capital:

141,779

-21,335

-1,210

140,569

-53,518

Decrease/(increase) of trade receivables

-21,482

-15,479

-21,001

-42,483

-24,115

Decrease/(increase) of other receivables & prepaid expenses

-7,006

-918

3,073

-3,933

-6,717

Decrease/(increase) of inventories

-12,303

-3,062

-18,886

-31,189

-17,411

Decrease/(increase) of contract assets

-15,667

0

0

-15,667

0

(Decrease)/increase of trade payables

-8,175

-3,341

27,240

19,065

-5,356

(Decrease)/increase of other liabilities

206,411

1,466

8,364

214,776

82

 

 

 

 

 

 

Income taxes (paid)/received

-401

-108

-109

-509

-215

 

 

 

 

 

 

Cash Flow from operating activities

203,522

23,308

57,339

260,861

32,787

 

 

 

 

 

 

Cash Flow from investing activities:

 

 

 

 

 

Payments for property, plant, equipment & intangible assets

-104,498

-36,760

-48,895

-153,393

-85,606

Payments for loan investments to related parties

-41

-35

-135

-176

-148

Proceeds from loan investments related parties

42

62

120

162

160

Proceeds from sale of property, plant, and equipment

208

64

1,486

1,694

228

Interest received

2,557

275

1,014

3,571

512

 

 

 

 

 

 

Cash Flow used in investing activities

-101,732

-36,393

-46,411

-148,143

-84,855

Condensed Consolidated Statement of Cash Flow – con’t

in thousands of USD

Quarter

ended 30 Jun 2023

unaudited

Quarter

ended 30 Jun 2022

unaudited

Quarter

ended 31 Mar 2023

unaudited

Half-year

ended 30 Jun 2023

unaudited

Half-year

ended 30 Jun 2022

unaudited

Cash Flow from (used in) financing activities:

 

 

 

 

 

Proceeds from loans and borrowings

5,027

15,281

9,213

14,240

22,542

Repayment of loans and borrowings

-13,870

-1,367

-35,931

-49,800

-4,170

Receipts of sale & leaseback arrangements

0

0

0

0

7,723

Payments of lease installments

-1,273

-1,258

-1,513

-2,785

-3,017

Interest paid

691

-432

-3,258

-2,568

-571

Distribution to non-controlling interests

0

0

0

0

-11

 

 

 

 

 

 

Cash Flow from (used in) financing activities

-9,425

12,224

-31,488

-40,913

22,495

 

 

 

 

 

 

Effect of changes in foreign currency exchange rates on cash

-855

-7,581

1,411

556

-9,786

Increase/(decrease) of cash and cash equivalents

92,365

-861

-20,560

71,805

-29,573

Cash and cash equivalents at the beginning of the period

350,276

259,271

369,425

369,425

290,187

Cash and cash equivalents at the end of

the period

441,786

250,828

350,276

441,786

250,828

###

View source version on businesswire.com: https://www.businesswire.com/news/home/20230727580520/en/

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