Intermediate declaration by the Board of Directors
Regulatory News: X-FAB (Paris:XFAB)
Highlights Q3 2020:
- Revenue was USD 96.1 million, within the
guidance of USD 91-97 million, down 26% year-on-year (YoY) and down
19% quarter-on-quarter (QoQ)
- Bookings were USD 111.6 million, down 8%
YoY and up 12% QoQ, recording a substantial increase in
September
- EBITDA margin of 4.9% above the 0-4%
guidance
- EBITDA was USD 4.7 million, down USD 7.9
million YoY and down USD 11.1 million QoQ
- EBIT was USD -13.9 million, down USD 7.8
million YoY and down USD 11.2 million QoQ
- Net loss was USD -12.9 million, down USD
4.7 million YoY and down USD 7.0 million QoQ
Outlook:
- Q4 2020 revenue is expected to rebound
markedly in the range of USD 120-127 million with an EBITDA margin
in the range of 10-14%.
- The guidance for Q4 2020 is based on an
average exchange rate of 1.18 USD/Euro.
Revenue breakdown per quarter:
in millions of USD
Q4 2018
Q1 2019
Q2 2019
Q3 2019
Q4 2019
Q1 2020
Q2 2020
Q3 2020
Q3 y-o-y growth
Automotive
59.7
64.1
62.5
60.5
56.7
68.3
61.6
40.8
-33%
Industrial
24.3
24.1
23.3
24.4
20.1
22.1
23.9
23.9
-2%
Medical
7.3
6.8
6.3
8.8
6.3
6.5
7.3
7.7
-12%
Subtotal core business
91.3
95.0
92.1
93.7
83.2
96.9
92.7
72.3
-23%
66.4%
72.5%
70.0%
71.8%
73.3%
76.4%
78.1%
75.2%
CCC1
45.9
35.8
39.1
36.7
30.1
29.7
25.9
23.7
-36%
Others
0.3
0.2
0.3
0.0
0.1
0.3
0.2
0.1
Total revenues
137.4
131.0
131.6
130.5
113.4
126.9
118.8
96.1
-26%
1 Consumer, Communications & Computer
in millions of USD
Q4 2018
Q1 2019
Q2 2019
Q3 2019
Q4 2019
Q1 2020
Q2 2020
Q3 2020
Q3 y-o-y growth
CMOS
122.0
118.2
114.4
114.4
98.1
112.8
103.4
81.1
-29%
MEMS
10.4
8.1
10.7
9.5
9.9
9.6
10.4
9.8
3%
Silicon carbide
5.0
4.7
6.4
6.5
5.5
4.5
5.0
5.2
-20%
Total revenues
137.4
131.0
131.6
130.5
113.4
126.9
118.8
96.1
-26%
Business development
As anticipated, the third quarter was marked by weaker sales.
Quarterly revenues came in at USD 96.1 million, at the upper end of
the guided USD 91-97 million. Revenues were down 26% year-on-year
and 19% quarter-on-quarter. Despite this fall in revenue and as a
result of the company’s ongoing cost-saving initiatives, X-FAB has
reached an EBITDA margin of 4.9% exceeding its 0-4% guidance.
Bookings have strongly picked up since the start of September. This
is a positive sign for business development going forward,
underpinned by a solid return to growth in the fourth quarter with
revenue guidance in the range of USD 120-127 million.
Quarterly revenues in X-FAB’s core business, namely automotive,
industrial and medical, amounted to USD 72.3 million, down 23%
year-on-year and down 22% quarter-on-quarter.
In the third quarter, the Automotive as well as the Consumer,
Communications & Computer (CCC) businesses were the main
contributors to the strong decline, which was in line with
expectations and primarily caused by the impact of the COVID-19
pandemic on the global economy.
Automotive revenues for the third quarter decreased 33% compared
to the same quarter last year and were down 34% quarter-on-quarter
due to a drop in automotive bookings in the previous quarter, which
was related to client’s inventory corrections. Production revenues
(which excludes prototyping) decreased year-on-year (-33%) as well
as quarter-on-quarter (-36%). Automotive prototyping revenues
declined 27% year-on-year due to an exceptionally strong quarter
last year but were up 13% quarter-on-quarter.
Industrial revenues for the third quarter were down 2%
year-on-year and flat quarter-on-quarter, both for production and
prototyping. Production revenues decreased 7% year-on-year, while
prototyping revenues increased 12%.
X-FAB’s medical revenues of the third quarter declined 12%
year-on-year and increased 6% quarter-on-quarter. The decline is
mainly caused by a 27% year-on-year drop in production revenues due
to an exceptionally high quarter last year. Quarter-on-quarter,
medical production revenues increased by 6%. Medical prototyping
revenues have been growing steadily over the past quarters and, in
the third quarter, recorded a 15% growth year-on-year and 5%
increase compared to the previous quarter.
In the third quarter, X-FAB’s CCC business decreased 36%
year-on-year and 8% quarter-on-quarter. Prototyping revenues
decreased 39% compared to the same quarter last year and slightly
increased quarter-on-quarter. CCC production revenues were down 35%
year-on-year and down 10% quarter-on-quarter. The decline was not
only driven by the ongoing gradual decrease of the legacy business
at X-FAB France but also, to some extent, by the impact of the
general economic slowdown related to COVID-19.
In the third quarter, the share of the French site’s revenues
based on X-FAB technologies amounted to 17%.
Prototyping revenues of the third quarter totaled at USD 16.0
million, down 7% year-on-year and up 3% quarter-on-quarter.
While bookings remained relatively weak over the first two
months of the third quarter, there was a strong pick up towards the
end of the reporting period with half of the quarterly order
entries booked in September, mainly coming from automotive
customers. Overall, bookings were at USD 111.6 million, up 12%
quarter-on-quarter and down 8% year-on-year.
Operations update
The various safety measures implemented at all locations in
response to the COVID-19 pandemic helped to ensure the health and
well-being of X-FAB’s employees in the third quarter and will be
pursued going forward contributing to the continuity of
production.
In response to the low utilization levels and as part of X-FAB’s
cost-saving initiatives, X-FAB’s manufacturing facilities were
temporarily shut down in July. While this was initially planned to
take place later in the third quarter, X-FAB brought those fab
shutdowns forward, following a cyber attack at the beginning of
July. After all the systems were successfully restored and
production was resumed, all sites were in position to execute all
orders received and catch up on any delays. At the same time, X-FAB
has also taken measures to upgrade its cyber security across the
Group.
The silicon carbide (SiC) business recorded quarterly revenues
of USD 5.2 million, which is a 20% decline year-on-year,
essentially due to the impact from the COVID-19 slowdown on the
global economy but also in light of a strong comparative quarter.
This is mainly reflected in the fall of SiC production revenues
down 56% compared to the same quarter last year, whereas the SiC
prototyping revenues recorded a growth of 42% year-on-year. The
pipeline of new projects remains strong with existing customers
constantly expanding their portfolio of offerings. In addition,
X-FAB won a new customer for its SiC business bringing the total up
to 22. The process of qualifying X-FAB’s in-house SiC epitaxy line
with various customers keeps progressing well with additional
customers having initiated this process during the quarter.
Quarterly capital expenditures amounted to USD 6.8 million, down
64% year-on-year.
Financial update
Despite the decline in quarterly revenues, the EBITDA of the
third quarter amounted to USD 4.7 million with an EBITDA margin of
4.9%, exceeding the guided 0-4%. This is mainly attributable to
X-FAB’s ongoing cost-saving initiatives with a variety of cost
reduction measures related to staff, travel, electricity and raw
materials. The use of short-time work schemes in France and Germany
has been a major contributor to savings during the quarter.
The inventory of unfinished and finished goods decreased by USD
0.5 million, which had a negative impact on profitability for the
third quarter.
Cash and cash equivalents at the end of the quarter were at USD
179.7 million, down 7% versus the end of the previous quarter,
which is primarily due to the drop in revenues.
X-FAB is well on track to achieve a natural currency hedging of
its business thanks to the continued efforts to increase the share
of Euro-denominated sales. In the third quarter, the share of
Euro-denominated sales reached 35%. X-FAB aims to further increase
the Euro share of sales to limit the impact of exchange rate
fluctuations on its profitability.
The actual US-Dollar/Euro exchange rate for the third quarter of
2020 was 1.17 leading to an EBITDA margin of 4.9%. At a constant
exchange rate of 1.11, as experienced in the third quarter of last
year, the EBITDA margin would have been 5.8%.
Management comments & outlook
Rudi De Winter, CEO of X-FAB Group, said: “While in line with
expectations, the third quarter was exceptionally weak in terms of
revenues; however, I am confident that we have clearly passed the
lowest point. The continued efforts to improve the cost structure
across the group resulted in a better than planned EBITDA and is at
a satisfactory level going forward. While uncertainties remain
high, in particular due to the COVID-19 pandemic and its impact on
the global economy, we do see strong positive signs. Bookings have
been recovering significantly since September, mainly attributable
to the automotive business indicating that customers in this
segment are returning to normal order patterns. While remaining
cautious going forward, it remains our top priority to ensure that
we meet the supply of our customers and the increased demand of the
market. Besides the general recovery of our main market automotive,
I am very excited about the opportunities in the medical segment
driven by the point-of-care diagnostics as well as lab-on-a-chip
applications, and also the silicon carbide business to support the
ongoing electrification in cars and other equipment.”
X-FAB Quarterly Conference Call
X-FAB’s third quarter results will be discussed in a live
conference call on Tuesday, October 27, 2020, 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/8513379.
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 October
27, 2020, 11.30 p.m. CET until November 3, 2020, 11.30 p.m. CET.
The replay number will be +44 (0) 3333009785, conference ID
8513379.
The fourth quarter 2020 results will be communicated on February
11, 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 3,800 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 Sep 2020
unaudited
Quarter
ended 30 Sep 2019
unaudited
Quarter
ended 30 Jun 2020
unaudited
Nine months
ended 30 Sep 2020
unaudited
Nine months
ended 30 Sep 2019
unaudited
Revenue
96,085
130,462
118,756
341,735
393,027
Revenues in USD in %
65
73
67
68
75
Revenues in EUR in %
35
27
32
32
25
Cost of sales
-97,233
-118,960
-107,942
-317,594
-361,425
Gross Profit
-1,148
11,503
10,814
24,141
31,602
Gross Profit margin in %
-2.0
8.8
9.1
6.8
8.0
Research and development expenses
-5,462
-8,055
-5,891
-17,253
-21,683
Selling expenses
-1,798
-2,013
-2,118
-5,928
-6,016
General and administrative expenses
-6,897
-7,248
-6,992
-21,544
-22,811
Rental income and expenses from investment
properties
765
-110
183
988
-297
Other income and other expenses
583
-199
1,210
1,359
-2,775
Operating profit
-13,957
-6,122
-2,794
-18,238
-21,980
Finance income
4,262
3,145
3,410
11,171
10,106
Finance costs
-3,240
-3,851
-5,260
-16,935
-11,437
Net financial result
1,022
-706
-1,850
-5,764
-1,331
Profit before tax
-12,935
-6,828
-4,644
-24,002
-23,311
Income tax
5
-1,361
-1,243
-1,540
-3,323
Profit for the period
-12,930
-8,189
-5,887
-25,541
-26,634
Operating profit (EBIT)
-13,957
-6,122
-2,794
-18,238
-21,980
Depreciation
18,700
18,807
18,657
56,188
52,956
EBITDA
4,743
12,685
15,863
37,950
30,976
EBITDA margin in %
4.9
9.7
13.4
11.1
7.9
Earnings per share at the end of
period
-0,10
-0,06
-0,05
-0,20
-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
1.16732
1.11236
1.10006
1.12418
1.12398
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 30 Sep 2020
unaudited
Quarter ended 30 Sep 2019
unaudited
Year ended
31 Dec 2019
audited
ASSETS
Non-current assets
Property, plant, and equipment
337,130
369,115
368,754
Investment properties
8,701
9,231
9,128
Intangible assets
4,747
8,355
8,363
Non-current investments
0
741
736
Other non-current assets
4,712
29,327
27,568
Deferred tax assets
33,103
34,397
33,922
Total non-current assets
388,393
451,166
448,471
Current assets
Inventories
160,088
153,026
154,649
Trade and other receivables
51,274
63,670
55,636
Other assets
35,285
23,475
34,429
Cash and cash equivalents
179,662
189,250
173,211
Total current assets
426,309
429,421
417,925
TOTAL ASSETS
814,702
880,587
866,397
EQUITY AND LIABILITIES
Equity
Share capital
432,745
432,745
432,745
Share premium
348,709
348,709
348,709
Retained earnings
-159,743
-112,183
-133,835
Cumulative translation adjustment
-715
-496
-445
Treasury shares
-770
-770
-770
Total equity attributable to equity
holders of the parent
620,225
668,005
646,403
Non-controlling interests
356
377
377
Total equity
620,581
668,382
646,781
Non-current liabilities
Non-current loans and borrowings
76,860
93,381
92,389
Other non-current liabilities and
provisions
7,409
7,435
7,407
Total non-current liabilities
84,269
100,816
99,795
Current liabilities
Trade payables
20,376
25,929
38,327
Current loans and borrowings
29,381
30,651
26,658
Other current liabilities and
provisions
60,094
54,809
54,835
Total current liabilities
109,852
111,389
119,821
TOTAL EQUITY AND LIABILITIES
814,702
880,587
866,397
Condensed Consolidated Statement of Cash Flow
in thousands of USD
Quarter
ended 30 Sep 2020
unaudited
Quarter
ended 30 Sep 2019
unaudited
Quarter
ended 30 Jun 2020
unaudited
Nine months
ended 30 Sep 2020
unaudited
Nine months
ended 30 Sep 2019
unaudited
Income before taxes
-13,685
-6,828
-4,644
-24,752
-23,311
Reconciliation of net income to cash
flow arising from operating activities:
9,974
19,154
18,427
54,623
52,794
Depreciation and amortization, before
effect of grants and subsidies
18,700
18,807
18,657
56,188
52,956
Recognized investment grants and subsidies
netted with depreciation and amortization
-852
-712
-851
-2,603
-2,199
Interest income and expenses (net)
348
382
1,114
1,980
1,224
Loss/(gain) on the sale of plant,
property, and equipment (net)
-270
0
-34
-584
6
Loss/(gain) on the change in fair value of
derivatives (net) and financial assets (net)
0
-35
0
-420
-360
Other non-cash transactions (net)
-7,953
713
-458
63
1,167
Changes in working capital:
1,897
3,510
16,687
12,929
-21,399
Decrease/(increase) of trade
receivables
-2,663
-763
15,547
3,954
7,978
Decrease/(increase) of other receivables
& prepaid expenses
4,800
-1,848
3,107
20,077
-12,940
Decrease/(increase) of inventories
5,928
4,933
-4,984
-4,692
-5,875
(Decrease)/increase of trade payables
-7,082
2,480
-4,950
-15,581
-8,383
(Decrease)/increase of other
liabilities
914
-1,293
7,967
9,172
-2,178
Income taxes (paid)/received
-113
-157
-92
-833
-667
Cash Flow from operating
activities
-1,926
15,679
30,379
41,969
7,417
Cash Flow from investing
activities:
Payments for property, plant, equipment
& intangible assets
-6,756
-18,600
-7,492
-23,849
-63,356
Payments for investments
0
0
0
0
-350
Proceeds from sale of financial assets
0
0
0
1,156
0
Acquisition of subsidiary, net of cash
acquired
0
0
0
0
0
Payments for loan investments to related
parties
-34
-63
-42
-172
-223
Proceeds from loan investments related
parties
40
44
51
154
177
Proceeds from sale of property, plant, and
equipment
1,208
0
40
1,526
40
Interest received
436
672
475
1,406
1,959
Cash Flow used in investing
activities
-5,105
-17,947
-6,967
-19,780
-61,753
Condensed Consolidated Statement of Cash Flow – con’t
in thousands of USD
Quarter
ended 30 Sep 2020
unaudited
Quarter
ended 30 Sep 2019
unaudited
Quarter
ended 30 Jun 2020
unaudited
Nine months
ended 30 Sep 2020
unaudited
Nine months
ended 30 Sep 2019
unaudited
Cash Flow from (used in) financing
activities:
Proceeds from loans and borrowings
-266
24,706
8,813
8,547
24,706
Repayment of loans and borrowings
-7,781
-7,329
-6,547
-20,718
-21,913
Receipts from sale & leaseback
arrangements
0
1,181
0
0
1,181
Payments of lease installments
-1,390
-1,311
-1,453
-4,201
-4,086
Receipt of government grants and
subsidies
0
6,300
0
696
6,300
Interest paid
-185
-383
-260
-627
-1,194
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
0
-12
-11
Cash Flow from (used in) financing
activities
-9,622
23,162
553
-16,315
4,983
Effect of changes in foreign currency
exchange rates on cash
4,679
-2,877
1,084
577
-4,165
Increase/(decrease) of cash and cash
equivalents
-16,654
20,895
23,965
5,874
-49,353
Cash and cash equivalents at the beginning
of the period
191,636
171,232
166,587
173,211
242,768
Cash and cash equivalents at the end
of
the period
179,662
189,250
191,636
179,662
189,250
###
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X-FAB Press Contact Uta Steinbrecher Investor Relations
X-FAB Silicon Foundries +49-361-427-6489
uta.steinbrecher@xfab.com
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