AT&S First choice for advanced applications - Company Presentation February 2020

AT&S First choice for advanced applications - Company Presentation February 2020
First choice for advanced applications
                                       Company Presentation
                                             February 2020

            AT & S Austria Technologie & Systemtechnik Aktiengesellschaft | Fabriksgasse 13 | A-8700 Leoben
                                                                                      Tel +43 (0) 3842 200-0
AT&S First choice for advanced applications - Company Presentation February 2020
Company Overview

AT & S Austria Technologie & Systemtechnik Aktiengesellschaft | Fabriksgasse 13 | A-8700 Leoben
                                                                          Tel +43 (0) 3842 200-0
AT&S First choice for advanced applications - Company Presentation February 2020
What guides us


                       We set the highest quality standards in our industry
                       We industrialize leading-edge technology
                       We care about people
                       We reduce our ecological footprint
                       We create value

Company Presentation                                                          2
AT&S First choice for advanced applications - Company Presentation February 2020
A world leading high-tech PCB & IC substrates company
   High-end interconnect solutions
                       for                      market growth
    Mobile Devices, Automotive, Industrial,
    Medical Applications and Semiconductor
                                                 over the last
                    Industry                                         high-end PCB producer
                                                                           worldwide *

           Among the top                      € 1bn
             PCB producers                    revenue in
               worldwide                      FY 2018/19          Efficient global production
                                                                         footprint with

                                                    ~ 10,000      plants in Europe and Asia

* For CY 2018
  Source: Prismark
** For AT&S FY 2018/19

Company Presentation                                                                            3
AT&S First choice for advanced applications - Company Presentation February 2020
Global footprint ensures proximity
   to supply chain & cost efficiency

   AT&S plant & sales office
   AT&S sales office
   AT&S Headquarters

                       974*                                 404*                   1,241*               2,369*              4,461*               289*

Leoben, Headquarters              Fehring                              Nanjangud            Chongqing            Shanghai            Ansan
Austria                           Austria                              India                China                China               Korea
   *Staff, Average, FTE, FY 2018/19; 73 employees in other locations

    Company Presentation                                                                                                                     4
AT&S First choice for advanced applications - Company Presentation February 2020
    Market Segments & Product Applications served by AT&S

      Communications,                    IC substrates          Automotive                        Industrial                 Medical
    Consumer Appliances
     Smartphones, Tablets,             High Performance        Advanced Driver               Machine-2-Machine                Patient
     Wearables, Ultrabooks,          Computer, Microserver    Assistance Systems,             Communication,          Monitoring, Hearing Aids,
           Cameras                                           Emergency-Call, X2X              Robots, Industrial           Pacemaker,
                                                                Communication                    Computer,            Neurostimulation, Drug
                                                                                             X2X Communication         Delivery, Prosthesis

            Segment Mobile Devices & Substrates                             Segment Automotive, Industrial, Medical

    Company Presentation                                                                                                                   5
AT&S First choice for advanced applications - Company Presentation February 2020
AT&S – Key Facts
1              Strong growth track record                                                      2   Balanced portfolio/Global customer base
                                                                                                        Revenue split by segment: Q1-3 2019/20


              763                                                    790
                                                +4%                                 753                                                      Mobile Devices & Substrates
667                               +22%
                                                                                                                       69%                   Automotive, Industrial,
                                                                           (4.7%)                                                            Medical

                                                          250                                           Revenue split by customer: Q1-3 2019/20
                                               226                     221                              (based on customer’s headquarters)
      168           168                                                               156
                              131*               90            117           122
         90           77*                                                                 48
 2014/15      2015/16       2016/17      2017/18       2018/19        Q1-3           Q1-3               8%
                                                                     2018/19        2019/20                                                  Americas
         Revenue                    EBITDA                    EBIT   Revenue growth                   16%
                                                                                                                  7%                         Germany/Austria
                                                                                                                         69%                 Asia
€ in millions                                                                                                                                Other European countries
*Based on ramp-up effects for new plants in China

 Company Presentation                                                                                                                                                      6
AT&S First choice for advanced applications - Company Presentation February 2020
Strategic focus on high-end technologies

                                                                AT&S Revenue structure in FY 2018/19 – based on technologies

                                                                               High-end technology share > 75%
                                                                                    HDI and any-layer PCBs,
                                                                                   Embedding, IC substrates
                                         HDI PCBs and
                                         IC substrates
                                             ~ 30%
                                                                                    Complementary technology
                                                                                          share: < 25%
                                                                                           SS, DS, ML,
                     Single-sided (SS), double-sided (DS), multilayer- (ML),
                                                                                            Flex, RF
                                   flex and rigid-flex (RF) PCBs
                                               ~ 70%

         Structure of general PCB market – based on technologies
Source: Prismark, AT&S

 Company Presentation                                                                                                          7
AT&S First choice for advanced applications - Company Presentation February 2020
More than AT&S
Broadening the service range and opening up of new business opportunities

                                                                                                                         provider of
                               Technology                                                                                solutions
                               Innovation power
                                                                                                                      Module integration
                               Clear focus on dedicated applications
                                                                                                                      Build-up of additional
                                                                                                 Substrates for HPC
                                                                                                 Diversification of
                                                                                PCBs/substrates application and
                                                                                for modules     customer portfolio
                                                            mSAP / SLP          High growth
                                       IC substrates        Technology leader
        Printed circuit boards
                                       One of the leading
        Leading producer of high-      producers
        end PCB

Company Presentation                                                                                                                           8
AT&S First choice for advanced applications - Company Presentation February 2020
Leading provider of high-end PCBs and IC substrates
Well positioned for the future
 Unique market position
         Broad product portfolio to serve all growth markets
         Long-standing customer relationships with technology and market leaders
         Technology innovator due to continuous R&D efforts
         Quality benchmark with outstanding process know-how, productivity and efficiency

 Growth oriented strategy
         Megatrend-driven markets with attractive growth potential
         Address growth opportunities with incremental investments

 Sustainable profitability
         AT&S has constantly outperformed the PCB and substrates market over the last years
         EBITDA margin of 20 – 25% above industry average
         Strong cash flow generation and therefore improved internal financing capabilities
         Solid balance sheet and attractive dividend policy

Investor and Analyst Presentation                                                              9   9

     Market players in the high-end segment

                                         Market position HDI Technology (2018)
      Rank              Supplier    Country/Region      mSAP        IC Substrates
                                                                                    (revenue in USD millions)
        1        AT&S              AUT                                                                   838
        2        Unimicron         TWN                                                                   799
        3        Compeq            TWN                                                                    779
        4        TTM               USA                                                                   681
        5        Meiko             JPN                                                                     472
        6        Tripod            TWN                                                                     443
        7        Zhen Ding         TWN                                                                     349
        8        DAP               KOR                                                                     276
        9        CMK               JPN                                                                     259
        10       SEMCO             KOR                                                                     245

     Source: Prismark

      Company Presentation                                                                                       10
Driving the Industry - Miniaturization & Modularization

                       2003/04         2013             2019                202X

TYPE                   Mobile Phone   Smartphone       Smartphone          All in One
PCB                     125x55mm      85x20mm           60x29mm            25x25mm?
FORM FACTOR                 1            0.25             0.23               0.06?
LINE/SPACE             100/100µm       40/40µm          30/30µm            10/10µm
TECHN.                    1-n-1        Any-layer         mSAP             FO/SAP/mSAP
                                                   (Sandwich structure)

Company Presentation                                                                    11
R&D as the key for technological leadership

           R&D Quota
   (equivalent to € 75.7 million)

                                                                               International International
                                                                               R&D Partners R&D Partners

           R&D                                 35.3%
        Headquarters                     Innovation Revenue Rate *
 Industrialization at the respective
          production site

As of FY 2018/19
* Revenue generated with products with new, innovative technologies introduced to the market within the last three years

  Company Presentation                                                                                                     12

AT & S Austria Technologie & Systemtechnik Aktiengesellschaft | Fabriksgasse 13 | A-8700 Leoben
                                                                          Tel +43 (0) 3842 200-0
Highlights in Q1-3 2019/20
Market drivers remain in place
 Current global market environment still challenging
  Global trade frictions have eased, but are still creating some uncertainties in the market
  Weakness in automotive market is mainly created by uncertainties about the future of the powertrain
  General weak economic environment weighs on European industrial investment behaviour

 Macroeconomic environment impacts revenue and earnings
    Positive trend at IC substrates nearly compensates for lower volume and unfavourable product mix in Mobile Devices
    Weaker market environment in the Industrial and Automotive segment causes temporary higher price pressure
    Automotive segment with stable performance despite difficult market situation
    Reduced volume in the Industrial segment
    Medical & Healthcare with robust trend

Company Presentation                                                                                     14          14
Financials in Q1-3 2019/20
AT&S held up well in a challenging environment
 Revenue at € 753.2 million (PY: € 790.1 million)
  Positively impacted by FX effects

 EBITDA at € 156.4 million (PY: € 220.5 million)
  Ongoing preparations for future applications demand higher R&D expenses (e.g. run-up costs for modularization and
  EBITDA margin with 20.8% (PY: 27.9%) still within target margin range of 20 – 25%

 EBIT at € 47.7 million (PY: € 121.5 million)
  Deviation from EBITDA development explained by higher depreciation

 Operating free cash flow at € 31.2 million (PY: € 90.0 million)
  Higher capex due to IC substrates investment

Company Presentation                                                                                  15           15
Market Update &

AT & S Austria Technologie & Systemtechnik Aktiengesellschaft | Fabriksgasse 13 | A-8700 Leoben
                                                                          Tel +43 (0) 3842 200-0
PCB & IC substrates market – Overview
Forecast for the total PCB & IC substrates market
until 2024: CAGR of 5.9%
                                                                      Data center expansions, networking and AI processors trigger
                                                                       additional demand for high-value IC substrates
                                                                      Despite a temporary slowdown, automotive business is driven by
                                                                       autonomous driving, V2X communication and electrification of
                                                                      Consumer: Wireless connectivity of smart devices enabling IoT drives
                                                                       the need for high-end PCBs and substrates for module applications
                                                                      Despite a flat development in 2019 smartphone unit sales, high-end
                                                                       PCB demand for mainboards and modules will grow due to additional
                                                                      Short term market decline in 2019 is driven by macro-economic
                                                                       conditions. Mid-term the growth will resume driven by application

Source: Prismark, January 2020; Yole (for IC Substrates), May 2019

Company Presentation                                                                                                       17           17
Module integration services market
Total market growth is forecast at ~12% p.a.    Overview
between 2019 and 2024
                                                  Major driver is the general modularization trend to reduce time to market,
                                                   size and cost for electronic products
                                                  AI and 5G requirements further drive module integration
                                                  Market revenue includes services for PCB/substrate, module assembly and

                                                Strategic applications
                                                  Power
                                                     Power modules include both low voltage power management for
                                                      consumer devices as well as power inverters for data centers, industrial
                                                      machinery and electrified vehicles
                                                  RF/Wireless
                                                     5G communication modules for smartphones, consumer devices,
                                                      automotive, and machine-to-machine communication provide growth
                                                      opportunities by integration of RF functions
                                                  Sensor and camera
                                                     Sensor and camera modules provide strong growth opportunities

Source: A.T. Kearney (8/2018), AT&S (9/2019)

 Company Presentation                                                                                      18             18
Growth opportunities in all segments
Future trends still intact

Communication                 Consumer / Computer        Automotive                       Industrial / Medical

  Increased digital           New applications          Autonomous driving              Automation
   networking (IoT)             (smartwatch, speakers,      RADAR, LiDAR, camera            Machine-to-machine
 Additional functionality      robots, VR, …)              5G                                communication (5G)
                               Edge & cloud computing      Artificial Intelligence
   5G                                                                                       Artificial Intelligence
                               Networking                Electrification of the drive
   Artificial Intelligence                                                                Mobile therapy and
                                                          Increasing electronics share
                               Big data / data server     per vehicle                      diagnostic devices

Company Presentation                                                                                19             19
Supply chain in the electronics industry
New business opportunities through entry into the module market

Module Design             Chip             Chip Assembly         PCB               Substrate       Product/         Product
                       Manufacturing           & Test        Manufacturing        Manufacturing     Module         Ownership
                          (Front-end)         (Back-end)                                           Assembly

                                                  03         Module Integration Service Provider

                                                           Module Board Manufacturer (SLP)

                                                               01                    01
                                                 OSATs                                             ODM/EMS/
                         Wafer Foundries                                                                             OEMs
   IC Players                                                                                        OSATs
                                                                    PCB               Substrate

Company Presentation                                                                                          20            20
Outlook for financial year 2019/20 adjusted
AT&S production sites in China affected by coronavirus
 All factories in China are again producing with reduced capacities
 Following aspects could influence the development in the coming months:
  Deterioration of the current general conditions
  Provision of production materials and personnel
  Processes in supply chain and demand situation

 Revenue to amount to € 960 million (previously: at the prior-year level of € 1,028.0 million)
 EBITDA margin of 18 to 20 % expected (previously: between 20% and 25%)

Company Presentation                                                                              21

AT & S Austria Technologie & Systemtechnik Aktiengesellschaft | Fabriksgasse 13 | A-8700 Leoben
                                                                          Tel +43 (0) 3842 200-0
AT&S – Stock Profile
Listing:                Vienna Stock Exchange,       # of shares outstanding   38.85m
                        Prime Standard               Dividend yield:           1.6 %
Indices:                ATX, ATX Prime, Vönix, WBI
Thomson Reuters (A):    ATSV.VI
Bloomberg (A):          ATS:AV

Shareholder structure

Company Presentation                                                                    23
AT&S Product Portfolio – I
                   ECP®:                                                        IC substrates                           Substrate-like printed circuit boards
        Embedded Component Packaging                                                                                                   mSAP

Embedded Component Packaging allows to embed               IC substrates serve as interconnection platform with   Substrate-like PCBs (mSAP technology) are the next
active/passive components (e.g. wafer level dies) within   higher density (Line/Space < 15 micron) between        evolution of high-end HDI PCBs with higher density:
the layers of a PCB – contributes to miniaturization.      semiconductors (Chips) & PCBs .                        Line/Space < 30 micron.

Production site
Leoben, Shanghai                                           Chongqing                                              Chongqing, Shanghai

Devices such as smartphones, tablets, digital              High-end processors for                                Mobile applications like smartphones
cameras and hearing aids                                   Computer, Communication, Automotive, Industrial

Company Presentation                                                                                                                                                    24
AT&S Product Portfolio – II
           HDI                          HDI microvia printed              Multilayer printed circuit             Double-sided printed             IMS printed circuit boards
 any-layer printed circuit              circuit boards – high                      boards                           circuit boards                    – insulated metal
         boards                         density interconnect                                                                                              substrate

Further technological                HDI: high density interconnect,     Found in almost every area of        Used in all areas of electronics.   IMS: insulated metal substrate.
enhancement to HDI microvia:         meaning                             industrial electronics. AT&S         AT&S focuses on double-sided        Primary function: heat
All electrical connections in HDI    laser-drilled connections           produces printed circuit boards      printed circuit boards with         dissipation for use mainly with
any-layer boards consist of laser-   (microvias). HDI is first step      with 4 to 28 layers, in quantities   thicknesses in the range of 0.1-    LEDs and power components.
drilled microvias. Advantage:        towards miniaturization.            from individual prototypes to        3.2mm.
further miniaturization, and         AT&S can produce 4-layer            small batches and mass
higher performance and               laser PCBs up to 6-n-6              production.
reliability. AT&S produces HDI       HDI multi layer PCBs.
any-layer in 4 to 12 layers.

Production site
Shanghai                             Shanghai, Leoben                    Leoben, Nanjangud, Fehring           Fehring, Nanjangud                  Fehring

Smartphones, Tablets,                Mobile phones and nearly all        Used in all electronic               Primarily industrial and            Lighting industry
Notebooks                            electronic applications including   applications including touch         automotive applications
                                     automotive (navigation,             panels, and in products ranging
                                     infotainment and driver             from aircraft to motorcycles,
                                     assistance systems)                 from storage power plants to
                                                                         solar arrays

Company Presentation                                                                                                                                                         25
AT&S Product Portfolio – III
      Flexible printed               Semi-flexible printed             Rigid-flex printed       Flexible printed circuit
       circuit boards                   circuit boards                   circuit boards          boards on aluminum

Used to replace wiring and        More limited bend radius than   Combine the                 Used when installing LEDs
connectors, allowing for          flexible printed circuit        advantages of flexible      in car headlights, for
connections and geometries that   boards. The use of a            and rigid printed circuit   example, where the
are not possible with rigid       standard thin laminate          boards, yielding benefits   printed circuit board is
printed circuit boards.           makes them a cost-effective     for signal transmission,    bonded to an aluminum
                                  alternative.                    size and stability.         heat sink to which the
                                                                                              LEDs are then attached.

Production site
Ansan, Fehring                    Fehring                         Ansan                       Ansan

Nearly all areas of               Automotive applications         Industrial electronics,     Lighting, automotive,
electronics, including                                            such as production          building lighting
measuring devices and                                             machines and industrial
medical applications                                              robots

Company Presentation                                                                                                       26

Andreas Gerstenmayer, CEO                      Monika Stoisser-Göhring, CFO              Heinz Moitzi, COO
 Joined AT&S as CEO in 2010                    CFO since 2017                           COO since 2005;
 Previous positions include:                   Previous positions include:              With AT&S since 19811)
   18 years of work experience at Siemens,       Since 2011 with AT&S in senior         Previous positions include:
     including Managing Director with               positions in Finance and Human          Various management positions
     Siemens Transportation Systems GmbH            Resources                                 within AT&S
     Austria and CEO of the Drive Technology      Various positions at international       Measurement engineer with Leoben
     business unit in Graz from 2003 to 2008        accounting and tax consulting             University of Mining and Metallurgy
   Partner at FOCUSON Business                     companies                             Education:
     Consulting GmbH after leaving Siemens      Education:                                 Degree from Higher Technical
 Education:                                      Certified Tax Consultant                   College of Electrical Engineering
   Degree in Production Engineering from         Degree in Business Administration
     Rosenheim University of Applied                from Karl-Franzens University Graz
                                                                                            1)He was already with the founding company of AT&S

 Company Presentation                                                                                                                            27
Milestones in the Group’s history
1987                                 1994                             1999                                                    2002
Founding of the Group, emerging      Privatization and                Initial public offering on Frankfurt Stock Exchange     Start of production at new Shanghai
from several companies owned by      acquisition by Messrs            („Neuer Markt“). Acquisition of Indal Electronics       facility – one of the leading HDI
the Austrian State Owned             Androsch, Dörflinger, Zoidl      Ltd., largest Indian printed circuit board plant        production sites in the world
Industries                                                            (Nanjangud) – today, AT&S India Private Limited

           2010                                    2009                                       2008
           Start of production                     New production direction: Austrian         AT&S change
           at plant II in India                    plants produce for high-value niches       to Vienna Stock
                                                   in the automotive and industrial
                                                   segment; Shanghai focuses on the
                                                                                              Exchange                                       2006
                                                   high-end mobile devices segment                                                           Acquisition of Korean
                                                                                                                                             flexible printed circuit
                                                                                                                                             board manufacturer,
                                       2011                                2013                                                              Tofic Co. Ltd. – today,
                                        Construction starts on new        AT&S enters the IC substrate                                      AT&S Korea Co., Ltd.
                                         plant in Chongqing, China         market in cooperation with a
                                        Capacity increase in              leading manufacturer of
                                         Shanghai by 30%                   semiconductors

                                                                                                                            2018                   2019
                                                                                                                            Start of the second    AT&S is the global
       2015                                         2016                             2017                                   expansion phase at     number one for high-
       AT&S again achieves record high sales and     AT&S starts serial production Successful introduction and              plant 1 in Chongqing   end printed circuit
       earnings for financial year 2014/15 and       of IC substrates at the plant optimisation of the mSAP technology                             boards
       decides to increase the investment program in in Chongqing                  in Shanghai and Chongqing
       Chongqing from € 350 million to € 480 million
 Company Presentation                                                                                                                                             28
Making sustainability central to our vision and mission

            Responsible                                          Responsible                              Responsible
            Management                                            Employer                           Resource Management
        Business Ethics        Innovation                Safety         Knowledge  Part-time           Climate Change      Energy
                                                    Health      Diversity                        Waste              CO2
Anti-Corruption  Human Rights                                                   Compensation                  LCA
                                     RBA                   Employee Development                    Emissions          Water Shortage
     Communication Digitization

                              Working conditions,
                              Health & Safety
                              Business Ethics

             100%                                       52                           3.391                 12 ≡ 9,3
 AT&S employees sign the Code of Conduct              Nationalities              Women (34,5%)              GWh                kt CO2
                                                                  As of 31.03.2019                       Savings in the Financial Year 2018/19

Company Presentation                                                                                                                             29
This presentation is provided by AT & S Austria Technologie & Systemtechnik Aktiengesellschaft, having its headquarter at Fabriksgasse 13, 8700 Leoben, Austria (“AT&S”), and the
contents are proprietary to AT&S and for information only.
AT&S does not provide any representations or warranties with regard to this presentation or for the correctness and completeness of the statements contained therein, and no
reliance may be placed for any purpose whatsoever on the information contained in this presentation, which has not been independently verified. You are expressly cautioned not
to place undue reliance on this information.
This presentation may contain forward-looking statements which were made on the basis of the information available at the time of preparation and on management‘s expectations
and assumptions. However, such statements are by their very nature subject to known and unknown risks and uncertainties. As a result, actual developments, results, performance
or events may vary significantly from the statements contained explicitly or implicitly herein.
Neither AT&S, nor any affiliated company, or any of their directors, officers, employees, advisors or agents accept any responsibility or liability (for negligence or otherwise) for any
loss whatsoever out of the use of or otherwise in connection with this presentation. AT&S undertakes no obligation to update or revise any forward-looking statements, whether as
a result of changed assumptions or expectations, new information or future events.
This presentation does not constitute a recommendation, an offer or invitation, or solicitation of an offer, to subscribe for or purchase any securities, and neither this presentation
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Company Presentation                                                                                                                                                                30
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