Siltronic closes Q3 2024 in line with expectations

Press release

Siltronic AG
Einsteinstrasse 172
81677 Munich
www.siltronic.com

Siltronic closes Q3 2024 in line with expectations

- Sales in the first nine months of 2024 declined 9.1 percent compared to the previous year; Q3 increased 1.7 percent q-o-q to EUR 357.3 million

- EBITDA margin remains solid at 25.7 percent after nine months (Q3 2024: 25.0 percent)

- Guidance for 2024 confirmed: Sales in the high single-digit percentage range below previous year; delayed customer qualifications for the new fab in Singapore lead to a slight adjustment of the EBITDA margin to a range of 24 to 26 percent

Munich, Germany, October 24, 2024 – As expected, the business performance of Siltronic AG (MDAX/TecDAX: WAF) in Q3 2024 was characterized by subdued demand from the semiconductor industry.

“In a persistently challenging market environment, we have delivered solid quarterly results. Consequently, we can confirm our guidance for the full year 2024. However, it remains uncertain when chip manufacturers' inventories will return to normal levels,” commented Dr. Michael Heckmeier, CEO of Siltronic AG on the developments.

Business Development in Q3 2024

Siltronic generated sales of EUR 357.3 million in Q3 2024, an increase of 1.7 percent compared to the previous quarter (Q2 2024: EUR 351.3 million). This is due to an increase in wafer area sold, which was partially offset by opposing product mix effects. After nine months, the company reported sales of EUR 1,052.2 million, a decrease of 9.1 percent year-on-year (Q1-Q3 2023: EUR 1,157.2 million). This was mainly due to the lower wafer area sold. In addition, product mix-, price- and FX effects also had a slightly negative impact.

Cost of sales increased by 2.6 percent in Q3 2024 compared to the previous quarter, mainly due to higher wafer area sold and a moderate increase in depreciation. For the first nine months of 2024, cost of sales decreased by 2.5 percent compared to the same period in 2023. The disproportionate decline compared to sales is primarily due to a reduced dilution of fixed costs and higher depreciation.

As a result, the gross profit fell by EUR 1.4 million compared to the previous quarter and from January to September 2024 by EUR 83.1 million compared to the previous year. The gross margin fell from 25.3 percent to 20.0 percent year-on-year.

EBITDA in Q3 was EUR 89.4 million and thus on the level of the previous quarter (Q2 2024: EUR 90.6 million). The EBITDA margin remained at a solid level of 25.0 percent (Q2 2024: 25.8 percent). After nine months, Siltronic reported an EBITDA of EUR 270.7 million (Q1-Q3 2023: EUR 342.8 million) and an EBITDA margin of 25.7 percent (Q1-Q3 2023: 29.6 percent).

Due to the lower EBITDA and higher depreciation, EBIT amounted to EUR 28.9 million in Q3 (Q2 2024: EUR 33.0 million) and to EUR 97.8 million after the first nine months (Q1-Q3 2023: EUR 194.5 million). Net profit for the quarter was EUR 18.8 million (Q2 2024: EUR 22.4 million) and earnings per share were EUR 0.60 (Q2 2024: EUR 0.73). Net income for the period from January to September was EUR 68.8 million (Q1-Q3 2023: EUR 169.0 million) and earnings per share of EUR 2.19 after EUR 5.13 in the same period of the previous year.

Investment activity continues to shape assets and financial position; successful refinancing attracts strong investor interest

With an equity ratio of 47.1 percent as of September 30, 2024 (December 31, 2023: 46.6 percent), Siltronic continues to maintain a good balance sheet quality. Loan liabilities increased mainly due to the partial draw of a loan. Additionally a promissory note loan was successfully placed in September and paid out in early October. At roughly EUR 370 million, the original issue volume was significantly exceeded.

“We are pleased with the high level of interest in this transaction. The strong demand is a demonstration of the promissory note loan investors' trust in the company” adds Claudia Schmitt, CFO of Siltronic AG.

Cash flow from operating activities for the period January to September 2024 decreased by EUR 83.3 million compared to the previous year. This was mainly due to the lower EBITDA and the change in prepayments. In the same period of the previous year, there was a significant net inflow, while in the first nine months of the financial year there was a net outflow of prepayments.

Despite a noticable reduction in capex during the year, cash outflows for capex remained at a high level of EUR 565.1 million, mainly due to the construction of the new 300 mm fab in Singapore. Accordingly, net cash flow, which excludes cash inflows and outflows from prepayments, was negative as expected at EUR -317.7 million (Q1-Q3 2023: EUR -631.3 million).

As a result, cash and cash equivalents and financial investments decreased by EUR 168.4 million to EUR 290.7 million in the first nine months of 2024. Siltronic thus reported net financial debt of EUR 739.1 million at the end of September 2024.

Guidance 2024 confirmed

As already communicated in the half-year report 2024, Siltronic AG's Executive Board expects sales to be in the high single-digit percentage range below the previous year. This is primarily due to the lower wafer area sold, as well as each slightly negative FX rate (EUR/USD 1.10), price- and product mix effects.

The customer qualifications that are decisive for the start of depreciation of the new fab in Singapore have been delayed from the fourth quarter of 2024 into next year. As a result, depreciation of the new fab and other ramp costs that impact earnings will occur over the course of 2025. Accordingly, the full-year EBITDA margin guidance is adjusted to 24 to 26 percent. Depreciation and amortization for 2024 will therefore be lower and is expected to be between EUR 230 million and EUR 250 million. Capex including intangible assets remains unchanged and will be in the range of EUR 500 million to EUR 530 million.

Despite the challenging market environment, the company anticipates a significant growth potential in the medium and long term. Key drivers of this growth are megatrends such as Artificial Intelligence, Digitization, and Electromobility. With its investments in expanding production capacity and improving the product mix, Siltronic is well-positioned to profitably support this growth.

Overview of guidance changes

Siltronic AG – Key financial figures Q3 2024

Conference call for analysts and investors

The Executive Board of Siltronic AG will hold a conference call with analysts and investors (in English only) on October 24, 2024 at 10:00 am (CEST). This call will be streamed via the Internet. The audio webcast will be available live as well as on demand on Siltronic’s website.

The current investor presentation and the quarterly statement are also published on the Siltronic website.

Contact:

Verena Stütze
Head of Investor Relations & Communications
Tel.:+49 (0)89 8564 3133
investor.relations@siltronic.com
 

Company profile:

Siltronic AG is one of the world's leading producers of hyperpure silicon wafers and has been a partner to many major semiconductor manufacturers for decades. Siltronic is globally oriented and operates production facilities in Asia, Europe and the USA. Silicon wafers are the foundation of the modern semiconductor industry and the basis for chips in all electronic applications - from computers and smartphones to electric cars and wind turbines. The international company is highly customer-oriented and focused on quality, precision, innovation and growth. Siltronic AG employs around 4,500 people worldwide and has been listed in the Prime Standard of the German Stock Exchange since 2015. Siltronic AG shares are included in both the MDAX and TecDAX stock market indices.

Financial information – pursuant to IFRS, unaudited

Siltronic AG – Consolidated Statement of Profit or Loss

Siltronic AG - Consolidated Statement of Financial Position

Siltronic AG - Consolidated Statement of Cash Flows

Additional financial information

Disclaimer

This press release contains forward-looking statements based on assumptions and estimates made by the Executive Board of Siltronic AG. These statements can be identified by wording such as "expect", "want", "anticipate", "intend", "plan", "believe", "strive", "estimate", and "will" or similar terms. Although we assume that the expectations contained in these forward-looking statements are realistic, we cannot guarantee that they will prove to be correct.  These assumptions may contain risks and uncertainties that could cause the actual figures to differ considerably from the forward-looking statements. Factors that can cause such discrepancies include changes in the macroeconomic and business environment, changes in exchange rates and interest rates, the introduction of products that compete with our own products, a lack of acceptance of new products or services, and changes in corporate strategy. Siltronic does not intend to update these forward-looking statements, nor does it assume any responsibility to do so.

This press release includes supplementary financial indicators that either are or may be so-called alternative performance indicators that are not clearly defined in the relevant financial reporting framework. In assessing the financial position and performance of Siltronic, these supplementary financial indicators should not be used in isolation or as an alternative to those presented in the consolidated financial statements and determined in accordance with the relevant financial reporting framework. Other companies that present or report alternative performance indicators with similar names may calculate them differently.  Explanations of the key financial figures used are available in the Annual Report of Siltronic AG.

Due to rounding, some of the figures presented in this press release as well as in other reports may not add up exactly to the stated totals and percentages presented may not accurately reflect the absolute values to which they relate.

This press release is a quarterly Group statement in accordance with Section 53 of the Exchange Rules for the Frankfurt Stock Exchange.