AIXTRON: 2019 guidance fully met and 2020 with growth potential
Strong revenues and order intake in the final quarter / AIXTRON becomes climate neutral / Contract renewal for Dr. Felix Grawert
Herzogenrath/Germany, February 27, 2020 - AIXTRON SE (FSE: AIXA), a leading provider of deposition equipment to the semiconductor industry, today announced its financial results for 2019.
- Order Intake for 2019 was slightly higher than expected at EUR 231.9 million, Orders in Q4/2019 were at EUR 81.4 million rising by 56% quarter-on-quarter
- Revenues were as guided at EUR 259.6 million, Q4/2019 Revenues of EUR 75.1 million were up by 43% quarter-on-quarter
- Gross profit was as guided at EUR 108.7 million or 42% of revenues, Gross Profit in Q4/2019 amounted to EUR 34.0 million (45% of revenues) increasing quarter-on-quarter by 54%
- Operating result (EBIT) was slightly higher than expected at EUR 39.0 million or 15% of revenues, Q4/2019 EBIT was EUR 14.4 million (19% of revenues) and almost tripled quarter-on-quarter
Order Intake for 2019 was EUR 231.9 million. The expected lower level of 2019 orders for MOCVD systems for the production of surface-emitting lasers (VCSEL) was partially offset by demand for power semiconductors and telecommunications production systems as well as by strategic investments of our customers in Mini- and Micro LEDs production feasibility projects. In a sequential quarterly comparison, orders increased from EUR 52.2 million in Q3/2019 to EUR 81.4 million in Q4/2019.
Equipment order backlog was EUR 116.7m as of December 31, 2019, 16% below the previous years' level. Compared to September 30, 2019, backlog increased by 8% from EUR 108.4 million.
Revenues (including service and spare parts) in 2019 were broadly stable at EUR 259.6m. 43% of total equipment revenues of EUR 207.3m were generated by MOCVD systems for the production of optoelectronic components, followed by equipment for LED production (including red-orange-yellow and specialty LEDs) with 35% and power electronics with 18%. In a quarterly comparison, Revenues increased by 43% from EUR 52.6 million in Q3/2019 to EUR 75.1 million in Q4/2019.
Gross Profit in 2019 amounted to EUR 108.7 million or 42% of Revenues. In a quarterly comparison, Gross Profit increased by 54% from EUR 22.1 million (42% of Revenues) in Q3/2019 to EUR 34.0 million (45% of Revenues) in Q4/2019. The Operating Result (EBIT) was EUR 39.0 million or 15% of Revenues which was slightly higher than expected. In a quarterly comparison, the Operating Result almost tripled from EUR 5.5 million (10% of Revenues) in Q3/2019 to EUR 14.4 million (19% of Revenues) in Q4/2019.
Net profit in 2019 was EUR 32.5 million. The year-on-year difference was largely due to the capitalization of deferred taxes in 2018, which led to a tax credit in that year. Compared to the previous quarter, net profit almost tripled from EUR 4.4 million in Q3/2019 to EUR 12.2 million in Q4/2019.
Free cash flow in 2019 was EUR 36.0 million (2018: EUR 4.4m). The increase is mainly due to a stable level of working capital in 2019 compared with increases in the previous year.
Cash and cash equivalents including short-term financial investments (bank deposits with a maturity of at least three months) as of December 31, 2019 were EUR 298.3 million compared to EUR 263.7 million as of December 31, 2018.
|(in EUR million)
|Order backlog (Equipment only)
|Free cash flow*
Business Development 2019
2019 was a challenging year in which AIXTRON successfully maintained its leading market position in MOCVD equipment and applications. Despite a market environment characterized by political and economic uncertainties, we met our full-year guidance. Free cash flow was higher than expected, mainly due to significantly higher cash inflows at the end of the reporting period.
In 2019, AIXTRON invested significantly in the development of new or enhanced products for all major applications. The launch of our new fully automated, high throughput silicon carbide production tool in September 2019 was followed by first customer qualifications and orders for the AIX G5 WW C.
As part of this comprehensive product initiative, we have been working intensively on the enhanced next generation MOCVD equipment for optoelectronics and power electronics. In doing so, we focus on high-performance tools for the production of high quality devices based on Gallium Arsenide (GaAs) and Gallium Nitride (GaN). The new products have been (SiC) or will be released in the 2020/21 timeframe. Our Product portfolio addresses a variety of innovative applications in e-mobility (powertrains, charging infrastructure), telecommunications (5G network), display technology (mini and micro LEDs) and consumer electronics (3D sensing, fast charging).
In the OLED area, our subsidiary APEVA continued last year to work on the qualification of a Gen2 system (370 x 470 mm) together with a large Asian display manufacturer. APEVA expects a decision on the further development of this project this year.
Our cost structure remained stable last year. At EUR 150.9 million, cost of sales in 2019 remained at the previous year's level (2018: EUR 151.2 million). Cost of sales as a percentage of revenues increased to 58% (2018: 56%) due to lower margin ROY LED systems shipped in the first half of the year.
At EUR 69.7 million, operating expenses decreased both in absolute terms (2018: EUR 76.2 million) and relative to revenues (2019: 27%; 2018: 28%).
Climate neutral Company 2019
In 2019, we have become a carbon neutral company. This underlines our commitment to a sustainable corporate governance. Further information on this topic can be found in our Sustainability Report, which we are publishing alongside our Annual Report.
In its meeting on February 26, 2020, the Supervisory Board extended the appointment and contract of Dr. Grawert until August 13, 2025.
For fiscal year 2020, we expect an overall stable to growing development of revenues compared to 2019. In terms of order intake, customer demand is expected across all technology areas. Due to this diversity, the development of orders in the second half of 2020 is difficult to predict. We are optimistic about the long-term positive outlook, both for demand for MOCVD systems for the production of 3D sensing lasers or lasers for optical data transmission as well as for LED-based display applications. In particular, we expect the demand for systems for the production of power electronics made of the wideband gap materials SiC and GaN (silicon carbide, gallium nitride) to increase again in 2020 compared to 2019.
Based on the current corporate structure, the assessment of the order situation and the budget exchange rate of 1.20 USD/EUR, we expect order intake for the Group during 2020 to be in a range between EUR 260 million and EUR 300 million. With revenues in a range between EUR 260 million and EUR 300 million, Management expects to achieve a gross margin of around 40% and an EBIT margin of between 10% and 15% of revenues in fiscal year 2020. The expectations for 2020 include in full the results of the APEVA Group including all necessary investments to further advance the development of OLED activities and are based on the assumption that the coronavirus COVID-19 outbreak will not have a significant impact on the development of our business.
Dr. Bernd Schulte, President of AIXTRON SE, comments: "In light of the many challenges we faced, we are very pleased with the past year. We have met our full year guidance and further strengthened our global market leadership position in MOCVD equipment. Our strategy to serve multiple end applications with one product platform has proven to be very effective in 2019: We were able to largely compensate for the somewhat weaker sales in the Laser/VCSEL segment, primarily through sales in power electronics and specialty LEDs, and thus achieve an operating result similar to that of the previous year".
"Last year we paid particular attention to the development of new or enhanced products within our product portfolio. The successful start with our new production system for silicon carbide applications in 2019 was very promising. We expect the same from the enhancement of our next generation products for optoelectronics and power electronics, which we will be bringing to market in the course of this and next year. In addition, we expect a decision on the further development of our OLED qualification project with a major Asian display manufacturer in 2020," comments Dr. Felix Grawert, President of AIXTRON SE.
The FY/2019 results presentation is available at https://www.aixtron.com/en/investors/publications. The consolidated financial statements (income statement, statement of comprehensive income, balance sheet, cash flow statement, statement of changes in equity) relating to this press release are part of AIXTRON's Annual Report 2019 and are available at https://www.aixtron.com/en/investors/publications. The non-financial group report of AIXTRON SE for 2019 ("Sustainability Report") is also available at https://www.aixtron.com/en/investors/publications.
Investor Conference Call
AIXTRON will host a financial analyst and investor conference call on Thursday, February 27, 2020, 3.00 p.m. CET (6.00 a.m. PST, 09.00 a.m. EST) to review its 2019 results. You can dial into the call at +49 (30) 23 25 31 411 or +1 (862) 701-2734 from 2.45 a.m. CET (5.45 a.m. PST, 8.45 a.m. EST). An audio replay or transcript will be available after the conference call at http://www.aixtron.com/en/investors/events/conference-call.
Investor Relations and Corporate Communications
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Investor Relations and Corporate Communications
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For further information on AIXTRON (FSE: AIXA, ISIN DE000A0WMPJ6) please consult our website at: www.aixtron.com.
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Due to rounding, numbers presented throughout this document may not add up precisely to the totals indicated and percentages may not precisely reflect the absolute figures for the same reason.
This document may contain forward-looking statements regarding the business, results of operations, financial condition and earnings outlook of AIXTRON. These statements may be identified by words such as "may", "will", "expect", "anticipate", "contemplate", "intend", "plan", "believe", "continue" and "estimate" and variations of such words or similar expressions. These forward-looking statements are based on our current assessments, expectations and assumptions, of which many are beyond control of AIXTRON, and are subject to risks and uncertainties. You should not place undue reliance on these forward-looking statements. Should these risks or uncertainties materialize, or should underlying expectations not occur or assumptions prove incorrect, actual results, performance or achievements of AIXTRON may materially vary from those described explicitly or implicitly in the relevant forward-looking statement. This could result from a variety of factors, such as actual customer orders received by AIXTRON, the level of demand for deposition technology in the market, the timing of final acceptance of products by customers, the condition of financial markets and access to financing for AIXTRON, general conditions in the market for deposition plants and macroeconomic conditions, cancellations, rescheduling or delays in product shipments, production capacity constraints, extended sales and qualification cycles, difficulties in the production process, the general development in the semi-conductor industry, increased competition, fluctuations in exchange rates, availability of public funding, fluctuations and/or changes in interest rates, delays in developing and marketing new products, a deterioration of the general economic situation and any other factors discussed in any reports or other announcements , in particular in the chapter Risks in the Annual Report, filed by AIXTRON. Any forward-looking statements contained in this document are based on current expectations and projections of the executive board based on information available the date hereof. AIXTRON undertakes no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise, unless expressly required to do so by law.
This document is an English language translation of a document in German language. In case of discrepancies, the German language document shall prevail and shall be the valid version.
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