XFAB X-FAB Silicon Foundries SE

Intermediate declaration by the Board of Directors

Regulatory News:

Highlights Q1 2022:

› Revenue was USD 178.7 million, within the guidance of USD 175-185 million, up 15% year-on-year (YoY) and up 4% quarter-on-quarter (QoQ)

› Continued strong demand with bookings at USD 239.3 million resulting in a book-to-bill ratio of 1.34

› EBITDA margin of 23.0%, at the upper end of the 19-23% guidance

› EBITDA was USD 41.0 million, up 15% YoY and up 21% QoQ

› EBIT was USD 22.2 million, up 31% YoY and up 57% QoQ

Outlook:

› Q2 2022 revenue is expected to be in the range of USD 180-190 million with an EBITDA margin in the range of 20-24%. This guidance is based on an average exchange rate of 1.10 USD/Euro.

› Management reiterates its full-year guidance with revenues in the range of USD 750-815 million and an EBITDA margin in the range of 21-25%.

› Based on accelerated market development, X-FAB adjusts the long-term guidance and expects to reach USD 1 billion in annual revenues two years earlier than the originally planned 2026 indicated at the X-FAB Investor Day in May 2021. The corresponding EBITDA margin guidance has been raised to >30% (previously >27%).

Revenue breakdown per quarter:

in millions of USD

Q2 2020

Q3 2020

Q4 2020

Q1 2021

Q2 2021

Q3 2021

Q4 2021

Q1 2022

Q1 y-o-y growth

Automotive

61.6

40.8

65.4

83.5

82.8

81.5

83.8

89.7

7%

Industrial

23.9

23.9

27.3

32.4

35.2

38.3

39.7

41.4

28%

Medical

7.3

7.7

12.0

8.7

10.4

14.3

14.5

13.7

59%

Subtotal core business

92.7

72.3

104.7

124.6

128.4

134.1

138.0

144.9

16%

78.1%

75.2%

77.1%

80.1%

79.8%

79.3%

80.1%

81.1%

 

CCC1

25.9

23.7

30.9

30.6

32.4

34.7

34.0

32.5

6%

Others

0.2

0.1

0.3

0.3

0.1

0.3

0.3

1.2

 

Total revenues

118.8

96.1

135.9

155.4

161.0

169.1

172.3

178.7

15%

1. Consumer, Communications & Computer

in millions of USD

Q2 2020

Q3 2020

Q4 2020

Q1 2021

Q2 2021

Q3 2021

Q4 2021

Q1 2022

Q1 y-o-y growth

CMOS

103.4

81.1

115.0

134.9

137.5

141.8

144.2

148.6

10%

MEMS

10.4

9.8

14.6

14.4

16.2

17.4

17.5

17.9

24%

Silicon carbide

5.0

5.2

6.3

6.1

7.2

9.9

10.6

12.1

99%

Total revenues

118.8

96.1

135.9

155.4

161.0

169.1

172.3

178.7

 

15%

 

Business development

In the first quarter of 2022, business continued to develop strongly. X-FAB recorded quarterly revenues of USD 178.7 million, within the guided USD 175-185 million, up 15% year-on-year and 4% quarter-on-quarter. Although slightly down compared to the previous quarter, first quarter bookings remained at an exceptionally high level at USD 239.3 million, up 13% year-on-year.

X-FAB is uniquely positioned as it focuses on specialty technologies tailored to serve the automotive, industrial, and medical markets. First quarter revenues in those core markets amounted to USD 144.9 million, up 16% year-on-year and 5% quarter-on-quarter. Together they accounted for 81% of the Group’s total revenues.

First quarter highlights include record prototyping revenues in automotive as well as all-time high volume production revenues in Industrial and Medical. Overall, Medical recorded the strongest revenue growth, up 59% year-on-year, while Automotive and Industrial rose 7% and 28% year-on-year respectively.

First quarter CCC (Consumer, Communication & Computer) revenues came in at USD 32.5 million, up 6% year-on-year.

The pipeline for new projects is solid reflecting continued strong prototyping revenues in the first quarter, which amounted to USD 24.6 million, up 30% growth year-on-year.

The accelerating transition to green energy and mobility is driving the demand for X-FAB’s silicon carbide (SiC) technology and other supporting applications, spurring growth in Industrial and Automotive. First quarter SiC revenues almost doubled compared to the same quarter last year and reached USD 12.1 million.

X-FAB’s medical business continues to grow in line with the increasing importance of digital healthcare covering point-of-care diagnostics, personalized medicine or telemedicine. As in previous quarters, lab-on-a-chip applications continued to be the main growth driver for Medical. They require the combination of CMOS and MEMS technologies, which X-FAB offers jointly, making it a clear differentiator and a key advantage for customers in developing highly complex lab-on-a-chip devices.

First quarter MEMS revenues, which X-FAB generates across all its end markets, amounted to USD 17.9 million, up 24% year-on-year. Lab-on-a-chip applications as well as contactless temperature sensors were the main growth drivers.

In the first quarter, as order intake remained exceptionally strong, capacity allocation had to be continued while every effort was made to supply customers with the quantities required to avoid supply chain disruptions. At the same time, the ramp-up of X-FAB technologies at X-FAB France progressed well and contributed positively to first quarter revenue growth. The share of the French site’s revenues based on X-FAB technologies reached 42% in the first quarter. While demand for X-FAB’s RF SOI technology weakened, X-FAB France’s automotive revenues, in particular in the highly demanded 180nm automotive technology, went up significantly, representing the main share of the overall automotive growth in the first quarter.

Prototyping and production revenue per quarter and end market:

in millions

of USD

Revenue

Q1 2021

Q2 2021

Q3 2021

Q4 2021

Q1 2022

Q1 y-o-y growth

Automotive

Prototyping

3.2

3.0

3.5

3.6

5.0

57%

Production

80.4

79.8

78.0

80.2

84.8

5%

Industrial

Prototyping

9.0

10.3

12.9

11.5

11.0

22%

Production

23.3

24.9

25.4

28.2

30.4

30%

Medical

Prototyping

2.2

2.9

4.1

4.0

3.1

38%

Production

6.4

7.5

10.2

10.6

10.7

66%

CCC

Prototyping

4.3

4.1

4.8

4.5

4.3

2%

Production

26.3

28.3

29.9

29.5

28.2

7%

Operations update

In the first quarter, X-FAB’s factories continued to run at high load. With continued high demand, increasing productivity and removing production bottlenecks at all sites remained key priorities and a major operational focus throughout the quarter. Multiple new tools ordered in 2021 were delivered this quarter with installation and qualification activities ongoing. Each new tool becoming operational will contribute positively to productivity gains.

Labor markets remained tight in all regions and strong focus has been placed on recruiting and employer marketing activities to ensure there are sufficient staff available to handle the high workload in the fabs. The German sites also suffered from an increased absence rate as a result of Covid-19 quarantines.

In light of the current volatility of global supply chains and even more so to support the Group’s future growth, X-FAB is closely monitoring the supply situation, taking appropriate measures to mitigate any supply risks. This includes the qualification of second and third source suppliers as well as geographical diversification. To date, X-FAB has not been impacted by supply bottlenecks.

Demand for X-FAB’s SiC technologies further accelerated with bookings in the first quarter reaching USD 21.4 million, up 149% year-on-year and 26% quarter-on-quarter. Major initiatives include the expansion of capacity for SiC processing as well as SiC epitaxy, while X-FAB also made progress in streamlining the onboarding process for new customers. The development of standard SiC process blocks is helping to speed up technology releases and reduces time-to-market. Customer interest remains high and the pipeline for new projects remains strong.

Capital expenditures increased significantly to USD 48.8 million during the first quarter, reflecting equipment orders from 2021 which were delivered during Q1 2022. Full-year capital expenditures are expected to come in at approx. USD 200 million. X-FAB is expanding its capacities across all sites in response to accelerated demand as well as expected long-term growth.

Financial update

First quarter EBITDA was USD 41.0 million with an EBITDA margin of 23.0%, at the upper end of the guided 19-23%. Top line growth contributed positively to profitability as did the substantial increase of unfinished and finished goods inventory, which amounted to USD 12.4 million in the first quarter. On the other hand, cost inflation as well as rising depreciations resulting from the Group’s capacity expansion projects put pressure on margins. In order to compensate for this effect, X-FAB is in the process of increasing pricing accordingly.

Cash and cash equivalents at the end of the first quarter amounted to USD 259.3 million, a decrease of 11% compared to the previous quarter end. In the fourth quarter 2021, X-FAB had drawn funds in the amount of USD 77.8 million from its revolving credit line. These were used in the first quarter to cover capex payments for new equipment deliveries.

Euro-denominated sales share came in at 40% during the first quarter, in line with the level of costs incurred in Euro. The actual US-Dollar/Euro exchange rate for the first quarter of 2022 was 1.12 leading to an EBITDA margin of 23.0%. At a constant exchange rate of 1.21, as experienced in the first quarter 2021, the EBITDA margin would have been 22.8%. This demonstrates that the achieved natural hedging of the business has made X-FAB’s profitability development robust against exchange rate fluctuations.

Management comments

Rudi De Winter, CEO of X-FAB Group, said: “In the first quarter we saw a continuation of strong market trends and exceptionally high bookings reflecting how well X-FAB is strategically positioned. With our automotive, industrial, and medical businesses, we are serving the strongest growing end markets, and our technology portfolio enables much needed innovative solutions, especially for the accelerating transition towards green energy and cleaner transportation. Despite the manifold challenges arising from geopolitical conflicts and tight supply chains, I am very excited about X-FAB’s growth prospects and see us well on track for sustainable success, which is also why we have adjusted X-FAB’s long-term guidance upwards.”

X-FAB Quarterly Conference Call

X-FAB’s first quarter results will be discussed in a live conference call on Thursday, April 28, 2022, at 6.30 p.m. CEST. The conference call will be in English. Please register in advance of the conference using the following link: http://emea.directeventreg.com/registration/8344839.

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 April 28, 2022, 11.30 p.m. CEST until May 5, 2022, 11.30 p.m. CEST. The replay number will be +44 (0) 3333009785, conference ID 8344839.

The second quarter 2022 results will be communicated on July 28, 2022.

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 approx. 4,000 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 31 Mar 2022

unaudited

Quarter

ended 31 Mar 2021

unaudited

Quarter

ended 31 Dec 2021

unaudited

Year

ended 31 Dec 2021

audited

Revenue

178,664

155,420

172,279

657,751

Revenues in USD in %

59

67

59

63

Revenues in EUR in %

40

33

41

37

Cost of sales

-135,422

-120,419

-138,351

-507,773

Gross Profit

43,241

35,001

33,928

149,978

Gross Profit margin in %

24.2

22.5

19.7

22.8

 

 

 

 

 

Research and development expenses

-10,759

-8,482

-9,383

-34,308

Selling expenses

-2,149

-2,119

-1,922

-8,017

General and administrative expenses

-8,732

-8,150

-8,651

-32,771

Rental income and expenses from investment properties

292

627

181

1,898

Other income and other expenses

331

155

38

412

Operating profit

22,223

17,032

14,192

77,192

Finance income

7,092

4,283

3,196

16,115

Finance costs

-8,490

-7,167

-4,143

-20,441

Net financial result

-1,398

-2,884

-947

-4,326

 

 

 

 

 

Profit before tax

20,825

14,148

13,245

72,866

Income tax

-1,450

-1,374

9,083

10,774

Profit for the period

19,375

12,775

22,327

83,640

 

 

 

 

 

Operating profit (EBIT)

22,223

17,032

14,192

77,192

Depreciation

18,808

18,551

19,748

76,093

EBITDA

41,031

35,583

33,940

153,286

EBITDA margin in %

23.0

22.9

19.7

23.3

 

 

 

 

 

Earnings per share at the end of period

0.15

0.10

0.17

0.64

Weighted average number of shares

130,631,921

130,631,921

130,631,921

130,631,921

 

 

 

 

 

EUR/USD average exchange rate

1.12305

1.20617

1.14382

 

 

 1.18331

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

31 Mar 2022

unaudited

Quarter ended

31 Mar 2021 unaudited

Year ended

31 Dec 2021

audited

ASSETS

 

 

 

Non-current assets

 

 

 

Property, plant, and equipment

368,674

328,469

340,670

Investment properties

8,158

8,411

8,310

Intangible assets

5,018

4,522

4,034

Other non-current assets

18

58

28

Deferred tax assets

45,528

30,359

45,645

Total non-current assets

427,397

371,819

398,687

 

 

 

 

Current assets

 

 

 

Inventories

195,362

156,180

181,014

Trade and other receivables

74,999

66,121

73,689

Other assets

48,654

43,361

43,354

Cash and cash equivalents

259,271

195,810

290,187

Total current assets

578,286

461,471

588,244

 

 

 

 

TOTAL ASSETS

1,005,683

833,290

986,931

 

 

 

 

EQUITY AND LIABILITIES

 

 

 

Equity

 

 

 

Share capital

432,745

432,745

432,745

Share premium

348,709

348,709

348,709

Retained earnings

-16,780

-107,858

-36,154

Cumulative translation adjustment

-607

-622

-559

Treasury shares

-770

-770

-770

Total equity attributable to equity holders of the parent

763,297

672,204

743,971

 

 

 

 

Non-controlling interests

355

344

365

 

 

 

 

Total equity

763,652

672,548

744,335

 

 

 

 

Non-current liabilities

 

 

 

Non-current loans and borrowings

36,877

40,842

39,917

Other non-current liabilities and provisions

5,685

4,179

5,686

Total non-current liabilities

42,562

45,021

45,602

 

 

 

 

Current liabilities

 

 

 

Trade payables

37,132

27,501

41,364

Current loans and borrowings

93,030

24,890

87,114

Other current liabilities and provisions

69,308

63,331

68,515

Total current liabilities

199,470

115,721

196,993

 

 

 

 

TOTAL EQUITY AND LIABILITIES

1,005,683

833,290

986,931

Condensed Consolidated Statement of Cash Flow

in thousands of USD

Quarter

ended 31 Mar 2022

unaudited

Quarter

ended 31 Mar 2021

unaudited

Quarter

ended 31 Dec 2021

unaudited

Year

ended 31 Dec 2021

audited

Income before taxes

20,825

14,148

13,245

72,866

 

 

 

 

 

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

20,944

21,592

18,518

70,319

Depreciation and amortization, before effect of grants and subsidies

18,808

18,551

19,748

76,093

Recognized investment grants and subsidies netted with depreciation and amortization

-874

-841

-991

-3,530

Interest income and expenses (net)

183

-122

203

-176

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

-158

-112

37

-275

Other non-cash transactions (net)

2,985

4,116

-480

-1,793

 

 

 

 

 

Changes in working capital:

-32,183

-20,195

-14,079

-31,573

Decrease/(increase) of trade receivables

-8,637

-11,293

1,027

-9,769

Decrease/(increase) of other receivables & prepaid expenses

-5,799

-5,499

-3,222

-4,034

Decrease/(increase) of inventories

-14,349

-2,469

-8,454

-27,302

(Decrease)/increase of trade payables

-2,014

526

301

5,146

(Decrease)/increase of other liabilities

-1,384

-1,460

-3,731

4,386

 

 

 

 

 

Income taxes (paid)/received

-107

-1,733

-134

-2,101

 

 

 

 

 

Cash Flow from operating activities

9,479

13,812

17,549

109,511

 

 

 

 

 

Cash Flow from investing activities:

 

 

 

 

Payments for property, plant, equipment & intangible assets

-48,847

-9,702

-21,122

-66,972

Payments for loan investments to related parties

-114

-91

-626

-827

Proceeds from loan investments related parties

98

80

45

211

Proceeds from sale of property, plant, and equipment

164

117

220

669

Interest received

237

471

380

1,769

 

 

 

 

 

Cash Flow used in investing activities

-48,462

-9,125

-21,104

-65,149

Condensed Consolidated Statement of Cash Flow – con’t

in thousands of USD

Quarter

ended 31 Mar 2022

unaudited

Quarter

ended 31 Mar 2021

unaudited

Quarter

ended 31 Dec 2021

unaudited

Year

ended 31 Dec 2021

audited

Cash Flow from (used in) financing activities:

 

 

 

 

Proceeds from loans and borrowings

7,261

0

77,796

82,585

Repayment of loans and borrowings

-2,803

-7,619

-7,807

-28,218

Receipts of sale & leaseback arrangements

7,723

0

0

0

Payments of lease installments

-1,759

-1,174

-1,057

-5,094

Receipt of government grants and subsidies

0

0

535

535

Interest paid

-139

-348

-558

-1,569

Distribution to non-controlling interests

-11

-12

0

-12

 

 

 

 

 

Cash Flow from (used in) financing activities

10,271

-9,153

68,908

48,228

 

 

 

 

 

Effect of changes in foreign currency exchange rates on cash

-2,205

-5,591

-1,180

-8,269

Increase/(decrease) of cash and cash equivalents

-28,712

-4,466

65,354

92,589

Cash and cash equivalents at the beginning of the period

290,187

205,867

226,013

205,867

Cash and cash equivalents at the end of

the period

259,271

195,810

290,187

290,187

###

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