XFAB X-FAB Silicon Foundries SE

Intermediate declaration by the Board of Directors

Regulatory News:

Highlights Q3 2022:

› Revenue was USD 188.3 million, within the guided USD 182-192 million, up 11% year-on-year (YoY) and flat quarter-on-quarter (QoQ)

› Consistently strong demand across X-FAB’s key end markets, with bookings totaling USD 217.0 million, up 9% YoY, while industrial and silicon carbide revenues were at record levels

› EBITDA at USD 9.2 million with a 4.9% margin due to the USD 36.8 million one-off impact from arbitration proceedings; excluding this exceptional item, EBITDA would have been USD 46.0 million with a margin of 24.4% above the guided 20-24%

› EBIT was USD -9.9 million and would have been USD 26.9 million excluding the one-off item

Outlook:

› Q4 2022 revenue is expected to be in the range of USD 180-190 million with an EBITDA margin in the range of 20-24%, reflecting the temporary impact of a facilities-related incident, which caused a power outage at the Malaysian site in early October, and based on an average exchange rate of 1.00 USD/Euro. Full-year revenues are expected to come in at a range of USD 735-745 million.

› Q1 2023 revenue is expected to come in at a range of USD 205-220 million following full operational recovery of X-FAB Sarawak, Malaysia, and based on a price increase effective January 2023.

Revenue breakdown per quarter:

in millions of USD

Q4 2020

Q1 2021

Q2 2021

Q3 2021

Q4 2021

Q1 2022

Q2 2022

Q3 2022

Q3 y-o-y growth

Automotive

65.4

83.5

82.8

81.5

83.8

89.7

98.3

96.9

19%

Industrial

27.3

32.4

35.2

38.3

39.7

41.4

42.5

46.7

22%

Medical

12.0

8.7

10.4

14.3

14.5

13.7

13.9

13.5

-6%

Subtotal core business

104.7

124.6

128.4

134.1

138.0

144.9

154.7

157.0

17%

77.1%

80.1%

79.8%

79.3%

80.1%

81.1%

81.9%

83.4%

 

CCC*

30.9

30.6

32.4

34.7

34.0

32.5

33.6

30.7

-11%

Others

0.3

0.3

0.1

0.3

0.3

1.2

0.6

0.6

 

Total revenues

135.9

155.4

161.0

169.1

172.3

178.7

188.8

188.3

11%

* Consumer, Communications & Computer

in millions of USD

Q4 2020

Q1 2021

Q2 2021

Q3 2021

Q4 2021

Q1 2022

Q2 2022

Q3 2022

Q3 y-o-y growth

CMOS

115.0

134.9

137.5

141.8

144.2

148.6

156.3

152.6

8%

MEMS

14.6

14.4

16.2

17.4

17.5

17.9

19.8

18.4

6%

Silicon carbide

6.3

6.1

7.2

9.9

10.6

12.1

12.8

17.4

76%

Total revenues

135.9

155.4

161.0

169.1

172.3

178.7

188.8

188.3

11%

Business development

In the third quarter, X-FAB’s business continued to develop strongly. Customer demand remained at high levels despite current political and economic volatility.

Third quarter revenues amounted to USD 188.3 million, within the guided USD 182-192 million, up 11% year-on-year and flat quarter-on-quarter. The current Euro weakness created a headwind for X-FAB’s top line. At the same USD/Euro exchange rate as experienced in the respective comparable quarter, X-FAB’s revenues would have recorded a growth of 19% year-on-year and 2% quarter-on-quarter.

Revenues in X-FAB’s core markets – automotive, industrial, and medical – came in at USD 157.0 million, up 17% year-on-year and 2% quarter-on-quarter. Their share of the Group’s total revenues increased further to more than 83% reflecting the continued strength of these key end markets and the underlying transformation towards businesses with longer life cycles and higher value-add.

X-FAB’s automotive revenues in the third quarter were up 19% year-on-year and are expected to develop strongly going forward due to the rising trend of vehicle electrification. X-FAB’s high-voltage CMOS as well as silicon carbide (SiC) technologies continued to be in high demand. In the third quarter, SiC revenues reached a record level of USD 17.4 million, up 76% year-on-year.

In the third quarter, X-FAB also recorded all-time high industrial revenues at USD 46.7 million, up 22% year-on-year. The strong and consistent growth in this market is mainly driven by the industry’s transition to renewable and environmentally friendly energy sources, which keeps pushing demand for power semiconductors. Additionally, industrial automation to increase efficiency across all sectors is also contributing to the sustainable growth of X-FAB’s industrial business.

Third quarter revenues in the medical market were down 6% year-on-year due to normal fluctuations of medical prototyping revenues (-32%) while medical production revenues continued to grow steadily by 5%. With its combined CMOS and MEMS capabilities, X-FAB is uniquely positioned to support advances in healthcare increasingly achieved using semiconductor technology. This will drive the growth of X-FAB’s medical business in the long-term. In the third quarter, the growth in medical volume production revenues was mainly driven by lab-on-a-chip applications for DNA sequencing, temperature sensors for contactless thermometers as well as chips for ultrasound equipment.

X-FAB’s CCC business (Consumer, Communication & Computer) recorded revenues of USD 30.7 million, down 11% year-on-year and 9% quarter-on-quarter. The decrease relates to the legacy business still being produced at X-FAB France which has recently been decreasing at a faster pace and is expected to be fully replaced in the first quarter of 2023. The portion of the French site’s revenues based on X-FAB technologies went up to 56% in the third quarter.

Quarterly bookings came in at USD 217.0 million, up 9% year-on-year and 33% quarter-on-quarter with particularly strong order intake in automotive. Third quarter bookings already reflect the increased price level effective 2023, both for LTA (long-term agreements) and non-LTA customers. Additionally, the bookings growth also shows the high demand beyond the business that will be covered by long-term contracts. This includes orders for MEMS and more mature CMOS nodes.

Third quarter prototyping revenues came in at USD 22.8 million, down 11% year-on-year and up 11% quarter-on-quarter.

Prototyping and production revenue per quarter and end market:

in millions

of USD

Revenue

Q3 2021

Q4 2021

Q1 2022

Q2 2022

Q3 2022

Q3 y-o-y growth

Automotive

Prototyping

3.5

3.6

5.0

4.1

3.3

-5%

Production

78.0

80.2

84.8

94.2

93.6

20%

Industrial

Prototyping

12.9

11.5

11.0

9.2

11.1

-14%

Production

25.4

28.2

30.4

33.3

35.6

40%

Medical

Prototyping

4.1

4.0

3.1

1.6

2.8

-32%

Production

10.2

10.6

10.7

12.4

10.7

5%

CCC

Prototyping

4.8

4.5

4.3

5.0

5.0

4%

Production

29.9

29.5

28.2

28.6

25.7

-14%

Operations update

In the third quarter, X-FAB continued to run its factories at full load and progressed to expand capacities in line with the delivery and availability of new tools. In times of universally limited resources, X-FAB’s stringent supply chain management as well as comprehensive recruiting activities contributed to seamless operations across all sites.

The silicon carbide business gained further traction. Driven by X-FAB’s streamlined onboarding process, which was introduced in the fourth quarter last year to speed up customers’ time-to-market, the number of new projects has been increasing significantly, and X-FAB keeps attracting new customers. In response to strong demand, X-FAB accelerated its activities to expand SiC processing capacity and plans to more than double the current run rate by the end of 2023. The delivery of additional tools to increase SiC epitaxy capacity is still expected this year.

On October 2, 2022, the Malaysian site experienced a major facilities-related power outage. Thanks to the high level of commitment of the teams on site, the damage was quickly contained, and comprehensive repair and re-qualifications of production started immediately. The incident is expected to impact fourth quarter revenues by approximately USD 15 million, which is taken into account in the respective guidance.

Quarterly capital expenditures came in at USD 40.9 million, up 87% against the same quarter last year. Full year capital expenditures are expected to come in at approximately USD 200 million but could eventually be lower due to prolonged and uncertain lead times for the delivery of new equipment ordered.

Financial update

The outcome of arbitration proceedings with a supplier (see press release dated Oct 6, 2022) had a one-off negative impact of USD 36.8 million on X-FAB’s third quarter earnings. EBITDA was USD 9.2 million with a margin of 4.9% versus the guided 20-24%. Excluding this non-recurring item, which was recorded under “Other income and expenses”, the EBITDA margin would have been 24.4%. Third quarter operating profit (EBIT) came in at USD -9.9 million compared to USD 26.9 million excluding the impact of the arbitration, which has now been completed and fully accounted for.

Cash and cash equivalents at the end of the third quarter amounted to USD 327.5 million, up 30.6% compared to the previous quarter end.

While the current Euro weakness created a headwind for the top line the natural hedging of the business makes X-FAB’s profitability largely independent from US-Dollar/Euro exchange rate fluctuations. At a constant USD/Euro exchange rate of 1.18 as experienced in the previous year’s quarter, the EBITDA margin would have been 0.3 percentage points higher.

Management comments

Rudi De Winter, CEO of X-FAB Group, said: “I am very excited about how well X-FAB is positioned and I could not be more convinced of our long-term growth trajectory. With the technologies and expertise X-FAB offers we address exactly those segments of the semiconductor industry that are forecast to show the strongest growth over the next decade, in particular the automotive part of our business, and we see this reflected in the consistently strong customer interest with bookings beyond our capability to produce. The urgent need for green mobility and sustainable energy keeps driving demand for X-FAB’s silicon carbide and high-voltage CMOS technologies while X-FAB also benefits from rising demand for novel medical applications that increasingly rely on semiconductor technologies as we provide them. I see X-FAB well on track to reach USD 1 billion revenues by 2024 with an EBITDA margin of 30% despite the currently challenging macro-economic environment.”

X-FAB Quarterly Conference Call

X-FAB’s third quarter results will be discussed in a live conference call on Thursday, October 27, 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: https://cossprereg.btci.com/prereg/key.process?key=PYN6XUTKT.

The conference call will be available for replay for ten days following the event. Please call +1 617 801 6888 and enter the following passcode: 95428830.

The fourth quarter 2022 results will be communicated on February 9, 2023.

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 30 Sep 2022

unaudited

Quarter

ended 30 Sep 2021

unaudited

Quarter

ended 30 Jun 2022

unaudited

Nine months

ended 30 Sep 2022

unaudited

Nine months

ended 30 Sep 2021

unaudited

Revenue

188,336

169,097

188,832

555,831

485,471

Revenues in USD in %

59

60

58

59

64

Revenues in EUR in %

41

40

42

41

35

Cost of sales

-142,432

-129,773

-142,870

-420,724

-369,422

Gross Profit

45,904

39,323

45,962

135,107

116,049

Gross Profit margin in %

24.4

23.3

24.3

24.3

23.9

 

 

 

 

 

 

Research and development expenses

-9,917

-7,751

-9,920

-30,596

-24,925

Selling expenses

-1,844

-1,969

-1,968

-5,961

-6,095

General and administrative expenses

-8,860

-8,320

-10,495

-28,087

-24,120

Rental income and expenses from investment properties

-328

422

187

151

1,717

Other income and other expenses

-34,897

-340

257

-34,310

374

Operating profit

-9,943

21,366

24,023

36,304

63,000

Finance income

10,219

5,166

8,585

25,896

12,920

Finance costs

-13,690

-6,027

-24,153

-46,332

-16,299

Net financial result

-3,471

-861

-15,567

-20,436

-3,379

 

 

 

 

 

 

Profit before tax

-13,413

20,505

8,456

15,868

59,621

Income tax

-1,608

1,296

-1,539

-4,596

1,691

Profit for the period

-15,021

21,801

6,917

11,272

61,313

 

 

 

 

 

 

Operating profit (EBIT)

-9,943

21,366

24,023

36,304

63,000

Depreciation

19,123

19,076

18,442

56,372

56,345

EBITDA

9,180

40,442

42,465

92,676

119,345

EBITDA margin in %

4.9

23.9

22.5

16.7

24.6

 

 

 

 

 

 

Earnings per share at the end of period

-0.11

0.17

0.05

0.09

0.47

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

1.00955

1.17954

1.06719

1.06620

 

1.19661

 

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 2022 unaudited

Quarter ended 30 Sep 2021 unaudited

Year ended 31 Dec 2021 audited

ASSETS

 

 

 

Non-current assets

 

 

 

Property, plant, and equipment

419,827

330,295

340,670

Investment properties

7,952

8,120

8,310

Intangible assets

7,269

3,996

4,034

Other non-current assets

6

38

28

Deferred tax assets

44,912

36,097

45,645

Total non-current assets

479,967

378,546

398,687

 

 

 

 

Current assets

 

 

 

Inventories

204,278

172,560

181,014

Trade and other receivables

82,595

66,530

73,689

Other assets

47,118

38,784

43,354

Cash and cash equivalents

327,468

226,013

290,187

Total current assets

661,459

503,886

588,244

 

 

 

 

TOTAL ASSETS

1,141,425

882,432

986,931

 

 

 

 

EQUITY AND LIABILITIES

 

 

 

Equity

 

 

 

Share capital

432,745

432,745

432,745

Share premium

348,709

348,709

348,709

Retained earnings

-24,625

-58,671

-36,154

Cumulative translation adjustment

185

-587

-559

Treasury shares

-770

-770

-770

Total equity attributable to equity holders of the parent

756,243

721,426

743,971

 

 

 

 

Non-controlling interests

0

348

365

 

 

 

 

Total equity

756,243

721,774

744,335

 

 

 

 

Non-current liabilities

 

 

 

Non-current loans and borrowings

65,234

32,251

39,917

Other non-current liabilities and provisions

3,686

4,153

5,686

Total non-current liabilities

68,921

36,404

45,602

 

 

 

 

Current liabilities

 

 

 

Trade payables

41,282

31,204

41,364

Current loans and borrowings

191,519

17,647

87,114

Other current liabilities and provisions

83,460

75,404

68,515

Total current liabilities

316,261

124,255

196,993

 

 

 

 

TOTAL EQUITY AND LIABILITIES

1,141,425

882,432

986,931

Condensed Consolidated Statement of Cash Flow

in thousands of USD

Quarter

ended 30 Sep 2022

unaudited

Quarter

ended 30 Sep 2021

unaudited

Quarter

ended 30 Jun 2022

unaudited

Nine months

ended 30 Sep 2022

unaudited

Nine months

ended 30 Sep 2021

unaudited

Income before taxes

-13,413

20,505

8,456

15,868

59,621

 

 

 

 

 

 

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

18,392

18,131

36,295

75,631

51,801

Depreciation and amortization, before effect of grants and subsidies

19,123

19,076

18,442

56,372

56,345

Recognized investment grants and subsidies netted with depreciation and amortization

-820

-850

-841

-2,535

-2,539

Interest income and expenses (net)

967

-139

13,015

14,165

-379

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

-1,822

80

-19

-1,998

-312

Other non-cash transactions (net)

945

-36

5,698

9,628

-1,313

 

 

 

 

 

 

Changes in working capital:

8,067

15,565

-21,335

-45,451

-17,494

Decrease/(increase) of trade receivables

7,883

1,439

-15,479

-16,232

-10,796

Decrease/(increase) of other receivables & prepaid expenses

1,913

10,743

-918

-4,804

-811

Decrease/(increase) of inventories

-5,852

-10,324

-3,062

-23,263

-18,848

(Decrease)/increase of trade payables

-3,080

4,446

-3,341

-8,436

4,845

(Decrease)/increase of other liabilities

7,203

9,261

1,466

7,284

8,117

 

 

 

 

 

 

Income taxes (paid)/received

-342

-220

-108

-557

-1,967

 

 

 

 

 

 

Cash Flow from operating activities

12,704

53,981

23,308

45,491

91,962

 

 

 

 

 

 

Cash Flow from investing activities:

 

 

 

 

 

Payments for property, plant, equipment & intangible assets

-40,918

-21,932

-36,760

-126,524

-45,849

Payments for investments

-204

0

0

-204

0

Payments for loan investments to related parties

-45

-72

-35

-193

-201

Proceeds from loan investments related parties

70

42

62

230

166

Proceeds from sale of property, plant, and equipment

1,887

47

64

2,115

449

Interest received

394

451

275

906

1,390

 

 

 

 

 

 

Cash Flow used in investing activities

-38,815

-21,464

-36,393

-123,670

-44,046

Condensed Consolidated Statement of Cash Flow – con’t

in thousands of USD

Quarter

ended 30 Sep 2022

unaudited

Quarter

ended 30 Sep 2021

unaudited

Quarter

ended 30 Jun 2022

unaudited

Nine months

ended 30 Sep 2022

unaudited

Nine months

ended 30 Sep 2021

unaudited

Cash Flow from (used in) financing activities:

 

 

 

 

 

Proceeds from loans and borrowings

129,728

310

15,281

152,270

4,789

Repayment of loans and borrowings

-1,892

-8,561

-1,367

-6,062

-20,411

Receipts of sale & leaseback arrangements

0

0

0

7,723

0

Payments of lease installments

-1,362

-1,335

-1,258

-4,379

-4,037

Receipt of government grants and subsidies

512

0

0

512

0

Interest paid

-13,503

-312

-432

-14,074

-1,010

Distribution to non-controlling interests

0

0

0

-11

-12

 

 

 

 

 

 

Cash Flow from (used in) financing activities

113,484

-9,898

12,224

135,979

-20,681

 

 

 

 

 

 

Effect of changes in foreign currency exchange rates on cash

-10,734

-1,715

-7,581

-20,519

-7,089

Increase/(decrease) of cash and cash equivalents

87,373

22,619

-861

57,800

27,235

Cash and cash equivalents at the beginning of the period

250,828

205,109

259,271

290,187

205,867

Cash and cash equivalents at the end of

the period

327,468

226,013

250,828

327,468

226,013

###

View source version on businesswire.com: https://www.businesswire.com/news/home/20221027005784/en/

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