XFAB X-FAB Silicon Foundries SE

Intermediate declaration by the Board of Directors

Regulatory News:

X-FAB Silicon Foundries SE (BOURSE:XFAB)

Highlights Q4 2022:

› Revenue was USD 183.6 million, within the guided USD 180-190 million, up 7% year-on-year (YoY) and down 2% quarter-on-quarter (QoQ)

› All-time high automotive revenue at USD 104.4 million, up 25% YoY

› Consistently strong demand with bookings at USD 191.5 million and a backlog at USD 480.5 million

› EBITDA at USD 42.2 million, up 24% YoY

› EBITDA margin of 23.0%, within the guided 20-24%

› EBIT was USD 21.0 million with an EBIT margin of 11.5%

Highlights 2022:

› Revenue was USD 739.5 million, within the guided USD 735-745 million, up 12% YoY

› Core business – Automotive, Industrial and Medical – reaching a share of 84% of total revenue and a CAGR of 12% over the past five years

› EBITDA at USD 134.9 million, down 12% YoY due to exceptional item in the third quarter 2022

› EBITDA margin of 18.2%, excluding one-off item EBITDA margin would have been 23.4%

› EBIT was USD 57.3 million with an EBIT margin of 7.8%, excluding one-off item EBIT margin would have been 12.9%

Outlook:

› Management reiterates the previous Q1 2023 guidance with revenues in the range of USD 205-220 million and an EBITDA margin in the range of 22-26%.

› Full-year 2023 revenues are expected to come in at a range of USD 880-960 million with an EBITDA margin in the range of 23-27%.

› Guidance is based on an average exchange rate of 1.08 USD/Euro

Revenue breakdown per quarter:

in millions of USD

Q1 2021

Q2 2021

Q3 2021

Q4 2021

Q1 2022

Q2 2022

Q3 2022

Q4 2022

Q4 y-o-y growth

Automotive

83.5

82.8

81.5

83.8

89.7

98.3

96.9

104.4

25%

Industrial

32.4

35.2

38.3

39.7

41.4

42.5

46.7

42.3

7%

Medical

8.7

10.4

14.3

14.5

13.7

13.9

13.5

14.6

1%

Subtotal core business

124.6

128.4

134.1

138.0

144.9

154.7

157.0

161.3

17%

80.1%

79.8%

79.3%

80.1%

81.1%

81.9%

83.4%

87.9%

 

CCC*

30.6

32.4

34.7

34.0

32.5

33.6

30.7

21.6

-36%

Others

0.3

0.1

0.3

0.3

1.2

0.6

0.6

0.7

 

Total revenues

155.4

161.0

169.1

172.3

178.7

188.8

188.3

183.6

7%

* Consumer, Communications & Computer

in millions of USD

Q1 2021

Q2 2021

Q3 2021

Q4 2021

Q1 2022

Q2 2022

Q3 2022

Q4 2022

Q4 y-o-y growth

CMOS

134.9

137.5

141.8

144.2

148.6

156.3

152.6

151.9

5%

MEMS

14.4

16.2

17.4

17.5

17.9

19.8

18.4

19.5

11%

Silicon carbide

6.1

7.2

9.9

10.6

12.1

12.8

17.4

12.2

15%

Total revenues

155.4

161.0

169.1

172.3

178.7

188.8

188.3

183.6

7%

Business development

In the fourth quarter, X-FAB recorded revenues of USD 183.6 million, within the guided USD 180-190 million, up 7% year-on-year and down 2% quarter-on-quarter. The Euro weakness in the fourth quarter continued to have an impact on the top line growth. At the same USD/Euro exchange rate as in the respective comparable quarter, X-FAB’s revenues would have gone up 12% year-on-year.

Full-year revenues amounted to USD 739.5 million, within the guided USD 735-745 million, up 12% year-on-year. X-FAB’s core markets – automotive, industrial, and medical – accounted for USD 618.0 million, up 18% year-on-year reflecting the strong demand in these end-markets throughout 2022. With its comprehensive technology portfolio X-FAB enables the development of sustainable and energy-efficient products and is ideally positioned to support the transition to electric mobility and renewable energy sources as well as digitization in the medical sector.

Fourth quarter revenues in X-FAB’s core markets came in at USD 161.3 million, up 17% year-on-year and 3% quarter-on-quarter. The proportion of total revenues accounted for by X-FAB's core business increased significantly to 88%, which was mainly driven by the strong growth of X-FAB’s automotive business.

Fourth quarter automotive revenues reached an all-time high of USD 104.4 million, up 25% year-on-year and up 8% quarter-on-quarter. The increase primarily reflects the ramp-up of the automotive business at X-FAB France, where the capacity conversion from legacy business to X-FAB technologies gained momentum. The proportion of the French site’s revenues based on X-FAB technologies increased significantly to 84% in the fourth quarter from 56% in the previous quarter. Full year automotive revenues recorded a growth of 17% year-on-year. In 2022, automotive demand continued to be driven by the transition to electric vehicles and the associated increase of semiconductor content per unit. Order intake was very high throughout the year and capacity had to be allocated between customers due to persistent shortage of supply.

In the fourth quarter, industrial revenues came in at USD 42.3 million, up 7% compared to the same quarter last year and down 9% quarter-on-quarter. In the full year of 2022, X-FAB’s industrial business recorded a growth of 19%. The shift to renewable energy sources drove strong demand for power semiconductors, which is expected to accelerate further by more stringent regulations for companies across all sectors to reduce greenhouse gas emissions.

Silicon carbide (SiC) revenues in the fourth quarter amounted to USD 12.2 million, up 15% year-on-year. The 30% quarter-on-quarter decline is entirely related to the increasing proportion of customers procuring their own SiC raw wafers and consigning them to X-FAB. While this has reduced the top line, particularly in Industrial where the SiC contribution is marginally higher, X-FAB’s value creation remained unaffected, and fourth quarter SiC wafer output was stable compared to the exceptionally strong previous quarter. Full year SiC revenues came in at USD 54.5 million, recording a strong year-on-year growth of 61%.

Fourth quarter medical revenues totaled USD 14.6 million, up 1% year-on-year and 8% sequentially. Due to normal fluctuations, prototyping revenues were down 30% compared to the same quarter last year, whereas medical volume production revenues recorded a 12% growth year-on-year. In 2022, medical revenues came in at USD 55.8 million, an increase of 16%. X-FAB benefits from the growing trend to use semiconductor technology for advances in the prevention, diagnosis, treatment and monitoring of disease. The main growth drivers in 2022 were DNA sequencing as well as ultrasound applications and contact-less temperature sensors.

In the fourth quarter, X-FAB’s CCC business (Consumer, Communication & Computer) recorded revenues of USD 21.6 million, down 36% year-on-year and 30% quarter-on-quarter. This is in line with the plan to convert capacity at X-FAB France, which was used to manufacture the site's legacy business, to X-FAB technologies. Full year CCC revenues for the same reason decreased to USD 118.4 million, down 10% compared to the previous year. The freed-up capacity will be fully converted to further ramp production of X-FAB's high-demand 180nm automotive technology.

Backlog in the fourth quarter reached a record of USD 480.5 million while quarterly bookings came in at USD 191.5 million with a book-to-bill of 1.04. Demand remains high and X-FAB expects its core business to grow strongly in 2023. Automotive revenues are forecast to increase by approximately 35% over 2022, industrial and medical revenues by about 25% and 10% respectively, whereas CCC revenues will further decrease at a rate of approximately 30%. This is supported by the increased visibility resulting from the introduction of long-term agreements (LTAs) with customers. To date, seven LTAs have been signed covering a large portion of X-FAB's 200mm CMOS capacity with a total value of USD 1.4 billion over three years. X-FAB has also started to negotiate LTAs for its SiC business. One LTA has been signed and five more are expected to be signed by the end of the first half 2023.

Prototyping revenues came in at USD 23.6 million, down 2% year-on-year and up 4% quarter-on-quarter. In 2022, they amounted to USD 91.5 million, up 3% over 2021.

Prototyping and production revenue per quarter and end market:

in millions

of USD

Revenue

Q4 2021

Q1 2022

Q2 2022

Q3 2022

Q4 2022

Q4 y-o-y growth

Automotive

Prototyping

3.6

5.0

4.1

3.3

4.7

29%

Production

80.2

84.8

94.2

93.6

99.8

24%

Industrial

Prototyping

11.5

11.0

9.2

11.1

11.2

-3%

Production

28.2

30.4

33.3

35.6

31.1

11%

Medical

Prototyping

4.0

3.1

1.6

2.8

2.8

-30%

Production

10.6

10.7

12.4

10.7

11.8

12%

CCC

Prototyping

4.5

4.3

5.0

5.0

4.6

1%

Production

29.5

28.2

28.6

25.7

17.1

-42%

Operations update

In the fourth quarter, all sites continued to operate at high load driving ongoing initiatives to increase productivity as well as to implement capacity expansion measures. X-FAB’s Malaysian site successfully recovered after the power outage experienced in early October 2022.

Quarterly capital expenditures came in at USD 54.1 million. With a total of USD 180.6 million in 2022, annual capital expenditures have turned out slightly lower than expected due to delays in the delivery of new equipment ordered.

In response to strong demand, X-FAB is expanding capacity at all sites and plans to invest a total of USD 1 billion over the period of 2023 to 2025, of which approximately USD 350 million are expected to be spent in 2023. Key investment projects include the capacity expansion at X-FAB Sarawak, Malaysia, and the continued conversion of capacity at the French site to X-FAB technologies. Both projects are essential to meet the strong demand for X-FAB's 180nm automotive technology platform. In line with growth projections, X-FAB will also gradually expand its SiC business with a target capacity of 17k wafer starts per month due to be installed by 2025. In 2023, the current run rate for SiC wafers is expected to double to approximately 7k wafer starts per month.

Financial update

Fourth quarter EBITDA was USD 42.2 million with an EBITDA margin of 23.0%, at the upper end of the guided 20-24%. Due to the natural hedging of X-FAB’s business, the current weakness of the Euro had no impact on earnings, while price increases offset cost inflationary pressures.

At a constant USD/Euro exchange rate of 1.14 as experienced in the previous year’s quarter, the EBITDA margin would have been 0.2 percentage points higher.

Cash and cash equivalents at the end of the fourth quarter amounted to USD 369.4 million, up 12.8% compared to the previous quarter end. Cash flow from operating activities was USD 54.5 million, fully covering capital expenditures in the fourth quarter.

Management comments

Rudi De Winter, CEO of X-FAB Group, said: “We closed 2022 with continued high demand and I see X-FAB very well positioned for future growth and success. X-FAB is in the sweet spot of the semiconductor market and our expertise in specialty applications for the automotive, industrial and medical sector continues to get a lot of traction in the market. In the fourth quarter, X-FAB’s automotive business accelerated and set a new revenue record, reflecting strong customer interest as well as the progress we have achieved in ramping automotive capacity at our French site. This positive overall trend will continue in 2023 and our key focus is on execution excellence and productivity improvements to meet customers' demand. The introduction of long-term agreements with customers has significantly increased the visibility of our business, providing a solid foundation for the major investment projects we have initiated in 2022. We are well on track to not only reach our USD 1 billion revenue target in 2024, but to continue to grow strongly beyond.”

Procedures of the independent auditor

The statutory auditor, KPMG Bedrijfsrevisoren – Réviseurs d’Entreprises BV/SRL, represented by Jos Briers, has confirmed that the audit procedures, which have been substantially completed, have not revealed any material misstatement in the accounting information included in the Company’s annual announcement.

X-FAB Quarterly Conference Call

X-FAB’s fourth quarter results will be discussed in a live conference call on Thursday, February 9, 2023, at 6.30 p.m. CET. 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=PFCHRG9TC.

The conference call will be available for replay for ten days following the event. Please call +1-754-333-7735 and enter the following replay code: 157834.

The first quarter 2023 results will be communicated on April 27, 2023.

Save the date: X-FAB Investor Day 2023 scheduled for June 8, 2023, in Paris.

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. 4,200 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 Dec 2022

unaudited

Quarter

ended 31 Dec 2021

unaudited

Quarter

ended 30 Sep 2022

unaudited

Year

ended 31 Dec 2022

unaudited

Year

ended 31 Dec 2021

audited

Revenue

183,638

172,279

188,336

739,469

657,751

Revenues in USD in %

56

59

59

58

63

Revenues in EUR in %

44

41

41

42

37

Cost of sales

-142,791

-138,351

-142,432

-563,515

-507,773

Gross Profit

40,847

33,928

45,904

175,954

149,978

Gross Profit margin in %

22.2

19.7

24.4

23.8

22.8

 

 

 

 

 

 

Research and development expenses

-10,208

-9,383

-9,917

-40,803

-34,308

Selling expenses

-2,218

-1,922

-1,844

-8,179

-8,017

General and administrative expenses

-9,400

-8,651

-8,860

-37,487

-32,771

Rental income and expenses from investment properties

-448

181

-328

-298

1,898

Other income and other expenses

2,458

38

-34,897

-31,852

412

Operating profit

21,031

14,192

-9,943

57,335

77,192

Finance income

10,635

3,196

10,219

36,531

16,115

Finance costs

-10,472

-4,143

-13,690

-56,804

-20,441

Net financial result

163

-947

-3,471

-20,273

-4,326

 

 

 

 

 

 

Profit before tax

21,194

13,245

-13,413

37,062

72,866

Income tax

20,025

9,083

-1,608

15,429

10,774

Profit for the period

41,219

22,327

-15,021

52,491

83,640

 

 

 

 

 

 

Operating profit (EBIT)

21,031

14,192

-9,943

57,335

77,192

Depreciation

21,161

19,748

19,123

77,534

76,093

EBITDA

42,192

33,940

9,180

134,869

153,286

EBITDA margin in %

23.0

19.7

4.9

18.2

23.3

 

 

 

 

 

 

Earnings per share at the end of period

0.32

0.17

-0.11

0.40

0.64

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

1.01900

1.14382

1.00955

1.05431

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

Year ended

31 Dec 2022

unaudited

Year ended

31 Dec 2021

audited

ASSETS

 

 

Non-current assets

 

 

Property, plant, and equipment

460,126

340,670

Investment properties

7,675

8,310

Intangible assets

6,199

4,034

Other non-current assets

79

28

Deferred tax assets

67,977

45,645

Total non-current assets

542,056

398,687

 

 

 

Current assets

 

 

Inventories

214,435

181,014

Trade and other receivables

73,116

73,689

Other assets

56,024

43,354

Cash and cash equivalents

369,425

290,187

Total current assets

713,001

588,244

 

 

 

TOTAL ASSETS

1,255,057

986,931

 

 

 

EQUITY AND LIABILITIES

 

 

Equity

 

 

Share capital

432,745

432,745

Share premium

348,709

348,709

Retained earnings

16,509

-36,154

Cumulative translation adjustment

-226

-559

Treasury shares

-770

-770

Total equity attributable to equity holders of the parent

796,968

743,971

 

 

 

Non-controlling interests

0

365

 

 

 

Total equity

796,968

744,335

 

 

 

Non-current liabilities

 

 

Non-current loans and borrowings

63,433

39,917

Other non-current liabilities and provisions

4,024

5,686

Total non-current liabilities

67,456

45,602

 

 

 

Current liabilities

 

 

Trade payables

53,654

41,364

Current loans and borrowings

233,513

87,114

Other current liabilities and provisions

103,467

68,515

Total current liabilities

390,633

196,993

 

 

 

TOTAL EQUITY AND LIABILITIES

1,255,057

986,931

Condensed Consolidated Statement of Cash Flow

in thousands of USD

Quarter

ended 31 Dec 2022

unaudited

Quarter

ended 31 Dec 2021

unaudited

Quarter

ended 30 Sep 2022

unaudited

Year

ended 31 Dec 2022

unaudited

Year

ended 31 Dec 2021

audited

Income before taxes

21,194

13,245

-13,413

37,062

72,866

 

 

 

 

 

 

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

20,664

18,518

18,392

96,296

70,319

Depreciation and amortization, before effect of grants and subsidies

21,161

19,748

19,123

77,534

76,093

Recognized investment grants and subsidies netted with depreciation and amortization

-811

-991

-820

-3,346

-3,530

Interest income and expenses (net)

3,242

203

967

17,407

-176

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

-1,890

37

-1,822

-3,889

-275

Loss/(gain) on the change in fair value of derivatives and financial assets (net)

500

0

0

500

0

Other non-cash transactions (net)

-1,538

-480

945

8,090

-1,793

 

 

 

 

 

 

Changes in working capital:

12,564

-14,079

8,067

-32,886

-31,573

Decrease/(increase) of trade receivables

9,571

1,027

7,883

-6,661

-9,769

Decrease/(increase) of other receivables & prepaid expenses

-7,955

-3,222

1,913

-12,759

-4,034

Decrease/(increase) of inventories

-10,159

-8,454

-5,852

-33,422

-27,302

(Decrease)/increase of trade payables

6,563

301

-3,080

-1,873

5,146

(Decrease)/increase of other liabilities

14,544

-3,731

7,203

21,828

4,386

 

 

 

 

 

 

Income taxes (paid)/received

77

-134

-342

-480

-2,101

 

 

 

 

 

 

Cash Flow from operating activities

54,500

17,549

12,704

99,991

109,511

 

 

 

 

 

 

Cash Flow from investing activities:

 

 

 

 

 

Payments for property, plant, equipment & intangible assets

-54,056

-21,122

-40,918

-180,580

-66,972

Payments for investments

0

0

-204

-204

0

Payments for loan investments to related parties

-106

-626

-45

-299

-827

Proceeds from loan investments related parties

54

45

70

284

211

Proceeds from sale of property, plant, and equipment

1,902

220

1,887

4,017

669

Interest received

895

380

394

1,801

1,769

 

 

 

 

 

 

Cash Flow used in investing activities

-51,311

-21,104

-38,815

-174,981

-65,149

Condensed Consolidated Statement of Cash Flow – con’t

in thousands of USD

Quarter

ended 31 Dec 2022

unaudited

Quarter

ended 31 Dec 2021

unaudited

Quarter

ended 30 Sep 2022

unaudited

Year

ended 31 Dec 2022

unaudited

Year

ended 31 Dec 2021

audited

Cash Flow from (used in) financing activities:

 

 

 

 

 

Proceeds from loans and borrowings

32,002

77,796

129,728

184,272

82,585

Repayment of loans and borrowings

-5,358

-7,807

-1,892

-11,420

-28,218

Receipts of sale & leaseback arrangements

0

0

0

7,723

0

Payments of lease installments

-1,283

-1,057

-1,362

-5,662

-5,094

Receipt of government grants and subsidies

433

535

512

945

535

Interest paid

-3,738

-558

-13,503

-17,812

-1,569

Distribution to non-controlling interests

0

0

0

-11

-12

 

 

 

 

 

 

Cash Flow from (used in) financing activities

22,056

68,908

113,484

158,035

48,228

 

 

 

 

 

 

Effect of changes in foreign currency exchange rates on cash

16,712

-1,180

-10,734

-3,808

-8,269

Increase/(decrease) of cash and cash equivalents

25,245

65,354

87,373

83,046

92,589

Cash and cash equivalents at the beginning of the period

327,468

226,013

250,828

290,187

205,867

Cash and cash equivalents at the end of

the period

369,425

290,187

327,468

369,425

290,187

###

View source version on businesswire.com: https://www.businesswire.com/news/home/20230209005539/en/

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