AIXTRON SE : Revenue increase in Q3/2015 based on broad foundation

October 27, 2015 | Finance news

Positive EBITDA in Q3/2015 due to favorable product mix

AIXTRON SE (FSE: AIXA; NASDAQ: AIXG) a leading provider of deposition equipment to the semiconductor industry, today announced financial results for the first nine months and the third quarter 2015.

Q3/2015 revenues improved to EUR 54.6m due to increased scheduled shipments and were 35% up against the previous quarter (Q2/2015: EUR 40.4m). Revenue growth was based on a wide range of different applications such as LEDs, laser, memory chips and power electronics.

For the first time since Q4/2013, EBITDA was positive in the third quarter at EUR 4.1m (Q2/2015: EUR -15.3m). It also improved by 36% year-on-year (9M/2015: EUR -17.6m; 9M/2014: EUR -27.5m). The main reasons are an improved gross margin in Q3 due to a more favorable product mix and lower operational costs, including a payment from a contractual settlement.

As a result of this development, Q3/2015 EBIT also came in positive with EUR 1.5m (Q2/2015: EUR -17.9m; 9M/2015: EUR -25.2m; 9M/2014: EUR -39.4m).

At EUR 0.3m net result was also positive (Q2/2015: EUR -18.1m; 9M/2015: EUR -27.3m; 9M/2014: EUR -43.4m).

Q3/2015 total order intake including spares and service came in at EUR 34.4m, 34% below the previous quarter (Q2/2015: EUR 52.5m). Total equipment order backlog at EUR 72.3m as at September 30, 2015 was 2% up compared with the previous year (September 30, 2014: EUR 70.7m) but 21% down against the previous quarter (June 30, 2015: EUR 91.2m). This backlog figure continues to exclude tools from the order of the major Chinese customer.

Key Financials

* Restated according to 'Additional Disclosures, 1. Accounting Policies' in the Nine Months Group Financial Report 9M/2015
** Operating CF + Investing CF + Changes in Cash Deposits, adjusted for acquisition effects (upfront payments and loan)

Business Development

The global penetration of LED technology in the lighting market continues. Because of the continuing qualification processes of the AIX R6 showerhead tool, the demand for this system type remained subdued. The revenue development in Q3/2015 was based on a wide range of different applications such as LEDs, laser, memory chips and power electronics. Overall, demand in the first nine months 2015 remained relatively slow.

Revenues at EUR 54.6m in Q3/2015 were 35% higher compared to the previous quarter (Q2/2015: EUR 40.4m). On a nine-month basis, 9M/2015 revenues were in line with the previous year (9M/2015: EUR 135.3m; 9M/2014: EUR 135.8m).

Third quarter cost of sales at EUR 36.8m was flat sequentially (Q2/2015: EUR 36.8m) despite higher revenues. On a yearly comparison, cost of sales in 9M/2015 fell slightly by 1% to EUR 105.1m (9M/2014: EUR 106.5m).

This resulted in a Q3/2015 gross profit of EUR 17.8m, significantly improved on a quarterly basis (Q2/2015: EUR 3.6m; 9M/2015: EUR 30.2m; 9M/2014: EUR 29.2m). While the gross margin on an annual basis remained unchanged (9M/2015: 22%; 9M/2014: 22%), it improved by 24 percentage points to 33% in Q3/2015 points due to a better product mix (Q2/2015: 9%). This is in line with the range targeted by AIXTRON.

Mainly due to better cost control and income from a contractual compensation recorded in other operating income, operating costs in Q3/2015 fell to EUR 16.3m sequentially (Q2/2015: EUR 21.5m). On a nine-month comparison, they decreased by 19% to 55.4m (9M/2014: EUR 68.7m).

As a result of the above-mentioned business development, the third quarter 2015 EBIT improved to EUR 1.5m both sequentially and compared to the previous-year period (Q2/2015: EUR -17.9m, 9M/2015: EUR -25.2m; 9M/2014: EUR -39.4m).

The net result for Q3/2015 rose to EUR 0.3m compared to the previous quarter (Q2/2015: EUR -18.1m) and improved by 37% on a nine-months basis (M9/2015: EUR -27.3m; 9M/2014: EUR -43.4m).

AIXTRON's total order intake including spares & service in the third quarter 2015 decreased 34% sequentially to EUR 34.4m (Q2/2015: EUR 52.5m). Compared to the previous-year period total order intake fell by 9% to EUR 135.8m (9M/2014: EUR 149.4m). This development reflects the lower overall market demand in the reporting period as well as the effects from the ongoing qualification processes for the AIX R6.

Free cash flow in Q3/2015 was EUR -10.0m (Q2/2015: EUR -0.1m; 9M/2015: EUR -22.3m; 9M/2014: EUR -52.9m).

Cash and cash equivalents (including bank deposits with a maturity of more than three months) as of September 30, 2015 amounted to EUR 243.5m, EUR 11.9m lower than the end of the previous quarter (June 30, 2015: EUR 255.4m). The difference from free cash flow mainly results from the currency difference of the US$-based cash and cash equivalents. AIXTRON does not have any bank borrowings.

Management Review

'Due to postponed shipments, in particular of the AIX R6 showerhead system, we have recently revised our revenue expectations for the current financial year. However, we work intensively with our customers to push forward and to successfully complete the qualification processes', says Martin Goetzeler, President and CEO of AIXTRON SE.

'We continue to proceed in the strengthening of our product and technology portfolio. In the area of OLEDs, we have received a first order for our encapsulation technology OPTACAP™. The test runs of our Gen8 demonstrator for the production of large-area OLEDs are moving forward on schedule and therefore, we anticipate results from customer demonstrations within the coming months. In addition, we were able to score in applications such as LED, laser, telecommunication and power electronics as well as in Memory products. The margin improvement resulting from it supports our recently communicated profit expectations for the current financial year. The third quarter also proves that markets in Europe and the U.S. are still of great importance.'

Guidance

Based on the results of the first nine months of 2015 and the assessment of AIXTRON's risks and opportunities, Management expects 2015 full year revenues of EUR 190m to 200m, based on the USD/EUR exchange rate of 1.12 as of September 30, 2015. The guidance was revised due to a postponement of shipments to a major Chinese customer which were planned for delivery in 2015. These deliveries are now expected for 2016 depending on the progress of the ongoing milestone based qualification process.

Management reiterates its target to reach EBITDA break-even within the second half of 2015. Year-on-year, EBIT and net result are expected to improve but to remain negative for the full year 2015.

Financial Tables

The 9M/2015 results presentation will be available at http://www.aixtron.com/en/investors/ir-presentation. The consolidated financial statements (statement of financial position, income statement, cash flow statement, statement of changes in equity) relating to this press release are available at http://www.aixtron.com/en/investors/financial-reports/ as part of AIXTRON's quarterly financial report for the first nine months of 2015.

Investor Conference Call

AIXTRON will host a financial analyst and investor conference call on Tuesday, October 27, 2015, 3:00 p.m. CET (7:00 a.m. PDT, 10:00 a.m. EDT) to review the first nine months 2015 results. From 2:45 p.m. CET (6:45 a.m. PDT, 9:45 a.m. EDT) you may dial in to the call at +49 (69) 247501-899 or +1 (212) 444-0297. Please note that Europe has already switched back from Daylight Savings Time to Standard Time resulting in 1 hour less time difference for example compared to the U.S. A conference call audio replay or a transcript of the conference call will be available at http://www.aixtron.com/en/investors/events/conference-call/ following the conference call.

Contact:

Guido Pickert
Investor Relations and Corporate Communications
T: +49 (2407) 9030-444
F: +49 (2407) 9030-445
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