SOITEC REPORTS SECOND QUARTER REVENUE AND
FIRST HALF RESULTS OF FISCAL YEAR 2024
- Q2’24 revenue reached €245m, down 7% at constant exchange rates and perimeter compared to Q2’23
- H1’24 revenue at €401m, down 15% both at constant exchange rates and perimeter and on a reported basis compared with H1’23 - in line with guidance
- H1’24 EBITDA1 margin2 stood at the robust level of 33% of revenue while the Company maintained significant investment in R&D
- Anticipated return to a slight year-on-year organic growth in H2’24, leading to a moderate downward revision of FY24 outlook: mid-single digit decline in FY’24 revenue expected at constant exchange rate and EBITDA1 margin2 anticipated around 35%
Bernin (Grenoble),
Looking ahead, we maintain our growth perspectives for the second part of the fiscal year. We note however that the absorption of RF-SOI inventories at our customers level will last longer than anticipated. At the same time, we continue to expect sustained demand in Automotive & Industrial as well as in Smart Devices. Consequently, we now anticipate a full-fiscal-year revenue decline of around mid-single digit percentage, and an EBITDA margin of around 35%. After this transition year, we will resume our growth trajectory” added
Second quarter FY’24 consolidated revenue
Q2’24 | Q2’23 | Q2’24/Q2’23 | ||
(Euros millions) | change reported | chg. at const. exch. rates & perimeter | ||
Mobile communications | 169 | 189 | -10% | -9% |
Automotive & Industrial | 38 | 34 | +12% | +13% |
Smart devices | 37 | 45 | -18% | -17% |
Total revenue | 245 | 268 | -9% | -7% |
Sequentially, second quarter FY’24 revenue was up 56% excluding currency impact compared to the first quarter of FY’24.
In the second quarter of FY’24,
As expected, the inventory digestion across the whole smartphone supply chain continued to impact our RF-SOI wafers sales, causing a decrease in revenue as compared to the second quarter of FY'23.
On a sequential basis, however, RF-SOI wafer sales were much higher than in the first quarter of FY’24, supported by a greater penetration of high-end smartphones, with continued adoption of 5G and Wi-Fi 6/6E/7 requiring higher content of RF-SOI per smartphone. Further deployment of 5G infrastructure is also contributing to higher sales.
Sales of POI (Piezoelectric-on-Insulator) wafers continued to grow, partially compensating for the year-on-year decrease of RF-SOI wafers sales. Growth was driven by higher volumes from both existing and new customers. Additionally, the Group continues to work with several customers on qualifying Soitec’s POI technology.
Sales of FD-SOI wafers continue to show strong year-on-year growth, further demonstrating the value they bring to front end modules integrated in both 5G Sub-6 GHz and 5G mmWave smartphones.
Automotive & Industrial
Automotive & Industrial revenue reached
Demand from the automotive industry continues to be driven by the rise in semiconductor content embedded in the latest generations of vehicles.
Growth in Automotive & Industrial mostly came from Power-SOI wafers sales, which increased significantly compared to the second quarter of FY’23, reflecting higher volumes and, to a lesser extent, a positive price / mix effect.
FD-SOI wafers sales remained strong, mostly driven by adoption for automotive microcontrollers.
In addition, Automotive & Industrial continues to benefit from revenue generated by Soitec’s SmartSiCTM technology. Soitec’s new plant dedicated to SmartSiC™ substrates for future generations of electric vehicles was inaugurated late September and production ramp-up is expected in FY’25.
Smart Devices
Smart Devices revenue reached
Products dedicated to Smart devices are supporting the need for more complex sensors, higher connectivity functionalities and embedded intelligence, leading to more powerful and efficient chips for Edge Artificial Intelligence, Image Sensors, Data Centers and Cloud Computing.
Compared to the second quarter of FY’23, performance was contrasted between the different products.
Sales of FD-SOI wafers were much higher than in the second quarter of FY’23, supported by structural demand for Edge Computing devices across consumer and industrial sectors.
Conversely, sales of Photonics-SOI wafers, providing high speed connectivity in the Cloud, and sales of Imager-SOI wafers for 3D imaging applications, were both lower than in the second quarter of FY’23.
First half FY’24 consolidated revenue
H1’24 | H1’23 | H1’24/H1’23 | ||
(Euros millions) | change reported | chg. at const. exch. rates & perimeter | ||
Mobile communications | 258 | 341 | -24% | -24% |
Automotive & Industrial | 75 | 57 | +31% | +31% |
Smart devices | 68 | 73 | -6% | -6% |
Total revenue | 401 | 471 | -15% | -15% |
Overall, consolidated revenue reached
The decline in revenue essentially reflects lower volumes, partly offset by a small favorable mix effect. Performance was mixed across Soitec’s three end-markets:
Mobile Communications revenue reached258 million Euros in the first half of FY’24 (64% of total revenue), down 24% on a reported basis and at constant exchange rates compared to the first half of FY’23. The decline essentially reflects the ongoing RF-SOI inventory adjustment across the entire smartphone supply chain. It was, however, partly offset by higher FD-SOI wafer sales and by a significant contribution from POI wafer sales.- Automotive & Industrial revenue amounted to
75 million Euros in the first half of FY’24 (19% of total revenue), up 31% on a reported basis and at constant exchange rates compared to the first half of FY’23. This strong performance was essentially driven by a solid increase in Power-SOI wafer sales, continued strength in automotive FD-SOI, and the revenue generated by SmartSiCTM technology. - Smart devices revenue reached
68 million Euros in the first half of FY’24 (17% of total revenue), down 6% on a reported basis and at constant exchange rates compared to the first half of FY’23. Strong growth in FD-SOI wafer sales was more than offset by lower sales of both Photonics-SOI and Imager-SOI wafers.
- Automotive & Industrial revenue amounted to
EBITDA1 margin2 maintained at a robust level
Consolidated income statement (part 1)
(Euros millions) | H1’24 | H1’23 | % change |
Revenue | 401 | 471 | -15% |
Gross profit | 144 | 168 | -14% |
As a % of revenue | 36.0% | 35.6% | |
Net research and development expenses | (34) | (29) | +17% |
Selling, general and administrative expenses | (25) | (28) | -11% |
Current operating income | 85 | 110 | -23% |
As a % of revenue | 21.3% | 23.4% | |
EBITDA1 | 132 | 167 | -21% |
As a % of revenue | 33.0% | 35.5% |
Current operating income amounted to
- Gross profit reached
144 million Euros in the first half of FY’24, down from168 million Euros in the first half of FY’23 as a result of lower revenue. Gross margin however recorded a 0.4 point increase, from 35.6% of revenue in the first half of FY’23 to 36.0% of revenue in the first half of FY’24.Soitec achieved a robust gross margin thanks to a favorable mix effect, a good industrial performance, tight costs control, and a positive currency impact, offsetting inflationary cost increases including higher bulk material prices and higher depreciation. Industrial capacity utilization rate was maintained at a satisfactory level as the Group also produced wafers in anticipation of higher second half deliveries. - Selling, general and administrative (SG&A) expenses were down from
28 million Euros in the first half of FY’23 to25 million Euros in the first half of FY’24, almost stable as a percentage of revenue at 6.3% of revenue compared to 6.0% in the first half FY’23. This is the result of further cost containment actions implemented by the Group. - While maintaining strong cost control, the Group preserved strategic investments such as innovation for new products development. As a consequence, net R&D expenses increased from
29 million Euros in the first half of FY’23 to34 million Euros in the first half of FY’24, representing 8.4% of revenue.
The EBITDA1 from continuing operations amounted to
Consolidated income statement (part 2)
(Euros millions) | H1’24 | H1’23 | % change |
Operating income | 86 | 110 | -22% |
Net financial result | 2 | (2) | |
Income tax | (8) | (13) | |
Net profit, Group share | 80 | 95 | -16% |
Basic earnings per share (in €) | 2.24 | 2.72 | -18% |
Diluted earnings per share (in €) | 2.19 | 2.65 | -17% |
Weighted average number of ordinary shares | 35,620,925 | 35,001,682 | |
Weighted average number of diluted ordinary shares | 37,623,199 | 36,951,749 |
The net financial result was a gain of
Income tax expense amounted to
Negative Free Cash Flow after further increase in capacity investments
Consolidated cash-flows
(Euros millions) | H1’24 | H1’23 |
Continuing operations | ||
EBITDA1 | 132 | 167 |
Change in working capital | (69) | (26) |
Tax paid | (19) | (15) |
Net cash generated by operating activities | 45 | 126 |
Net cash used in investing activities | (129) | (120) |
Free Cash Flow | (85) | 7 |
Liquidity contract and other items | (7) | 0 |
New loans and debt repayment (including finance leases), drawing on credit lines | (32) | (15) |
Financial expenses | (6) | (3) |
Net cash used in financing activities | (45) | (17) |
Impact of exchange rate fluctuations | 2 | 26 |
Group net change in cash | (127) | 15 |
The Group generated a negative Free Cash Flow of
The cash outflow from working capital amounted to
- a 65 million Euros increase in inventories in anticipation of higher deliveries projected in the second half of the fiscal year,
- a
105 million Euros decrease in trade payables, including non-recurring down payments in connection with the signing of long-term supply agreements, - partly offset by a
106 million Euros decrease in trade receivables: the level of these receivables was high at the start of the fiscal year after the record level of revenue achieved in the fourth quarter of FY’23.
The net cash used in investing activities amounted to
- 300-mm SOI production capacity investments, both in Bernin and in
Singapore , including refresh capacity in Bernin IV and work related to the extension ofSingapore facility, - the installation of the first SmartSiC™ production capacities,
- capitalized development costs (R&D investments of around
15 million Euros ), - other investments related to Innovation, Sustainability and IT.
Net cash used in financing activities amounted to
In total, including a
Strong Balance sheet maintained
Shareholders’ equity increased by
Financial debt stood at
As a result of the
FY’24 outlook
As a result, FY’24 EBITDA margin is now expected to be around 35% of revenue. The Group will continue to implement cost control measures, while further investing significantly in R&D.
FY’24 Capital expenditure is expected to be around
Soitec’s growth outlook remain very strong: while the SOI content within end devices continues to increase, the ongoing penetration of the Group’s products across its three end markets and the successful deployment of its expansion into Compound Semiconductors with POI and SmartSiCTM becoming new significant growth drivers in the future.
Key events of H1’24
On
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H1’24 results will be commented during an analyst and investor conference call to be held in English on
The live webcast and slide presentation will be available on:
https://channel.royalcast.com/soitec/#!/soitec/20231116_1
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Agenda
Q3’24 revenue is due to be published on
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Disclaimer
This document is provided by
The Company’s business operations and financial position are described in the Company’s 2022-2023 Universal Registration Document (which notably includes the 2022-2023 Annual Financial Report) which was filed on
Your attention is drawn to the risk factors described in Chapter 2.1 (Risk factors and controls mechanism) of the Company’s 2022-2023 Universal Registration Document.
This document contains summary information and should be read in conjunction with the 2022-2023 Universal Registration Document.
This document contains certain forward-looking statements. These forward-looking statements relate to the Company’s future prospects, developments and strategy and are based on analyses of earnings forecasts and estimates of amounts not yet determinable. By their nature, forward-looking statements are subject to a variety of risks and uncertainties as they relate to future events and are dependent on circumstances that may or may not materialize in the future. Forward-looking statements are not a guarantee of the Company’s future performance. The occurrence of any of the risks described in Chapter 2.1 (Risk factors and controls mechanism) of the 2022-2023 Universal Registration Document may have an impact on these forward-looking statements. In particular, the future consequences of geopolitical conflicts, notably the
The Company’s actual financial position, results and cash flows, as well as the trends in the sector in which the Company operates may differ materially from those contained in this document. Furthermore, even if the Company’s financial position, results, cash-flows and the developments in the sector in which the Company operates were to conform to the forward-looking statements contained in this document, such elements cannot be construed as a reliable indication of the Company’s future results or developments.
The Company does not undertake any obligation to update or make any correction to any forward-looking statement in order to reflect an event or circumstance that may occur after the date of this document. In addition, the occurrence of any of the risks described in Chapter 2.1 (Risk factors and controls mechanism) of the 2022-2023 Universal Registration Document may have an impact on these forward-looking statements.
This document does not constitute or form part of an offer or a solicitation to purchase, subscribe for, or sell the Company’s securities in any country whatsoever. This document, or any part thereof, shall not form the basis of, or be relied upon in connection with, any contract, commitment or investment decision.
Notably, this document does not constitute an offer or solicitation to purchase, subscribe for or to sell securities in
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About
For more information: https://www.soitec.com/en/ and follow us on X: @Soitec_Official
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Investor Relations: investors@soitec.com | Media contacts: +33 6 42 37 54 17 isabelle.laurent@oprgfinancial.fr +33 6 14 08 29 81 fabrice.baron@oprgfinancial.fr |
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Financial information and consolidated financial statements in appendix include:
- Consolidated revenue per quarter
- H1’24 consolidated income statement
- Balance sheet at
September 30 th, 2023 - H1’24 consolidated cash-flows
Appendix 1 – Consolidated revenue per quarter
Quarterly revenue | Q1’23 | Q2’23 | Q3’23 | Q4’23 | Q1’24 | Q2’24 | H1’23 | H1’24 | |
(Euros million) | |||||||||
Mobile communications | 152 | 189 | 170 | 220 | 89 | 169 | 341 | 258 | |
Automotive & Industrial | 23 | 34 | 37 | 47 | 37 | 38 | 57 | 75 | |
Smart devices | 28 | 45 | 67 | 77 | 31 | 37 | 73 | 68 | |
Total revenue | 203 | 268 | 274 | 344 | 157 | 245 | 471 | 401 |
Change in quarterly revenue | Q1’24/Q1 23 | Q2’24/Q2’23 | H1’24/H1’23 | ||||
Reported change | Organic change1 | Reported change | Organic change1 | Reported change | Organic change1 | ||
(vs. previous year) | |||||||
Mobile communications | -42% | -43% | -10% | -9% | -24% | -24% | |
Automotive & Industrial | +60% | +57% | +12% | +13% | +31% | +31% | |
Smart devices | +12% | +10% | -18% | -17% | -6% | -6% | |
Total revenue | -23% | -24% | -9% | -7% | -15% | -15% |
- At constant exchange rates and comparable scope of consolidation (there was no scope effect in Q1’24, nor in Q2’24)
Appendix 2 - Consolidated financial statements for H1’24
As previously reported, Soitec’s refocus on Electronics operations decided in
Consolidated income statement
H1’24 | H1’23 | |
(Euro millions) | (ended | (ended |
Revenue | 401 | 471 |
Cost of sales | (257) | (303) |
Gross profit | 144 | 168 |
Research and development expenses | (34) | (29) |
SG&A expenses | (25) | (28) |
Current operating income | 85 | 110 |
Other operating income / (expenses) | 1 | 0 |
Operating income | 86 | 110 |
Financial income | 12 | 4 |
Financial expenses | (11) | (7) |
Financial income / (expense) | 2 | (2) |
Profit before tax | 88 | 108 |
Income tax | (8) | (13) |
Net profit from continuing operations | 80 | 95 |
Net loss from discontinued operations | (0) | 0 |
Consolidated net profit | 80 | 95 |
Non-controlling interests | - | - |
Net profit, Group share | 80 | 95 |
Basic earnings per share (in €) | 2.24 | 2.72 |
Diluted earnings per share (in €) | 2.19 | 2.65 |
Weighted average number of ordinary shares | 35,620,925 | 35,001,682 |
Weighted average number of diluted ordinary shares | 37,623,199 | 36,951,749 |
Appendix 3 - Balance sheet at
Assets | ||
(Euro millions) | ||
Non-current assets: | ||
Intangible assets | 143 | 128 |
Property, plant and equipment | 843 | 705 |
Non-current financial assets | 25 | 25 |
Other non-current assets | 82 | 59 |
Deferred tax assets | 64 | 67 |
Total non-current assets | 1,158 | 985 |
Current assets: | ||
Inventories | 263 | 175 |
Trade receivables | 260 | 363 |
Other current assets | 89 | 105 |
Current financial assets | 9 | 3 |
Cash and cash equivalents | 661 | 788 |
Total current assets | 1,281 | 1,435 |
Total assets | 2,439 | 2,420 |
Equity and liabilities | ||
(Euro millions) | ||
Equity: | ||
Share capital | 71 | 71 |
Share premium | 228 | 229 |
Reserves and retained earnings | 1,077 | 994 |
Other reserves | 26 | 12 |
Equity, Group Share | 1,403 | 1,306 |
Total equity | 1,403 | 1,306 |
Non-current liabilities: | ||
Long-term financial debt | 612 | 578 |
Provisions and other non-current liabilities | 72 | 80 |
Total non-current liabilities | 684 | 659 |
Current liabilities: | ||
Short-term financial debt | 69 | 69 |
Trade payables | 117 | 171 |
Provisions and other current liabilities | 165 | 216 |
Total current liabilities | 352 | 456 |
Total equity and liabilities | 2,439 | 2,420 |
Appendix 4 - Consolidated cash-flows
H1’24 | H1’23 | |
(Euro millions) | (ended | (ended |
Consolidated net profit | 80 | 95 |
of which continuing operations | 80 | 95 |
Depreciation and amortization expense | 60 | 50 |
Provisions / (reversals of provisions), net | (4) | 5 |
Provisions / (reversal of provisions) for retirement benefit obligations, net | 0 | 1 |
Income tax | 8 | 13 |
Financial expense / (income) | (2) | 2 |
Share-based payments | 7 | 9 |
Other non-cash items | (17) | (8) |
EBITDA2 | 132 | 167 |
of which continuing operations | 132 | 167 |
Increase / (decrease) in cash relating to: | ||
Inventories | (65) | (39) |
Trade receivables | 106 | 28 |
Other receivables and liabilities | (5) | (18) |
Trade payables | (105) | 4 |
Income tax paid | (19) | (15) |
Change in working capital and income tax paid | (88) | (41) |
of which continuing operations | (88) | (41) |
Net cash generated by operating activities | 44 | 126 |
of which continuing operations | 45 | 126 |
H1’24 | H1’23 | |
(Euro millions) | (ended | (ended |
Net cash generated by operating activities | 44 | 126 |
of which continuing operations | 45 | 126 |
Purchases of intangible assets | (23) | (20) |
Purchases of property, plant and equipment | (114) | (97) |
(Acquisitions) and disposals of non-current assets, net of financial income from cash investments | 8 | (2) |
Net cash used in investing activities (1) | (129) | (120) |
of which continuing operations (1) | (129) | (120) |
Loans and drawdowns on credit lines | 3 | 10 |
Repayment of borrowings (including leases) | (35) | (26) |
Interest paid | (6) | (3) |
Liquidity contract | (8) | - |
Other financing flows | 1 | - |
Financing flows related to discontinued operations | (0) | (0) |
Net cash used in financing activities | (45) | (17) |
of which continuing operations | (45) | (17) |
Effects of exchange rate fluctuations | 2 | 26 |
Change in net cash | (127) | 15 |
of which continuing operations | (127) | 15 |
Cash at beginning of the period | 788 | 728 |
Cash at end of the period | 661 | 743 |
(1) According to IFRS, the cash used in investing activities is calculated net of investments financed through leasing, which accounted for
1 The EBITDA represents operating income before depreciation, amortization, impairment of non-current assets, non-cash items relating to share-based payments, provisions for impairment of current assets and for contingencies and expenses, and disposals gains and losses. EBITDA is not a financial indicator defined by IFRS and may not be comparable to EBITDA as reported by other groups. It represents additional information and should not be considered as a substitute for operating income or net cash generated by operating activities.
2 EBITDA margin = EBITDA from continuing operations / Revenue.
3 Review procedures were completed and the review report is in the process of being issued.
4 There was no scope effect in Q2’24
5 There was no scope effect in H1’24
6 The net cash position represents cash and cash equivalents less financial debt. A positive net cash position reflects cash and cash equivalents higher than financial debt. A net debt position reflects cash and cash equivalents lower than financial debt.
Attachment
- Soitec_PR_H1_24 results_VA
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