EANS-Adhoc: ams AG ams reports second quarter revenues above guidance range
despite negative EUR/USD trend; revised expected revenue growth CAGR 2016-2019
of more than 40%, EBIT margin target confirmed; ...
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Key financial data for second quarter and first half 2017
Mid Year Financial Report
24.07.2017
Premstaetten - (PR title cont'd) strong expected quarter-on-quarter growth with
third quarter revenues of EUR 260-290 million at adjusted EBIT margin above 10%;
ongoing optical solutions ramp drives expectation of record second half and
substantial sequential revenue growth in fourth quarter; VCSEL manufacturing
investment pulled forward given significant business opportunities
Premstaetten, Austria (24 July 2017) - ams (SIX: AMS), a leading worldwide
supplier of high-performance performance sensor solutions, reports second
quarter and first half 2017 results with revenues above the previous guidance
range despite a negative EUR/USD trend. ams increases its revenue growth target
for 2016-2019 to more than 40% compound annual growth rate (CAGR) and confirms
its adjusted EBIT margin target of 30% from 2019 onwards. ams expects strong
quarter-on-quarter growth with third quarter revenues of EUR 260-290 million
reflecting the ramp-up nature of the quarter in ams' consumer business and
currency headwinds, together with an adjusted EBIT margin of above 10%. Driven
by ongoing optical solutions ramps, ams expects a record second half 2017
including substantial sequential revenue growth for the fourth quarter at an
expected growth rate comparable to the expected growth rate from second quarter
to third quarter, based on currently available information. ams has also decided
to pull forward an investment into Vertical Cavity Surface-Emitting Laser
(VCSEL) manufacturing capacity in order to pursue significant business
opportunities.
Second quarter group revenues were EUR 181.5 million, up 22% sequentially
compared to the first quarter and up 37% from EUR 132.4 million in the same
quarter 2016 (EUR 184.1 million based on the guidance EUR/USD exchange rate of
1.08). Group revenues for the first half of 2017 were EUR 330.8 million, up 23%
compared to EUR 269.6 million recorded in the first half of 2016. On a constant
currency basis, second quarter revenues were 35% higher compared to the second
quarter last year with first half revenues 21% higher compared to the first half
of 2016.
In the second quarter, adjusted gross margin (excluding acquisition-related and
share-based compensation costs) was 41% with IFRS reported gross margin
(including acquisition-related and share-based compensation costs) at 35%,
compared to 56% and 53% respectively in the same quarter 2016. In the first half
of 2017, adjusted gross margin (excluding acquisition-related and share-based
compensation costs) stood at 44% and IFRS reported gross margin (including
acquisition-related and share-based compensation costs) at 37%, compared to 57%
and 54% respectively in the first half of 2016.
The adjusted result from operations (EBIT) (excluding acquisition-related and
share-based compensation costs) for the second quarter was EUR 1.3 million or 1%
of revenues in line with previous expectations, decreasing from EUR 24.4 million
in the same period 2016. The IFRS reported result from operations (EBIT)
(including acquisition-related and share-based compensation costs) for the
second quarter was a loss of EUR 21.5 million or -12% of revenues, down from a
profit of EUR 16.7 million in the same period 2016. This expected result
reflects the underutilization of expanded capacity in ams' Heptagon business in
the second quarter. For the first half of 2017, the adjusted EBIT (excluding
acquisition-related and share-based compensation costs) was EUR 5.4 million,
down from EUR 52.6 million in the same period 2016, and the IFRS reported EBIT
(including acquisition-related and share-based compensation costs) was a loss of
EUR 35.3 million, down from a profit of EUR 36.4 million in the first half year
2016.
The net result for the second quarter was a loss of EUR 17.8 million compared to
a profit of EUR 19.6 million in the same period last year. Basic and diluted
earnings per share were
CHF -0.23/-0.22 or EUR -0.21/-0.21 based on 83,327,015/86,462,424 shares (basic/
diluted; weighted average) compared to CHF 0.32/0.31 or EUR 0.29/0.28 for the
second quarter 2016 based on 68,085,043/70,016,054 shares (basic/diluted;
weighted average). The net profit for the first half year 2017 was a loss of EUR
34.0 million, equivalent to CHF -0.47/-0.45 or EUR -0.43/
-0.42 per share (basic/diluted) based on 78,870,841/81,254,354 shares (basic/
diluted; weighted average), compared to a profit of EUR 33.2 million, i.e. CHF
0.53/0.52 or EUR 0.49/0.47 per share (basic/diluted) based on 68,321,871/
70,388,158 shares (basic/diluted; weighted average), for the same period last
year.
Operating cash flow for the second quarter was EUR -33.1 million compared to EUR
7.3 million in the second quarter last year, while operating cash flow for the
first half was EUR -7.0 million compared to EUR 14.8 million in the first half
year 2016. Total backlog on June 30, 2017 (excluding consignment stock
agreements) was EUR 211.0 million compared to EUR 195.6 million at the end of
the first quarter and EUR 146.6 million on June 30, 2016, today's total backlog
exceeds EUR 275 million.
ams' business showed a strong performance in the second quarter and first half
of 2017 as all end markets contributed meaningfully to ams' second quarter
results. Despite the negative EUR/USD exchange rate trend in the second half of
the quarter the company's second quarter results demonstrate the attractive
demand environment for ams' sensor solutions resulting in group revenues above
the top end of the company's guidance range.
ams' consumer and communications business performed well in the second quarter
driven by high run rates for existing products, a new platform launch by a major
smartphone OEM and positive effects from a display management ramp for another
Asian smartphone OEM. Light sensor solutions were again the most important
product segment in ams' consumer business in the second quarter. ams' latest
display management products are gaining importance in its optical sensing
portfolio which is expanding from color/RGB ambient light sensing, proximity
sensing and multi-function modules into 3D sensing and advanced spectral
sensing. These cutting-edge technologies are seeing increasing market interest
as OEMs explore new sensing possibilities for future devices. ams' multi-year
product and development pipeline which also covers audio and environmental
sensing mirrors these trends. ams' Heptagon business recorded the expected
flattish revenue development in the second quarter compared to the first quarter
while ams' audio business showed a good performance in the first half of the
year. In the quarter, ams won a prestigious industry award for its innovative
ACI interface allowing power and high speed data transmission over the
microphone line in 3.5mm or USB-C audio designs.
ams' industrial, medical, and automotive businesses recorded very attractive
results in the second quarter and first half 2017. End-market demand in these
non-consumer areas continues to be solid as ams enters the second half of the
year. ams' industrial business had a successful second quarter with ams'
industrial imaging and machine vision product lines showing noticeable strength.
ams is a key supplier to industrial OEMs worldwide for an expanding range of
industrial sensing solutions. The company's low-power low-latency Simblee
Bluetooth offering is seeing increasing customer interest for emerging
Industrial IoT applications. Here ams can offer an integrated solution
capability to create high performance connected sensing systems. In ams' medical
business, digital imaging sensor solutions for computed tomography (CT), digital
X-ray, and mammography continued to show good volumes while ams ramps new
business in Asia this year as the market and technology leader. ams' automotive
business recorded another positive quarter amid attractive demand across product
lines which the company sees continuing. ams focuses on sensing applications for
safety, driver assistance, position, and chassis control and sees strong market
interest to explore next generation applications. ams' specialty analog foundry
business contributed attractively to the company's results in the first half.
In manufacturing operations, ams has been expanding capacity in Singapore and
Austria to support volume requirements for the recently initiated ramps of new
consumer optical sensing solutions while ams continues to add capacity to
support expected customer needs for 2018. This includes investments in optical
back-end manufacturing and optical filter deposition equipment.
Faster than expected, ams completed the acquisition of Princeton Optronics, a
leading provider of high power single and array Vertical Cavity Surface-Emitting
Lasers (VCSELs) earlier this month. ams is now able to cover the complete value
chain in optical sensing including VCSEL illumination and can aggressively
pursue end-to-end solutions for new growth areas such as 3D sensing, the Human
Machine Interface (HMI) or spectral sensing. This strategic approach offers
strong potential to increase ams' presence in innovative consumer applications
as well as future automotive sensing systems. ams is already seeing substantial
VCSEL business opportunities and has therefore decided to pull forward an
investment into internal VCSEL manufacturing capacity to exploit differentiating
technology and cost advantages. In order to prepare for expected volume
opportunities from 2019 onwards ams plans to build a VCSEL manufacturing line in
Singapore in two stages at a total expense of around EUR 100 million over a
period of approximately 24 months.
For the third quarter 2017, ams sees significant upward momentum for the company
as ams starts to ramp new optical solutions in its consumer business and its
other end markets continue to contribute positively to ams' overall growth.
Based on available information and a current EUR/USD exchange rate of 1.16, ams
expects third quarter revenues to show strong sequential growth to EUR 260-290
million which reflects the ramp-up nature of the quarter in ams' consumer
business and headwinds from a negative EUR/USD exchange rate trend.
Driven by these ongoing high value consumer ramps, ams expects a record second
half year 2017. This includes substantial sequential revenue growth for the
fourth quarter at an expected growth rate comparable to the expected growth rate
from second quarter to third quarter, based on currently available information.
These expectations confirm the excellent positioning of ams as a key provider of
innovative high performance optical technologies including 3D sensing and
advanced display management. The adjusted operating margin for the third quarter
(excluding acquisition-based and share-based compensation costs) is expected to
show a significant sequential improvement to more than 10%, predominantly
resulting from increasing capacity utilization in ams' Heptagon business.
Based on substantially increased customer forecasts and a higher revenue
pipeline for this year and particularly 2018, ams increases its revenue growth
target for the period 2016-2019 to more than 40% compound annual growth rate
(CAGR). The continuing strong market traction ams sees for its innovative
technologies adds to ams' confidence in this new target. Despite this steep
revenue growth and ongoing investments supporting this business expansion ams
confirms its adjusted EBIT margin target of 30% from 2019 onwards.
ams' half year report 2017 including additional financial information is
available on the company website at www.ams.com/eng/Investor/Financial-Reports
[http://www.ams.com/eng/Investor/Financial-Reports] .
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About ams
ams is a global leader in the design and manufacture of advanced sensor
solutions. The mission of ams is to shape the world with sensor solutions by
providing a seamless interface between humans and technology.
ams' high-performance sensor solutions drive applications requiring small form
factor, low power, highest sensitivity and multi-sensor integration. The ams
portfolio focuses on sensor solutions, sensor ICs, sensor interfaces and related
software for consumer, communications, automotive, industrial, and medical
markets.
With headquarters in Austria, ams employs over 5,800 people globally and serves
more than 8,000 customers worldwide. ams is listed on the SIX Swiss stock
exchange (ticker symbol: AMS). More information about ams can be found at
www.ams.com [http://www.ams.com]
Further inquiry note:
Moritz M. Gmeiner
Vice President Investor Relations
Tel: +43 3136 500-31211
Fax: +43 3136 500-931211
Email: investor@ams.com
end of announcement euro adhoc
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issuer: ams AG
Tobelbader Strasse 30
A-8141 Premstaetten
phone: +43 3136 500-0
FAX: +43 3136 500-931211
mail: investor@ams.com
WWW: www.ams.com
ISIN: AT0000A18XM4
indexes:
stockmarkets: SIX Swiss Exchange
language: English