EANS-Adhoc: ams AG ams reports first quarter results in guidance range
reflecting customer volume effects, revenues up 147% year-on-year; expected
second quarter revenues strongly impacted by ...
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Key financial data for first quarter 2018
Quarterly Report
23.04.2018
Premstaetten - (PR title cont'd) ... accelerated customer product transition;
significant second quarter capacity under-utilization as product changes in
major consumer program prevent pre-production; on track for expected major
second half ramp-ups; Annual Report 2017 published
Premstaetten, Austria (23 April 2018) -- ams AG (SIX: AMS), a leading worldwide
supplier of high performance sensor solutions, reports first quarter results
with revenues and operating profitability in guidance range reflecting customer
volume effects, and revenues up 147% year-on-year. ams expects a significant
short-term impact from strongly accelerated customer-driven product transitions
related to large smartphone programs in the second quarter resulting in expected
revenues of USD 220-250 million. Due to these product transitions and product
changes in a major consumer program preventing a pre-production of parts, ams
also expects a significant under-utilization of capacity in the second quarter
leading to a negative adjusted operating margin. At the same time, preparations
for expected major ramp-ups in the second half 2018 are on track.
First quarter group revenues were USD 452.7 million, in the lower half of our
previous guidance, up 147% from USD 183.5 million in the same quarter 2017 and
22% lower sequentially compared to the previous quarter. Adjusted gross margin
for the first quarter 2018 was 36% (excluding acquisition-related and share-
based compensation costs), compared to 44% in the same quarter 2017 (33%
including acquisition-related and share-based compensation costs, compared to
40% in the same period 2017).
The adjusted result from operations (EBIT) for the first quarter was USD 77.3
million or 17% of revenues in line with previous guidance (excluding
acquisition-related and share-based compensation costs), up strongly from USD
5.0 million or 3% of revenues in the first quarter 2017 (USD 46.5 million or 10%
of revenues including acquisition-related and share-based compensation costs,
compared to USD -16.9 million or -9% of revenues in the first quarter 2017).
Adjusted net income for the first quarter was USD 99.9 million (excluding
valuation effect of option element of foreign currency convertible bond),
compared to USD -19.9 million for the same period 2017 (first quarter 2018: USD
77.1 million including valuation effect). Adjusted basic/diluted earnings per
share for the first quarter were CHF 1.20/1.12 or USD 1.25/1.17 based on
80,064,021/ 83,082,083 shares (weighted average; CHF 0.92/0.86 or USD 0.96/0.89
including valuation effect; first quarter 2017: CHF -0.23/-0.23 or USD -0.27/-
0.26 based on 74,496,209/76,213,409 shares, weighted average).
Cash flow from operations for the first quarter was USD 56.3 million compared to
USD 32.0 million in the same quarter last year. Total backlog on 31 March 2018,
excluding consignment stock agreements and including certain forecasted
commitments, was USD 345.9 million (USD 666.1 million on 31 December 2017 and
USD 240.4 million on 31 March 2017).
ams' business showed a solid performance in the first quarter with strong year-
on-year growth despite customer volume effects in its consumer business. ams'
first quarter results thus confirm the company's strong market position in high
performance sensor solutions across consumer and non-consumer businesses.
The consumer and communications business started into the year on a positive but
more balanced note as the market success of ams' solutions was moderated by
noticeable customer volume effects in the smartphone market. Leading in optical
sensing, ams provides high performance optical sensing solutions including 3D
sensing optical systems, TrueColor display management, proximity sensing and
other optical applications to many of the world's largest smartphone and
consumer OEMs. With a focus on emerging applications ams drives innovation
around optical technologies for long-term growth markets. ams' optical sensing
portfolio spans a wide array of hardware and software where ams recently added
leading software IP for 3D facial recognition through the acquisition of
KeyLemon which closed in the quarter.
While ams is experiencing a more difficult short-term demand environment in the
smartphone market, ams sees consumer OEMs actively engaging with the company on
3D sensing and other new upcoming sensing functionalities, all driven by the
need for differentiation. ams pursues its comprehensive multi-generation roadmap
in 3D sensing and prepares for significantly broader adoption of 3D sensing in
the consumer market. ams' VCSEL and VCSEL driver capabilities are a key element
of its 3D sensing portfolio with strong market traction and they create clear
competitive advantages for ams' 3D sensing strategy. Given the complexity of 3D
sensing, ams' broad solution expertise is of particular value as ams builds a
leading position in this market. ams also works on extensive product development
in further areas of optical sensing, including spectral sensing, and other
multi-sensor solutions for consumer applications which enable new growth
opportunities in the next years. ams' other consumer product lines including
audio solutions saw continued attractive run rates at a range of device vendors
and contributed positively to the company's first quarter.
ams' industrial, medical, and automotive businesses had a good start into the
year in the first quarter, performing in line with to slightly ahead of
expectations. In industrial markets, the overall demand situation remains
attractive across product lines for automation, building control, HABA and
emerging industrial IoT. ams' strong position in industrial sensing is built
around innovation and the ability to support challenging applications for major
OEMs and their customers. In imaging, ams recently received an important
industry award for a new highly innovative industrial imaging solution. ams'
medical business recorded attractive results as ams extends its medical imaging
portfolio for computed tomography (CT), digital X-ray, and mammography and
advances miniature camera technology. ams' automotive business also continued to
perform well with its broad range of solutions for safety, driver assistance,
position, and chassis control. ams is encouraged by the early large program win
for VCSEL illumination in automotive 3D LIDAR which has increased further in
projected life-time program value. This success confirms the key relevance of
solid state LIDAR technology for autonomous driving. ams' unmatched ability to
combine very high power VCSELs and advanced driver circuits into highly
differentiated illumination solutions creates significant competitive advantages
in this long-term market as market interest continues to grow. In addition, ams
is seeing increasing traction for innovative in-cabin 3D sensing opportunities.
The investment into ams' internal VCSEL manufacturing capacity in Singapore is
progressing to plan and ams is confident about its ability to support large
scale internal production of differentiated high power VCSELs in 2019.
For the second quarter 2018, ams expects a significant short-term impact in its
consumer business from strongly accelerated customer-driven product transitions
related to large smartphone programs. ams' non-consumer businesses are expected
to continue their solid development in the second quarter. As a result ams
expects second quarter revenues of USD 220-250 million, up 10-25% year-on-year
and leading to expected first half 2018 revenues growing 87-96% compared to the
first half of last year, based on available information.
As previously mentioned, ams is preparing for major second half 2018 ramp-ups of
high volume optical solutions for consumer 3D sensing applications, among
others. To this end, ams focuses on ensuring full availability of resources for
these substantial ramp-ups the company sees coming up. Consequently and to avoid
unwanted risks, ams does not pursue short-term reductions of its trained
workforce in its Asian manufacturing locations despite an impending significant
underutilization of capacity. This underutilization is due to the mentioned
product transitions as well as product changes in a major consumer program which
prevent a potential pre-production of parts.
The adjusted operating margin for the second quarter (excluding acquisition-
based and share-based compensation costs) is therefore expected to be negative
at around -20 to -25% driven by the underutilization of production capacity in
ams' Singapore facilities. Looking forward, ams does not expect a recurrence of
short-term transition effects on a similar scale in future years. ams assumes
intra-year ramp-up seasonality to be more balanced from 2019 onwards as ams
expects to broaden its consumer OEM base in optical sensing.
Despite this short-term volume effect ams' strong position and growth potential
in several of the most exciting growth areas in sensing is underscored by the
excellent market traction ams sees with OEMs across end markets. ams' mid-term
growth and profitability targets for, respectively, the 2016-2019 period and
onwards remain unchanged.
The quarterly report for the first quarter 2018 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].
Concurrently, ams has published the Annual Report 2017 which is also 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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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