XFAB X-FAB Silicon Foundries SE

Intermediate declaration by the Board of Directors

Regulatory News:

X-FAB (BOURSE:XFAB):

Highlights Q2 2024:

• Revenue was USD 205.1 million, within the guidance of USD 200-210 million, down 9% year-on-year (YoY) and down 4% quarter-on-quarter (QoQ), mainly driven by weakness in industrial and SiC
• Strong bookings at USD 248.4 million, up 12% YoY
• EBITDA at USD 47.9 million, down 23% YoY
• EBITDA margin of 23.3%; excluding IFRS 15 impact, EBITDA margin was 22.7%, compared to the guidance of 20-23%
• EBIT was USD 22.8 million, down 44% YoY

Outlook:

• Q3 2024 revenue is expected to come in within a range of USD 205-215 million with an EBITDA margin in the range of 24-27%.
• The guidance is based on an average exchange rate of 1.07 USD/Euro and does not take the impact related to IFRS 15 into account
• X-FAB adjusts the full-year revenue guidance from USD 900-970 million to USD 860-880 million, mainly reflecting the overall delayed recovery of the SiC power device market; with a slightly adjusted top end, the full-year EBITDA margin guidance range has been narrowed to 25-28%.

Revenue breakdown per quarter:

in millions of USD

Q3 2022

Q4 2022

Q1 2023

Q2 2023

Q3 2023

Q4 2023

Q1 2024

Q2 2024

Q2 y-o-y growth

Automotive

96.9

104.4

120.9

131.1

135.3

151.8

135.6

142.4

9%

Industrial

46.7

42.3

46.9

51.3

53.7

54.3

52.6

34.4

-33%

Medical

13.5

14.6

17.6

16.2

17.0

16.4

14.5

13.2

-18%

Subtotal core business

157.0

161.3

185.4

198.7

206.1

222.5

202.6

190.1

-4%

83.4%

87.9%

89.1%

90.8%

92.2%

92.8%

92.6%

93.7%

 

CCC1

30.7

21.6

22.5

20.0

17.2

17.2

16.0

12.6

-37%

Others

0.6

0.7

0.2

0.2

0.2

0.1

0.1

0.1

 

Revenue*

188.3

183.6

208.1

218.9

223.5

239.8

218.7

202.8

-7%

Impact from revenue recognized over time

0

0

0

8.3

10.4

-2.0

-2.6

2.3

 

Total revenue

188.3

183.6

208.1

227.1

233.8

237.7

216.2

205.1

-9%

1Consumer, Communications & Computer

in millions of USD

Q3 2022

Q4 2022

Q1 2023

Q2 2023

Q3 2023

Q4 2023

Q1 2024

Q2 2024

Q2 y-o-y growth

CMOS

152.6

151.9

172.8

180.7

180.5

188.4

168.3

166.2

-8%

Microsystems

18.4

19.5

22.2

20.8

24.4

27.9

24.1

25.1

21%

Silicon carbide

17.4

12.2

13.2

17.3

18.6

23.5

26.3

11.6

-33%

Revenue*

188.3

183.6

208.1

218.9

223.5

239.8

218.7

202.8

-7%

Impact from revenue recognized over time

0

0

0

8.3

10.4

-2.0

-2.6

2.3

 

Total revenue

188.3

183.6

208.1

227.1

233.8

237.7

216.2

205.1

-9%

Business development

In the second quarter of 2024, X-FAB recorded revenues of USD 205.1 million, down 9% year-on-year and 4% quarter-on-quarter. Excluding the positive impact from revenue recognized over time of USD 2.3 million, second quarter revenue totaled USD 202.8 million, which is in line with the guidance of USD 200-210 million.

Revenues in X-FAB’s core markets – automotive, industrial, and medical – amounted to USD 190.1 million*, down 4% year-on-year and representing a record 94% share of total revenues*.

The second quarter was marked by a combination of developments. Demand for X-FAB’s 200mm CMOS technologies remained on the high side and the allocation of available capacities continued. In particular, the continued ramp of X-FAB’s popular 180nm automotive technology at X-FAB France contributed to automotive growth in the second quarter with revenues amounting to USD 142.4 million, up 9% year-on-year. X-FAB’s second quarter CMOS business totaled USD 166.2 million, down 8% compared to the same quarter last year. The decline reflects the demand weakness for X-FAB’s 150mm CMOS technologies following expected inventory corrections in the industrial end-markets.

As anticipated, SiC revenue for the second quarter declined by 33% year-on-year to USD 11.6 million after low bookings in the first quarter. The current weakness is projected to bottom out in the third quarter. Based on customer feedback, a recovery is anticipated to begin in the fourth quarter, with a return to robust growth expected in 2025.

Both, the weakness in 150mm CMOS as well as silicon carbide had an impact on X-FAB’s industrial business, which recorded second quarter revenues of USD 34.4 million, down 33% year-on-year. Order intake for X‑FAB’s 150mm CMOS technologies however started to recover in the second quarter and will be contributing positively to the revenue evolution in the fourth quarter.

X-FAB’s microsystems business recorded revenues of USD 25.1 million in the second quarter, with a strong growth of 21% year-on-year. This was mainly driven by the ramp of a next-generation automotive headlamp application.

Medical revenues came in at USD 13.2 million, down 18% year-on-year. Apart from normal fluctuations, the decline is a temporary effect related to the need to allocate capacity. Going forward, medical revenue is expected to return to solid growth based on new design wins, high-demand applications as well as strong medical bookings in the second quarter.

Overall, X-FAB recorded strong quarterly bookings amounting to USD 248.4 million, up 12% year-on-year. This reflects the robust demand for X-FAB’s 200mm CMOS and microsystems technologies as well as the uptick in 150mm CMOS order intake, the latter primarily related to the industrial and medical end market. Backlog at the end of the second quarter came in at USD 517.3 million, compared to USD 520.9 million at the end of the previous quarter.

Quarterly prototyping revenues totaled USD 21.1 million*, down 24% year-on-year.

Prototyping and production revenue* per quarter and end market:

in millions

of USD

Revenue

Q2 2023

Q3 2023

Q4 2023

Q1 2024

Q2 2024

Automotive

Prototyping

3.9

6.2

10.0

6.7

7.6

Production

127.2

129.1

141.8

128.9

134.8

Industrial

Prototyping

16.6

14.3

10.5

10.7

8.9

Production

34.8

39.4

43.8

41.9

25.5

Medical

Prototyping

2.5

3.3

3.3

2.7

2.0

Production

13.7

13.7

13.1

11.8

11.2

CCC

Prototyping

4.5

3.3

3.5

3.1

2.5

Production

15.4

13.9

13.7

12.9

10.2

The revision of the full year guidance mainly reflects the delayed recovery of the silicon carbide business. Despite this temporary effect, X-FAB remains confident in the long-term prospects of its SiC business. With the projected increase in EV unit sales, the greater adoption of SiC inverters in EV powertrains, and the anticipated completion of customer destocking, X-FAB expects a return to strong silicon carbide revenue growth in 2025.

Business fundamentals are intact and X-FAB remains well positioned for long-term business success. X‑FAB's comprehensive and highly specialized technology portfolio enables innovative solutions to address the major megatrends of our time. The electrification of everything is inevitable to move away from fossil fuels and mitigate climate change, driving long-term growth in X‑FAB's automotive and industrial businesses. Aging and growing populations require technological innovation to make prevention, diagnosis and treatment of disease more efficient, reliable and accessible to an ever-growing number of people. X-FAB's microsystems expertise with the combination of CMOS and MEMS supports the development of world-leading medical applications and fuels the long-term growth of X-FAB's medical business.

Operations update

Capacity utilization at X-FAB’s factories varied by technology. The 200mm CMOS lines, especially those producing the high demand 180nm technologies, were running at full load while others recorded lower utilization rates in line with the current demand.

In the second quarter, X-FAB continued its capacity expansion program. Total capital expenditures for the second quarter amounted to USD 121.9 million, up 17% sequentially.

The building construction at X-FAB Sarawak to create additional cleanroom space is on track, as is the plan to start moving in equipment in the fourth quarter. X-FAB France continued to expand capacity with new equipment coming online. Both sites manufacture X-FAB’s popular 200mm CMOS technologies and it is essential to increase capacity to better meet customer demand.

The SiC capacity expansion at X-FAB Texas was slowed in the second quarter in response to the current market demand, reflecting X-FAB's approach of gradually increasing capacity in line with identified demand and long-term customer commitments (long-term agreements).

Financial update

Second quarter EBITDA was USD 47.9 million with an EBITDA margin of 23.3%. Excluding the positive impact from revenues recognized over time, the EBITDA margin of the second quarter would have been 22.7%, at the higher end of the guided 20-23%.

Profitability is not affected by exchange rate fluctuations as X-FAB’s business is naturally hedged. At a constant USD/Euro exchange rate of 1.09 as experienced in the previous year’s quarter, the EBITDA margin would have been the same.

Cash and cash equivalents at the end of the second quarter amounted to USD 290.1 million.

The financing of X-FAB’s capital expenditures for the ongoing capacity expansion program through 2025 is secured by available cash reserves in combination with credit facilities, prepayments received from customers with long-term contracts and operating cash flows, each of which accounting for approximately one-third of total cash requirements.

For the additional capacity that X-FAB is building as part of its expansion program, the corresponding business has been identified, either as part of long-term agreements or as part of customer forecasts for existing products in high demand.

Based on the amendments to IAS 1 (International Accounting Standard) regarding the classification of liabilities as current or non-current, X-FAB has changed the presentation of borrowings under the Group's multicurrency revolving credit facility, which were classified as current until December 31, 2023.

As of January 1, 2024, these obligations are classified as non-current, also retrospectively. Accordingly, the balance sheets as of June 30, 2023, and December 31, 2023, have been restated to reflect this change, whereby the outstanding position of the Group's multicurrency revolving credit facility, respectively amounting to USD 180.9 million and USD 192.7 million, were reclassified from current to non-current borrowings.

Management comments

Rudi De Winter, CEO of X-FAB Group, said: "X-FAB's second quarter results, which were fully in line with expectations, reflect the contrasting market dynamics we are currently experiencing. We continue to see strong demand for our 200mm CMOS technologies. They represent the largest part of our business, and it is paramount that we continue to expand this capacity in line with customer needs that have been identified and secured through long-term contracts. I am pleased that we have initiated these investments and continue to make good progress in executing our expansion program. Another highlight for me is our microsystems business, where demand is strong and the pipeline is full of exciting applications. While our SiC business is experiencing a period of customer destocking, I remain confident in the structurally strong demand for silicon carbide applications driven by the worldwide transition to green mobility and green energy. It is rather a demand shift into next year, and I am convinced that our SiC business will return to robust growth in 2025.”

Procedures of the independent auditor

The statutory auditor, KPMG Bedrijfsrevisoren – Réviseurs d’Entreprises BV/SRL, represented by Herwig Carmans, has confirmed that the review procedures, which have been substantially completed, have not revealed any material misstatement in the accounting information included in this press release as of and for the six months ended June 30, 2024.

X-FAB Quarterly Conference Call

X-FAB’s second quarter results will be discussed in a live conference call/webcast on Thursday, July 25, 2024, at 6.30 p.m. CEST. The conference call will be in English.

Please register here for the webcast (listen only).

Please register here for the conference call (listen and ask questions).

The third quarter 2024 results will be communicated on October 24, 2024.

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 µm to 110 nm, 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. 4,500 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.

*excluding impact from revenue recognized over time according to IFRS 15

Condensed consolidated statement of profit and loss

in thousands of USD

Quarter

ended 30 Jun 2024

unaudited

Quarter

ended 30 Jun 2023

unaudited

Quarter

ended 31 Mar 2024

unaudited

Half-year

ended 30 Jun 2024

unaudited

Half-year

ended 30 Jun 2023

unaudited

Revenue*

202,847

218,870

218,712

421,559

426,979

Impact from revenue recognized over time

2,255

8,261

-2,559

-305

8,261

Total revenue

205,102

227,131

216,152

421,254

435,240

Revenues in USD in %

58

56

62

60

56

Revenues in EUR in %

42

44

38

40

44

Cost of sales

-160,236

-159,492

-165,786

-326,022

-310,404

Gross profit

44,866

67,639

50,367

95,232

124,836

Gross profit margin in %

21.9

29.8

23.3

22.6

28.7

 

 

 

 

 

 

Research and development expenses

-11,387

-12,905

-11,106

-22,494

-23,828

Selling expenses

-2,142

-2,112

-2,537

-4,679

-4,308

General and administrative expenses

-11,660

-11,961

-12,811

-24,471

-22,462

Rental income and expenses from investment properties

394

390

1,434

1,828

2,462

Other income and other expenses

2,755

-231

1,847

4,603

1,512

Operating profit

22,825

40,820

27,193

50,019

78,213

Finance income

6,775

6,658

5,778

12,552

15,196

Finance costs

-7,419

-8,229

-7,653

-15,072

-18,484

Net financial result

-644

-1,571

-1,875

-2,519

-3,288

 

 

 

 

 

 

Profit before tax

22,181

39,249

25,318

47,499

74,925

Income tax

-2,359

-548

-2,260

-4,619

6,494

Profit for the period

19,822

38,701

23,059

42,881

81,418

 

 

 

 

 

 

Operating profit (EBIT)

22,825

40,820

27,193

50,019

78,213

Depreciation

25,028

21,465

23,765

48,792

42,083

EBITDA

47,853

62,284

50,958

98,811

120,295

EBITDA margin in %

23.3

27.4

23.6

23.5

27.6

 

 

 

 

 

 

Earnings per share

0.15

0.30

0.18

0.33

0.62

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

1.07667

1.08946

1.08605

1.08145

1.08060

Amounts in the financial tables provided in this press release are rounded to the nearest thousand except when otherwise indicated, rounding differences may occur.

*excluding impact from revenue recognized over time in accordance with IFRS 15

Condensed consolidated statement of financial position

in thousands of USD

Quarter ended

30 Jun 2024

 

unaudited

Quarter ended

30 Jun 2023

restated

unaudited

Year ended

31 Dec 2023

restated

audited

ASSETS

 

 

 

Non-current assets

 

 

 

Property, plant, and equipment

879,363

568,926

734,488

Investment properties

7,608

7,403

7,171

Intangible assets

5,986

5,989

5,627

Other non-current assets

50

68

58

Deferred tax assets

83,173

79,082

83,772

Total non-current assets

976,180

661,467

831,116

 

 

 

 

Current assets

 

 

 

Inventories

277,587

247,912

269,227

Contract assets

23,706

15,667

24,010

Trade and other receivables

108,980

115,217

123,101

Other assets

46,918

61,322

50,659

Cash and cash equivalents

290,054

441,786

405,701

Total current assets

747,245

881,905

872,698

 

 

 

 

TOTAL ASSETS

1,723,425

1,543,372

1,703,814

 

 

 

 

EQUITY AND LIABILITIES

 

 

 

Equity

 

 

 

Share capital

432,745

432,745

432,745

Share premium

348,709

348,709

348,709

Retained earnings

223,604

100,230

180,159

Cumulative translation adjustment

-636

-243

-301

Treasury shares

-770

-770

-770

Total equity

1,003,653

880,672

960,542

 

 

 

 

Non-current liabilities

 

 

 

Non-current loans and borrowings

244,604

236,833

235,318

Other non-current liabilities and provisions

4,652

4,025

4,024

Total non-current liabilities

249,256

240,858

239,342

 

 

 

 

Current liabilities

 

 

 

Trade payables

55,103

67,764

90,681

Current loans and borrowings

26,272

24,067

25,659

Other current liabilities and provisions

389,140

330,011

387,590

Total current liabilities

470,516

421,842

503,930

 

 

 

 

TOTAL EQUITY AND LIABILITIES

1,723,425

1,543,372

1,703,814

Condensed consolidated statement of cash flows

in thousands of USD

Quarter

ended 30 Jun 2024

unaudited

Quarter

ended 30 Jun 2023

unaudited

Quarter

ended 31 Mar 2024

unaudited

Half-year

ended 30 Jun 2024

unaudited

Half-year

ended 30 Jun 2023

unaudited

Income before taxes

22,181

39,249

25,318

47,499

74,925

 

 

 

 

 

 

Reconciliation of income before taxes to cash flow arising from operating activities:

28,972

22,895

23,732

52,704

45,876

Depreciation and amortization, before effect of grants and subsidies

25,028

21,465

23,765

48,792

42,083

Amortization of investment grants and subsidies

-624

-751

-673

-1,296

-1,488

Interest income and expenses (net)

959

652

-306

653

2,097

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

-2,020

-137

-1,751

-3,771

-1,620

Other non-cash transactions (net)

5,629

1,666

2,698

8,327

4,804

 

 

 

 

 

 

Changes in working capital:

7,487

141,779

-799

6,688

140,569

Decrease/(increase) of trade receivables

10,211

-21,482

8,252

18,463

-42,483

Decrease/(increase) of other receivables and other assets

12,244

-7,006

6,587

18,831

-3,933

Decrease/(increase) of inventories

-604

-12,303

-4,951

-5,554

-31,189

Decrease/(increase) of contract assets

-2,255

-15,667

2,559

305

-15,667

(Decrease)/increase of trade payables

-14,369

-8,175

-206

-14,575

19,065

(Decrease)/increase of other liabilities

2,260

206,411

-13,040

-10,780

214,776

 

 

 

 

 

 

Income taxes (paid)/received

-1,227

-401

-1,441

-2,668

-509

 

 

 

 

 

 

Net cash from operating activities

57,413

203,522

46,810

104,224

260,861

 

 

 

 

 

 

Cash flow from investing activities:

 

 

 

 

 

Payments for property, plant, equipment and intangible assets

-121,893

-104,498

-104,980

-226,873

-153,393

Acquisition of subsidiary, net of cash acquired

-24,863

0

23,229

-1,634

0

Payments for loan investments to related parties

0

-41

0

0

-176

Proceeds from loan investments related parties

0

42

0

0

162

Proceeds from sale of property, plant, and equipment

2,020

208

1,791

3,811

1,694

Interest received

2,984

2,557

3,433

6,417

3,571

 

 

 

 

 

 

Net cash used in investing activities

-142,752

-101,732

-76,527

-218,279

-148,143

Condensed consolidated statement of cash flows – con’t

in thousands of USD

Quarter

ended 30 Jun 2024

unaudited

Quarter

ended 30 Jun 2023

unaudited

Quarter

ended 31 Mar 2024

unaudited

Half-year

ended 30 Jun 2024

unaudited

Half-year

ended 30 Jun 2023

unaudited

Cash flow from (used in) financing activities:

 

 

 

 

 

Proceeds from loans and borrowings

42,601

5,027

50,300

92,901

14,240

Repayment of loans and borrowings

-5,644

-13,870

-94,113

-99,757

-49,800

Receipts of sale and leaseback arrangements

-5,147

0

31,616

26,469

0

Payments of lease installments

-3,061

-1,273

-1,169

-4,230

-2,785

Interest paid

-4,574

691

-4,058

-8,632

-2,568

 

 

 

 

 

 

Cash flow from (used in) financing activities

24,175

-9,425

-17,423

6,751

-40,913

 

 

 

 

 

 

Effect of changes in foreign currency exchange rates on cash balances

-1,250

-855

-7,093

-8,343

556

Increase/(decrease) of cash and cash equivalents

-60,164

92,365

-47,140

-107,304

71,805

Cash and cash equivalents at the beginning of the period

351,468

350,276

405,701

405,701

369,425

Cash and cash equivalents at the end of the period

290,054

441,786

351,468

290,054

441,786

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240725542174/en/

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