Siltronic AG started very well in 2018 and boosted both sales and earnings

  • First-quarter sales around 27 percent up year-on-year

  • EBITDA more than doubled

  • EBITDA margin improved from 20.5 percent to 37.4 percent

  • Net financial assets at new high of EUR 490.8 million

  • Net cash flow of EUR 112.4 million

  • Forecast for full year 2018 confirmed 

In line with expectations, the ongoing high global demand for wafers continued to drive the positive business performance of Siltronic AG (TecDAX: WAF) seen in 2017 throughout the first quarter of 2018, primarily due to again higher average selling prices.

"We have made an excellent start in 2018 and achieved significant growth in both sales and earnings compared with the first quarter 2017. Continuing full capacity utilization and rising wafer prices have played a key role in achieving this success. Despite the headwind predicted for 2018 coming from the stronger euro exchange rate against the US dollar, we have been able to maintain our sales at a similarly high level to the very strong previous quarter and additionally increased our profitability," states Dr. Christoph von Plotho, CEO of Siltronic AG.

The Company's sales rose to EUR 327.4 million in the first quarter of 2018, 26.9 percent up year-on-year (Q1 2017: EUR 258.0 million), driven by the high demand for wafers and the resulting increase in average selling prices.

As expected, the sales performance was held down by the stronger exchange rate of the euro against the US dollar. In the first quarter of 2017, the rate still averaged USD 1.06 to the euro. The US currency was therefore 15 percent stronger than in the same period of 2018 (USD 1.23).

Despite the weaker US dollar but slightly higher selling prices, sales remained at the level of the fourth quarter of 2017 (EUR 328.1 million).

Despite higher volumes, cost of sales increased only slightly from EUR 198.6 million in the first quarter of 2017 to EUR 202.5 million in the first quarter of 2018. As the sales growth is primarily due to price increases, gross profit more than doubled year-on-year from EUR 59.4 million in the first quarter of 2017 to EUR 124.9 million for the same period of 2018. The gross margin climbed correspondingly from 23.0 percent to 38.1 percent. Cost of sales per wafer area were slightly lower.

Quarter-on-quarter, cost of sales decreased by approximately 2 percent (Q4 2017: EUR 206.1 million). At EUR 122.0 million, gross profit for the previous quarter was slightly lower, as was the corresponding gross margin of 37.2 percent.

Selling expenses, research and development (R&D) and general and administrative expenses were EUR 31.6 million in the first quarter of 2018 and therefore on the same level as in the first quarter of 2017 (EUR 31.2 million), but significantly lower as a percentage of sales. This corresponds to 9.7 percent and 12.1 percent, respectively.

The expenses declined quarter-on-quarter (Q4 2017: EUR 34.9 million).

Siltronic's other operating income and expenses are strongly affected by exchange rate gains and losses, in particular for currency hedging measures relating to the US dollar and the Japanese yen.

In the first quarter of 2018, the company generated EUR 2.7 million of income from exchange rate effects (Q1 2017: expenses of EUR -4.5 million). In the fourth quarter of 2017 income from exchange rate effects amounted to EUR 1.6 million.

The further rise in average selling prices also resulted in a significant increase in profitability. EBIT in the first quarter of 2018 more than quadrupled year-on-year to EUR 96.6 million (Q1 2017: EUR 23.4 million).

EBIT also increased by EUR 5.5 million compared to the previous quarter, despite the currency-related headwind. The improvement is mainly attributable to lower depreciation.

As a result, EBITDA also increased to EUR 122.3 million in the first quarter of 2018 and has thus more than doubled compared with the EUR 53.0 million recorded for the first quarter of 2017. The EBITDA margin climbed from 20.5 percent to 37.4 percent.

EBITDA and the corresponding EBITDA margin were approximately at the level of the previous quarter (Q4 2017: 36.8 percent).

Siltronic Group's net result for the first quarter of 2018 increased significantly to EUR 82.0 million. By comparison: the net result for the first quarter of 2017 amounted to EUR 17.0 million. The sharp jump in profit is due to constant increases in average selling prices and a slight decline in production costs per wafer area. There was also an improvement of EUR 8.1 million quarter-on-quarter.

Earnings per share amounted to EUR 2.62 for the first quarter of 2018, compared with EUR 0.56 for the corresponding period of 2017. In the fourth quarter 2017, profit per common share stood at EUR 2.37.

ROCE came in at 49.3 percent for the first quarter of 2018, compared with 12.9 percent one year earlier. The driving factor was the significant increase in EBIT. In the fourth quarter of 2017, ROCE stood at 48.8 percent.

Equity rose to EUR 707.1 million in the first quarter of 2018. The increase of EUR 69.2 million is mainly attributable to the net result for the period amounting to EUR 82.0 million.

Non-current liabilities rose to 492.3 million euros as of March 31, 2018. The increase is mainly due to higher customer prepayments and lower interest rates in the valuation of pension provisions in Germany.

As at March 31, 2018, the pension provision in Germany was discounted at 2.02 percent and as of December 31, 2017 at 2.10 percent. In the USA, however, the interest rate increased from 3.45 percent to 3.81 percent.

Due to the strong quarterly result, net cash flow in the first quarter of 2018 totaled EUR 112.4 million.

In the first quarter of 2018, Siltronic has already received customer prepayments from customers in the amount of approximately EUR 41 million and expects to receive further prepayments in the remainder of the fiscal year. 

The increase in payments for capital expenditure in the first three months of 2018, amounting to EUR 25.1 million, mainly relates to capacity expansions in 2019 and the further automation of production.

As at March 31, 2018, net financial assets reached a new high of EUR 490.8 million. Approximately half of this amount consists of cash and cash equivalents and fixed-term deposits.

Forecast for full year 2018 confirmed 

Siltronic AG predicts a positive business performance in 2018, driven by further price increases for wafers, and confirms the forecast made at the beginning of March 2018. For further information on the forecast for the full year 2018, please see the Annual Report 2017.

For the full version of this news release (incl. financial data), please download the PDF version.


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