Siltronic with strong sales growth in the first half of 2018 and slight forecast increase

  • Wafer demand in all diameters continues to be high

  • Sales grew to EUR 688.7 million

  • EBITDA increased to EUR 268.3 million and EBITDA margin to 39.0 percent

  • Significant sales and earnings growth also quarter-on-quarter

  • Forecast slightly increased

Siltronic AG (TecDAX: WAF) recorded a very pleasing first half of 2018. Demand for wafers remained at a high level. This led to further increases in average selling prices. After a successful start to the current financial year, the second quarter of 2018 also developed very positively.

"Wafers continued to show strong demand in the current financial year, driven by a variety of applications, especially by memory and logic, but also automotive and industrial applications. The higher average selling prices once again had a positive effect on our sales and earnings," said Dr. Christoph von Plotho, CEO of Siltronic.

High wafer demand drives sales

Due to the high demand for wafers and the further rise in average selling prices, sales in the first half of 2018 increased to EUR 688.7 million and were 27.3 percent higher than in the previous year (EUR 541.1 million). Revenues increased by 10.4 percent from EUR 327.4 million in the first quarter to EUR 361.3 million in the second quarter of 2018.

As expected, revenue development was curbed by the stronger Euro against the US dollar, albeit less strongly than anticipated at the beginning of the year. In the first half of 2018 the Euro-USD exchange rate stood at 1.21, in the first half of 2017 however at 1.08.

Gross profit doubled

Despite an increase in wafer area, cost of sales rose only slightly year on year from EUR 403.1 million to EUR 411.9 million in the first half of 2018. As a result of the price increases, gross profit increased significantly to 276.8 million (H1 2017: EUR 138.0 million) and the gross margin to 40.2 percent (H1 2017: 25.5 percent).

Cost of sales rose only slightly quarter-on-quarter. Due to the price increases gross profit and gross margin gained significantly to EUR 152.0 million (Q1 2018: EUR 124.9 million) or 42.1% (Q1 2018: 38.1%). The costs per wafer area were slightly down compared to the same period last year.

Selling, R&D and general administration expenses stable

At EUR 64.5 million, selling, R&D and general administration expenses in the first half of 2018 were at the level of the first half of 2017 (EUR 63.8 million). Costs in relation to sales have declined significantly. The ratio fell from 11.8 percent to 9.4 percent. Compared to the previous quarter with costs of EUR 31.6 million and a ratio of 9.7 percent, there was no significant change.

Other income from exchange rate effects of EUR 7.1 million

Furthermore, income from foreign exchange effects amounted to EUR 7.1 million in the first half of 2018, of which EUR 4.4 million was attributable to the second quarter and EUR 2.7 million to the first quarter of 2018. In the first half of 2017, there was an expense of EUR 7.2 million.

Significant increase in profitability

Driven by higher average selling prices, profitability has also continued to increase.

EBIT more than tripled from EUR 66.8 million in the first half of 2017 to EUR 220.7 million in the first half of 2018. The EBIT margin was 32.0 percent, compared with 12.3 percent in the first half of 2017. EBIT increased by 28.5 percent from EUR 96.6 million in the first quarter of 2018 to EUR 124.1 million in the second quarter. The EBIT margin increased from 29.5 percent to 34.4 percent.

EBITDA improved by 113.4 percent to EUR 268.3 million in the first six months of 2018, compared to EUR 125.7 million in the same period of the previous year. The EBITDA margin increased significantly from 23.2 percent to 39.0 percent. From the first to the second quarter of 2018, EBITDA increased by 19.4 percent from EUR 122.3 million to EUR 146.0 million. The EBITDA margin increased from 37.4 percent in the first quarter of 2018 to 40.4 percent.

Half-year result more than tripled 

The profit for the period in the first half of 2018 was EUR 180.0 million and thus more than tripled compared to the same period of 2017. For the second quarter of 2018, there was a profit for the period of EUR 98.0 million (Q1 2018: EUR 82.0 million).

Earnings per share amounted to EUR 5.66 in the first half of 2018 (H1 2017: EUR 1.69). Of this, EUR 3.04 were generated in the second quarter of 2018.

In the first half of 2018, the return on capital employed (ROCE) was 57.4 percent compared to 18.6 percent in the same period of the previous year. Quarter-on-quarter, ROCE increased from 49.3 percent to 64.2 percent. The driving factor was the significant increase in EBIT.

Net cash flow rises to EUR 179.5 million

The financial position also improved significantly. Due to the high net profit for the period, the net cash flow was EUR 179.5 million (H1 2017: EUR 68.8 million). In the second quarter of 2018, the net cash flow was EUR 67.1 million.

In the first half of 2018, Siltronic received customer prepayments of EUR 168.5 million. The company expects further advance payments from customers in the second half of 2018.

Cash outflows for property, plant and equipment and intangible assets came to EUR 73.3 million (H1 2017: EUR 41.2 million) mostly for capacity increases in 2019 and further automation of the production.

Equity increased despite first-time dividend payment

Despite the first-time dividend payment of EUR 75.0 million in April 2018, equity increased by EUR 82.2 million to EUR 720.1 million. This is primarily attributable to the half-year profit of EUR 180.0 million.

Net financial assets increased to EUR 602.7 million

Net financial assets reached a new high of EUR 602.7 million as of June 30, 2018. The amount consists of approximately two-thirds liquidity and one-third fixed-term deposits.

On an operational level, Siltronic celebrated the ground-breaking of its new crystal-pulling hall in Singapore. The ceremony took place at the end of June. The new pulling-hall will be completed in the second half of 2019 and will then be equipped with crystal pulling equipment over a period of about one year.

Forecast slightly increased

Based on the development so far, Siltronic is optimistic about the second half of 2018. "As we continue to see high demand for wafers, we slightly raise our forecast given in March 2018. We now expect sales of close to EUR 1.4 billion and an EBITDA margin of around 40 percent. In addition, capital expenditures will increase slightly to around EUR 260 million and EUR 280 million, as we bring forward downpayments to our suppliers to 2018," says Christoph von Plotho.

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


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