AT&S benefits from global recovery

The Group’s expansion in China – the 11th high-tech HDI production line for Smartphones was ramped up in Shanghai in October – is ongoing. Overall, the first nine months of 2010/11 have turned out much better than expected. Net earnings were of course slightly down in December as a result of the holidays, but cumulative sales (EUR 365m) were better than original projected. Earnings per share for the first nine months came out at EUR 1.27. Earnings before interest and tax (EBIT) for the first nine months of the financial year 2010/11 (adjusted for non-recurring expenses) came to EUR 40.3m, resulting in earnings per share of some EUR 1.27. “As we still cannot fully meet the roaring demand for high-end printed circuit boards especially for Smartphones, we are commissioning the capacity expansion with highest priority,” comments AT&S CEO Andreas Gerstenmayer. “The recovery of the automotive supply industry worldwide and the whole industry segment is highly satisfactory, and has brought us additional orders in India and Austria.” Currently, the negative factors are continues upward pressure on raw materials prices and high volatility in exchange rates. The resignation of Board Member Steen Hansen also resulted in an additional provision of some EUR 1.9m. This takes the cumulative total of non-recurring expenses in the first nine months to around EUR 2.7m. However, the overall EBIT Margin remained at 10.3%. Outlook “In the short term, I am confident that we will meet the market expectations which we have already communicated to the financial markets a while ago,” says Gerstenmayer. “Net revenues for the whole financial year will be in the envisaged range running from 470m to 500m Euros, especially as the 4th quarter is traditional the lowest one in revenue terms due to Chinese New Year. Taking into account the upward price trends of raw materials and the high volatility in foreign exchange rates, I expect an EBIT margin also within the scope of 9%. With CAPEX spent in amount of EUR 130m, we foresee that the net gearing ratio will remain under 80%. So I am not expecting any surprises by the end of the financial year 2010/11, given that the global economy appears to be experiencing a sustainable recovery.” “In the mid terms, though, the AT&S Group is facing a number of challenges. In all our markets – be it mobile devices, automotive or medical technology – I foresee strong demand for high-end printed circuit boards. But our competitors in Asia are not resting on their laurels – increasingly, they are investing not just in expanding low-tech capacity but in high-end HDI technology as well. We are monitoring this trend closely, and are currently in the process of analysing these developments and their strategic implications for us in detail.” Gerstenmayer foresees an upholding strong demand for high end PCBs and expects a 10% growth rate over the next two years. “We are currently evaluating the best location for a new site in Asia to keep up with demand. I am expecting for our expert team to come up with meaningful results in the foreseeable future”, says Gerstenmayer.