Improved profitability for Aixtron in H1/2019

Revenues, gross profit and operating result (EBIT) increased significantly against the previous year, while operating expenses continued to decline year-on-year. Gross and EBIT margins reached the upper end of the ranges forecasted at the beginning of the year. Profitability thus continued to improve in H1/2019. As expected, order intake in the first half of 2019 was down year-on-year, especially in the optoelectronics segment. Against the backdrop of the ongoing trade dispute between the USA and China, customers were reluctant to invest in the expansion of their production capacities. Despite this development, the key figures for the first half of the year are fully in line with the annual guidance, a press release notes. The market developments of an increasing use of lasers for 3D sensor technology and optical data transmission, a progressive expansion of the 5G network and an increasing use of energy-efficient power electronics remain positive and are only affected for a short time by the current tensions. Dr. Bernd Schulte, President of Aixtron SE, comments: "We are pleased with the improved profitability in the first half of 2019, but this also reflects the expected customer reluctance to invest in new production capacity, which was further exacerbated in the short term by the US sanctions against Huawei. We are optimistic that order intake will improve in the second half of the year, in particular due to an expected recovery in demand from Asia. In combination with our strong order backlog, we plan to meet our forecast for the year. Especially in the areas of lasers, power electronics and special LEDs, we continue to see three strong growth drivers that are important building blocks for global megatrends such as the next generation of 5G wireless networks, 3D sensors for mobile phones and power electronics for electromobility and renewable energies, as well as next-generation MicroLED displays." The company's Gen2 OLED system was installed in a pilot production line at a customer's facility and is operated jointly by engineers from the unnamed customer and Aixtron's subsidiary APEVA. Equipment order backlog as of June 30, 2019 decreased by 20% year-on-year to EUR 110.1m. The majority of the order backlog is scheduled for shipment in 2019. Revenues in H1/2019 increased by 12% year-on-year to EUR 132.0m (H1/2018: EUR 117.6 m). At 45%, the slightly lower-margin LED systems business accounted for the largest share of revenues, while revenues from MOCVD systems for optoelectronics declined to 32% compared to the previous year, as expected. Power electronics equipment accounted for 11% of total revenues. Operating result (EBIT) in H1/2019 improved year-on-year by 59% to EUR 19.1m (H1/2018: EUR 12.0m). At EUR 15.8m, net profit in H1/2019 was at the same level as in the previous year (H1/2018: EUR 16.0m). "Our OLED subsidiary APEVA has reached another important milestone with the successful commissioning of a Gen2 system at our customer's site. The tool is currently undergoing an extensive evaluation program and we are confident that we will make further progress in qualifying the system. In power electronics, we see a steadily rising demand for systems for gallium nitride-based applications, driven among other things by the expansion of 5G mobile communication networks. In addition, we are making great progress in marketing our new silicon carbide production system, for which we have already received initial orders in addition to positive customer feedback," adds Dr. Felix Grawert, President of Aixtron SE. Guidance Based on the good results for the first six months of the fiscal year 2019 and the assessment of the development of demand in the current market environment, Aixtron Management confirms its 2019 full year guidance for sales and orders and now expects improved profitability for 2019 with margins at the upper end of the previously forecast ranges.