AT&S First choice for advanced applications€¦ · Company Presentation June 2020. AT & S Austria...

AT & S Austria Technologie & Systemtechnik Aktiengesellschaft | Fabriksgasse 13 | A-8700 Leoben Tel +43 (0) 3842 200-0

www.ats.net

AT&SFirst choice for advanced applications

Company PresentationJune 2020


www.ats.net

Company Overview

Company Presentation 2

What guides us

VISION

FIRST CHOICE FOR ADVANCED APPLICATIONS

MISSIONWe set the highest quality standards in our industry

We industrialize leading-edge technology

We care about people

We reduce our ecological footprint

We create value


Among the top PCB producers

worldwide

A world leading high-tech PCB & IC substrates company

* For CY 2019 Source: Prismark

** For AT&S FY 2019/20

High-end interconnect solutionsfor

Mobile Devices, Automotive, Industrial, Medical Applications and Semiconductor

Industry

Outperforming

market growth over the last

decade# 2

high-end PCB producer worldwide*

€ 1bnrevenue in FY 2019/20

~ 10,000Employees**

Efficient global production footprint with

6 plants in Europe and Asia


Global footprint ensures proximity to supply chain & cost efficiency

977* 395* 1.315* 2.676* 4.542* 258*

Shanghai China

AnsanKorea

ChongqingChina

Leoben, HeadquartersAustria

FehringAustria

NanjangudIndia

AT&S plant

AT&S sales support office

AT&S Headquarters

*Staff, Average, FTE, FY 2019/20; 75 employees in other locations


5

Market Segments & Product Applications served by AT&S

Computer, Communications,

Consumer Appliances

Smartphones, Tablets, Wearables, Ultrabooks,

Cameras

Industrial

Machine-2-Machine Communication,

Robots, Industrial Computer,

X2X Communication

Automotive

Advanced Driver Assistance Systems,

Emergency-Call, X2X Communication

Medical

Patient Monitoring, Hearing Aids,

Pacemaker, Neurostimulation, Drug

Delivery, Prosthesis

IC substrates

High Performance Computer, Microserver

Segment Mobile Devices & Substrates Segment Automotive, Industrial, Medical


AT&S – Key Facts

763815

9921,028 1,001

168131*

226 250195

77*7*

90 11747

2015/16 2016/17 2017/18 2018/19 2019/20

Revenue EBITDA EBIT

(2.7%)

Strong growth track record1 Balanced portfolio/Global customer base2

7%

+7%

+22%

€ in millions*Based on ramp-up effects for new plants in China

Revenue growth

+4%

Revenue split by segment: FY 2019/20

Revenue split by customer: FY 2019/20(based on customer’s headquarters)

6

69%

31%

Mobile Devices & Substrates

Automotive, Industrial,Medical

68%

16%

8%8%

Americas

Germany/Austria

Asia

Other European countries


Strategic focus on high-end technologies

AT&S revenue structure – based on technologies

High-endHDI PCBs andIC substrates

~ 30%

Single-sided (SS), double-sided (DS), multilayer- (ML), flex and rigid-flex (RF) PCBs

~ 70%

High-end technology share > 80%* HDI and any-layer PCBs,

Embedding, IC substrates

Complementary technology share: < 20%*

SS, DS, ML,Flex, RF

Structure of general PCB market – based on technologies

* for FY 2019/20Source: Prismark, AT&S


More than AT&S

Printed circuit boards

Leading producer of high-end PCB

IC substrates

One of the leading producers

mSAP / SLP

Technology leader

PCBs/substrates for modules

High growth potential

Substrates for HPC modules

Diversification of application and customer portfolio

Broadening the service range and opening up of new business opportunities

Module integration services Build-up of additional capabilities

Technology

Innovation power

Clear focus on dedicated applications

Leadingprovider ofinterconnectsolutions


Leading provider of high-end PCBs and IC substrates

Unique market position Broad product portfolio to serve all growth markets

Long-standing customer relationships with technology and market leaders

Technology innovator due to continuous R&D efforts

Quality benchmark with outstanding process know-how, productivity and efficiency

Growth oriented strategy Megatrend-driven markets with attractive growth potential

Address growth opportunities with incremental investments

Sustainable profitability AT&S has constantly outperformed the PCB and substrates market over the last years

EBITDA margin of 20 – 25% above industry average

Strong cash flow generation and therefore improved internal financing capabilities

Solid balance sheet and attractive dividend policy

Well positioned for the future

9


Market players in the high-end segment10

Market position HDI Technology (2019)

Rank Supplier Country/Region mSAP IC SubstratesHDI

(revenue in US-$ millions)

1 Compeq TWN 776

2 AT&S AUT 736

3 TTM USA 716

4 Unimicron TWN 706

5 Tripod TWN 508

6 Meiko JPN 461

7 Zhen Ding TWN 428

8 Korea Circuit KOR 227

9 Founder PCB CHN 222

10 CMK JPN 220

Source: Prismark, AT&S Market Intelligence


Driving the Industry - Miniaturization & Modularization

?

2003/04 2013 2019 202X

TYPE Mobile Phone Smartphone Smartphone All in One

PCB 125x55mm 85x20mm 60x29mm 25x25mm?

FORM FACTOR 1 0.25 0.23 0.06?

LINE/SPACE 100/100µm 40/40µm 30/30µm 10/10µm

TECHN. 1-n-1 Any-layer mSAP(Sandwich structure)

FO/SAP/mSAP


R&D as the key for technological leadership

International R&D Partners

As of FY 2019/20* Revenue generated with products with new, innovative technologies introduced to the market within the last three years

R&DHeadquarters

AustriaIndustrialization at the respective

production site

9.5%R&D Quota

(equivalent to € 94.8 million)

30.8%Innovation Revenue Rate *

International R&D Partners

326 Patents


www.ats.net

Financials


AT&S development in FY 2019/20Satisfying operating performance despite challenging environment

Excellent crisis management helped to mitigate impact on revenue

Lower volume and unfavourable product mix in Mobile Devices segment

Strong trend at IC substrates business

Automotive segment with almost stable performance despite difficult market situation

Reduced volume in the Industrial segment

Weaker market environment in the Industrial and Automotive segment causes temporary higher price pressure

Medical & Healthcare continued positive trend

14


Financials in FY 2019/20Revenue exceeds the one-billion-euro mark again

Revenue at € 1,000.6 million (PY: € 1,028.0 million)

EBITDA at € 194.5 million (PY: € 250.1 million)

EBIT at € 47.4 million (PY: € 117.2 million)

Operating free cash flow at € -33.4 million (PY: € 69.7 million)

Earnings per share down to € 0.34; dividend of € 0.25 proposed

15


www.ats.net

Market Update & Outlook


PCB & IC substrates market outlook

6.8 8.93.7

3.12.6

3.21.3

1.54.8

9.3

17.2

23.814.5

16.9

8.0

10.0

CY 2 0 1 9 CY 2 0 2 5

Consumer

Computer

Communication

Substrates

Medical

Industrial

Aviation

Automotive

58.0

76.6+4.7%

+2.4%

+3.8%

+2.5%

+5.6%

+11.4%

+4.5%

+2.8%

+3.1%

CAGRin US-$ billionSource: Prismark, April 2020


Global Module Integration Service Market

in US-$ billionSource: A.T. Kearney (8/2018), AT&S (04/2020)

by application

Total annual market growth is forecast at 11.3% from 2019 to 2025(Market revenue includes services for PCB/substrate, module assembly and test)

8.713.7

5.8

9.64.0

7.9

2.3

10.2

11.2

19.2

CY 2 0 1 9 CY 2 0 2 5

Camera

Sensor

RF/Wireless

Power

Other

32.0

60.6+11.3%

+12.0%

+7.9%

+9.4%

+28.5%

+8.9%

CAGR


Growth opportunities in all segmentsFuture trends still intact

19

New applications (smartwatch, speakers, robots, VR, …)

Edge & cloud computing

Networking

Big data / data server

Consumer / Computer

Increased digital networking (IoT)

Additional functionality

5G

Artificial Intelligence

Communication

Automation

Machine-to-machine communication (5G)

Artificial Intelligence

Mobile therapy and diagnostic devices

Industrial / Medical

Autonomous driving RADAR, LiDAR, camera 5G Artificial Intelligence

Electrification of the drive Increasing electronics share

per vehicle

Automotive


Supply chain in the electronics industryNew business opportunities through entry into the module market

20

SubstrateManufacturing

Module Design Chip Manufacturing

(Front-end)

PCBManufacturing

Chip Assembly & Test(Back-end)

Product/Module

Assembly

ProductOwnership

OSATs

PCB

Wafer FoundriesODM/EMS/

OSATsOEMs

OEMs

Fab-less IC Players

Module Integration Service ProviderDesign houses

02

Module Board Manufacturer (SLP)

01

0

Substrate

0


Outlook for 2020/21AT&S is well positioned to positively participate in intact market trends

Future trends not harmed by COVID-19 pandemic

Influences on customer demand in the coming months expected Product launches may be delayed in the Mobile Devices segment

Visibility in Automotive business is limited

Industrial segment continues to develop at a low level

Stable development for medical applications

Demand for IC substrates remains strong according to current forecasts

Solid performance in Q1 with revenue and EBITDA at the level of previous year

Outlook update as soon as economic framework conditions can be better quantified

Investments in the IC substrate and module business to be consistently continued Depending on market developments CAPEX for maintainance and tech-upgrade of up to € 80 million

CAPEX for strategic projects of up to € 410 million


Medium-term guidance confirmed

Expansion of technology leadership Leading provider of new interconnect solutions Innovation revenue rate: > 20%

Focus on continued profitable growth

Revenue target of € 2 billion

Prosecution of sustainable margin improvement Medium-term EBITDA margin target of 25-30%

Creation of shareholder value Medium-term ROCE above 12%

Sustainability management 80% renewable energy Eco-balancing of product groups 30 % women in management positions

First choice for advanced applications

Technology development to module integration and capacitiy expansion


www.ats.net

Annex


AT&S – Stock ProfileListing: Vienna Stock Exchange,

Prime Standard

Indices: ATX, ATX Prime, Vönix, WBI

Thomson Reuters (A): ATSV.VI

Bloomberg (A): ATS:AV

Shareholder structure

# of shares outstanding 38.85m

Dividend per share*: € 0.25*Proposed to the AGM


AT&S Product Portfolio – I

ECP®:Embedded Component Packaging IC substrates Substrate-like printed circuit boards

mSAP

Embedded Component Packaging allows to embed active/passive components (e.g. wafer level dies) within the layers of a PCB – contributes to miniaturization.

IC substrates serve as interconnection platform withhigher density (Line/Space < 15 micron) between semiconductors (Chips) & PCBs .

Substrate-like PCBs (mSAP technology) are the next evolution of high-end HDI PCBs with higher density: Line/Space < 30 micron.

Production siteLeoben, Shanghai Chongqing Chongqing, Shanghai

ApplicationsDevices such as smartphones, tablets, digitalcameras and hearing aids

High-end processors for Computer, Communication, Automotive, Industrial

Mobile applications like smartphones


HDI any-layer printed circuit

boards

HDI microvia printed circuit boards – high density interconnect

Multilayer printed circuit boards

Double-sided printed circuit boards

IMS printed circuit boards – insulated metal

substrate

Further technological enhancement to HDI microvia: All electrical connections in HDI any-layer boards consist of laser-drilled microvias. Advantage: further miniaturization, and higher performance and reliability. AT&S produces HDI any-layer in 4 to 12 layers.

HDI: high density interconnect, meaninglaser-drilled connections (microvias). HDI is first step towards miniaturization.AT&S can produce 4-layerlaser PCBs up to 6-n-6HDI multi layer PCBs.

Found in almost every area of industrial electronics. AT&S produces printed circuit boards with 4 to 28 layers, in quantities from individual prototypes to small batches and mass production.

Used in all areas of electronics. AT&S focuses on double-sided printed circuit boards with thicknesses in the range of 0.1-3.2mm.

IMS: insulated metal substrate. Primary function: heat dissipation for use mainly with LEDs and power components.

Production siteShanghai Shanghai, Leoben Leoben, Nanjangud, Fehring Fehring, Nanjangud Fehring

ApplicationsSmartphones, Tablets, Notebooks

Mobile phones and nearly all electronic applications including automotive (navigation, infotainment and driver assistance systems)

Used in all electronic applications including touch panels, and in products ranging from aircraft to motorcycles, from storage power plants to solar arrays

Primarily industrial and automotive applications

Lighting industry

AT&S Product Portfolio – II


Flexible printed circuit boards

Semi-flexible printed circuit boards

Rigid-flex printed circuit boards

Flexible printed circuitboards on aluminum

Used to replace wiring and connectors, allowing for connections and geometries that are not possible with rigid printed circuit boards.

More limited bend radius than flexible printed circuitboards. The use of astandard thin laminatemakes them a cost-effective alternative.

Combine theadvantages of flexibleand rigid printed circuitboards, yielding benefitsfor signal transmission,size and stability.

Used when installing LEDsin car headlights, forexample, where theprinted circuit board isbonded to an aluminumheat sink to which theLEDs are then attached.

Production siteAnsan, Fehring Fehring Ansan Ansan

ApplicationsNearly all areas ofelectronics, includingmeasuring devices andmedical applications

Automotive applications Industrial electronics,such as productionmachines and industrialrobots

Lighting, automotive,building lighting

AT&S Product Portfolio – III


Management

Andreas Gerstenmayer, CEO and CFO (interim)

Joined AT&S as CEO in 2010 Previous positions include:

18 years of work experience at Siemens, including Managing Director with Siemens Transportation Systems GmbH Austria and CEO of the Drive Technology business unit in Graz from 2003 to 2008

Partner at FOCUSON Business Consulting GmbH after leaving Siemens

Education: Degree in Production Engineering from Rosenheim University of

Applied Sciences

Heinz Moitzi, COO

COO since 2005; With AT&S since 19811)

Previous positions include: Various management positions within AT&S Measurement engineer with Leoben University of Mining and

Metallurgy Education:

Degree from Higher Technical College of Electrical Engineering

1)He was already with the founding company of AT&S


Milestones in the Group’s history

1987Founding of the Group, emerging from several companies owned by the Austrian State Owned Industries

1994Privatization and acquisition by MessrsAndrosch, Dörflinger, Zoidl

1999Initial public offering on Frankfurt Stock Exchange („Neuer Markt“). Acquisition of Indal Electronics Ltd., largest Indian printed circuit board plant (Nanjangud) – today, AT&S India Private Limited

2002Start of production at new Shanghai facility – one of the leading HDI production sites in the world

2010Start of productionat plant II in India

2009New production direction: Austrianplants produce for high-value nichesin the automotive and industrialsegment; Shanghai focuses on thehigh-end mobile devices segment

2008AT&S changeto Vienna StockExchange 2006

Acquisition of Koreanflexible printed circuitboard manufacturer,Tofic Co. Ltd. – today,AT&S Korea Co., Ltd.

2015AT&S again achieves record high sales and earnings for financial year 2014/15 and decides to increase the investment program in Chongqing from € 350 million to € 480 million

2011 Construction starts on new

plant in Chongqing, China Capacity increase in

Shanghai by 30%

2013AT&S enters the IC substrate market in cooperation with a leading manufacturer of semiconductors

2017Successful introduction and optimisation of the mSAP technology in Shanghai and Chongqing

2016AT&S starts serial production of IC substrates at the plant in Chongqing

2018Start of the second expansion phase at plant 1 in Chongqing

2019AT&S is the global number one for high-end printed circuit boards


DisclaimerThis presentation is provided by AT & S Austria Technologie & Systemtechnik Aktiengesellschaft, having its headquarter at Fabriksgasse 13, 8700 Leoben, Austria (“AT&S”), and thecontents are proprietary to AT&S and for information only.

AT&S does not provide any representations or warranties with regard to this presentation or for the correctness and completeness of the statements contained therein, and noreliance may be placed for any purpose whatsoever on the information contained in this presentation, which has not been independently verified. You are expressly cautioned notto place undue reliance on this information.

This presentation may contain forward-looking statements which were made on the basis of the information available at the time of preparation and on management‘s expectationsand assumptions. However, such statements are by their very nature subject to known and unknown risks and uncertainties. As a result, actual developments, results, performanceor events may vary significantly from the statements contained explicitly or implicitly herein.

Neither AT&S, nor any affiliated company, or any of their directors, officers, employees, advisors or agents accept any responsibility or liability (for negligence or otherwise) for anyloss whatsoever out of the use of or otherwise in connection with this presentation. AT&S undertakes no obligation to update or revise any forward-looking statements, whether asa result of changed assumptions or expectations, new information or future events.

This presentation does not constitute a recommendation, an offer or invitation, or solicitation of an offer, to subscribe for or purchase any securities, and neither this presentationnor anything contained herein shall form the basis of any contract or commitment whatsoever. This presentation does not constitute any financial analysis or financial research andmay not be construed to be or form part of a prospectus. This presentation is not directed at, or intended for distribution to or use by, any person or entity that is a citizen orresident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which wouldrequire any registration or licensing within such jurisdiction.

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