Aixtron has recently announced financial results for the fourth quarter 2016 and the full financial year 2016.
Following a strong second half, Aixtron met its guidance published at the beginning of the year. At EUR 196.5 million, total revenues for 2016 virtually matched the previous year’s figure (2015: EUR 197.8m), while Q4/2016 revenues came to EUR 89.8m (Q3/2016: EUR 51.2m). This figure, which represents the highest quarterly revenues since 2011, was due to a high volume of planned system shipments. The largest contributions came from production systems for LED, telecom and optoelectronics, as well as for the silicon industry.
EBITDA in 2016 rose year-on-year by 52% (2016: EUR -7.9m; 2015: EUR -16.4m). This development was driven by the strong fourth quarter of 2016 (Q4/2016: EUR 12.5m; Q3/2016: EUR -0.4m) for which a positive EBIT and net result of EUR 7.9m and EUR 6.4m respectively were also posted. As expected, overall EBITDA in H2/2016 came in positive at EUR 12.1m.
The free cash flow of EUR -42.9m in 2016 improved by EUR 14.4m, or 25%, on the previous year (2015: EUR -57.3m). The negative free cash flow of EUR -4.9m in the fourth quarter of 2016 (Q3/2016: EUR 3.0m) was mainly due to high shipment volumes at the end of the year. A large part of the resultant increase in outstanding receivables has converted into cash in Q1/2017.
Total order intake in 2016 came to EUR 225.1m, 35% higher than in the previous year (2015: EUR 167.1m) and the highest figure in five years. In Q4/2016, total order intake of EUR 60.5m was slightly down on the previous quarter but significantly higher than in the previous year (Q3/2016: EUR 69.0m, Q4/2015: EUR 31.3m). This was due to consistently high demand for LED, telecom and optoelectronic applications, including the sale of AIX R6 inventories.
As of December 31, 2016, the equipment order backlog totalled EUR 78.1m, a 67% increase on the figure of EUR 46.7m at the beginning of the year (December 31, 2015: EUR 42.9m; September 30, 2016: EUR 104.0m).
Key Financials
| Aixtron reports financial results for Q4 | 2016 FY |
2015 FY |
+/- | 2016 Q4 |
2016 Q3 |
+/- |
|---|---|---|---|---|---|---|
| Revenue | 196.5 | 197.8 | -1% | 89.8 | 51.2 | 75% |
| Gross Profit | 56.3 | 49.8 | 13% | 29.4 | 16.9 | 74% |
| Operating result (EBIT) | (21.4) | (26.7) | 20% | 7.9 | (3.4) | n/a |
| Net result | (24.0) | (29.2) | 18% | 6.4 | (3.8) | n/a |
| Net result per share - basic(€) | (0.22) | (0.26) | 15% | 0.05 | (0.04) | n/a |
Management Review
Martin Goetzeler, President and Chief Executive Officer at Aixtron said:
- The dominant topic in fiscal year 2016 was certainly the planned takeover by Grand Chip Investment, which was intended to secure the company’s access to the major Chinese market while also ensuring that all of Aixtron's product portfolio could be brought to market maturity
- Following the US President’s order prohibiting the bidder's acquisition of Aixtron's US business and the investor's subsequent withdrawal, Aixtron acted to realign its corporate strategy targeting a sustainable return to profitability and to report a positive EBIT for full year 2018
- Operationally, we made major progress in numerous areas in fiscal year 2016 and met the financial targets communicated at the beginning of the year.
- The strong performance in the second half, and especially in the fourth quarter of 2016, enabled us to further improve the company’s full-year results, even if we did not yet return to profitability due to ongoing high research and development costs
- It was important that we continued to press ahead with diversifying our technology and product portfolio last year
- That is also one of the reasons why, based on our own calculations, we were once again the global market leader for MOCVD systems in 2016
- The strong reported equipment order backlog gives us reason to be confident in our outlook for 2017, in particular with regard to opto- and power electronics as well as to the silicon business
- We took a decisive step forward by supplying a Beta system with Gen1 (200 x 200 mm) configurations to a major display manufacturer to demonstrate our production processes on site
- This way, we have moved significantly closer to obtaining the first order initially targeted for 2016
- With the strategy it has taken, the innovative products it can offer to numerous key markets of the future, the processes and structures it has put in place in recent years, and its clear results focus, Aixtron is on the road towards sustainable profitability
Guidance
Following the termination of the planned takeover transaction by a Chinese investor in December 2016, Aixtron is now focusing on the optimal structure of its technology portfolio as part of its corporate strategy.
Against this background, Aixtron is currently pursuing different options in order to successfully reduce required upfront expenses for the development of future technologies.
These options include looking for partners, joint ventures or other alternatives. All these measures are targeted to enable a sustainable return to profitability and to report a positive EBIT for full year 2018.
Based on the existing business structure and the assessment on Aixtron's current order situation with the internal budget rate of USD/EUR 1.10, Management expects for fiscal year 2017 to achieve revenues and an order intake between EUR 180 million and 210 million.
Due to planned additional upfront expenses for development of future technologies and based on the existing structure, Aixtron expects to achieve lower EBITDA, EBIT and net result for fiscal year 2017.
As previously discussed, Aixtron is pursuing the options mentioned above in order to return to sustainable profitability.
Depending on the execution of above mentioned strategy with its various options and due to the uncertainty of its impact on earnings, Management is currently not in the position to offer guidance on EBITDA, EBIT and net result for fiscal year 2017.
Management will provide an update on the 2017 earnings outlook as the above mentioned plans materialize.
Influenced by the significant reimbursement of an advance payment in Q1/2016 which will not repeat, Management expects a further improvement of the free cash flow in 2017.
In addition to above mentioned activities, Management will continue to focus on costs, margin contributions and the allocation of funds and will continuously review the performance and prospects of the Companies’ product portfolio. As in previous years, Management expects that the Company does not require any external bank debt financing in 2017. Furthermore, the Company will retain its strong equity base also in the foreseeable future.