EQS-News: AT&S continues upward trend and exceeds forecast

AT&S continues upward trend and exceeds forecast

• Revenue increases to € 846 million in H1 2025/26, up 6% on the prior-year period
• EBITDA of € 175 million corresponds to a margin of 20.6%
• Revenue, earnings and equity strongly impacted by foreign exchange development
• Forecast for financial year 2025/26: revenue € 1.7 billion, EBITDA margin 23%
• Outlook for FY 2026/27 confirmed

Leoben – “Despite massive foreign exchange headwinds and a challenging market environment, we were able to increase revenue and EBITDA and exceeded the half-year forecast,” says AT&S CEO Michael Mertin. “We have successfully diversified our customer base and are now in close contact with further key players of the global AI chip industry. With the ramp of our new plants in Kulim, Malaysia, and Leoben, Austria, we plan to increase revenue to € 1.7 billion – although we sold our plant in Ansan, Korea, and exchange rate effects are likely to slow us down also in the second half of the year.”

In comparison to the prior-year period, consolidated revenue increased by 6% to € 846 million in the first half of 2025/26 (PY: € 800 million). Adjusted for currency effects, consolidated revenue rose by 11%. Due to a positive volume development, AT&S was able to successfully counter both the ongoing price pressure and negative exchange rate effects during the reporting period.

EBITDA improved by 11% from € 157 million to € 175 million - adjusted for currency effects, the increase amounted to 18%. The earnings improvement is primarily due to higher volumes. Despite the positive development, AT&S will continue to intensively pursue its comprehensive cost optimization and efficiency program in order to counter effects such as price pressure and Inflation resulting from the persisting difficult market environment. In addition to price pressure, start-up costs in Kulim, Malaysia, and Leoben, Austria, had a negative impact on earnings. The EBITDA margin amounted to 20.6%, exceeding the prior-year level of 19.6%.

Depreciation and amortization increased by € 24 million to € 175 million (21% of revenue) due to additions to assets and technology upgrades. EBIT fell from € 7 million to € 0 million; without foreign exchange effects, EBIT would already have been positive for the first half-year. The EBIT margin amounted to 0% (PY: 0.9%). Finance costs – net amounted to € -67 million after € -50 million in the previous year, mainly as a result of negative currency effects. The net loss for the period remained constant at € -63 million, leading to a minor decline in earnings per share by € 0.02 € from € -1.84 to € -1.86.

Cash flow from operating activities amounted to € 209 million, exceeding the prior year figure by € 300 million. This was primarily driven by resuming the international factoring program, which was reorganized, and an improvement in trade and other payables.

Total assets declined by 1% to € 4,562 million in the first half of 2025/26. The equity ratio decreased by 4.0 percentage points to 19.2% due to negative exchange rate effects in other comprehensive income (OCI) and the loss for the period.

Cash and cash equivalents increased to € 793 million (March 31, 2025: € 485 million). Unused credit lines totaled € 18 million. The net debt/EBITDA ratio of the last twelve months declined from 2.5 (as of March 31, 2025) to 2.2.

Cost optimization and efficiency program

Cost reduction measures are further intensified in the financial year 2025/26. All investments are subject to thorough review. After reducing the cost base by € 120 million in the previous year, it will now be sustainably decreased by at least another € 150 million. The goal is to compensate for the effects of the ongoing challenging market environment and for the start-up costs of the additional production lines in Kulim.

Expected market environment

Despite several announcements of tariffs, which have been an important issue since the beginning of the year, their impact on the market has been minor so far. The uncertain situation has caused some companies to reduce inventory levels or place orders early. Overall, these effects had no impact on the general market situation, which improved compared with the previous quarter.

The data center and server segment continues to be the driver: Here, demand continues to be stable. Demand is particularly strong for high-end products developed for artificial intelligence. There is an ongoing trend towards high-end IC substrates in this area, from which AT&S will continue to benefit.

Despite continuing geopolitical tensions, demand developed positively in most other markets. Notebooks show a positive picture, which is in part attributable to the progress made in artificial intelligence and renewal cycles, but also to a shift in seasonality for fear of potential tariffs. Likewise, the smartphone market is strong.

In the industrial and automotive segments, only moderate growth is expected for 2025, one of the reasons being inventories that have not been fully reduced yet. The situation is particularly challenging in the area of e-mobility: here, the currently low demand is weakening the market environment. Moreover, tariffs as well as political and legal obstacles in the USA and the EU are causing additional burdens.

Outlook 2025/26

AT&S expects to generate annual revenue of approximately € 1.7 billion in the financial year 2025/26 (2024/25: € 1,590 million), which – adjusted for currency effects and the sold plant in Ansan – corresponds to operational growth of approximately 20% compared to the previous year. The expected EBITDA margin of approximately 23% will still reflect the start-up costs of the additional lines in Kulim (2024/25 incl. proceeds from the sale of the plant in Ansan, Korea: 38.1%; adjusted for the proceeds: 17.7%). The management plans CAPEX of roughly € 250 million (2024/25: € 415 million). The majority of these investments will be used for expanding the IC substrate production at the new plant in Kulim. AT&S expects EBIT and free cash flow from operating activities to be positive.

Outlook 2026/27

AT&S anticipates continuing strong and growing demand for products with high added value, especially for generative artificial intelligence. But the established markets such as servers for companies, PCs & notebooks have also recovered. Moreover, AT&S has decided to increasingly serve the defense sector. Against this positive market backdrop, AT&S currently assumes that revenue of approximately € 2.1 to € 2.4 billion will be generated in the financial year 2026/27 and expects an EBITDA margin of 24 to 28%.

AT&S generates more than three quarters of its revenue with US companies, and the majority of its revenues in US dollars. Production costs are largely incurred in Asian currencies, while the reporting currency is the euro. Since the publication of the forecast for 2026/27 in December 2024, the US Dollar has fallen against the euro, from 1.07 US dollars per euro to approx. 1.17 US dollars per euro, which corresponds to a decline by roughly 10%. As a result, the management’s revenue expectations shifted from the upper to the lower end of the expected revenue range. Further changes in exchange rates – positive or negative – would have an impact on the revenue forecast.

In addition to these general market dynamics, raw material shortages could pose a challenge. Fiberglass mats – in particular E-glass and the technically more sophisticated T-glass – are essential components in the structure of PCBs and IC substrates. T-glass is indispensable for large-format and complex IC substrates. Last year, there were already indications of potential supply chain bottlenecks in the market, in particular due to the dependence on one central supplier. AT&S responded early and qualified additional suppliers together with its customers in order to increase supply security. Some of these new partners are in the process of building their production capacities and are currently not yet able to supply the full quantities required. Therefore, there is a certain risk that AT&S, as well as competitors, may not be able to fully meet all customer requirements in the second half of the financial year 2026/27. While such a shortage would limit the production volume, it could reduce the price pressure on IC substrates at the same time.

The forecast does not include a potential escalation of the currently smoldering trade dispute, a significant shortage of fiberglass mats or a further devaluation of the US dollar. The management monitors the currently tense geopolitical situation very carefully in order to be able to respond to developments at any time and to make strategic adaptations.

 AT&S Austria Technologie & Systemtechnik Aktiengesellschaft – Advanced Technologies & Solutions

AT&S is a leading global manufacturer of high-end IC substrates and printed circuit boards. AT&S develops and produces leading-edge interconnect technologies for key digital industries: mobile devices, automotive & aerospace, industrial, medical and high-performance computing for AI applications. With production sites in Austria (Leoben, Fehring), China (Shanghai, Chongqing), Malaysia (Kulim), India (Nanjangud) and a European competence center for R&D and IC substrate production in Leoben, AT&S is actively shaping the digital transformation – through forward-looking investments in research and development and the responsible use of resources. The company currently employs around 13,000 people. Further information can also be found at www.ats.net