Emerald Group Publishing Limited
Copyright © 2011, Emerald Group Publishing Limited
AT&S expects revenues of €535-550 million in 2011
Article Type: Industry news From: Circuit World, Volume 37, Issue 3
Over the next three years, the AT&S Group aims to outpace the growth in the market and to consolidate its leading position in the high-end PCB business.
The overall goal is to increase the group’s sales by an annual 10-13 per cent over the next few years (ignoring the possible effects of changes in exchange rates), with the mobile devices business as the principal engine of growth.
The Management Board’s growth scenario for the next few years foresees that every second HDI PCB used will be manufactured in China. To consolidate and extend its current position, AT&S has decided to build a new HDI plant in Chongqing, Western China. Construction of the plant will proceed in stages, with the timing of each determined by market demand and technological developments.
The first step will be to develop the plot (120,000 m2) as quickly as possible, and to construct the necessary building and infrastructure. Approximately €50 million has been set aside for this purpose (the exact amount will depend on the prevailing dollar exchange rate). As with the existing factory in Shanghai, the new HDI plant in Chongqing will be one of the most modern production facilities of its kind, focusing on any layer and equipped with the latest technologies, such as any layer interstitial via hole. Based on the current scenario and the predicted future market development, the Management Board expects total investment in technical equipment of some €150 million for the first phase. On completion, AT&S will have around 200,000 m2 of additional high-end HDI production capacity available.
AT&S will invest up to 5 per cent of its revenue in R&D activities every year in an effort to further strengthen its position. In this way, development of the existing technology portfolio will continue, while new technologies are introduced to reflect emerging trends. The Management Board also expects that further increases in productivity will largely compensate for the increase in production costs driven by rising raw material prices and wage costs, and a higher burden of depreciation. This should mean that the EBIT margin (adjusted for any exchange rate effects) will remain at its current healthy level. Seasonal effects, in particular in the mobile devices business, however can result in fluctuations during the year.
In the long term, the Management Board will maintain its target of a gearing ratio of 80 per cent in spite of the major capital investment programme. Additional committed credit lines for approximately €100 million have been agreed with the banks in order to underwrite the planned growth.
Guidance for next year is as follows:
Expected revenues of €535-550 million.
EBIT margin > 9 per cent.
Effective tax rate of approximately 20 per cent.
Investments (CAPEX): over €130 million.
Net gearing (long term) = 80 per cent.