24 February 2015

Aixtron's revenue rebounds by 27% in Q4, driving 6% growth in full-year 2014

Deposition equipment maker Aixtron SE of Herzogenrath, near Aachen, Germany has reported full-year revenue growth of 6% from €182.9m in 2013 to €193.8m in 2014. Results are "in line with our stated expectations, but continue to be unsatisfactory," comments president & CEO Martin Goetzeler. "This was mainly due to the low top-line level reflecting the challenges that specifically the MOCVD [metal-organic chemical vapor deposition] industry faces." However, fourth-quarter 2014 revenue was €58m, up 27% on €45.6m last quarter and 14% on €51.1m a year ago.  

Although still down on 34% a year ago, quarterly gross margin has rebounded from the low of 14% last quarter to 20%. Full-year gross margin has improved from -4% in 2013 to 21% for 2014.

Reflecting efficiency gains from the firm's 5-Point-Program to return to sustainable profitability (initiated in May 2013), operating expenses have risen less than expected, from €88.4m for 2013 to €99.8m for 2014 (staying below the targeted €100m), including rising from €24.4m in Q3 to €30.5m in Q4. This is despite full-year R&D spending being increased from €57.2m for 2013 to €66.7m for 2014, in preparation for the launch of the firm's next-generation Showerhead MOCVD tools.

Full-year EBITDA (earnings before interest, tax, depreciation and amortization) improved from -€67.9m for 2013 to -€41.3m for 2014. Compared with +€3.7m a year ago, Q4/2014 EBITDA was -€13.9m, but this was a slight improvement on -€14.1m last quarter, despite restructuring costs for the firm's reorganization being recorded mainly in Q4.

Full-year free cash flow has plummeted from -€1.1m in 2013 to -€47m in 2014, driven mainly by substantial expenses for future technologies (with  the planned increase in inventories related to the launch of the next-generation MOCVD tools financed through advance payments from customers). However, after slumping from ‑€0.2m in Q4/2013 to ‑€21.7m in Q3/2014, quarterly free cash flow rebounded to positive €5.9m in Q4.

During 2014, cash and cash equivalents has fallen by €38.2m from €306.3m at the end of 2013 to €268.1m at the end of 2014, due mainly to the currency difference of the US$-based cash and cash equivalents. However, this represents a slight rebound from €260.5m at the end of Q3.

Full-year equipment order intake has risen by 15% from 2013's €133.2m to €153.4m for 2014. In particular, Q4 order intake was €39.9m, up 6% on €37.6m last quarter and up 8% on €37.1m a year ago. The growth reflects the improved market demand throughout the reporting period, says Aixtron. Total equipment order backlog of €65.2m at the end of 2014 was 9% higher than the €59.6m at the end of 2013 and 12% higher than the January 2014 opening backlog of €58.1m. In addition, due to internal booking principles, Q4 does not include a large order from a Chinese LED maker for 50 AIX R6 Showerhead MOCVD tools received in September, as this will be recognized as order intake and revenue mostly in the course of 2015.

"In fiscal year 2014 order intake and revenues developed positively," comments president & CEO Martin Goetzeler. "The global trend towards LED lighting continues. This development, as well as the availability of new MOCVD tool generations, will have a positive impact on investment demand," he adds. "Even if this is not yet reflected in the figures, we have achieved an important milestone with the market launch of the AIX R6 and a resultant major order," Goetzeler notes.

"We as management strongly believe that it is important continuing to invest in R&D, thereby reducing our dependency on one product while creating new business opportunities," states Goetzeler. "Our future-oriented technologies have already started to perform well, despite the fact that market introduction of these new products still requires preparatory efforts," he adds. "Due to our focus on active cash management, we continue to be in a solid financial situation."

Aixtron says that, in the course of its 5-Point-Program, it is further adapting its organizational structure in line with customer and market requirements. Alongside cost-cutting measures, Aixtron is pursuing new market opportunities, e.g. with its new AIX R6 product generation and in promising future business fields such as power and logic semiconductors as well as organic light-emitting diodes (OLED).

For 2015, Aixtron expects growth across all technology areas (and thus improved demand for the corresponding production systems), driving a sequential increase in results in both halves of 2015 compared with the previous six-month periods and growth in full-year revenue to €220-250m. Also, considering the ongoing ramp-up costs for the new AIX R6 system as well as costs for some crucial R&D projects, Aixtron expects a return to positive EBITDA in second-half 2015, as the firm presses ahead with implementing its roadmaps, productivity and efficiency programs across all areas.

See related items:

Aixtron continues reorganization in 2015

Aixtron launches AIX R6 next-generation MOCVD system

Aixtron's losses worsen in Q3, driven by product launch, sales mix and upfront investments

China's San'an expands by ordering 50 Aixtron MOCVD systems

Aixtron's orders rise for fifth consecutive quarter

Aixtron's quarterly orders the highest in over two years

Aixtron's quarterly revenue rises 10% in Q4/2013, but demand remains subdued

Aixtron outlines 5-Point Program to return to sustainable profitability

See: Aixtron Company Profile

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