AT&S shows upward trend in the first quarter

• Revenue increases to € 399 million in Q1 2025/26, up 14% on the prior-year quarter
• EBITDA of € 71 million corresponds to a margin of 17.7%
• Revenue, earnings and equity strongly impacted by foreign exchange development
• Half-year forecast: revenue € 820 million, EBITDA margin 20%
• Outlook for FY 2026/27 confirmed

Leoben – “Investments in artificial intelligence continue to drive the market for IC substrates and printed circuit boards for servers and high-performance computing,” says AT&S CEO Michael Mertin. “Our focus on high-end IC substrates and the new plants in Kulim/Malaysia and Leoben/Austria are decisive steps for AT&S on its path towards profitable growth based on leading-edge technology, solid expertise and strong partnerships with globally leading companies.”

In comparison to the prior-year quarter, consolidated revenue increased by 14% to € 399 million in the first quarter of 2025/26 (PY: € 349 million). Adjusted for currency effects, consolidated revenue rose by 19%. 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 9% from € 65 million to € 71 million ‒ adjusted for currency effects, the increase amounted to 24%. 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 currently 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 17.7% and was thus slightly below the prior-year level of 18.5%.

Depreciation and amortization increased by € 14 million to € 87 million (22% of revenue) due to additions to assets and technology upgrades. EBIT fell from € -8 million to € -16 million. The EBIT margin amounted to     -4.1% (PY: -2.3%). Finance costs – net declined from € -20 million in the previous year to € -44 million, primarily due to negative currency effects. The net loss for the period decreased from € -34 million to            € -56 million, leading to a decline in earnings per share by € 0.56 from € -0.99 to € -1.55.

Cash flow from operating activities amounted to € 184 million, exceeding the prior-year figure by € 170 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 3% to € 4,516 million in the first quarter of 2025/26 compared to the balance sheet date. The equity ratio decreased by 3.9 percentage points to 19.4% due to negative exchange rate effects in other comprehensive income (OCI) and the loss for the period.

Cash and cash equivalents increased to € 772 million (March 31, 2025: € 485 million). In addition, AT&S has unused credit lines of € 152 million to secure financing of the remaining investment program and short-term repayments. The net debt/EBITDA ratio of the last twelve months declined from 2.5 (at March 31, 2025) to 2.3.

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 another € 130 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.

“We assume that we will continue to operate in a price-sensitive market; therefore, we will consistently pursue our previously successful efficiency programs. We will counter the challenges of the geopolitical situation and the new dynamic markets with continuous risk and opportunity assessments, and a fast and agile portfolio of measures,” Mertin explains.

Expected market environment

Despite several announcements of tariffs, which have been an important issue over the past months, their impact on the market has so far remained unclear. The uncertain situation has caused some companies to reduce inventory levels or place orders early. However, these are isolated effects and only have a minor influence on the general market situation.

The only exception is the data center and server segment: Here, demand is still stable, as this segment would not be affected by tariffs. 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 benefit.

In most other markets, growth is slowed down by geopolitical tensions. Potential tariffs could lead to higher prices in the USA, especially for smartphones, notebooks and other electronic devices, which would reduce demand in North America. At the same time, however, there are also positive developments: the progress made in artificial intelligence is likely to stimulate demand, thus offsetting part of the economic difficulties.

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

There is still no clear picture of how the US government intends to deal with tariffs on goods imported into the USA in the future. While AT&S does not expect such a decision to result in an immediate substantial impact on its own products, it may have a significant influence on its customers’ end products – and consequently on the demand for AT&S products. The impact on exchange rates, in particular the weakness of the US dollar, is also still volatile. The Management Board has therefore decided to wait before issuing an annual forecast for 2025/26.

Rather than an annual guidance, the company is publishing its expectations for the first half of 2025/26. In the second quarter of the financial year 2025/26, the management has been observing that the volatile order behavior of a key customer is continuing. High-volume production at the new plant in Kulim has started, but start-up costs for further production lines will continue to burden the earnings/revenue ratio in the coming months.

The company expects to generate revenue of approximately € 820 million in the first half of the year (H1 2024/25: € 800 million); the expected EBITDA margin, at around 20%, will reflect the above-mentioned start-up costs of the additional lines (H1 2024/25: 19.6%). The management plans CAPEX of roughly € 110 million (H1 2024/25: € 254 million). In the second half of the financial year, the company expects investments to exceed this figure. The majority of these investments will be used for expanding the IC substrate production at the new plant in Kulim.

Outlook 2026/27

The production capacity expansion in Kulim and the expansion of the site in Leoben are still developing positively despite the currently challenging global economic situation. 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%. This forecast does not include a potential escalation of the currently smoldering trade dispute, a further devaluation of the US dollar, or potential revenue from the second plant built by AT&S in Kulim. 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

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