Aixtron Forecasts Stronger Growth
Order, sales and earnings growth expected for 2021
Deposition equipment company Aixtron SE has remained on track in fiscal year 2020. It increased both revenues and earnings and met its full-year 2020 guidance. In Q4 of 2020 in particular, the company was able to meet its demanding expectations in terms of sales and earnings.
In the 2020 reporting year, order intake of €301.4 million exceeded the previous year's figure by 30 percent. In Q4, new orders amounted to €92.2 million, also 30 percent above Q3 volume. This was the highest order intake in a single quarter since 2011. In particular, Aixtron equipment for the production of energy-efficient power electronics based on GaN and SiC, specialty LEDs for display applications, and lasers for optical data communication and 3D sensing were ordered by customers.
High order backlog
The equipment manufacturer's order backlog grew by 29 percent to €150.9 million by the end of 2020. Aixtron's revenue development benefited from the growing requirements for higher energy efficiency and data transmission speeds, as well as the growing use of innovative display technologies in consumer electronics. Full year 2020 revenues of €269.2 million were slightly higher than the previous year (€259.6 million), but in Q4 exceeded the previous quarter's level by 69 percent.
As expected, revenue development in the optoelectronics segment in 2020 remained below that of the previous year, equipment for the manufacture of optoelectronic components continued to make the largest contribution with 33 percent of revenues (previous year: 43 percent). Sales of equipment for manufacturing of power electronics nearly doubled compared to 2019, contributing 31 percent of total revenues (previous year: 18 percent). Equipment for the production of LEDs contributed 27 percent to revenues (previous year: 35 percent).
In 2020, the MOCVD semiconductor equipment manufacturer again generated the majority of its sales in Asia with 73 percent (previous year: 68 percent), followed by Europe and America with 15 percent and 12 percent respectively (previous year: 16 percent each).
Investment in next-generation MOCVDt
Aixtron achieved a high gross profit of €108.3 million in 2020 (previous year: €108.7 million). The high momentum was reflected in the year-end quarter, where the gross profit of €45.0 million exceeded the previous quarter by 74 percent. Aixtron increased its research and development (R&D) expenses, including expenses for OLED development activities, by 6 percent to €58.4 million in the past fiscal year (previous year: €55.0 million).
The company has invested more than one in five euros (approximately 22 percent) of its revenues in R&D, primarily to bring next generation MOCVD tools to market for various applications. At year-end 2020, more than one third of the Aixtron Group's total 728 employees were engaged in R&D activities. Following completion of the Gen 2 OLED development project, customer discussions are currently being held on the final qualification phase of this technology. Selling, general and administrative expenses also increased from €26.4 million in 2019 to €27.7 million in 2020.
The operating result (EBIT) of €34.8 million was 11 percent lower than in the previous year (€39.0 million). Aixtron's earnings before interest and taxes in the year-end quarter increased very strongly to €24.5 million, compared to €8.2 million in Q3.
Financial position remains strong
Net income for the full year 2020 increased slightly year-on-year by 6 percent to €34.5 million. In Q4, the equipment manufacturer achieved net income of €24.9 million, more than tripling the previous quarter's net income of €7.1 million. Aixtron's continued high gross margin of 40 percent (previous year: 42 percent) and EBIT margin of 13 percent (previous year: 15 percent) demonstrate the company's strong profitability.
Free cash flow amounted to €14.0 million in the past financial year (previous year: €35.1 million). Cash and cash equivalents including financial assets amounted to €309.7 million as of December 31, 2020 (previous year: €298.3 million).
The continued high equity ratio of 84 percent (as of December 31, 2020; previous year 82 percent) underlines Aixtron's financial strength.
In view of the positive business development in the past fiscal year, Aixtron intends to pay a dividend. The executive board and the supervisory board will propose to the Annual General Meeting on May 19, 2021, to pay a dividend of 11 euro cents per share. Aixtron had last distributed a dividend to shareholders for fiscal year 2011.
In line with the volume of business, the number of employees in the Group also increased from 688 to 728 (as of December 31).