Aixtron Reports Highest Order Intake Since 2011
"Many years of research work are now paying off," says Felix Grawert, CEO of Aixtron
Deposition equipment company Aixtron has recorded its highest quarterly order intake since 2011 in the second quarter of 2022.
The order intake was driven by broad based demand. Along with the underlying strong demand, Aixtron says its equipment for energy efficient power electronics using GaN and SiC ensure an excellent order situation for Aixtron supporting the year-on-year improvement of both revenue and profit in the second quarter.
Based on the current momentum of demand, and in expectation of a continuation of the high number of orders, the executive board reiterates growth guidance for the full year 2022 given in February 2022.
The company says that overall, the current global crisis situations and market developments continue to only have a minor impact on its business. Logistics and supply chains are still challenging, but in its, view continue to be manageable.
The order intake in the first half of 2022 was with €282.8 million 7 percent above the order intake of the previous year's period (H1/2021: €263.3 million). The strongest demand was recorded for tools for the volume production of Micro LEDs followed by demand for efficient power electronics based on the material systems SiC and GaN.
At €152.6 million in Q2/2022, order intake even exceeded the strong level of the previous quarter (Q1/2022: €130.2 million) as well as of the prior-year quarter (Q2/2021: €139.0 million). The order backlog at June 30, 2022 increased to €314.4 million, from €295.0 million in the previous year and €260.4 million as of March 31, 2022. Most of the order backlog is due for delivery in 2022.
SiC power electronics on the rise
Revenues improved significantly in H1/2022 by 63 percent to €191.1 million (H1/2021: €117.2 million) compared to the same period of the previous year. In Q2/2022, revenues increased year-on-year by around 51 percent to €102.5 million (Q2/2021: €67.7 million).
As expected, deliveries of tools for manufacturing of traditional red LEDs accounted for a large share of this. Sales of tools for SiC power electronics in particular grew strongly. Also strong was the revenue contribution from optoelectronics area and optical data communication in particular.
Strong earnings performance
In the first half of 2022, gross profit increased by 63 percent to €73.7 million at a gross margin of 39 percent (H1/2021: €45.2 million at 39 percent gross margin). Gross profit development in Q2/2022 was driven by a comparatively low-margin product mix. In addition, higher costs incurred from projects to strengthen production and supply chains. Nevertheless, gross profit increased by 36 percent year-on-year to €37.8 million at a gross margin of 37 percent (Q2/2021: €27.9 million at gross margin of 41 percent).
Operating expenses amounted to €42.3 million and with that were slightly higher compared to previous year's period (H1/2021: €40.2 million). Increased R&D expenses and higher variable compensation components contributed to the increase in operating expenses in H1/2022. In Q2/ 2022, they decreased slightly year-on-year to €20.6 million (Q2/2021: €22.3 million).
The operating result (EBIT) increased year-on-year from €4.9 million to €31.4 million, corresponding to an EBIT margin of 16 percent (H1/2021: 4 percent). This development was mainly the result of significantly higher year-on-year revenues and the corresponding gross margin in conjunction with the business and cost developments described above. Operating result (EBIT) in Q2/2022 more than tripled year-on-year to €17.2 million (Q2/2021: €5.6 million) at an EBIT margin of 17 percent (Q2/2021: 8 percent).
Net profit of Aixtron SE in H1/2022 increased to €31.1 million (H1/2021: €11.5 million). In Q2/2022 net profit more than doubled to €17.3 million (Q2/2021: €7.7 million). Earnings per share increased in H1/2022 to €0.28 and to €0.16 in Q2/2022 (H1/2021: €0.11; Q2/2021: €0.07).
Strong financial position
Free cash flow increased to €26.4 million in H1/2022 (H1/2021: €46.1 million). This development is mainly related to advance payments received for customer orders and the simultaneous increase in inventories. Free cash flow In Q2/2022 was at €4.0 million, and with that was lower than in the same quarter of the previous year (Q2/2021: €18.0 million). This is mostly related to the increase in inventories in preparation for the higher business volume expected in the coming quarters.
Mainly due to the dividend payment of €33.7 million in May 2022, cash and cash equivalents including financial assets decreased to €346.2 million as of June 30, 2022, compared to €352.5 million as of December 31, 2021.
The high equity ratio of 78 percent as of June 30, 2022 (June 30, 2021: 73 percent) underlines Aixtron's financial strength.
The number of employees in the Group increased to 772 as of June 30, 2022. The structural strengthening of the organisation for further growth is thus well on track.
Growth guidance 2022 confirmed
Due to the good business development in the first half of 2022 and in view of the expectation of a positive development of demand for the remainder of the year 2022, the Executive Board reconfirms the growth guidance issued. Accordingly, order intake is expected to be in a range between €520 million and €580 million. With revenues in a range between €450 million and €500 million, the Executive Board expects to achieve a gross margin of approximately 41 percent and an EBIT margin of approximately 21 percent to 23 percent of revenues in fiscal year 2022.
As before, the expectations for 2022 are subject to the provision, that global crisis situations continue to have no significant impact on the development of the business.
"Many years of research work are now paying off," says Felix Grawert, CEO of Aixtron SE. "This quarter marks another milestone as we are not only showing continued strong growth on a broad basis in our addressed markets, but especially with the first order for our equipment for the volume production of Micro LEDs."
"We were able to grow as planned despite the challenging market environment with supply chains remaining constrained," said Christian Danninger, CFO of Aixtron SE. "In addition, we are driving process improvements along the entire organisation in order to prepare Aixtron SE for the expected future growth."