Aixtron hits targets despite challenging market
Deposition equipment company Aixtron has released strong results in a challenging market for the fiscal year 2024, meeting both its updated and original guidance. It achieved revenues of €633.2m, a +1 percent increase year-on-year.
Since 2020, Aixtron's revenue has grown at a compounded average rate of around 24 percent per year.
At €131.2m, the operating result was down -16 percent on the previous year due to negative product mix effects, cost under-absorption in operations and higher operating expenses.
Nevertheless, the company says it has maintained and expanded its competitive position in all relevant end markets, in particular with the G10 system family for GaN , SiC and optoelectronic components, introduced in 2022 and 2023. In 2024, the G10 series accounted for around 50 percent of equipment revenue.
Aixtron says it is also well positioned for the next technology leap: in 2024, the Hyperion, the pilot system for 300 mm GaN wafers, was successfully placed with several leading customers.
Felix Grawert (pictured above), CEO of Aixtron said that the company had performed well in a difficult market. "We were able to slightly increase our revenues and further strengthened our market positions. The potential of SiC- and GaN- based efficient power electronics remains vast, driven by AI and other energy-intensive applications. With our new Innovation Centre and our first 300 mm GaN prototype system, we are ideally positioned to support our customers in their future transition to the next wafer size. We will leverage the current phase of market consolidation to prepare optimally for the next growth phase of the semiconductor cycle."
In fiscal year 2024, revenues grew by 1 percent to €633.2m compared to the previous year (2023: €629.9m). Revenues were largely driven by systems for applications in power electronics based on SiC and GaN, which accounted for 55 percent of system sales revenues (2023: 74 percent).
Further revenues were recorded in the areas of LEDs including Micro LEDs (28 percent) and optoelectronics (12 percent).
In Q4/2024, revenues reached €226.9m – an increase of 6 percent compared to the strong prior-year quarter (Q4/2023: €214.2m). This is almost double the revenue of the first quarter of the fiscal year (Q1/2024: €118.3m).
Order intake reflects weakening market demand
In the fiscal year 2024, Aixtron says it was unable to repeat the strong order intake of the previous year and recorded a decline of -7 percent. This resulted in orders worth €596.4m (2023: €640.7m). In particular, the weakening demand in the power electronics market led to customers reducing their capital expenditure budgets and postponing projects.
With €157.0m, incoming orders in Q4 2024 were 9 percent higher than in Q3. Compared to Q4 of the previous year (€204.5m) order intake was down by -23 percent. This is also reflected in the equipment order backlog at the end of the 2024 financial year, which fell to €289.3m (2023: €353.7m).
Gross profit and gross margin below previous year
Mainly due to negative product mix effects and cost under-absorption in operations, gross profit fell by -6 percent year-on-year to €262.5m (2023: €279.0m).
In Q4, gross profit was at €102.5m, up 4 percent versus the same quarter last year (Q4/2023: €98.2m).
Gross margin for the full year 2024 decreased by three percentage points reaching 41 percent (2023: 44 percent). In the Q4 2024, gross margin was at 45 percent compared to 46 percent in the same period of the previous year.
Investing into revenues of the future
In 2023 and 2024, Aixtron built its a new €100m Innovation Centre at its headquarters in Herzogenrath to unlock the potential of 300 mm GaN technology. This expands the existing cleanroom space by 1,000 m2.
In 2024, it completed the purchase of a production facility located near Turin, Italy. This investment creates additional capacity to cover demand peaks that are expected in the medium term as end markets continue to improve.
R&D spending was further increased in 2024: at €91.4m, higher than the previous year (2023: €87.7m).
In the 2024 financial year, operating expenses increased slightly, from €122.3m in 2023 to €131.2m. This increase is due in particular to the higher expenses for research and development and, at the same time, lower gains from financial assets, according to the company.
Operating result (EBIT) and net profit below previous year
The weaker gross profit and the higher operating expenses led to a decline of -16 percent in earnings before interest and taxes (EBIT) to €131.2m in the financial year 2024 (2023: €156.8m). Accordingly, the EBIT margin was 21 percent after 25 percent in the previous year.
With its strong fourth quarter, Aixtron was able to increase its Q4/2023 result (EBIT of €63.4m, EBIT margin of 30 percent) to an EBIT of €71.0m (EBIT margin of 31 percent).
The group's net income for the year amounted to €106.2m, which corresponds to a decline of -27 percent compared to the previous year (2023: €145.2m). The increase in tax expense resulted mainly from the reduction in deferred tax assets on tax loss carryforwards, as these are expected to be utilised to a lesser extent in 2025 due to the reduced earnings expectations. Earnings per share were €0.94, also lower than the €1.29 in 2023.
Financial position
Operating cash flow improved by around €70m to €26.2m in the financial year 2024 (2023: €-47.3m). Free cash flow in the financial year 2024 was €-72.4m (2023: €-109.7m), which is mainly due to high investments for the construction of the Innovation Centre and the acquisition of the production site in Italy.
Cash and cash equivalents, including financial assets, amounted to €64.6m as of December 31, 2024 (previous year: €181.7m).
Dividend of €0.15 planned
At the AGM on May 15, 2025, a dividend of €0.15 per eligible share (2023: €0.40 per share) will be proposed. This lower than in the previous year because the expected liquidity inflow in 2025 is required to rebuild a strong cash position.
Aixtron says its top priority for the use of generated cash will remain on implementing its strategy: Aixtron will apply its core competencies and capabilities to markets with high growth, differentiation and margin potential in order to sustainably increase the company's value.
Strengthening research & development
In fiscal year 2024, the number of employees in the group grew by around 5 percent from 1,147 at the end of 2023 to 1,207 as of December 31, 2024. This increase was mainly in R&D. As in previous years, the majority of employees are based in Europe.
Guidance 2025: softer market environment expected
For the 2025 financial year, Aixtron expects a short-term weakness in power electronics and a decline in demand in the field of LEDs. Positive momentum is expected from optoelectronics, where AI applications are leading to increasing data volumes and further expansion of optical data communication.
Based on this, the management board expects the group in the 2025 financial year to generate revenues in the range between €530m and €600m, a gross margin of around 41 percent to 42 percent and an EBIT margin of around 18 percent to 22 percent.
The outlook for the gross and EBIT margin includes expenses in the mid-single digit million euro range for a voluntary severance program in the operations area. This measure will lead to future savings in the mid-single digit million euro range per year, which corresponds to an improvement of gross margin and EBIT margin of around 1 percentage point.
For the first quarter of 2025, the executive board expects revenues in the range of €90m to €110m.
"The year 2024 has developed significantly different than originally expected. Nevertheless, we continue to invest consistently into our future. Our new Innovation Center will further strengthen our research and development activities. The focus of our activities in 2025 is now on strengthening profitability and rebuilding a strong cash position," said CFO Christian Danninger.
