Siltronic (WAF) Q2 2024 earnings summary

Executive summary

• Q2 2024 saw a challenging demand environment for wafers due to elevated chip industry inventories, with end market growth not yet translating into order intake; productivity and efficiency were prioritized.

• Sales for H1 2024 declined 14% year-over-year to EUR 694.8 million, with only a slight sequential increase in Q2 2024; Q2 sales reached EUR 351.3 million, up 2.3% quarter-on-quarter.

• EBITDA margin for H1 2024 was 26.1%, down from 30.2% in H1 2023, reflecting lower volumes and higher depreciation; Q2 EBITDA margin was 25.8%.

• Cost and liquidity management measures were intensified, including labor cost adjustments, hiring freeze, and strict working capital management.

• Medium-term outlook remains positive, with growth expected from AI, digitalization, and electromobility trends.

Financial highlights

• Q2 2024 sales were EUR 351.3 million, up 2.3% sequentially but down 13% year-over-year; gross margin at 20.1%.

• EBITDA for H1 2024 was EUR 181.4 million, down from EUR 243.8 million in H1 2023; Q2 EBITDA was EUR 90.6 million (25.8% margin).

• EBIT was EUR 33 million in Q2, impacted by higher plant depreciation; net income for Q2 was EUR 22.4 million.

• CapEx for H1 2024 was EUR 314 million, mainly for the new Singapore fab; Q2 CapEx was EUR 140.6 million.

• Net financial debt increased to EUR 639.2 million as of June 30, 2024, reflecting high CapEx and dividend payment.

Outlook and guidance

• 2024 sales are expected to be in the high single-digit percentage range below 2023, an upgrade from previous guidance.

• EBITDA margin guidance improved to 23%-25%, with H2 margin expected to be lower than H1 due to price, mix, FX, and new fab rent costs.

• CapEx guidance for 2024 further reduced to EUR 500-530 million; net cash flow to improve but remain significantly negative.

• Depreciation and amortization for 2024 expected below EUR 300 million.

• Mid-term ambition for 2028: sales above EUR 2.2 billion and EBITDA margin in the high 30s.