Siltronic (WAF) Q3 2024 earnings summary

Executive summary

• Q3 2024 performance aligned with expectations, with sales rising 1.7% sequentially to EUR 357.3 million amid weak wafer demand and delayed customer qualifications, but nine-month sales declined 9.1% year-over-year due to lower wafer area sold and negative FX, price, and product mix effects.

• EBITDA margin remained robust at 25% in Q3 and 25.7% for the first nine months, though net income for Q3 was EUR 18.8 million and EPS at EUR 0.60, both lower than Q2.

• Successfully placed a EUR 370 million promissory note loan in September, supporting liquidity and financial flexibility.

• Major product qualifications for the new Singapore fab postponed to 2025, leading to a slight adjustment in EBITDA margin guidance.

• Remain on track to meet full-year 2024 guidance, with cautious outlook due to persistent demand weakness and high inventories.

Financial highlights

• Q3 2024 sales reached EUR 357.3 million, up 1.7% quarter-on-quarter, but nine-month sales declined to EUR 1,052.2 million, down 9% year-over-year.

• Q3 EBITDA was EUR 89.4 million, with a margin of 25%, nearly flat sequentially; Q3 EBIT was EUR 28.9 million, impacted by increased depreciation.

• Net income for Q3 was EUR 18.8 million, with EPS at EUR 0.60; net income for the first nine months was EUR 68.8 million, significantly lower year-over-year.

• Gross margin for Q3 was 19.4%, down from 20.1% in Q2 and 21.7% in Q3 2023; nine-month gross margin at 20.0%.

• Capex for Q3 was EUR 93.5 million, mainly for the new Singapore fab; free cash flow for Q1–Q3 2024 was negative at EUR -324.1 million, but improved from the prior-year period.

Outlook and guidance

• 2024 sales expected to be in the high single-digit percentage range below 2023, mainly volume-driven with slight negative FX and pricing effects.

• EBITDA margin guidance adjusted to 24–26% due to delayed depreciation start of the new Singapore fab; depreciation and amortization guidance lowered to EUR 230–250 million for 2024.

• Capex for 2024 guided at EUR 500–530 million; net cash flow to improve versus previous year but remain negative.

• No guidance provided for 2025; market recovery timing remains uncertain.

• Guidance reflects delayed customer qualifications and ongoing wafer demand weakness.