Siltronic Ag Ord

Welcome, everybody, to our Q3 23 results presentation. This call is also being broadcast live on the internet on Ziltronic.com. A replay of the call will be available on our website shortly after the conclusion of this call. Our CEO, Michael Heckmeyer, and our CFO, Claudia Schmidt, will give you an overview of our Q3 financials, our guidance, and the current market developments. After the presentation, we will be happy to take your questions. Please note that management comments during this call will include forward-looking statements which involve risks and uncertainties. For a discussion of risk factors, I encourage you to review the safe harbor statement contained in today's press release and presentation. All documents relating to our Q3 23 reporting are available on our website. I now turn the call over to Michael for his remarks.

Thank you, Verena, and a warm welcome from my side as well. We deliver what we promised. Through to this commitment, the development in the past quarter and correspondingly in the first nine months can be summarized as follows. We are fully on track to reach our full year guidance for 2023. We went through the draft this year in Q3 due to a continued weak demand, as we already communicated at the end of July during our Q2 call. Nevertheless, there are stable prices. Consequently, we are going ahead with our preparations in order to get ready for the expected market turnaround. We're also investing into our global production network and product mix. I would like to continue with a quick summary of this quarter's highlights. The operating figures are again in line with expectations. Despite challenging conditions, pricing is stable, our profitability is solid, and our cash flow and financial KPIs are affected by the high investments to get ready for future growth. Our investment focus step next is even slightly ahead of schedule, and we expect the first wafers to produce soon. Amongst others, we will give you more details on FedNext that our next investor relations highlight, the capital markets in London on November 13th. Claudia will now give you a deep dive into our financials before I report back with some details about the market expectations and the outlook for full year 23 and beyond. Claudia, please.

Thank you, Michael. A warm welcome also from my side. Let us jump directly into the analysis of our Q3 results, which I would characterize as solid and expected in a still challenging environment. As anticipated, sales in Q3 declined by 14% quarter on quarter, impacted by the lower wafer area sold. I'd like to underline that prices remained stable in the course of the year, despite a significant year-on-year decline in volumes, and that there was no major FX impact on sales in Q3. EBITDA came in at 99 million euro, sequentially down 16%. The EBITDA margin was robust at 28%, just minus one percentage point compared to Q2. With lower volumes, the fixed cost dilution decreased, but on the positive side, our material energy costs were stable. In addition, we saw a tailwind from FX in the balance of other operating income and expenses in Q3. EBIT declined to 46 million euro. As expected, depreciation increased in Q3. Net income came in at 35 million euro, down 43% quarter on quarter. Due to our high level of investments, our cash and securities were significantly reduced. This led to a slight decrease in interest income compared to Q2. Overall, the financial result was slightly negative in Q3. The tax rate was impacted by a shift in the site mix. The volume reductions we experienced in Q3 mainly affected one of our FAPs in Singapore, which is currently benefiting from a tax holiday. I've just mentioned that in Q3, there was no notable impact from FX on the top line, but we saw clearly positive FX results in other operating income and expenses. So it's worthwhile to take a closer look at our currency effects in general. On the sales side, our primary FX exposure is tied to the US dollar, while our costs show a significant Euro exposure. changes in the US dollar exchange rate have a relevant impact on our sales and earnings. That is why we have a hedging strategy in place. The operational hedging focuses on the recorded US dollar positions and covers up to two months. For strategic hedging, we have a gradual approach covering up to 18 months based on the expected net exposure. Year-to-date, we've posted FX gains of €17 million in the balance of other operating income and expenses. A significant part of this is based on our hedging efforts. For 2023, we expect an FX result slightly above €20 million. Looking at our balance sheet, total assets sum up to roughly €4.3 billion. the changes compared to the end of 2022 are mainly attributable to our high investments. Year-to-date, CAPEX totaled €944 million. As a result, our fixed asset share increased from 58% to 73% of total assets. Consequently, our cash and securities have significantly decreased from more than €1 billion to slightly above €500 million. The equity ratio remained stable at 49%. Financial liabilities increased slightly as we have drawn the last portion of our Singapore dollar loan in Q3. Therefore, loans amounted to a total of nearly 800 million euro at the end of Q3. In the first nine months of 2023, we've received customer prepayments amounting to 79 million euro. Total prepayments sum up to €605 million at the end of September. 2023 will be the peak of our investment phase. Therefore, as already mentioned in Q2, we expect a total capex of roughly €1.3 billion in 2023. These investments primarily cover the FabNext project in Singapore, the expansion of the Crystal Pulling Hall in Freiberg, which was inaugurated in September, as well as the capability enhancements. For 2024, we expect capex to be less than half. Depreciation this year is expected at roughly 200 million euro, a little lower than communicated in Q2. To finance these high investments, we have a conservative approach in place, ensuring we always maintain an adequate liquidity reserve. The debt financing picture has not changed compared to Q2, except for the fact that we have fully drawn the Singapore dollar loan as already indicated. Finally, let's take a closer look at our cash and debt situation by looking at the bridge on the left side. End of 2022, Siltronic had net financial assets of 374 million euro. We generated a solid operating cash flow of 324 million euro in the first nine months of this year, which was not sufficient to offset the high payments for capex of €905 million and the dividend payment of €90 million. As a result, our net financial assets turned into net financial debt of €316 million. With this, I hand back to Michael.