EANS-Adhoc: ams AG / ams reports second quarter results at high end of expectations; year-on-year revenue growth expected in third quarter; revenue target of EUR 1bn in 2019; Alexander Everke to becom

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Mid Year Results/6-month report/Management Board
27.07.2015

ams reports second quarter results at high end of expectations;
year-on-year revenue growth expected in third quarter; revenue target
of EUR 1bn in 2019; Alexander Everke to become CEO of ams in March
2016; agreement with State of New York (USA) on construction of
dedicated wafer fab for use by ams; acquisition of environmental CMOS
sensor business from NXP

Key financial data for the second quarter and first half 2015

Unterpremstaetten, Austria (27 July 2015) - ams (SIX: AMS), a leading
worldwide manufacturer of high performance sensor and analog
solutions, reports second quarter 2015 results at the high end of
expectations with year-on-year and quarter-on-quarter growth in
revenues and earnings. For the third quarter 2015, ams expects
year-on-year revenue growth with operating profitability reflecting
revenue trends and the addition of R&D resources. ams adds a revenue
goal of EUR 1 billion in 2019 and announces that Alexander Everke
will become CEO of ams in March 2016. ams has entered into an
agreement with the State of New York (USA) on construction of a
dedicated analog wafer fab for use by ams and has acquired the
environmental CMOS sensor business from NXP.

Second quarter group revenues were EUR 169.5 million, the highest
quarterly revenues in ams history, up 11% sequentially compared to
the first quarter and increasing 59% from EUR 106.3 million in the
same quarter 2014. Group revenues for the first half of 2015 were EUR
322.9 million, increasing 68% from EUR 192.6 million recorded in the
first half of 2014. On a constant currency basis, second quarter
revenues were 36% higher compared to the second quarter last year and
first half revenues were 44% higher compared to the first half of
2014.

In the second quarter, gross margin remained high at 56% excluding
acquisition-related costs and 54% including acquisition-related
costs, compared to 57% and 55% respectively, in the same quarter
2014. In the first half of 2015, gross margin was unchanged at 56%
excluding acquisition-related costs and 54% including
acquisition-related costs, from 56% and 54% respectively, in the
first half of 2014.

The result from operations (EBIT) excluding acquisition-related costs
for the second quarter was EUR 48.5 million or 29% of revenues,
increasing by 84% from EUR 26.4 million in the same period 2014. The
result from operations (EBIT) including acquisition-related costs for
the second quarter was EUR 44.6 million or 26% of revenues, up 86%
from EUR 24.0 million in the same period 2014. This increase includes
a one-time positive effect from the sale of an investment as well as
operational leverage effects. For the first half of 2015, the result
from operations (EBIT) including acquisition-related costs was EUR
82.8 million, up 110% from EUR 39.4 million in the same period 2014.

The net result for the second quarter was EUR 41.8 million compared
to EUR 22.2 million in the same period last year. Basic and diluted
earnings per share were CHF 0.63/0.61 or EUR 0.61/0.58 based on
68,948,844/71,639,611 shares (basic/diluted; weighted average)
compared to CHF 0.40/0.38 or EUR 0.33/0.31 for the second quarter
2014 based on 67,822,300/70,833,270 shares (basic/diluted;
split-adjusted weighted average). The net profit for the first half
year 2015 was EUR 84.0 million, equivalent to CHF 1.28/1.23 or EUR
1.22/1.17 per share (basic/diluted) based on 68,792,636/71,560,877
shares (basic/diluted; weighted average), compared to EUR 36.9
million, i.e. CHF 0.66/0.63 or EUR 0.54/0.52 per share
(basic/diluted) based on 67,788,585/ 70,855,770 shares
(basic/diluted; split-adjusted weighted average), for the same period
last year.

Operating cash flow for the second quarter was EUR 30.1 million
compared to EUR 33.9 million in the second quarter last year, while
operating cash flow for the first half was EUR 74.4 million compared
to EUR 48.2 million in the first half year 2014. Total backlog as of
today (excluding consignment stock agreements) is above EUR 138
million while total backlog on June 30, 2015 (excluding consignment
stock agreements) was EUR 133.3 million compared to EUR 150.7 million
at the end of the first quarter and EUR 107.1 million on June 30,
2014.

ams' business performed strongly in the second quarter and first half
of 2015 given robust worldwide demand for ams' high performance
sensor and analog solutions.

ams' consumer and communications business showed a very positive
performance in the second quarter and first half, particularly driven
by its light sensor, gesture sensor, and NFC product areas. Run rates
for the ams portfolio of intelligent light sensors for leading
consumer and smartphone OEMs continued at high levels in the second
quarter including support for new devices. The company's gesture
sensor solution combining advanced gesture recognition with RGB
color, proximity sensing and other functions in a minimized footprint
is shipping into multiple device platforms in high volume. Other
product lines also performed well supporting major device vendors'
products while in audio solutions ams expects further adoption of its
low-power ANC noise cancellation technology in bundled in-box
accessories.

ams continued high volume shipments of its patented boosted NFC
solution in the second quarter driven by the demand for smartphones
and small mobile devices. The company's technology ensures reliable
transactions in space-constrained devices such as smartphones and
wearables. ams is strongly positioned in differentiated boosted NFC
technology with a multi-year roadmap to exploit the company's
technical advantages. ams is pursuing multiple paths including
strategic licensing to maximize the market and financial value of its
proprietary NFC technology and has recently concluded a licensing
agreement for mobile device boosted NFC technology with a strategic
partner. ams is seeing strong market traction for its NFC offering
and expect NFC solutions to contribute meaningfully to its
anticipated revenue and earnings growth over the coming years.

The company's industrial, medical and automotive businesses posted
attractive results in the second quarter and first half. The demand
environment in ams' industrial end markets is benefitting its
differentiated sensor and sensor interface solutions as leading
industrial OEMs rely on ams to power high value industrial sensor
applications. ams is sampling first announced products in the
emerging area of sensor-based LED lighting control for industrial
applications. ams' medical business performed well in the second
quarter and first half focusing on digital imaging sensor solutions
for advanced computed tomography (CT), digital X-ray and mammography.
Here, ams enables high quality diagnostics for high performance
imaging systems. In the company's automotive business, good demand
for its sensor and sensor interface solutions continued in the second
quarter. ams is well positioned in advanced driver assistance
applications such as collision avoidance, magnetic and inductive
position sensing, and battery management which align with major
automotive trends. ams' sensor and analog expertise helps improve
vehicle safety and comfort as sensor content in vehicles continues to
expand. The specialty foundry business also contributed positively to
the company's results in the first half.

ams' strong pipeline of design and development projects points
towards attractive growth potential in the coming years. ams has
therefore decided to introduce the strategic goal of EUR 1bn in
revenues in 2019 built on organic expansion of its business. To
leverage ams' capabilities long-term and beyond this goal, the
Supervisory Board is pleased to announce that Alexander Everke will
join ams' Management Board on October 1, 2015 as CEO designate with
responsibility for corporate strategy, sales and marketing. On March
1, 2016, Alexander Everke will become CEO of ams. At this time, Kirk
Laney will take on the new position of Chief Strategist Sensor
Solutions for a minimum of 18 months, responsible for defining sensor
solution roadmaps. He will work closely with the other Management
Board members, particularly on M&A and strategic relationships.

Alexander Everke built extensive experience in all aspects of the
semiconductor business including mixed signal and analog during his
24-year career in the semiconductor sector. Following a master
diploma in Electrical Engineering and a degree in International
Business, he spent 14 years at Siemens AG and Infineon Technologies
AG in sales, marketing and senior management roles including VP Sales
& Marketing for the Memory Products Division, SVP Global Sales, and
General Manager Chip Card and Security ICs Business Unit. From
2006-2014, Alexander Everke held senior management positions at NXP
Semiconductors including SVP & General Manager Business Line Power
Management, EVP & General Manager Business Unit Multi Market
Semiconductors, EVP & General Manager Business Unit High Performance
Mixed Signal, and EVP & General Manager Business Unit Infrastructure
and Industrial and was member of the NXP management team.

In this context, the Supervisory Board would like to emphasize Kirk
Laney's outstanding contribution to the success of ams and continued
strong leadership as ams is becoming a leading provider of sensor
solutions. Kirk Laney has been instrumental in creating leading
technology and significant growth opportunities for ams which will
continue to shape the future of the company. The Supervisory Board
has also extended the Management Board contract of Michael
Wachsler-Markowitsch as CFO of ams until 2019.

Fast-forwarding its manufacturing strategy, ams has entered into an
agreement with the State of New York (USA) under which they will
construct a new analog wafer fab to ams' specifications. In its first
buildout stage, the wafer fab will offer capacity of at least 150k
200mm-wafer equivalents per year with a view to further expansion up
to a total buildout potential of over 450k 200mm-wafer equivalents
per year. Capable of 130nm and more advanced future manufacturing
nodes, the new wafer fab will be located in Tech Valley, the largest
technology region in the U.S. and home to other nanotechnology and
semiconductor companies.

Under the agreement, ams will rent the fully operational wafer fab
for a period of 20 years for a nominal yearly amount and will only
incur operating expenses on the wafers produced. This structure
offers significant cost benefits as ams will not be burdened with
depreciation expenses for facility and equipment and therefore
expects cost per wafer to be highly competitive. ams expects the new
wafer fab to become operational by the end of 2017 with volume
production ramp immediately thereafter. As part of the project, ams
also plans to establish a design center at the Tech Valley location
with a focus on advanced wafer scale packaging. Together with ams'
highly efficient 200mm wafer fab in Austria whose recent expansion
shows ams' clear long-term commitment to this manufacturing location,
the new wafer fab advances and strengthens ams' robust production
model which includes outsourcing partnerships with major merchant
providers.

ams also completed a strategic transaction in the quarter acquiring
the CMOS sensor business from NXP Semiconductors for an undisclosed
amount. The acquisition of the CMOS sensor business based in
Eindhoven (Netherlands) expands ams' environmental sensor portfolio
with advanced monolithically integrated relative humidity,
temperature, and pressure sensors and adds a fully developed product
line with first shipments expected in the beginning of 2016. ams sees
this as a disruptive technology given ultra-small form factors
deploying chip-scale packaging (CSP), very low power consumption,
outstanding analog accuracy and performance, and high
cost-effectiveness. This attractive product line opens a large array
of applications across mobile device/wearable, consumer, industrial,
medical and automotive markets with significant revenue opportunities
in the coming years. As part of the transaction, over 100 relevant
patents were transferred or licensed to ams creating a substantial
product and IP position in the growth market for CMOS-based
environmental sensors. To integrate the CMOS sensor team of around 40
employees, ams recently opened a design center in the Netherlands.

In operations, the second capacity expansion step in ams' wafer fab
in Austria was completed as planned. To support two significant new
programs for mobile device/smartphone applications which ams expects
to ramp in 2016, ams has decided to accelerate investments into
additional fab equip¬ment. ams will also implement a further
expansion of its test capacity for upcoming high volume requirements.
Total capital expenditures for 2015 are therefore expected to reach
EUR 75-80 million as ams prepares to realize its growth plans in the
coming years.

For the third quarter 2015, ams expect revenues of EUR 150-155
million driven by ongoing business momentum in its consumer and
non-consumer markets based on available information and current
exchange rates. ams anticipates continued high gross margin
profitability in the third quarter with gross margins remaining on a
comparable level quarter-on-quarter while operating profitability is
expected to reflect revenue development and the addition of further
R&D resources including the new CMOS sensor business.

ams is confident about the strong revenue and earnings potential of
its business, particularly when looking towards 2016 and beyond,
based on available information. ams' focus on high performance sensor
solutions including new opportunities such as IP licensing drives a
full design and development pipeline across the markets for
smartphones, mobile devices, industrial, medical, and automotive
systems. This pipeline offers significant opportunities for revenue
and earnings growth on the way to ams' EUR 1bn revenue goal in 2019.

The company's first half report 2015 including additional financial
information is available on the company website at
http://www.ams.com/eng/Investor/Financial-Reports .

###

About ams

ams is a global leader in the design and manufacture of advanced
sensor solutions and analog ICs. Our mission is to shape the world
with sensor solutions by providing a seamless interface between
humans and technology.

ams' high-performance analog products drive applications requiring
extreme precision, dynamic range, sensitivity, and ultra-low power
consumption. Products include sensors, sensor interfaces, power
management and wireless ICs for consumer, communications, industrial,
medical, and automotive markets.

With headquarters in Austria, ams employs over 1,800 people globally
and serves more than 8,000 customers worldwide. ams is listed on the
SIX Swiss stock exchange (ticker symbol: AMS). More information about
ams can be found at www.ams.com.

Further inquiry note:
Moritz M. Gmeiner
Director Investor Relations
Tel: +43 3136 500-31211
Fax: +43 3136 500-931211
Email: investor@ams.com

end of announcement euro adhoc
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issuer: ams AG
Tobelbader Strasse 30
A-8141 Unterpremstaetten
phone: +43 3136 500-0
FAX: +43 3136 500-931211
mail: investor@ams.com
WWW: www.ams.com
sector: Technology
ISIN: AT0000A18XM4
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language: English