EANS-Adhoc: ams AG / ams reports full year 2016 results with fourth quarter 2016 revenues at upper end of guidance; expects sequential revenue growth in first quarter 2017 with flattish revenue develo

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Financial Figures/Balance Sheet
07.02.2017

Selected financial information for fiscal year and fourth quarter
2016

Premstaetten, Austria (7 February 2017) - ams (SIX: AMS), a leading
worldwide supplier of high performance sensor and analog solutions,
reports full year results for 2016 with fourth quarter 2016 revenues
at the upper end of previous guidance. Following soft demand in the
first half year, the success of ams' consumer solutions in new
devices played a key role for ams' business performance in the second
half. For the first quarter 2017, ams sees sequentially higher
expected revenues of EUR 141-148 million including the Heptagon
business and a flattish quarter-on-quarter revenue development
improving on typical seasonality, when excluding the Heptagon
business.

2016 full year revenues were EUR 549.9 million (USD 608.7 million)
compared to EUR 623.1 million in 2015. Adjusted gross margin
(excluding acquisition-related and share-based compensation costs)
was 55% while the full year adjusted operating (EBIT) margin
(excluding acquisition-related and share-based compensation costs)
was 18%. Revenues for the fourth quarter 2016 were EUR 133.6 million,
down 9% year-on-year and 9% quarter-on-quarter. Adjusted gross margin
for the fourth quarter 2016 stood at 52%, while the adjusted
operating (EBIT) margin reached 12%, in line with previous
expectations.

Financial overview

Group revenues for 2016 were EUR 549.9 million (USD 608.7 million),
decreasing 12% from EUR 623.1 million (USD 691.4 million) for 2015.
In constant currency, full year revenues were 12% lower compared to
the previous year. Revenues for the fourth quarter 2016 were EUR
133.6 million, at the upper end of published expectations of EUR
127-134 million and 9% lower compared to EUR 147.2 million recorded a
year ago (10% lower in constant currency).

Gross margin for the full year 2016 was 55% (excluding
acquisition-related and share-based compensation costs), compared to
56% in 2015 (52% including acquisition-related and share-based
compensation costs, compared to 54% in 2015). ams achieved this
positive result despite gross margin impacts in several product areas
including product life cycle effects and a previously announced
customer-specific volume impact in the fourth quarter. Gross margin
for the fourth quarter 2016 was 52% (excluding acquisition-related
and share-based compensation costs), down from 57% in the same period
2015 (49% including acquisition-related and share-based compensation
costs, compared to 55% in the same period 2015).

The result from operations (EBIT) for 2016 was EUR 97.1 million or
18% of revenues (excluding acquisition-related and share-based
compensation costs) compared to EUR 165.5 million or 27% in 2015 (EUR
93.3 million or 17% of revenues including acquisition-related and
share-based compensation costs, compared to EUR 147.3 million or 24%
of revenues in 2015). Research and development expenses amounted to
EUR 138.6 million or 25% of revenues in 2016 and were driven by
consolidation effects and expanded development resources. The result
from operations (EBIT) for the fourth quarter 2016 was EUR 16.4
million or 12% of revenues (excluding acquisition-related and
share-based compensation costs) compared to EUR 35.0 million or 24%
of revenues in the fourth quarter 2015 (EUR 7.1 million or 5% of
revenues including acquisition-related and share-based compensation
costs, compared to EUR 29.3 million or 20% of revenues in the fourth
quarter 2015).

Net income for 2016 was EUR 102.9 million, compared to EUR 148.7
million in 2015. Basic / diluted earnings per share for 2016 were CHF
1.67 / 1.62 or EUR 1.53 / 1.48 based on 67,241,926 / 69,373,197
shares (weighted average; 2015: CHF 2.30 / 2.21 or EUR 2.16 / 2.08
based on 68,873,498 / 71,604,447 shares, weighted average). Net
income for the fourth quarter 2016 was EUR 13.7 million compared to
EUR 30.6 million for the same period 2015. Basic / diluted earnings
per share for the fourth quarter were CHF 0.22 / 0.22 or EUR 0.21 /
0.20 based on 66,245,957 / 67,812,290 shares (weighted average; 2015:
CHF 0.48 / 0.46 or EUR 0.44 / 0.43 based on 69,026,942 / 71,598,007
shares, weighted average).

Cash flow from operations for 2016 was EUR 82.3 million compared to
EUR 155.6 million in 2015. Cash and short term investments increased
to EUR 215.8 million on 31 December 2016 from EUR 143.9 million at
year-end 2015, while net debt was EUR 256.2 million on 31 December
2016 (year-end 2015: net debt EUR 131.3 million) due to strategic
investments and transactions in 2016. Capital expenditures for 2016
were EUR 91.7 million compared to EUR 80.1 million for 2015,
particularly driven by planned investments to expand optical layer
deposition capacity. The total backlog on 31 December 2016, excluding
consignment stock agreements, was EUR 136.1 million (EUR 132.2
million on 30 September 2016 and EUR 119.4 million at year-end 2015).

Based on the company's cash dividend policy stipulating the
distribution of 25% of net earnings, ams will propose a dividend of
EUR 0.30 per outstanding share for 2016.

Business

ams' business showed a solid performance in 2016 against the backdrop
of a weak market environment in the consumer and smartphone markets
in the first half of the year. ams benefitted from a stronger
momentum in its consumer business in the second half of 2016 but
group business performance was impacted by previously announced
negative customer- and product line-specific effects in the fourth
quarter. Overall, ams' consumer and communications business again had
a strong influence on the development of group revenues.

ams is executing a focused strategy around leadership in the
fast-growing markets for optical, imaging, environmental and audio
sensing which the company defined last year. 2016 was an expected
year of transformation for ams as the company started to implement
this strategy through active management of its technology portfolio:

Taking a significant strategic step forward, ams announced the
acquisition of Heptagon last year. Heptagon is a global leader in
micro-optics and optical sensing solutions with particular expertise
in high performance optical packaging. Adding Heptagon's capabilities
positions ams very strongly for leadership in upcoming optical
sensing applications including spectral sensing, time-of-flight
technology, and 3D sensing. The Heptagon business offers a
substantial existing pipeline and major opportunities to combine ams'
and Heptagon technologies into industry-leading optical solutions.
ams therefore expects the Heptagon business to accelerate growth for
the group in the coming years. Following the recent closing of the
transaction, ams will consolidate Heptagon's business from February
2017 onwards.

Besides Heptagon, ams acquired CCMOSS, a world leader in gas and IR
sensor technologies, MAZeT, an important technology player in
spectral sensing solutions, and Incus, a provider of intellectual
property (IP) for digital active noise cancellation, in 2016. The
addition of CCMOSS created a complete value chain offering for
integrated gas sensors propelling ams into a leadership position in
gas sensing for industrial and consumer applications, while MAZeT
broadened ams' portfolio for next generation spectral sensing with an
industrial focus. Both transactions added significant future growth
potential in new markets and innovative applications for ams. Incus'
IP and acoustic characterization technology will improve new digital
noise cancellation systems. Moreover, ams successfully divested its
wireless business for NFC and RFID reader applications last year as
part of its strategic portfolio alignment. ams retained relevant
wireless IP to support the expected adoption of wireless sensor
solutions in multiple end markets.

Based on its clear strategic focus, ams sees very strong traction
across the company's global customer base. ams is receiving excellent
market and customer feedback on its competences and capabilities and
expects its strategy to drive significant growth and profitability
for the company. ams therefore fully reiterates the previously
announced growth and margin targets.

ams' consumer and communications business which is a major supplier
of advanced sensor and analog solutions for smartphones, tablet PCs
and other consumer devices recorded a solid performance in 2016 as
expected. ams' optical sensor product lines again provided the
largest share of group revenues in 2016 while ams fortified its
position as worldwide market leader in advanced light sensors.

ams continued to supply a broad range of leading smartphone and
consumer OEMs with mobile device light sensor solutions last year.
ams' high performance color, ambient light and proximity sensors and
modules are found in a wide spectrum of high volume consumer devices
globally. The fourth quarter of 2016 was impacted by the previously
expected customer-specific effect resulting in lower shipment volumes
of a new optical sensor product. ams broadened its portfolio of
mobile optical sensor solutions last year despite this development
and has a strong pipeline including designs at new customers.

In combination with Heptagon, ams sees itself extremely well
positioned to capture significant value in new optical sensing
solutions for consumer and non-consumer applications from this year
onwards. ams expects technologies such as true color, spectral
sensing, 3D sensing and new imaging-related applications to drive
substantial growth for the company over the coming years.

In audio solutions, the MEMS microphone interface product line
performed well again last year with ams' market leadership resulting
in continued very high volumes. Active noise cancellation (ANC) where
ams broadened its technology reach in 2016 through the addition of
Incus offers attractive potential for higher ams content in consumer
devices.

ams' industrial, medical and automotive businesses developed
positively in 2016 in line with expectations. ams was able to improve
its market penetration given a strong technology base including newly
acquired IP, its wide range of end markets, and broad base of
customers worldwide.

ams' industrial business performed well last year, however, business
momentum remained limited in the fourth quarter and second half of
2016 with certain signs of end market and macroeconomic uncertainty.
As a leading supplier of sensors and sensor interfaces for industrial
and factory automation, building control, and industrial sensing, ams
offers a broad portfolio of differentiated solutions for major OEMs
and a wide range of applications worldwide. Imaging product lines
generally developed in line with expectations last year with an
attractive pipeline going forward driven by new applications. ams
expects to resolve the currently remaining production yield issue for
an industrial product line in the coming months as previously
anticipated.

ams' medical business recorded attractive results again in 2016,
mainly driven by the core area of Medical Imaging for computed
tomography (CT), digital X-ray, and mammography. As the market leader
in high resolution imaging solutions ams ramped a new OEM last year
and gained additional imaging customers in Asia for future programs.
ams therefore broadened its market reach and continues to advance
diagnostic, patient and cost benefits in medical imaging.

The company's automotive business showed another year of solid growth
in 2016 given a supportive demand environment and the ongoing
expansion of sensing content in vehicles. ams' high performance
sensor solutions for safety, position measurement, level control and
other applications are successful in an growing range of vehicle
platforms. ams sees attractive potential in the evolution of LIDAR
technology which is expected to expand into a key element of the
autonomous driving roadmap. ams' specialty foundry business for
analog and mixed-signal ICs contributed attractively to the company's
results.

ams' in-house manufacturing capacity was fully utilized throughout
2016. ams successfully completed its significant investment to expand
optical filter layer deposition capacity at the company's
headquarters last year, preparing for expected business growth in
2017 and beyond. In addition, ams has defined a robust,
cost-attractive path for expanding wafer volumes with its technology
manufacturing partners to support its growth targets for the years to
come. The major capacity expansion for ams' Heptagon business to
realize expected strong growth from the second half of 2017 onwards
is progressing to plan.

Kirk Laney, ams' Chief Strategist Sensor Solutions, has decided to
retire from his active role at ams, and will therefore resign from
the Management Board as of 31 March 2017. Following the acquisition
of TAOS in 2011, Kirk Laney has been active in ams' management team
and served the company as CEO for almost three years. ams wants to
thank Kirk Laney, who has been instrumental in creating leading
technology for ams, focusing the company on sensor solutions, and
building significant growth opportunities during his more than 5
years of service for ams. Additionally, ams' works council has
decided that Guenter Kneffel is named as employee representative
member of the Supervisory Board given that employee representative
Vida Uhde-Djefroudi has been recalled from ams' Supervisory Board as
of end of yesterday.

Outlook

For the first quarter 2017, ams expects sequentially higher revenues
of EUR 141-148 million including consolidation of the Heptagon
business, based on available information and a current USD/EUR
exchange rate of 1.07. At the same time, ams expects the first
quarter adjusted operating (EBIT) margin (excluding
acquisition-related and share-based compensation costs) around break
even due to consolidation effects from the known negative operating
profitability of the Heptagon business.

Improving on typical first quarter seasonality, ams expects a
flattish revenue development excluding the Heptagon business in the
first quarter and sees the related adjusted EBIT margin excluding the
Heptagon business on a level comparable to the fourth quarter 2016.

ams expects to continue its share buy-back activities over the course
of 2017 up to a value of CHF 60 million in order to cover obligations
from a prospective earn-out for the Heptagon transaction and employee
incentive plans.

ams is confident about a strong revenue growth potential for the
group for full year 2017 including expected growth from ams' existing
businesses as well as from the Heptagon business. Based on currently
available forecasts, ams expects the full earn-out for the Heptagon
transaction to be realized which would relate to fully consolidated
2017 revenues of the Heptagon business of around USD 300 million.

Additional selected financial information for fiscal year 2016 and
the fourth quarter 2016 is available on the company website at
www.ams.com/eng/Investor/Financial-Reports

Further inquiry note:
Moritz M. Gmeiner
Vice President 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 Premstaetten
phone: +43 3136 500-0
FAX: +43 3136 500-931211
mail: investor@ams.com
WWW: www.ams.com
sector: Technology
ISIN: AT0000A18XM4
indexes:
stockmarkets: official dealing: SIX Swiss Exchange
language: English

Original-Content von: ams AG, übermittelt durch news aktuell