(BFM Bourse) – The semiconductor manufacturer reported an end to 2023 generally in line with expectations. But X-Fab reveals disappointing prospects for the current year, which is sanctioned by the stock market.
Less known than STMicroelectronics, X-Fab nonetheless remains a major player in semiconductors. It is one of the main European foundries, specializing in the development of chips on silicon wafers for digital or analog circuits.
The group joined the SBF 120 last September, the second major Parisian index, rewarded for its excellent stock market performance. X-Fab also ended the year 2023 with a gain of 53%, at the foot of a podium which had then been dominated by Stellantis, Virbac and Solutions 30.
It must be said that the year 2023 was that of X-Fab both on the stock market and in its accounts. Over the last three months of last year, the company also experienced significant growth in its activity, with turnover up 29% to $237.7 million. This is the middle of the forecast range of $230 million to $245 million, communicated last October. This level of activity is slightly higher than Degroof Petercam’s forecasts as well as the consensus ($236 million).
Its products notably serve the automotive industry, which consumes a lot of silicon, with vehicles that are increasingly sophisticated in terms of electronic systems. Moreover, billings in X-Fab’s flagship markets – namely automotive, industrial and medical – increased by 38% year-on-year, to reach $222.5 million, thus representing 93 % of turnover achieved at the end of 2023.
Ebitda (gross operating surplus) appreciated by 41% to $60 million in the fourth quarter. For this indicator X-Fab misses both the market consensus housed at $65 million as well as the estimates of Degroof Petercam ($62 million). And in terms of the corresponding margin, here too the founder disappoints, with an Ebitda margin of 25.1%, or at the bottom of the forecast range of 25% to 29%.
This erosion of the margin from one quarter to the next (26.4% in the third quarter) is explained by “higher maintenance costs for industrial tools, an increase in overheads linked to optimization activities of processes, the planned introduction of the new ERP (software for managing central business functions such as accounting, purchasing or supply chain management) as well as the increase in the payroll”, explains the company.
Disappointing outlook
However, the prospects for X-Fab are disappointing. In the first quarter, X-Fab sales are expected in a range of $215 million to $225 million with an Ebitda margin of 24% to 27%. This objective is lower than the expectations of Degroof Petercam which expected sales of 243 million euros at the start of the year.
The middle of the range announced by X-fab implies an Ebitda of $56 million, “which is slightly lower than our estimate of $58 million”, adds the financial intermediary.
The forecast “reflects the faster-than-expected decline in demand for older 150mm Complementary Metal-Oxide-Semiconductor (CMOS) technologies due to inventory adjustments, primarily in the industry end market,” explains X- Fab which hopes that “this decline will be overcompensated in the medium term by the transition towards the growing activity of microsystems and silicon carbide (SiC)”.
And for the whole year, here too, the prospects announced by X-Fab are raising eyebrows in the market. The 2024 turnover is expected between 900 to 970 million dollars, much less than the expectations of Degroof Petercam which are close to the billion dollars in billings (992 million dollars). This sales objective for 2024 is accompanied by ‘an Ebitda margin of between 25% and 29%
“The forecasts for the first quarter of 2024 and the entire financial year are lower than our estimates and those of the consensus, both for revenues and for the Ebitda margin,” summarizes the financial intermediary.
This disappointment is spreading to the stock market. The stock of
Sabrina Sadgui – ©2024 BFM Bourse
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