• Revenue: EUR1.4 billion, reflecting a 7% decline year-over-year.
• EBITDA: EUR364 million, down EUR70 million compared to 2023.
• EBITDA Margin: 26% for the full year.
• Net Income: EUR67 million for the full year.
• Net Financial Debt: Increased to EUR734 million by the end of 2024.
• CapEx: EUR523 million for 2024, with a planned reduction to EUR350 million to EUR400 million in 2025.
• Equity Ratio: Decreased to 44%.
• Dividend Proposal: $0.20 per share, approximately 10% payout ratio.
• Depreciation and Amortization: Expected to be between EUR380 million and EUR440 million in 2025.
• Sales Guidance for 2025: Anticipated to be in the region of 2024 levels.
• EBIT Guidance for 2025: Expected to be significantly lower than the previous year and negative.

• Warning! GuruFocus has detected 8 Warning Signs with SSLLF.

Release Date: March 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Siltronic AG (SSLLF) achieved its annual guidance at the upper end despite challenges in 2024.
• The company maintained a stable market share in the semiconductor-based market.
• A positive development in 300 millimeter wafers compensated for the planned exit from the SD sales business.
• Siltronic AG (SSLLF) implemented a stringent cost and cash management program, resulting in a resilient EBITDA margin of 26%.
• The company is well-positioned for growth, with strong relationships with major industry players and a focus on leading-edge technologies.

Negative Points

• Year-over-year sales declined by 7%, reflecting subdued demand in the wafer industry.
• Net financial debt increased to EUR734 million due to continued negative net cash flow.
• The company anticipates a further reduction in CapEx payments in 2025, but net cash flow will remain significantly negative.
• Siltronic AG (SSLLF) expects sales in 2025 to be similar to 2024, with a negative impact on average selling prices.
• The company plans to reduce its dividend to $0.20 per share, corresponding to a payout ratio of approximately 10% of consolidated net income.

Q & A Highlights

Q: What gives you confidence in a strong ramp in the second half of 2025, given the guidance for a high single-digit decline in the first half? Also, what are your assumptions for demand, particularly in the automotive sector? A: Michael Heckmeier, CEO: We have seen some customers asking for volume postponements from H1 to H2, which aligns with the general industry sentiment that H2 should be better. Regarding automotive demand, we see growth driven by electro mobility and server market dynamics. However, macroeconomic factors could affect PC and smartphone unit growth, making our 7% growth assumption balanced with some risks and opportunities.

Q: Can you provide more color on inventory levels, particularly in logic, and how they compare to your peers? A: Michael Heckmeier, CEO: We gather information from public sources and direct customer insights. Logic inventories are close to normal, unlike memory and power segments, which are more elevated. Our visibility comes from aligning customer insights with publicly available data.

Q: How does spot market pricing differ from LTA pricing for 12-inch wafers, and what pricing is embedded in your guidance for this year? A: Michael Heckmeier, CEO: Two-thirds of our business is in LTAs, with prices honored by customers. Spot market pricing is more variable, with smaller diameters facing more pressure. We saw some price effects in 2024, which will continue in 2025, but two-thirds of our business remains unaffected by these changes.

Q: Are you seeing any replacement of demand for your wafers by local Chinese manufacturers, particularly for 300mm wafers? A: Michael Heckmeier, CEO: The market situation in China is stable, with no significant changes in market share. Local Chinese manufacturers are more advanced in smaller diameters, but there are still gaps in 300mm, especially in high-end and leading-edge segments.

Q: What is the impact of the 150mm wafer phase-out on sales and costs, and how does it affect your financials? A: Michael Heckmeier, CEO: The 150mm business is a minor part of our sales, with a mid-single-digit share in 2024, declining in 2025. The phase-out is progressing smoothly, with minimal impact on costs. Claudia Schmitt, CFO: The financial impact is minor, with no significant effect on COGS.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.