The company announced on Tuesday in Munich that the proceeds should increase in the mid to high single-digit percentage range despite the strong euro. Thanks to the cost-cutting measures introduced, Siltronic is also assuming an increasing operating margin and thus a significant increase in earnings before interest and taxes (EBIT). In 2020, sales and the operating result fell – as already known – due to the corona pandemic, among other things.
The Taiwanese competitor GlobalWafers recently achieved important successes in an attempt to take over Siltronic for just under 4.4 billion euros. More than half of the shares were offered to the group and the Federal Cartel Office approved the takeover. Completion is expected in the second half of the year, subject to further approvals. The management of Siltronic has been behind the merger from the start. The companies had already agreed in December on a guarantee for the German Siltronic locations as well as protection against redundancies at the German locations until the end of 2024.
GlobalWafers had expressed interest in a takeover in November and initially entered the race with 125 euros per share. Since the demand at this price was too low, the group gradually increased the bid to 145 euros. GlobalWafers was offered almost 57 percent of the shares at this price until mid-February. This means that the minimum acceptance threshold, which has been reduced to 50 percent, has been reached. On the stock exchange, the shares listed in the MDAX recently cost a little less than 140 euros, after the price climbed to 147 euros in the hope of a further increase in January.
The company’s shares, which have been listed on the stock exchange since the spin-off from WACKER CHEMIE in 2015, had already risen significantly before the GlobalWafers offer and had recovered from the Corona crash. The bid continued to fuel the course. Since mid-February 2020, the price has risen by almost 30 percent, which is more than the MDAX, in which the share has been listed since 2018. Since the initial listing, the price has risen by more than 350 percent.
Siltronic securities are temporarily traded 0.47 percent higher at 137.70 euros via XETRA.
WACKER CHEMIE still has a stake of around 30 percent in Siltronic, but is transferring this stake to GlobalWafers as part of the takeover offer.
In addition to the consequences of the corona pandemic, Siltronic also struggled with a strong euro in 2020. As has been known since the end of January, sales fell by five percent to 1.21 billion euros. According to the final figures, the decline in earnings before interest, taxes, depreciation and amortization (Ebitda) was slightly higher than initially announced, at almost a fifth to 332 million euros. This is due to the consulting costs of around twelve million euros that have now been booked in connection with the GlobalWafers offer.
The bottom line was a profit of 161 million euros, almost 30 percent less than a year earlier. The dividend is to be reduced by one euro to two euros. “2020 was shaped by the digitization surge triggered by the corona pandemic, which resulted in a slightly higher than expected demand for silicon wafers. The average revenues per wafer area were below the previous year,” said CEO Christoph von Plotho. In the second half of the year, sales and earnings were also negatively impacted by the strength of the euro, especially against the dollar.
Siltronic continues to anticipate negative effects from the exchange rate. For 2021, the company expects euro exchange rates of 1.23 dollars and 128 yen. “An exchange rate within a range of the euro to the dollar of 1.20 to 1.25 in 2021 would reduce sales by around 50 to 80 million euros (including a weaker Japanese yen).” Since sales will increase by eight to twelve percent and the average sales revenue should remain stable, sales should increase. Thanks to the austerity measures that have already been introduced, profits should increase.
/ zb / stk
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Siltronic expects sales profits rise Siltronic shares rise