Siltronic AG (SSLLF) Q2 2025 Earnings Call Highlights: Resilient Performance Amid Market Challenges

Yahoo

30-07-2025

Sales: EUR329 million in Q2, a 5% decline compared to Q1.
EBITDA: EUR86 million in Q2, up from EUR78 million in Q1.
EBITDA Margin: Increased to 26.3% in Q2 from 22.6% in Q1.
CapEx: EUR126 million in Q2, primarily for the new fab in Singapore.
Net Cash Flow: Negative EUR83 million in Q2.
Net Income: EUR15 million in Q2.
Total Assets: EUR4.9 billion at the end of June.
Equity Ratio: Stable at 43%.
Net Financial Debt: Increased to EUR903 million by the end of June.
Full Year Sales Guidance: Expected to be in the mid-single-digit percentage range below 2024 levels.
Depreciation Outlook: Expected to range between EUR340 million to EUR400 million.
Warning! GuruFocus has detected 10 Warning Signs with SSLLF.
Release Date: July 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Siltronic AG (SSLLF) achieved its targets for the first half of 2025, delivering solid results despite subdued demand.
The company successfully completed important prime wafer qualifications for its new fab, paving the way for depreciation to begin in August.
EBITDA improved in Q2 2025, reaching EUR86 million, up from EUR78 million in Q1, with the EBITDA margin increasing to 26.3%.
Siltronic AG (SSLLF) maintained stable market share among major competitors, demonstrating resilience in a challenging environment.
The company is on track to complete the phase-out of its small diameters business by the end of July 2025, marking a successful transition process.
Negative Points
Sales declined by 5% quarter-on-quarter, primarily due to FX effects and price differences.
The weakening US dollar against the euro posed a significant headwind, leading to a revised full-year sales guidance.
Net cash flow remained negative at EUR83 million, with CapEx exceeding depreciation.
Elevated inventory levels across key segments continue to weigh on wafer demand, impacting short-term demand recovery.
The company anticipates full-year 2025 sales to be in the mid-single-digit range below 2024 levels due to FX developments.
Q & A Highlights
Q: Can you quantify the decrease in cost of sales from the write-down of spare parts? A: This was a mid-single-digit amount in Q2, which impacted our EBITDA positively. It's a one-time effect. - Claudia Schmitt, CFO
Q: How is your market share stable despite slower dynamics compared to peers, and do you see pressure from China's acceleration in 300-millimeter wafers? A: Market share is stable due to gains at other customers despite negative mix effects. We don't see significant acceleration in China dynamics, especially in higher specs where there's a technical gap. - Michael Heckmeier, CEO
Q: With inventories still high, how should we think about CapEx in 2026? A: CapEx will come down, but there is a hangover from our fab in Singapore that will trail into '26. We will specify this more concretely closer to the '26 guidance timeframe. - Michael Heckmeier, CEO
Q: Are there any major long-term agreements expiring soon, and could current market conditions affect future negotiations? A: No major LTAs are expiring this year or in 2026. We have robust LTAs with long durations, and current market conditions are not conducive to concluding major new LTAs. - Michael Heckmeier, CEO
Q: Why are inventories taking so long to come down, and could Asian manufacturers' higher LTA portions affect this? A: The inventory situation is industry-wide, affecting all wafer manufacturers similarly. The decoupling of volume and value growth at certain customers contributes to the prolonged inventory issue. - Michael Heckmeier, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.