- Generates record full-year 2021 revenues of
$1.5 billion 1, an increase of 21% over the prior-year period, including chemistry organic revenue growth of 11% - Reports 2021 net income of
$7.5 million , compared to a net loss of$289 million in 2020, the latter including impairment charges of$279.5 million of our GMF segment as a result of changed market conditions caused by the COVID-19 pandemic - Delivers record 2021 Adjusted EBITDA2 of
$458 million , a 26% increase over the prior-year period - Year-end Net debt leverage decreased to 2.8x
Management Commentary
“Over the course of 2021,
Fourth-quarter 2021 Results
Total revenue was
Adjusted EBITDA was
Diluted earnings per share was
Adjusted EBITDA margin was 30% for the fourth quarter of 2021, up 100 basis points over the prior-year period. The increase reflects a strong chemistry product mix, positive scale effects, and a successful start of the Company’s price-increase initiatives to offset inflationary conditions.
Fourth-quarter 2021 Segment Highlights
Electronics: Revenue for the fourth quarter of 2021 in the Company’s Electronics segment was
Adjusted EBITDA for our Electronics segment was
General Metal Finishing: Revenue for the fourth quarter of 2021 in our GMF segment was
Adjusted EBITDA for the Company’s GMF segment was
MKS Transaction
The MKS Transaction has been unanimously approved by the MKS and
Update Regarding Geopolitical Events and Palladium Sourcing
Conference Call
In light of the pending transaction with MKS, the Company will not host a conference call in connection with this release.
Cautionary Statement Regarding Forward-Looking Statements
This communication contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “will,” “would,” “target,” and similar expressions and variations or negatives of these words.
These forward-looking statements, which are subject to risks, uncertainties, and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies, and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, and such differences could be material. We undertake no obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances.
More information on potential factors that could affect Atotech’s financial results is available in “Forward-Looking Statements”, the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” within Atotech’s most recent Annual Report on Form 20-F, and in other documents that we have filed with, will file with, have furnished to, or will furnish to the
Additional Information and Where to Find It
Shareholders may obtain a free copy of the scheme document published by
No Offer or Solicitation
This communication is for information purposes only and is not intended to and does not constitute, or form part of, an offer, invitation or the solicitation of an offer or invitation to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the proposed MKS Transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law.
The proposed MKS Transaction will be implemented solely pursuant to the scheme of arrangement, subject to the terms and conditions of the definitive agreement between MKS and
Unaudited Financial Information
The information included in this release reflect our preliminary unaudited financial results for the year or quarter ended
Non-IFRS Financial Measures
This communication contains certain non-IFRS financial measures designed to complement the financial information presented in accordance with IFRS because management believes such measures are useful to investors. However, our use of these non-IFRS financial measures may vary from that of others in our industry. Our non-IFRS metrics have limitations as analytical tools, and you should not consider them in isolation or as alternatives to consolidated net income (loss) or other performance measures derived in accordance with IFRS as measures of operating performance, operating cash flows or liquidity. The Company believes that these measures are important and supplement discussions and analysis of its results of operations and enhances an understanding of its operating performance. See the Appendix for a reconciliation of the non-IFRS financial measures.
About
Atotech’s team of 4,000 experts in over 40 countries generated revenues of
1 The financial information for the fourth quarter and full-year 2021 included herein is preliminary unaudited financial information. See “Unaudited Financial Information” below.
2 Adjusted EBITDA is a non-IFRS financial measure. Adjusted EBITDA should be considered in addition to, but not as a substitute for, the information provided in accordance with IFRS. A reconciliation for adjusted EBITDA to the most directly comparable IFRS financial measure is provided in the Reconciliation of Adjusted EBITDA to Consolidated Net Income (Loss) table. We are not able to forecast Consolidated net income (loss) on a forward-looking basis without unreasonable efforts due to the high variability and difficulty in predicting certain items that affect Consolidated net income (loss), including, but not limited to, Income taxes, Interest expense, net, and Foreign exchange income (loss).
Financial Statement Tables
Consolidated Statements of Comprehensive Income/(Loss)
Three months ended (unaudited) | ||||||
($ in millions), except earnings per share | ||||||
Revenue | $ | 386.5 | $ | 365.4 | ||
Cost of sales, excluding depreciation and amortization | (185.7 | ) | (173.8 | ) | ||
Depreciation and amortization | (49.0 | ) | (45.4 | ) | ||
Selling, general and administrative expenses | (82.5 | ) | (72.1 | ) | ||
Research and development expenses | (13.3 | ) | (17.6 | ) | ||
Restructuring benefit (expenses) | 0.2 | (0.7 | ) | |||
Operating profit (loss) | 56.2 | 55.8 | ||||
Interest expense | (14.1 | ) | (36.4 | ) | ||
Other income (expense), net | 6.8 | 23.4 | ||||
Income (loss) before income taxes | 48.8 | 42.8 | ||||
Income tax expense | (18.7 | ) | (20.4 | ) | ||
Consolidated net income (loss) | $ | 30.1 | $ | 22.4 | ||
Earnings per share | ||||||
Basic earnings (loss) per share | 0.15 | (0.12 | ) | |||
Diluted earnings (loss) per share | 0.15 | (0.12 | ) |
Three months ended (unaudited) | ||||||
($ in millions) | ||||||
Consolidated net income (loss) | $ | 30.1 | $ | 22.4 | ||
Other comprehensive income (loss) | ||||||
Actuarial gains and losses | 8.2 | 10.0 | ||||
Tax effect | (2.4 | ) | (3.0 | ) | ||
Items not potentially reclassifiable to statement of income | 5.8 | 7.0 | ||||
Currency translation adjustment | (6.0 | ) | 92.1 | |||
Hedge reserve | — | (10.5 | ) | |||
Thereof: Income (cost) of Hedging ( | — | 0.5 | ||||
Other | 0.5 | 1.5 | ||||
Items potentially reclassifiable to statement of income (loss), net of tax | (5.5 | ) | 83.1 | |||
Total other comprehensive income (loss), net amount | $ | 0.3 | $ | 90.1 | ||
Comprehensive income (loss) | $ | 30.4 | $ | 112.5 |
Consolidated Statements of Comprehensive Income/(Loss)
Twelve months ended | ||||
($ in millions), except earnings per share | (unaudited) | (audited) | ||
Revenue | 1,499.2 | 1,234.3 | ||
Cost of sales, excluding depreciation and amortization | (731.8 | ) | (558.0 | ) |
Depreciation and amortization | (181.4 | ) | (450.3 | ) |
Selling, general and administrative expenses | (289.5 | ) | (270.2 | ) |
Research and development expenses | (53.3 | ) | (54.4 | ) |
Restructuring benefit (expenses) | 0.6 | (2.5 | ) | |
Operating profit (loss) | 243.8 | (101.2 | ) | |
Interest expense | (107.2 | ) | (144.5 | ) |
Other income (expense), net | (52.4 | ) | 20.6 | |
Income (loss) before income taxes | 84.1 | (225.1 | ) | |
Income tax expense | (76.6 | ) | (64.3 | ) |
Consolidated net income (loss) | 7.5 | (289.4 | ) | |
Earnings per share | (0.04 | ) | (4.64 | ) |
Basic earnings (loss) per share | (0.04 | ) | (4.64 | ) |
Diluted earnings (loss) per share | (0.04 | ) | (4.64 | ) |
Twelve months ended | ||||
($ in millions) | (unaudited) | (audited) | ||
Consolidated net income (loss) | 7.5 | (289.4 | ) | |
Other comprehensive income (loss) | ||||
Actuarial gains and losses | 20.2 | (3.8 | ) | |
Tax effect | (5.9 | ) | 1.1 | |
Items not potentially reclassifiable to statement of income | 14.3 | (2.8 | ) | |
Currency translation adjustment | (77.1 | ) | 114.9 | |
Hedge reserve | (0.4 | ) | (13.4 | ) |
Thereof: Income (cost) of Hedging ( | 2.2 | 2.0 | ||
Other | 0.5 | 1.5 | ||
Items potentially reclassifiable to statement of income (loss), net of tax | (77.0 | ) | 103.0 | |
Total other comprehensive income (loss), net amount | (62.7 | ) | 100.2 | |
Comprehensive income (loss) | (55.2 | ) | (189.2 | ) |
Consolidated Statements of Financial Position
As of | ||||
($ in millions) | (unaudited) | (audited) | ||
Assets | ||||
Non-current assets | ||||
Property, plant and equipment | $ | 328.9 | $ | 359.4 |
Intangible assets | 1,343.0 | 1,471.0 | ||
786.9 | 804.1 | |||
Right-of-use assets | 83.4 | 104.1 | ||
Other financial assets | 8.9 | 70.3 | ||
Other non-financial assets | 3.5 | 2.7 | ||
Total non-current assets | 2,554.7 | 2,811.6 | ||
Current assets | ||||
Inventories | 185.8 | 145.4 | ||
Trade receivables | 290.4 | 262.0 | ||
Other financial assets | 18.9 | 24.9 | ||
Other non-financial assets | 24.4 | 24.1 | ||
Tax assets | 51.2 | 46.4 | ||
Cash and cash equivalents | 371.6 | 320.1 | ||
Total current assets | 942.3 | 822.9 | ||
Total assets | $ | 3,496.9 | $ | 3,634.5 |
Liabilities & shareholders’ equity | ||||
Shareholders’ equity | ||||
Common shares and preferred shares | 19.5 | 102.1 | ||
Paid-in surplus and retained earnings | 819.5 | 261.6 | ||
Currency translation adjustment and other reserves | 57.3 | 120.0 | ||
Total shareholders’ equity | 896.3 | 483.7 | ||
Non-current liabilities | ||||
Borrowings | $ | 1,540.9 | $ | 2,065.7 |
Deferred tax liabilities | 306.1 | 340.8 | ||
Employee benefits | 143.4 | 176.2 | ||
Provisions | 9.3 | 13.2 | ||
Lease liabilities | 52.1 | 67.7 | ||
Other financial liabilities | 0.1 | 1.5 | ||
Total non-current liabilities | 2,052.0 | 2,665.1 | ||
Current liabilities | ||||
Borrowings | 10.7 | 0.5 | ||
Trade payables | 259.2 | 221.0 | ||
Tax liabilities | 93.0 | 99.2 | ||
Lease liabilities | 12.1 | 13.8 | ||
Other financial liabilities | 11.5 | 38.5 | ||
Other non-financial liabilities | 146.2 | 89.7 | ||
Provisions | 16.1 | 23.0 | ||
Total current liabilities | 548.7 | 485.8 | ||
Total liabilities & shareholders’ equity | $ | 3,496.9 | $ | 3,634.5 |
Consolidated Statement of Cash Flows
Twelve months ended | ||||||
($ in millions) | (unaudited) | (audited) | ||||
Operating activities | ||||||
Consolidated net income (loss) | $ | 7.5 | $ | (289.4 | ) | |
Adjustments to reconcile net income (loss) to cash provided by operating activities: | ||||||
Depreciation and amortization | 181.4 | 450.3 | ||||
Income taxes and changes in non-current provisions | 67.0 | 55.1 | ||||
(Gains)/losses on disposals of assets | 1.0 | 1.5 | ||||
Net (gain)/loss on financial instruments at fair value | 54.1 | (36.8 | ) | |||
Accrued financial interest costs | 70.5 | 128.9 | ||||
Amortization of deferred financing cost, including original issuance discounts | 35.3 | 15.6 | ||||
Interest paid | (68.2 | ) | (126.9 | ) | ||
Taxes paid | (118.0 | ) | (70.6 | ) | ||
Other | (18.3 | ) | (0.1 | ) | ||
(Increase)/decrease in inventories | (46.4 | ) | (10.8 | ) | ||
(Increase)/decrease in trade receivables | (0.2 | ) | (9.1 | ) | ||
Increase/(decrease) in trade payables | 49.5 | 40.7 | ||||
Changes in other assets and liabilities | (1.5 | ) | 12.5 | |||
Cash flow provided by operating activities | 213.7 | 160.6 | ||||
Investing activities | ||||||
Acquisition of subsidiaries, net of cash acquired | — | (2.7 | ) | |||
Intangible assets and property, plant and equipment additions | (56.5 | ) | (52.8 | ) | ||
Other investments and increase in non-current loans | — | (0.1 | ) | |||
Proceeds from disposals of intangible assets and property, plant and equipment | 5.5 | 0.2 | ||||
Repayments of non-current loans | 0.1 | 0.3 | ||||
Cash flow used in investing activities | (51.0 | ) | (55.0 | ) | ||
Financing activities | ||||||
Issuance of shares | 473.4 | — | ||||
Issuance of non-current debt | 130.0 | 175.1 | ||||
Repayment of non-current debt | (685.7 | ) | (255.2 | ) | ||
Changes in current borrowings and bank debt | 0.7 | (17.4 | ) | |||
Changes in current financial assets and liabilities | (1.5 | ) | 0.0 | |||
Payment of lease liabilities | (15.3 | ) | (15.3 | ) | ||
Payment of deferred finance costs | — | (9.2 | ) | |||
Cash flow used in financing activities | (98.4 | ) | (122.0 | ) | ||
Net (decrease)/increase in cash and cash equivalents | 64.3 | (16.4 | ) | |||
Effect of exchange rates | (12.8 | ) | 33.7 | |||
Cash and cash equivalents at the beginning of the period | 320.1 | 302.7 | ||||
Cash and cash equivalents at the end of the period | $ | 371.6 | $ | 320.1 |
Revenue Data
Three months ended (unaudited) | ||||
($ in millions) | ||||
Type of goods or service | ||||
Chemistry revenue | $ | 322.3 | $ | 318.1 |
Equipment revenue | 64.2 | 47.3 | ||
Total revenue from contracts with customers | 386.5 | 365.4 | ||
Geographical market | ||||
317.8 | 272.6 | |||
36.8 | 63.8 | |||
31.9 | 29.0 | |||
Total revenue from contracts with customers | $ | 386.5 | $ | 365.4 |
Segment Data
Three months ended (unaudited) | ||||||||
($ in millions) | EL | GMF | Total | EL | GMF | Total | ||
Revenue | 253.9 | 132.6 | $ | 386.5 | 232.4 | 133.0 | $ | 365.4 |
thereof Chemistry revenue | 198.9 | 123.3 | 322.3 | 188.8 | 129.3 | 318.1 | ||
thereof Equipment revenue | 54.9 | 9.3 | 64.2 | 43.6 | 3.7 | 47.3 | ||
Segment Adjusted EBITDA | 85.9 | 31.6 | 117.6 | 70.3 | 36.0 | 106.3 |
Reconciliation of Adjusted EBITDA to Consolidated Net Income (Loss)
Three months ended (unaudited) | ||||||
($ in millions) | Dec 31, 2021 | |||||
Consolidated net income (loss) | $ | 30.1 | $ | 22.4 | ||
Interest expense, net | 9.9 | 36.4 | ||||
Income taxes | 18.7 | 20.4 | ||||
Depreciation and amortization (excluding impairment charges) | 45.0 | 43.4 | ||||
EBITDA | $ | 103.8 | $ | 122.5 | ||
Non-cash adjustments(a) | 4.9 | (32.2 | ) | |||
Foreign exchange loss(b) | 1.8 | 11.6 | ||||
Restructuring(c) | (0.2 | ) | 0.7 | |||
Transaction related costs(d) | 5.7 | 2.8 | ||||
Management fee(e) | 1.2 | 0.4 | ||||
COVID-19 adjustment(f) | 0.3 | 0.4 | ||||
Adjusted EBITDA | $ | 117.6 | $ | 106.3 | ||
thereof EL Segment Adjusted EBITDA | $ | 85.9 | $ | 70.3 | ||
thereof GMF Segment Adjusted EBITDA | $ | 31.6 | $ | 36.0 |
(a) Eliminates the impact of (1) share-based compensation expenses, (2) losses on the sale of fixed assets, (3) impairment charges, (4) mark to market adjustments related to our foreign currency derivatives entered into in connection with certain redenomination transactions not linked to underlying individual transactions and bifurcated embedded derivatives related to certain redemption features of the Opco Notes and Holdco Notes, and (5) valuation adjustments from the revaluation of the earn-out liability initially recognized in 2019. The dollar value of these non-cash adjustments for each period presented above is set forth below:
Three months ended (unaudited) | |||||||
($ in millions) | |||||||
Share-based compensation | $ | 3.9 | $ | 0.1 | |||
Losses on the sale of fixed assets | 1.6 | 0.6 | |||||
Impairment charges | 4.0 | 2.0 | |||||
Mark-to-market adjustments | (3.4 | ) | (34.8 | ) | |||
Valuation adjustments | (1.2 | ) | 0.0 | ||||
Non-cash adjustments | $ | 4.9 | $ | (32.2 | ) |
(b) Eliminates net foreign currency transactional gains and losses on balance sheet items.
(c) Eliminates charges resulting from restructuring activities principally from the Company’s cost reduction efforts.
(d) Reflects an adjustment to eliminate (1) IPO-related costs linked to the existing equity, (2) professional fees paid to third-party advisors in connection with the implementation of strategic initiatives, and (3) for the three months ended
(e) Reflects an adjustment to eliminate fees paid to Carlyle. The consulting agreement pursuant to which management fees are paid to Carlyle will terminate on the earlier of (i) the Third anniversary of the IPO and (ii) the date upon which Carlyle ceases to own more than ten percent of the outstanding voting securities of the Company. Management does not view these fees as indicative of the Company’s operational performance and the removal of these fees from Adjusted EBITDA is consistent with the calculation of similar measures under our old senior secured credit facilities and our new credit agreement as well as the indentures that previously governed the Holdco Notes and Opco Notes.
(f) Eliminates charges in connection with masks, sanitizers, and other COVID-19 related expenses at certain plant and office locations.
Chemistry Revenue Growth Reconciliation
Three months ended (unaudited) | ||||
Reported Revenue Growth | Impact of Currency | Palladium Pass-Through | Organic Growth | |
Electronics | 5% | 0% | 1% | 6% |
General Metal Finishing | -5% | 1% | 0% | -3% |
Total | 1% | 1% | 1% | 2% |
Reconciliation of Consolidated Net Income (Loss) to Adjusted EPS
Twelve months ended (unaudited) | ||||||
($ in millions) | Dec 31, 2021 | |||||
Consolidated net income (loss) | $ | 7.5 | $ | (289.4 | ) | |
Reversal of amortization expenses(a) | 113.8 | 108.1 | ||||
One-off interest due to refinancing(b) | 54.7 | - | ||||
Non-cash adjustments(c) | 89.7 | 250.7 | ||||
Foreign exchange loss(c) | (13.0 | ) | 14.8 | |||
Restructuring(c) | (0.6 | ) | 2.5 | |||
Transaction related costs(c) | 19.9 | 7.6 | ||||
Management fee(c) | 2.6 | 2.7 | ||||
COVID-19 adjustment(c) | 0.9 | 2.2 | ||||
Tax impact of pre-tax non GAAP adjustments | (28.9 | ) | (28.6 | ) | ||
Adjusted Net Income from continuing operations | $ | 246.7 | $ | 70.7 | ||
Weighted average number of shares outstanding | 184,962,274 | 91,152,556 | ||||
Number of shares as of latest balance sheet date | 194,695,832 | 194,695,832 | ||||
Adjusted EPS(d) | 1.33 | 0.78 | ||||
ProForma Adjusted EPS(e) | 1.27 | 0.36 |
(a) Eliminates the impact of amortization expenses.
(b) Eliminates the one-off derecognition of capitalized financing costs resulting from the refinancing.
(c) Please refer to Adjusted EBITDA reconciliation for definition of adjustments items.
(d) Adjusted Net Income from continuing operations divided by weighted average number of shares outstanding.
(e) Adjusted Net Income from continuing operations divided by number of shares as of latest balance sheet date.
Contacts: Media relations:Susanne Richter +49 30 349 85 418 press@atotech.com Investor relations:Lex Suvanto /Patrick Ryan /Ruediger Assion Edelman Emails: lex.suvanto@edelman.com / Patrick.ryan@edelman.com / Ruediger.assion@edelman.com
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