-- Generates first quarter revenue of $353 million, an increase of 25% over
the prior year period, including chemistry organic revenue growth of 13%
-- Reports a net loss of $72 million, primarily reflecting one-time costs
associated with the Company's recent refinancing
-- Delivers adjusted EBITDA of $110 million, a 32% increase over the prior
year period
-- Reduces net leverage to 3.7x
-- Raises guidance for full year 2021 organic revenue growth, which is now
expected to be in the range of 11% to 13%, including full year chemistry
organic revenue growth of approximately 9%
-- Increases guidance for full year 2021 adjusted EBITDA1, which is now
anticipated to be in the range of $415 million to $435 million, an
increase of $10 million over the prior guidance at the mid-point
BERLIN, May 04, 2021 (GLOBE NEWSWIRE) -- Atotech (NYSE: ATC), a leading
specialty chemicals technology company and a market leader in advanced
electroplating solutions, today reported its financial results for the
first quarter of 2021 and raised its revenue and adjusted EBITDA
guidance for full year 2021. Chemistry organic revenue growth, a key
performance indicator for the Company, increased 13% over the first
quarter of 2020. Chemistry organic revenue growth reflects chemistry
revenue growth excluding the impact of foreign exchange translation
("FX") and palladium pass-through ("palladium").
Management Commentary
Geoff Wild, Atotech's Chief Executive Officer said, "We are very pleased
with our first quarter performance. As we lap the first quarter of the
Covid-19 pandemic, we delivered strong revenue and EBITDA growth, driven
by an acceleration in the secular trends that are fueling demand for our
products. Whether it is the robust smartphone cycle, the increasing
adoption of 5G, work-from-home and higher PC demand, or the
electrification of automobiles, our comprehensive solutions address
customer requirements and we continue to lead the market with our
customer service approach."
"Despite several external disruptions putting pressure on global supply
chains this quarter, we feel confident about delivering strong revenue
and earnings growth this year and are actively engaged in multiple
initiatives to mitigate the impact of current supply chain shortages and
disruptions."
"I was also very pleased to have successfully completed our refinancing
during the first quarter. We moved quickly to leverage our stronger
balance sheet as a result of the IPO, as well as our positive business
outlook, to significantly lower our cost of borrowing. The combination
of healthy markets and an improved capital structure have Atotech
well-positioned to generate meaningful free cash flow in 2021."
First Quarter 2021 Results
Total revenue was $353 million for the first quarter, an increase of 25%
over the prior year period. Total organic revenue, which reflects total
revenue excluding the impact of FX and palladium, increased 17%. FX was
a 7% tailwind and palladium increased total revenue by 1% for the
quarter. These strong quarterly results were driven by organic growth in
chemistry revenue of 13%, reflecting double-digit increases in both the
Electronics ("EL") and General Metal Finishing ("GMF") segments.
Adjusted EBITDA was $110 million for the first quarter, a 32% increase
over the prior year period, reflecting strong chemistry organic volume
growth, stable pricing, and FX tailwinds, partially offset by increased
costs associated with supply chain inefficiencies.
Diluted earnings per share was $(0.55) for the quarter ended March 31,
2021, primarily reflecting one-time costs associated with the Company's
recent refinancing.
Adjusted EBITDA margin was 31.2% for the first quarter of 2021, a gain
of 150 basis points. The improvement reflects operating leverage on
chemistry organic revenue, offset in part by the impact of palladium
pass-through, the product mix of chemistry versus equipment, and supply
chain inefficiencies.
First Quarter 2021 Segment Highlights
Electronics: Revenue for the first quarter in our Electronics segment of
$226 million increased 31% over the prior year period. Total organic
revenue grew 21%, consisting of 15% chemistry organic growth and a 77%
increase in equipment organic revenue. Palladium pass-through increased
revenue by 2% and FX was an 8% tailwind for the quarter.
The Electronics organic revenue increase was driven by strong demand for
the Company's leading IC substrate and advanced semiconductor packaging
solutions, as we experienced an acceleration in the secular trends of 5G
infrastructure and smartphone growth, as well as auto electrification
and advanced consumer electronics. These trends are also driving strong
demand for our equipment, as our customers actively upgrade technology
and expand production capacity.
Adjusted EBITDA for our Electronics segment was $76 million for the
quarter, an increase of 38% over the prior year period, primarily driven
by strong chemistry volume growth, as well as ongoing pricing and cost
measures. Adjusted EBITDA margin increased 180 basis points to 33.6%,
largely reflecting operating leverage on chemistry organic growth,
offset by the palladium pass-through and the cost of supply chain
disruptions.
General Metal Finishing: Revenue for the first quarter in our GMF
segment of $128 million increased 15% over the prior year period. Total
organic GMF revenue increased 9%, consisting of 11% chemistry revenue
growth, partially offset by a decline in equipment revenue. Palladium
and FX added 1% and 5% to revenue for the quarter, respectively.
Chemistry organic revenue growth was primarily driven by the continued
global automotive market recovery and solid demand in other industrial
end-markets.
Adjusted EBITDA for our GMF segment was $35 million, an increase of 19%
over last year, reflecting operating leverage on chemistry volume growth,
partially offset by supply chain inefficiencies. Adjusted EBITDA margin
increased 90 basis points to 27.2%.
Initial Public Offering
The Company closed its initial public offering of 29,268,000 common
shares at $17.00 per share on February 8, 2021. The gross proceeds to
Atotech from the offering were approximately $498 million, before
deducting the underwriting discount and offering expenses, and were used
to repay indebtedness and to pay underwriting discounts and offering
expenses. On March 9, 2021, investment funds affiliated with The Carlyle
Group sold an additional 4,390,200 common shares pursuant to the
over-allotment option granted to the underwriters in the initial public
offering. The shares, representing the full over-allotment option, were
sold at $17.00 per share less underwriting discounts, and we did not
receive any proceeds from the sale of these shares by The Carlyle Group.
Refinancing
On March 18, 2021, the Company successfully refinanced its existing
senior secured credit facilities and entered into a new credit agreement
which provided for a U.S. dollar-denominated senior secured term loan
facility in an initial aggregate principal amount of $1.35 billion (the
"USD Term Loan"), a Euro-denominated senior secured term loan facility
in an initial aggregate principal amount of EUR200.0 million (the "EUR
Term Loan"), and a senior secured multi-currency revolving credit
facility that provides for revolving loans and letters of credit in an
aggregate principal amount of up to $250.0 million. The net proceeds of
the USD Term Loan and EUR Term Loan were used to fund the refinancing in
full of the Company's then-outstanding term loan credit facilities,
which were set to mature in January 2024, and to repay and replace its
then-existing revolving credit agreement, which was set to mature in
January 2022.
Full Year 2021 Guidance
Regarding the Company's 2021 outlook, Peter Frauenknecht, Atotech's
Chief Financial Officer said, "As a result of our very strong first
quarter and our improved outlook for the entire year, we are raising our
revenue and adjusted EBITDA guidance. We now expect full year 2021 total
organic revenue growth to be in the range of 11% to 13%, including full
year organic growth in chemistry revenue of approximately 9%, which
excludes the impact of FX and palladium pass-through. Additionally, we
now expect full year 2021 adjusted EBITDA to be in the range of $415
million to $435 million, which represents a $10 million improvement over
our prior guidance, at the mid-point."
Conference Call
The Company will host a conference call today at 8:00 a.m. Eastern time
to discuss these results. To participate on the conference call, please
dial +1 833 714-3263 (United States) or +1 270 823-1866 (international),
using conference ID 5176076. A link to the live audio webcast, and
associated materials, will also be available on the Company website at
investors.atotech.com
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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
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