Ladies and gentlemen, thank you for standing by. I am Ulrike, your operator today. Welcome, and thank you for joining the AT&S conference call on the results for the fiscal year 2022, 2023. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question and answer session. If you would like to ask a question, you may press 9 and star on your telephone. If any participant has difficulty hearing the conference, please press 0 followed by the hash key for operator assistance. I would now like to turn the conference over to Mr. Philipp Gebhardt.
Thank you, Ulrike. Good afternoon or morning, ladies and gentlemen. Welcome to the AT&S full year 2022, 2023 conference call. With us today are Andreas Gerstenmayer, CEO, and Petra Preining, CFO. Mr. Gerstenmayer will start with a brief overview of the key developments of the year and especially on Q4 as well as a market update. Afterwards, Ms. Preining will comment on the financial figures and our guidance. As Ulrike mentioned, the presentation will be followed by a Q&A session. Now I would like to hand over to Mr. Gerstenmayer. The floor is yours.
Thanks, Philipp, good afternoon, good morning to our 2022, 2023 earnings call. I'm sure you have seen already our announcements we have published already this morning. Let's jump into the key developments of the last fiscal year. As you have seen from numerous disclosures we had to make throughout the year, it was a quite mixed situation in the markets. We had a very successful and strong first half year, which brought us to record numbers in the half year's earnings call. We had to enter and to face a quite challenging second half year of the fiscal year, mainly caused by certain weaknesses in the market environment, especially focusing on the semiconductor, Microelectronics, and IC substrate markets.
I think it's just brief to and worth to mention a little bit about the impacting factors, how we have seen them and how we see them still. With a discussion about increasing energy prices, increasing inflation, slowing down of COVID and the restrictions like shutdowns, the demand situation in the market, especially in the consumer market in the second half of our fiscal year, slowed down significantly. That was firsthand impacting our IC substrate business, where we had to consider that demand is slowing down. Also over the time the inventory levels have piled up over the quarters. You have also seen that we have initiated significant cost saving programs to be prepared for that situation and to manage the situation.
Here we can clearly state we're well on track. We see already a nice impact. Nevertheless it's a volatile environment with, you know, I would say still low visibility. The good thing is, where there's shadow, there's always light. Customer and regional diversification is well on track. We could speed up also our adding new customers to our portfolio and with the projects in Kulim and in Austria, which are also nicely progressing. We could also diversify our regional set up already, we are executing according to our plans communicated. What we foresee for the running fiscal year, this is what we hear from the market and from the market analysts, that there could be some uptake of the market in the second half of 2023, 2024.
As I said, needs to be observed closely. What we can already see is that the inventory levels are going down. This is the first important step, which will help us by creating new demand. New products are coming to the market. New products are about to be issued to the market. Last but not least, the expectation is that at least a certain recovery in some parts of the market will happen until the end of the fiscal year. We are still confident that we can achieve our midterm guidance we have pushed out by one year due to market conditions. Nevertheless, we stick to our guidance here and work hard to achieve it.
Moving to the next slide, some words about the markets, how we see them, how we have experienced the latest development, starting with the IC substrate market on the left-hand side of the slide. The server market you see still until 2022. Strong development growth year-over-year by 10%. But also this market has slowed down in the light of the economic environment. Expectation in that market for the year 2023 is that we see a flat demand development. After that, recovery should be expected to be strong and returning to quite healthy growth rates of about 7%. Average. On the right-hand side, notebooks here, you clearly see what I have mentioned before. Consumer sentiment suffered more.
We have already seen in 2022 a decline in the notebook market demand by almost 18%. We foresee further decline in 2023, fully in line with the global consumer behavior and the resistance to invest in devices like notebooks and other electronic devices. The focus for consumers has moved away from devices to more consumption, traveling, and so, and so on. This is what we see, but the expectation is that this will normalize after 2023 and coming back to also here, nice growth rate of round about 4% average. What needs to be mentioned here is the even lower or lowest level in 2023 is still above 2019 numbers before COVID.
Market is stronger than 2019 started, and from there, we will hopefully see the recovery with 2024 starting. Moving to the next slide about the PCB market segments, which is the clusters of computing communication consumer. It's a similar picture here as well. Computing communication consumer is slowing down or almost flat for 2023, and a nice recovery in the years after by 5% average growth is expected. What we see also is that still the communication infrastructure is still healthy, which is mainly related to the 5G network installation globally, which is continuously going on. This gives also a good indication that also on the device level, the rollout of the 5G devices is ongoing.
In the automotive, industrial, medical, and aerospace segment, quite stable situation, but also there, due to different impacting factors, the expectation is that another growth wave could start with 2024. To make one deep dive on the smartphone market, just to show you what mechanics are there. The overall smartphone shipment, this is now here millions per year, declined significantly between 2021, 2022 and a small decline is expected to happen in 2023. If you have a closer look to the iOS devices, you see they are much more stable. They had a significant lower decline in 2022 and keeps, or stay stable in the ongoing years. Obviously the iOS segment is much more robust against this kind of volatility in downturns like the rest of the business and the smartphones is.
This was also a certain level of confidence we can create moving forward. As I said in the beginning, we had initiated and intensified significantly our efficiency and cost saving programs on the OpEx side. The saving plan for the next two years, this year and next fiscal year, is EUR 440 million combined. There is a portion of sustainable and non-sustainable savings in there. It's cost cutting and really efficiency gains. With a mixture here and the portfolio of measures and actions initiated, we are quite confident that we can well prepare ourselves for the rough sea we are in today and also take benefit once the market is recovering afterwards to be on a quite competitive cost level later.
CapEx, we also have communicated that we pushed out some of the investment, like one plant in Kulim, which is still about to be fully finalized in terms of the factory shell. As said, this will stop at the status wind and watertight with some safety installations to take care about the sustainability of the building. The other one is just moving ahead, has already achieved equipment move-in status, and first equipment is installed. Almost every equipment for infrastructure is in there and up and running, and we are about to start qualification of the first production equipment already. Still the plan is to get or to achieve the milestone for ramp in 2024.
We have also disclosed already with our announcement that we, with the 1st of April, we have changed our segment reporting structure and our operating system. We were over the years, several times, asked and required to bring more transparency in there, and we also decided that it would be a more straightforward lean organization. If we split it up in Microelectronics, which is more or less the IC substrate business and our Electronics Solutions business, which is mainly covering the PCB business. On the slide, you can see the underlying market segments in PCB. It stays like it was in the past, mobile devices, automotive, aerospace, industrial, medical.
With the allocation of plans to the new business units, we have the R&D center in Leoben and the rest of the location, including Chongqing 1, 3, and the new plant in Malaysia. The Electronics Solutions contains Shanghai, Chongqing 2 with the module business, Nanjangud, Korea, and the second plant in Austria, Fehring. We are quite convinced that this is a good move for us to be more straightforward in terms of execution of our business. To generate synergies out of the business segments to combine technologies and processes under each of the business units roof.
We also expect that it will also be appreciated by the investors because it's significantly more transparent to talk about the big investment projects in IC substrates under one business unit and showing also the related business development and performance. The same is true for the PCB business under the Electronics Solutions business unit. I said before expansion Kulim and Leoben both are very nice on track according to the latest communication. We have the first machines in start of production still 2024. And Leoben, the same with the schedule. First machines have moved in and start of production is in 2024 as well. This was my short overview about the latest development, the most key topics we wanted to talk about after the last fiscal year.
I hand now over to Petra to walk you through the numbers and the more thrilling things.
Thank you very much and also a warm welcome from my side. I have the pleasure to present the full year 2022, 2023 earnings today. For me, having joined on 1st of October, 2022, this year feels like two entirely separated years. As Mr. Gerstenmayer has already said, the 1st year very nicely supported by strong market demand, strong tailwinds when it comes to FX, and then the turnaround starting Q3, Q4. We are very pleased with the 1st half. We are also still quite nicely, we have nicely delivered Q3 results. To be very frank, we are not happy with Q4. It is way below our expectation and the expectation of the AT&S team. It's in line with what we have told you and the market on 1st of February this year.
We have, again, even though, so more importantly, outperformed the prior year by achieving almost EUR 1.8 [inaudible] in revenue and EUR 417 million in EBITDA. Which is give and take exactly what we have told you on 1st of February. It's slightly above the numbers we have shared. Even in those really bumpy times when transparency is limited, the forecast, the guidance we gave since 1st of February was, I have to say, spot on when it comes to the full year numbers. What we also do see that the result, even though we're very happy with the performance, especially for the first half and the third quarter, was clearly impacted and influenced by the market developments starting Q3.
On the other side, also highly impacted by exogenous factors like inflation, like interest, like the concern for recession, and the overall market situation. AT&S has managed to also take advantage of the FX tailwind, which brings us to a net profit of EUR 137 million for the year. In alignment with Mr. Gerstenmayer has already said, we have used the fourth quarter to bring AT&S into a position not only to lift the efficiency gains, which we have already announced in Q3, but also furthermore, align the cost structure to the current situation to allow AT&S to recover in the year 2023, 2024, coming from a very low, and as I said, disappointing Q4, last year. Turning the page.
By looking at the numbers on a quarterly basis. As already said, the Q4 2022, 2023 is by far the lowest we have achieved in the last couple of quarters and is highly impacted by the lower volumes for IC substrates. Over and above the lower volume, in times where there is overcapacity and low demand, the price pressure significantly has increased in Q4 2022, 2023. As said, the measures implemented will support and are already supporting the margin forward looking. Over to the next page on the BU Mobile Devices & Substrates. As Mr. Gerstenmayer has just presented to you, this is the last time when we show the business units in the old structure.
You can clearly see that with EUR 189 million, the problem is located in that particular business unit where we see weak market environment for substrates and over and above, compared to Q4 2021, 2022, also a lack of new products in spring when it comes to mobile devices. The same, as I've said already, applies of course to the BU Mobile Devices and Substrates when we talk about EBITA and EBITA margins, highly impacted by significant price pressure due to the current overcapacity in the market. Turning the page on the BU AIM, Automotive, Industrial, Medical, we see a very resilient and stable revenue development, showing an increase from Q4, 2021, 2022 to the last quarter of the last fiscal year of 4%.
We also do see, similar to last year same time, the margin increase due to the European IPCEI funding, not only IPCEI funding, but mainly related to IPCEI funding. What we also do see, as we have reported over the last quarters already, in this BU, we also allocate the start of costs for our R&D center here in Leoben, in Hinterberg. Therefore, the margins get more pressure than purely from operational business. In times like these, I'm pretty sure, similar to myself being the CFO, you're very interested when it comes to the financial position of AT&S. Well, what you can see here is that in line with our large CapEx projects, as you know already, and as they have been presented again by Mr.
Gerstenmayer today, we see a depletion in cash, which is clearly allocated and deployed for those CapEx programs. On the other hand, we have been very successful increase our unused credit lines in order to secure funding forward looking. Overall, we have a solid financial structure with roughly EUR 1.5 billion cash and cash equivalents, including unused credit lines in order to support further growth programs. Turning the page, in addition to what I've just said, as you do know, because we present that slide every quarter, there is EUR 660 million number or debt instruments which have reached a maturity less than one year.
The cash and cash equivalents plus unused credit lines will very nicely or are prepared to fulfill or to refinance the debt instruments, which will reach their maturity within the next 12 months. Additionally, we not only diversify when it comes to customers and regions, we have also very nicely managed to diversify our financing sources. Maybe you have read in the press that we have also secured from the European Investment Bank funds. Additionally, also on governmental organizations, we get still very nice margins offered. In total, our current financing cost is in the range of roughly 3%, 3.2% to be precise. Turning the page to the balance sheet.
I don't think that a lot of it will be, will come as a surprise to you. We have, with the large CapEx programs, and therefore the assets enlarged our balance sheet amount to EUR 4.162 billion, which is an increase of 11%, and additionally, slightly decreased our equity. The equity was decreased due to on one side, nice net income in the amount of EUR 137 million, offset by translation adjustments coming out of the OCI. Plus, of course, the repayment of the old hybrid bonds and our dividend payments of the last year in the amount of EUR 35 million. In total, equity got slightly decreased, total assets got enlarged.
The equity ratio is now slightly below 30%, which is also anticipated and not unusual in times of strong CapEx programs and a weakening of the market. Our Net Debt to EBITDA ratio has reached 2.0 times , which is on the back of the decrease in cash and cash equivalents, as I have already stated two slides before. Turning the page on the cash flow, we see a lower cash flow from operating activities compared to prior year. This is mainly due to customer prepayments. Customer prepayments were planned accordingly way before. This is on the back of higher EBITDA operating activities. The delta comes mainly from the prepayments.
The cash flow from investing activities is driven by higher CapEx. I think we have already spoken about that in length. Cash flow from financing activities, please keep in mind that compared to the prior year, the prior year has the hybrid included. In total, AT&S has reached an operating free cash flow of minus EUR 520 million, which is in line with the projection we have had when doing the announcement earlier this year. Turning the page, as you might have read from last week's announcement, the Executive Board will provide the consent of the Supervisory Board proposed EUR 0.40 per share to the Annual General Meeting on July 6, 2023.
The dividend payout ratio equals to 13%, and in total, it's a little less than EUR 16 million. Given this continuously challenging market environment, but at the same time, the confidence the board and the AT&S team has in our growth strategy, we foresee this as a good contribution and also an indication on the further outlook of AT&S. Bringing me to the guidance of the current year, which has started on first of April, 2023. The board foresees a revenue in the range of EUR 1.7 billion-EUR 1.9 billion and the profitability of adjusted EBITDA margin between 25% and 29%. Start-up costs in relation to Kulim and Leoben are projected to reach roughly EUR 100 million.
Our investment net CapEx is in the range of EUR 1.1 billion. One still, one comment I would like to make, however, that on the back of our depreciation, please keep in mind that the Chongqing 3 depreciation or the assets are now up for depreciation, even though that the loading might be still lower. On the midterm guidance, Mr. Gerstenmayer has said it on his first slide. He will happily confirm the midterm guidance which we have announced earlier this year by moving it to 2026, 2027, but confirming all ratios as stated. This is it from my side. Thank you very much. We now are happy to take your questions.
Yeah. Thank you, Mr. Gerstenmayer. Thank you, Ms. Preining. We will now start the Q&A. In order to give everyone the opportunity to raise questions, we would like to ask you to limit yourselves to two questions. Once we are through and there's still questions and time, we will start another round. I would like to hand over to Ulrike to handle the session.
Yes. Thank you very much. Ladies and gentlemen, if you would like to ask a question now, please press nine, followed by the star key on your telephone keypad. If you wish to cancel that question, please press nine followed by the star key a second time. The first question comes from Jürgen Wagner, Stifel.
Yeah, good afternoon. Thank you. You talked about price pressure. Where are you seeing it? Yeah, how are your LTAs or how sticky are your LTAs? The second question is on your contract liabilities that are now quite high compared to your sales level. How high can they get, and how will the reversal of these liabilities look like in 2024, 2025? Thank you.
Jürgen brief NTA stands for?
Long term agreement. Sorry.
Sorry. LTA.
In substrates. Yeah.
Okay. Let's start with the price pressure. I think in times like this, where we have seen a U-turn in the market from shortage in capacity down to overcapacity. I think it's a natural development that price pressure kicks in especially in a market that is as competitive as the electronics market is. Sure, we see significant price pressure in the substrate business, but we see also quite some price pressure in the PCB business. I think it's true for both business segments. Yeah, I think mainly driven by available capacity on the production side. The second question was about our long-term agreements. I think there is no real big change in the long-term agreements.
Like we have agreed them with our customers, as I said before, the only change is that we pushed out the one capacity investment in Kulim. Definitely this is a change in the agreement with the customer. The rest, I think we are executing according to the plans and the agreements.
Okay. The contract liabilities, how high can they go and how will they reverse or when?
Okay. This question is answered.
No, give us a second.
Okay.
Lost you. What we have already announced is that this will reach half of the prepayments level.
Okay. Okay. Thank you.
Okay, now going on to the next question here. That is Alexander Thiel, Jefferies.
Hi, good afternoon, Alex Thiel from Jefferies. First from my side is on your visibility. Your Q4 run rate implies a very strong uptake in the second half to reach your very ambitious full year guidance of EUR 1.8 billion on the midpoint with 27%, which is already low end of your midterm guidance and with price pressure on top. I'm just wondering if you could talk about your confidence to achieve this level again, what you're hearing right now from your big customers that makes you so confident that we're gonna see this uptake in the second half?
Yeah, I think this is a very good question because visibility is not the best one. Nevertheless, what we see is that the inventory levels are coming down month by month. We see also an uptake in demand for new products. We see the pipelines for new products are nicely filled, which is to be expected that also new products are kicking in. I think this in combination with the forecasts we receive from our customers with a caveat that these are not always binding forecasts, but nevertheless, it's a indication we receive. We have a certain confidence level that this is an challenging but achievable target.
Let me add to the bottom line. What we do see is a mirrors curve in general from 2021 to 2022. We will start lower and then see higher top line and also higher EBITDA margin. What we have already said, all these efficiency gains and cost optimization will kick in or are already because we do have visibility of the first one and a half months of this fiscal year already. We are quite pleased with the outcome. We are quite confident that we can achieve the guidance we have just given.
Okay. Thank you. My second one is basically, will you provide us a historical comparison for the new reporting structure? A follow-up to the first question from my colleague is on the contract or on the customer prepayments that we have seen, right? On the balance sheet, it says roughly EUR 600 million what you received. I think previously you guided us for roughly EUR 850 million-EUR 900 million. You expect now that another EUR 200 million is coming this year? That's how we should read it. Thank you.
Okay. This is a very diverse question. Firstly, yes, we will provide the comparison. Secondly, it's, I think it's fair to say that we will approximately reach by the end of this fiscal year the total amount we have already stated a couple of quarters ago. I'm just looking at Philipp, how long this was back, how long this is backdated. The number which you have already received, we very likely will see by the end of the year.
All right. Thank you.
The next question comes from Patrick Steiner, Kepler Cheuvreux.
Good afternoon, ladies and gentlemen. This is Patrick Steiner, Kepler Cheuvreux. I'll try to go with the first two questions on ABF substrate server business. Can you give us an overview of your server substrates business at the moment? I mean, your large customer's latest chip seems to have quite low acceptance rate, and the actual sales numbers they target are rather negligible, I would say. Are you still mostly producing as a predecessor generation or what's the situation here? Do you expect the situation to get much better with the next generation chip, which is expected to be launched at the end of this year? Or is this too early?
Now you're asking very tricky questions because, you know, we typically cannot talk too much detail about customer and also customer developments. Let take or let continue what I have said before. What we see, and I'm not relating to one specific customer because, server business is not only related to one. We see quite a nicely filled technology and product pipeline. Whether the one or the other shows already huge demand, we always need to consider when was the launch time of the new product and has it already ramped or is it under ramp conditions. Basically, I would say if you talk about server CPUs, you talk about in volume two customers. If you're engaged with them, then the likelihood, if the market takes up, that you receive certain volumes is not that bad.
It's somehow communicating, pipes. I think that I tried to circle a little bit around your question because, you know, customer specific answers is really difficult for us.
Thanks.
I hope it gives you at least an indication.
Yeah. Yeah. Thank you. Thank you. I might squeeze a second one in about the reporting structure. I mean, it seems like a really good move and should increase transparency a lot going forward. This might also indicate to me, and please correct me if I'm wrong, that you might see first revenues with your new substrate customers in the first quarter of 2023, 2024. If yes, could you give us some kind of growth trajectory or how you expect the business with those customers to develop over the next one or two years?
You're kindly asking the difficult questions today.
Persistent. Persistent.
What I can tell, yes, we generate the revenues with new customers already. I will not talk about how much and who it is. I think you have an estimation already. Just wanted to add here, it's not just a reporting structure. We completely changed our operating model. We are really running the entire company with a new setup, which was important for us also to streamline the processes and to focus the teams on the different kinds of businesses. PCB is definitely a different business than substrate, which is closely related to Microelectronics. I hope this is somehow sufficient for you. I cannot tell you more in specific.
Okay, great. Thank you very much.
The next question comes from Daniel Lion, Erste Group Research. Please go ahead.
Good afternoon. Thanks for taking my questions as well. I'd like to follow up on the capacities and demand patterns that you're seeing or expecting when going into the second half year or maybe towards the end of the year. On the one hand, just to maybe somehow put it in figures. How would you expect that the new setup that you currently have, you know, less capacity in Kulim, but now additional capacity in Leoben? What does this mean for the graph that you used to show in terms of capacity growth compared to fiscal year 2019, 2020? Where do you think would we be now at the end of this fiscal year and maybe also a year further ahead?
Are we still somewhere close to what you've shown us historically, or has this changed a lot?
Okay. In regards of the running fiscal year 2023-2024, no change because it was always the plan that we start production in Kulim 2024, somewhere mid of that or second half. The same is true for Leoben. You see no impact for the running fiscal year. And for the year after, on top of my head, I think the impact will be limited. It also depends how the mix will look like and how we can manage the ramp. We need to update these numbers, but it's a little bit far out when we talk about the year after. Probably for next time we, you know, update our capacity overview chart again and potentially talk about that later.
Okay. Maybe related to this or also, how do you expect the sales mix to come in towards the end of the year on the one hand? Yeah, maybe also some kind of a follow-up to Patrick's questions. Would you expect the sales mix to move towards the high-end products of your big client? Also regarding the new clients, are you getting their demand from the high-end products immediately, or are you starting with, let's say, lower margin products first, and you need to build your way up until you get the more profitable products? How?
How would you expect this to look like in the coming quarters towards the end of the year?
I would say, I can answer your question in a way that there was an underlying mix we have already, always assumed with the business cases, with the communication we have done and so on. No fundamental change is there. We also receive very nice feedback from new customers, where we are in qualification, and they clearly state that AT&S is kind of a benchmark in terms of, yield and quality performance, which qualifies us to very fast move into the high end, which is always our target. I would say no real change to the original plans. I think this generates then the numbers we have, we have told you in the guidance for the running fiscal year and in the midterm guidance.
My second would relate to the balance sheet structure. Also you mentioned that you expect some further prepayments until the end of the year, around about EUR 250 million in addition, when I understood this correctly. Would you expect some additional cash flows from subsidies or maybe also subsidized loans in the course of the year that we need to take into account when modeling the balance sheet structure?
That's a very, very good question, and a topic we are currently chasing, especially when it comes to European subsidies. It's a difficult environment. We are on a good path, but it's very difficult to foresee right now how much will actually be received in the upcoming fiscal year.
Mm-hmm. What would you expect to have as an average interest rate in the course of the year, roughly?
Let me answer it differently. What I've said already, it's 3.2 at current stage, where we do expect with the higher volume that we roughly double the interest expense in euros.
Compared to last fiscal year?
Exactly.
Okay. Okay, thank you.
Welcome.
There's one follow-up question coming from Alexander Thiel. Please go ahead.
Yeah, thank you. Is it still two questions, or can I already ask more? Let's go for two.
There are still others in line, so please limit it.
Okay. Two from me again. First, on the ramp-up in Kulim, you stated in the press release that 1 customer will fully proceed and 1 customer, only the shell will be finished without machines. Is this still the case, and how much of the CapEx guidance is allocated to Leoben? The second one would be, could you explain what is included in the EUR 100 million adjusted EBITDA? EUR 100 million for startup costs, that's roughly 20% of your guided EBITDA. I just want to understand the costs associated that are classified as one-offs. Thank you.
Okay.
Mm-hmm.
What was the question for Kulim? Sorry.
That, it's still true, just wind and watertight.
Yeah, yeah. As I said before, Kulim, it's true, we will ramp one factory as planned. The other one will stop at the status wind and watertight in Kulim. I think the rest I have said already. What we are not disclosing is single location CapEx by year. This is what we don't disclose.
Similar accounts for startup, but maybe it helps if I tell you that the main effect comes from salary, wages, and materials and supplies.
Okay, and that's EUR 100 million for Kulim and Leoben, basically?
Correct.
Okay. Thank you.
The next question comes from Teresa Schinwald, Raiffeisen Bank International.
Hi, and good afternoon. My two questions, one is, looking back, if you could give us a number for the IPCEI funding in the last year and in the fourth quarter, as well as the ramp-up costs for Leoben and Fehring. That would be the first one. The second one remaining is, you mentioned depreciation and one-offs. Consensus receives EUR 312 million for 2023, 2024. Do you feel comfortable with that or? Thank you.
Okay. It was very difficult to hear you because there was a lot of noise in the background, but I hope I got your questions correctly. If not, then please jump in. On EPS, it was EUR 11 million this year and roughly EUR 17 million last year. On depreciation, it's compared to this, or last year's, 2022, 2023, it's roughly 25% higher. You need to help me with the question in the middle there. I lost the connectivity, so I couldn't hear what the middle question was.
Thank you. The ramp-up costs for Leoben and Fehring in the past year.
Fehring?
For the Austrian locations.
Last year to the fiscal year we just finished was roughly EUR 53 million all together. All together. Kulim and Leoben. There was nothing for Fehring. I think this is a misunderstanding.
Oh, okay. You don't provide a split for Leoben and Kulim?
No. There was nothing in Fehring, that much I can tell you. For Leoben-
Okay.
together, it's EUR 53 million.
Okay. Thank you.
There's also a follow-up question from Patrick Steiner.
Hello. Two follow-up questions. One more complicated, the other one probably not. First of all, on financing. I mean, you've taken out another EUR 200 million of debt in Q4, if I'm not mistaken. We'll have to refinance some EUR 1.1 billion of existing debt within the next three years. On top of that, depending on the customer prepayments, we'll probably have to issue some more debt the next year, given the CapEx level. Firstly, do you experience any difficulties in financing such amounts in this current environment with significantly stricter lending standards?
Um, let's-
Yep.
Okay. Okay.
Please go ahead. I'll ask the next one afterwards, yeah.
All right. All right. I think that the answer I can give to you is, it's not HNS related. I mean, we have seen now difficulties when it comes to liquidity, on the back of 3 U.S. banks and 1 European bank that have reported problems, let's put it this way. Generally, the liquidity part or the bank liquidity is not as it was a year ago. However, as I have already told you, we're starting the year with EUR 1.5 billion. We have very good relationship with our investing financing banks, and so far we do not foresee any problems.
I don't know, honestly, how the future will, what will happen to the European or the U.S. banking sector forward-looking. For today, we are very pleased with the support we receive. We are also very pleased with the financing we have just recently closed. For as current state, we do not see any difficulties. However, the banking sector in generally, in general became more difficult. This does not yet, or this does not apply to AT&S.
Okay. Thank you very much. Second question would be on competition in the high-end ABF substrate space. Could you give us some more color on this space? I mean, we've seen some competitors struggling with yields. We are, we're seeing some of some other competitors trying to get in the market because, of course, competitors want to get in these markets because of the higher margins available in the high-end space. Has anything changed over the last couple of months or quarters? Are competitors, do you see competitors improving in the quality level and the yields and so on? How is the competitive space in this high-end server space, evolving in your view?
Basically, when we talk about really the top end in the technology, I would say there are mainly three companies really generating volumes. Two Japanese and an Austrian company. We see that another Taiwanese is trying to get into it, as you said rightly, several times struggling with yield levels. Never say never. For sure, everyone is eager to enter into it, but it is a very small club. I would say a little bit more than one handful companies capable to fulfill the requirements and to run an efficient operation for this level of technology. No big changes.
Okay. Great. Thanks. How would this change the next two to three years in your view? Do you see any significant changes? Could you expect any significant changes, or would you say, okay, that's pretty much, that's not possible to see some three or four of players enter this space?
For the foreseeable time, we don't see it because it typically takes companies quite a while to enter into it. For sure, we see movements in the market that try that companies try to enter into it, but if they are not teaming up with the big guys on the customer side, Typically can, at a certain point in time, become visible or will become visible. This is so far not the case. Sure, Chinese competitors will try to enter, but there are definitely no one who is really entering in the high end. They are doing the legacy products, and as long as they are not accepted by the large customers, they will struggle to move up the technology level.
Perfect. Great. Thank you very much.
Welcome.
The next follow-up question comes from Alexander Thiel.
Yeah, thank you. Also thanks to Patrick for taking some questions off my list. So two kitchen sinking ones. The FX assumption for U.S. dollar, for this year that you have baked in. The second one would be, do you have a Net Debt to EBITDA target, for the end of 2023 or 2024? Is there any governance baked into the existing debt? Thank you.
All right. The assumption we have taken is EUR 1.1, which is nicely backed up, and this is where we currently fluctuate around. The euro remains at CNY 7.2, there we can see maybe some, some tailwind to be seen. What we do not have any breakup covenants in our in our contracts. That and is absolutely safe and nicely negotiated.
What I can tell you from the net debt EBITDA is that given the flattish guidance we have just given, plus the CapEx growth investments, which we have deliberately taken as the executive board in order to underpin and support the mid-term guidance, will bring the leverage under pressure, which is a mathematical calculation. The net debt EBITDA will be above the 3.5 times the banks usually would assume.
Okay. I'm sorry, but we are unfortunately running out of time. We will conclude today's conference call. Thank you for your participation and questions. There are further questions, please feel free to contact the IR team, Johannes Mattner and myself. Thanks again. Goodbye.
The conference is now