Atotech (NYSE: ATC) (the “Company”), a leading specialty chemicals
technology company and a market leader in advanced electroplating
solutions, today reported its financial results for the first
quarter ended March 31, 2022. Chemistry organic revenue growth, a
key performance indicator for Atotech, increased 3% over the first
quarter of 2021. 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 performance in the first quarter of 2022. The
Atotech team managed effectively in a complex macro environment by
focusing on finding solutions to serve the global customer demand
for our technologies.
“The recovery in automotive that was expected for the first
quarter was delayed due to the ongoing chip shortage and other
supply-chain issues,” continued Mr. Wild. “Despite this delayed
recovery of the automotive industry overall, we are seeing very
positive dynamics for our business related to automotive
electrification and higher electronics content per unit. Atotech’s
comprehensive systems-and-solutions approach, combined with our
leading R&D capabilities, will allow us to leverage the demand
that will come as volumes pick up and the proportion of
battery-powered vehicles increases.
“In addition, the trend to increase capacities for
high-performance computing and advanced-packaging applications has
continued,” said Mr. Wild. “Particularly for FC-BGA (flip chip ball
grid array), we see that the demand is still greater than the
supply, and we are delighted that our customers are ramping up
their capacities with additional lines and production
facilities.
“In the first quarter, we continued to manage higher freight and
energy costs as well as broad-based inflationary pressures,
including raw-material price increases,” concluded Mr. Wild. “We
consequently have implemented price increases with our customers to
mitigate those factors and will continue to roll those increases
out over the coming months.”
First Quarter 2022 Results
Total revenue was $358 million for the first quarter, a 1%
increase over the prior-year period. Total organic revenue, which
reflects total revenue excluding the impact of FX and palladium,
increased 6% from the prior-year period. FX reduced total revenues
by 3% and palladium decreased total revenue by 2% for the quarter.
These quarterly results were driven by organic growth in chemistry
revenue of 3%, reflecting increases in both the Electronics (“EL”)
and General Metal Finishing (“GMF”) segments as well as a strong
equipment business, which grew 33% excluding the impact of FX
translation.
Adjusted EBITDA was $112 million for the first quarter, a
2% increase over the prior-year period, reflecting chemistry
organic revenue growth, strong equipment sales, and cost
discipline, partially offset by FX headwinds and increased costs
associated with global supply-chain disruptions.
Diluted earnings per share was $0.24 for the quarter ended March
31, 2022, and Adjusted EPS was $0.37.
Adjusted EBITDA margin was 31% for the first quarter of 2022, a
gain of 20 basis points over the prior-year period. The improvement
reflects operating leverage on chemistry organic revenue and cost
discipline, offset by the product mix of chemistry versus equipment
and supply-chain inefficiencies.
First Quarter 2022 Segment Highlights
Electronics: Revenue for the first quarter in
Atotech’s EL segment of $232 million represented a 3% increase from
the prior-year period on a reported basis. Total organic revenue
increased 8%, consisting of 5% chemistry organic growth and a 26%
increase in equipment organic revenue. Palladium pass-through and
FX decreased revenue for the quarter by 3% and 2%,
respectively.
Organic revenue for the EL segment was driven by strong demand
for Atotech’s leading solutions for high-performance computing,
partially offset by lower smartphone business due to
Covid-19-related lockdowns in China. As in prior quarters, the
global build-out of production capacity for advanced packaging
applications translated into strong demand for Atotech’s equipment,
which the Company expects will also support sales growth in the
future.
Adjusted EBITDA for Atotech’s EL segment was $81 million for the
quarter, an increase of 7% over the prior-year period, primarily
driven by chemistry volume growth as well as cost measures.
Adjusted EBITDA margin increased 150 basis points to 35%, largely
reflecting operating leverage on chemistry organic growth, offset
by inflation-related cost, which is passed on to customers over
time.
General Metal Finishing: Revenue for the first
quarter in Atotech’s GMF segment of $126 million represented a
1% decline from the prior-year period on a reported basis. Total
organic GMF revenue increased 3%, consisting of 1% chemistry
revenue growth and a 124% increase in equipment revenue. Palladium
and FX decreased revenue for the quarter by 1% and 4%,
respectively.
GMF Chemistry revenue growth was affected by the delay in
automotive recovery due to supply-chain issues caused by the
Russia/Ukraine crisis, chip shortages, as well as Covid-19-related
lockdowns in China. Other industry sectors continued to show strong
growth in the first three months of the year.
Adjusted EBITDA for Atotech’s GMF segment was $31 million, a
decrease of 10% over last year, reflecting the impact of
inflation-related factors, which the Company is addressing through
its pricing and other initiatives. Adjusted EBITDA margin decreased
250 basis points to 25%, mainly related to lower sales volumes and
the additional cost of global supply-chain disruptions.
Update Regarding Geopolitical Events and
Palladium Sourcing
Atotech noted that its direct exposure to
Ukraine and Russia is currently expected to be immaterial to
operations and financial results. Atotech does not source palladium
directly from Russia or Ukraine; the majority of its palladium is
from South Africa and recycling sources. Additionally, Atotech is
continuing to pass the cost of palladium on to customers in order
to mitigate the impact of price volatility on its results from
operations.
MKS Transaction
On July 1, 2021, Atotech announced that it had
entered into a definitive agreement with MKS Instruments, Inc.
(“MKS”), a global provider of technologies that enable advanced
processes and improve productivity. Under the agreement, MKS will
acquire Atotech for $16.20 in cash and 0.0552 of a share of MKS
common stock for each Atotech common share (the “MKS Transaction”).
The MKS Transaction is to be effected by means of a scheme of
arrangement under Article 125 of the Companies (Jersey) Law 1991
(as amended).
The MKS Transaction has been unanimously
approved by the MKS and Atotech boards of directors, and each of
the resolutions put to Atotech’s shareholders at the court meeting
and the general meeting convened in connection with the MKS
Transaction, which were each held on November 3, 2021, were passed
by the requisite majority of votes.
Atotech previously announced that it has agreed
to extend the date for completing MKS’s pending acquisition of
Atotech to September 30, 2022, from March 31, 2022. The extension
is intended to allow additional time for receipt of regulatory
approval from China’s State Administration for Market Regulation
(“SAMR”). In addition to receiving approval from SAMR, the
acquisition, which is to be effected by means of a scheme of
arrangement under the laws of the Bailiwick of Jersey, is subject
to obtaining the required sanction by the Royal Court of Jersey and
the satisfaction of customary closing conditions.
Conference Call
In light of the pending transaction with MKS,
Atotech will not host a conference call in connection with this
report.
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 U.S. Securities and Exchange Commission
(the “SEC”), and such factors include, but are not limited to: the
uncertainty of the magnitude, duration, geographic reach, impact on
the global economy of the COVID-19 pandemic, as well as the current
and potential travel restrictions, stay-at-home orders, and other
economic restrictions implemented to address it; uncertainty,
downturns, and changes in our target markets; foreign currency
exchange rate fluctuations; reduced market acceptance and inability
to keep pace with evolving technology and trends; loss of
customers; increases in costs or reductions in the supplies of raw
materials that may materially adversely affect our business,
financial condition, and results of operations; our ability to
provide products and services in light of changing environmental,
health and safety, product liability, financial, and other
legislation and regulation; our failure to compete successfully in
product development; our ability to successfully execute our growth
initiatives, business strategies, and operating plans; whether the
secular trends we expect to drive growth in our business
materialize to the degree we expect them to, or at all; material
costs relating to environmental and health-and-safety requirements
or liabilities; underfunded defined benefit pension plans; risk
that the insurance we maintain may not fully cover all potential
exposures; failure to comply with the anti-corruption laws of the
United States and various international jurisdictions; tariffs,
border adjustment taxes, or other adverse trade restrictions and
impacts on our customers’ value chains; political, economic, and
legal uncertainties in China, the Chinese government’s control of
currency conversion and expatriation of funds, and the Chinese
government’s policy on foreign investment in China; regulations
around the production and use of chemical substances that affect
our products; the United Kingdom’s withdrawal from the European
Union; weak intellectual property rights in jurisdictions outside
the United States; intellectual property infringement and product
liability claims; our substantial indebtedness; our ability to
obtain additional capital on commercially reasonable terms may be
limited; risks related to our derivative instruments; our ability
to attract, motivate, and retain senior management and qualified
employees; increased risks to our global operations including, but
not limited to, political instability, acts of terrorism, taxation,
and unexpected regulatory and economic sanctions changes,
including, for example, the recent Russia/Ukraine crisis and
resulting sanctions against Russia and its economy and other
impacts on the global economy, among other things; natural
disasters that may materially adversely affect our business,
financial condition, and results of operations; the inherently
hazardous nature of chemical manufacturing that could result in
accidents that disrupt our operations and expose us to losses or
liabilities; damage to our brand reputation; Carlyle’s ability to
control our common shares; risks relating to the pending MKS
Transaction, including that such transaction may not be
consummated; any statements of belief and any statements of
assumptions underlying any of the foregoing; and other factors
beyond our control.
Additional Information and Where to Find
It
Shareholders may obtain a free copy of the
scheme document published by Atotech on September 28, 2021 in
relation to the MKS Transaction (the “Scheme
Document”) and other documents Atotech files with the SEC
(when available) through the website maintained by the SEC at
www.sec.gov. The Scheme Document is also available free of charge
on Atotech’s investor relations website at investors.atotech.com
together with copies of materials it files with, or furnishes to,
the SEC.
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 Atotech,
dated July 1, 2021, which contains the full terms and conditions of
the proposed MKS Transaction.
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
Atotech is a leading specialty chemicals
technology company and a market leader in advanced electroplating
solutions. Atotech delivers chemistry, equipment, software, and
services for innovative technology applications through an
integrated systems-and-solutions approach. Atotech solutions are
used in a wide variety of end-markets, including smartphones and
other consumer electronics, communications infrastructure, and
computing, as well as in numerous industrial and consumer
applications such as automotive, heavy machinery, and household
appliances.
Atotech, headquartered in Berlin, Germany, has
over 4,000 employees in more than 40 countries, with manufacturing
operations across Europe, the Americas, and Asia. In 2021, the
Company generated revenues of $1.5 billion. With its
well-established innovative strength and industry-leading global
TechCenter network, Atotech delivers pioneering solutions combined
with unparalleled on-site support for over 8,000 customers
worldwide. For more information about Atotech, please visit us at
atotech.com.
___________________________________
1 Adjusted EBITDA is a non-IFRS financial
measure. Adjusted EBITDA should be considered in addition to, but
not as a substitute for, the information provided in accordance
with IFRS. A reconciliation for adjusted EBITDA to the most
directly comparable IFRS financial measure is provided in the
Reconciliation of Adjusted EBITDA to Consolidated Net Income (Loss)
table.
Financial Statement Tables
ATOTECH LIMITED Consolidated
Statements of Comprehensive Income/(Loss)
|
Three months
ended(unaudited) |
($ in millions), except earnings per share |
March 31,2022 |
|
March 31,2021 |
Revenue |
$ |
358.0 |
|
|
$ |
353.1 |
|
Cost of sales, excluding
depreciation and amortization |
|
(174.1 |
) |
|
|
(167.0 |
) |
Depreciation and
amortization |
|
(42.6 |
) |
|
|
(44.6 |
) |
Selling, general and
administrative expenses |
|
(64.9 |
) |
|
|
(68.3 |
) |
Research and development
expenses |
|
(12.1 |
) |
|
|
(12.3 |
) |
Restructuring benefit
(expenses) |
|
0.1 |
|
|
|
(0.1 |
) |
Operating profit
(loss) |
|
64.3 |
|
|
|
60.9 |
|
Interest expense |
|
(13.8 |
) |
|
|
(64.1 |
) |
Other income (expense),
net |
|
16.8 |
|
|
|
(58.6 |
) |
Income (loss) before
income taxes |
|
67.3 |
|
|
|
(61.7 |
) |
Income tax expense |
|
(19.5 |
) |
|
|
(9.9 |
) |
Consolidated net
income (loss) |
$ |
47.8 |
|
|
$ |
(71.6 |
) |
Earnings per share |
|
|
Basic earnings (loss) per
share |
|
0.25 |
|
|
|
(0.55 |
) |
Diluted earnings (loss) per
share |
|
0.24 |
|
|
|
(0.55 |
) |
|
Three months
ended(unaudited) |
($ in millions) |
March 31,2022 |
|
March 31,2021 |
Consolidated net income (loss) |
$ |
47.8 |
|
|
$ |
(71.6 |
) |
Other comprehensive
income (loss) |
|
|
Actuarial gains and
losses |
|
16.5 |
|
|
|
11.4 |
|
Tax effect |
|
(4.8 |
) |
|
|
(3.4 |
) |
Items not potentially
reclassifiable to statement of income |
|
11.6 |
|
|
|
8.0 |
|
Currency translation
adjustment |
|
(29.8 |
) |
|
|
(63.1 |
) |
Hedge reserve |
|
— |
|
|
|
0.1 |
|
Thereof: Income (cost) of
Hedging (OCI II) |
|
— |
|
|
|
1.3 |
|
Items potentially
reclassifiable to statement of income (loss), net of
tax |
|
(29.8 |
) |
|
|
(63.0 |
) |
Total other
comprehensive income (loss), net amount |
$ |
(18.2 |
) |
|
$ |
(54.9 |
) |
Comprehensive income
(loss) |
$ |
29.6 |
|
|
$ |
(126.5 |
) |
ATOTECH LIMITED Consolidated
Statements of Financial Position
|
As of |
($ in millions) |
March 31, 2022 (unaudited) |
Dec. 31, 2021 (audited) |
Assets |
|
|
Non-current
assets |
|
|
Property, plant and equipment |
$ |
316.8 |
$ |
328.9 |
Intangible assets |
|
1,304.9 |
|
1,343.0 |
Goodwill |
|
780.0 |
|
786.9 |
Right-of-use assets |
|
81.5 |
|
83.4 |
Other financial assets |
|
23.2 |
|
8.9 |
Other non-financial
assets |
|
3.0 |
|
3.5 |
Total non-current
assets |
|
2,509.3 |
|
2,554.7 |
Current
assets |
|
|
Inventories |
|
211.9 |
|
185.8 |
Trade receivables |
|
281.7 |
|
290.4 |
Other financial assets |
|
21.3 |
|
18.9 |
Other non-financial
assets |
|
32.9 |
|
24.4 |
Tax assets |
|
32.1 |
|
51.2 |
Cash and cash equivalents |
|
373.6 |
|
371.6 |
Total current
assets |
|
953.6 |
|
942.3 |
Total
assets |
$ |
3,462.9 |
$ |
3,496.9 |
Liabilities &
shareholders’ equity |
|
|
Shareholders’
equity |
|
|
Common shares and preferred
shares |
|
19.5 |
|
19.5 |
Paid-in surplus and retained
earnings |
|
870.5 |
|
819.5 |
Currency translation
adjustment and other reserves |
|
39.2 |
|
57.3 |
Total shareholders’
equity |
|
929.1 |
|
896.3 |
Non-current
liabilities |
|
|
Borrowings |
$ |
1,533.7 |
$ |
1,540.9 |
Deferred tax liabilities |
|
301.0 |
|
306.1 |
Employee benefits |
|
124.1 |
|
143.4 |
Provisions |
|
8.4 |
|
9.3 |
Lease liabilities |
|
50.4 |
|
52.1 |
Other financial
liabilities |
|
0.0 |
|
0.1 |
Total non-current
liabilities |
|
2,017.6 |
|
2,052.0 |
Current liabilities |
|
|
Borrowings |
|
10.7 |
|
10.7 |
Trade payables |
|
242.2 |
|
259.2 |
Tax liabilities |
|
75.6 |
|
93.0 |
Lease liabilities |
|
11.6 |
|
12.1 |
Other financial
liabilities |
|
10.4 |
|
11.5 |
Other non-financial
liabilities |
|
148.8 |
|
146.2 |
Provisions |
|
17.0 |
|
16.1 |
Total current
liabilities |
|
516.2 |
|
548.7 |
Total liabilities
& shareholders’ equity |
$ |
3,462.9 |
$ |
3,496.9 |
ATOTECH
LIMITED Consolidated Statement of Cash Flows
|
Three months
ended(unaudited) |
($ in millions) |
March 31, 2022 |
March 31, 2021 |
Operating
activities |
|
|
Consolidated net income (loss) |
$ |
47.8 |
|
$ |
(71.6 |
) |
Adjustments to reconcile net
income (loss) to cash provided by operating activities: |
|
|
Depreciation and
amortization |
|
42.6 |
|
|
44.6 |
|
Income taxes and changes in
non-current provisions |
|
19.2 |
|
|
10.1 |
|
(Gains)/losses on disposals of
assets |
|
0.0 |
|
|
0.1 |
|
Net (gain)/loss on financial
instruments at fair value |
|
(16.3 |
) |
|
67.0 |
|
Accrued financial interest
costs |
|
12.7 |
|
|
31.2 |
|
Amortization of deferred
financing cost, including original issuance discounts |
|
0.8 |
|
|
32.9 |
|
Interest paid |
|
(12.3 |
) |
|
(27.7 |
) |
Taxes paid |
|
(25.8 |
) |
|
(38.7 |
) |
Other |
|
(6.1 |
) |
|
(10.8 |
) |
(Increase)/decrease in
inventories |
|
(28.1 |
) |
|
(21.8 |
) |
(Increase)/decrease in trade
receivables |
|
7.0 |
|
|
10.0 |
|
Increase/(decrease) in trade
payables |
|
(14.1 |
) |
|
(16.3 |
) |
Changes in other assets and
liabilities |
|
(4.8 |
) |
|
(8.5 |
) |
Cash flow provided by
operating activities |
|
22.5 |
|
|
0.4 |
|
Investing
activities |
|
|
Intangible assets and
property, plant and equipment additions |
|
(8.9 |
) |
|
(11.5 |
) |
Proceeds from disposals of
intangible assets and property, plant and equipment |
|
0.1 |
|
|
0.1 |
|
Cash flow used in
investing activities |
|
(8.7 |
) |
|
(11.4 |
) |
Financing
activities |
|
|
Issuance of shares |
|
— |
|
|
472.7 |
|
Issuance of non-current
debt |
|
— |
|
|
100.0 |
|
Repayment of non-current
debt |
|
(3.4 |
) |
|
(648.9 |
) |
Changes in current borrowings
and bank debt |
|
(0.7 |
) |
|
— |
|
Changes in current financial
assets and liabilities |
|
1.2 |
|
|
(4.0 |
) |
Payment of lease
liabilities |
|
(3.7 |
) |
|
(3.9 |
) |
Cash flow used in
financing activities |
|
(6.6 |
) |
|
(84.2 |
) |
Net
(decrease)/increase in cash and cash equivalents |
|
7.2 |
|
|
(95.2 |
) |
Effect of exchange rates |
|
(5.1 |
) |
|
(8.1 |
) |
Cash and cash equivalents at
the beginning of the period |
|
371.6 |
|
|
320.1 |
|
Cash and cash
equivalents at the end of the period |
$ |
373.6 |
|
$ |
216.8 |
|
ATOTECH LIMITED Revenue Data
|
Three months
ended(unaudited) |
($ in millions) |
March 31, 2022 |
March 31, 2021 |
Type of goods or
service |
|
|
Chemistry revenue |
$ |
312.2 |
$ |
317.0 |
Equipment revenue |
|
45.7 |
|
36.1 |
Total revenue from
contracts with customers |
|
358.0 |
|
353.1 |
Geographical
market |
|
|
Asia |
|
246.5 |
|
237.7 |
Europe |
|
77.7 |
|
84.5 |
Americas |
|
33.8 |
|
30.9 |
Total revenue from
contracts with customers |
$ |
358.0 |
$ |
353.1 |
ATOTECH LIMITED Segment Data
|
Three months
ended (unaudited) |
|
March 31, 2022 |
March 31, 2021 |
($ in
millions) |
EL |
GMF |
Total |
EL |
GMF |
Total |
Revenue |
231.8 |
126.1 |
$ |
358.0 |
225.6 |
127.5 |
$ |
353.1 |
thereof Chemistry revenue |
191.9 |
120.4 |
|
312.2 |
192.2 |
124.9 |
|
317.0 |
thereof Equipment revenue |
40.0 |
5.8 |
|
45.7 |
33.4 |
2.7 |
|
36.1 |
Segment Adjusted EBITDA |
81.3 |
31.1 |
|
112.4 |
75.7 |
34.6 |
|
110.3 |
ATOTECH LIMITED Reconciliation
of Adjusted EBITDA to Consolidated Net Income (Loss)
|
Three months
ended(unaudited) |
($ in millions) |
March 31, 2022 |
March 31, 2021 |
Consolidated net income (loss) |
$ |
47.8 |
|
$ |
(71.6 |
) |
Interest expense, net |
|
(1.2 |
) |
|
58.6 |
|
Income taxes |
|
19.5 |
|
|
9.9 |
|
Depreciation and amortization
(excluding impairment charges) |
|
42.5 |
|
|
45.1 |
|
EBITDA |
$ |
108.6 |
|
$ |
42.0 |
|
Non-cash adjustments(a) |
|
3.3 |
|
|
79.4 |
|
Foreign exchange loss(b) |
|
(0.7 |
) |
|
(16.3 |
) |
Restructuring(c) |
|
(0.1 |
) |
|
0.1 |
|
Transaction related
costs(d) |
|
0.9 |
|
|
4.4 |
|
Management fee(e) |
|
0.5 |
|
|
0.5 |
|
COVID-19 adjustment(f) |
|
— |
|
|
0.2 |
|
Adjusted EBITDA |
$ |
112.4 |
|
$ |
110.3 |
|
thereof EL Segment Adjusted
EBITDA |
$ |
81.3 |
|
$ |
75.7 |
|
thereof GMF Segment Adjusted
EBITDA |
$ |
31.1 |
|
$ |
34.6 |
|
(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) |
March 31, 2022 |
|
March 31, 2021 |
Share-based compensation |
$ |
3.2 |
|
|
$ |
0.2 |
|
Losses on the sale of fixed
assets |
|
(0.0 |
) |
|
|
0.2 |
|
Impairment charges |
|
0.2 |
|
|
|
(0.5 |
) |
Mark-to-market
adjustments |
|
(0.6 |
) |
|
|
81.0 |
|
Valuation adjustments |
|
0.6 |
|
|
|
(1.5 |
) |
Non-cash
adjustments |
$ |
3.3 |
|
|
$ |
79.4 |
|
(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, and (2)
professional fees paid to third-party advisors in connection with
the implementation of strategic initiatives.(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.
ATOTECH LIMITED Chemistry
Revenue Growth Reconciliation
|
Three months ended March 31, 2022
(unaudited) |
|
Reported Revenue Growth |
Impact of Currency |
Palladium Pass-Through |
Organic Growth |
|
|
|
|
|
Electronics |
-0.2 |
% |
1.6 |
% |
3.3 |
% |
4.7 |
% |
General Metal Finishing |
-3.6 |
% |
3.6 |
% |
0.6 |
% |
0.6 |
% |
Total |
-1.5 |
% |
2.4 |
% |
2.2 |
% |
3.1 |
% |
ATOTECH LIMITEDReconciliation of
Consolidated Net Income (Loss) to Adjusted EPS
|
Three months ended
(unaudited) |
($ in millions) |
March 31, 2022 |
March 31, 2021 |
Consolidated net income (loss) |
$ |
47.8 |
|
$ |
(71.6 |
) |
Reversal of amortization
expenses(a) |
|
28.3 |
|
|
28.7 |
|
One-off interest due to
refinancing(b) |
|
- |
|
|
54.7 |
|
Non-cash adjustments(c) |
|
3.3 |
|
|
79.4 |
|
Foreign exchange loss(c) |
|
(0.7 |
) |
|
(16.3 |
) |
Restructuring(c) |
|
(0.1 |
) |
|
0.1 |
|
Transaction related
costs(c) |
|
0.9 |
|
|
4.4 |
|
Management fee(c) |
|
0.5 |
|
|
0.5 |
|
COVID-19 adjustment(c) |
|
- |
|
|
0.2 |
|
Tax impact of pre-tax non GAAP
adjustments |
|
(7.1 |
) |
|
(7.4 |
) |
Adjusted Net Income
from continuing operations |
$ |
72.9 |
|
$ |
72.7 |
|
Weighted average number of
shares outstanding |
|
194,695,832 |
|
|
156,384,703 |
|
Number of shares as of latest
balance sheet date |
|
194,695,832 |
|
|
194,695,832 |
|
Adjusted
EPS(d) |
|
0.37 |
|
|
0.47 |
|
ProForma Adjusted
EPS(e) |
|
0.37 |
|
|
0.37 |
|
(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:
Todd Fogarty
Kekst CNC
Email: todd.fogarty@kekstcnc.com
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