AT & S Austria Technologie & Systemtechnik AG

VSE:ATS

Earnings Call Transcript

[Operator]

Ladies and gentlemen, thank you for standing by. I'm Nadia, your operator today. Welcome, and thank you for joining the AT&S conference call on current business environment. [Operator Instructions]

I would now like to turn the conference over to Ms. Gerda Koenigstorfer.

[Gerda Königstorfer, executive]

Thank you, Nadia, and welcome to the conference call of AT&S about the full year 2020/'21. Today's call will led by Andreas Gerstenmayer, CEO; and CFO, Simone Faath. Andreas will update you about the market development and, of course, about the strategic business drivers and the growth potential for AT&S. Simone Faath will give you an update about the full year -- of the 2020/'21 year, and, of course, she will give you an outlook update for the current year. After the presentation, we will have a Q&A session, and Nadia will handle that. You'll find the presentation on the website of AT&S in the section Investor Relations, under the Downloads.

With that, I want to hand over to Andreas Gerstenmayer and please start.

[Andreas Gerstenmayer, executive]

Thank you very much, Ms. Koenigstorfer, and also a warm welcome from my side to our annual earnings call about the fiscal year 2020/'21. As Ms. Koenigstorfer already said, I will start with a little bit of a market overview, what are the major business drivers, what we foresee for the upcoming period of time and how we want to take advantage of that.

So starting with the first slide, you can see what is the assumption about the global electronic systems market, which shows a very, very nice prosperous situation. So the expectation for the running year 2021 is that the market will generate growth closely to 7%. For sure, there are some catch-up effects incorporated after the challenging year 2020, especially in the area of automotive and medical devices, but also in the area of communication, computer and consumer. The expectation is high that some of the effects that have negatively impacted the market last year will turn into positive development for the coming year. For the midterm, the expectation from the analysts is about the market growth in average of about 4% to 5% for the next 5 years. So in total, the environment shows nice opportunities.

If we drill it down now to the PCB and IC substrate market on Slide 2, you see a similar positive development also there. Some catch-up effects are to be expected in the running year. The entire average growth is expected to come in with 8.6%, but the similar picture about the different market segments in automotive, industrial and so on is to be expected. Highlighting there, you can also see the expectation in the IC substrate market, which is expected to grow by 23%. I will cover that later, what is the main driver in that business and what is the impacting factors there. In total, the expectation for the coming years is that, in average, the market should grow by 5.3% for the next 5 years. If you just have a few -- a brief look back to the history, AT&S could generate already growth of 8 -- closely 19% in the last fiscal year, so outperforming the market. And as you will hear later on, we will continue to foresee an outperformance of the market in the future as well.

Turning to Slide 5 now. I want to dig into the details about the drivers in the IC substrate market because this is a significant impacting factor. As you know, we are heavily investing in that business and in technologies there. So on the graph, you can see an upcoming gap in supply/demand relation. Especially the supply gap is increasing significantly. With all the already announced investments in the market, this is what we show here in the slight gray area, is the supply gap, which will open up over the next couple of years. So everything what is already available is information as announced.

Investments from our competition in ours is already factored in here. So this is the remaining gap, what we are showing here. And it's somehow scaled to the number of factories that are missing in the future. Today, or what we assumed as a factory is like we have it under installation, our Chongqing III factory, with fourth production lines. So you can easily calculate how much the gap could be in future. The upper limit is defined of a mix, which is more balanced or focused on high-end products like servers. The lower end is if the mix would turn more into the client computing area.

So this is the -- we need to show the range here because we definitely will see certain fluctuations in the mix development over the couple of years. But either you take the higher number or the lower number, a significant gap will remain between the 2 levels. So the gap will be between 6 to 12 factories missing in the industry. So whoever -- whenever you ask us about our investments and if we see the risk of overcapacities, with today's available numbers, with today's view we have on the market, the risk of creating overcapacity and having underutilized equipment for the coming years is quite limited.

For sure, there will be further development there, and there will be also technologies and demand volatility there. But I think this is quite a strong picture for the future how the demand will develop. Driven -- the whole thing is driven by mainly higher complexity in the microprocessors area, which is driven by processing performance, energy efficiency. This is impacting the complexity of the packages required. So in terms of substrates, we need larger substrate sizes, and we have also higher layer count demand.

This, again, is impacting the available capacity and the higher need for additional capacities. And finally, it's also heavily driving the value of the components we are supplying to the market. And as I said already in the previous calls, the good message here, again, is the growth for IC substrate is driven by value of the components more than by unit numbers. So we have a value-driven growth cycle here, which is to be expected be more positive for us as a supplier than we just have a unit number of growth.

What is generally driving the business behind the strategic drivers of the business finally is the digitalization of the society. And if we turn to the Slide 7 I have here, the main drivers behind that is the introduction of the 5G communication standard, the big data, the Internet of Things and artificial intelligence. By saying that, just a few words on the artificial intelligence application side. If you would have a closer look on the entire total market, the addressable market globally about artificial intelligence and what is also reflected into the computing power there, we're talking about a market of around about $43 trillion in artificial intelligence. What does it mean? Artificial intelligence needs very powerful environment, very powerful infrastructure, computers and so on.

Another number is 98% of today's available data are not analyzed. We're only doing data management, data analytics on 2% of the available data. I think this is also somehow proving what they have said before that the artificial intelligence market is significantly growing and also will provide significant business opportunities. So with this huge amount of data that is generated globally, all the data analytics can only be done by applications in the area of artificial intelligence. It cannot be done by manpower also. So this market will increase over the next couple of years significantly and provide heavy opportunities for the entire computing market. Just to give you a little bit more insight what are the really underlying numbers and potentials of the market.

Moving to Slide 8. You can also see what is the impact of the data generated out of the digital environment we have in front of us. We see that the data growth on this slide -- this is the upper line -- is tremendously growing. We have shown it here as percentage-wise. You can also show it by the data volume, but it doesn't matter. What we need to expect and what we need to prepare ourselves for is that the increase of data volume is significant. And you can also see with our already announced midterm guidance, we are developing in line with the data growth. And also here, you can prove again that our business is heavily driven by the increasing numbers of data available and processed in the market. But we can also see that AT&S revenue growth is significantly higher than the entire global PCB and IC substrate markets over the next couple of years. So we are benefiting more than the average of the market.

What is finally behind that story on Slide 8 -- 9, you can see we have mainly 4 areas, which is to be addressed, and which is also supporting all the areas we are doing the business in. On the 1 side, we have the area of data creation. This is all about consumer electronics, but also automotive, industrial, electronics, medical, Internet of things, sensors and so on. So later on the front, it need and will be generated somewhere. And we have the part of the data storage. This is mainly driving the semi convert, but also the storage devices like hard disk drives and others. We have, as already mentioned before, the data analytics part where we talk about very powerful data center servers, big data and so on. And we have the data transmission, which is all about wireless and wireline infrastructure, 5G and so on and so on.

So a lot of components, devices front and back end are needed to maintain the digital environment and we see ourselves as AT&S very well positioned there because all the areas which are digitalized in the coming years, we are engaged in and we are active and have technologies for that. Why we are convinced that we are very well positioned there? We will show on the next slide because we have prepared our application-based strategy where we try to identify all these applications that are mainly impacted and benefiting from the digitalization.

On the one hand side, we have our business segment Mobile Device & Substrates. Here, you can see that the consumer, compute and communication area is very much benefiting from the development. So this is what I mentioned before, more the front end devices, the end user devices, which are generating the data mainly. On the other hand side, we have the IC substrate business, which is supporting the infrastructure and the data management, data analytics side with the servers, with the gaming, networking and so on and so on.

The same is true for the segment, Automotive, Industrial and Medical. You can see on the automotive side, as there will be significant growth over the next couple of years, driven by 2 main trends. The one is the electrification and the other is the autonomous driving. Also there, we will see very nice opportunities to further grow. The same is true for industrial, probably a little bit lagging behind because typically, industrial is a more conservative business, but also their digitalization will show impact.

And once the COVID crisis turns into growth area again and new capacities needs to be installed on the production side, also the digitalization and usage of new digital technologies will increase. And the same is also in the medical area. We have already seen it over the last couple of years, in 2020, we have a little bit lagging behind because the focus was on the treatment of COVID patients. But now the business is catching up again. And also the treatments are recovering, and we definitely see, especially in the area of therapy devices, recovery for the coming years.

What is the main driver of AT&S business behind? And what is -- what are we doing to prepare ourselves? This is about our R&D power. And R&D power -- we can show you on four aspects. The 1 aspect definitely is the R&D rate, the money we are spending for new technologies, innovating, introducing and industrializing new technologies. This is now on a level of 10%, which is outstanding to the industry and which also reflects the power of AT&S to prepare for the future, the necessary technologies, technology toolbox and applications. We have a very strong setup in R&D. We always call it a 2-step approach. We have the central R&D in our headquarter in Austria, where we do the basic R&D activities, together with a couple of well-known, famous partners from university, but also from other organizations.

And we have also continuously increased the number of patents we have applied for, and we have already got granted the 429 patent families -- is what we have already got granted, and we have a lot of -- lot more of them in the pipeline. And the fourth part here is the Vitality Index, our former Innovation Revenue Rate. It's simply the same, just a new wording here. The 21% is still in the range we have given as -- ourselves as a target. We are now in the phase of preparing new technologies to be introduced to the market, and it's expected that Vitality Index will increase in future.

Yes, here, you can see again how the R&D investments developed over time. Last year, 9.5% of the last -- last year -- last fiscal year at 10%. This is completely in line what I have mentioned before that we are now prepared -- in the process to prepare quite a number of new technologies to be issued to the market, which are close to be ready and ready to go. With the Innovation Revenue Rate or the Vitality Index, we have generated EUR 246 million revenue with new products. New products means not older than 3 years in HVM, high-volume manufacturing, and mainly addressing for parameters or for perspectives.

One is there is still the miniaturization and functional integration, which is mainly true for mobile devices, but also for the modules and the IC substrates. Fast signal transmission, everything what is increasing the performance of the devices and the components, needs faster signal transmission. This has to do with the creation of lines and with the architecture of the products. Performance and efficiency, especially when it comes to energy consumption, all the wireless products need a very high level of energy efficiency. And this is what we are driving for and what we try to address heavily. And for sure, we are also preparing ourselves from R&D side for the future of manufacturing, which on the one hand side, is to go to more virtual environment, to simulation of production processes, but also talk about and think about how more sustainable, environmental-friendly manufacturing processes can be introduced.

This brings me to the last or second last topic from my side, the ESG topics. What are the highlights in the -- what was the highlights in the last fiscal year? We achieved a renewable energy quota of 45%. As we have communicated, our midterm target until 2025 is to come to a level of 80% renewable energy share, and the expectation for the now running fiscal year '21/'22 is to achieve 50%. This is mainly driven by introducing or applying all the international standards from the ISO area, especially now from the ISO 50001, which is covering the energy management systems, which we are underway to roll them out in Austria and India. In the subsequent years, we will also roll it out to other plants globally.

We have started the life cycle assessment methodology, which means we are turning towards a circular usage of our materials and also our equipment and products. This assessment is to be run throughout the next fiscal year to derive the activities and also all the measures need to be implemented over time. We have achieved the 100% coverage of main suppliers this year or last year for our code of conduct. This we will then roll out to the next level of suppliers. And over time, we are targeting to cover almost every of our suppliers to be covered by the code of conduct we have in place.

On the diversity area, we have achieved already 20% women in management positions. The midterm target is to come to a level of 30%. Also there, we have the related programs behind, and we are quite confident that we will make progress year-over-year. And we have the Responsible Minerals Initiatives where we take care about how the base materials and other materials are provided, are produced and supplied to us. We have a 100% coverage of all the materials we are using. So transparency is quite high already there. And there, we need to take care that we can maintain this high level of coverage of the RMI supply chain compliance.

Coming to the last fiscal year, what were the main developments, the key developments in the fiscal year 2020/'21. In total, I think we have been able to show quite nicely developing business in the light of global crisis, driven by the COVID outbreak in the early time 2020. We could bring additional capacities and subsequently a strong demand in the ABF substrate business to the operations, especially reflected in the Chongqing I expansion project, which has been finished.

We have seen a nice customer diversification in the mobile applications business. Also the PCB and substrate like PCB for modules business, nicely contributed to the revenue and also was in line with our expectations. So the entrants to our so-called Level 1 activities is achieved, and we will continue to develop from there. Automotive, we had quite a challenging situation in the first 2 quarters, as we reported at our half year's results. But we also have seen a nice recovery in the second half. And also, the Q4 was already a good situation and above the 2019 numbers.

Medical and health care was more or less stable in the light that we had some challenges in the beginning of the year. As already said before, the priorities in the health systems was definitely to care about the COVID patients and other treatments were postponed. But also there in the second half year, this recovered, and we could come to a similar good number like the year before. Industrial segment was quite positive, also a little bit surprising because, typically, we would have expected at the beginning of the year that we would also suffer more in that area from the COVID impact. Finally, we came out with very nice numbers. And with all the challenges around us, the Chongqing III development expansion, the construction of the plant, the installation of infrastructure and equipment was very nicely developing. And we can now foresee a faster ramp than we have and an earlier ramp than we have originally planned for.

This, you can also see on Slide 17. You see this slide now for quite a couple of quarters. And the good message also there is the first 2 parts -- the first 2 fiscal years, we can tick mark. We delivered what we have said. We can now expect that we speed up a little bit in the running fiscal year because we can already take benefit from the first equipments we have in operations already and on the qualification. And by doing that, the expectation is that until the fiscal year '23/'24 and of the fiscal year, we will have all the capacity, all the equipment on full capacity. So '24, '25 will be the first year where we can benefit completely for 1 fiscal year from the new capacities.

But I need also to mention already here, this is a heavy investment program. We are investing this EUR 1 billion for this factory. We have to prepare ourselves the technology-wise. So therefore, also, we increased our R&D quota. And on the other hand side, we need to engage quite a number of people. So finally, when we end up, we have at least around about 4,000 to 5,000 people additional to the other plants. So that needs also be ramped. We will have to take care about the ramp-up costs. The upfront cost we have to take care of.

And also, as we always have seen and communicated, a new factory is not from the first day running on the full efficiency level like a fully utilized production plant. Just giving you a flavor. This factory covers 65,000 square meters of production area. This is slightly bigger than both of the factories in Chongqing we have already installed there. So this is definitely the largest factory ever have installed. We are well underway, but please also consider in all your calculations that this will somehow burden our P&L during the ramp-up phase. And once the whole thing is up and running, we can digest the positive effects.

Coming to my last slide, I just wanted to summarize. We have now running through a heavy investment phase over the last couple of years. We have made the promise that we will become a EUR 1 billion revenue company. This was achieved in '18/'19. We have now a few months -- a few weeks ago preponed our midterm guidance to become a EUR 2 billion revenue company by 1 year. We have also established ourselves nicely in the HDI high end PCB market where we were among the top 3 companies, players for several years to show a very sustainable position there. And we are on the way to become one of the most important players in the ABF substrate business, which we have just entered into a high-volume manufacturing in 2016.

So when we are up to the EUR 2 billion in few years, we -- the expectation is that we will move up the level to the #3 position and be #3 globally there as well in that short period of time. And we are transforming from a pure PCB manufacturer into interconnect solution provider, Level 0. It's high end printed circuit boards module business, as I mentioned before, and substrates, which is more or less covered under the headline of carrier components, is already achieved, and we're preparing ourselves for entering into the module integration service providers.

So I think summarizing, we have proven again also in the crisis situation that we have a robust, resilient strategy. We're executing according what we are saying, and we're achieving what we are promising. So I think you can have a high level of confidence that this will be the case also in future.

With that, I will now turn over to Ms. Faath to guide you through the numbers and the results of the last fiscal year.

[Simone Faath, executive]

Okay. Thank you, Andreas, and good morning, everyone. I will be reviewing our financial results for the fiscal year 2021, which are also shown in our press release of today. I'm pleased to report that our revenue was at a historic high with EUR 1.188 billion. Also, we faced some headwinds from foreign exchange of around EUR 37 million. Without this negative FX effect, our revenue growth would have been 22%. Year-over-year, our EBITDA margin increased by 140 basis points to 20.8% of revenue. Here, too, we were facing challenges of foreign exchange. Our return on capital employed was 5.8% and 300 basis points higher than a year ago due to a higher EBIT.

Coming to the next page. In fiscal year 2021, our revenue was EUR 1.188 billion compared to EUR 1 billion in fiscal year '19/'20. The year-over-year increase in revenue is driven by the growth in our Mobile Devices & Substrates segment, partially offset by a decline in our Automotive, Industrial and Medical segment. EBITDA in fiscal year 2021 was EUR 247 million compared to EUR 195 million in fiscal year '19/'20. This increase of 27% year-over-year is due to our top line growth and an improved gross profit, partially offset by higher operating expenses and negative foreign exchange effects. Net profit in fiscal year 2021 was EUR 45 million and could be more than doubled compared to fiscal year '19/'20.

Going to the next slide, showing our revenue and EBITDA development of the last 5 quarters. The pattern, according to which Q1 represents our lowest quarterly revenue for the fiscal year, is similar to prior years and is characterized by the usual seasonality in our mobile application business. However, I am pleased to say that Q3 of fiscal year 2021 with EUR 346 million revenue was our highest revenue quarter ever. And Q4 of fiscal year 2021 was our highest Q4 revenue quarter in the history of AT&S, with EUR 304 million, which represents an increase versus Q4 fiscal year '19/'20 of 23%. Also, our profitability has clearly picked up. If you compare Q4 fiscal year 2021, our EBITDA margin a year ago, you see a clear improvement from 50% to 19% of revenue.

On the next 2 pages, I would like to review our business segments. Let's start with our largest, Mobile Devices & Substrates. This segment represents 74% of AT&S total revenue of fiscal year 2021. This compares to 69% in the year before. Mobile Devices & Substrates grew 27% year-over-year and reached its highest ever generated revenue, totaling EUR 882 million. The main driver was the IC substrates business due to the additional capacity in Chongqing. EBITDA margin in fiscal year 2021 was 22% compared to 20% in fiscal year '19/'20. Regarding the quarterly development, this shows the typical seasonality with Q2 and Q3 being the highest revenue quarters for this segment.

Going to the next page to our smallest segment, Automotive, Industrial and Medical. This business contributed 26% of our total group revenue in fiscal year 2021 compared to 31% a year ago. The segment realized a revenue of EUR 307 million in fiscal year 2021 compared to EUR 315 million in the year before. While industry shows a year-over-year growth, medical shows a flattish year-over-year development and automotive remained slightly below prior year. Nevertheless, Q4 2021 showed the highest Q4 revenue in our history, with 16% growth versus Q4 2019/2020. EBITDA margin in fiscal year 2021 was with 8%, in line with the year before.

Turning to Page 25 and our financial position. Our balance sheet and liquidity remains strong. There is a substantial liquidity available for repayment as well as for further investments. Cash and cash equivalents at the end of fiscal year 2021 were EUR 553 million compared to EUR 418 million a year before. Our net debt divided by last 12 months EBITDA was 2.1x. Looking at our capital expenditure. Our net CapEx in fiscal year 2021 were EUR 436 million. We continue investing in growing markets like IC substrates and module PCBs, which is also reflected in our fiscal year '21/'22 outlook. In the current year, so '21/'22, we expect net CapEx of up to EUR 630 million. Approximately EUR 100 million of the EUR 630 million are dedicated to maintenance and tech upgrades. But the major portion, roughly EUR 0.5 billion, is for strategic projects like Chongqing.

Next, I will cover some details from our balance sheet. Total assets as of end of March 2021 were EUR 2.390 billion, an increase of 29% versus previous year, mainly due to our investments in Chongqing. Equity increased by 6% to EUR 802 million, driven by our higher net income. Equity ratio went down to 34%, which is a decline of 740 basis points versus a year ago. Our net debt at the end of fiscal year 2021 was EUR 509 million, again driven by our investments.

Turning to our cash flow. Cash flow from operations was EUR 185 million in fiscal year 2021. Cash flow from investing activities was minus EUR 340 million and significantly above the value from the year ago. Cash flow from financing activities was EUR 304 million and significantly higher than in fiscal year '19/'20. This is primarily due to cash inflow from borrowings and from grants. Our operating free cash flow calculated from operating cash flow less net CapEx was minus EUR 251 million compared to minus EUR 33 million in fiscal year '19/'20.

Now I'd like to turn to our guidance for the current fiscal year '21/'22. We expect our revenue to grow between 13% and 15%. We expect our adjusted EBITDA margin to be in the range of 21% to 23% of revenue. And as shown before, we expect CapEx up to EUR 630 million. And we propose a dividend of EUR 0.39 per share for the fiscal year 2021.

That concludes our presentation. And now we would like to open the line for questions. Thank you very much.

[Gerda Königstorfer, executive]

Thank you, Simone, and thank you, Andreas, for the report. May I ask you for your question, and, Nadia, please moderate that.

[Operator]

[Operator Instructions] And the first question comes from Daniel Lion.

[Daniel Lion, analyst]

Yes. Strong development, and a few questions, of course. I would like to start with the sales mix in the fourth quarter development. And also going forward, how do you see sales mix development? How has fourth quarter sales mix developed? Maybe you could give us a little bit more light what to expect also going forward from this development here?

[Andreas Gerstenmayer, executive]

Shall we answer now immediately or you will raise your 4 questions first?

[Daniel Lion, analyst]

I would do it one by one, I guess.

[Andreas Gerstenmayer, executive]

Okay. So sales mix, I think there was no real special effect in the fourth quarter. As we always see, the mobile device area has quite of seasonality. And also in the fourth quarter, we have experienced it already. For sure, the increasing share of substrate business is starting to level out that effect a little bit. And this is also the reason why we have seen a slightly lower seasonality, but also it was supported by a very strong automotive business in that period. And I think the other areas were quite flattish to the expectations we had before. So I think nothing what was special in the fourth quarter. It's just the impact of the overall development of the company, a little bit more weight on the substrates, but still seasonality from the mobile devices.

[Daniel Lion, analyst]

And is this going to change now starting with the first quarter, second quarter to some extent or are you...

[Andreas Gerstenmayer, executive]

No. I would -- we have no real change because this -- when will it -- when will be a trigger to change that, this will once more capacities from the IC substrates are contributing to the revenue generation. And over time, it could change slightly because, typically, the substrate business has less seasonality. So once we have more -- a bigger contribution from the substrates, the leveling out of the seasonality could be bigger.

[Daniel Lion, analyst]

So there's no expectations that there could be a price effect starting from the second quarter because client is now ramping the 10 nanometers, in addition to the capacity improvements that you're facing?

[Andreas Gerstenmayer, executive]

I think -- no, there should be not expected that we have had a significant impact there because when they are now ramping and you mean ramping, so they are issuing it to the market now. So we have seen the effect of that in our production.

[Daniel Lion, analyst]

Okay. Okay. Having a look at the IC substrates, the Chongqing III plant, you've outlined the changes and the capacity development. But by when would you expect Chongqing III to positively add to profitability? Or when would you expect the breakeven level in this plant from a timing perspective?

[Andreas Gerstenmayer, executive]

So typically, these kind of factories need at least to be close to fully ramp because you have these very expensive infrastructure, significant investment in buildings and so on and equipment. And also you need to ramp the efficiency levels. So definitely, it can be expected that it will be faster than in Chongqing I. But our expectation is that the full contribution will come in starting end of 2023 fiscal year and fully showing impact then end of 2024.

[Daniel Lion, analyst]

So this will be the time where you expect the positive contribution? So up until then, you would expect a negative one?

[Andreas Gerstenmayer, executive]

Not a negative one, but it will not support significantly the -- or balance out the ramp-up cost. You always need to keep in mind we have significant ramp-up costs. So we have upfront investment. We have upfront increase in cost because we need to hire people up in advance at least 6 months in advance months when it comes to the blue collar and 1 year in advance at least when it comes to white collar. So we have already all the white collars in the plant for generating the revenues for the fiscal year 2022/2023. So they are on training. They are installing the equipment and so on and so on. And this is typically how these factories are ramped. So what we can see this time, we are much faster than we have done it in the past. We have special procedures and processes implemented, so that we can do it faster as we announced. And we already preponed the ramp by 1 year. So having such a big facility under ramp within 3 years, I think this is already, I would say, outstanding.

[Daniel Lion, analyst]

Okay. And then last 1 for the time being. On further capacity or investments on the 1 hand, relating to the article in the Hanoi Times a few weeks back, EUR 1.5 billion investment that was mentioned in the article. And on the other hand, also referring to your further steps towards becoming a module integration service provider. So what are you expecting on top of the current investment plan for Chongqing III to materialize going forward, maybe earlier, maybe later? What are the next steps that you're currently looking at? And how do you expect to finance such steps?

[Andreas Gerstenmayer, executive]

So first of all, we have done an announcement, and we also have this adhoc announcement issued a few weeks ago that we can prepone the ramp of the Chongqing III factory, that we can also prepone our target to generate the EUR 2 billion revenues already in the fiscal year 2024.

[Simone Faath, executive]

'23/'24.

[Andreas Gerstenmayer, executive]

'23/'24. And we have also communicated that we are investigating opportunities for future potential steps, whatever that means. So there is nothing defined. There's nothing decided. We need to prepare ourselves. We are in an environment like I have shown in the beginning that is showing significant growth. And whatever the Hanoi news showed and disclosed, I don't know. We have nothing decided so far. And once it is -- there is a decision, we anyhow will disclose it, and we will communicate it. But until then, we should not so much focus on rumors. I think it's easy to come up with certain numbers if there is a new or could be or would be a new investment, how big that investment could be. But sometimes also, and it was also referring to the Prime Minister's disclosure, sometimes also politics are wishing for something. So be careful with too much reflecting on that.

[Daniel Lion, analyst]

But on the other hand, it would be the time to invest in further capacity as you showed the capacity gaps for IC substrates. All of the current IC substrate players are seeing this gap arising. So everybody wants to monetize on this gap. So it's more or less a race, who will be among the first to cover these capacities. And the earlier you decide to go for it, the better your situation in this race, right?

[Andreas Gerstenmayer, executive]

Sure. And this is the reason why we started investigating, but investigation for such a complex investment and, for sure, whatever we do, if you just would repeat Chongqing III, it's also investment of one -- would be an investment of EUR 1 billion, needs to be investigated carefully. Wherever it will be, whatever it will be, needs to be solidly planned. And once we put or will make any kind of decisions, we will communicate to the market.

[Operator]

And the next questioner is Florian Treisch.

[Florian Treisch, analyst]

I have 2 questions. So the 1 is around your decent dividend of EUR 0.39. It's a quite high payout ratio, Simone. A bit questioning, what kind of message should be behind it, in light of, yes, probably very negative free cash flow in the coming -- or in the current year thereafter? So are you afraid that you will be above 3x net debt to EBITDA? And the second question is around your customer concentration. Can you tell me what your top-2 clients are -- have generated in the current fiscal year? And what are your expectations for the next years? I believe, the IC substrate is only going to 1 client. So in the end, customer concentration should clearly increase in the coming quarters.

[Simone Faath, executive]

So let me take your questions so -- with regards to our dividend proposal. So remember, the year before, we paid a dividend of EUR 0.25 per share and with a net profit of EUR 22 million. And then in fiscal year 2021, we were able to more than double our net profit, so currently amounting to EUR 46 million. And this is also the reason why we decided to increase our dividend payment to EUR 0.39. I think this makes sense in line and in light of our increase in net profit. So coming to your next question, I think, Andreas will take this.

[Andreas Gerstenmayer, executive]

Customer concentration, as we always do not disclose single customers, I can talk about the top 5. So what we see there is we have a slight increase, should be around 65%, generated out of the top 5 customers in terms of revenue. For sure, it was an increase in the IC substrate area, but also a slight decrease in the automotive area in the last fiscal year. And as you know, we have heavy investments in the IC substrate, so we need to see how further -- how we can further diversify the customer portfolio also in that area.

[Florian Treisch, analyst]

Okay. Maybe just a quick follow-up to the first part to the dividend payout ratio. That is around 40% of EPS. Is that also a range going forward? Or will we normalize here again closer to numbers we have seen in the past?

[Simone Faath, executive]

Let's see. So this is a decision we have to make next year.

[Operator]

The next question comes from Teresa Schinwald.

[Teresa Schinwald, analyst]

I have more bookkeeping questions. And maybe I've missed it somewhere in the results releases. But could you give us absolute EBITDA results for the 2 main segments? And the other 1 is, you were kind enough to provide us with an FX impact on sales. Could you give us already a flavor for the EBITDA impact from FX effects?

[Simone Faath, executive]

So the FX effect for EBITDA for the last fiscal year was EUR 25 million negative, so to start with your last questions. When it comes to the EBITDA for our 2 mobile -- to our segments, so far for our Mobile Device & Substrate business, we had last year an EBITDA of EUR 219 million. And for our segment, Automotive, Industrial and Medical, we had an EBITDA last year of EUR 26 million.

[Operator]

And the next question comes from Patrick Steiner.

[Patrick Steiner, analyst]

Congratulations on the great results. Just a quick question from my side. Could you give us a specific number on the total ramp-up costs for Chongqing III?

[Simone Faath, executive]

So when we talk about this fiscal year, so '21/'22, there, we are currently calculating with 400 -- EUR 40 million -- sorry, EUR 40 million of start-up costs for Chongqing.

[Patrick Steiner, analyst]

Yes. And for the whole start-up? Do you have a number for this as well?

[Simone Faath, executive]

Sorry, can you please repeat your question?

[Patrick Steiner, analyst]

Would you also have a number for the ramp-up for the other years?

[Andreas Gerstenmayer, executive]

No, we don't have -- we don't disclose for the time being the number because there are a lot of changes to be foreseen. So we give an annual guidance there, and I think this should be reflecting what we know best to our knowledge. But we should stick on real calculations.

[Operator]

There are no further questions from the audience. So I'd like to hand back to you, Gerda.

[Gerda Königstorfer, executive]

Thank you, Nadia. Thank you for your questions. And yes, we wish you a nice day, and see you soon. Thank you. Goodbye.