X Fab Silicon Foundries EV 2025 will be a transition year due to continued destocking
X-Fab expects 2025 to be a transition year due to ongoing destocking, but it will also mark the completion of their CapEx projects, enabling better support for increased production demand for their 180nm technologies.They forecast FY25 revenue between $820-870m with an EBITDA margin of 24-27%, considering the uncertainty of the destocking cycle, which varies by market. While industrial and medical markets show recovery signs, automotive inventory corrections, where X-Fab has high exposure, began in 2H24 and will continue into FY25. Structural growth drivers remain strong, with technologies addressing megatrends like climate change mitigation and medical digitization.
Post-CapEx, capital expenditures will normalize to 10-15% of revenue from 2H25, aiming for positive free cash flow and a balance between debt reduction, capital return, and growth.
We have lowered our FY25 sales forecasts (based on their guidance) from € 898.6m to € 836.7m and decrease our Target Price to € 6.3 while maintaining our Accumulate rating.
X Fab Silicon Foundries EV is a Belgium-based company primarily engaged in the semiconductors industry. The Company focuses on the design and manufacture of silicon wafers for mixed-signal integrated circuits (ICs). Its products are integrated with additional features, such as high voltage option, embedded non-volatile memory, optical, radio frequency (RF) and bipolar elements, as well as microelectromechanical sensors. The Company distributes silicon wafers for various applications, including automotive, industrial, medical, as well as consumer electronics and mobile communications sector. The Company operates in a number of countries, such as Germany, France, Malaysia and the United States.
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