Soitec Earnings: Flat Sales Outlook for 2024; Weak Smartphone Market Offset by Automotive, Devices

Soitec closed its fiscal 2023 (ended March 30) on a positive note, with sales for the fourth quarter up 16% at constant exchange rates and sales for the full year up 19%, in line with guidance. EBITDA margin for the full year came in at 36%, also in line with guidance. For fiscal 2024, sales are expected to remain flat on an absolute level, with a 15% decline in the first half of 2024 followed by a strong recovery in the second half. We are maintaining our EUR 190 fair value estimate and expect to make no or only minor adjustments to it when we revisit our model. Our medium-term sales and EBITDA margin forecasts remain more conservative than management’s targets, given the uncertainty brought by the macroeconomic environment and the semiconductor cycle change expected in 2023 (global semiconductor revenue is expected to decline 11% in 2023, according to Gartner).