1. cockpit electronicssmartphone CT and MRI devicelane change assistant navigation systemtablet pcAnnual Report 2011/12 AT&S - part of your daily life

2. Highlights 2011/12 RECORD SALESAT&S finishes the financial year with record sales of around EUR 514m, about 5% higher than a year ago.CORPORATE BOND FULLY SUB-SCRIBED IN JUST 24 HOURS AT&Ssuccessfully launches EUR 100 million (m) bond issue inNovember 2011. 3. AT&S GOES WEST AT&S builds its seventhplant in Chongqing, China. Focus on manufacture ofhigh-end products.STRATEGIC ALLIANCE The alliancebetween AT&S and MFLEX enables the Group to pro-duce best-in-class HDI rigid-flex printed circuitboards for electronic applications.OEKB LOAN AT&S secures long-term finan-cing for Phase I expansion in Chongqing under theterms of a EUR 69m loan granted by OesterreichischeKontrollbank AG (OeKB).BEHIND THE SCENESVisitorshave had the chance to gain first-hand insightinto the world of printed circuit boards on HighTechnology Experience tours at AT&S Leobensince October 2011.MAJOR ADVANCES AT&S receivesStyrias Fast Forward Award for its ECP technology.Printed circuit boards becoming even more powerful.HERMES CONSORTIUM: PROMISINGOUTCOME The Hermes consortium, founded in 2008 byAT&S and eleven other companies, delivers positive results.The alliances aim: industrialisation of new miniaturisationtechnologies. 4. Key FiguresIFRS2011/12 2010/11 2009/10 before non- after non-before non- after non- before non- after non-recurringrecurringrecurringrecurring recurring recurring(If not otherwise stated, all figures in EUR 1,000) itemsitems items1)items1) items2)items2)CONSOLIDATED INCOME STATEMENTRevenues 514,180 487,948372,184 thereof produced in Asia73.4% 68.6%67.1% thereof produced in Europe26.6% 31.4%32.9%EBITDA 103,356 103,356 98,582 95,94754,082 34,480 EBITDA margin 20.1% 20.1%20.2%19.7% 14.5% 9.3%EBIT42,13942,139 49,208 46,53110,971(25,562) EBIT margin8.2%8.2%10.1% 9.5%2.9% (6.9%)Net income26,51426,514 37,709 35,032(1,084) (37,617)Net income of owners of the parent company26,55026,550 37,845 35,168(739) (37,271)Cash earnings 87,76787,767 87,218 84,58442,37222,771CONSOLIDATED BALANCE SHEETTotal assets 694,649 575,335483,390Total equity 283,110 229,816208,793Total equity of owners of the parent company 283,165 229,463208,304Net debt 242,536 193,726147,985 Net gearing 85.7% 84.3%70.9%Net working capital 92,32379,357 71,906 Net working capital per revenues18.0% 16.3%19.3%Equity ratio 40.8% 39.9%43.2%CONSOLIDATED CASH FLOW STATEMENTNet cash generated from operating activities (OCF)87,20770,707 47,003CAPEX, net 113,085 115,145 19,505GENERAL INFORMATIONPayroll (incl. leased personnel), ultimo7,478 7,4865,875Payroll (incl. leased personnel), average 7,417 6,9875,616KEY STOCK FIGURESEarnings per share (EUR) 1.141.14 1.62 1.51(0.03)(1.60)Cash earnings per share (EUR)3.763.76 3.74 3.631.820.98Dividend per share (EUR)3) 0.32 0.36 0.10 Dividend yield (year end close)3) 3.5% 2.3% 1.2%Market capitalisation, ultimo 213,402 369,430192,411 Market capitalisation per equity4) 75.4%161.0%92.2%Weighted average number of shares outstanding23,322,58823,322,588 23,322,588KEY FINANCIAL FIGURESROE5)10.3% 10.3%17.2%16.0% (0.5%)(16.3%)ROCE5)7.7%7.7%10.5% 9.8% 1.9%(7.5%)ROS5.2%5.2%7.7% 7.2% (0.3%)(10.1%)1) Non-recurring items include the closing of the Vienna office and the advanced resignment of Board Member Steen Hansen.2) Non-recurring items particularly include the restructuring of Leoben-Hinterberg plant.3) 2011/12: Proposal for the Annual General Meeting on 5 July 2012.4) Equity attributable to owners of the parent company.5) Calculated on the basis of average values. 5. Annual Report 2011/12RevenuesEBITDA Earnings before interest,taxes, depreciation, and amortization514103 103488 514 96488 9645045037237252523434 EUR millionEUR millionEUR million EUR million 2008/09 2008/09 2009/10 2009/10 2010/11 2010/11 2011/12 2011/122008/092008/09 2009/102009/10 2010/112010/11 2011/122011/12StAff (incl. leased personnel)CAPEX7,4867,486 7,4787,478115 115 113 1135,610 5,8755,8755,6105959EUR million EUR million2020 2008/09 2008/09 2009/10 2009/10 2010/11 2010/11 2011/12 2011/122008/092008/09 2009/102009/10 2010/112010/11 2011/122011/12 6. Table of ContentsOrientation and FocusPage 26-51Market DevelopmentsPage 27-31Vision 2015Page 32AT&S StrategyPage 33-35 The Group Corporate Page 16-25 Sales and MarketingSeite 36-37Governance The Development of theReport Letter to our Printed Circuit BoardThe AT&S Product Page 52-63 Page 17 Shareholders Portfolio Page 10-11 Page 38-39 The History of AT&S Page 18AT&S Worldwide Report of thePage 40-43 AT&S at a Glance Supervisory Board Page 19-20 Supply Chain Management Page 12-13Page 44 Human Resources Page 21-22 Research and DevelopmentPage 45-47 Investor Relations Page 23-25 Corporate SocialResponsibilityPage 48-51 7. ConsolidatedFinancial Statementsas of 31 March 2012Page 64-113Consolidated Income StatementPage 66Consolidated Statement of GlossaryComprehensive IncomePage 124-126Page 66Imprint/ContactConsolidated Statement of Page 127Balance SheetPage 67all LegalGroupRepresentativesConsolidated Statement Page 122of Cash Flows ManagementPage 68Report 2011/12 Auditors ReportPage 114-121 Page 123Consolidated Statementof Changes in EquityPage 69Notes to ConsolidatedFinancial StatementsPage 70-113 8. Sending a messagewith AT&S 9. Mobile Device ApplicationsAT&S - part of your daily life 10. Letter to our Shareholders Dear shareholders,After this difficult start to the year, the eurozone financial crisis added to the challenges facing our business. The uncertain mood AT&S can again look back on a successful financial year, despiteon Europes financial markets was reflected in sluggish demand, a challenging first few months. The conditions facing the Group especially in the industrial market. last year were exceptionally difficult at times, but on the whole AT&S passed these tests with flying colours and has maintainedTurnaround thanks to strong its strong market position. fourth quarter Demand stabilised from the sec- ond quarter onwards, especially in the Mobile Devices segment. A turbulent start to the year A detailedAT&S closed an eventful financial year with very strong fourth- review of the past financial year illustrates clearly that external quarter results. Despite the impact of external factors such as the factors had a direct impact on the performance of the entire Group. economic crisis in Europe and the USA as well as the tsunami in The earthquake and tsunami in Japan and subsequent meltdown Japan, the company reported record sales revenues. However, the at the Fukushima nuclear power plant caused immense difficul- fact that we were not able to make up for capacity underutilisation ties for the Mobile Devices business. In addition to the shocking in the first quarter, resulting in a fall in profitability, was a dis- humanitarian catastrophe in the region, the disaster also had anappointment. Nevertheless, the strong performance in the Mobile effect on our customers purchasing behaviour. AT&S does notDevices and Automotive Business Units was very pleasing, as was have any production facilities in Japan, but owing to the com-the about-turn in the industrial business. panys relations with mobile devices partners based in the region, the events and their consequences put the Group under significant financial pressure.10 Corporate Governance Report 11. Earnings performance The Groups growth Future trends The ability to anticipate future devel-and performance in the financial year just ended underline AT&Ss opments and the changing needs of customers is the true strengthsolid position on the market. AT&S finished the financial yearof any business. AT&S is one of the few European printed circuit2011/12 with record sales of around EUR 514m, about 5% higher board manufacturers with an excellent position on the global mar-than a year ago. Despite a slight decline in EBIT for the year, ket. However, the Groups successes also highlight its ability toEBITDA (earnings before interest, tax, and depreciation and amor- operate in technical niche markets. This not only reinforces thetisation) rose to more than EUR 103m (2010/11: EUR 95.9m). This companys strategic direction; it also strengthens AT&Ss com-translates into earnings per share for the Group of about EUR 1.14, mitment to bolstering its technological leadership in the high-endas against EUR 1.51 in the financial year 2010/11.segment.Corporate responsibility AT&S has alwaysIn the future, responsiveness and flexibility will increasingly playplayed a pioneering role in improving working conditions anda part in determining a companys success or failure in the printedimplementing environmental protection measures. The economic- circuit board industry. And this trend poses a challenge for everyal use of resources in production and the well-being of staff havesingle staff member at AT&S. However, the Groups successesbeen part of the AT&S corporate culture from the start, and haveshow that it is heading in the right direction. The priority now isgenerated significant competitive advantages. In February 2012, to build on those successes and boost profitability.the company launched the Sustainable AT&S Project, which isdesigned to further emphasise the role of sustainability in the The outlook for the global printed circuit board industry is en-corporate culture, as well as strengthening AT&Ss leading posi-couraging. AT&S sees good prospects for expanding its markettion in the industry. share in the mobile devices business, and a number of attractiveopportunities in the automotive segment. Although the industrialInnovation The focal points of AT&Ss strategy have business has been in decline in Europe for the last few quarters,always been improving our ability to innovate and maintaining demand seems to be rebounding. The Group remains committedour technological leadership in interconnection technologies. Asto enhancing its market position. AT&S is still underrepresenteda global enterprise, it is vital that AT&S has the capacity to an-in several attractive markets, and these will increasingly take upticipate market developments and remain one step ahead of its more of the companys attention in the future.competitors. Continuous innovation and process optimisation arethe keys to extending the Groups leadership. With this in mind,Over the past few years AT&S has carved out an exceptionallyAT&S concluded a variety of projects in the financial year 2011/12, strong position for itself this is underlined by the Groups out-including strategic partnerships with MFLEX and Panasonic. Thestanding reputation worldwide. As a European industry heavy-Group also invested in the development and marketing of new weight, AT&Ss reliable image allows it to play to its technologi-technologies, such as the Embedded Component Packaging (ECP) cal strengths. These solid foundations and a long track record inTechnology which was designed entirely in-house. A structured innovation enable the Group to continuously increase the valueapproach known internally as the Stage-Gate Process is essentialof the business. And for this reason AT&S is looking to the futurefor identifying the prospective uses of new technological advanceswith confidence.at an early stage and assessing their marketability.With best regardsAndreas GerstenmayerThomas Obendrauf Heinz MoitziChairman of the Management Board Chief Financial OfficerChief Technical Officer Letter to our Shareholders11 12. Report of the Supervisory BoardVienna University of Economics and Business Administration,with responsibility for finances and infrastructure. Sabine Fussi,the new Works Council delegate, is an AT&S staff member withmany years of experience.All the elected members have signed a declaration pursuant tosection 87(2) Austrian Companies Act (AktG) that they possessthe appropriate professional or comparable qualifications, andthat no circumstances exist that could give rise to concern aboutpossible conflicts of interest.Throughout the financial year ended on 31 March 2012, the Super-visory Board received written and oral reports from the Manage-ment Board on the companys policies and performance, and wasclosely involved in the Groups major issues. During the financialyear 2011/12 the Supervisory Board met four times, with the par-ticipation of the Management Board. In these meetings the Man-agement Board and the Supervisory Board discussed the state ofAT&S Groups affairs in depth. As part of the Companys ongoingreporting process and at all board meetings, the ManagementBoard also gave the Supervisory Board comprehensive reportson the Groups operating and financial position, as well as itsinterests in other companies, its staff situation and its plannedinvestments. Strategic projects, the Groups long-term interna-tional focus, new statutory requirements, the development ofinternational compliance standards, and structural and person-nel changes were also discussed and authorised. The SupervisoryBoard satisfied itself of the existence of an effective groupwide The 17th Annual General Meeting of AT&S Austria Technologie &programme of staff development and succession planning and Systemtechnik Aktiengesellschaft (AT&S) resolved to increase of a well-functioning issuer compliance system. Regina Prehofer the number of Supervisory Board members by two, bringing the and Hannes Androsch personally attended fewer than half of total to eight. Georg Riedl was reelected, and Karin Schaupp and the Supervisory Board meetings in the financial year 2011/12. Regina Prehofer were elected as new members of the Supervisory Outside Supervisory Board meetings, the Management Board and Board. Sabine Fussi was delegated by the Works Council as an the Chairman of the Supervisory Board, Hannes Androsch, also additional member. held ongoing discussions on the Groups strategic focus and theprogress of its business activities. Hannes Androsch participated Since her resignation as Member of the Management Board of in the ground-breaking ceremony in Chongqing and at the same Fresenius-Kabi AG, Karin Schaupp has been working as an in-time informed himself extensively on the planned expansion. dependent consultant since 2003. Her principal interests are corporate strategic development, innovation management,The committees established by the Supervisory Board carried out technology transfer, organisational structure, and mergers and detailed analysis of particular issues and reported their findings acquisitions. Regina Prehofer had a successful career in bank- to the Supervisory Board. Subjects included important aspects ing: from 2008 to 2010 she was a member of the Managementof the accounting and reporting process, internal auditing, risk Board of BAWAG P.S.K. In 2011 she was appointed Vice Rector of management, the internal control system and Group manage-12 Report of the Supervisory Board 13. ment controls. The Audit Committee met twice in the last finan- The Supervisory Board adopted the Management Boards recom-cial year. The meetings were chaired by Willi Drflinger, who was mendation for the allocation of profits: the retained earnings asregularly involved in the quarterly reporting in this capacity, and of 31 March 2012 in the amount of EUR 24,237,345.84 are to bereported on these matters to the Audit Committee. distributed in payment of a dividend of EUR 0.32 per share, andthe remaining amount is to be carried forward.In 2011 the Supervisory Board again carried out its annual self-evaluation in order to ensure the continuous improvement of its The Supervisory Board thanks the Management Board and all theoperations as well as the fulfilment of its responsibilities to the Groups employees for their hard work and dedication during theshareholders and other stakeholders. Its findings confirmed the financial year 2011/12.effectiveness of its organisation and procedures. Self-evaluationwill continue to constitute an important component of the Super-visory Boards critical review of its own activities. On behalf of the Supervisory BoardThe annual financial statements of AT&S AG and the consolidat-ed financial statements for the year ending 31 March 2012 wereboth audited by PwC Wirtschaftsprfung GmbH, Vienna, andwere awarded an unqualified audit certificate. The managementreport and the Group management report for the financial year2011/12 were consistent with the annual financial statementsHannes Androschand the consolidated financial statements. Based on the prior Chairman of the Supervisory Boarddiscussions of the Audit Committee, and after its own detaileddiscussions and examination, the Supervisory Board approvedthe annual financial statements for the year ended 31 March2012 in accordance with section 96(4) AktG. Based on the priordiscussions of the Audit Committee, and after its own detailedconsideration and examination, it also approved the consoli-dated financial statements drawn up in accordance with section245a Austrian Business Code (UGB) and with IFRS, as well as themanagement report, the consolidated management report andthe corporate governance report. The Supervisory Board reviewdid not give rise to any objections.Report of the Supervisory Board 13 14. At a payment terminal andAT&S is part of your daily life 15. Industrial Applications AT&S - part of your daily life 16. The Group Table of Contents The Development of the Printed Circuit Board17 The History of AT&S18 AT&S at a Glance19 Human Resources21 Investor Relations2316 The Group 17. The Developmentof the Printed Circuit BoardHow it all beganToday, printed circuit boards are taken for granted as part of our University of Technology. Formally, the computer was known aseveryday life. They are the brains of many electronic appliances the binary-decimal fully transistorised computing automaton, smartphones, navigation systems, cameras, automotive elec- and the nickname was a self-deprecating reference to the com-tronics, aeronautics and a large number of modern industrial putational speeds of American computers. Zemanek jested thatand medical technologies. Without printed circuit boards, theeven if it cannot match the high computation rates of Americanworld would be a very different place. But how did these modernmodels called Whirlwind or Typhoon, it will be enough for aelectronic brains develop? Wiener Mailfterl (gentle Viennese spring breeze). His Mailfterl was in operation until 1966 and represents an important step inA constantly growing nerve systemthe history of technological development. From the early 1960sAt its most basic, a printed circuit board connects the active and Zemanek worked for IBM, and to this day he is highly regardedpassive electronic components of an appliance. Printed circuit as an Austrian computer pioneer.boards also known as PCBs or circuit boards have a fascinat-ing history. Computer industry as technology driver In the 1960s and 1970s advances in the computerAn Austrian invention A patent application for industry brought increased impetus to printed circuit board de-a circuit board was filed in England as early as 1903, but Paulvelopment. As computers became more powerful, the ever moreEisler born in Vienna is nowadays considered the inventorexacting requirements for printed circuit boards resulted in nu-of the printed circuit board. Shortly before the outbreak of the merous innovations, always with the principal aim of enhanc-Second World War he equipped a radio with a printed circuiting performance. The invention of the multilayer printed circuitboard, but unfortunately he was far ahead of his time. His ideaboard, which allows circuits and I/O (input/output) pads to bewas rejected by the radio manufacturer, since at that time it wasplaced on several layers, solved the problems of space and per-cheaper to pay workers to mount and wire up the radio valves formance at least for a time.by hand. Faster, better, smaller The multilayer print-Global developmentBefore the Second Worlded circuit board was an important advance, but it was only a firstWar there was no interest in Eislers invention, but during thestep. The emergence of portable devices laptops and mobileWar the Americans were the first to discover the advantages of phones in particular meant that the extra layers in multilayerusing printed circuit boards. With the invention of the transistor printed circuit boards quickly became too heavy. Laser technol-radio in 1947 printed circuit board technology finally took off, ogy provided the answer and the way of the future.and by the 1950s printed circuit boards were being had enteredseries production. Printed circuit boards allowed electronic ap- Printed circuit boards now Many differentpliances to be made significantly smaller, and their largely au- kinds of printed circuit boards are in use today: single-sided,tomated production reduced costs in the electronics industry.double-sided, multilayer, HDI (high density interconnect: multi- layer printed circuit boards with ultra-fine structures), flexible,A wind of change In 1955 the Mailfterl, literally semi-flexible, rigid-flexible. Which kind of printed circuit boarda spring breeze, developed by the Austrian researcher Heinzis used depends on the technical and economic requirements ofZemanek, brought a wind of change to the industry. Mailfterlthe products. Another market segment is IC substrates, which arewas the nickname of the first fully transistorised computer in increasingly being used thanks to the spread of PCs, notebooks,Continental Europe. It was built in the mid-1950s at the Viennasmartphones and tablet PCs. The Group 17 18. The History of AT&SFrom cathode ray tubes to smartphones AT&S today is a global enterprise, with plants and offices allinvestment of EUR 14.5m. The purpose of the plant was to produce around the world, but there were many obstacles to be overcomemulti-layer printed circuit boards under a contract signed with on the road to technology leadership in printed circuit boards. IBM Sindelfingen in 1981. AT&S was formed by the merger of three companies: Eumig Fohn- sdorf GmbH, AT&S Technologie- und Systemtechnik GmbH basedThe birth of AT&S In 1987 the VOEST plant in in Leoben-Hinterberg, and Steirische Elektronik GmbH in Fehring.Leoben-Hinterberg was spun off as an independent company, In 1995 these three companies were merged to form AT&S AustriaAT&S, and in 1990 the plants in Fohnsdorf (Eumig) and Fehring Technologie & Systemtechnik AG. (Steirische Elektronik) were added. In 1990 E+E Leiterplattenhold- ing was founded as parent company for the three manufacturing The beginnings Elektrizitts- und Metallwaren In- plants AT&S Fehring, AT&S Fohnsdorf and AT&S Leoben. dustrie GmbH (Eumig) was founded in 1919. Eumig initially manu- factured lighters, and in the 1930s the first hand-operated Eumig Leading-edge technologies combined with its employees high lev- film projector came onto the market. The first steps in printed els of expertise and commitment have enabled AT&S to become a circuit board manufacture were made in the 1970s, in an effortworldwide enterprise. Following its acquisition in 1994 by Hannes to gain independence from suppliers. In 1981, after a number of Androsch, Willi Drflinger and Helmut Zoidl and its conversion economically challenging years, the Eumig plant in Fohnsdorf wasto a public limited company, AT&S set out to conquer the world deconsolidated from the group retroactively as of July 1980. The from Styria. company only began to recover its standing in 1983, when the manufacturing focus shifted from single-sided to double-sided Global expansionToday, AT&S has established printed circuit boards with plated-through interconnects. itself as a global player with plants in India, China and Korea as well. In 1999, with the purchase of the Indian company INDAL Fehring is AT&Ss oldest existing plant. The Krting Group, which Electronics Ltd., AT&S acquired Indias largest printed circuit specialised in electronics, began operations here in November board manufacturing plant. In 2002 a plant in Shanghai joined 1974. Its main end product was television sets, together with the the AT&S global family. Production in China started in 2002, and in manufacture of the necessary printed circuit boards. The state- the following year the plant in India was expanded. Thanks to the owned Elin Group acquired the Fehring plant in 1979 following ongoing expansion of the plant in Shanghai and by the purchase the bankruptcy of the Krting Group, and renamed it Steirischeof a printed circuit board manufacturer in Ansan, Korea, AT&S Elektronik. has been firmly established in the global market since 2006. And with the start of construction of the plant in Chongqing, China, in AT&Ss largest Austrian facility is in Leoben-Hinterberg and was2011, the next step has been taken on the road to future success. built as a manufacturing plant for VOEST-Alpine in 1982 with an 1994 Privatisation and acquisition by Messrs Androsch, Drflinger and Zoidl 1987 AT&S founded 1982 Voest-Alpine plant opens in Leoben 1977 Eumig plant established in Fohnsdorf 1974 Krting plant in Fehring begins operations18 The Group 19. AT&S at a Glance AT&S - part of your daily lifeAT&S is by far the largest producer of printed circuit boards in Business segments AT&S has three core printedEurope and India, and ranks among the top suppliers worldwide. circuit board businesses: Mobile Devices, Automotive and Indus-The AT&S Group employs around 7,500 people and has a globaltrial. The Mobile Devices segment generates the highest revenues.presence thanks to its worldwide network of production facilitiesAs a supplier to eight of the ten largest mobile phone manufac-and sales offices. Founded in 1987, it is headquartered in Leoben, turers, AT&S has a unique position in this market. AutomotivesAustria. The Group was listed on the stock exchange in 1999, customer base includes all of the major automotive componentfollowing a management buy-out in 1994. Its financial year runssuppliers in Europe. Industrial is currently concentrated on thefrom 1 April to 31 March. The company has been quoted in the European market, but its focus is increasingly shifting towardsVienna Stock Exchange prime market segment since May 2008. America and Asia.AT&Ss positioning AT&S has three sites in Austria In order to offer a wider range of products and services and(Leoben, Fehring and Klagenfurt) and three in Asia (Shanghai instrengthen its market position, AT&S provides design services,China, Nanjangud in India, and Ansan in Korea). In June 2011 as well as manufacturing printed circuit boards tailored to itsAT&S laid the foundations for its seventh site in Chongqing, customers precise specifications. Thanks to its new and nowChina (about 1,500 kilometres from Shanghai).patented embedding technology, in future AT&S will also be able to supply chip embedding services.In addition to its seven manufacturing plants, the AT&S Grouphas a distribution, service and design centre in Nrvenich, Ger- SEASONALITY All of AT&Ss operations, and in particularmany, and a distribution network comprising 16 offices on four those of Mobile Devices, are subject to seasonal variations in thecontinents. The Group is represented throughout Asia, with first and fourth quarters, capacity utilisation is generally lowerbranches in Hong Kong, Singapore, Taiwan, Bangalore in India,than in the second and third. In a high-fixed-cost business likeAnsan in South Korea and the Japanese capital Tokyo. AT&Ssours, low capacity utilisation puts pressure on margins.existing American branch in San Jose was joined by a new of-fice in Chicago in April 2012. The AT&S Group also has a strongFocus on growth AT&Ss growth strategy is closelypresence in European markets thanks to its sales offices in Aus- aligned to the needs of its customers. The focus of investmenttria, Ireland, Germany, the Czech Republic, France, Hungary andactivities is primarily on the high-tech segment, where custom-Belgium. er demand is strong, with a particular emphasis on HDI and any-layer capacities. Two-thirds of global printed circuit boardTechnological focusEach of the plants con- manufacturing capacity is currently located in Asian countries,centrates on a specific portfolio of technologies. The Austrianexcluding Japan. By 2015, HDI printed circuit board productionplants are geared to the European market and also, increasingly, is expected to rise by 8.2% a year.towards the American one. Short processing times, special ap-plications and a greater emphasis on suppliers closeness to cus-tomers are typical for Europe. The facilities in India also servethe European market, and specialise in medium-sized series pro-duction of double-sided and multilayer printed circuit boards.The plant in Korea, which was acquired in 2006, manufacturesflexible printed circuit boards for the European market and forcustomers of the Mobile Devices business. Shanghai the larg-est facility in the AT&S Group specialises in producing longruns of HDI printed circuit boards for mobile devices, but isalso increasingly focusing on applications for automotive andindustrial customers. The research units in Leoben-Hinterbergand Shanghai are AT&S Groups main technology drivers. The Group19 20. Focus on innovation Future printed circuit Corporate governance As a listed company, board technologies will be shaped by greater demand for min- AT&S is expressly committed to good corporate governance, and iaturisation and increasingly higher specifications. AT&Ss re-therefore subscribes to the Austrian Corporate Governance Code. search and development department is the driving force behindDuring the financial year 2011/12, the members of the AT&S Man- the identification of new technological options. AT&S has takenagement Board were as follows: an important step towards the future of the printed circuit board with the development of its Embedded Component Packaging Andreas Gerstenmayer, Chairman since February 2010 technology (ECP). ECP is suitable for use in a broad range of Thomas Obendrauf, CFO and Deputy Chairman since Octo- applications. Among the technologys strengths are its effective-ber 2010 ness wherever increased miniaturisation and higher specifica- Heinz Moitzi, Chief Technical Officer since April 2005 tions are called for, and its advantages in terms of sustainability. The Supervisory Board has twelve members, four of whom are AT&S on the capital markets AT&S was employee representatives. The Chairman of the Supervisory initially listed on the Frankfurt Stock Exchanges Neuer Markt Board is Hannes Androsch. Willibald Drflinger is the Deputy in July 1999. In spring 2008 AT&S switched to its home stock Chairman. exchange in Vienna. The company has been quoted in the Vienna Stock Exchange prime market segment since 20 May 2008. 50.80% of the shares are in free float and 9.95% is held by AT&S. 21.51% is held by the Androsch Private Foundation and 17.74% by the Drflinger Private Foundation. Hannes Androsch and Wil- libald Drflinger were two of the three initiators of the 1994 management buy-out. AT&S AT A GLANCE Largest printed circuit board producer in Europe and India Around 7,500 employees on four continents Strategy centred on the high-tech segment Focus on innovation20 The Group 21. Human ResourcesPutting people firstAT&S is a global business with production facilities in EuropeStaff development a key successand Asia, and sales offices on four continents. Highly skilled, factor In addition to continuous recruitment, ongoingmotivated employees are the key to success in the global mar- staff training and development is an important investmentketplace. AT&S staff are experts in their fields. They always in the Groups future success. We put particular emphasis onperform to the best of their ability with the aim of safeguard- promoting teamwork in an international company, this is theing the Groups technological leadership in a highly competitivecornerstone of collaboration between the various functions andoperating environment.sites, and the key to maximising process efficiency. Fostering in-novation and customer focus is another of our leading priorities.Supporting high potentials work-ing towards a bright future AT&S is New employees receive comprehensive basic training at all AT&Scommitted to retaining and supporting up-and-coming talents,facilities. Recruits learn about the entire production process forwith a view to preserving a pool of talented, highly qualifiedprinted circuit boards, the Groups structure and administra-employees. To this end, AT&S regularly welcomes groups of tion, and our social values. Technical and intercultural trainingschoolchildren to its facilities, giving them an insight into tech- courses as well as programmes tailored specifically to managersnical occupations and training opportunities. Tours of The High needs give our employees the skills they need to handle currentTechnology Experience and events organised as part of the Takeand future challenges. As a result, such training is an integral partTech initiative offer youngsters first-hand experience of cutting-of our corporate philosophy. The AT&S Management Trainingedge professions. Programme took place once again in the financial year 2011/12,with courses in Asia and Austria. The young participants under-Opportunities for Austrian appren-went intensive training designed to give them the skills requiredtices AT&S currently has some 34 trainees at its Austrian to assume leadership and project-related responsibilities.plants. The Group offers training in eight different professions:mechatronics technician, chemistry laboratory technician, phys- Enhancing job satisfaction Professionalics laboratory technician, mechanical engineering technician, and personal development opportunities play an important partelectrical service technician, production technologist, office ad-in encouraging staff to perform to the best of their ability. Aministration, and metals technician. Basic skills are vital for clearly defined system for internal job advertisements forms theeach of these training paths, and AT&S is proud that over 20% ofbasis of personal development paths. All vacancies are initiallyits trainees complete their apprenticeship with a school-leavingadvertised internally, and internal applicants are given prec-qualification. In the financial year just ended, all of the appren- edence over external candidates with identical qualifications.tices who completed their training took up specialist positions Internal appointments enable the Group to systematically in-within the Group. crease the level of employee qualifications.Cross-border training As a global enterprise, Focus on international coopera-AT&S is strongly committed to providing the staff at all of its tion AT&Ss global structure and international perspectivefacilities with training and development opportunities. In Indiarequire a constant exchange of skills and expertise and the closethe Group has made a significant contribution to the success of integration of different cultures in order to fully realise staffa development programme specifically designed for industrialpotential. The key steps taken to achieve this goal include expertworkers. Every year it prepares and certifies a large number of and management meetings with employees from all countriestrainees for work in international industrial enterprises.where the Group is represented, as well as cross-cultural andlanguage training. The Group21 22. AT&Ss global structure provides a variety of international careerHuman resources: facts and figures opportunities. The targeted employment of international experts Overall headcount remained unchanged in the financial year remains one of the most effective methods of encouraging fur- 2011/12. A drop in the number of trainees in China and a seasonal ther qualitative improvements and quantitative expansion at the decline in leased personnel in Austria were compensated for by companys Asian facilities. The ongoing transfer of skills andadditions to the headcount in China and Korea. expertise, which is designed to support the long-term expansion of capacities in the region, is a major priority in this regard. Pro- (as at 31 March)2011/12 2010/11Change fessional mobility and international collaboration are expressly Salaried 1,505 1,392 113 encouraged, and assignments to different Group facilities are Non-salaried and temporary 5,478 5,40474 supported by our mobility policy. AT&Ss worldwide leadership principles lay the foundations for cross-border cooperation and Trainees and work experience495 690 -195 the continuous development of the corporate culture. Total7,478 7,486 -8 Staff (incl. leased personnel) (as at 31 March) 2011/12 2010/11 Change Austria 1,243 1,374-131 China 4,910 4,571 3 339 India 1,035 1,278-243 Korea 233 21320 Other5750 7 Total 7,478 7,486-8 leased personnel (as at 31 March) 2011/12 2010/11 Change Austria89 171 -82 China 3,540 3,7983 -258 India4156 -15 Korea271215 Total 3,697 4,037-34022 The Group 23. Investor Relations Responsibility to shareholdersIR activities and aims The goal of our investor Standing in the finance markets Therelations activities is to provide all capital market participantssuccessful placement of a EUR 100m corporate bond with a five-with up-to-date corporate information transparently and si- year maturity and a 5% coupon in November 2011 shows AT&Ssmultaneously. The latest figures, data and facts are availableexcellent standing in the Austrian capital market. The bond wasonline at www.ats.net under Investors. The new permanent exhi-taken up by both institutional and private investors and was soldbition at the Leoben-Hinterberg plant gives virtual insights into out in a very short time. The proceeds of the issue will mainlythe manufacturing process of a complex printed circuit board. Inbe used to improve the financing portfolio, to expand capacitiesaddition, the Management Board is available to discuss any ques-and for general purposes.tions that analysts, shareholders and fund managers may have.Share price Since AT&S is considered one of the ViennaStock Exchanges cyclical stocks, the change in general marketsentiment also affected the performance of the AT&S share. The Financial calendarcontinuing decline in turnover on the Vienna Stock Exchange andthe escalation of the debt crisis in several European countries,leading to a deterioration in the economic outlook for Europe as 18th Annual General Meeting 5 July 2012a whole, had an unfavourable impact on the share price.1st quarter 2012/13 24 July 2012 Dividend payment date andCoverage In the autumn of 2011, UniCredit unexpectedly ex-dividend date26 July 2012ceased all coverage of Austrian shares. At the end of the report-ing period the AT&S share was being followed by four analyst Quarter 2 2012/13 23 October 2012houses, of which two rated the share buy and two rated it hold.Quarter 3 2012/13 22 January 2013In the medium term, the aim is to achieve coverage by a minimumAnnual Results 2012/138 May 2013of six local and international analysts.AT&S against the ATX Prime200%1-year performance AT&S ATX Prime180%160%140%120%100% 80% 60% 40% 20% 0%0101010101010101 0101010101/01/02/03/04/04 /05/06/07/08/09/10/11/12 /20 /20/20 /20/20 /20/20 /20/20 /20 /20 /20 /20 11 11 11 12 12 12 12 11 11 11 11 11 11The Group 23 24. In-car entertainmentand in-car infotainment 25. AutomotiveApplicationsAT&S - part of your daily life 26. Orientation and Focus Table of Contents Market Developments27 Vision 201532 AT&S Strategy33 Sales and Marketing36 The AT&S Product Portfolio38 AT&S Worldwide40 Supply Chain Management44 Research and Development45 Corporate Social Responsibility4826 Orientation and Focus 27. Market DevelopmentsHigh-tech on the advanceAT&S takes a confident view of the future. In the financial year 2011/12 the repercussions of the economic crisis were felt par-ticularly in the first two quarters, but in the fourth quarter the situation improved considerably and the financial year ended withrecord sales. The recovery of all AT&Ss markets had a positive effect on the whole financial year.The global market The global demand for printed circuit boards is characterised by long-term cycles. After thesharp drop in demand caused by the economic crisis in 2009 and the ensuing recovery in 2010, the market showed continuousgrowth again in 2011. The main drivers of this growth were the increasing demand for mobile devices and the general increase inthe use of electronics in a wide variety of applications in, for example, automobiles and medical technology. The forecasts for thecoming years predict that this trend will continue. This means that AT&S can look forward to a stable market environment in themedium term as well. USD million 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,0000,00019 1919 1919 1919 1919 1919 1919 1919 1919 1919 1920 2020 2020 2020 2020 2020 2020 2020 2080 8182 8384 8586 8788 8990 9192 9394 9596 9798 9900 0102 0304 0506 0708 0910 1112 1314 15Source: AT&SThe world of printed circuit boards Asia as growth driver Vigorous growth of 6.5%in numbers In the last year, the manufacture of print-is predicted for 2012, which would make the global market worthed circuit boards worldwide increased in value to USD 55.4bn, USD 59.0bn. The positive market outlook is mainly a reflection ofan increase of 5.6% compared with the previous year (2010:the driving force of the Asian markets. Analysts expect China toUSD 52.4bn). This positive development benefited all regions: remain the strongest growth driver, and substantial growth ratesproduction in China increased by nearly 10%, while production inare also predicted for the rest of Asia (not including Japan). Fore-Asia excluding China and Japan also grew by 10%. Even in Europe casts show growth of 9.4% in China, and a respectable 9.3% forthere was an increase of roughly 3.5%. Broken down by technolo- the rest of Asia (not including Japan). In Asia the lowest growthgies, at 17.4% HDI printed circuit boards showed the strongestrate is expected for Japan, at 2.5%. A look at the rest of the worldgrowth, followed by flexible printed circuit boards with 12.4%puts this low growth rate for Japan into perspective: while theand IC substrates with 6.6%.Japanese growth rate will be low, in the Americas and Europe ex-pected growth rates are even lower (0.9% and 0.7% respectively).Orientation and Focus27 28. Market growth by technology In terms Growth of printed circuit board marketof technologies, HDI printed circuit boards will be the fastest grow-ing segment with an 11.5% increase, followed by flexible printed 5.4% 4.4%circuit boards with 10.0% and IC substrates with 7.4%. With the4.6% 68.2 70construction of a high-tech printed circuit board manufacturing6.5%plant in Chongqing, China, AT&S has already taken these future64.7 5.5% 61.7developments into account.59.0 6055.423.5The plant, located approximately 1,500 kilometres from the ex-52.5isting manufacturing facilities in Shanghai, is geared primarily18.920.421.9 50towards the production of next-generation high-end printed cir- 16.017.5cuit boards. With this plant the AT&S Group is anticipating the 40market developments that are becoming apparent in order to beable to grow with the market in a sustainable and timely fashion. 30.030The coming years Over the next five years, i.e., up 20.021.9 23.825.7 28.8until the end of 2016, volumes in the printed circuit board marketare expected to reach USD 72.0bn per year, an annual growth rate 20(CAGR) of 5.4%. This growth will chiefly be attributable to in- USD billioncreases in production in China, where the growth rate is expected 10.29.9 9.4 9.9 9.68.510to average 9.1% over the period. Production volumes in the rest ofAsia (not including Japan) are expected to increase by an average 3.93.93.9 3.8 3.7 3.7of 7.6%, while the other regions (Americas, Japan and Europe) will2.52.62.6 2.5 2.4 2.2 0decline by 1-3% during the period.20102011 20122013 2014 2015 Europe AmericaJapanChina Asia (excl. Japan and China)SOURCE: PRISMARKEnd-user markets for our core businessesMobile Devices SmartphonesNon-smartphones Total 2,5002,1351,969 2,0001,8171,6761,5461,5001,1031,1211,1531,055 1,085982 1,000848 sold million units714591 54%491 68% 65% 60%57%46% 50043%40% 35%32%0201120122013 2014 2015Source: IDC28Orientation and Focus 29. Mobile Devices Smartphones are the major growth driv-Automotiveers in the mobile devices sector. In 2011 smartphones alreadyaccounted for 32% of the overall mobile phone market. In 2012 120smartphone sales are forecast to rise by a further 20%. ComparedTriad (Japan. N. America, Western Europe) 114with just 10% growth for the market as a whole, this underlines Chinathe increasing importance of the smartphone business. The long- BRI (Brazil, Russia, India)11%term forecast is that smartphones will replace standard mobileOtherphones as the dominant application. 100Tablet PC sales14% 350 80 300 2852506531% 2505714%60 19711% 11% 2006%3%22% 150 40New vehicle sales (million units)124 100 44%sold million units6580%2053%50 0 201102012 20132014201520002011 2025 SOURCE: JD PowersThe tablet market also showed extremely strong and sturdyWorldwide sales of passenger vehicles grew by 6% in 2011, withgrowth last year. In 2011 65.2 million tablets were sold, and for65.4 million new cars sold, making for a very strong and stable2012 analysts predict another jump in sales to approximately market. Analysts from the German Association of the Automo-124 million units. This represents an annual growth rate of 90%. tive Industry (VDA) predict growth of 4% for 2012, for a total of 68 million units. The markets in China with an increase of ap-Industrial In 2011 the economic slowdown particularlyproximately 10% and India with an increase of 8-10% will be themarked in Europe meant that growth in industrial business wasgrowth drivers. For the USA the analysts are expecting growthvery moderate. Growth rates higher than 5% were only achievedof around 5%. In Europe and Japan sales are expected to remainin a few market segments. Because of the uncertain economicstable at last years levels. The long-term trend can be assumedoutlook no significant increases in sales are expected for 2012. to be one of continuing growth in the market for automobiles. InAT&S is expecting growth of 3-5% in industrial business in 2012this industry the developments in the high-tech segment are ofand a fiercely competitive environment as a result.particular relevance to AT&S, since the automotive electronics market is showing stronger growth than the automotive industry itself.Orientation and Focus29 30. A successful operation usingAT&S technology 31. Medical andHealthcare ApplicationsAT&S - part of your daily life 32. Vision 2015 Tomorrow is already here Robert Jungk Thanks to its high-end printed circuit boards and innovationNew demands from a changing so- strategy, the AT&S Group has become a major international ciety We also expect to see rapid growth in the medical competitive force. AT&Ss products now set the standards fortechnology segment. This is due to a variety of factors, including miniaturisation and the design of electronic devices. Advancesincreases in average ages, greater awareness of health-related in smartphones, the spread of tablet PCs, the introduction of matters, more affordable basic medical treatment, and improved new mobile telephony standards such as Long Term Evolutionhealth service infrastructure in the emerging economies. As a (LTE) as well as the increased use of electronics in all segments result, AT&S sees a number of major growth opportunities in the will change the world and increase the need for more complexmedical technology business. printed circuit boards. In the past two years AT&S has invested heavily in expanding capacity and in new technologies to keep Focusing on what we do best AT&Ss stra- pace with these trends. tegic focus lies in technically advanced market segments with attractive growth rates. The new plant currently under construc- Smartphones driving growth Forecaststion in Chongqing, China will increase our high-end production suggest that deliveries of smartphones will pass the 500 mil- capacity, making it a key element in the Groups strategy. The lion mark in 2012. The emerging economies of the Asia-Pacific strategic partnership set up recently with flexible printed circuit region, especially China and India, and the Central and Latin board manufacturer MFLEX is also significant, since it will en- American states are the main drivers of this rising demand. Thisable us to produce best-in-class HDI rigid-flex printed circuit has significant implications for AT&S: the Group needs to growboards for electronic applications. Although both companies will its core business in order to keep up with market developmentscontinue to service their core markets, they will be able to incor- and satisfy customer requirements.porate the new technology in their product portfolios. Customers will also benefit from access to MFLEXs and AT&Ss combined Smarter cars As predicted, the automotive electron- expertise in rigid-flex printed circuit boards, which in turn will ics sector is expanding more quickly than the automotive indus- open up a host of potential new applications and designs. try, and the number of printed circuit boards found in vehicles will continue to rise. We are likely to see above-average growthOur mission for 2015 AT&S Group is the technol- in applications related to information and communication, en- ogy leader in the market for high-end printed circuit boards. vironmental protection and energy saving, as well as safety and AT&S leads the field in miniaturisation and integration, and its reliability. Demand for HDI technology will rise in line with interconnection solutions give customers a decisive competitive the increased implementation of multimedia, infotainment andedge. As a global provider with European roots, the group is navigation systems. The automotive electronics market will be strongly committed to sustainability, quality and the efficient worth USD 200bn by 2015, and as the technology leader in themanagement of resources. printed circuit board industry, AT&S will benefit significantly from these trends.32 Orientation and Focus 33. AT&S StrategyPlanning: focusing on tomorrows needs todayThe AT&S Groups strategy is geared towards innovation and long-AT&Ss new high-tech plant in Chongqing, which will focus onterm, profitable organic growth.next-generation technologies, will help the Group to bolster itsposition on the highly competitive Asian market.Positioning on global markets Securinga strong position on global markets is a vital strategic aim forFocus on research and developmentAT&S. Achieving this requires well thought-out, forward-looking Identifying the materials and interconnection solutions that willresponses to market developments, allowing us to grow effectively shape the future is already a vital issue. Scarce resources, thein line with our markets. ongoing trend towards miniaturisation, shifting demographicstructures, changes in global competitive conditions, and the in-More specifically, this means leveraging our strengths in Europecreasing prevalence of communications solutions are constantlyand capitalising on opportunities in Asia. AT&S is currently ex-placing new demands on AT&Ss products. In addition, technologi-tremely well placed to achieve these goals. Thanks to its Shanghaical advances are opening up new applications for high-end printedplant - one of the most modern of its kind in the world - the Group circuit boards. Last financial year AT&S reinvested some 6% ofis in a position to meet the rising demand in the mobile devicesrevenues in applied research and technology development, withbusiness, which can be traced back to increased sales of tablet PCs the aim of bolstering its position as the most innovative companyand the rapid expansion of the smartphone segment.in the printed circuit board industry.Securing a share of the growing demand for high-end printed cir-Corporate social responsibility As acuit boards from the automotive industry, and promoting new dedicated corporate citizen, AT&S is committed to meeting itsapplications in this field, are also among AT&Ss strategic objec-economic, environmental and social responsibilities. The efficienttives. In addition, attractive niche markets are opening up in theand sustainable use of all kinds of resources is the key to AT&SsGroups traditional industrial business. AT&S sees excellent op-business success the economical and responsible use of resourc-portunities in the medical technology sector, where the diagnosis es enhances the Groups ability to compete and continue growing.segment, and applications for therapeutic and medical equipment AT&S also has a responsibility towards people and the planet. Allare increasingly becoming the centre of attention.of the Groups sites operate according to the strict environmentalregulations that apply in Europe, and AT&Ss emissions of exhaustThe Groups potential target markets include Asia and Europe, air and wastewater have been below EU standards for many years.as well as the USA, where AT&S anticipates growing demand for The company is also committed to addressing the needs of itshigh-end technologies and design. employees and local communities. Strategy at a glance Technology leader in the high-end segment Most innovative company in the printed circuit board industry Focus on research and development AT&S committed to people and the environment Orientation and Focus 33 34. A safe flightwith AT&S 35. Aviation andSecurity Applications AT&S - part of your daily life 36. Sales and Marketing The journey is its own reward Confucius AT&S aims for stable long-term customer relationships. These customers are high expectations in terms of product quality and depend not just on meeting customer expectations, but on antici- on-time delivery. Whether it is involved in development projects pating and exceeding them. Reliability and trust are the corner- or the run-up to volume production, AT&S offers custom solu- stones of AT&Ss partnerships with regular customers.tions an important differentiator. Global network AT&S is equally comfortable work- Thanks to its new partnership with flexible printed circuit maker ing with small firms and global corporations; its partners varyMFLEX, AT&S can now offer best-in-class rigid-flex printed cir- from one area of business to another. Seven plants in Europe and cuit boards for electronic devices. The line-up enables the two Asia, and a service and sales network that spans four continents sides to pool their expertise. enable AT&S to provide customers of all kinds with responsive service across a wide range of time zones. Customers are also benefiting from an alliance between AT&Sand Panasonic Electronic Devices Co. Ltd. The licensing agree- Broad customer base AT&Ss customer portfo-ment with the latter has enabled AT&S to become the first com- lio is varied in terms of the industries involved as well as geo-pany to market Panasonics ALIVH technology worldwide. This graphical locations. The Group supplies printed circuit boards has advantages in terms of miniaturisation, reduced environ- not only to manufacturers of mobile devices, but also to custom- mental impacts and production efficiency. The new technol- ers in the industrial electronics, measurement and control engi- ogy offers shorter throughput times and more environmentally neering, medical equipment and aviation industries. The main friendly production processes both major concerns for AT&Ss markets for the printed circuit boards designed for the latter customers. applications are Europe and the USA; the customer base is highly diversified. Most of the AT&S Groups automotive customers are Industrial This business unit comprises over 500 cus- in the high-end market segment. This broad customer base bringstomers with a vast array of technological requirements. The end a wide array of highly specialised requirements which the AT&S products run the gamut from measurement and control systems Group meets by developing custom solutions.to medical equipment, industrial computers and avionics. All thiscalls for a high degree of adaptability. The products supplied Special features of AT&Ss businessrange from multilayer printed circuit boards with up to 22 layers All of AT&Ss operations, and in particular those of Mobile De-through to single and double sided, flexible and semi-flexible, vices are subject to seasonal variations in the first and fourth and rigid-flex boards. quarters capacity utilisation is generally lower than in the sec- ond and third. Boosting efficiency and delivering top quality standards are majorissues in this line of business, too. Last years start-up of volume Mobile Devices The main growth driver in the Mo- production of the first heart pacemakers with highly complex biles Devices segment is the HDI market. Eight of the ten leadingprinted circuit boards marked a major strategic breakthrough for mobile phone manufacturers currently put their faith in AT&Ss AT&S. AT&S is one of only a few European printed circuit board expertise, its reliable production methods and its ability to keep manufacturers to have obtained certification under the EN ISO developing new miniaturisation solutions. Any-layer HDI boards 13485 medical devices standard and meet the high quality man- are in growing demand. Last year AT&S responded to the impor-agement standards associated with medical equipment. tance of this market by opening a new sales office in Taiwan.Most of Industrials sales are generated in Europe and the USA. The suppliers of smart phones, tablets and notebooks, musicAustria, Germany and Switzerland are the largest national mar- players, digital cameras and game consoles have their roots in kets. However the consolidation trend currently under way is a number of different industries, meaning that AT&S must beopening up growth opportunities for AT&S in other countries open to its customers varying cultures. What is common to all notably the USA.36 Orientation and Focus 37. Automotive Automotives core geographical market is Sustainability is another important issue. AT&S is developingEurope. Virtually all of the major tier one European automotive specialised printed circuit board technologies such as thickcomponent suppliers are AT&S customers. AT&S is aiming to copper, IMS and HSMtec for heat management and high-currentprogressively widen its geographical reach. The trend towards applications in powertrains which should underpin long-termincreased use of high-tech components is creating big growthgrowth in this line of business.opportunities for AT&S. AT&S supplies its automotive custom-ers with a variety of products, including single and double sided The autoelectronics market is expected to grow faster than theprinted circuit boards, and HDI microvia and any-layer boards.automotive market as a whole. HDI and standard multilayerMany are custom solutions.boards are the main products required for high-priced, high-tech cars. Standard printed circuit boards are mostly built intoThe increasing amount of electronics built into cars threatenssmaller, more affordable models.to deluge drivers with a flood of information they can scarcelysift through without help. Because of this AT&Ss customers aredeveloping systems that control the information flow and onlytell drivers what they need to know in a given situation. KEY DIFFERENTIATORS Stable long-term customer relationships Anticipating customer expectations at an early stage Extensive customer portfolio Custom solutions Orientation and Focus 37 38. The AT&S Product PortfolioAT&S - part of your daily lifeHDI microvia PCBs Laser-drilled circuit boards with up to 5 microvia build-up layers per circuit board side, or with stacked microvias throughout over the whole thickness of the circuit board Applications: handheld devices and con- sumer electronicsFlexible PCBs onAluminium Flexible PCBs bonded on anANYLAYER PCBs aluminium heatsink. For high- Laser-drilled with microvias at each volumes LED applications forinterconnection boundary and rear lighting and Applications: smartphones and automo-front headlights in the automotivetive applications segment, as well as for LED appli-cations in building lightingEmbedded ComponentPACKAGING (ECP) Integration of passive and active elec- tronic components in the printed circuit board Applications: increased efficiency through miniaturisation Multilayer PCBs (up to 22 layers) Made from standard to high Tg materials, as well as special materials Applications: high-frequency applications, and all electronics applications and indus- tries38 Orientation and Focus 39. The AT&S Group has six production plants specialising in different technologies, and a seventh is currently under construction. As a result AT&S has a comprehensive product portfolio, efficient man- ufacturing operations and high quality standards. Technological and economic considerations deter- mine which type of printed circuit board is used for a given application. Consumers encounter AT&S products in many different guises in their everyday lives. 2.5D technology platform Mechanical integration by means ofcavities and novel semi-flexible manu-facturing concepts (flex-to-install ap-plications; usable for one-time bending- radius 3mm) Applications in all segmentsFlexible PCBs For static and dynamic bending ap-plications where space and weightreduction is requiredRigid-Flex PCBs Combine the advantages of rigidand flexible PCBs by substitutingcables and connectors, and achiev-INSULATED METALLIC SUBSTRATEing the required level of miniaturi-(IMS)sation Printed circuit boards designed for enhancedcomponent heat dissipationUsage Applications: automotive LED products and Industrial, medical, consumer andbuilding lightingautomotive applicationsDouble-sided plated-through PCBs Made of epoxy resin or special materials Applications: high-frequency applications, and all elec-tronics applications and industries.Single-sided PCBs Made of phenolic or epoxy resin materials Applications: in the automotive and industrialNuCleusmarket segments Alternative, environmentally friendly single-card manufacturing concept Material and energy savings, with increased panel utilisationOrientation and Focus39 40. AT&S WorldwideSeven international sites The AT&S Group currently has six production plants specialis- ing in different technologies: Leoben-Hinterberg, Fehring and Klagenfurt in Austria, Ansan in Korea, Nanjangud in India and Shanghai in China. The Group is currently building a seventh facility in Chongqing in China. AT&S employs around 7,500 peo- ple worldwide. Each of the plants concentrates on a specific portfolio of tech- nologies. The Austrian plants are geared to the European market and also, increasingly, to the American one. Short production times, special applications and a greater emphasis on suppli- ers closeness to customers are typical for Europe. The plants in Austria, India and Korea usually concentrate on small and medium-sized batches for industrial and automotive customers, while in China the focus is on large volumes for mobile commu- nications customers. Shanghai and Leoben-Hinterberg are a major innovative force within the AT&S Group thanks to their research and develop- ment facilities.Leoben-Hinterberg (Austria)Headquarters Staff: 753 Opened: 1982 Fehring (Austria) Production capacity: 130,000 square metres Staff: 379 Customer orientation: 12% Automotive, Opened: 1974 86% Industrial, 2% Mobile Devices Production capacity: 300,000 square metres Customer orientation: 44% Automotive,Technologies 56% Industrial Standard printed circuit boards HDI Multilayer printed circuit boardsTechnologies Rigid-flex printed circuit boards Double-sided plated-through printed circuit ECP (Embedded Component Packaging) boards Rigid-flex printed circuit boardsCertifications DS/EN ISO 13485:2003 Certifications ISO 9001:2008 ISO 9001:2008 ISO/TS 16949:2009 ISO/TS 16949:2009 ISO 14001:2004 ISO 14001:2004 OHSAS 18001:2007 OHSAS 18001:2007 Sony Green Partner Certificate Sony Green Partner Certificate40 Orientation and Focus 41. Ansan (Korea) Staff: 233 Opened: 2006 Production capacity: 120,000 square metres Customer orientation: 5% Automotive, 36% Industrial, 59% Mobile DevicesTechnologies Single and double-sided flexible printed circuit boards Flexible multilayer circuit boards Rigid-flex printed circuit boards Flexible printed circuit boards with metal reinforcementCertifications ISO 9001:2008 ISO/TS 16949:2009 ISO 14001:2004 OHSAS 18001:2007Shanghai (China) Staff: 4,910 Opened: 2002 AT&Ss largest production facility and the largest HDI printed circuit board manufacturing plant in China Production capacity: 710,000 square metres Customer orientation: 4% Au- tomotive, 2% Industrial, 94% Mobile DevicesTechnologiesKlagenfurt (Austria)Nanjangud (India) HDI multilayer printed circuit Staff: 107 Staff: 1,035boards Opened: 2003 Opened: 1999 Production capacity: 300,000 square metres Production capacity: 300,000 square metres Certifications Customer orientation: 17% Automotive, Customer orientation: 47% Automotive, ISO 9001:2008 83% Industrial53% Industrial ISO/TS 16949:2009 ISO 14001:2004TechnologiesTechnologies OHSAS 18001:2007 Single-sided printed circuit boards Standard multilayer circuit boards Sony Green Partner Certificate Double-sided, not through-hole plated Double-sided plated-through printed circuit Canon Green Partner Certificate printed circuit boardsboards with reinforcement Insulated metallic substrate (IMS)CertificationsCertifications ISO 9001:2008Chongqing (China) ISO 9001:2008 ISO/TS 16949:2009 Groundbreaking ceremony: ISO/TS 16949:2009 ISO 14001:2004June 2011 ISO 14001:2004 OHSAS 18001:2007 Focus: high-end products OHSAS 18001:2007 Orientation and Focus41 42. AT&S drives mobilityin all market segments 43. ECP - The Leading Chip Embedding TechnologyAT&S - part of your daily life 44. Supply Chain Management Good planning is half the battle Supply chain management is the creation of a single process toGetting thereModern supply chain management meet the logistics needs of suppliers, internal operations andmethods and AT&Ss global presence underpin optimum secu- customers. It includes capacity and materials planning, storage rity of supply. The goal is to constantly improve the balance of provision, logistics and billing. global demand and capacity, and to pare the total cost of the end product down to a minimum. AT&S can not only promise its Supply chain management a key customers good quality and supply security, it is also increas- success factor AT&S supplies customers in manyingly offering one-stop shopping and vendor managed inventory different sectors from the mobile phone to the automotive, med- (VMI) solutions. ical equipment and aviation industries. Because of the vast array of custom products, in an average year the AT&S Group deliversOptimised planning tools To keep produc- about 16,000 different products to a broad range of different tion going, AT&S needs almost one tonne of gold, 2,001 tonnes of customers. It goes without saying that reliability and qualitycopper, and 875 tonnes (seven million square metres) of copper are key. In a fast-moving industry like printed circuit boards, foil. The Group also processes some 11 million square metres of just-in-time (JIT) production where parts and products are notlaminates and 82,000 tonnes of chemicals, using 27 million micro delivered until they are needed, reducing the need to hold inven- drill bits and five million router bits. tories calls for outstanding supply chain management skills. JIT ordering and the wide range of products make stockholding State-of-the-art IT tools help manage the gigantic flows of goods and production planning highly complex. and information, and the processes taking place in the back- ground, reliably and efficiently for customers and suppliers. The AT&S vision AT&Ss supply chain managementThey support precise planning, geared to available production systems play a major part in maintaining our competitivenesscapacity, making it possible to check the feasibility of every or- and meeting the high quality standards customers expect. It der at once. This enables AT&S to operate efficiently, and to matches customer requirements with suppliers capacity and themaintain customer satisfaction by providing reliable deliveries specialisms of the AT&S Groups sites around the world. Not onlyand constant quality. is AT&S a global player with an international network of pro- duction plants, but customers operations and locations are justThe AT&S Groups delivery reliability has long been above 90%, as diverse. Because of this the key task of AT&Ss supply chain and hit 94% last year despite the fact that order volume and management functions is to optimise the activities involved onoutput have steadily risen. A delivery is only deemed to be have a global basis. Taking a total cost approach to operations alongbeen properly made if the quantity and arrival time are abso- the entire supply chain maximises quality and competitiveness.lutely correct. Customer focus The smooth interaction of all con- cerned is the key to the success of any supply chain manage- ment system. The AT&S Groups network comprises about 1,000 customers worldwide and 800 suppliers, 35 of which are classed as key suppliers. An average of 350 shipments and 300 parts numbers are dispatched each day. In all, AT&S handles logistics and inventory management for almost 500 different products at over 60 storage facilities around the globe, and ensures that stocks are kept between specified minimum and maximum levels.44 Orientation and Focus 45. Research and Development Lift your eyes and you will see no bordersChinese sayingIn the past few years AT&S has become one of the technology Challenges But making a reality of such developmentsleaders in the printed circuit board industry. Behind this successwill involve paying close attention to the problems of the future.lies a record of constant innovation, product replacement and For example, the availability or scarcity of natural resources willsuccessful marketing of new products. be an increasingly pressing issue. Intensifying competition fordwindling supplies of commodities over the next few decadesGrowth driver The importance of new technological will inevitably be a major focus of the AT&S Groups researchdevelopments for the AT&S Group is shown by the fact that overand development effort.15% of our revenue in FY 2011/12 was generated by productslaunched in the past three years. Technological strategy The trends andconsiderations outlined above form the basis of AT&Ss techno-Future developmentsThe potential for pro- logical strategy. The core of the strategy can be summarised ingress and the pressure to innovate are particularly great in thethree main goals:electronics industry and nowhere more so than in the smart-phone business. Stress on the high-tech segment The new tech- nologies and products taking shape at AT&S are aimed at theIndustry analysts expect new technology to make it even easier high-tech segments of their respective markets.to exchange information. Mobile devices are set to be still moreseamlessly integrated with everyday living. Sensors that capture Increased contribution to the value chaininformation and transmit it to processors will increasingly be The new technologies and products AT&S is evolving will playused in public and private spaces. In the future electronic sys- an increased role in the manufacturing value chains of elec-tems will pull the strings in the background in many products - astronic devices.is already the case in luxury cars - making life simpler and safer. Reduced consumption of natural resour-The key to this will be continued miniaturisation of terminalces AT&S is developing new technologies and products thatdevices and the roll-out of wireless capable infrastructure. The will consume fewer natural resources (materials, water, en-aim is not just to enable users to communicate, but to allow ergy, etc.) than their conventional counterparts.machines and devices to do so as well. Orientation and Focus45 46. The four pillars of AT&Ss R&D ac- Mechanical integration A key issue addressed bytivities On the basis of these key strategic goals, as well as this core development area is improved integration of the printedcustomers needs and suppliers developments, AT&S has identi- circuit board with the other components in an electronic device.fied four core development areas that will form the centrepieceNew rigid-flex boards, cavity and embedding techniques andof the Groups efforts. A large number of projects aimed at creat- fully flexible boards are under development.ing the technologies and products of the future revolve aroundthese issues. Many different departments at AT&S are involvedFunctionality integration This R&D field involvesin researching into the future and attempting to bring it closer.integrating additional functionalities in the printed circuit board. It is chiefly concerned with new approaches to embed-Overview - Core development areasding components where this is not yet possible with the AT&S Groups current ECP technology.Interconnect density This R&D area concerns devel-oping new solutions designed to further reduce the dimensionsPrinted solutions This development area focuses onof the printed circuit board while increasing its complexity. De-new solutions that reduce the consumption of water and othervelopment activities are mainly driven by chip design. Changes natural resources (e.g. copper). New technologies based on print-in chip technology have a direct impact on printed circuit boards, ing are being developed. These will make it possible to manufac-and the latter must connect chips with other components. Anture printed circuit boards with minimal resource inputs.important task is to reduce the size of the structures and thethickness of the boards without affecting the necessary electricaland mechanical properties. New ProdUCtsNew AT&S products Key DevelopmentInterconnect MechanicalFunctionalityPrinted Areasdensityintegration integrationsolutionsStrategic MINIATURISATIONIntegration ConceptsTargetsEco-Friendly Products46Orientation and Focus 47. Patent strategy The AT&S Groups increased fo- Patent declarationscus on research and development goes hand in hand with strong-er legal safeguards for our core technologies. In the past financial 21year AT&S filed nine patent applications, and now holds 62 pat-20ents and patent applications. The constant growth in the patent 5portfolio underpins our reputation as a technologically advanced16printed circuit board supplier.151212 2 2 1016 161010510 1 Interconnect Fuctionality MechanicalPrinted Otherdensity integrationintegrationsolutionsPatents led in FY2011/12Existing patents Orientation and Focus 47 48. Corporate Social ResponsibilityLiving up to our responsibilities As a global corporate citizen, AT&S is committed to combin-Environmental policy AT&S takes its envi- ing an entrepreneurial approach with social and environmentalronmental responsibilities extremely seriously. The continuous responsibility, and to applying the highest possible standards improvement of processes and products is a vital task at all levels at all of its facilities. For AT&S sustainable business practice of the organisation, and the Group places particular emphasis on means using the available resources to deliver the best possible the economical use of resources. A series of targets are in place long-term results for all our stakeholders. We recognise that thethat reflect the principles set out in AT&Ss environmental policy people, planet and profit dimensions of performance need not and its obligation to constantly enhance its environmental per- conflict with each other. On the contrary, all three underpin theformance. These targets also take into account key environmen- sustainability of a business.tal factors, as well as economic and operational considerations.AT&S constantly strives to exceed statutory requirements and Integrated management system minimise the ecological impact of its products and services. To AT&S AGs integrated management system (IMS) helps the com-date, the Group has invested EUR 30 million in environmental pany to take a systematic, holistic approach to managing and protection measures at its Shanghai plant. mapping all internal business processes. This is essential to implementing company policy and meeting corporate targets. Social responsibility AT&S aims to achieve the The system enables us to bring together the requirements withhighest possible standards of corporate citizenship. This means respect to a range of issues such as quality, safety and the envi- going beyond compliance with minimum legal requirements for ronment in a uniform management system.socially responsible behaviour. We make a significant contribu-tion to the welfare of people living in the catchment areas of our A tool for the long term The IMS is a man- plants around the world by means of targeted health care and agement tool that facilitates long-term improvements within theeducation projects. In the past financial year, AT&S provided organisation. The system sets up common regulations for allmedical care to local communities living close to the Nanjan- AT&S facilities, and is based on the ISO 9001 and IOS/TS 16949 gud facility in India. In China, the Group donated CNY 1m for (quality management for automotive production) quality stand-a technical college and IT equipment for local schools to mark ards, the ISO 14001 environmental management standard andthe groundbreaking ceremony for the new Chongqing facility. In the OHSAS 18001 standard for occupational health and safety. Inaddition, employees at AT&Ss Asian sites receive a host of fringe addition, the Hinterberg site was certified according to the ISO benefits, including an extensive shuttle bus network, staff rooms, 13485 standard for medical devices in 2011 another important small supermarkets, libraries, internet access and on-site medi- step towards expanding the product portfolio. The suitabilitycal check-ups. We also support various local projects such as and effectiveness of the integrated management system is as- the construction of a nursery school and a health centre in India sessed by means of regular senior management reviews, internal with the aim of creating sustainable community infrastructure. audits and audits by independent certification bodies. Occupational health and safety Rais- ing awareness of safe working methods and avoiding accidents is the primary objective of AT&Ss occupational health and safety and emergency prevention activities. Thanks to ongoing training courses, annual initiatives and long-term goals all of which are part of the IMS we again recorded a 5% drop in accident rates during the financial year. A global reporting system and stand- ardised approaches have enabled AT&S to continuously improve its excellent safety record and reduce the time lost through ac- cidents at work, which is already well below the statutory limits.48 Orientation and Focus 49. AT&S leading the way in corporatekoprofit project Improving energy efficiency is thesocial responsibility Last year a number of ourcentral aim of the Styrian provincial governments koprofitcompetitors hit the headlines for their lack of social responsi- project. The Fehring facility joined forces with other businessesbility and the shortcomings in their environmental protectionto identify potential energy savings and devise measures aimedsystems. By contrast, AT&S is proud of the recognition it hasat enhancing energy efficiency. This resulted in the installationwon for its commitment to corporate social responsibility (CSR), of a variable speed compressor with a heat recovery system inand its activities in this area. The Group has secured a numberFehring.of awards in China, India and Austria, and has been singled outby the Chinese government as an industry benchmark for CSR GLOBAL CARBON FOOTPRINT AT&S Group, CO2 emissionsperformance. from production and transportAT&S is aiming to reaffirm its commitment to CSR principles 60and to give them an even higher profile within the company.6057 54The launch of the Sustainable AT&S project in late 2011 markedthe first step towards integrating CSR into all of the companysoperations. A global project team is currently working on a strat-egy and a set of targets for the next five years, in consultationwith the Management Board. Our aim is to make sustainability 40a central aspect of the day-to-day work of every employee. As aresult, the entire organisation will need to play a part in imple-menting global environmental protection, occupational health53and safety, and social initiatives.47 20Projects and long-term initiativesReducing CO2 emissions In the financial year 2011/12, kg/mall of our facilities continued to implement measures aimed atachieving an annual reduction of 5% in greenhouse gas emissions 0from production and transport. Initiatives at our plants around20112012 2013the globe resulted in a 10% cut in actual CO2 emissions to 47 kg/m of printed circuit boards. Actual CO2 emissionsTarget CO2 emissionsRecycling printed circuit board waste Allmetals such as copper, nickel and gold can recycled. The remain-ing insulation materials are incinerated or properly disposed of.Nachhaltigkeitsland Steiermark projectThe federal province of Styria launched the NachhaltigkeitslandSteiermark (Sustainable Styria) project in November 2011. Theproject enabled small groups of companies to exchange notes onsustainability strategies. AT&Ss Hinterberg and Fehring plantswere closely involved in the project, which officially concludedin May 2012.AIM Annual reduction of 5%in CO emissions from productionand transport Orientation and Focus 49 50. Driverless carsfor greater safety 51. Future TrendsAT&S - part of your daily life 52. Corporate Governance Report Table of Contents Principles and Corporate Governance Declaration53 AT&S AG Management Board54 AT&S AG Supervisory Board56 Independence of Supervisory Board Members58 Committees59 Remuneration Report60 Directors Holdings & Dealings62 Other Codes of Conduct6352 Corporate Governance Report 53. Principles andCorporate Governance DeclarationAT&S Austria Technologie & Systemtechnik AG (AT&S) declaresBy the following commitments, AT&S has complied with all theits voluntary adherence to the Austrian Corporate Governance provisions of the CGK in the version of January 2012 sinceCode (CGK) in the amended version as of January 2012. 31 March 2012:Corporate Governance CodeIn AustriaC Rules 27-28a and all related passages: Thesethe Corporate Governance Code, drawn up by the Working Group rules were amended in the course of the review of the CGK infor Corporate Governance under the guidance of the governmentDecember 2009 and came into force on 1 January 2010. Rulesauthorities responsible for the Austrian capital markets has been27, 27a and 28 contained in the version of January 2010 only ap-in force since 1 October 2002. Since then it has been reviewed ply to contracts concluded after 31 December 2009. As a result,annually in light of national and international developments these rules do not apply to the appointment of Mr Moitzi to theand where necessary amended, most recently with effect ofManagement Board. Due to the short period between the most1 January 2012.recent review of the CGK and the appointment of Mr Gersten- mayer as Chairman of the Management Board in mid-DecemberThe Code contains all the rules essential to good corporate gov- 2009, and in order to avoid any departure from the remunerationernance, divided into the following categories:provisions applicable to the appointment of Mr Moitzi, the new rules were not taken into consideration in the contract concluded L Rules (legal requirements): rules based on mandatory statu- with Mr Gerstenmayer in January 2010. These rules were alsotory requirementsnot included in the Management Board appointment agreed with C Rules (comply or explain): rules from which any departure Mr Obendrauf in October 2010, in order to avoid any unequalmust be explainedtreatment of individual Management Board members. R Rules (recommendations): rules in the nature of recommen-dations, where non-compliance need neither be disclosed norManagement bodies of a public lim-explained. ited company The Management Board is responsible for managing the affairs of the company so as to further theThe version of the CGK currently in force can be downloaded wellbeing of the company, taking into consideration the interestsfrom the Working Groups website. An English translation of theof shareholders, employees and the general public. Members ofCode and interpretations of the Code prepared by the Working the Management Board are appointed by the Supervisory Board.Group are also available there. The Supervisory Board is responsible for overseeing the manage-For many years, AT&S has followed a strategy designed to further ment of the company and is required to convene at least once athe long-term, sustainable growth of the Groups value. AT&S has quarter. Members of the Supervisory Board are appointed by thebeen listed on the Vienna Stock Exchange since May 2008, and General Meeting. In addition, the employee representatives aresince then the company has subscribed to the Austrian Corporateentitled to delegate one representative as a Supervisory BoardGovernance Code. An undertaking to comply with the CGK is a member for every two Supervisory Board members elected bycondition prerequisite for the listing of Austrian companies onthe General Meeting.the Vienna Stock Exchange Prime Market. AT&Ss commitment tothe principles of good governance is reflected in the open discus- The General Meeting is the primary forum for shareholders tosions that take place within and between the Management Boardexercise their participatory decision-making rights as providedand the Supervisory Board. under statute and the companys articles of incorporation. Corporate Governance Report 53 54. AT&S AG Management Board The Management Board is collectively responsible for the manage- ment of the company. Each member of the Management Board is also responsible for specific areas of the business which does not affect their collective responsibility. Management Board members have a duty to keep each other informed of all important business events and transactions. Fundamental issues of business policy and major decisions require the joint decision of all Management Board members. Open discussions take place between members of the Management Board during Board meetings. If unanimous agreement is not reached on such decisions, the Chairman of the Supervisory Board must be informed without delay. The Supervisory Board must also be informed of all proposed de- cisions with far-reaching consequences. The Management Board must inform the Supervisory Board at least once a year of measures taken to combat corruption in the Group. Internal audit has been set up as a separate organisational unit answerable to the Man- agement Board. The audit plan and any material outcomes must Andreas Gerstenmayer be reported to the Audit Committee at least once a year. The rules Chairman of the Management Board and procedures of AT&Ss Management Board require the Boardsince 1 February 2010, appointed until 31 January 2013 to meet at least once a month. A total of 27 Management Board meetings were held in the past financial year. The minutes of allMr Gerstenmayer was born on 18 February 1965 and is a German Board meetings and decisions must be taken in writing. citizen. He studied Production Engineering at Rosenheim Univer-sity of Applied Sciences. In 1990, he joined Siemens in Germany, As of 31 March 2012, the Management Board of AT&S consistedworking first in lighting, and then holding various management of Andreas Gerstenmayer (Chairman), Thomas Obendrauf (Deputy positions in the Siemens Group. In 2003 he was appointed Manag- Chairman and Chief Financial Officer) and Heinz Moitzi (Chiefing Director of Siemens Transportation Systems GmbH Austria and Technical Officer).CEO of the Drive Technology business unit in Graz (world head-quarters). He was partner at FOCUSON Business Consulting GmbHfrom 1 January 2009, but left the operational consulting businessafter becoming Chairman of the Management Board at AT&S. MrGerstenm