by Rogers Corporation on Feb 22, 2019
Selected quotes from our recent earnings call. Read the corporate financials news release: Rogers Corporation Reports Fourth Quarter 2018 and Full Year Results.
In Q4 2018, Rogers reached net sales of $222.94 million, near the top of our previously announced guidance and an increase of 7% over Q4 2017. For the year, the company achieved net sales of $879 million, an increase of 7% over 2017.
Bruce Hoechner, CEO, on Growth Drivers
We accelerated capacity expansion projects as market indicators provided greater clarity on the timing and the increasing size of opportunities in advanced mobility and advanced connectivity applications.
As part of the transition to 5G, in 2018, we experienced somewhat weaker demand for 4G/LTE wireless applications. However, there is encouraging news about the wireless infrastructure market moving forward. For example, China’s Ministry of Industry and Information Technology assigned 5G spectrums to China’s three telecom operators during December. In early January, the Ministry issued temporary 5G licenses paving the way for larger 5G networks and hotspots to be put in place in some cities. According to industry consultancy, Mobile Experts, the number of base stations shipments will be more than 200,000 which we expect to be weighted toward the second half of the year.
The growth outlook for Rogers in advanced mobility, which includes EV/HEV, vehicle electrification, and ADAS applications, remains robust. Looking at e-Mobility, as the auto industry moves toward higher levels of electrification, the opportunity for Rogers expands through both increased market penetration and higher content. During 2018, a number of major automotive manufacturers accelerated their plans for a substantial transition from internal combustion engine vehicles to EV/HEV models over the next three years to five years. This shift is driving a compounded annual growth rate of 28% for EV/HEV through to 2023.
Automotive OEMs continue to increase the electrification of systems in internal combustion engines such as power steering, air conditioning and stop/start. This transition is providing additional growth opportunities for Rogers.
Additionally, through 2023, industry experts are projecting a compounded annual growth rate in the 20% range for automotive radar units across a variety of radar sensors. Rogers’ portfolio spans the full range of requirements for short, mid, and long-range radar sensors for ADAS applications.
Bruce Hoechner, CEO, on Rogers’ Business Units
Advanced Connectivity Solutions’ 2018 net sales of $294 million were down 2% compared to 2017. Demand in aerospace and defense and ADAS was offset by weaker demand for 4G/LTE applications.
As we look ahead, we are encouraged by the imminent 5G telecom deployments which utilize three to five times more Rogers’ material compared to traditional 4G/LTE designs. This greater content is due primarily to the adoption of advanced MIMO 5G antenna systems which require high performance, low loss circuit materials, in addition to greater content requirements in base station power amps. And in ADAS, we expect to maintain a steady growth as safety features continue their expansion into more mass market models.
Elastomeric Material Solutions achieved net sales of $341 million, reflecting organic growth of 5%. Including Griswold; EMS net sales increased 9% over full year 2017. Results for the year were driven by double-digit growth in applications for portable electronics as well as automotive applications, particularly EV/HEV battery pads and battery pack sealing systems. An excellent example of EMS innovation in this area is our newly launched PORON EVExtend materials, which provide lithium-ion battery designers with new ways to optimize the performance of their battery packs. PORON EVExtend helps ensure that the lithium-ion cells perform consistently over an extended period of time.
Power Electronics Solutions achieved all-time record sales of $223 million, an increase of 21% over full year 2017. This outstanding organic growth was driven primarily by EV/HEV and vehicle electrification applications, where revenues grew more than 50%. As automotive propulsion technologies advance toward greater degrees of electrification, Rogers is positioned to grow its content. For example, a pure electric vehicle can have 10 times more Rogers’ material content than an internal combustion engine vehicle with electrified systems such as power steering and stop/start capabilities.
Q4 2018 and Full Year Earnings Call Transcript
Q4 2018 and Full Year Results Press Release
Q4 2018 and Full Year Earnings Call Slides