Published
by Macey Streeper
Corporate
Selected quotes from our recent earnings call. Read the corporate financials news release: Rogers Corporation Reports Fourth Quarter and Full Year 2019 Results.
In the fourth quarter of 2019, Rogers achieved net sales of $193.8 million and gross margin of 33.1%.
Beginning with Advanced Connectivity, the expectations for 5G deployment over the next several years continues to be very strong. Recent estimates from third party experts project that nearly 4 million 5G base stations will be installed globally by 2023 with around 880,000 deployed in 2020. However, there are some challenges and uncertainties that we face in the wireless infrastructure market, which we reviewed with our investors during our recent earnings call. In summary with forecasts for strong multi-year 5G deployments, we see the wireless market as a promising growth opportunity for Rogers.
The Advanced Connectivity sector also includes portable electronics and we saw a strong growth in this market in 2019. Despite the decline in the global smartphone market last year, Rogers expanded our market share based on our broad portfolio of sealing and protection technologies, which continues to be a leading choice in this market for major smartphone manufacturers.
Turning to Advanced Mobility. The growth outlook for sales of EVs and HEVs continues to be robust. Industry experts project that through 2024 sales of EVs and HEVs will continue at a compounded annual growth rate of approximately 30%. In response to this trend, automakers worldwide continue to make multi-billion dollar commitments to electrify their fleets and invest in electric vehicle battery technologies. For a number of years, Rogers has targeted investments towards innovative technologies that have put us in a strong position to take advantage of these significant opportunities. For example, our PES business has a leading market position based on the strength of our new generation wide band gap semiconductor silicon nitride substrates for the EV/HEV market. And in our EMSEMS business, we saw solid demand growth in 2019 for battery pads and battery pack sealing solutions for electric vehicles. The superior performance of our products developed for this market has firmly established Rogers as a leading provider to a large number of EV battery manufacturers and automakers.
Additionally, the outlook for ADAS continues to be very positive based on trends and adoption of automotive safety systems and the push by automakers to higher levels of autonomy. Our leadership position has been reinforced by positive customer responses to our new products for the next generation auto radar and we continue to maintain high share with leading global auto suppliers for existing and new designs.
In 2019, ACS net sales were $317 million, an increase of 8% compared to 2018, or 10% on a constant currency basis. The higher sales were driven by demand in Wireless Infrastructure, Aerospace and Defense and ADAS. Wireless Infrastructure accounted for about 14% of total Rogers revenue in 2019. The multi-year growth outlook for 5G deployments remain very strong, with projections of four million base station being deployed over the next four years at three times the content of 4G. Aerospace and Defense grew at double digit rates in 2019 and has delivered consistent growth over the past three years, with a compounded annual growth rate of about 10%. ADAS grew at a solid rate in 2019 and has also demonstrated a strong multi-year growth profile over the past three years with a compounded annual growth rate of more than 15%.
EMS net sales were $362 million, an increase of 6% versus 2018 or 8% on a constant currency basis. The higher EMS sales resulted from strong growth in applications for portable electronics, mass transit and EV/HEV as well as contributions from our recent acquisitions. This growth was partially offset by weakness in general industrial and traditional automotive markets. As mentioned, we believe there is a substantial growth opportunity for the company in battery pads and battery pack sealing solutions for the EV/HEV market. The application of our innovative technologies add value by enhancing the life of lithium-ion batteries. We are encouraged by our growing sales in this market and a significant design progress in a number of battery suppliers.
2019 PES net sales were $199 million, a decrease of 11% as compared to 2018 or 7% on a constant currency basis, double-digit growth in mass transit, power interconnects and power semiconductor substrates for EV/HEV were areas of strength. However weakness in the industrial power and traditional automotive markets in the second half of 2019 more than offset these increases. We made significant improvements in PES operations in the fourth quarter. As we indicated in the middle of last year, PES operational improvements were a top priority for company and we established a detailed recovery plan.
Q4 2019 Financial Press Release
Tags:
Investor Relations
Published on Feb 21, 2020
