Ad-hoc | 22 April 2003 07:31

Infineon Technologies AG english

Infineon announces 2nd Quarter and Half Year 2003 Results (ended March 31) Ad-hoc-announcement transmitted by DGAP. The issuer is solely responsible for the content of this announcement. ——————————————————————————– Infineon announces 2nd Quarter and Half Year 2003 Results (ended March 31) SECOND QUARTER RESULTS (January 1 to March 31, 2003) Infineon Technologies AG, one of the world’s leading semiconductor manufacturers, had second quarter revenues from continuing operations of EUR 1.48 billion, an increase of 3 percent sequentially and 13 percent year-on-year. Net loss amounted to EUR 328 million compared to a net loss of EUR 40 million in the previous quarter and EUR 108 million in the second quarter of last fiscal year. The quarterly net loss reflects the strong price decline for DDR memory chips as well as continued pricing pressure in most segments. The second quarter tax expense includes a valuation allowance for tax losses incurred of EUR 103 million in accordance with US GAAP and as announced in the previous two quarters. In addition, net loss included exceptional effects of EUR 54 million related to inventory write downs, non-recurring license income, restructuring charges and acquisition-related expenditures. Without these effects net loss would have been EUR 171 million. Basic and diluted loss per share was EUR 0.45, compared to a loss per share of EUR 0.06 in the previous quarter and EUR 0.16 year-on-year. Quarterly EBIT (earnings before interest, minority interest and taxes) amounted to a loss of EUR 223 million, compared to a loss of EUR 31 million in the previous quarter, and to a loss of EUR 176 million in the second quarter of the last fiscal year. The quarterly EBIT loss includes exceptional effects of EUR 82 million. Infineon’s gross cash position, representing cash and cash equivalents, marketable securities and restricted cash amounted to EUR 1.5 billion, down sequentially from EUR 1.6 billion. The decrease in gross cash was mainly due to investing activities exceeding cash flow from operations during the quarter. Free cash flow, representing cash from operating and investing activities excluding purchases or sales of marketable securities, significantly improved to negative EUR 90 million, up sequentially from negative EUR 362 million. This improvement mainly stems from higher operating cash flow and lower capital expenditures compared to the previous quarter. end of ad-hoc-announcement (c)DGAP 22.04.2003 Issuer’s information/explanatory remarks concerning this ad-hoc-announcement: Dr. Ulrich Schumacher, President and CEO of Infineon Technologies AG commented: “We achieved a very good revenue growth and gained further market share in a continued difficult market environment mainly driven by increased sales for memory products and repeated record performance of the automotive & industrial segment. We increased our productivity significantly, however could not compensate for the dramatic price decline for memory products.” Pursuant to an agreement reached with Osram GmbH, the Company transferred all its opto-electronic activities to Osram as of March 31, 2003. Accordingly, the results of the opto-electronics business (previously in other operating segments) are reflected as a discontinued operation, and the operating results (e.g. sales, cost of sales and operating expenses) through March 31, 2003 have been reclassified to ensure comparability with the results of Infineon’s continuing operations. HALF YEAR RESULTS (October 1, 2002 to March 31, 2003) Total revenues for the first half of fiscal year 2003 were EUR 2.93 billion, up 28 percent from EUR 2.28 billion in the same period last year. Net loss amounted to EUR 368 million, compared to a net loss of EUR 439 million year-on-year. The first half of fiscal year 2003 tax expense includes a valuation allowance for tax losses of EUR 125 million incurred in accordance with US GAAP. EBIT for the first half of this fiscal year was a loss of EUR 254 million, a significant improvement from an EBIT loss of EUR 735 million in the first half of the last fiscal year. OUTLOOK UNTIL SEPTEMBER 2003 “The current tough global economic environment and the international uncertainties do not allow for much market visibility. Over the last three months we have seen a further positive development of demand in most of our segments. Looking forward we expect a further positive development of demand in all target applications. To compensate for the ongoing pricing pressure we will continue to focus on improving productivity, further reducing costs and implementing Infineon’s restructuring programs, as well as our Agenda 5-to-1,” commented Dr. Schumacher. For its Secure Mobile Solutions segment, Infineon expects a further moderate increase of demand for GSM/GPRS mobile handsets which is likely to have a positive effect on the demand for Bluetooth products as well. The company expects an ongoing difficult market environment with continued strong pricing pressure for silicon discretes. Industry analysts are predicting a 5 percent reduction of capital expenditures in the global wireline telecom infrastructure market in 2003, but with regional differences, including moderate growth in Europe. Infineon expects continuing pricing pressure in its fiber optics business, but improved demand for broadband access technology (ADSL, VDSL), particularly in Asia and Japan. In the automotive electronics and automotive semiconductor markets, Infineon expects the pricing pressure to continue. However, the company anticipates that further productivity increases combined with its strong portfolio for automotive power and power management and supply products will lead to additional market share gains. At the beginning of the current third quarter Infineon has seen strong demand from OEMs for memory products. However, visibility for the DRAM market remains poor. A positive development of demand and a sustained improvement in prices still depend on the beginning of the corporate replacement cycle, increased infrastructure investments, and higher MB per box sales. TELEPHONE CONFERENCE INFORMATION The Management Board of Infineon Technologies will conduct a telephone conference with analysts and institutional investors on April 22, 2003 at 3:30 a.m. Eastern Standard Time (U.S. EST), 9:30 a.m. Central European Time (CET), to discuss operating performance of the second quarter fiscal year 2003. A broadcast of the telephone conference will be available live and for download on Infineon’s web site at: http://www.infineon.com DISCLAIMER This discussion includes forward-looking statements about our future business. These forward-looking statements include statements relating to future developments of the world semiconductor market, especially the market for memory products, Infineon’s future growth, the benefits of research and development alliances and activities, our planned levels of future investment in the expansion and modernization of our production capacity, the introduction of new technology at our facilities, the transitioning of our production processes to smaller structures, cost savings related to such transitioning and other initiatives, our successful development of technology based on industry standards, our ability to offer commercially viable products based on our technology, our ability to achieve our cost savings and growth targets. These forward-looking statements are subject to a number of uncertainties, including trends in demand and prices for semiconductors generally and for our products in particular, the success of our development efforts, both alone and with our partners, the success of our efforts to introduce new production processes at our facilities and the actions of our competitors, the availability of funds for planned expansion efforts, as well as the other factors mentioned herein. As a result, our actual results could differ materially from those contained in the forward-looking statements. ——————————————————————————– WKN: 623100; ISIN: DE0006231004; Index: DAX Listed: Amtlicher Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin- Bremen, Düsseldorf, Hamburg, Hannover, München und Stuttgart; NYSE 220731 Apr 03