Corporate | 19 November 2009 07:30
Infineon Technologies AG / Quarter Results
19.11.2009
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Infineon reports results for the fourth quarter and the 2009 fiscal year
and provides outlook for the first quarter of the 2010 fiscal year
INFINEON REPORTS POSITIVE FOURTH QUARTER 2009 NET INCOME AND STRONG FREE
CASH FLOW
2009 FISCAL YEAR ENDS WITH SOLID BALANCE SHEET AND NET CASH POSITION
FOURTH QUARTER 2009 RESULTS (July 1 to September 30, 2009)
in Euro million Q4 FY09 Q3 FY09 +/-
Revenues 855 761 12%
Combined Segment Result 52 0 + +
Income (loss) from continuing operations 24 (26) + +
Income (loss) from discontinued operations, net (10) 3 - -
of tax
Net income (loss) 14 (23) + +
in Euro
Basic and diluted earnings (loss) per share from 0,03 (0,03) + +
continuing operations
Basic and diluted earnings (loss) per share from (0,01) 0 + +
discontinued operations
Basic and diluted earnings (loss) per share 0,02 (0,03) + +
For results for the 2009 fiscal year, please see page 3 in the quarterly
information at http://www.infineon.com.
Neubiberg, Germany - November 19, 2009 - Infineon Technologies AG (FSE: IFX
/ OTCQX: IFNNY) today reported results for the fourth quarter and the full
2009 fiscal year, ended September 30, 2009.
Infineon's revenues in the fourth quarter were Euro 855 million, a strong
increase of 12 percent compared to the third quarter, but a decline of 18
percent year-over-year. Infineon's fourth quarter combined Segment Result
was Euro 52 million, a significant improvement compared to break-even
combined Segment Result in the third quarter. Income from continuing
operations increased to Euro 24 million, up from a loss from continuing
operations of Euro 26 million in the prior quarter. Net income was also
positive at Euro 14 million compared to a net loss of Euro 23 million in
the third quarter. For the fourth quarter, Infineon's free cash flow from
continuing operations was Euro 151 million, compared to free cash flow from
continuing operations of Euro 143 million in the third quarter.
'The significant improvement in results in the fourth quarter, including
positive net income and free cash flow from continuing operations of Euro
151 million, reflects our cost-reduction efforts and continuing strong cost
discipline, as well as a recovery in demand across all our operating
segments', said Peter Bauer, CEO of Infineon Technologies AG. 'Building on
this momentum, we look back on a fiscal year, which was extremely demanding
but also featured the most remarkable improvements and achievements in
Infineon's history. For the 2010 fiscal year, we are well positioned to
grow market share in our four target markets and deliver improved results
on a sustainable basis.'
The sequential increase in revenues reflects growth in all of the company's
four operating segments, driven by the economic recovery and improved
demand in the supply chain as well as at end customers.
Fourth quarter combined Segment Result of Euro 52 million improved
significantly compared with break-even combined Segment Result in the third
quarter. All of the company's four operating segments achieved positive
Segment Result. Higher sales levels, continued tight cost control, and
higher factory loading were the main drivers of the earnings improvement,
which were, however, partially offset by the weaker U.S. dollar against the
Euro.
For the fourth quarter, income from continuing operations improved
significantly on a sequential basis and was Euro 24 million, with basic and
diluted earnings per share from continuing operations of Euro 0.03. For the
third quarter, net loss from continuing operations was Euro 26 million, and
basic and diluted loss per share from continuing operations was Euro 0.03.
Infineon reported a loss from discontinued operations, net of income taxes,
of Euro 10 million for the fourth quarter. Also included in this amount was
the net income of the Wireline Communications (WLC) business which was
classified as discontinued operations in the company's consolidated
financial statements for the entire 2009 fiscal year and prior periods,
reflecting the sale of this business to Lantiq, affiliates of Golden Gate
Private Equity Inc. The sale closed on November 6, 2009.
Net income was Euro 14 million in the fourth quarter, a strong improvement
from the net loss of Euro 23 million in the prior quarter. Basic and
diluted earnings per share were Euro 0.02 for the fourth quarter compared
to a basic and diluted loss per share of Euro 0.03 for the third quarter.
For the fourth quarter, Infineon's free cash flow from continuing
operations was Euro 151 million, compared to free cash flow from continuing
operations of Euro 143 million in the third quarter. The sequential
increase in free cash flow was driven by the improvement of the operating
results as well as ongoing tight working capital management and low capital
expenditures (CapEx). CapEx, including capitalized intangible assets, were
Euro 40 million in the fourth quarter, compared to Euro 25 million in the
third quarter. Depreciation and amortization was Euro 114 million, compared
to Euro 128 million in the prior quarter. Free cash flow from continuing
operations included cash outflows of Euro 12 million in connection with the
IFX10+ cost-reduction program.
The company's gross cash increased by Euro 636 million from the end of the
prior quarter, to a gross cash position of Euro 1,507 million at the end of
the fourth quarter. This reflected both the proceeds of the successful
rights offering, which closed in August, and strong free cash flow, offset
in part by voluntary repurchases and redemptions of the 2010 convertible
and exchangeable bonds, totaling Euro 115 million at book values. This
amount includes the voluntary early final repayment of the exchangeable
bonds. In addition, the increase of the fourth quarter's gross cash
position was offset partially by the repayment of other debt of Euro 68
million. The company's net debt position of Euro 151 million as of the end
of the third quarter swung to a net cash position of Euro 657 million as of
September 30, 2009.
OUTLOOK FOR THE FIRST QUARTER OF THE 2010 FISCAL YEAR
Having closed the sale of the WLC business to Lantiq on November 6, 2009,
Infineon and Lantiq have entered into various product supply and
transitional service agreements. Beginning with the closing, Infineon will
report its business with Lantiq in Other Operating Segments within
continuing operations.
For the first quarter of the 2010 fiscal year, Infineon expects group
revenues, including sales to Lantiq under product supply agreements, to be
approximately on the same level as in the fourth quarter of the 2009 fiscal
year. Revenues in the Automotive (ATV) and Industrial & Multimarket (IMM)
segments should continue to grow. Revenues in the Chip Card & Security
(CCS) segment are likely to experience some seasonal slow-down. Revenues in
the Wireless Solutions (WLS) segment are expected to be negatively impacted
by the weaker U.S. dollar against the Euro.
The termination of temporary labor cost reduction measures (short-time work
and unpaid leave) is expected to lead to an increase in operating expenses
of around Euro 25 million in the first quarter of the 2010 fiscal year
compared to the fourth quarter of the 2009 fiscal year. Despite this
increase and an assumed U.S. dollar/Euro exchange rate of 1.50, Infineon
expects combined Segment Result for the first quarter to stay approximately
on the same level as in the fourth quarter. In light of the combination of
strong demand and low inventories, Infineon is increasing production levels
further during the first quarter. The positive earnings impact of higher
utilization rates is expected to offset the above-mentioned negative
effects.
OUTLOOK FOR THE 2010 FISCAL YEAR
Assuming a stabilizing or growing world economy, currently high demand and
order levels lead Infineon to expect sales growth of ten percent or more
for the 2010 fiscal year at an assumed U.S. dollar/Euro exchange rate of
1.50. The year-over-year increase is anticipated to be driven by increases
in revenues in all of the company's operating segments, particularly in the
ATV segment, with lower revenue increases anticipated in the WLS and IMM
segments, and the lowest growth rate expected in the CCS segment. Revenues
in Other Operating Segments are expected to be impacted positively by the
product supply agreements with Lantiq by a mid- to high double-digit
million Euro amount.
Infineon expects combined Segment Result in the 2010 fiscal year to improve
considerably from the 2009 fiscal year and to be significantly positive,
with combined Segment Result margin of a mid single-digit percentage. As is
the case for the revenue outlook, this forecast assumes a stable to growing
world economy and hence no significant declines in capacity utilization.
The forecasted increase in revenues, significantly higher utilization rates
in the company's manufacturing facilities and continued cost discipline are
expected to drive a strong recovery in combined Segment Result despite the
termination of temporary cost reduction measures and the adverse impact of
the weaker U.S. dollar against the Euro.
The outlook for the 2010 fiscal year assumes that Infineon will complete
the sale of ALTIS, its manufacturing joint venture in France, in the first
half of the 2010 fiscal year. Should this not be feasible, the company will
have to re-assess all options. In all conceivable scenarios, Infineon
anticipates that it will record a non-recurring charge as part of its
non-segment result.
For the 2010 fiscal year, Infineon anticipates that CapEx, including
capitalized intangible assets, will increase to approximately Euro 220
million to Euro 250 million compared to Euro 154 million in the 2009 fiscal
year. Depreciation and amortization is expected to decrease to
approximately Euro 400 million in the 2010 fiscal year compared to Euro 513
million in the 2009 fiscal year.
'The strong impact of our cost reduction measures and the successful
completion of the capital market transactions during the 2009 fiscal year
have stabilized our balance sheet and helped to increase our financial
freedom and flexibility,' said Peter Bauer. 'It will remain our goal to
increase revenues and profitability on a sustainable basis and thus
generate value for shareholders and other stakeholders alike.'
The Infineon segments' performance in the fourth quarter of the 2009 fiscal
year can be found in the quarterly information at http://www.infineon.com.
All figures in this quarterly information are preliminary and unaudited.
ANALYST TELEPHONE AND PRESS CONFERENCES
Infineon Technologies AG will conduct a telephone conference (in English
only) with analysts and investors on November 19, 2009, at 10:00 a.m.
Central European Time (CET), 4:00 a.m. Eastern Standard Time (U.S. EST), to
discuss operating performance during the fourth quarter and the 2009 fiscal
year. In addition, the Infineon Management Board will host a press
conference with the media at 11:30 a.m. (CET), 5:30 a.m. (U.S. EST). It can
be followed in German and English over the Internet. Both conferences will
be available live and for download on the Infineon web site at
http://corporate.infineon.com.
IFX FINANCIAL AND TRADE FAIR CALENDAR (*preliminary date)
Jan 29, 2010* Earnings Release for the First Quarter of the 2010 Fiscal
Year
Feb 11, 2010* 2010 Annual General Meeting of Shareholders
Feb 16, 2010 Analyst Presentation at the Mobile World Congress in
Barcelona
Apr 29, 2010* Earnings Release for the Second Quarter of the 2010 Fiscal
Year
Jul 28, 2010* Earnings Release for the Third Quarter of the 2010 Fiscal
Year
Nov 16, 2010* Earnings Release for the Fourth Quarter and Full 2010
Fiscal Year
New in the IFX podcast section at www.infineon.com/podcast:
Press conference call: Infineon closes capital increase
D I S C L A I M E R
This press release includes forward-looking statements and assumptions
about the future of Infineon's business and the industry in which we
operate. These include statements and assumptions relating to general
economic conditions, future developments in the world semiconductor market,
our ability to manage our costs and to achieve our savings and growth
targets, the resolution of Qimonda's insolvency proceedings and the
liabilities we may face as a result of Qimonda's insolvency, the benefits
of research and development alliances and activities, our planned levels of
future investment, the introduction of new technology at our facilities,
the continuing transitioning of our production processes to smaller
structure sizes, our ability to continue to offer commercially viable
products, and our expected or projected future results.
These forward-looking statements are subject to a number of uncertainties,
including broader economic developments, including the duration and depth
of the current economic downturn and the sustainability of recent
improvements; trends in demand and prices for semiconductors generally and
for our products in particular, as well as for the end-products, such as
automobiles and consumer electronics, that incorporate our products; the
success of our development efforts, both alone and with partners; the
success of our efforts to introduce new production processes at our
facilities; the actions of competitors; the availability of funds,
including for the re-financing of our indebtedness; the outcome of
antitrust investigations and litigation matters; and the outcome of
Qimonda's insolvency proceedings; as well as the other factors mentioned in
this press release and those described in the 'Risk Factors' section of the
prospectus relating to our rights offering closed in August 2009 (a form
of which was approved by the German Federal Financial Supervisory Authority
(BaFin) on July 16, 2009 and a form of which is contained in the
registration statement on Form F-3 filed with the U.S. Securities and
Exchange Commission on July 16, 2009).
As a result, Infineon's actual results could differ materially from those
contained in these forward-looking statements. You are cautioned not to
place undue reliance on these forward-looking statements. Infineon does not
undertake any obligation to publicly update or revise any forward-looking
statements in light of developments which differ from those
anticipated.
Contact:
Investor Relations, Tel.: +49 89 234-26655, Fax: +49 89 234-9552987
19.11.2009 Financial News distributed by DGAP. Media archive at www.dgap-medientreff.de and www.dgap.de
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Language: English
Company: Infineon Technologies AG
Am Campeon 1-12
85579 Neubiberg
Deutschland
Phone: +49 (0)89 234-26655
Fax: +49 (0)89 234-955 2987
E-mail: investor.relations@infineon.com
Internet: www.infineon.com
ISIN: DE0006231004
WKN: 623100
Indices: DAX
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, Düsseldorf, München, Hannover, Stuttgart, Hamburg;
Terminbörse EUREX
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