2Q 2011 RESULTS: GROWTH AND MARGINS ABOVE ORIGINAL EXPECTATIONS WITH SALES OF EURO 994 MILLION AND TOTAL SEGMENT RESULT MARGIN OF 20.3 PERCENT
SALES UP 8 PERCENT SEQUENTIALLY WITH STRENGTH IN ALL DIVISIONS
STRONG PROFITABILITY WITH TOTAL SEGMENT RESULT OF EURO 202 MILLION
3Q 2011 OUTLOOK: SALES AND TOTAL SEGMENT RESULT EXPECTED TO BE BROADLY FLAT
FY 2011 OUTLOOK RAISED: 20 PERCENT SALES GROWTH; TOTAL SEGMENT RESULT MARGIN TO BE BROADLY IN LINE WITH THE 19.8 PERCENT RECORDED FOR THE FIRST HALF OF THE FISCAL YEAR
SECOND QUARTER 2011 RESULTS (January 1 to March 31, 2011)
|
in Euro million
|
Q2 FY11
|
Q1 FY11
|
+/-
|
|
|
|
|
|
|
Revenue
|
994
|
922
|
8
|
|
Total Segment Result
|
202
|
177
|
14
|
|
Total Segment Result Margin [in %]
|
20.3%
|
19.2%
|
|
|
Income (loss) from continuing operations
|
173
|
149
|
16
|
|
Income from discontinued operations, net of income taxes
|
399
|
83
|
+++
|
|
Net income
|
572
|
232
|
+++
|
|
|
|
|
|
|
in Euro
|
|
|
|
|
Basic earnings (loss) per share from continuing operations
|
0.16
|
0.14
|
14
|
|
Basic earnings (loss) per share from discontinued operations
|
0.37
|
0.07
|
+++
|
|
Basic earnings per share
|
0.53
|
0.21
|
+++
|
|
|
|
|
|
|
Diluted earnings (loss) per share from continuing operations
|
0.15
|
0.13
|
15
|
|
Diluted earnings (loss) per share from discontinued operations
|
0.35
|
0.07
|
+++
|
|
Diluted earnings per share
|
0.50
|
0.20
|
+++
|
|
|
|
|
|
Neubiberg, Germany – May 3, 2011 – Infineon Technologies AG (FSE: IFX / OTCQX: IFNNY) today reported results for the second quarter of the 2011 fiscal year, ended March 31, 2011.
'In the first half of this fiscal year, we have outgrown our addressed market and our competition, earned record margins and returned Euro 216 million in cash to the capital market. This quarter proved once again that focusing on energy efficiency, mobility and security is the right strategy. With our system expertise and highly innovative products we will further enlarge our footprint in these fast growing markets', says Peter Bauer, CEO of Infineon Technologies AG.
Fiscal second quarter 2011 review: strong sequential sales growth drives record Total Segment Result margin of 20.3 percent
Infineon booked fiscal second quarter sales of Euro 994 million in the 2011 fiscal year, an increase of 8 percent from the previous quarter. Relative to the original guidance calling for only a slight increase in revenues, upside was driven by all operating segments.
SECOND QUARTER TOTAL SEGMENT RESULT WAS EURO 202 MILLION, UP 14 PERCENT FROM THE PRECEDING QUARTER. TOTAL SEGMENT RESULT MARGIN AGAIN SET AN ALL-TIME-HIGH AT 20.3 PERCENT IN THE FISCAL SECOND QUARTER, UP FROM 19.2 PERCENT IN THE FIRST QUARTER.
Infineon reported net income from continuing operations of Euro 173 million, up from Euro 149 million in the first quarter. Higher operating income and improved net financial expenses more than offset adverse effects from higher tax expenses. Basic earnings per share from continuing operations were Euro 0.16, up from Euro 0.14 in the previous quarter. Diluted earnings per share from continuing operations were Euro 0.15 versus Euro 0.13 in the preceding quarter.
Income from discontinued operations, net of income taxes, was Euro 399 million for the second quarter, up significantly from Euro 83 million in the first quarter of the fiscal year. After the closing of the sale of the Wireless mobile phone business to Intel on January 31, 2011, net income from discontinued operations in the second quarter of the 2011 fiscal year contained an after tax gain of Euro 378 million relating to this transaction. The pre-tax gain amounted to Euro 535 million.
Net income for the group was Euro 572 million in the second quarter, up from Euro 232 million in the previous quarter. Second quarter basic earnings per share were Euro 0.53 and diluted earnings per share were Euro 0.50, up from Euro 0.21 and Euro 0.20, respectively, for basic and diluted EPS in the first quarter of the 2011 fiscal year.
Operating cash flow from continuing operations amounted to Euro 177 million for the second quarter of the 2011 fiscal year, up from Euro 134 million in the prior quarter. Investments from continuing operations, which the company defines as the sum of purchases of property, plant and equipment, purchases of intangible assets and capitalized research & development (R&D) assets, were Euro 164 million in the second quarter of the 2011 fiscal year, compared to Euro 131 million in the prior quarter. Depreciation and amortization was Euro 89 million, up slightly from Euro 83 million in the preceding quarter. Free cash flow from continuing operations for the first quarter was Euro 13 million versus Euro 4 million in the first quarter of the 2011 fiscal year.
CASH INFLOW FROM SALE OF WIRELESS MOBILE PHONE BUSINESS TO INTEL DRIVES NET CASH POSITION OF EURO 2,335 MILLION; FURTHER REPURCHASES OF THE 2014 CONVERTIBLE BOND AND DIVIDEND PAYMENT
As of March 31, 2011, the company's gross cash position stood at Euro 2,691 million with a net cash position of Euro 2,335 million. Both positions increased significantly quarter over quarter versus values of Euro 1,669 million and Euro 1,293 million for gross and net cash, respectively, at the end of the fiscal first quarter 2011. The increase was due primarily to the receipt of the proceeds from the sale of the Wireless mobile phone business to Intel effective with the closing of the transaction on January 31, 2011. In addition, after repurchases of Euro 80 million of its 2014 convertible bond in the first quarter of the 2011 fiscal year, Infineon spent another Euro 27 million on repurchases of that bond during the second quarter of the 2011 fiscal year. The aggregate amount spent on bond repurchases during the first half of the 2011 fiscal year therefore comes to Euro 107 million. The company repurchased bonds with a nominal value of Euro 8 million during the quarter, effectively reducing the amount of shares underlying the convertible bond by more than three million shares. This amount of shares equates to a reduction in the number of fully diluted shares outstanding of approximately another 0.3 percent relative to the fully diluted share count as of December 31, 2010. Finally, the company effected the payment of an annual dividend of 10 cents per share during the second quarter of the fiscal year for an aggregate amount of Euro 109 million. Total cash returns to the capital market through bond repurchases and dividend payments therefore sum-up to Euro 216 million during the first half of the fiscal year.
OUTLOOK FOR THE THIRD QUARTER OF THE 2011 FISCAL YEAR: SALES AND TOTAL SEGMENT RESULT MARGIN EXPECTED TO REMAIN ABOUT FLAT
Infineon is monitoring closely the effects of the aftermath of the March 2011 earthquake in Japan on its supply chain as well as on its customers' supply chains. Operational risks remain on the supply side for example with raw materials or front end and back end services and on the demand side in terms of the ability of Infineon's customers to procure all components required in their products. Nonetheless, efforts are under way on all levels of the supply chain to prevent any disruptions. To date, Infineon has not experienced any shortage of materials nor has it experienced any change in order or delivery acceptance patterns on the part of customers.
Taking into account the above as well as current backlogs and scheduled delivery dates, Infineon expects revenues and Total Segment Result margin for the third quarter of the 2011 fiscal year to be about flat relative to the levels of the fiscal second quarter 2011.
Within this outlook, Automotive (ATV) revenues are expected to decline slightly, whereas turnover in Chip Card & Security (CCS) and Industrial & Multimarket (IMM) should exhibit some growth.
OUTLOOK FOR THE FISCAL YEAR 2011: RAISING ANTICIPATED GROWTH AND MARGIN AGAIN
At an assumed Euro/U.S. Dollar exchange rate of 1.40, Infineon expects full-year revenue growth of 20 percent, compared to a mid-teens percentage guided for so far. Within this outlook, the company expects above group average growth for IMM, growth about in-line with the group average for ATV, and growth below group average for CCS revenues.
Total Segment Result margin for the 2011 fiscal year is expected to be broadly in line with the 19.8 percent recorded for the first half of the 2011 fiscal year. This represents an increase from the earlier guidance calling for a high teens percentage of sales.
In light of sustained high levels of order intake and order backlog Infineon is currently considering a further increase to the current budget of Euro 700 million for investments in the 2011 fiscal year. Investments in the 2010 fiscal year amounted to Euro 325 million.
Depreciation and Amortization is now expected to come in at about Euro 375 million for the 2011 fiscal year, compared to Euro 336 million in the 2010 fiscal year and compared to the previous guidance of just over Euro 400 million. The reduction is due mainly to revised assumptions regarding investment in and amortization of intangible assets.
Infineon segments' performance in the seond quarter of the 2011 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 AND PRESS TELEPHONE CONFERENCES
Infineon Technologies AG will conduct a telephone conference (in English only) with analysts and investors on May 3, 2011, at 10:00 a.m. Central European Summer Time (CEST), 4:00 a.m. Eastern Daylight Time (U.S. EDT), to discuss operating performance during the second quarter of the 2011 fiscal year. In addition, the Infineon Management Board will host a telephone conference with the media at 11:30 a.m. (CEST), 5:30 a.m. (U.S. EDT). 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 CALENDAR (*preliminary date)
– Jun 7, 2011 IFX Day, Capital Markets Day at headquarters in Neubiberg, Germany
– Jul 28, 2011* Earnings Release for the Third Quarter of the 2011 Fiscal Year
– Nov 16, 2011* Earnings Release for the Fourth Quarter and Full 2011 Fiscal Year
About Infineon
Infineon Technologies AG, Neubiberg, Germany, offers semiconductor and system solutions addressing three central challenges to modern society: energy efficiency, mobility, and security. In the 2010 fiscal year (ending September 30), the company reported sales of Euro 3,295 million with approximately 26,650 employees worldwide. With a global presence, Infineon operates through its subsidiaries in the U.S. from Milpitas, CA, in the Asia-Pacific region from Singapore, and in Japan from Tokyo. Infineon is listed on the Frankfurt Stock Exchange (ticker symbol: IFX) and in the USA on the over-the-counter market OTCQX International Premier (ticker symbol: IFNNY).
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 as well as our expected future results. 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, our ability to continue to offer commercially viable products.
These forward-looking statements are subject to a number of uncertainties, including broader economic developments, trends in demand and prices for semiconductors generally and for our products in particular, as well as for the end-products 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 continued availability of adequate funds, 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 our quarterly and annual reports.
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.