Corporate | 28 July 2011 07:30

Infineon reports results for the third quarter and provides outlook for the fourth quarter of the 2011 fiscal year

Infineon Technologies AG / Key word(s): Quarter Results

28.07.2011 / 07:30

Quarter Results / Final Results

3Q 2011 REVENUES ABOVE EXPECTATIONS AT EURO 1,043 MILLION. TOTAL SEGMENT RESULT MARGIN MAINTAINED AT HIGH LEVEL OF 20.3 PERCENT

SALES UP 5 PERCENT SEQUENTIALLY DRIVEN BY STRENGTH IN ATV AND IMM
INCREASE OF TOTAL SEGMENT RESULT BY 5 PERCENT TO EURO 212 MILLION
4Q 2011 OUTLOOK: BROADLY FLAT SEGMENT RESULT, SALES EXPECTED TO BE AT LEAST FLAT

Neubiberg, Germany – July 28, 2011 – Infineon Technologies AG (FSE: IFX / OTCQX: IFNNY) today reported results for the third quarter of the 2011 fiscal year, ended June 30, 2011.

THIRD QUARTER 2011 RESULTS (April 1 to June 30, 2011)

in Euro million	Q3 FY11	Q2 FY11	+/- in %
Revenue	1,043	994	5
Total Segment Result	212	202	5
Total Segment Result Margin [in %]	20.3%	20.3%
Income (loss) from continuing operations	175	173	1
Income from discontinued operations, net of income taxes	15	399	(96)
Net income	190	572	(67)
in Euro
Basic earnings (loss) per share from continuing operations	0.16	0.16	–
Basic earnings (loss) per share from discontinued operations	0.01	0.37	(97)
Basic earnings per share	0.17	0.53	(68)
Diluted earnings (loss) per share from continuing operations	0.16	0.15	7
Diluted earnings (loss) per share from discontinued operations	0.01	0.35	(97)
Diluted earnings per share	0.17	0.50	(66)

In the third quarter of the fiscal year Infineon again grew faster than the market and its direct competitors. Total Segment Result margin remained at last quarter's high levels. 'Our excellent results continue to prove that Infineons focus on energy efficiency, mobility and security is the right strategy', says Peter Bauer, CEO of Infineon Technologies. Infineon will further extend its technology leadership by driving 300mm thin wafer manufacturing of power semiconductors out of the newly-acquired facility in Dresden. 'With this leading innovation Infineon will expand its competitive advantage,' says Peter Bauer. In order to fully exploit Infineons growth potential, the Company will also expand the cost efficient 200mm manufacturing site in Kulim, Malaysia.

FISCAL THIRD QUARTER 2011: GROWTH IN IMM AND ATV DRIVES SALES AND TOTAL SEGMENT RESULT
Infineon booked fiscal third quarter sales of Euro 1,043 million in the 2011 fiscal year, an increase of 5 percent from the previous quarter. At a constant exchange rate for the U.S. Dollar against the Euro, Infineon's quarter-over-quarter growth rate would have been approximately two percentage points higher. The original guidance called for flat revenues. Sales growth was driven by strong demand in Industrial & Multimarket (IMM) as well as revenue growth in Automotive (ATV). Counter to original expectations, the ATV division did not experience any significant negative impact neither on revenue nor on Segment Result from disruptions within the automotive supply chain after the Japan earthquake.

Third quarter Total Segment Result was Euro 212 million, an increase of 5 percent compared to Euro 202 million in the prior quarter. Total Segment Result margin in the third quarter remained at an all-time-high level of 20.3 percent.

Infineon reported net income from continuing operations of Euro 175 million, up from Euro 173 million in the second quarter. Basic earnings per share from continuing operations stayed unchanged compared to the preceding quarter at Euro 0.16 and diluted earnings per share from continuing operations increased from Euro 0.15 to Euro 0.16.

Income from discontinued operations, after income taxes, was Euro 15 million for the third quarter, down from Euro 399 million in the second quarter. Net income from discontinued operations decreased mainly as the second quarter of the 2011 fiscal year contained a non-recurring after tax gain of Euro 378 million relating to the closing of the sale of the Wireless mobile phone business to Intel on January 31, 2011.

Net income for the group was Euro 190 million in the third quarter, a decrease from Euro 572 million in the previous quarter. Third quarter basic and diluted earnings per share were Euro 0.17, down from Euro 0.53 and Euro 0.50, respectively, for basic and diluted earnings per share in the second quarter of 2011 fiscal year.

Operating cash flow from continuing operations amounted to Euro 311 million for the third quarter of the 2011 fiscal year, up from Euro 177 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) expenses, were Euro 319 million in the third quarter of the 2011 fiscal year, compared to Euro 164 million in the second quarter. The increase was primarily due to the purchase of real estate and manufacturing assets from the insolvency administrator of Qimonda Dresden GmbH & Co. OHG for Euro 101 million in May, Euro 91 million of which were paid in the third quarter. Depreciation and amortization was Euro 94 million, up from Euro 89 million in the preceding quarter. Despite the significant increase in investments versus the last quarter, Free cash flow from continuing operations for the third quarter turned only marginally negative at Euro -8 million versus Euro 13 million in the prior quarter of the 2011 fiscal year.

CASH POSITION REMAINS COMFORTABLE; REPURCHASE OF THE 2014 CONVERTIBLE BOND CONTINUED; PUT OPTIONS FOR SHARE BUY-BACK ISSUED
As of June 30, 2011, the Company's gross cash position stood at Euro 2,585 million with a net cash position of Euro 2,246 million. Compared to the end of the prior quarter, both positions decreased versus values of Euro 2,691 million and Euro 2,335 million for gross and net cash, respectively. Under its announced capital returns program, Infineon continued the repurchase of its 2014 convertible bond during the quarter and spent Euro 16 million of cash to acquire bonds with a nominal value of Euro 4 million, effectively reducing the amount of shares underlying the convertible bond by roughly 2 million shares. The aggregate amount spent on bond repurchases during the first nine months of the 2011 fiscal year now comes to Euro 123 million. In the third quarter of the current fiscal year Infineon also began to write put options under its capital returns program. A total of 18 million put options with expiry dates between August 2011 and March 2012 have been sold. The maximum buy-back value, should all put options be exercised, equates to Euro 114 million. Infineon collected premiums worth Euro 4 million with these transactions.

EXPANSION OF PRODUCTION CAPACITY
In order to secure further growth, Infineon decided to begin building a shell for a second 200mm clean room at its existing, highly cost-competitive frontend site in Kulim, Malaysia. Capitalizing on its competitive lead in the manufacturing of power semiconductors on 300mm wafers, Infineon furthermore resolved that it will use the clean room that was purchased in May 2011 for about Euro 101 million from the insolvency administrator of Qimonda Dresden GmbH & Co. OHG for the mass manufacturing of power devices on 300mm wafers. Until 2014 Infineon will invest around Euro 250 million and create approximately 250 jobs in Dresden. If the market, revenue and underlying conditions develop in line with forecasts, further expansion would be possible.

OUTLOOK FOR FOURTH QUARTER OF THE 2011 FISCAL YEAR: SALES EXPECTED TO BE AT LEAST FLAT; TOTAL SEGMENT RESULT TO BE ABOUT FLAT IN ABSOLUTE TERMS
Infineon expects sales for the fourth quarter of the 2011 fiscal year to be at least flat compared to the third quarter of the current fiscal year. Within this outlook, the Company expects a further increase in revenues in Industrial & Multimarket (IMM), broadly flat turnover in Chip Card & Security (CCS) and a seasonal sales decline in Automotive (ATV). Total Segment Result is expected to remain broadly flat in absolute terms from the levels reached in the third quarter of the 2011 fiscal year.

Infineon segments' performance in the third 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 July 28, 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 third 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 .

PLEASE FIND THE Q3 INVESTOR PRESENTATION ON OUR WEB SITE AT http://www.infineon.com/cms/en/corporate/investor/reporting/index.html

I FX FINANCIAL CALENDAR (*PRELIMINARY DATE)

– Nov 16, 2011* Earnings Release for the Fourth Quarter and Full 2011 Fiscal Year

– Mar 8, 2012* Annual General Meeting 2012 in Munich, Germany
(Start: 10.00 a.m. CET)

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. 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).

*Mentioned number of employees contains about 3,075 employees of the Wireless mobile phone business (Wireless Solutions), which was sold to Intel Corporation.

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.

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Language:	English
Company:	Infineon Technologies AG
	Am Campeon 1-12
	85579 Neubiberg
	Germany
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
Listed:	Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover, München, Stuttgart; Terminbörse EUREX

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133486  28.07.2011