Infineon reports results for the fourth quarter of the 2011 fiscal year and provides outlook for the first quarter and the 2012 fiscal year
11-11-16

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

16.11.2011 07:30

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Quarter Results / Final Results

Q4 FY 2011 TOTAL SEGMENT RESULT OF EURO 195 MILLION AND FLAT SALES
COMPLETE THE RECORD 2011 FISCAL YEAR

QUARTERLY SALES OF EURO 1.038 BILLION ALMOST FLAT SEQUENTIALLY; TOTAL
SEGMENT RESULT MARGIN OF 18.8 PERCENT

2011 FISCAL YEAR: 21 PERCENT SALES GROWTH TO EURO 4.0 BILLION AT 19.7
PERCENT TOTAL SEGMENT RESULT MARGIN WITH GROUP NET INCOME IN EXCESS OF EURO
1 BILLION MARK ALL-TIME HIGHS FOR THE CURRENT PORTFOLIO. EURO 308 MILLION
OF CASH RETURNED TO THE CAPITAL MARKETS, DILUTED SHARE COUNT REDUCED BY
CIRCA 2.5 PERCENT

OUTLOOK FOR THE FIRST QUARTER OF THE 2012 FISCAL YEAR: SALES TO DECLINE
ABOUT TEN PERCENT; TOTAL SEGMENT RESULT MARGIN TO BE 13 TO 14 PERCENT

FY 2012 OUTLOOK: REVENUE EXPECTED TO BE DOWN A MID SINGLE DIGIT PERCENTAGE
VERSUS THE 2011 FISCAL YEAR WITH A LOW TO MID TEENS PERCENTAGE FOR TOTAL
SEGMENT RESULT MARGIN

Neubiberg, Germany - November 16, 2011 - Infineon Technologies AG today
reported results for the fourth quarter as well as the whole 2011 fiscal
year, ended September 30, 2011.

FOURTH QUARTER 2011 RESULTS (July 1 to September 31, 2011)


in Euro million                                 Q4 FY11   Q3 FY11   +/- in
                                                                    %
Revenue                                           1,038     1,043      (0)
Total Segment Result                                195       212      (8)
Total Segment Result Margin [in %]                18.8%     20.3%
Income (loss) from continuing operations            247       175       41
Income from discontinued operations, net of       (122)        15      ---
income taxes
Net income                                          125       190     (34)
in Euro
Basic earnings (loss) per share from continuing    0.23      0.16       44
operations
Basic earnings (loss) per share from             (0.11)      0.01      ---
discontinued operations
Basic earnings per share                           0.12      0.17     (29)
Diluted earnings (loss) per share from             0.22      0.16       38
continuing operations
Diluted earnings (loss) per share from           (0.11)      0.01      ---
discontinued operations
Diluted earnings per share                         0.11      0.17     (35)


REVIEW OF GROUP FINANCIALS FOR THE 2011 FISCAL YEAR The 2011 fiscal year continued Infineon's improvements from the 2010 fiscal year in a number of respects. After 51 percent sales growth in the 2010 fiscal year, turnover grew another 21 percent in the 2011 fiscal year to Euro 3.997 billion. This annual turnover marks an all-time high for the current portfolio of businesses. Infineon's growth outpaced that of the industry and the peer group by a wide margin in two consecutive years. Total Segment Result rose by 65 percent from the 2010 fiscal year to Euro 786 milllion with Total Segment Result margin of 19.7 percent. This, again, is a record for the current portfolio of businesses. Income from continuing operations more than doubled from Euro 312 million in the 2010 fiscal year to Euro 744 million in the 2011 fiscal year. Helped by gains from the sale of the Wireless mobile phone business, net income exceeded the Euro one billion mark to stand at Euro 1.119 billion. Infineon closed the 2011 fiscal year with a strong balance sheet, posting Euro 2.692 billion of gross cash and Euro 2.387 billion of net cash. Such values are up from gross and net cash at the end of the 2010 fiscal year of Euro 1.727 billion and Euro 1.331 billion, respectively. Cash returns to capital markets during the 2011 fiscal year totaled Euro 308 million. Of that amount, Euro 109 million was spent on the annual dividend. Euro 173 million was used towards repurchases of the 2014 convertible bond and Euro 26 million were spent on share repurchases. Through the combination of bond and share repurchases, Infineon reduced the diluted number of shares by 29 million or by about 2.5 percent over the course of the fiscal year. The Infineon share price rose 10 percent over the course of the 2011 fiscal year, outperforming the Dax index by 22 percentage points. REVIEW OF GROUP FINANCIALS FOR THE FOURTH QUARTER OF THE 2011 FISCAL YEAR Infineon's revenues in the fourth quarter were Euro 1.038 billion, essentially flat compared to Euro 1.043 billion in the third quarter. Rising macroeconomic uncertainty due to the European debt crisis prevented further revenue growth. Fourth quarter Total Segment Result was Euro 195 million, a decrease of 8 percent compared to Euro 212 million in the prior quarter. Total Segment Result margin in the fourth quarter decreased to 18.8 percent, down from 20.3 percent in the third quarter. Aside from the lack of revenue growth, Total Segment Result decreased also as depreciation and amortization grew to Euro 98 million from Euro 94 million in the prior quarter and as Operating Expenses rose to Euro 229 million from Euro 223 million in the prior quarter. The expiry of service agreements under which Infineon provided services for its former Wireless mobile phone business contributed to higher expenses both within the Cost of Goods Sold and within Operating Expenses. In the fourth quarter, income from continuing operations rose to Euro 247 million from Euro 175 million in the prior quarter despite the decline in Total Segment Result as a tax expense of Euro 24 million in the third quarter of the 2011 fiscal year swung to a tax benefit of Euro 75 million in the fourth quarter of the 2011 fiscal year. The tax benefit in the last quarter of the 2011 fiscal year resulted primarily from two non-recurring effects. Firstly, Infineon booked an increase in its Deferred Tax Assets as sustainable profitability of Infineon Technologies AG resulted in higher anticipated future usage of net operating loss carry forwards. Secondly, differences in respect of the treatment of certain items for IFRS and tax purposes had an additional positive effect. Excluding such non-recurring benefits, the tax rate would be in the expected range from 10 to 15 percent. Loss from discontinued operations, net of income taxes was Euro 122 million compared to income from discontinued operations of Euro 15 million in the previous quarter. The loss arose due to additional provisions totaling Euro 144 million, net of taxes, in connection with the insolvency proceedings of Qimonda AG. The basic and diluted loss from discontinued operations per share stood at Euro 0.11 per share, down from basic and diluted earnings per share of Euro 0.01 in the prior quarter. Net income was Euro 125 million compared with Euro 190 million in the quarter before. In the fourth quarter, basic earnings per share were Euro 0.12 compared with Euro 0.17 in the prior quarter and diluted earnings per share were Euro 0.11 compared with Euro 0.17 in the quarter before. Investments, which the Company defines as the sum of purchases of property, plant and equipment, purchases of intangible assets and capitalized research & development assets, were Euro 273 million in the fourth quarter, down from Euro 319 million in the prior quarter. Investments in the third quarter included a cash outflow of Euro 91 million for the purchase of real estate including a cleanroom and manufacturing facilities as well as 300-millimeter manufacturing equipment from the insolvency administrator of the Qimonda Dresden GmbH & Co. OHG. Depreciation and amortization rose to Euro 98 million, compared to Euro 94 million in the prior quarter, due to higher investments over the last quarters. Free cash flow from continuing operations for the fourth quarter was Euro 97 million, up significantly from negative Euro 8 million for the third quarter. The increase was due to tighter working capital management and lower investments relative to the third quarter of the 2011 fiscal year. Free cash flow from discontinued operations was Euro 102 million, up from negative Euro 75 million in the preceding quarter. The sale of inventory held for the former Wireless mobile phone business to Intel Mobile Communications (IMC) drove up free cash flow from discontinued operations this quarter, while the settlement of certain personnel related liabilities with IMC had a negative impact in the prior quarter. Group free cash flow for the quarter hence amounted to Euro 199 million. The strong free cash flow generation drove increases in the Company's gross cash position to Euro 2,692 million and its net cash position to Euro 2,387 million as of September 30, 2011. Both increased from Euro 2,585 million and Euro 2,246 million, for gross and net cash, respectively, as of June 30, 2011. Part of the positive free cash flow of the quarter was used towards total capital returns to financial markets of Euro 76 million. Infineon repurchased a nominal value of Euro 18.7 million of its 2014 convertible bond during the quarter for Euro 50 million in cash. Consequently, the Company's fully diluted sharecount was reduced by 8.1 million shares or approximately 0.7 percent of the fully diluted number of shares outstanding during the third quarter of the 2011 fiscal year. In addition, the Company repurchased 4 million shares through the exercise of put options under its share buy-back program for Euro 26 million in cash. This repurchase equates to a reduction of the number of basic and fully diluted shares outstanding during the third quarter of the 2011 fiscal year of approximately 0.3 percent. The total reduction of diluted shares effected during the quarter hence amounts to 1.0 percent of diluted shares outstanding during the third quarter of the 2011 fiscal year. OUTLOOK FOR THE FIRST QUARTER OF THE 2012 FISCAL YEAR Subsequent to the pre-announcement dated October, 14, 2011, the Company has observed increasing caution also on the part of customers in the typical late-cycle high power businesses such as, for example, industrial drives. Taking this into account, Infineon for the first quarter of the 2012 fiscal year now expects a sequential revenue decline of about 10 percent and 13 to 14 percent Total Segment Result margin. Within the expected Group turnover development, Automotive (ATV) revenue is expected to be down slightly quarter-over-quarter, whilst sales in Industrial & Multimarket (IMM), Chip Card & Security (CCS) and Other Operating Segments (OOS) should exhibit more pronounced declines. OUTLOOK FOR THE 2012 FISCAL YEAR At an assumed Euro/U.S. Dollar exchange rate of 1.40, the Company expects full-year revenue to be down a mid single digit percentage relative to the 2011 fiscal year. Within this sales outlook, the Company expects revenue in ATV to develop better than the corporate average, whilst sales in IMM and CCS should develop slightly worse than the Group average. In addition, the Company anticipates a revenue decline in Other Operating Segments of about 40 percent relative to the level of the 2011 fiscal year due to planned reductions in wafer supplies to previously divested businesses. Total Segment Result margin for the 2012 fiscal year is expected to be a low to mid teens percentage of revenues. Within this outlook, the Company assumes a mid single digit revenue decline, a reduction in gross margin to below 40 percent and a 5 to 10 percent increase in operating expenses relative to the 2011 fiscal year. The Company is convinced that secular demand drivers such as the trends towards hybrid and electric vehicles, renewable energies and reduced electricity consumption remain intact. As such, whilst measures have been implemented to curb expense increases, the Company is maintaining high efforts in research and development as well as in selling in order to fully capitalize on its end markets' growth potential beyond the 2012 fiscal year. For the 2012 fiscal year Infineon expects investments to be about flat compared with the levels of the 2011 fiscal year. As part of its investment budget, the Company will expand its capacity at its Dresden site in Germany for 300-millimeter production. The Company regards this as a strategic investment in manufacturing technology to bolster its lead over competition. In addition, Infineon will construct a second 200-millimeter wafer fabrication building at its highly cost-efficient site in Kulim, Malaysia. With full conviction regarding the long-term growth potential of its addressed markets, the planned investments during the 2012 fiscal year are intended to enable highly competitive growth beyond the 2012 fiscal year. Given long lead times between equipment orders, equipment installation and revenue generation, investments have to be made in the 2012 fiscal year in order to enable growth in later periods. Depreciation and amortization is expected to be about Euro 430 million compared with Euro 364 million in the previous year. Infineon segments' performance in the fourth 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 TELEPHONE CONFERENCE AND PRESS CONFERENCE Infineon Technologies AG will conduct a telephone conference (in English only) with analysts and investors on November 16, 2011, 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 2011 fiscal year. In addition, the Infineon Management Board will host a press conference 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 www.infineon.com/investor. PLEASE FIND THE Q4 INVESTOR PRESENTATION ON OUR WEB SITE AT http://www.infineon.com/cms/en/corporate/investor/reporting/index.html IFX FINANCIAL CALENDAR (*preliminary date) - Nov 17-18, 2011 Morgan Stanley TMT Conference, Barcelona, Spain - Nov 22, 2011 Web cast, fourth quarter results, Automotive segment - Nov 29-30, 2011 Credit Suisse Technology Conference, Scottsdale, AZ, USA - Feb 1, 2012* Earnings Release for the First Quarter of the 2012 Fiscal Year - Mar 8, 2012* Annual General Meeting 2012, Munich, Germany(Start: 10:00 a.m. CET) - May 3, 2012* Earnings Release for the Second Quarter of the 2012 Fiscal Year - Jun 28, 2012* IFX Day 2012 - Infineons Capital Markets Day,Campeon Neubiberg (Munich), Germany - Jul 31, 2012* Earnings Release for the Third Quarter of the 2012 Fiscal Year - Nov 13, 2012* Earnings Release for the Fourth Quarter and Full 2012 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 2011 fiscal year (ending September 30), the Company reported sales of Euro 4.0 billion with close to 26 thousand 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). 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. Kontakt: Investor Relations, Tel.: +49 89 234-26655, Fax: +49 89 234-9552987 16.11.2011 DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- 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 Indices: DAX Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover, München, Stuttgart; Terminbörse EUREX End of Announcement DGAP News-Service ---------------------------------------------------------------------------
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