03.05.2018
Infineon Technologies AG DE0006231004
DGAP-News: Infineon Technologies AG: STRONG EARNINGS IN SECOND QUARTER. CONTINUED HIGH ORDER INTAKE DRIVING FASTER CAPACITY EXPANSION
DGAP-News: Infineon Technologies AG / Key word(s): Quarterly / Interim
Statement/Forecast
Infineon Technologies AG: STRONG EARNINGS IN SECOND QUARTER. CONTINUED HIGH
ORDER INTAKE DRIVING FASTER CAPACITY EXPANSION
03.05.2018 / 07:30
The issuer is solely responsible for the content of this announcement.
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- Q2 FY 2018: REVENUE EUR 1,836 MILLION; SEGMENT RESULT EUR 314 MILLION;
SEGMENT RESULT MARGIN 17.1 PERCENT; EARNINGS PER SHARE EUR 0.40 (BASIC AND
DILUTED); ADJUSTED EARNINGS PER SHARE EUR 0.26 (DILUTED); GROSS MARGIN 37.1
PERCENT; ADJUSTED GROSS MARGIN 38.0 PERCENT
- OUTLOOK FOR FY 2018: BASED ON AN ASSUMED EXCHANGE RATE OF US$ 1.25 TO THE
EURO, YEAR-ON-YEAR REVENUE GROWTH OF ABOUT 4 TO 7 PERCENT AND SEGMENT RESULT
MARGIN OF 17 PERCENT AT MID-POINT OF REVENUE GUIDANCE. GROUP NET INCOME
LIKELY EXCEEDING EUR 1 BILLION DUE TO THE SALE OF THE RF POWER BUSINESS
- OUTLOOK FOR Q3 FY 2018: BASED ON AN ASSUMED EXCHANGE RATE OF US$ 1.25 TO
THE EURO, QUARTER-ON-QUARTER REVENUE GROWTH OF 3 PERCENT (PLUS OR MINUS 2
PERCENTAGE POINTS) AND SEGMENT RESULT MARGIN OF 17 PERCENT AT MID-POINT OF
REVENUE GUIDANCE
- INVESTMENTS OF ABOUT EUR 1.2 BILLION IN THE CURRENT FISCAL YEAR DUE TO
ACCELERATED CAPACITY EXPANSION
Neubiberg, Germany - 3 May 2018 - Infineon Technologies AG today reported
results for the second quarter of the 2018 fiscal year (period ended 31
March 2018).
"Infineon continues to grow profitably," stated Dr. Reinhard Ploss, CEO of
Infineon. "Our growth is broadly based: Solutions for the entire range of
drivetrain systems for all types of electric vehicles, including 48-volt
systems, high-speed trains and renewable power generation. In addition, we
are seeing growing demand for data center power supplies for artificial
intelligence. Our order books are bulging. We therefore are very confident
that we will achieve our revenue targets for the 2018 fiscal year. Compared
to the previous year's March quarter, the average US dollar exchange rate
against the euro fell by around 16 percent in the three-month period to 31
March 2018. Despite headwinds from the US dollar and rising material prices,
we expect to achieve our targeted Segment Result Margin of 17 percent again
in the 2018 fiscal year. This demonstrates the robustness of our business
model," continued Dr. Reinhard Ploss.
Euro in millions Q2 Q1 +/- in
FY18 FY18 %
Revenue 1,836 1,775 3
Segment Result 314 283 11
Segment Result Margin 17.1% 15.9%
Income (loss) from continuing operations 457 206 +++
Income (loss) from discontinued operations, net of - (1) +++
income taxes
Net income 457 205 +++
in Euro
Basic earnings (loss) per share from continuing 0.40 0.18 +++
operations1
Basic earnings (loss) per share from discontinued - - -
operations1
Basic earnings per share1 0.40 0.18 +++
Diluted earnings (loss) per share from continuing 0.40 0.18 +++
operations1
Diluted earnings (loss) per share from - - -
discontinued operations1
Diluted earnings per share1 0.40 0.18 +++
Adjusted earnings per share diluted2 0.26 0.20 30%
Gross margin 37.1% 36.4%
Adjusted gross margin2 38.0% 37.4%
1 The calculation for earnings per share and for adjusted earnings per share
is based on unrounded figures.
2 The reconciliation of net income to adjusted net income and adjusted
earnings per share as well as of cost of goods sold to adjusted cost of
goods sold and adjusted gross margin can be found in the quarterly
information at www.infineon.com.
REVIEW OF GROUP FINANCIALS FOR THE SECOND QUARTER OF THE 2018 FISCAL YEAR
Quarter-on-quarter, revenue grew by 3 percent to EUR 1,836 million in the
second three-month period of the 2018 fiscal year. Revenue in the first
quarter amounted to EUR 1,775 million. The Automotive (ATV) and Industrial
Power Control (IPC) segments reported significant growth, while the Power
Management & Multimarket (PMM) and Chip Card & Security (CCS) segments
remained almost unchanged compared to the preceding quarter.
The gross margin for the three-month period under report came in at 37.1
percent, compared to 36.4 percent in the first quarter. These figures
include acquisition-related depreciation and amortization and other expenses
totaling EUR 16 million, mainly relating to the International Rectifier
acquisition. The adjusted gross margin amounted to 38.0 percent, up from the
37.4 percent recorded in the first quarter of the 2018 fiscal year.
The second-quarter Segment Result rose to EUR 314 million, up from EUR 283
million in the previous quarter. The Segment Result Margin improved from
15.9 percent to 17.1 percent.
The non-segment result in the second quarter was a net profit of EUR 218
million, compared to the net loss of EUR 35 million reported one quarter
earlier. The second-quarter figure includes a pre-tax gain of EUR 268
million, which arose on the sale of the major part of Infineon's RF power
business to Cree Inc., USA. The gain, along with impairment losses of EUR 11
million, is included in other operating income. The non-segment result
includes EUR 16 million of cost of goods sold, EUR 21 million selling,
general and administrative expenses and EUR 2 million research and
development expenses.
The non-segment result includes EUR 28 million of depreciation and
amortization arising in conjunction with the purchase price allocation as
well as other expenses for post-merger integration measures relating to
International Rectifier.
Operating income for the second quarter increased to EUR 532 million
compared to EUR 248 million one quarter earlier and includes the
above-mentioned sale of the major part of Infineon's RF power components
business. Income from continuing operations for the three-month period
improved accordingly to EUR 457 million. The corresponding figure for the
previous quarter was EUR 206 million. A break-even result is reported for
discontinued operations, compared to the preceding quarter's loss of EUR 1
million. Net income improved from EUR 205 million in the first quarter to
EUR 457 million in the second quarter. The second-quarter income tax expense
amounted EUR 62 million, also influenced by the sale of the major part of
Infineon's RF power business. The equivalent figure for the first quarter
was EUR 28 million.
Earnings per share improved from EUR 0.18 to EUR 0.40 (in each case basic
and diluted) quarter-on-quarter. Adjusted earnings per share3 (diluted)
amounted to EUR 0.26, compared to EUR 0.20 in the first quarter. For the
purpose of calculating adjusted earnings per share (diluted), a number of
items were eliminated, most notably the gain arising on the sale of the
major part of Infineon's RF power business, acquisition-related
depreciation/amortization and other expenses (net of tax) as well as
valuation allowances on deferred tax assets.
Investments - which Infineon defines as the sum of purchases of property,
plant and equipment, purchases of intangible assets and capitalized
development costs - amounted to EUR 263 million in the second quarter of the
2018 fiscal year, compared to the EUR 293 million in the preceding
three-month period. The depreciation and amortization expense increased to
EUR 211 million, compared to the previous quarter's EUR 204 million.
Free cash flow from continuing operations improved to EUR 334 million. This
figure includes the effects of the sale of the major part of Infineon's RF
power business, the acquisition of the Danish company Merus Audio and the
foundation of the SIAPM joint venture (SAIC Infineon Automotive Power
Modules (Shanghai) Co. Ltd.), together with the Chinese automobile
manufacturer SAIC Motor Corporation Limited. Free cash flow in the first
quarter of the 2018 fiscal year was a negative amount of EUR 135 million.
Net cash provided by operating activities from continuing operations
increased from EUR 158 million to EUR 310 million quarter-on-quarter.
The gross cash position at the end of the second quarter of the 2018 fiscal
year improved to EUR 2,438 million, up from EUR 2,312 million at 31 December
2017. The net cash position improved from EUR 503 million to EUR 649 million
during the three-month period from January to March 2018. In February 2018,
Infineon declared a dividend of EUR 0.25 per share, resulting in a total
distribution of EUR 283 million.
Provisions relating to Qimonda decreased from EUR 32 million at 31 December
2017 to EUR 30 million at 31 March 2018. These provisions are recognized for
legal costs in conjunction with the defense against claims made by the
Qimonda insolvency administrator and for residual liabilities related to
Qimonda Dresden GmbH & Co. OHG.
OUTLOOK FOR THE THIRD QUARTER OF THE 2018 FISCAL YEAR
Based on an assumed exchange rate of US$ 1.25 to the euro, Infineon
forecasts third-quarter revenue growth of 3 percent (plus or minus 2
percentage points). At the mid-point of the revenue guidance, the Segment
Result Margin is expected to come in at about 17 percent.
OUTLOOK FOR 2018 FISCAL YEAR
Based on an assumed exchange rate of US$ 1.25 to the euro, Infineon now
expects year-on-year revenue growth of between 4 and 7 percent for the 2018
fiscal year. Previously, an increase of approximately 5 percent (plus or
minus 2 percentage points) had been expected. The average EUR/USD exchange
rate during the 2017 fiscal year was 1.11 and thus more favorable for
Infineon's revenue and earnings performance than the exchange rate of 1.25
now assumed. At an unchanged exchange rate of 1.11, expected year-on-year
growth would be significantly higher and within the double-digit percentage
range. The Segment Result Margin is predicted to be in the region of 17
percent at the mid-point of revenue guidance. Previously, a segment profit
margin of 16.5 percent had been expected at the mid-point of revenue
guidance. Due to the higher forecast for the Segment Result and the gain
arising on the sale of the major part of Infineon's RF power business, net
income for the year is expected to be well in excess of EUR 1 billion.
ATV segment revenue is expected to grow significantly faster than the Group
average. Revenue of the IPC segment is likely to grow at a similar rate to
the Group's revenue growth. In the PMM segment revenue growth is expected to
be below the Group average, but still sufficient to fully offset the
decrease in revenue caused by the sale of the major part of Infineon's RF
power components business. Given the difficult market situation and the
sharp loss in value of the US dollar, CCS segment revenue is expected to
decline.
Due to the accelerated expansion of production capacities, the previous
forecast for investments of between EUR 1.1 and EUR 1.2 billion has been
raised. Investments in property, plant and equipment, intangible assets and
capitalized development costs for the 2018 fiscal year are now expected to
be in the region of EUR 1.2 billion. The ratio of investment to revenue at
the mid-point of revenue guidance for the 2018 fiscal year would then be
about 16 percent. The development reflects sizeable investments in
additional manufacturing capacities, especially for electric mobility
products. Depreciation and amortization is likely to be in the region of EUR
850 million.
3 Adjusted net income and adjusted earnings per share (diluted) should not
be seen as a replacement or superior performance indicator, but rather as
additional information to the net income and earnings per share (diluted)
determined in accordance with IFRS.
Infineon's segments' performance in the second quarter of the 2018 fiscal
year can be found in the quarterly information at www.infineon.com.
All figures in this quarterly information are preliminary and unaudited.
ANALYST AND PRESS TELEPHONE CONFERENCE
Infineon will host a telephone conference call for analysts and investors
(in English only) on 3 May 2018 at 9:30 am (CEST), 3:30 am (EDT). During the
call, the Infineon Management Board will present the Company's results for
the second quarter of the 2018 fiscal year. In addition, the Management
Board will host a telephone conference with the media at 11:00 am (CEST),
5:00 am (EDT). It can be followed over the Internet in both English and
German. Both conferences will also be available live and for download on
Infineon's website at www.infineon.com/investor.
The Q2 Investor Presentation is available (in English only) at:
http://www.infineon.com/cms/en/corporate/investor/reporting/
INFINEON FINANCIAL CALENDAR (* preliminary)
- 12 Jun 2018 Capital Markets Day "IFX Day 2018", London
- 13 - 14 Jun 2018 Exane BNP Paribas European CEO Conference, Paris
- 22 Jun 2018 Deutsche Bank AutoTech Conference, London
- 1 Aug 2018* Earnings Release for the Third Quarter of the 2018 Fiscal Year
- 30 Aug 2018 Commerzbank Sector Conference, Frankfurt
- 24 Sept 2018 Berenberg and Goldman Sachs 7th German Corporate Conference,
Unterschleißheim nearby Munich
- 25 Sept 2018 Baader Investment Conference, Munich
- 2 Oct 2018 ATV Presentation by Peter Schiefer, Division President, London
- 12 Nov 2018* Earnings Release for the Fourth Quarter and the 2018 Fiscal
Year
- 14 - 15 Nov 2018 Morgan Stanley TMT Conference, Barcelona
- 27 - 28 Nov 2018 Credit Suisse TMT Conference, Scottsdale, Arizona
- 28 Nov 2018 Equita European Conference, Milan
- 28 Nov 2018 UBS German Senior Investor Day, Munich
ABOUT INFINEON
Infineon Technologies AG is a world leader in semiconductor solutions that
make life easier, safer and greener. Microelectronics from Infineon is the
key to a better future. In the 2017 fiscal year (ending 30 September), the
Company reported sales of around EUR7.1 billion with about 37,500 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).
Further information is available at www.infineon.com
This press release is available online at www.infineon.com/press
Follow us: Twitter - Facebook - LinkedIn
D I S C L A I M E R
This press release contains forward-looking statements about the business,
financial condition and earnings performance of the Infineon Group.
These statements are based on assumptions and projections resting upon
currently available information and present estimates. They are subject to a
multitude of uncertainties and risks. Actual business development may
therefore differ materially from what has been expected.
Beyond disclosure requirements stipulated by law, Infineon does not
undertake any obligation to update forward-looking statements.
Due to rounding, numbers presented throughout this press release and other
reports may not add up precisely to the totals provided and percentages may
not precisely reflect the absolute figures.
Contact:
Bernd Hops, Media Relations, phone: +49 89 234-24123 [IMAGE], fax: +49 89
234-154123 [IMAGE]
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03.05.2018 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
The DGAP Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Archive at www.dgap.de
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Language: English
Company: Infineon Technologies AG
Am Campeon 1-15
85579 Neubiberg
Germany
Phone: +49 (0)89 234-26655
Fax: +49 (0)89 234-955 2987
E-mail: [email protected]
Internet: www.infineon.com
ISIN: DE0006231004
WKN: 623100
Indices: DAX
Listed: Regulated Market in Frankfurt (Prime Standard); Regulated
Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover,
Munich, Stuttgart, Tradegate Exchange
End of News DGAP News Service
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