DGAP-News: Infineon Technologies AG: BIG REVENUE JUMP ON

DGAP-News: Infineon Technologies AG / Key word(s): Quarter Results/Forecast Infineon Technologies AG: BIG REVENUE JUMP ON THE BACK OF STRONG DEMAND AND INTEGRATION OF INTERNATIONAL RECTIFIER 05.05.2015 / 07:30 --------------------------------------------------------------------- - INTEGRATION OF INTERNATIONAL RECTIFIER WELL ON TRACK - Q2 FY 2015: REVENUE UP BY EUR355 MILLION FROM EUR1,128 MILLION TO EUR1,483 MILLION DUE TO CONSOLIDATION OF INTERNATIONAL RECTIFIER, INCREASED DEMAND FOR CHIP CARD & SECURITY PRODUCTS AND POSITIVE CURRENCY DEVELOPMENT; SEGMENT RESULT UP FROM EUR169 MILLION TO EUR198 MILLION; SEGMENT RESULT MARGIN DOWN QUARTER-ON-QUARTER FROM 15.0 PERCENT TO 13.4 PERCENT - NET INCOME AND EARNINGS PER SHARE LOWER AS A RESULT OF ACQUISITION-RELATED CHARGES; ADJUSTED EARNINGS PER SHARE STABLE - OUTLOOK FOR Q3 FY 2015: QUARTER-ON-QUARTER REVENUE GROWTH OF BETWEEN 7 AND 11 PERCENT AND SEGMENT RESULT MARGIN OF 15 PERCENT AT THE MID-POINT OF THE GROWTH RANGE - OUTLOOK FOR FY 2015: BASED ON AN ASSUMED EXCHANGE RATE OF US$ 1.10 TO THE EURO, REVENUE GROWTH OF 36 PERCENT, PLUS OR MINUS 2 PERCENTAGE POINTS AND SEGMENT RESULT MARGIN OF 15 PERCENT EXPECTED AT THE MID-POINT OF THE GROWTH RANGE Neubiberg, Germany, May 5, 2015 - Infineon Technologies AG today reports its results for the second quarter of the 2015 fiscal year ended March 31, 2015. "Infineon has recorded a big revenue jump in the second quarter. Business was running very well, with additional tailwinds provided by the acquisition of International Rectifier and the strong dollar", stated Dr. Reinhard Ploss, CEO of Infineon Technologies AG. "The signals we are receiving from our markets are generally positive. We are making good progress with the integration of International Rectifier. Our strategy is paying off and Infineon remains on a growth path." <pre> in Euro million Q2 FY15 Q1 FY15 +/- in % Revenue 1,483 1,128 31 Segment Result 198 169 17 Segment Result Margin [in %] 13.4 15.0 Income (loss) from continuing operations 69 130 (47) Income (loss) from discontinued operations, - 6 --- net of income taxes Net income 69 136 (49) in Euro Basic earnings (loss) per share from 0.06 0.12 (50) continuing operations1 Basic earnings (loss) per share from - - - discontinued operations1 Basic earnings per share1 0.06 0.12 (50) Diluted earnings (loss) per share from 0.06 0.12 (50) continuing operations1 Diluted earnings (loss) per share from - - - discontinued operations1 Diluted earnings per share1 0.06 0.12 (50) Adjusted earnings per share diluted2 0.13 0.13 - </pre> 1 The calculation for earnings per share is based on unrounded figures. 2 The reconciliation of net income to adjusted net income and adjusted earnings per share can be found in the quarterly information at http://www.infineon.com. SCOPE OF REPORTING Infineon's acquisition of 100 percent of the shares of (and related voting rights in) International Rectifier Corporation ("International Rectifier"), based in El Segundo, California (USA), announced on August 20, 2014, was closed on January 13, 2015. This press release therefore includes the results, assets, liabilities and cash flows of International Rectifier with effect from the acquisition date. International Rectifier's various lines of business have been fully integrated with Infineon's existing Automotive, Industrial Power Control and Power Management & Multimarket segments, whereby by far the largest proportion has been allocated to the Power Management & Multimarket segment. The figures presented for prior periods have not been adjusted. REVIEW OF GROUP FINANCIALS FOR THE SECOND QUARTER OF THE 2015 FISCAL YEAR Second-quarter revenue of the Infineon Group grew by 31 percent to EUR1,483 million, compared to the EUR1,128 million reported one quarter earlier. The EUR355 million jump in revenue was attributable to the first-time consolidation of International Rectifier, strong organic revenue growth in the Chip Card & Security segment and the continued strengthening of the US dollar against the euro. Group revenue includes revenue of EUR199 million generated by International Rectifier from closing of the acquisition on January 13, 2015 up to the end of the quarter on March 31, 2015. Segment Result improved by 17 percent from EUR169 million in the first quarter to EUR198 million in the second quarter of the current fiscal year. The first-time consolidation of International Rectifier as well as currency effects had a positive impact on Segment Result, whereas the normal round of selling price reductions partly offset the positive impact of the step-up in revenue. The previous quarter's Segment Result had also benefitted from the one-time positive impact arising from reduction in future rental expenses for the Group's Campeon headquarters. The Segment Result Margin came in at 13.4 percent, down from the first quarter's 15.0 percent. In addition to the factors stated above, the decrease in Segment Result margin was also a consequence of the first-time consolidation of International Rectifier. Non-Segment Result decreased to a negative amount of EUR113 million due to additional acquisition-related depreciation and amortization and other expenses totaling EUR102 million following the acquisition of International Rectifier. Therefore, operating income declined quarter-on-quarter from EUR153 million to EUR85 million. Income from continuing operations fell on a similar scale from EUR130 million to EUR69 million in the second quarter of the 2015 fiscal year. Income from discontinued operations, after rounding, was EUR0 million, as a result of which second-quarter net income also amounted to EUR69 million. In the first quarter, Infineon reported income from discontinued operations amounting to EUR6 million and net income of EUR136 million. Earnings per share declined quarter-on-quarter from EUR0.12 to EUR0.06 (basic and diluted). Second-quarter adjusted earnings per share* diluted) amounted to EUR0.13. Acquisition-related depreciation and amortization and other expenses, net of tax, were eliminated for the purposes of calculating adjusted earnings per share (diluted). (*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.) Investments - which Infineon defines as the sum of purchases of property, plant and equipment, purchases of intangible assets and capitalized development assets - amounted to EUR150 million in the second quarter 2015, compared to the EUR141 million in the preceding quarter. Depreciation and amortization rose quarter-on-quarter from EUR141 million to EUR199 million, mainly due to the first-time inclusion of depreciation and amortization arising from the consolidation of International Rectifier. This figure includes an expense of EUR33 million recorded on assets recognized or revalued in conjunction with the purchase price allocation. Free cash flow from cash flow from continuing operations deteriorated to a negative amount of EUR1,880 million in the second quarter, of which EUR1,864 million (after deduction of cash acquired) are related to the acquisition of International Rectifier. The equivalent figure for the free cash flow for the first quarter of the 2015 fiscal year was a negative EUR171 million. Net cash provided by operating activities from continuing operations was positive in the second quarter of the current fiscal year and amounted to EUR135 million. As a result of the purchase price payment for International Rectifier and the distribution of a dividend totaling EUR202 million in February, the gross cash position decreased from EUR2,107 million at December 31, 2014 to EUR1,656 million at March 31, 2015. Since part of the purchase price for International Rectifier has been financed with outside capital, short-term debt and long-term debt increased during the three-month period to EUR1,832 million. Reflecting these changes, the net cash position at the end of the second quarter was a negative EUR176 million, compared to a positive EUR1,917 million at December 31, 2014. INTEGRATION OF INTERNATIONAL RECTIFIER The integration of International Rectifier into the Infineon Group is proceeding according to plan. At the latest in fiscal year 2017, International Rectifier's margin contribution is expected to be at least in line with Infineon's target of 15 percent Segment Result margin over the cycle. Sales has been integrated into one joint team since March. In addition, many key organizational changes have already been completed. Infineon has also started the optimization of the product portfolio. In March, the combined range of gallium nitride products was presented at the US trade fair for power electronics - APEC 2015, for example. Additionally, a comprehensive concept for the combined production network has been drawn up. We will be discontinuing manufacturing operations at Techview in Singapore by the end of the year. Production in Newport, Wales, will be running at full capacity until the end of calendar year 2016 and will then be phased out in 2017. In parallel, we are looking for a buyer to take over and continue to operate the factory. OUTLOOK FOR THE THIRD QUARTER OF THE 2015 FISCAL YEAR Based on an assumed exchange rate of US$ 1.10 to the euro, Infineon expects quarter-on-quarter revenue growth of between 7 and 11 percent in the third quarter of the 2015 fiscal year. All segments are forecast to make a contribution to the expected revenue growth. At the mid-point of the growth range, the Segment Result Margin is expected to be about 15 percent. OUTLOOK FOR THE 2015 FISCAL YEAR Based on an assumed exchange rate of US$ 1.10 (previously US$ 1.20) to the euro, Infineon forecasts year-on-year growth in revenue of 36 percent, plus or minus 2 percentage points. At the mid-point of the growth range, the Segment Result Margin is expected to be about 15 percent. All four operating segments will contribute to revenue growth. This outlook also includes International Rectifier's expected contribution to revenue in the period from January 13, 2015 to September 30, 2015. Investments during the 2015 fiscal year are expected to be in the region of EUR800 million. This figure includes investments in plant and equipment at existing factories and in intangible assets including capitalized development assets. Specifically included in these investments are EUR60 to EUR70 million for readying the second shell in Kulim, Malaysia, for volume production and EUR21 million for the purchase of Qimonda patents in conjunction with the settlement reached with the insolvency administrator of Qimonda AG. Depreciation and amortization will increase to around EUR750 million, mostly as a result of acquisition-related depreciation and amortization. Infineon segments' performance in the second quarter of the 2015 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 CONFERENCE Infineon will host a telephone conference call for analysts and investors (in English only) on May 5, 2015 at 9:30 am (CEST), 3:30 am (EST). During the call, the Infineon Management Board will present the Company's results for the second quarter of the 2015 fiscal year. In addition, the Management Board will host a live telephone conference with the media at 11:00 am (CEST), 5:00 am (EST). 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/inve...index.html Infineon Financial Calendar (*preliminary) - May 28, 2015 CCS Analyst Call by Stefan Hofschen, Division President Chip Card & Security - May 28, 2015 J.P. Morgan Cazenove Investor Forum, Amsterdam - Jun 2, 2015 DZ Bank Sustainable Technologies Conference, Zurich - Jun 3, 2015 Danske Bank German Corporate Day, Copenhagen - Jun 17, 2015 Deutsche Bank German, Swiss & Austrian Conference, Berlin - Jul 30, 2015* Earnings Release for the Third Quarter of the 2015 Fiscal Year - Sep 16, 2015 ATV Analyst Call by Jochen Hanebeck, Division President Automotive - Sep 22, 2015 Baader Investment Conference, Munich - Sep 23, 2015 Berenberg Bank and Goldman Sachs German Corporate Conference, Munich - Nov 11 - 13, 2015 Morgan Stanley TMT Conference, Barcelona - Nov 26, 2015* Earnings Release for the Fourth Quarter and Full 2015 Fiscal Year - Nov 30 - Dec 3, 2015 Credit Suisse TMT Conference, Scottsdale/Arizona ABOUT INFINEON Infineon Technologies AG is a world leader in semiconductors. Infineon offers products and system solutions addressing three central challenges to modern society: energy efficiency, mobility, and security. In the 2014 fiscal year (ending September 30), the Company reported sales of euro 4.3 billion with about 29,800 employees worldwide. In January 2015, Infineon acquired US-based International Rectifier Corporation, a leading provider of power management technology, with revenues of US$1.1 billion (fiscal year 2014 ending June 29) and approximately 4,200 employees. 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 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. --------------------------------------------------------------------- 05.05.2015 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. 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: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart; Terminbörse EUREX End of News DGAP News-Service --------------------------------------------------------------------- 352707 05.05.2015