Quarterly Report • May 6, 2015
Quarterly Report
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Interim report Q1 2015
| in million Euro or percent | 01/01 – | 01/01 – | |
|---|---|---|---|
| unless otherwise indicated | 03/31/2015 | 03/31/2014 | Change |
| Sales | 55.3 | 49.4 | 12.1% |
| Semiconductor | 49.4 | 45.6 | 8.3% |
| Micromechanics | 6.0 | 3.8 | 57.1% |
| Gross profit | 22.4 | 20.5 | 9.1% |
| in percent of sales | 40.5% | 41.6% | |
| R&D expenses | 9.8 | 8.7 | 12.8% |
| in percent of sales | 17.6% | 17.5% | |
| Operating income before other operating expenses (–)/income | 3.2 | 2.8 | 12.6% |
| in percent of sales | 5.7% | 5.7% | |
| Exchange rate gains/losses (–) | 2.9 | –0.2 | n/a |
| Other operating expenses (–)/income | 0.3 | 0.6 | –49.1% |
| EBIT | 6.3 | 3.2 | 96.6% |
| in percent of sales | 11.5% | 6.5% | |
| Net income for the period after non-controlling interests | 4.3 | 4.0 | 6.9% |
| in percent of sales | 7.8% | 8.2% | |
| Basic earnings per share in Euro | 0.22 | 0.21 | 5.6% |
| Cash flow from operating activities | 12.6 | 11.6 | 9.0% |
| Capital expenditures for intangible assets and property, plant and equipment | 6.1 | 8.0 | –23.7% |
| in percent of sales | 11.1% | 16.2% | |
| Free cash flow1 | 8.8 | 3.4 | >100.0% |
| Adjusted free cash flow2 | 6.5 | 3.6 | 82.3% |
| in million Euro or percent | |||
| unless otherwise indicated | 03/31/2015 | 12/31/2014 | Change |
| Equity | 213.5 | 206.9 | 3.2% |
| in percent of total assets | 70.1% | 70.0% | |
| Employees (reporting date) | 1,122 | 1,116 | |
1 Cash flow from operating activities less cash flow from investing activities
2 Cash flow from operating activities less capital expenditures for intangible assets and property, plant and equipment, less payments for investments, plus disposal of investments
Due to calculation processes, tables and references may produce rounding differences from the mathematically exact values (monetary units, percentage statements, etc.).
Elmos started the year 2015 with quarterly sales of 55.3 million Euro, thus continuing the positive trend of the year before (Q1 2014: 49.4 million Euro). Apart from the pleasant business performance, the high sales increase of 12.1% compared to the previous year is driven by significant one-off effects as of the reporting date as well as the strong U.S. dollar. It is also worth mentioning that sales are up 3.5% over the previous quarter (Q4 2014: 53.5 million Euro) despite the typical annual price discounts granted at the beginning of the year.
Disproportionately large growth in Asia and the U.S.A. overcompensated for weak sales with European customers. With a 46.6% gain in the first quarter of 2015, sales generated in the Asian market came to 17.3 million Euro (Q1 2014: 11.8 million Euro) resulting in a share of total sales now amounting to 31.2% (Q1 2014: 23.9%). Elmos also managed to increase its U.S. sales (+50.8% in comparison with the previous year). Contrary to that, the European business was declining in the first quarter of 2015 (–5.3%).
Sales of the Semiconductor segment went up by 8.3% to 49.4 million Euro in comparison with the prior-year period (Q1 2014: 45.6 million Euro). In addition to the positive exchange rate effects, new ramp-ups in the Micromechanics segment continued to contribute to sales, gaining 57.1% to 6.0 million Euro in Q1 2015 (Q1 2014: 3.8 million Euro).
The ratio of orders received to sales, the so-called book-to-bill, was about one at the end of the first quarter of 2015.
| Third-party sales | 01/01 – 03/31/2015 thousand Euro |
in percent of sales |
01/01 – 03/31/2014 thousand Euro |
in percent of sales |
Change |
|---|---|---|---|---|---|
| EU countries | 28,686 | 51.8% | 30,288 | 61.4% | –5.3% |
| U.S.A. | 6,283 | 11.4% | 4,167 | 8.4% | 50.8% |
| Asia/Pacific | 17,272 | 31.2% | 11,781 | 23.9% | 46.6% |
| Others | 3,107 | 5.6% | 3,132 | 6.3% | –0.8% |
| Consolidated sales | 55,348 | 100.0% | 49,368 | 100.0% | 12.1% |
In line with the sales increase, the gross profit for the first quarter also improved over the previous year's period of comparison, from 20.5 million Euro to 22.4 million Euro. The gross margin reached 40.5% in the first quarter of 2015 (Q1 2014: 41.6%). As in the years before, the typical annual price discounts to be granted at the beginning of the year had a negative effect on gross profit and gross margin of the first quarter of 2015. The majority of the increase in the cost of sales is attributable to negative effects from the stronger U.S. dollar exchange rate and a higher depreciation amount due to capital expenditures linked to the conversion of production from 6-inch to 8-inch manufacturing in the year 2014. The conversion of production continues to be right on schedule in the year 2015. The remainder of the year will be determined by scheduled product ramp-ups and the continued optimization of 8-inch manufacturing.
Research and development expenses went up slightly due to license acquisitions among other factors (9.8 million Euro compared to 8.7 million Euro in Q1 2014). The R&D ratio of 17.6% remained constant in the quarter under review (Q1 2014: 17.5%). Distribution expenses also remained unchanged compared to the prior-year quarter at 4.8 million Euro; in relation to sales they were down by 0.9% points to 8.7%. In absolute terms, administration expenses went up slightly from 4.3 million Euro to 4.7 million Euro; however, owing to increased sales they went down in relative terms to 8.4% of sales (Q1 2014: 8.7%). Like the cost of sales, operating expenses were affected by the stronger U.S. dollar in comparison with the prior-year period. Overall, operating expenses dropped slightly in relation to sales (Q1 2015: 34.8% vs. Q1 2014: 35.9%). Thus the operating income before other operating expenses/ income went up from 2.8 million Euro in the prior-year quarter to 3.2 million Euro in the first quarter of 2015. Earnings before interest and taxes (EBIT) almost doubled, climbing to 6.3 million Euro (Q1 2014: 3.2 million Euro), positively affected by exchange rate gains of 2.9 million Euro primarily from hedging transactions (Q1 2014: exchange rate losses of 0.2 million Euro), among other factors. These gains on the one hand consist of realized hedging transactions and on the other hand on the market valuation of hedging transactions, extending beyond the reporting date. The EBIT margin came to 11.5% (Q1 2014: 6.5%).
After taxes, Elmos generated a consolidated net income attributable to the owners of the parent of 4.3 million Euro in the first quarter of 2015 (Q1 2014: 4.0 million Euro). Consolidated net income increased unproportional to the EBIT as the previous year's consolidated net income was supported by one-off tax effects. The consolidated net income equals basic earnings per share (EPS) of 0.22 Euro compared to 0.21 Euro in the first quarter of 2014.
The cash flow from operating activities showed a good development over the first quarter of 2015 and came to 12.6 million Euro (Q1 2014: 11.6 million Euro). In comparison with the prior-year period, the increase in trade receivables in line with the sales increase (–3.0 million Euro cash effect) was compensated by the increase of other provisions and other liabilities (+1.8 million Euro) as well as depreciation and amortization (+1.2 million Euro). Capital expenditures for intangible assets and property, plant and equipment in the combined amount of 6.1 million Euro or 11.1% of sales turned out lower than in the corresponding prior-year period (Q1 2014: 8.0 million Euro or 16.2% of sales). The adjusted free cash flow (cash flow from operating activities less capital expenditures for intangible assets and property, plant and equipment, less payments for investments, plus disposal of investments) recorded a positive performance for the first three months of 2015 altogether and came to 6.5 million Euro (Q1 2014: 3.6 million Euro).
Cash and cash equivalents and marketable securities amounted to 89.9 million Euro as of March 31, 2015, up from their amount as of December 31, 2014 (84.4 million Euro). Accordingly, net cash increased as well, coming to 52.7 million Euro as of the end of the quarter (December 31, 2014: 47.0 million Euro). The equity ratio of 70.1% remains virtually unchanged at the end of the first quarter of 2015 (December 31, 2014: 70.0%).
The global auto markets recorded gains for the most part in the first quarter of 2015. The entire Western European passenger car market increased by about 8.6% to 3.5 million units in the first three months of 2015, according to the European Automobile Manufacturers' Association (ACEA). Particularly Spain (+32.2%) and Italy (+13.5%) managed to generated above-average growth in the first quarter of 2015. In contrast to that, the markets of France (+6.9%), Great Britain (+6.8%) and Germany (+6.4%) showed growth rates below average. Growth is based on catch-up effects, a sound consumer climate, and regional bonus incentives.
For the first three months of 2015, the U.S. market volume of light vehicles (passenger cars and light trucks) was almost 6% above the prior-year level at 3.9 million units, according to the German Association of the Automotive Industry (VDA).
The Chinese passenger car market continues to prove the global growth driver at the beginning of the year 2015 even though its growth has slowed down a little compared to the previous year's growth rate. Roughly 11% more new cars were sold in the first quarter of 2015 than in the prior-year period (prior-year growth of the first quarter of 2014 over the first quarter of 2013: 14%). This gain equals close to 5 million new vehicles.
The market in Japan continues to be determined strongly by last year's sales tax increase (April 1, 2014). The previous year's first quarter had been positively affected by forward purchases. Over the first three months of 2015, the market fell short of the prior-year period by more than 15% at roughly 1.3 million cars.
Dr. Anton Mindl, CEO, and Dr. Arne Schneider, CFO, explained the past fiscal year within the framework of annual press conference and analysts' conference on March 18, 2015. Apart from explaining the factors for the proposed dividend increase to 0.33 Euro/share (previous year: 0.25 Euro/share), the Management Board presented the general economic conditions and the forecast for 2015. Elmos had released the forecast and key financials for 2014 already on February 10, 2015. The analysts' conference is available as a recording at www.elmos.com.
Furthermore, Elmos exhibited at the world's leading trade shows. In the first quarter of 2015 Elmos introduced its products at the trade fairs "embedded world 2015" in Nuremberg and "electronica China" in Shanghai and received highly positive customer feedback.
Prestigious carmakers displayed promising gesture control advancements in concept cars at the Consumer Electronics Show (CES) in Las Vegas in January 2015. For the sensors used in these gesture control solutions, Elmos is currently no. 1 in the global market with its Halios® solutions based on an optical principle.
Elmos Dortmund & Duisburg
The Elmos Group's workforce came to 1,122 employees as of March 31, 2015. Compared with December 31, 2014 (1,116 employees), the number of employees has thus changed only insignificantly.
In spite of the difficult political and economic environment, the stock markets recorded a highly positive performance in the first quarter of 2015 – the DAX registered its all-time high at over 12,200 points in March. The market indices of relevance to Elmos also performed well. TecDAX, DAXsector Technology, and Technology All Share gained 17.8%, 25.7%, and 17.5% respectively.
The Elmos stock price showed another good performance in the first quarter of 2015 and increased by 11.5%. The share closed on March 31, 2015 at 18.07 Euro. Market capitalization came to 358.9 million Euro as of that date (based on 19.9 million issued shares). The stock price reached its high on March 16, 2015 at 18.45 Euro and its low on February 11, 2015 at 16.34 Euro (Xetra closing prices).
The daily trading volume of the first three months of 2015 was 29.5 thousand shares on average (Xetra and Frankfurt floor) and was thus slightly below the 2014 average (32.6 thousand shares). The treasury stock was reduced by servicing stock options with treasury shares. As of March 31, 2015 Elmos Semiconductor AG held 257,700 treasury shares (December 31, 2014: 280,825).
Prof. Dr. Günter Zimmer, chairman Graduate physicist | Duisburg
Dr. Burkhard Dreher, deputy chairman Graduate economist | Dortmund
Dr. Klaus Egger Graduate engineer | Steyr-Gleink, Austria
Thomas Lehner Graduate engineer | Dortmund
Sven-Olaf Schellenberg Graduate physicist | Dortmund
Dr. Klaus Weyer Graduate physicist | Penzberg
Dr. Anton Mindl, chairman Graduate physicist | Lüdenscheid
Dr. Arne Schneider Graduate economist | Munich
Reinhard Senf Graduate engineer | Iserlohn
Dr. Peter Geiselhart Graduate physicist | Ettlingen
Risk management and the individual corporate risks and opportunities are described in our Annual Report 2014. No material changes of the Company's risks and opportunities as detailed therein have occurred in the first three months of 2015. No risks are visible at present that could either separately or collectively jeopardize the Company's continued existence.
The German economic researchers of the ifo Institute have revised their 2015 forecast upwards. Now they anticipate 2.1% growth of the economic performance after having expected merely 1.2% in the fall. The low oil price leaves Germans with more money for consumer spending and the low euro exchange rate has been driving the export business, according to the ifo Institute.
Germany's federal bank, the Bundesbank, sees the economic performance progress rather slowly in the first quarter of 2015, however, according to its monthly report of April. "Economic data for the industry have been disappointing for the second month in a row," the central bank analyzes. The economy's basic growth is supposed to turn out lower than the expectations the strong growth toward the end of the year 2014 had given rise to suggest.
According to the assessment shared by treasury secretaries and federal bank chairmen at the Spring Meeting of the International Monetary Fund (IMF), the global economy's recovery stands on shaky ground despite positive indications. The Greece crisis, asynchronous monetary policies applied in Europe and the U.S.A., and the low inflation rates in developed economies were considered the major risks to the global economy whose recovery has been holding up although its growth remains moderate at mixed prospects. High fluctuation of the exchange rates and raw materials prices, high sovereign debts of many states, and geopolitical tensions have made "vigilance" a necessity.
For the automotive industry, the President of Germany's Association of the Automotive Industry (VDA), Matthias Wissmann, expects an increase in the global passenger car market of 2% to 76.4 million vehicles in 2015. The U.S.A. and China are regarded as the principal growth drivers. The VDA also considers the growth generated in Western Europe over the first quarter of 2015 a good perspective for the full year based on catch-up effects and a sound consumer climate. At the same time the VDA cautions that the global trouble spots keep carrying risks for the economies of Germany and the whole of Europe.
Based on the currently available information and the performance of the first three months of 2015, the Management Board presents the following outlook for the full year 2015:
We expect to benefit from our increasingly stronger position in the Asian market and its economic growth and to generate growth in the U.S.A. based on our MEMS products in the course of the year.
Elmos adjusts the forecast due to exchange rate effects. The forecast is now based on an exchange rate of 1.10 USD/EUR (formerly: 1.20 USD/EUR).
Accordingly, management is expecting a sales increase between 5% and 9% (formerly: mid single-digit percentage range) for the current fiscal year 2015. Thanks to the hedging transactions entered into we still expect to achieve a slightly better EBIT margin in 2015 compared to 2014 despite the exchange rate's negative effects on costs.
For 2015 capital expenditures for intangible assets and property, plant and equipment are scheduled not to exceed 15% of sales. We expect that Elmos will generate a positive adjusted free cash flow in 2015 once again.
The underlying premise of this forecast is the assumption of a stable macroeconomic situation. In that case Elmos will participate in the positive development of the automotive semiconductor market in 2015. The electrification will continue. At the same time it holds true that such expectations can be affected by market turbulence. Particularly the consequences of the political and economic developments and crises in the international markets cannot be foreseen with respect to their effects on the global economy and our core market.
| Assets | 03/31/2015 thousand Euro |
12/31/2014 thousand Euro |
|---|---|---|
| Non-current assets | ||
| Intangible assets1 | 21,276 | 21,439 |
| Property, plant and equipment1 | 80,863 | 82,429 |
| Securities1, 2 | 39,519 | 41,632 |
| Investments1, 2 | 20 | 20 |
| Other financial assets1 | 4,335 | 4,147 |
| Deferred tax assets | 2,573 | 2,468 |
| Total non-current assets | 148,585 | 152,136 |
| Current assets | ||
| Inventories1 | 55,253 | 53,217 |
| Trade receivables2 | 36,366 | 35,022 |
| Securities2 | 10,778 | 10,226 |
| Other financial assets | 6,276 | 3,640 |
| Other receivables | 7,504 | 8,078 |
| Income tax assets | 151 | 562 |
| Cash and cash equivalents2 | 39,578 | 32,520 |
| Total current assets | 155,906 | 143,265 |
| Total assets | 304,491 | 295,400 |
1 Cf. note 3
2 Cf. note 4
| Equity and liabilities | 03/31/2015 | 12/31/2014 |
|---|---|---|
| thousand Euro | thousand Euro | |
| Equity | ||
| Equity attributable to owners of the parent | ||
| Share capital1 | 19,860 | 19,860 |
| Treasury stock1 | –258 | –281 |
| Additional paid-in capital | 89,859 | 89,657 |
| Surplus reserve | 102 | 102 |
| Other equity components | –447 | –2,366 |
| Retained earnings | 103,393 | 99,083 |
| 212,510 | 206,055 | |
| Non-controlling interests | 1,007 | 844 |
| Total equity | 213,517 | 206,898 |
| Liabilities | ||
| Non-current liabilities | ||
| Provisions for pensions | 571 | 599 |
| Financial liabilities2 | 36,967 | 37,076 |
| Other liabilities | 3,719 | 3,878 |
| Deferred tax liabilities | 3,634 | 2,874 |
| Total non-current liabilities | 44,890 | 44,427 |
| Current liabilities | ||
| Provisions | 15,354 | 12,811 |
| Income tax liabilities | 2,685 | 2,565 |
| Financial liabilities2 | 228 | 333 |
| Trade payables2 | 23,726 | 21,856 |
| Other liabilities | 4,092 | 6,509 |
| Total current liabilities | 46,085 | 44,075 |
| Total liabilities | 90,974 | 88,502 |
| Total equity and liabilities | 304,491 | 295,400 |
1 Cf. note 3
2 Cf. note 4
| for the period January 1 to March 31 | 01/01 – 03/31/2015 thousand Euro |
in percent of sales |
01/01 – 03/31/2014 thousand Euro |
in percent of sales |
Change |
|---|---|---|---|---|---|
| Sales | 55,348 | 100.0 | 49,368 | 100,0 | 12.1% |
| Cost of sales | –32,937 | –59.5 | –28,820 | –58.4 | 14.3% |
| Gross profit | 22,411 | 40.5 | 20,548 | 41.6 | 9.1% |
| Research and development expenses | –9,767 | –17.6 | –8,662 | –17.5 | 12.8% |
| Distribution expenses | –4,820 | –8.7 | –4,762 | –9.6 | 1.2% |
| Administrative expenses | –4,654 | –8.4 | –4,308 | –8.7 | 8.0% |
| Operating income before other operating expenses (–)/income |
3,170 | 5.7 | 2,816 | 5.7 | 12.6% |
| Exchange rate gains/losses (–) | 2,862 | 5.2 | –200 | –0.4 | n/a |
| Other operating income | 680 | 1.2 | 872 | 1.8 | –22.0% |
| Other operating expenses | –370 | –0.7 | –263 | –0.5 | 40.7% |
| Earnings before interest and taxes (EBIT) | 6,342 | 11.5 | 3,226 | 6.5 | 96.6% |
| Finance income | 530 | 1.0 | 642 | 1.3 | –17.4% |
| Finance cost | –436 | –0.8 | –451 | –0.9 | –3.4% |
| Earnings before taxes | 6,437 | 11.6 | 3,417 | 6.9 | 88.4% |
| Taxes on income | |||||
| Current income tax | –1,516 | –2.7 | –544 | –1.1 | >100.0% |
| Deferred tax | –478 | –0.9 | 1,129 | 2.3 | n/a |
| –1,994 | –3.6 | 585 | 1.2 | n/a | |
| Consolidated net income | 4,443 | 8.0 | 4,001 | 8.1 | 11.0% |
| Consolidated net income attributable to | |||||
| Owners of the parent | 4,310 | 7.8 | 4,034 | 8.2 | 6.9% |
| Non-controlling interests | 133 | 0.2 | –32 | –0.1 | n/a |
| Earnings per share | Euro | Euro | |||
| Basic earnings per share | 0.22 | 0.21 | |||
| Fully diluted earnings per share | 0.22 | 0.20 |
| for the period January 1 to March 31 | 01/01 – 03/31/2015 |
01/01 – 03/31/2014 |
|---|---|---|
| thousand Euro | thousand Euro | |
| Consolidated net income | 4,443 | 4,001 |
| Other comprehensive income | ||
| Items that may be reclassified to the income statement in future periods including respective tax effects |
||
| Foreign currency adjustments not affecting deferred taxes | 605 | –32 |
| Foreign currency adjustments affecting deferred taxes | 1,725 | –4 |
| Deferred tax (on foreign currency adjustments affecting deferred taxes) | –432 | 1 |
| Value differences relating to hedges | 97 | –29 |
| Deferred tax (on value differences relating to hedges) | –32 | 9 |
| Changes in market value of available-for-sale financial assets | –27 | 434 |
| Deferred tax (on changes in market value of available-for-sale financial assets) | 9 | –142 |
| Items that will not be reclassified to the income statement in future periods including respective tax effects |
||
| Actuarial gains from pension plans | 7 | 9 |
| Deferred tax on actuarial gains from pension plans | –2 | –3 |
| Other comprehensive income after taxes | 1,950 | 243 |
| Total comprehensive income after taxes | 6,393 | 4,244 |
| Total comprehensive income attributable to | ||
| Owners of the parent | 6,230 | 4,287 |
| Non-controlling interests | 163 | –43 |
| for the period January 1 to March 31 | 01/01 – 03/31/2015 thousand Euro |
01/01 – 03/31/2014 thousand Euro |
|---|---|---|
| Cash flow from operating activities | ||
| Consolidated net income | 4,443 | 4,001 |
| Depreciation and amortization | 7,079 | 5,835 |
| Financial result | –94 | –191 |
| Other non-cash expenses/income (–) | 427 | –1,182 |
| Current income tax expense | 1,516 | 544 |
| Expenses for stock options/stock awards/share matching | 78 | 107 |
| Changes in pension provisions | –21 | –15 |
| Changes in net working capital: | ||
| Trade receivables | –1,344 | 1,641 |
| Inventories | –2,036 | –739 |
| Other assets | –2,068 | –603 |
| Trade payables | 2,355 | 2,262 |
| Other provisions and other liabilities | 3,173 | 1,328 |
| Income tax payments | –985 | –1,476 |
| Interest paid | –436 | –451 |
| Interest received | 537 | 525 |
| Cash flow from operating activities | 12,624 | 11,586 |
| for the period January 1 to March 31 | 01/01 – 03/31/2015 | 01/01 – 03/31/2014 |
|---|---|---|
| thousand Euro | thousand Euro | |
| Cash flow from investing activities | ||
| Capital expenditures for intangible assets | –589 | –485 |
| Capital expenditures for property, plant and equipment | –5,533 | –7,535 |
| Disposal of non-current assets held for sale | 0 | 2 |
| Disposal of non-current assets | 865 | 927 |
| Disposal of/Payments for (–) securities | 1,535 | –1,080 |
| Payments for other non-current financial assets | –151 | 0 |
| Cash flow from investing activities | –3,873 | –8,171 |
| Cash flow from financing activities | ||
| Repayment of current liabilities to banks | –105 | 0 |
| Borrowing of current liabilities from banks | 0 | 277 |
| Repayment of non-current liabilities | –109 | 0 |
| Issue of treasury shares | 147 | 51 |
| Distribution/Other payments to non-controlling shareholders | –3,000 | –267 |
| Cash flow from financing activities | –3,067 | 61 |
| Increase in cash and cash equivalents | 5,684 | 3,476 |
| Effect of exchange rate changes on cash and cash equivalents | 1,374 | –33 |
| Cash and cash equivalents at beginning of reporting period | 32,520 | 27,949 |
| Cash and cash equivalents at end of reporting period | 39,578 | 31,392 |
| Equity attributable to owners of the parent | Non controlling interests |
Group | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Other equity components | ||||||||||||
| Shares | Share capital |
Treasury stock |
Additional paid-in capital |
Surplus reserve |
Reserve for available-for-sale financial assets |
Hedges | Foreign currency translation |
Unrealized actuarial gains/losses |
Retained earnings |
Total | Total | Total |
| thousand | thousand Euro |
thousand Euro |
thousand Euro |
thousand Euro |
thousand Euro |
thousand Euro |
thousand Euro |
thousand Euro |
thousand Euro |
thousand Euro |
thousand Euro |
thousand Euro |
| January 1, 2014 19,675 |
19,675 | –328 | 88,161 | 102 | 78 | –1,119 | –2,191 | –688 | 86,868 | 190,559 | 2,127 | 192,686 |
| Consolidated net income | 4,034 | 4,034 | –32 | 4,001 | ||||||||
| Other comprehensive income for the period | 292 | –20 | –24 | 6 | 254 | –11 | 243 | |||||
| Total comprehensive income | 292 | –20 | –24 | 6 | 4,034 | 4,287 | –43 | 4,244 | ||||
| Issue of treasury shares | 14 | 37 | 51 | 51 | ||||||||
| Distribution to non-controlling shareholders | –267 | –267 | ||||||||||
| Expenses for stock options/stock awards | 107 | 107 | 107 | |||||||||
| March 31, 2014 19,675 |
19,675 | –314 | 88,305 | 102 | 370 | –1,139 | –2,215 | –682 | 90,902 | 195,004 | 1,817 | 196,821 |
| January 1, 2015 19,860 |
19,860 | –281 | 89,657 | 102 | 89 | –1,063 | –547 | –845 | 99,083 | 206,055 | 844 206,898 | |
| Consolidated net income | 4,310 | 4,310 | 133 | 4,443 | ||||||||
| Other comprehensive income for the period | –18 | 65 | 1,868 | 5 | 1,920 | 30 | 1,950 | |||||
| Total comprehensive income | –18 | 65 | 1,868 | 5 | 4,310 | 6,230 | 163 | 6,393 | ||||
| Issue of treasury shares | 23 | 124 | 147 | 147 | ||||||||
| Expenses for stock options/stock awards/share matching | 78 | 78 | 78 | |||||||||
| March 31, 2015 19,860 |
19,860 | –258 | 89,859 | 102 | 71 | –999 | 1,321 | –840 | 103,393 | 212,510 | 1,007 | 213,517 |
The condensed interim consolidated financial statements for the 1st quarter of 2015 were released for publication pursuant to Management Board resolution in May 2015.
Elmos Semiconductor Aktiengesellschaft ("the Company" or "Elmos") has its registered office in Dortmund (Germany) and is entered in the register of companies maintained at Dortmund District Court (Amtsgericht), section B, no. 13698. The Articles of Incorporation are in effect in the version of March 26, 1999, last amended by resolution of the Annual General Meeting of May 13, 2014 and edited by resolution of the Supervisory Board of December 23, 2014.
The Company's business is the development, manufacture and distribution of microelectronic components and system parts (application specific integrated circuits, or in short: ASICs) as well as technological devices with similar functions. The Company may conduct all transactions suitable for serving the object of business directly or indirectly. The Company may establish branches, acquire or lease businesses of the same or a similar kind or invest in them, and conduct all business transactions that are beneficial to the Articles of Association. The Company is authorized to conduct business in Germany as well as abroad.
In addition to its domestic branches, the Company has sales companies and business locations in Europe, Asia, South Africa and the United States and cooperates with other German and international companies in the development and production of ASIC chips.
The Company is a listed stock corporation and its shares are traded in the Prime Standard segment in Frankfurt/Main.
The address of the Company's registered office is: 44227 Dortmund, Heinrich-Hertz-Straße 1.
The condensed interim consolidated financial statements for the period January 1 through March 31, 2015 have been prepared in accordance with IAS 34 "Interim Financial Reporting". These financial statements do therefore not contain all the information and disclosures required for consolidated financial statements and should therefore be read in conjunction with the consolidated financial statements for the fiscal year ended December 31, 2014.
For the preparation of the condensed interim consolidated financial statements, the same accounting policies and valuation methods have been adopted as were applied for the preparation of the consolidated financial statements for the fiscal year ended December 31, 2014, with the exception of the following new or amended IFRS standards and interpretations listed below.
First-time application of these standards or interpretations did not result in material effects on the Group's profit and financial position and assets and liabilities.
The Company recognizes provisions for pension and partial retirement obligations pursuant to IAS 19. For 2015 an actuarial interest rate of 1.9% has been applied, unchanged from December 31, 2014.
There were no exceptional business transactions in the first quarter of 2015.
There were neither additions to nor disposals from the basis of consolidation in the first quarter of 2015.
The corporations Elmos Central IT Services GmbH and Elmos Facility Management GmbH shall be merged into Elmos Semiconductor AG in the financial year 2015. The registration of the merger in the register of companies of the respective corporations will most probably occur within in the second quarter of 2015.
According to the assessment shared by treasury secretaries and federal bank chairmen at the Spring Meeting of the International Monetary Fund (IMF), the global economy's recovery stands on shaky ground despite positive indications. The Greece crisis, asynchronous monetary policies applied in Europe and the U.S.A., and the low inflation rates in developed economies were considered the major risks to the global economy whose recovery has been holding up although its growth remains moderate at mixed prospects. High fluctuation of the exchange rates and raw materials prices, high sovereign debts of many states, and geopolitical tensions have made "vigilance" a necessity. The business of Elmos Semiconductor AG tends to result in subordinated seasonal fluctuation.
The business segments correspond to the Elmos Group's internal organizational and reporting structure. The definition of segments considers the different products and services supplied by the Group. The accounting principles of the individual segments correspond to those applied by the Group.
The Company divides its business activities into two segments:
The Semiconductor business is operated through the various national subsidiaries and branches in Germany, the Netherlands, South Africa, Asia, and the U.S.A. Sales in this segment are generated predominantly with electronics for the automotive industry. In addition to that, Elmos operates in the markets for industrial and consumer goods and provides semiconductors e.g. for applications in household appliances, installation and building technology, and machine control.
Sales in the Micromechanics segment are generated by the subsidiary SMI in the U.S.A. Its product portfolio includes micro-electro-mechanical systems (MEMS) which are primarily silicon-based high-precision pressure sensors.
Business operations are organized and managed separately from each other with respect to the type of products, with each segment representing one strategic business unit that provides different products and supplies different markets. Inter-segment sales are based on cost-plus pricing or on settlement prices that correspond to prices paid in transactions with third parties.
The following tables provide information on sales and earnings (for the period January 1 through March 31, 2015 and 2014, respectively) as well as on assets of the Group's business segments (as of March 31, 2015 and December 31, 2014).
| Quarter ended 03/31/2015 | Semiconductor thousand Euro |
Micromechanics thousand Euro |
Consolidation thousand Euro |
Group thousand Euro |
|---|---|---|---|---|
| Sales | ||||
| Third-party sales | 49,351 | 5,997 | 0 | 55,348 |
| Inter-segment sales | 256 | 254 | –5101 | 0 |
| Total sales | 49,607 | 6,251 | –510 | 55,348 |
| Earnings | ||||
| Segment earnings | 5,572 | 770 | 0 | 6,342 |
| Finance income | 530 | |||
| Finance cost | –436 | |||
| Earnings before taxes | 6,437 | |||
| Taxes on income | –1,815 | –179 | 0 | –1,994 |
| Consolidated net income including | ||||
| non-controlling interests | 4,443 | |||
| Assets | ||||
| Segment assets | 241,380 | 20,789 | 42,3022 | 304,471 |
| Investments | 20 | 0 | 0 | 20 |
| Total assets | 304,491 | |||
| Other segment information | ||||
| Capital expenditures for intangible assets and property, plant and equipment |
5,573 | 5 | 0 | 5,578 |
| Depreciation and amortization | 6,778 | 301 | 0 | 7,079 |
| Quarter ended 03/31/2014 | Semiconductor thousand Euro |
Micromechanics thousand Euro |
Consolidation thousand Euro |
Group thousand Euro |
|---|---|---|---|---|
| Sales | ||||
| Third-party sales | 45,551 | 3,817 | 0 | 49,368 |
| Inter-segment sales | 84 | 351 | –4531 | 0 |
| Total sales | 45,635 | 4,168 | –435 | 49,368 |
| Earnings | ||||
| Segment earnings | 2,899 | 327 | 0 | 3,226 |
| Finance income | 642 | |||
| Finance cost | –451 | |||
| Earnings before taxes | 3,417 | |||
| Taxes on income | 592 | –7 | 0 | 585 |
| Consolidated net income including | ||||
| non-controlling interests | 4,001 | |||
| Assets (as of 12/31/2014) | ||||
| Segment assets | 241,553 | 18,277 | 35,5502 | 295,380 |
| Investments | 20 | 0 | 0 | 20 |
| Total assets | 295,400 | |||
| Other segment information | ||||
| Capital expenditures for intangible assets and | ||||
| property, plant and equipment | 8,090 | 44 | 0 | 8,134 |
| Depreciation and amortization | 5,647 | 188 | 0 | 5,835 |
Sales from inter-segment transactions have been eliminated for consolidation purposes.
2 Non-attributable assets as of March 31, 2015 include cash and cash equivalents (39,578 thousand Euro),
income tax assets (151 thousand Euro), and deferred tax (2,573 thousand Euro), as these assets are controlled at group level.
Sales from inter-segment transactions have been eliminated for consolidation purposes.
2 Non-attributable assets as of December 31, 2014 include cash and cash equivalents (32,520 thousand Euro),
income tax assets (562 thousand Euro), and deferred tax (2,468 thousand Euro), as these assets are controlled at group level.
Geographical information
| Development of selected non-current assets from January 1 through |
Net book value 1/1/2015 |
Reclassi fication |
Additions | Disposals/ Other movements |
Depreciation/ Amortization |
Net book value 3/31/2015 |
|---|---|---|---|---|---|---|
| March 31 | thousand Euro |
thousand Euro |
thousand Euro |
thousand Euro |
thousand Euro |
thousand Euro |
| Intangible assets | 21,439 | 0 | 1,095 | 88 | 1,346 | 21,276 |
| Property, plant and equipment |
82,429 | 0 | 4,483 | –316 | 5,733 | 80,863 |
| Securities | 41,632 | 0 | 210 | –2,323 | 0 | 39,519 |
| Investments | 20 | 0 | 0 | 0 | 0 | 20 |
| Other financial assets | 4,147 | 0 | 181 | 6 | 0 | 4,335 |
| 149,668 | 0 | 5,969 | –2,545 | 7,079 | 146,012 |
The item "Disposals/Other movements" includes positive currency adjustments in the amount of 672 thousand Euro.
| 03/31/2015 thousand Euro |
12/31/2014 thousand Euro |
|
|---|---|---|
| Raw materials | 4,634 | 4,069 |
| Work in process | 39,200 | 38,463 |
| Finished goods and merchandise | 11,419 | 10,685 |
| 55,253 | 53,217 |
The share capital of 19,860 thousand Euro entered in the statement of financial position as of March 31, 2015 (December 31, 2014: 19,860 thousand Euro) and consisting of 19,859,749 (December 31, 2014: 19,859,749) no-par value bearer shares is fully paid up. As of March 31, 2015 the Company holds 257,700 (December 31, 2014: 280,825) of the Company's no-par shares, adding up to a theoretical share in the share capital of 258 thousand Euro (December 31, 2014: 281 thousand Euro).
As of March 31, 2015 altogether 757,058 options from stock option plans are outstanding. The options are attributable to the separate tranches as follows:
| Tranche | 2009 | 2010 | 2011 | 2012 | Total |
|---|---|---|---|---|---|
| Year of resolution and issue | 2009 | 2010 | 2011 | 2012 | |
| Exercise price in Euro | 3.68 | 7.49 | 8.027 | 7.42 | |
| Blocking period ex issue (years) | 3 | 4 | 4 | 4 | |
| Exercise period after blocking period (years) | 3 | 3 | 3 | 3 | |
| Options outstanding as of 12/31/2014 (number) | 38,940 | 123,744 | 233,505 | 384,844 | 781,033 |
| Granted 1/1 - 3/31/2015 (number) | 0 | 0 | 0 | 0 | 0 |
| Exercised 1/1 - 3/31/2015 (number) | 6,820 | 16,305 | 0 | 0 | 23,125 |
| Forfeited 1/1 - 3/31/2015 (number) | 0 | 0 | 400 | 450 | 850 |
| Options outstanding as of 3/31/2015 (number) | 32,120 | 107,439 | 233,105 | 384,394 | 757,058 |
| Options exercisable as of 3/31/2015 (number) | 32,120 | 107,439 | 233,105 | 384,394 | 757,058 |
The following table lists the book values and fair values of the Group's financial instruments. The fair value of a financial instrument is the price that would be received for the sale of an asset or paid for the transfer of a liability between market participants in a regular business transaction as of the measurement date. In view of varying factors of influence, the presented fair values can only be regarded as indicators of the amounts actually recoverable in the market. Detailed information on the methods and assumptions underlying the determination of the value of financial instruments can be found under note 29 to the 2014 consolidated financial statements. Their relevance to these quarterly financial statements is undiminished.
| 03/31/2015 | 12/31/2014 | |||
|---|---|---|---|---|
| thousand Euro | Book value | Fair value | Book value | Fair value |
| Financial assets | ||||
| Investments | 20 | 20 | 20 | 20 |
| Long-term securities | 39,519 | 39,519 | 41,632 | 41,632 |
| Short-term securities | 10,778 | 10,778 | 10,226 | 10,226 |
| Trade receivables | 36,366 | 36,366 | 35,022 | 35,022 |
| Cash and cash equivalents | 39,578 | 39,578 | 32,520 | 32,520 |
| Other financial assets | ||||
| Other receivables and assets | 2,386 | 2,386 | 1,709 | 1,709 |
| Other loans | 4,016 | 4,016 | 3,865 | 3,865 |
| Forward exchange contracts/Currency option transactions |
4,193 | 4,193 | 2,190 | 2,190 |
| Call option | 0 | 0 | 0 | 0 |
| Embedded derivatives | 16 | 16 | 23 | 23 |
| Financial liabilities | ||||
| Trade payables | 23,726 | 23,726 | 21,856 | 21,856 |
| Liabilities to banks | 37,195 | 38,762 | 37,409 | 38,737 |
| Other financial liabilities | ||||
| Miscellaneous financial liabilities | 327 | 327 | 3,705 | 3,705 |
| Put option | 2,000 | 2,000 | 2,000 | 2,000 |
| Hedged derivatives (short-term) | 628 | 628 | 616 | 616 |
| Hedged derivatives (long-term) | 858 | 858 | 967 | 967 |
At the end of the reporting period a review is conducted to find out whether reclassifications between valuation hierarchies must be made. The following presentation shows which valuation hierarchy levels (according to IFRS 13) financial assets and liabilities measured at fair value are classified to.
The Group applies the following hierarchy for the determination and reporting of the fair values of financial instruments according to the respective valuation methods:
Level 1: quoted (unadjusted) prices in active markets for similar assets or liabilities
Level 2: methods where all input parameters with material effect on the determined fair value are observable either directly or indirectly
Level 3: methods using input parameters that have material effect on the determined fair values and are not based on observable market data
| Level 1 | Level 2 | Level 3 | |
|---|---|---|---|
| thousand Euro | thousand Euro | thousand Euro | |
| Securities | |||
| January 1, 2015 | 47,858 | ||
| Addition of securities (long-term) | 210 | ||
| Reclassification of securities (long-term) | –2,383 | ||
| Market valuation of securities (long-term) | 59 | ||
| Addition of securities (short-term) | 255 | ||
| Reclassification of securities (short-term) | 2,383 | ||
| Market valuation of securities (short-term) | –86 | ||
| March 31, 2015 | 48,296 | ||
| Investments | |||
| January 1, 2015 | 20 | ||
| March 31, 2015 | 20 | ||
| Call option | |||
| January 1, 2015 | 0 | ||
| March 31, 2015 | 0 | ||
| Hedged derivatives | |||
| January 1, 2015 | –1,583 | ||
| Correction of measurement of hedged derivatives outside profit or loss (short- and long-term) |
97 | ||
| March 31, 2015 | –1,486 | ||
| Put option | |||
| January 1, 2015 | –2,000 | ||
| March 31, 2015 | –2,000 | ||
| Forward exchange contracts/Currency option transactions | |||
| January 1, 2015 | 2,190 | ||
| Market valuation of forward exchange contracts/currency | |||
| option transactions | 2,003 | ||
| March 31, 2015 | 4,193 | ||
| Embedded derivatives | |||
| January 1, 2015 | 23 | ||
| Market valuation of embedded derivatives | –7 | ||
| March 31, 2015 | 16 |
The securities reported under hierarchy level 1 are bonds classified by Elmos as available for sale.
The hedged derivatives allocated to hierarchy level 2 comprise the Company's interest rate swaps. In addition to that, foreign currency transactions (USD) and credit linked notes (embedded derivatives) of various issuers are also reported under this hierarchy level.
The available-for-sale financial assets reported under hierarchy level 3 are investments in various companies, among other assets. With this respect, the book value essentially corresponds to the market value. The call and put options agreed on with a non-controlling shareholder are measured annually at fair value, most recently as of December 31, 2014, in application of the DCF method and in consideration of the terms and conditions of the contract. In the course of the valuation process, the required publicly available market data are collected and the input parameters that cannot be observed are reviewed on the basis of internally available current information and updated if necessary. Material changes of the input parameters and their respective effects on book values are subject to routine reporting to management.
As reported in the consolidated financial statements for the fiscal year ended December 31, 2014, the Elmos Group maintains business relationships with related companies and individuals in the context of the ordinary course of business.
These supply and performance relationships continue to be transacted at market prices.
| 3-month results Q1/20151 | May 5, 2015 |
|---|---|
| Annual General Meeting in Dortmund | May 8, 2015 |
| 6-month results Q2/20151 | August 5, 2015 |
| 9-month results Q3/20151 | November 4, 2015 |
| Equity Forum in Frankfurt | November 24-25, 2015 |
1 The German Securities Trading Act (Wertpapierhandelsgesetz) obliges issuers to announce immediately any information that may have a substantial price impact, irrespective of the communicated financial calendar. It is therefore possible that we have to announce key figures of quarterly and annual results ahead of the dates mentioned above. As we can never rule out changes of dates, we recommend checking them ahead of schedule on the Company's website (www.elmos.com).
Phone: + 49 (0) 231-75 49-287 Fax: + 49 (0) 231-75 49-111 [email protected]
Elmos Semiconductor AG
Heinrich-Hertz-Straße 1 44227 Dortmund | Germany Phone: + 49 (0) 231-75 49-0 Fax: + 49 (0) 231-75 49-149 [email protected] | www.elmos.com
This report contains statements directed to the future that are based on assumptions and estimates made by the management of Elmos. Even though we assume the underlying expectations of our statements to be realistic, we cannot guarantee these expectations will prove right. The assumptions may carry risks and uncertainties, and as a result actual events may differ materially from the forward-looking statements. Among the factors that could cause such differences are changes in general economic and business conditions, fluctuations of exchange rates and interest rates, the introduction of competing products, lack of acceptance of new products, and changes in business strategy. Elmos neither intends nor assumes any obligation to update its statements with respect to future events.
This English translation is for convenience purposes only.
The following reportable securities transactions (directors' dealings) were made in the reporting period January 1 through March 31, 2015:
| Date Place |
Name | Function | Transaction | Number Price/Basic price (Euro) |
Total volume (Euro) |
|
|---|---|---|---|---|---|---|
| 03/26/2015 off-market |
Sven-Olaf Schellenberg |
Supervisory Board member |
Sale of Elmos shares from exercise of stock options |
400 | 17.22 | 6,887 |
There have been no reportable significant events or transactions after the end of the first quarter of 20105.
Dortmund, May 2015
Dr. Anton Mindl Dr. Arne Schneider Reinhard Senf Dr. Peter Geiselhart
Heinrich-Hertz-Straße 1 44227 Dortmund | Germany Phone +49(0)231-75 49-0 Fax +49(0)231-75 49 -149 [email protected] | www.elmos.com
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