Quarterly Report • Nov 2, 2010
Quarterly Report
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July 1 – Sept. 30, 2010 Q3| 2010
[1] Chal•lenge to rise to a challenge, to bear a challenge, Inflected Form(s): challenged; challenging, defiance, provocation, [2] Op|por|tu|ni|ty
| 3rd quarter | 9 months | |||||
|---|---|---|---|---|---|---|
| in million Euro or %, unless otherwise indicated |
7/1 – 9/30/2010 |
7/1 – 9/30/2009 |
Change | 1/1 – 9/30/2010 |
1/1 – 9/30/2009 |
Change |
| Sales | 46.3 | 35.5 | 30.3% | 136.1 | 83.3 | 63.3% |
| Semiconductor | 42.6 | 32.3 | 31.8% | 124.9 | 75.6 | 65.4% |
| Micromechanics | 3.7 | 3.2 | 15.4% | 11.1 | 7.8 | 43.4% |
| Gross profit | 22.4 | 12.4 | 79.9% | 60.6 | 19.9 | >100.0% |
| in % of sales | 48.3% | 35.0% | 44.5% | 23.9% | ||
| R&D expenses | 7.3 | 6.2 | 16.4% | 22.1 | 19.2 | 14.7% |
| in % of sales | 15.7% | 17.6% | 16.2% | 23.1% | ||
| Operating income | 7.6 | 0.3 | >100.0% | 15.7 | –17.8 | n/a |
| in % of sales | 16.4% | 0.8% | 11.6% | –21.4% | ||
| EBIT | 7.4 | 0.1 | >100.0% | 15.6 | –18.7 | n/a |
| in % of sales | 16.0% | 0.3% | 11.5% | –22.4% | ||
| Net income/loss for the period | 5.2 | –0.3 | n/a | 10.5 | –14.0 | n/a |
| in % of sales | 11.2% | –0.8% | 7.7% | – 16.7% | ||
| Basic earnings per share in Euro | 0.27 | –0.02 | n/a | 0.54 | – 0.72 | n/a |
| Operating cash flow | 4.7 | 2.7 | 71.7% | 22.4 | 1.0 | >100.0% |
| Capital expenditures for intangible assets and property, |
||||||
| plant and equipment | 3.3 | 1.1 | >100.0% | 11.0 | 4.6 | >100.0% |
| in % of sales | 7.1% | 3.2% | 8.1% | 5.5% | ||
| Free cash flow* | –1.3 | 2.5 | n/a | 5.7 | –2.0 | n/a |
| Adjusted free cash flow** | 1.4 | 1.6 | –12.1% | 11.4 | –3.6 | n/a |
* Cash flow from operating activities less cash flow from investing activities ** Cash flow from operating activities less capital expenditures for fixed assets
| in million Euro or %, unless otherwise indicated |
9/30/2010 | 12/31/2009 | Change |
|---|---|---|---|
| Equity | 169.1 | 159.1 | 6.3% |
| in % of total assets | 69.4% | 70.3% | |
| Employees (balance sheet date) | 978 | 1,009 | – 3.1% |
Due to calculation processes, tables and references may produce rounding differences from the mathematically exact values (monetary units, percentage statements, etc.).
Sales showed a very satisfying development over the first nine months of 2010 compared to the prior-year period. Sales increased from 83.3 million Euro to 136.1 million Euro. This represents a sales growth of 63.3%. In the third quarter of 2010, sales grew by 30.3% from 35.5 million Euro in the prior-year quarter to 46.3 million Euro. In the course of the year, however, the sales increase has slowed down.
A positive business performance is also apparent in view of the segments. The semiconductor segment managed to benefit to a particularly large extent from the automotive industry's recovery. Over the first nine months of 2010, semiconductor sales went up 65.4% to 124.9 million Euro (9M 2009: 75.6 million Euro). In the third quarter of 2010, sales amounted to 42.6 million Euro. Compared to the prior-year period, this means an improvement of sales by 31.8% (Q3 2009: 32.3 million Euro). The growth of the micromechanics segment was strong as well, reporting a 43.4% increase to 11.1 million Euro for the first nine months of 2010 (9M 2009: 7.8 million Euro) and a 15.4% increase to 3.7 million Euro comparing quarters (Q3 2009: 3.2 million Euro).
The regional distribution of sales shows a continued positive development of the key markets. Increased distribution activities in the Asian markets over the past quarters lead to a rising share in sales of the "other countries".
| Region | 1/1 – 9/30/2010 thousand Euro |
in percent of sales |
1/1 – 9/30/2009 thousand Euro |
in percent of sales |
Change |
|---|---|---|---|---|---|
| Germany | 50,964 | 37.5% | 32,231 | 38.7% | 58.1% |
| Other EU countries | 48,306 | 35.5% | 31,336 | 37.6% | 54.2% |
| U.S.A. | 9,392 | 6.9% | 5,574 | 6.7% | 68.5% |
| Other countries | 27,413 | 20.1% | 14,182 | 17.0% | 93.3% |
| Group sales | 136,075 | 100.0% | 83,323 | 100.0% | 63.3% |
Compared to the extraordinarily strong 1st half-year 2010, the volume of orders received stabilized in the third quarter of 2010. As in the months before, ELMOS successfully supplied all customers with semiconductor and sensor products according to the customers' volume and timeline requirements. The relation of orders received to sales, the so-called book-to-bill, came to roughly one at the end of the third quarter of 2010.
The gross profit was more than tripled by nine-month comparison from 19.9 million Euro to 60.6 million Euro. The gross margin reached 44.5% as opposed to 23.9% in the prior-year period of comparison. Improvements in manufacturing efficiency and increased inventories resulted in a significant increase of the gross margin in the third quarter of 2010, even compared to the first half-year 2010, to 48.3% (Q3 2009: 35.0%; HY1 2010: 42.5%).
Research and development expenses climbed to 22.1 million Euro in the first nine months of 2010 (9M 2009: 19.2 million Euro), thus disproportionately low compared to sales. R&D expenses amounted to 16.2% of sales (9M 2009: 23.1%). The same trend applies for distribution costs and general administrative expenses. These items respectively gained 17.7% and 27.2% and amounted to 9.3 million Euro and 13.5 million Euro (9M 2009: 7.9 million Euro and 10.6 million Euro, respectively). In relation to sales, distribution costs came to 6.8% (9M 2009: 9.5%), and general administrative expenses came to 9.9% (9M 2009: 12.7%).
The considerable increase in both operating income and EBIT to respective amounts of 15.7 million Euro and 15.6 million Euro over the first nine months of 2010 (9M 2009: −17.8 million Euro and −18.7 million Euro, respectively) is particularly the result of the rise in gross profit in the third quarter of 2010. The EBIT margin came to 16.0% in the third quarter of 2010 (Q3 2009: 0.3%); over the nine-month period 2010, the EBIT margin was 11.5%.
The net income improved to 10.5 million Euro or 7.7% of sales in the first nine months of 2010 (9M 2009: −14.0 million Euro or −16.7%). This results in earnings per share of 0.54 Euro (9M 2009: −0.72 Euro per share). Especially the significant improvement of the quality of earnings in the third quarter of 2010 (net profit margin of 11.2% or earnings per share of 0.27 Euro) led to this strong growth in net income. The number of 19,294,598 shares outstanding as of September 30, 2010 was slightly reduced in comparison with the previous year because of share buyback (2009: 19,414,205 shares).
The operating cash flow reached 22.4 million Euro in the first nine months of 2010 (9M 2009: 1.0 million Euro). This is essentially accounted for by the improvement of earnings. Compared to the prior-year period, however, cash was needed for financing growth and thus the working capital. Capital expenditures in the amount of 11.0 million Euro or 8.1% of sales (9M 2009: 4.6 million Euro or 5.5% of sales) as well as other investment transactions of 5.7 million Euro (9M 2009: −1.6 million Euro) resulted in a free cash flow of 5.7 million Euro (9M 2009: −2.0 million Euro). The adjusted free cash flow (cash flow from operating activities less capital expenditures for fixed assets) came to 11.4 million Euro (9M 2009: −3.6 million Euro). The conversion of production from 6-inch to 8-inch wafers at the Dortmund location continued to be carried out intensively through the first nine months of 2010 and will have a positive effect on earnings in the medium term.
The cash flow from financing activities came to −1.4 million Euro for the first nine months of 2010 on account of the repurchase of the company's own shares and the repayment of current and noncurrent liabilities. Compared to December 31, 2009, cash and cash equivalents thus increased from 46.8 million Euro to 51.3 million Euro as of September 30, 2010. The equity ratio of 69.4% continues to be at a high level (December 31, 2009: 70.3%).
The global demand for new cars continued to be satisfying in the third quarter of 2010. While the great dynamics in the Asian markets has slightly slowed down, it can still be assessed as very positive. Furthermore, the U.S. market keeps up its recovery. In Western Europe, though, passenger car demand fell short of the bonus-supported high prior-year numbers as was expected.
The German market turns out 18% below the prior-year level with 260,000 new car registrations in this year's first nine months. However, the German Association of the Automotive Industry (VDA) is optimistic that rising registration numbers will again be filed by the end of the year. The figures of the German market must still be considered in view of last year's car scrap bonus. The export business paints a very satisfying picture with a growth of 56% compared to the first nine months of 2009.
In Western Europe, the market performance has been rather restrained. Over the first nine months of 2010, passenger car sales in Western Europe missed the prior-year level by 3%. This comparison must also be considered in the context of national incentive schemes particularly with regard to the first half-year 2009.
Registrations of passenger cars and light trucks have gained 10% since the beginning of the year in the U.S. market. Sales figures turned out positive in September 2010 especially. With a 28% plus in September, new registrations were considerably ahead of the admittedly weak prior-year volume.
In Asia, the growth dynamics has been slowing down as expected, but the development of demand in Asia is still satisfying. On the Chinese market, more than 8 million vehicles have been delivered since the beginning of the year (+38%). In India, car sales have gained 32% over the year so far. In Japan, the number of new registrations was raised by close to a fifth to 3.5 million automobiles.
From June through August, ELMOS carried out a share buyback plan. A total of 119,607 shares were repurchased at an average share price of 7.03 Euro. The shares are primarily intended as share-based remuneration component.
Also in June, ELMOS received the "New Deals" award for outstanding human resources development. The jury assessed the overall concept of human resources management in the year of crisis 2009 as excellent, particularly the measures taken in the context of short-time work and the continued provision of trainee positions. The award selection was decided by the jury of the New Deals initiators, comprising representatives of chambers of commerce, trade associations, trade unions, the Dortmund business development agency, and the Federal Employment Agency.
ELMOS continued the development and marketing of standard products (ASSPs) in the reporting period. The advancements are summarized in the new product catalog. Altogether 63 products are presented on 24 pages. 18 semiconductors were newly included in the catalog.
In the quarter under review, ELMOS celebrated the company's 25+1 year anniversary. Customers, friends and neighbors looked back in time, and ahead. Among other events, ELMOS welcomed a large number of customers within the framework of a two-day workshop, featuring top-notch speakers from automotive suppliers or car manufacturers such as Audi, BMW, Daimler, Ford, Opel, and VW, as well as from utility and infrastructure companies. The speeches were framed by the motto "Mobility 2020 and beyond..." Focal issues were the future electric drivetrain, alternative energy supply from the desert (Desertec), individual mobility concepts including those on two wheels, mobility and operation systems for the aged, and last not least the light/vision technology of the future. As its guest of honor, ELMOS was proud to welcome the Minister-President of the federal state of NRW, Hannelore Kraft.
The number of ELMOS Group employees went down by 3.1% to 978 compared to December 31, 2009 (1,009 employees).
The ELMOS share moved within a margin between 5.60 Euro and 8.43 Euro over the first nine months of 2010. It closed on September 30, 2010 at 7.90 Euro. The market capitalization came to 152.4 million Euro as of September 30, 2010 (based on 19.3 million shares outstanding). The ELMOS share reached its nine-month high on September 2, 2010 at 8.43 Euro and its low on May 25, 2010 at 5.60 Euro. In comparison with the beginning of the year, the ELMOS share gained 17.9%. Its performance is thus considerably ahead of the performances of the market indices DAX (4.6%) and TecDax (−4.4%). The average daily trading volume of the ELMOS share came to 41.6 thousand shares in the first nine months of 2010 and is thus higher than over the full year 2009 (27.4 thousand shares).
By September 30, 2010, altogether 119,607 own shares have been repurchased in the context of a share buyback plan at an average share price of 7.03 Euro, reducing the number of shares outstanding to 19,294,598 as of September 30, 2010.
By way of the release of voting rights notifications, it was announced in January 2010 that the shares in the company formerly held directly and indirectly by EFH ELMOS Finanzholding GmbH were divided between the shareholders of (extinct) EFH ELMOS Finanzholding GmbH, namely Dr. Weyer GmbH & Co. Vermögensverwaltung KG (20.50%), Jumakos GmbH & Co. KG (16.67%), and ZOE GmbH & Co. KG (15.71%). The above-mentioned shares in voting interests are held indirectly by the respective companies.
On September 17, 2010 Fidelity Management & Research Company (Boston, MA, U.S.A.) fell below the voting rights threshold of 5%, holding 4.97% or 964,785 ELMOS shares as of that time according to the company's information.
Staff development ELMOS Group (balance sheet date)
COMPANY BOARDS Supervisory Board Prof. Dr. Günter Zimmer, chairman Graduate physicist | Duisburg
Dr. Burkhard Dreher, vice chairman Graduate economist | Dortmund
Dr. Klaus Egger (until May 4, 2010) Graduate engineer | Steyr-Gleink, Austria
Jörns Haberstroh (until May 4, 2010) Business management graduate | Kerken
Jutta Weber (until May 4, 2010) Graduate educationist | Tarrytown, New York, U.S.A.
Dr. Klaus G. Weyer Graduate physicist | Schwerte
Dr. Anton Mindl, chairman Graduate physicist | Lüdenscheid
Nicolaus Graf von Luckner Graduate economist | Oberursel
Reinhard Senf Graduate engineer | Iserlohn
Jürgen Höllisch Engineer | Purbach, Austria
Risk management and the individual corporate risks and opportunities are described in our Annual Report 2009. Over the first nine months of 2010, no material changes in the company's risks and opportunities as detailed therein have occurred. At present no risks are visible that could either separately or collectively jeopardize the company's continued existence.
The general conditions continue to indicate a positive trend. An economic downturn in 2010 has become far less probable over the past months. However, due to increasingly volatile markets macroeconomic uncertainties remain beyond the year 2010.
According to VDA information, the global auto market will increase to at least 59 million passenger cars for the full year 2010 (2009: 53 million vehicles). The U.S. is anticipated to grow by 12%, China by roughly 20%. In the third quarter of 2010, a light slowdown in the Chinese market expected for the second half-year 2010 set in, according to the VDA. Western Europe will not reach the prior-year level over the full year as government incentive programs have expired in many EU member states.
The order situation appears solid. The relation of orders received to sales, the so-called book-to-bill, came to roughly one at the end of the first nine months. Irrespective of a consolidation movement apparent in the short term, the medium-term and long-term growth dynamics is sound, both in the existing business and with respect to new product launches.
As the materialization of macroeconomic risks before the end of 2010 has become highly improbable and as the year's first nine months have shown a positive development, ELMOS raises its EBIT forecast once more. For the full year 2010, ELMOS still predicts a sales growth of more than 40%. For the EBIT margin, a level of at least 10% is now anticipated for the current fiscal year. The adjusted free cash flow will be clearly positive.
Based on the available information, the start into the new year 2011 can also be assessed as positive with respect to the development of sales and earnings. Whether this trend will keep up over the full year cannot be predicted at present.
The principal risk is another slump in worldwide car sales. Therefore the company's management directs its special attention to lingering risks which could trigger a new downturn in the economy.
Condensed consolidated balance sheet
| Assets | 9/30/2010 Euro |
12/31/2009 Euro |
|---|---|---|
| Non-current assets | ||
| Intangible assets* | 36,337,911 | 38,311,293 |
| Property, plant and equipment* | 73,160,316 | 72,779,258 |
| Investments accounted for at equity | 1 | 1 |
| Securities and investments** | 6,000,919 | 503,619 |
| Deferred tax assets | 6,180,408 | 7,831,575 |
| Total non-current assets | 121,679,555 | 119,425,746 |
| Current assets | ||
| Inventories* | 35,681,518 | 31,538,737 |
| Trade receivables | 23,744,668 | 20,008,220 |
| Securities | 1,232,614 | 0 |
| Other financial assets | 4,229,795 | 3,803,473 |
| Other receivables | 5,579,762 | 4,446,499 |
| Income tax assets | 46,157 | 305,731 |
| Cash and cash equivalents | 51,274,244 | 46,841,487 |
| 121,788,758 | 106,944,147 | |
| Non-current assets classified as held for sale | 152,888 | 0 |
| Total current assets | 121,941,646 | 106,944,147 |
| Total assets | 243,621,201 | 226,369,893 |
* Cf. note 3
** Cf. notes 1 and 3
| Equity and liabilities | 9/30/2010 Euro |
12/31/2009 Euro |
|---|---|---|
| Equity | ||
| Equity attributable to equity holders of the parent | ||
| Share capital* | 19,294,598 | 19,414,205 |
| Additional paid-in capital | 88,388,645 | 89,001,006 |
| Surplus reserve | 102,224 | 102,224 |
| Accumulated other comprehensive income | – 5,156,891 | – 5,414,047 |
| Retained earnings | 66,656,384 | 56,193,375 |
| 169,284,960 | 159,296,763 | |
| Non-controlling interest | –209,277 | –242,098 |
| Total equity | 169,075,683 | 159,054,665 |
| Liabilities | ||
| Non-current liabilities | ||
| Provisions | 615,963 | 791,895 |
| Financial liabilities | 40,128,122 | 40,237,034 |
| Other liabilities | 1,839,214 | 2,011,452 |
| Deferred tax liabilities | 1,291,971 | 0 |
| Total non-current liabilities | 43,875,270 | 43,040,381 |
| Current liabilities | ||
| Provisions | 10,933,178 | 8,439,717 |
| Income tax liabilities | 1,123,002 | 199,741 |
| Financial liabilities | 342,393 | 576,497 |
| Trade payables | 16,529,530 | 12,917,877 |
| Other liabilities | 1,742,145 | 2,141,015 |
| Total current liabilities | 30,670,248 | 24,274,847 |
| Total liabilities | 74,545,518 | 67,315,228 |
Total equity and liabilities 243,621,201 226,369,893
* Cf. note 3
| 3rd quarter | 7/1 – 9/30/2010 Euro |
in percent of sales |
1.7. – 30.9.2009 Euro |
in percent of sales |
Change in % |
|---|---|---|---|---|---|
| Sales | 46,295,224 | 100.0% | 35,527,578 | 100.0% | 30.3% |
| Cost of sales | 23,930,484 | 51.7% | 23,095,616 | 65.0% | 3.6% |
| Gross profit | 22,364,740 | 48.3% | 12,431,962 | 35.0% | 79.9% |
| Research and development expenses | 7,269,177 | 15.7% | 6,245,472 | 17.6% | 16.4% |
| Distribution expenses | 3,136,741 | 6.8% | 2,481,856 | 7.0% | 26.4% |
| Administrative expenses | 4,350,466 | 9.4% | 3,437,671 | 9.7% | 26.6% |
| Operating income before other operating expenses/(income) | 7,608,356 | 16.4% | 266,963 | 0.8% | >100% |
| Finance income | –265,556 | – 0.6% | –192,211 | – 0.5% | 38.2% |
| Finance expenses | 621,255 | 1.3% | 570,900 | 1.6% | 8.8% |
| Foreign exchange losses/(gains) | – 131,832 | – 0.3% | 13,006 | 0.0% | n/a |
| Other operating income | – 712,757 | –1.5% | – 382,735 | –1.1% | 86.2% |
| Other operating expenses | 1,045,813 | 2.3% | 513,092 | 1.4% | >100% |
| Earnings before taxes | 7,051,433 | 15.2% | –255,089 | – 0.7% | n/a |
| Income taxes | |||||
| Income tax expense | 746,358 | 1.6% | 177,189 | 0.5% | >100% |
| Deferred tax expense/(income) | 1,081,079 | 2.3% | –241,030 | – 0.7% | n/a |
| 1,827,437 | 3.9% | – 63,842 | – 0.2% | n/a | |
| Net income/(loss) | 5,223,996 | 11.3% | –191,247 | – 0.5% | n/a |
| Other comprehensive income | |||||
| Foreign currency adjustments without deferred tax effect | –328,149 | –126,079 | |||
| Foreign currency adjustments with deferred tax effect | –1,729,905 | –504,640 | |||
| Deferred taxes (on foreign currency adjustments with deferred tax effect) | 441,126 | 129,356 | |||
| Valuation differences in cash flow hedges | –588,114 | 0 | |||
| Deferred taxes on valuation differences in cash flow hedges | 143,281 | 0 | |||
| Other comprehensive income after taxes | – 2,061,761 | –501,363 | |||
| Comprehensive income after taxes | 3,162,235 | –692,610 | |||
| Net income/(loss) attributed to: | |||||
| Equity holders of the parent | 5,203,828 | 11.3% | –293,530 | –0.8% | n/a |
| Non-controlling interest | 20,168 | 0.0% | 102,282 | 0.3% | – 80.3% |
| 5,223,996 | 11.3% | –191,247 | –0.5% | n/a | |
| Comprehensive income attributed to: | |||||
| Equity holders of the parent | 3,142,067 | – 794,892 | |||
| Non-controlling interest | 20,168 | 102,282 | |||
| 3,162,235 | –692,610 | ||||
| Earnings per share (with respect to net income/(loss)) | |||||
| Basic earnings per share | 0.27 | – 0.02 | |||
| Fully diluted earnings per share | 0.27 | – 0.02 | |||
| Earnings before interest and taxes (EBIT) | 7/1 – 9/30/2010 Euro |
in percent of sales |
7/1 – 9/30/2010 Euro |
in percent of sales |
Change |
| Operating income before other operating expenses/(income) | 7,608,356 | 16.4% | 266,963 | 0.8% | n/a |
| Foreign exchange losses/(gains) | – 131,832 | – 0.3% | 13,006 | 0.0% | n/a |
| Other operating expenses/(income) | 333,056 | 0.8% | 130,357 | 0.3% | >100% |
| EBIT | 7,407,132 | 16.0% | 123,600 | 0.3% | n/a |
| 9 months | 1/1 – 9/30/2010 Euro |
in percent of sales |
1/1 – 9/30/2009 Euro |
in percent of sales |
Change in % |
|---|---|---|---|---|---|
| Sales | 136,075,355 | 100.0% | 83,322,994 | 100.0% | 63.3% |
| Cost of sales | 75,511,008 | 55.5% | 63,435,486 | 76.1% | 19.0% |
| Gross profit | 60,564,347 | 44.5% | 19,887,507 | 23.9% | >100% |
| Research and development expenses | 22,067,711 | 16.2% | 19,247,371 | 23.1% | 14.7% |
| Distribution expenses | 9,274,096 | 6.8% | 7,880,617 | 9.5% | 17.7% |
| Administrative expenses | 13,473,873 | 9.9% | 10,590,573 | 12.7% | 27.2% |
| Operating income before other operating expenses/(income) | 15,748,667 | 11.6% | –17,831,055 | –21.4% | n/a |
| Finance income | –690,254 | – 0.5% | –716,202 | –0.9% | –3.6% |
| Finance expenses | 1,830,045 | 1.3% | 1,686,829 | 2.0% | 8.5% |
| Foreign exchange losses/(gains) | –26,263 | 0.0% | 696,119 | 0.8% | n/a |
| Other operating income | –2,149,184 | –1.6% | –1,713,859 | –2.1% | 25.4% |
| Other operating expenses | 2,302,374 | 1.7% | 1,849,593 | 2.2% | 24.5% |
| Earnings before taxes | 14,481,949 | 10.6% | –19,633,536 | –23.6% | n/a |
| Income taxes | |||||
| Income tax expense | 905,846 | 0.7% | 609,723 | 0.7% | 48.6% |
| Deferred tax expense/(income) | 3,080,274 | 2.2% | –6,335,740 | –7.6% | n/a |
| 3,986,120 | 2.9% | – 5,726,017 | – 6.9% | n/a | |
| Net income/(loss) | 10,495,829 | 7.7% | – 13,907,518 | – 16.7% | n/a |
| Other comprehensive income | |||||
| Foreign currency adjustments without deferred tax effect | 135,900 | 1,004,915 | |||
| Foreign currency adjustments with deferred tax effect | 759,851 | –1,634,497 | |||
| Deferred taxes (on foreign currency adjustments with deferred tax effect) | –193,762 | 395,650 | |||
| Valuation differences in cash flow hedges | –588,114 | 0 | |||
| Deferred taxes on valuation differences in cash flow hedges | 143,281 | 0 | |||
| Other comprehensive income after taxes | 257,156 | – 233,932 | |||
| Comprehensive income after taxes | 10,752,985 | – 14,141,450 | |||
| Net income/(loss) attributed to: | |||||
| Equity holders of the parent | 10,463,008 | 7.7% | –13,955,626 | –16.7% | n/a |
| Non-controlling interest | 32,821 | 0.0% | 48,108 | 0.0% | –31.8% |
| 10,495,829 | 7.7% | –13,907,518 | –16.7% | n/a | |
| Comprehensive income attributed to: | |||||
| Equity holders of the parent | 10,720,164 | – 14,189,558 | |||
| Non-controlling interest | 32,821 | 48,108 | |||
| 10,752,985 | – 14,141,450 | ||||
| Earnings per share (with respect to net income/(loss)) | |||||
| Basic earnings per share | 0.54 | –0.72 | |||
| Fully diluted earnings per share | 0.53 | –0.72 | |||
| Earnings before interest and taxes (EBIT) | 1/1 – 9/30/2010 Euro |
in percent of sales |
1/1 – 9/30/2009 Euro |
in percent of sales |
Change |
| Operating income before other operating expenses/(income) | 15,748,667 | 11.6% | –17.831,055 | –21.4% | n/a |
| Foreign exchange losses/(gains) | – 26,263 | 0.0% | 696,119 | 0.8% | n/a |
| Other operating expenses/(income) | 153,190 | 0.1% | 135,734 | 0.1% | 12.9% |
| EBIT | 15,621,740 | 11.5% | –18,662,908 | –22.4% | n/a |
| Shares | Share capital |
Additional paid-in capital |
Surplus reserve |
|
|---|---|---|---|---|
| Number | Euro | Euro | Euro | |
| January 1, 2009 | 19,414,205 | 19,414,205 | 88,736,563 | 102,224 |
| Net loss | ||||
| Other comprehensive income/loss for the period | ||||
| Comprehensive income/loss | ||||
| Stock option expense | 37,187 | |||
| Acquisition of minority interest/Mechaless | 199,366 | |||
| September 30, 2009 | 19,414,205 | 19,414,205 | 88,973,116 | 102,224 |
| January 1, 2010 | 19,414,205 | 19,414,205 | 89,001,006 | 102,224 |
| Net income | ||||
| Other comprehensive income/loss for the period | ||||
| Comprehensive income/loss | ||||
| Stock option expense | 109,353 | |||
| Acquisition of own shares* | –119,607 | –119,607 | –721,713 | |
| September 30, 2010 | 19,294,598 | 19,294,598 | 88,388,646 | 102,224 |
* Cf. note 3
| Group | Non-controlling interest | Equity attributable to equity holders of the parent | |||
|---|---|---|---|---|---|
| Total Euro |
Total Euro |
Total Euro |
Retained earnings Euro |
Foreign currency translation reserve Euro |
Cash flow hedge reserve Euro |
| 171,204,919 | –13,825 | 171,218,744 | 68,410,785 | –5,445,033 | 0 |
| –13,907,518 | 48,108 | –13,955,626 | –13,955,626 | ||
| –233,932 | –233,932 | –233,932 | 0 | ||
| –14,141,450 | 48,108 | –14,189,558 | –13,955,626 | –233,932 | 0 |
| 37,187 | 37,187 | ||||
| – 49,000 | –248,366 | 199,366 | |||
| 157,051,656 | –214,083 | 157,265,739 | 54,455,159 | –5,678,965 | 0 |
| 159,054,665 | –242,098 | 159,296,763 | 56,193,375 | –5,414,047 | 0 |
| 10,495,829 | 32,821 | 10,463,008 | 10,463,008 | ||
| 257,156 | 257,156 | 701,989 | – 444,833 | ||
| 10,752,985 | 32,821 | 10,720,164 | 10,463,008 | 701,989 | – 444,833 |
| 109,353 | 109,353 | ||||
| –841,320 | –841,320 | ||||
| 169,075,683 | –209,277 | 169,284,960 | 66,656,384 | –4,712,058 | – 444,833 |
| Euro | 1/1 – 9/30/2009 Euro |
7/1 – 9/30/2010 Euro |
7/1 – 9/30/2009 Euro |
|
|---|---|---|---|---|
| Cash flow from operating activities | ||||
| Net income/loss | 10,495,829 | – 13,907,518 | 5,223,996 | – 191,247 |
| Depreciation and amortization | 11,908,948 | 12,383,344 | 4,025,132 | 4,342,744 |
| Financial result | 1,139,791 | 970,628 | 355,699 | 378,690 |
| Other non-cash expenses/income | 3,080,274 | – 6,335,740 | 1,081,079 | – 241,030 |
| Income tax expenses | 905,846 | 609,723 | 746,358 | 177,189 |
| Stock option plan expense | 109,353 | 37,187 | 42,504 | 27,890 |
| Changes in pension provisions | – 175,932 | – 93,705 | – 79,824 | – 31,209 |
| Changes in net working capital: | ||||
| Trade receivables | – 3,736,448 | 9,235,361 | 1,183,008 | – 4,759,443 |
| Inventories | – 4,142,781 | 3,862,089 | – 2,265,046 | 2,254,144 |
| Other assets | – 1,559,585 | 2,666,535 | – 838,656 | 1,224,175 |
| Trade payables | 3,611,653 | – 6,140,990 | – 3,486,779 | 556,414 |
| Other provisions and other liabilities | 1,649,760 | 591,980 | – 592,279 | 162,719 |
| Income tax refunds/payments | 276,990 | – 1,893,731 | – 334,325 | – 781,410 |
| Interest paid | – 1,830,045 | – 1,686,829 | – 621,255 | – 570,900 |
| Interest received | 690,254 | 716,202 | 265,556 | 192,211 |
| Cash flow from operating activities | 22,423,908 | 1,014,535 | 4,705,168 | 2,740,936 |
| Cash flow from investing activities | ||||
| Capital expenditures for intangible assets | –2,040,347 | –2,889,075 | –674,505 | –737,879 |
| Capital expenditures for property, plant and equipment | –8,934,789 | –1,683,088 | –2,607,149 | –384,224 |
| Capital expenditures for/Disposal of non-current assets classified as held for sale | –152,888 | 1,516,251 | 527,913 | 933,111 |
| Disposal of fixed assets | 1,139,628 | 126,667 | 84,869 | 12,958 |
| Capital expenditures for securities | –6,322,449 | 0 | –3,316,887 | 0 |
| Capital expenditures for investments | –407,465 | 0 | 0 | 0 |
| Acquisition of minority interest | 0 | – 49,000 | 0 | – 49,000 |
| Cash flow from investing activities | – 16,718,311 | –2,978,246 | – 5,985,759 | –225,034 |
| Cash flow from financing activities | ||||
| Payment of non-current liabilities | – 318,718 | – 315,766 | – 117,814 | – 108,459 |
| Payment/Borrowing of current liabilities to banks | – 196,537 | 236,872 | 84,806 | 152,610 |
| Acquisition of own shares | – 841,320 | 0 | – 339,458 | 0 |
| Cash flow from financing activities | – 1,356,575 | –78,894 | – 372,466 | 44,151 |
| Increase/Decrease in cash and cash equivalents | 4,349,022 | –2,042,605 | –1,653,057 | 2,560,052 |
| Effect of exchange rate changes on cash and cash equivalents | 83,735 | 387,476 | – 180,581 | – 162,632 |
| Cash and cash equivalents at beginning of reporting period | 46,841,487 | 42,463,401 | 53,107,882 | 38,410,852 |
| Cash and cash equivalents at end of reporting period | 51,274,244 | 40,808,273 | 51,274,244 | 40,808,273 |
The condensed interim consolidated financial statements for the 3rd quarter of 2010 were released for publication in November 2010 pursuant to Management Board resolution.
ELMOS Semiconductor Aktiengesellschaft ("the company" or "ELMOS") has its registered office in Dortmund (Germany) and is entered in the register of companies kept at the District Court (Amtsgericht) Dortmund, section B, no. 13698. The articles of incorporation are in effect in the version of March 26, 1999, last amended by shareholders' resolution of May 4, 2010 and entered in the register of companies on September 13, 2010.
The company's business is the development, manufacture, and distribution of microelectronic components and system parts (application specific integrated circuits or, in short: ASICs) and 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 for the purpose of the articles of association. The company may conduct business in Germany as well as abroad.
In addition to its domestic branches, the company maintains sales companies in France and the U.S. and cooperates with other German and international companies in the development and manufacture of ASIC chips.
The condensed interim consolidated financial statements for the period from January 1 to September 30, 2010 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, 2009.
Different insofar from December 31, 2009, the consolidated balance sheet as of September 30, 2010 divides the other assets into other financial assets and other receivables. This adjustment has been made against the background of the significant increase in other financial assets. As a result, the amount of 8,250 thousand Euro capitalized under other assets as of December 31, 2009 was allocated to the balance sheet items other financial assets (3,803 thousand Euro) and other receivables (4,446 thousand Euro).
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, 2009, with the exception of the new or amended IFRS Standards and Interpretations listed below. The application of these new Standards and Interpretations had no effect on the group's assets and liabilities, finances, and profit situation.
| -> | IAS 27 | Consolidated and Separate Financial Statements |
|---|---|---|
| -> | Amendments to IAS 39 | Eligible Hedged Items |
| -> | Amendment to IFRS 1 | Additional Exemptions for First-time Adopters |
| -> | IFRS 1 | First-time Adoption of IFRS |
| -> | IFRS 2 | Amendment to IFRS 2 Share-based Payment – |
| Group Cash-settled Share-based Payment Transactions | ||
| -> | IFRS 3 | Business Combinations |
| -> | IFRIC 12 | Service Concession Arrangements |
| -> | Amendment to IFRIC 14 | Prepayments of a Minimum Funding Requirement |
| -> | IFRIC 15 | Agreements for the Construction of Real Estate |
| -> | IFRIC 16 | Hedges of a Net Investment in a Foreign Operation |
| -> | IFRIC 17 | Distributions of Non-cash Assets to Owners |
| -> | IFRIC 18 | Transfers of Assets from Customers |
| -> | IFRIC 19 | Extinguishing Financial Liabilities with Equity Instruments |
| -> | Improvements to IFRS 2009 |
The company makes provisions for pension and partial retirement obligations pursuant to IAS 19. An actuarial interest rate of 5.6% has been applied for 2010, the same interest rate as of December 31, 2009.
There were no exceptional business transactions in the third quarter of 2010.
Compared to December 31, 2009, securities and investments disclosed under non-current assets have increased by 5,497 thousand Euro. In the amount of 407 thousand Euro, this increase represents the acquisition of shares by the U.S. subsidiary Silicon Microstructures Inc., Milpitas/U.S.A. However, due to the percentage of shares of below 2%, this transaction had no effects on the basis of consolidation.
The general conditions continue to indicate a positive trend. An economic downturn in 2010 has become far less probable over the past months. However, macroeconomic uncertainties remain beyond the year 2010 due to increasingly volatile markets. The business of ELMOS Semiconductor AG is not subject to material seasonal fluctuation.
The segments correspond with 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 with 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, France, South Africa, and the U.S.A. Sales in this segment are generated predominantly with electronics for the automotive industry. In addition, ELMOS operates in the markets for industrial and consumer goods and provides semiconductors e.g. for applications in household appliances, photo cameras, installation and building technology, and machine control. Sales in the micromechanics segment are generated by the subsidiary SMI in the U.S.A. The product portfolio includes micro-electro-mechanical systems (MEMS) which are primarily silicon-based high-precision pressure sensors. The following tables provide information on sales and earnings (for the period from January 1 to September 30, 2010 and 2009, respectively) and on assets of the Group's business segments (as of September 30, 2010 and December 31, 2009).
| 9 months as of 9/30/2010 | Semiconductor thousand Euro |
Micromechanics thousand Euro |
Consolidation thousand Euro |
Total thousand Euro |
|---|---|---|---|---|
| Sales | ||||
| Third-party sales | 124,941 | 11,134 | 0 | 136,075 |
| Inter-segment sales | 246 | 140 | −386 | 0 |
| Total sales | 125,187 | 11,274 | −386 | 136,075 |
| Earnings | ||||
| Segment earnings | 15,057 | 565 | 0 | 15,622 |
| Financial result | −1,140 | |||
| Earnings before taxes | 14,482 | |||
| Income taxes | 3,986 | |||
| Net income | 10,496 | |||
| Assets | ||||
| Segment assets | 170,202 | 15,007 | 0 | 185,209 |
| Investments | 504 | 407 | 911 | |
| Non-attributable assets | 57,501 | |||
| Total assets | 243,621 | |||
| Other segment information | ||||
| Capital expenditures for intangible assets and property, plant and equipment | 10,829 | 146 | 10,975 | |
| Depreciation and amortization | 10,882 | 1,027 | 11,909 |
Non-attributable assets as of September 30, 2010 comprise cash and cash equivalents (51,274 thousand Euro), income tax assets (46 thousand Euro), and deferred taxes (6,181 thousand Euro), as these assets are controlled at Group level.
| Semiconductor | Micromechanics | Consolidation | Total | |
|---|---|---|---|---|
| 9 months as of 9/30/2009 | thousand Euro | thousand Euro | thousand Euro | thousand Euro |
| Sales | ||||
| Third-party sales | 75,558 | 7,765 | 0 | 83,323 |
| Inter-segment sales | 282 | 137 | –419 | 0 |
| Total sales | 75,840 | 7,902 | –419 | 83,323 |
| Earnings | ||||
| Segment earnings | –17,260 | –1,402 | 0 | –18,663 |
| Financial result | – 971 | |||
| Earnings before taxes | –19,634 | |||
| Income taxes | 5,726 | |||
| Net loss | –13,908 | |||
| Assets (as of 12/31/2009) | ||||
| Segment assets | 155,275 | 15,612 | 0 | 170,887 |
| Investments | 504 | 0 | 0 | 504 |
| Non-attributable assets | 54,979 | |||
| Total assets | 226,370 |
Non-attributable assets as of December 31, 2009 comprise cash and cash equivalents (46,841 thousand Euro), income tax assets (306 thousand Euro), and deferred taxes (7,832 thousand Euro), as these assets are controlled at Group level.
| Sales generated with third-party customers |
9 months as of 9/30/2010 thousand Euro |
9 months as of 9/30/2009 thousand Euro |
|---|---|---|
| Germany | 50,964 | 32,231 |
| EU | 48,306 | 31,336 |
| U.S.A. | 9,392 | 5,574 |
| Others | 27,413 | 14,182 |
| 136,075 | 83,323 |
| Geographical distribution of non-current assets |
9/30/2010 thousand Euro |
9/30/2009 thousand Euro |
|---|---|---|
| Germany | 98,128 | 93,888 |
| EU | 8,092 | 8,426 |
| U.S.A. | 9,277 | 9,277 |
| Others | 2 | 3 |
| 115,499 | 111,594 |
| Development of selected non current assets from Jan. 1 to Sept. 30, 2010 |
Net book value 1/1/2010 thousand Euro |
Additions thousand Euro |
Disposals/Other movements thousand Euro |
Depreciation and amortization thousand Euro |
Net book value 9/30/2010 thousand Euro |
|---|---|---|---|---|---|
| Intangible assets | 38,311 | 2,040 | −428 | 3,585 | 36,338 |
| Property, plant and equipment | 72,779 | 8,935 | −230 | 8,324 | 73,160 |
| Securities and investments | 504 | 5,497 | 0 | 0 | 6,001 |
| 111,594 | 16,472 | −658 | 11,909 | 115,499 |
Additions to securities and investments relate to investments in bonds with maturities of more than 12 months in the amount of 5,090 thousand Euro.
The position of disposals/other movements includes positive currency adjustments in the amount of 481 thousand Euro. Amortization of intangible assets includes extraordinary impairment loss in the amount of 723 thousand Euro. The impairment loss was disclosed in the consolidated comprehensive income statement under other operating expenses. Assets are attributable to the semiconductor segment.
| 9/30/2010 thousand Euro |
12/31/2009 thousand Euro |
|
|---|---|---|
| Raw materials | 7,215 | 6,099 |
| Work in process | 22,688 | 19,534 |
| Finished goods | 5,779 | 5,905 |
| 35,682 | 31,539 |
The share capital of ELMOS Semiconductor AG consists of 19,294,598 shares as of September 30, 2010. By shareholders' resolution passed at the General Meeting of May 4, 2010, the Management Board was authorized, subject to the Supervisory Board's consent, to acquire the company's own shares in the total amount of up to 10% of the current share capital until May 3, 2015. Due to the acquisition of 119,607 own shares as of closing date September 30, 2010, the equity was reduced by 841 thousand Euro compared to December 31, 2009.
By way of the release of voting rights notifications, it was announced in January 2010 that the shares in the company formerly held directly and indirectly by EFH ELMOS Finanzholding GmbH were divided between the shareholders of (extinct) EFH ELMOS Finanzholding GmbH, namely Dr. Weyer GmbH & Co. Vermögensverwaltung KG (20.50%), Jumakos GmbH & Co. KG (16.67%), and ZOE GmbH & Co. KG (15.71%). The above-mentioned shares in voting interests are held indirectly by the respective companies.
713,040 options from stock option plans are altogether outstanding as of September 30, 2010. The options are attributable to the tranches as follows:
| Tranche 5 | Tranche 6 | Tranche 7 | Total | |
|---|---|---|---|---|
| Year of resolution | 2004 | 2009 | 2010 | |
| Year of issue | 2005 | 2009 | 2010 | |
| Exercise price in EUR | 13.98 | 3.68 | 7.49 | |
| Blocking period ex issue (years) | 2 | 3 | 4 | |
| Exercise period after blocking period (years) | 3 | 3 | 3 | |
| Options outstanding as of 12/31/2009 (number) | 140,306 | 486,800 | 0 | 627,106 |
| 1/1- 9/30/2010 granted (number) | 0 | 0 | 250,000 | 250,000 |
| 1/1- 9/30/2010 exercised (number) | 0 | 0 | 0 | 0 |
| 1/1- 9/30/2010 expired (number) | 140,306 | 19,850 | 3,910 | 164,066 |
| Options outstanding as of 9/30/2010 (number) | 0 | 466,950 | 246,090 | 713,040 |
| Options exercisable as of 9/30/2010 (number) | 0 | 0 | 0 | 0 |
Tranche 7, resolved in 2010, is based on the authorization granted by shareholders' resolution of May 4, 2010 for the launch of a stock option plan for employees, executives, and Management Board members of ELMOS Semiconductor AG as well as employees and executives of affiliated companies.
As has been reported in the consolidated financial statements for the fiscal year ended December 31, 2009, the ELMOS Group maintains business relationships with related companies and individuals in the ordinary course of business.
These supply and performance relationships continue to be transacted at market prices.
The following reportable securities transactions (directors' dealings) were made in the reporting period from January 1 to September 30, 2010.
| Date/Place | Name | Function | Transaction | Number | Price/Basic price (Euro) |
Total volume (Euro) |
|---|---|---|---|---|---|---|
| 3/31/2010 Off-market |
ZOE Beteiligungs GmbH |
Legal entity closely related to the chairman of the Supervisory Board |
Purchase of ELMOS shares |
100,000 | 6.87 | 687,000 |
| 5/10/2010 Off-market |
Dr. Anton Mindl |
CEO | Purchase of ELMOS shares |
15,000 | 5.58 | 83,700 |
| 5/25/2010 Off-market |
Dr. Anton Mindl |
CEO | Purchase of ELMOS shares |
10,000 | 5.545 | 55,450 |
There have been no reportable events of significance since the end of the third quarter.
Dortmund, November 2010
Dr. Anton Mindl Nicolaus Graf von Luckner Reinhard Senf Jürgen Höllisch
Janina Rosenbaum | Investor Relations
Phone + 49 (0) 231 - 75 49 - 287 Fax + 49 (0) 231 - 75 49 - 548 [email protected]
This interim financial report was released on November 2, 2010 in English and German. Both versions are available for download on the Internet at www.elmos.de.
We are happy to send you additional informative material free of charge on your request.
| Analysts' conference (Equity Forum in Frankfurt) | November 24, 2010 |
|---|---|
| Preliminary results 2010 | February 17, 2011 |
| Results 2010 | March 16, 2011 |
| Annual press conference | March 17, 2011 |
| Analysts' conference | March 17, 2011 |
| Quarterly results Q1/2011 | May 10, 2011 |
| Annual General Meeting in Dortmund | May 17, 2011 |
| Quarterly results Q2/2011 | August 9, 2011 |
| Quarterly results Q3/2011 | November 3, 2011 |
Results are usually announced after-hours. Conference calls are usually conducted the day after the announcement of quarterly results.
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 current statements made with respect to the future. Among the factors that could cause such differences are changes in 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.
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