Infineon Technologies AG

Earnings Release • Jul 29, 2009

News Details

Corporate | 29 July 2009 07:31

Infineon reports results for the third quarter of the 2009 fiscal year and provides outlook for the fourth quarter

Infineon Technologies AG / Quarter Results

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Infineon reports results for the third quarter of the 2009 fiscal year and
provides outlook for the fourth quarter

INFINEON REPORTS THIRD QUARTER REVENUES UP 13 PERCENT QUARTER-ON-QUARTER
AND SIGNIFICANT IMPROVEMENT IN EARNINGS; FREE CASH FLOW FROM CONTINUING
OPERATIONS OF EURO 152 MILLION

THIRD QUARTER 2009 RESULTS (April 1 to June 30, 2009)

in Euro million Q3 FY09 Q2 FY09 +/-
Revenues 845 747 13%
Loss from continuing operations (20) (150) 87%
Loss from discontinued operations, net of tax (3) (108) 97%
Net loss (23) (258) 91%
in Euro
Basic and diluted loss per share from continuing (0.03) (0.20) 85%
operations
Basic and diluted loss per share from _ (0.12) 100%
discontinued operations
Basic and diluted loss per share (0.03) (0.32) 91%

Neubiberg, Germany - July 29, 2009 - Infineon Technologies AG (FSE: IFX /
OTCQX: IFNNY) today reported results for the third quarter of the 2009
fiscal year, ended June 30, 2009.

Infineon's revenues in the third quarter were Euro 845 million, up 13
percent compared to the second quarter and down 18 percent year-over-year.
Infineon's third quarter Segment Result improved significantly compared to
the previous quarter, net loss was Euro 23 million.

'Thanks to higher sales, higher factory loading and the cost savings from
our IFX10+ cost-reduction program, we improved our operational performance
considerably during the third quarter compared to the previous quarter.
Together with strict cash management, we generated positive free cash flow
from continuing operations of Euro 152 million and reduced our net debt
position significantly', said Peter Bauer, CEO of Infineon Technologies AG.

During the third quarter, Infineon implemented a series of measures to
improve its balance sheet and to achieve a more focussed product portfolio.
The company launched a cash tender offer for a portion of its outstanding
bonds and issued new convertible bonds. In July 2009, it announced the sale
of its Wireline Communications business and launched the pending rights
offering, backstopped by Apollo. 'If successful, these steps would complete
the refinancing of the company', said Peter Bauer.

The sequential increase in revenues reflects increased revenues in all of
the company's five operating segments. The Wireless Solutions (WLS) segment
achieved by far the strongest percentage increase in revenues, with the
segments Industrial & Multimarket (IMM), Automotive (ATV), Wireline
Communications (WLC), and Chip Card & Security (CCS) following at some
distance.

Third quarter earnings improved significantly compared to the second
quarter. The drivers of the improvement included significant cost
reductions, mainly due to the IFX10+ cost-reduction program, higher factory
loading as Infineon carefully adjusted production according to the improved
demand environment, and higher sales levels driven by the company's strong
product portfolio. All of the company's operating segments achieved
positive Segment Result, except the ATV segment which posted a Segment
Result of negative Euro 17 million.

Net loss from continuing operations for the third quarter was Euro 20
million, resulting in basic and diluted loss per share from continuing
operations of Euro 0.03. For the second quarter, net loss from continuing
operations was Euro 150 million, and basic and diluted loss per share from
continuing operations was Euro 0.20.

Infineon reported loss from discontinued operations, net of income taxes,
of Euro 3 million for the third quarter. As a result of Qimonda's
application to open insolvency proceedings on January 23, 2009, Infineon
deconsolidated Qimonda during the second quarter.

For the third quarter, Infineon reported group net loss of Euro 23 million,
and basic and diluted loss per share of Euro 0.03.

In the third quarter, Infineon's free cash flow from continuing operations
was Euro 152 million, compared to a free cash flow from continuing
operations of negative Euro 22 million in the second quarter. This strong
improvement was driven by improved operating results and the company's
strict cash management.

Through the company's IFX10+ cost-reduction program, Infineon achieved
significant cost reductions, also in the third quarter. Infineon's
operating expenses decreased by Euro 88 million compared to the fourth
quarter of the 2008 fiscal year, which the company believes was principally
due to the IFX10+ cost-reduction program. This figure includes cost savings
resulting from reduced working hours and unpaid leave.

In addition, Infineon contained capital expenditures (CapEx) to Euro 27
million in the third quarter, including capitalized intangible assets,
while depreciation and amortization was Euro 133 million.

Within working capital, each of trade and other receivables, and
inventories declined by Euro 22 million in the third quarter, while trade
and other payables increased by Euro 63 million, compared to the previous
quarter. In total, the company reduced net working capital by Euro 36
million during the third quarter.

Free cash flow from continuing operations of Euro 152 million for the third
quarter also included cash inflow of Euro 17 million from the German bank
deposit protection fund following the insolvency of Lehman Brothers and
cash outflows of approximately Euro 25 million in connection with the
IFX10+ cost-reduction program.

Due to the strong free cash flow, Infineon reduced its net debt position at
book values by Euro 170 million to Euro 151 million on June 30, 2009
compared to Euro 321 million on March 31, 2009.

OUTLOOK FOR THE FOURTH QUARTER
Reflecting the pending sale of the WLC business, Infineon will classify
this business as discontinued operations in its consolidated financial
statements for the fiscal quarter and fiscal year ending September 30,
2009, effective as of the fourth quarter.

Infineon expects group revenues to grow in the fourth quarter compared to
the third quarter - on a comparable basis, excluding the WLC segment. The
company anticipates the revenue increase to be driven in particular by the
segments ATV and IMM.

Infineon plans continued, but cautious increases in production levels in
the fourth quarter as it adapts capacity loadings to the improved demand.
Together with the benefits of anticipated higher sales levels and continued
tight cost control, the company therefore expects Segment Result - on a
comparable basis, excluding the WLC segment - to improve as well.

For the 2009 fiscal year, Infineon now expects depreciation and
amortization to exceed the previous forecast level of Euro 500 million.

The successful sale of the WLC business and the successful completion of
the rights offering are expected to lead to a solid balance sheet. Infineon
intends to use this strength and concentrate its resources on the four
remaining segments, exploiting the growth potential offered by the overall
drivers of energy efficiency, communications, and security. At the same
time, the company plans to maintain a high level of cost and cash flow
discipline.

The Infineon segments' performance in the third quarter of the 2009 fiscal
year can be found in the quarterly information at http://www.infineon.com.

All figures in this quarterly information are unaudited.

ANALYST AND PRESS TELEPHONE CONFERENCES
Due to special legal restrictions about communications in conjunction with
the announced rights offering and the publication of the prospectus on July
16, 2009, Infineon will not conduct an analyst and press conference call on
the 2009 fiscal third quarter results today. Infineon's investor and media
relations teams will be available for questions following the publication
of the earnings announcement.

IFX FINANCIAL CALENDAR (*preliminary date)
- Nov 19, 2009* Earnings Release for the Fourth Quarter and Full 2009
Fiscal Year

New in the IFX podcast section at www.infineon.com/podcast
- Press conference call about the sale of the Infineon Wireline
Communications business

D I S C L A I M E R
This press release includes forward-looking statements and assumptions
about the future of Infineon's business and the industry in which we
operate. These include statements and assumptions relating to general
economic conditions, future developments in the world semiconductor market,
our ability to manage our costs and to achieve our savings and growth
targets, the resolution of Qimonda's insolvency proceedings and the
liabilities we may face as a result of Qimonda's insolvency, the benefits
of research and development alliances and activities, our planned levels of
future investment, the introduction of new technology at our facilities,
the continuing transitioning of our production processes to smaller
structure sizes, our ability to continue to offer commercially viable
products, and our expected or projected future results.

These forward-looking statements are subject to a number of uncertainties,
including broader economic developments, including the duration and depth
of the current economic downturn; trends in demand and prices for
semiconductors generally and for our products in particular, as well as for
the end-products, such as automobiles and consumer electronics, that
incorporate our products; the success of our development efforts, both
alone and with partners; the success of our efforts to introduce new
production processes at our facilities; the actions of competitors; the
availability of funds, including for the re-financing of our indebtedness;
the outcome of antitrust investigations and litigation matters; and the
outcome of Qimonda's insolvency proceedings; as well as the other factors
mentioned in this press release and those described in the 'Risk Factors'
section of the prospectus relating to our pending rights offering (a form
of which was approved by the German Federal Financial Supervisory Authority
(BaFin) on July 16, 2009 and a form of which is contained in the
registration statement on Form F-3 filed with the U.S. Securities and
Exchange Commission on July 16, 2009).

As a result, Infineon's actual results could differ materially from those
contained in these forward-looking statements. You are cautioned not to
place undue reliance on these forward-looking statements. Infineon does not
undertake any obligation to publicly update or revise any forward-looking
statements in light of developments which differ from those
anticipated.

Contact:
Investor Relations, Tel.: +49 89 234-26655, Fax: +49 89 234-9552987

29.07.2009 Financial News transmitted by DGAP

Language: English
Issuer: Infineon Technologies AG
Am Campeon 1-12
85579 Neubiberg
Deutschland
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: TecDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, Düsseldorf, München, Hannover, Stuttgart,
Hamburg; Terminbörse EUREX

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