Infineon Technologies AG

Earnings Release • Feb 1, 2012

News Details

Corporate | 1 February 2012 07:30

Infineon reports results for the first quarter of the 2012 fiscal year

Infineon Technologies AG / Key word(s): Quarter Results

01.02.2012 / 07:30

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Quarter Results / Final Results

Infineon reports results for the first quarter of the 2012 fiscal year

INFINEON FIRST QUARTER FY 2012 SALES AND EARNINGS SLIGHTLY AHEAD OF GUIDANCE

QUARTERLY SALES OF EURO 946 MILLION DOWN FROM EURO 1.038 BILLION

SUPERIOR GROWTH AND PROFITABILITY: 14 PERCENT GROWTH IN CALENDAR YEAR 2011 VS 3 PERCENT FOR INDUSTRY EXCLUDING MEMORIES AND MICROPROCESSORS

14.9 PERCENT TOTAL SEGMENT RESULT MARGIN IN-LINE WITH THROUGH-CYCLE TARGET

SUSTAINED EFFORTS FOR FUTURE SUCCESS: COUNTER-CYCLICAL INVESTMENTS OF EURO 294 MILLION TO ENABLE MOVE TO HIGHLY COMPETITIVE 300MM MANUFACTURING;

SUSTAINING HIGH R&D AND SELLING EXPENSE

STRONG RETURNS: 27 PERCENT ROCE FOR THE QUARTER; 1.0 PERCENT REDUCTION IN FULLY DILUTED SHARE COUNT

OUTLOOK FOR THE SECOND QUARTER OF THE FY 2012: SALES TO BE FLAT TO DOWN SLIGHTLY; TOTAL SEGMENT RESULT MARGIN TO BE DOWN BROADLY BY 1 PERCENTAGE POINT

Neubiberg, Germany – February 1, 2012 – Infineon Technologies AG today reported results for the first quarter of the 2012 fiscal year, ended December 31, 2011.

FIRST QUARTER 2012 RESULTS (October 1 to December 31, 2011)

in Euro million	Q1 FY12	Q4 FY11	+/- in %
Revenue	946	1,038	(9)
Total Segment Result	141	195	(28)
Total Segment Result Margin [in %]	14.9%	18.8%
Income (loss) from continuing operations	104	247	(58)
Income from discontinued operations, net of income taxes	(8)	(122)	93
Net income	96	125	(23)
in Euro
Basic earnings (loss) per share from continuing operations	0.10	0.23	(57)
Basic earnings (loss) per share from discontinued operations	(0.01)	(0.11)	91
Basic earnings per share	0.09	0.12	(25)
Diluted earnings (loss) per share from continuing operations	0.10	0.22	(55)
Diluted earnings (loss) per share from discontinued operations	(0.01)	(0.11)	91
Diluted earnings per share	0.09	0.11	(18)

'Infineon continues to deliver solid profitability despite a difficult economic environment. Our strategy to focus on less volatile and more profitable businesses is paying off demonstrated by a stronger top-line as compared to our peers', says Peter Bauer, CEO of Infineon Technologies AG. 'To secure future profitable growth in our markets of energy efficiency, mobility and security we continue to invest in R&D, customer relationships and manufacturing capacity.'

REVIEW OF GROUP FINANCIALS FOR THE FIRST QUARTER OF THE 2012 FISCAL YEAR

Infineon's revenues in the first quarter of the 2012 fiscal year were Euro 946 million compared with revenues of Euro 1.038 billion in the fourth quarter of the 2011 fiscal year. The decline occurred due to customer caution as a result of global economic uncertainties.

First quarter Total Segment Result was Euro 141 million, down from Euro 195 million in the prior quarter. First quarter Total Segment Result Margin decreased to 14.9 percent, from 18.8 percent in the previous quarter, but remained in line with the Group's through-cycle target of 15 percent. The decline in Total Segment Result and Margin was primarily due to lower sales. Total Segment Result Margin remained slightly ahead of Company guidance for the quarter as operating expenses, in particular R&D expenses, were slightly lower than planned and slightly lower than in the previous quarter.

Infineon reported income from continuing operations of Euro 104 million, down from Euro 247 million in the previous quarter. In addition to a lower Total Segment Result, income from continuing operations now contained a tax expense of Euro 20 million after a tax benefit of Euro 75 million in the preceding quarter. Basic and diluted earnings per share from continuing operations decreased to Euro 0.10, down from Euro 0.23 and Euro 0.22, respectively, in the last quarter.

Loss from discontinued operations was reduced substantially from a loss of Euro 122 million in the fourth quarter of the last fiscal year to a loss of Euro 8 million in the first quarter of the current financial year. Basic and diluted loss per share from discontinued operations stood at a loss of Euro 0.01, down from a loss of Euro 0.11.

Net income decreased to Euro 96 million from Euro 125 million in the prior quarter. Basic earnings per share were Euro 0.09 compared with Euro 0.12 in the preceding quarter and diluted earnings per share were Euro 0.09 compared with Euro 0.11.

Investments , which the Company defines as the sum of purchases of property, plant and equipment, purchases of intangible assets and capitalized research and development assets, were Euro 294 million in the first quarter, up from Euro 273 million in the prior quarter. Approximately one third of the annual investment budget was spent already in the first quarter.

Depreciation and amortization was almost flat at Euro 97 million, compared to Euro 98 million in the prior quarter. Whilst higher investments of recent quarters generally drive increasing depreciation, the end of depreciation of older equipment at the facility in Kulim, Malaysia, more than offset this in the first quarter of the 2012 fiscal year.

Free cash flow from continuing operations for the first quarter turned negative to Euro 234 million. In the previous quarter, free cash flow from continuing operations was positive Euro 97 million. The development of free cash flow from continuing operations reflects lower results, investments of Euro 294 million and an increase in working capital of Euro 202 million.

Negative free cash flow, further capital returns of Euro 70 million, as well as a net reduction of debt of Euro 23 million, drove a decline in the Company's gross cash position to Euro 2,337 million, down from Euro 2,692 million at the end of September, 2011. Net cash declined to Euro 2,068 million from Euro 2,387 million at the end of the preceding quarter.

Within the capital returns program, the Company spent Euro 50 million for the repurchase of a nominal value of Euro 19 million of its 2014 convertible bond. This effectively reduced the fully diluted number of shares outstanding by roughly 8 million or approximately 0.7 percent. In addition, a total of 3 million put options were exercised during the quarter for a cash outflow of Euro 20 million. This resulted in the buy-back of 3 million shares or 0.3 percent of fully diluted shares outstanding.

INFINEON'S SUPERVISORY BOARD AND MANAGEMENT BOARD WILL PROPOSE A DIVIDEND OF EURO 0.12 PER SHARE TO THE ANNUAL GENERAL MEETING, UP 20 PERCENT FROM PREVIOUS YEAR

On November 23, 2011, the Management Board and the Supervisory Board decided to propose to the upcoming Annual General Meeting a 20 percent dividend increase to Euro 0.12 per qualifying ordinary share. For the 2010 fiscal year, the Company paid a dividend of Euro 0.10 per share. If the upcoming Annual General Meeting on March 8, 2012 approves the proposal, the dividend payout will amount to approximately Euro 130 million, depending on the effective number of qualifying shares.

PRODUCT AND INNOVATION HIGHLIGHTS

Following a philosophy of anticyclical investment and in an effort to fully capitalize on future growth opportunities, Infineon maintains high levels of investment and R&D as well as selling expenses also in economically more challenging times.

One example for this is the high level of investments of Euro 294 in the first quarter of the 2012 fiscal year. On the one hand, this aims at enabling future growth driven by secular growth trends such as renewable energies, electromobility, variable speed drives or more efficient power conversion in electricity consuming devices. On the other hand, Infineon invests into securing and expanding long-term competitiveness: 300-millimeter production of power semiconductors on thin wafers in Dresden, Germany, the construction of a second 200-millimeter wafer fabrication building at the highly cost-efficient site in Kulim, Malaysia, expansion of power module capacity in Cegléd, Hungary, as well as numerous automation and quality projects.

The examples set forth below illustrate Infineon's focus on innovative developments to drive differentiation and customer utility at the same time, hence enabling market success:

– Near Field Communication (NFC) is one example. NFC contactless communication allows smart phones and other mobile devices to function as means for payment, as tickets for public transportation and the like or as keys. NFC technology should enjoy high growth rates going forward. As stated in an IMS Research study dated January 2012, Infineon dominated the NFC security microcontroller market in 2011 with 51.5 percent market share.

– In a similar vein, the Company has just announced a new family of ARM(R)-based 32-bit XMC4000 microcontrollers optimized for industrial applications such as electrical motors, factory automation and solar inverters. These new devices will enable our customers to benefit from our system expertise, low software development effort and maximum flexibility.

OUTLOOK FOR THE SECOND QUARTER OF THE 2012 FISCAL YEAR

With continued confidence on the part of automotive customers and some early signs of stabilization in the chipcard and lower power markets, Infineon expects revenues for the second quarter of the 2012 fiscal year to be flat to down slightly compared to the first quarter. Within this revenue outlook, Automotive (ATV) sales should be up and Chip Card & Security (CCS) turnover should be about flat. Seasonal weakness will drive a decline in Power Management & Multimarket (PMM) sales, while Industrial Power Control (IPC) turnover should continue to decline owing to the late-cycle nature of this business.

Total Segment Result Margin should be down broadly by 1 percentage point. With a view to the growth prospects of the Company, Infineon is planning slightly higher R&D and SG&A expense for the second quarter of the 2012 fiscal year relative to the preceding quarter.

As announced earlier, Infineon has divided its segment Industrial & Multimarket (IMM) into two new segments effective January 1, 2012: Industrial Power Control (IPC) and Power Management & Multimarket (PMM). The Company will report exclusively according to its new structure from second quarter of the 2012 fiscal year onwards.

Infineon segments' performance in the first quarter of the 2012 fiscal year can be found in the quarterly information at http://www.infineon.com .

All figures in this quarterly information are preliminary and unaudited.

ANALYST AND PRESS TELEPHONE CONFERENCES

Infineon Technologies AG will conduct a telephone conference (in English only) with analysts and investors on February 1, 2012, at 10:00 a.m. Central European Time (CET), 4:00 a.m. Eastern Standard Time (US EST), to discuss operating performance during the first quarter of the 2012 fiscal year. In addition, the Infineon Management Board will host a telephone conference with the media at 11:30 a.m. (CET), 5:30 a.m. (US EST). It can be followed in German and English over the Internet. Both conferences will be available live and for download on the Infineon web site at www.infineon.com/investor .

Please find the Q1 Investor Presentation on our web site at http://www.infineon.com/cms/en/corporate/investor/reporting/index.html

IFX financial calendar (*preliminary date)

– Mar 8, 2012 Annual General Meeting 2012, Munich, Germany

(Start: 10:00 a.m. CET)

– May 3, 2012* Earnings Release for the Second Quarter of the 2012 Fiscal Year

– May 15 – 17, 2012 JPMorgan Global TMT Conference, Boston, USA

– Jun 5, 2012 DZ Bank Sustainability Technologies Conference, Zurich, Switzerland

– Jul 31, 2012* Earnings Release for the Third Quarter of the 2012 Fiscal Year

– Aug 29 – 30, 2012 Commerzbank Sector Conference Week, Frankfurt, Germany

– Sep 13, 2012 JPMorgan Pan Euro Tech Conference, London, UK

– Sep 26, 2012 Baader Investment Conference, Munich, Germany

– Nov 13, 2012* Earnings Release for the Fourth Quarter and Full 2012 Fiscal Year

– Nov 14 – 16, 2012 Morgan Stanley TMT Conference, Barcelona, Spain

– Nov 27 – 28, 2012 Credit Suisse Technology Conference, Scottsdale, USA

ABOUT INFINEON

Infineon Technologies AG, Neubiberg, Germany, offers semiconductor and system solutions addressing three central challenges to modern society: energy efficiency, mobility, and security. In the 2011 fiscal year (ending September 30), the Company reported sales of Euro 4.0 billion with close to 26,000 employees worldwide. Infineon is listed on the Frankfurt Stock Exchange (ticker symbol: IFX) and in the USA on the over-the-counter market OTCQX International Premier (ticker symbol: IFNNY).

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 as well as our expected future results. 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, our ability to continue to offer commercially viable products.

These forward-looking statements are subject to a number of uncertainties, including broader economic developments, trends in demand and prices for semiconductors generally and for our products in particular, as well as for the end-products 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 continued availability of adequate funds, 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 our quarterly and annual reports.

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.

End of Corporate News

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Language:	English
Company:	Infineon Technologies AG
	Am Campeon 1-12
	85579 Neubiberg
	Germany
Phone:	+49 (0)89 234-26655
Fax:	+49 (0)89 234-955 2987
E-mail:	investor.relations@infineon.com
Internet:	www.infineon.com
ISIN:	DE0006231004
WKN:	623100
Listed:	Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover, München, Stuttgart; Terminbörse EUREX

End of News	DGAP News-Service

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