Earnings Release • Feb 5, 2019
Earnings Release
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Infineon closes December quarter with revenue down as forecast and earnings slightly better than expected. Slowing global economic momentum dampens outlook: revenue predicted to remain stable in March quarter
Neubiberg, Germany, 5 February 2019 – Infineon Technologies AG today reports results for the first quarter of the 2019 fiscal year (period ended 31 December 2018).
"So far we have been able to master the challenges of an increasingly difficult business environment well," stated Dr. Reinhard Ploss, CEO of Infineon. "Despite market headwinds, we expect to be able to grow by about 9 percent in the 2019 fiscal year and gain further market share on the back of healthy structural growth drivers. Our long-term growth prospects remain intact. We will therefore continue to pursue core projects such as the construction of the 300-millimeter cleanroom in Villach, but moderately reduce investments in manufacturing equipment."
For the Business and Trade Press: INFXX201902-033e
Bernd Hops (Headquarters) Sian Cummings (Americas) Chi Kang David Ong (Asia-Pacific) Jonathan Liu (Greater China) Yoko Sasaki (Japan)
Tel.: +49 89 234 23888 Tel.: +1 310 252 7148 Tel.: +65 6876 3070 Tel.: +86 21 6101 9182 Tel.: +81 3 5745 7340
[email protected] [email protected] [email protected] [email protected] [email protected]
| € in millions | 3 | 3 | 3 | ||
|---|---|---|---|---|---|
| months | sequen | months | year-on | months | |
| ended | tial | ended | year | ended | |
| 31 Dec 18 +/- in % 30 Sep 18 +/- in % 31 Dec 17 | |||||
| Revenue | 1,970 | (4) | 2,047 | 11 | 1,775 |
| Segment Result | 359 | (10) | 400 | 27 | 283 |
| Segment Result Margin [in %] | 18.2% | 19.5% | 15.9% | ||
| Income from continuing operations | 254 | (15) | 300 | 23 | 206 |
| Loss from discontinued operations, net of income taxes | – | +++ | (159) | +++ | (1) |
| Net income | 254 | 80 | 141 | 24 | 205 |
| Basic earnings per share (in euro) attributable to shareholders | |||||
| of Infineon Technologies AG:1 Basic earnings per share (in euro) from continuing operations |
0.22 | (19) | 0.27 | 22 | 0.18 |
| Basic loss per share (in euro) from discontinued operations | - | +++ | (0.14) | - | - |
| Basic earnings per share (in euro) | 0.22 | 69 | 0.13 | 22 | 0.18 |
| Diluted earnings per share (in euro) attributable to shareholders | |||||
| of Infineon Technologies AG:1 | |||||
| Diluted earnings per share (in euro) from continuing operations | 0.22 | (19) | 0.27 | 22 | 0.18 |
| Diluted loss per share (in euro) from discontinued operations | - | +++ | (0.14) | - | - |
| Diluted earnings per share (in euro) | 0.22 | 69 | 0.13 | 22 | 0.18 |
| Adjusted earnings per share (in euro) – diluted2 | 0.24 | (14) | 0.28 | 20 | 0.20 |
| Gross margin [in %] | 39.5% | 39.8% | 36.4% | ||
| Adjusted gross margin3 [in %] | 40.4% | 40.6% | 37.4% | ||
1 The calculation for earnings per share and adjusted earnings per share is based on unrounded figures.
2 The reconciliation of net income to adjusted net income and adjusted earnings per share is presented on page 9.
3 The reconciliation of cost of goods sold to adjusted cost of goods sold and adjusted gross margin is presented on page 10.
With effect from the beginning of 2019 fiscal year, Infineon is applying IFRS 15 (Revenue from Contracts with Customers) and IFRS 9 (Financial Instruments) using the modified retrospective approach. As a result, prior periods are not adjusted to the new accounting policies. Overall, the first-time application of these Standards has not had any material impact.
Due to seasonal factors, revenue declined by 4 percent to €1,970 million in the first quarter of the 2019 fiscal year, compared to €2,047 million in the fourth quarter of the preceding fiscal year. Revenue was down slightly in the Automotive (ATV) and Industrial Power Control (IPC) segments. Compared to the Group average, the decline was somewhat more pronounced in the Power Management & Multimarket (PMM) segment and noticeably more pronounced in the Digital Security Solutions (DSS) segment.
The gross margin remained largely stable quarter-on-quarter, falling from 39.8 percent to 39.5 percent. Included therein are acquisition-related depreciation and amortization as well as other expenses totaling €16 million, mainly relating to the International Rectifier acquisition. The adjusted gross margin also remained virtually unchanged, coming in at 40.4 percent in the first quarter compared with 40.6 percent in the final quarter of the 2018 fiscal year.
For the Business and Trade Press: INFXX201902-33e
Bernd Hops (Headquarters) Sian Cummings (Americas) Chi Kang David Ong (Asia-Pacific) Zhu Lin (Greater China) Yoko Sasaki (Japan)
Tel.: +49 89 234 23888 Tel.: +1 310 252 7148 Tel.: +65 6876 3070 Tel.: +85 2161019199 Tel.: +81 3 5745 7340
[email protected] [email protected] [email protected] [email protected] [email protected]
The Segment Result for the first quarter of the current fiscal year amounted to €359 million, down from €400 million one quarter earlier. The Segment Result Margin decreased from 19.5 percent to 18.2 percent.
The non-segment result for the three-month period was a net loss of €32 million, compared to a net loss of €30 million in the previous quarter. The first-quarter nonsegment result comprises €16 million of cost of goods sold, €15 million of selling, general and administrative expenses, and €1million of research and development expenses.
Operating income in the first quarter totaled €327 million, compared to the previous quarter's €370 million. Income tax expense increased slightly from €54 million to €56 million. Income from continuing operations totaled €254 million, compared with €300 million in the fourth quarter of the 2018 fiscal year.
The result from discontinued operations for the first three months of the 2019 fiscal year was zero. In the previous quarter, the increase in provisions relating to the lawsuit brought by the Qimonda insolvency administrator for the alleged activation of a shell company and the liability for the impairment of capital had resulted in a net loss of €159 million. Net income improved accordingly from €141 million in the previous quarter to €254 million in the first quarter of the 2019 fiscal year.
Earnings per share from continuing operations for the first quarter of the current fiscal year amounted to €0.22 (basic and diluted), down from €0.27 one quarter earlier. Adjusted earnings per share1 (diluted) declined from €0.28 to €0.24.
Investments – which Infineon defines as the sum of purchases of property, plant and equipment, purchases of intangible assets and capitalized development assets – decreased slightly in the first quarter of the current fiscal year to €408 million, down from €417 million in the previous three-month period. Depreciation and amortization increased slightly from €226 million to €230 million.
Free cash flow2 from continuing operations amounted to minus €221 million, compared to a positive €227 million in the preceding quarter. The figure reported for the first three
For the Business and Trade Press: INFXX201902-33e
Bernd Hops (Headquarters) Sian Cummings (Americas) Chi Kang David Ong (Asia-Pacific) Zhu Lin (Greater China) Yoko Sasaki (Japan)
[email protected] [email protected] [email protected] [email protected] [email protected]
1 Adjusted net income and adjusted earnings per share (diluted) should not be seen as a replacement or superior performance indicator, but rather as additional information to the net income and earnings per share (diluted) determined in accordance with
IFRS. The detailed calculation of adjusted earnings per share is presented on page 9. 2 For definitions and the calculation of free cash flow and of the gross and net cash position, please see page 12.
months of the current fiscal year includes an outflow of €123 million arising in conjunction with the acquisition of Siltectra in November 2018. Net cash provided by operating activities from continuing operations totaled €310 million, compared to €641 million in the fourth quarter of the 2018 fiscal year.
The gross cash position at the end of the first quarter of the 2019 fiscal year amounted to €2,306 million, compared to €2,543 million at 30 September 2018. The net cash position amounted to €773 million, compared to €1,011 million three months earlier.
Based on an assumed exchange rate of US\$ 1.15 to the euro in the second quarter of the 2019 fiscal year, Infineon forecasts that revenue will remain stable quarter-onquarter (plus or minus 2 percentage points). At the mid-point of revenue guidance, the Segment Result Margin is expected to come in at about 16 percent.
Based on actual figures for the first quarter and forecast figures for the second quarter, Infineon now expects to reach the lower end of its predicted revenue range for the 2019 fiscal year, which corresponds to year-on-year revenue growth of 9 percent at an assumed exchange rate of US\$ 1.15 to the euro. At this level, a Segment Result Margin of about 17.5 percent is expected. Revenue growth in the Automotive segment is predicted to exceed the Group average. The Industrial Power Control segment is forecast to grow in line with the Group average. Revenue growth in the Power Management & Multimarket segment is expected to be below the Group average. Due to the difficult market situation, revenue in the Digital Security Solutions segment is forecast to drop by a low- to mid-single digit percentage year-on-year.
Investments in property, plant and equipment, intangible assets and capitalized development costs are now planned at approximately €1.5 billion for the 2019 fiscal year, compared to the previously forecast range of €1.6 to 1.7 billion. The figure continues to include the construction of the cleanroom for the new 300-millimeter production facility in Villach. Depreciation and amortization are still expected to be in the region of €1 billion, whereby approximately €90 million of that amount relates to amortization resulting from purchase price allocations, primarily for International Rectifier.
For the Business and Trade Press: INFXX201902-33e
Bernd Hops (Headquarters) Sian Cummings (Americas) Chi Kang David Ong (Asia-Pacific) Zhu Lin (Greater China) Yoko Sasaki (Japan)
Tel.: +49 89 234 23888 Tel.: +1 310 252 7148 Tel.: +65 6876 3070 Tel.: +85 2161019199 Tel.: +81 3 5745 7340
[email protected] [email protected] [email protected] [email protected] [email protected]
| € in millions | in % of total revenue |
3 months ended 31 Dec 18 |
sequen tial +/- in % |
3 months ended 30 Sep 18 |
year-on year +/- in % |
3 months ended 31 Dec 17 |
|---|---|---|---|---|---|---|
| Infineon | ||||||
| Revenue | 100 | 1,970 | (4) | 2,047 | 11 | 1,775 |
| Segment Result | 359 | (10) | 400 | 27 | 283 | |
| Segment Result Margin [in %] | 18.2% | 19.5% | 15.9% | |||
| Automotive (ATV) | ||||||
| Segment Revenues | 43 | 846 | (2) | 867 | 10 | 770 |
| Segment Result | 117 | (8) | 127 | 14 | 103 | |
| Segment Result Margin [in %] | 13.8% | 14.6% | 13.4% | |||
| Industrial Power Control (IPC) | ||||||
| Segment Revenues | 18 | 352 | (2) | 361 | 19 | 296 |
| Segment Result | 69 | (5) | 73 | 44 | 48 | |
| Segment Result Margin [in %] | 19.6% | 20.2% | 16.2% | |||
| Power Management & Multimarket (PMM) | ||||||
| Segment Revenues | 31 | 617 | (5) | 651 | 13 | 545 |
| Segment Result | 155 | (14) | 181 | 45 | 107 | |
| Segment Result Margin [in %] | 25.1% | 27.8% | 19.6% | |||
| Digital Security Solutions (DSS) | ||||||
| Segment Revenues | 8 | 149 | (9) | 163 | (8) | 162 |
| Segment Result | 16 | (33) | 24 | (36) | 25 | |
| Segment Result Margin [in %] | 10.7% | 14.7% | 15.4% | |||
| Other Operating Segments (OOS) | ||||||
| Segment Revenues | 0 | 6 | 20 | 5 | +++ | 2 |
| Segment Result | 3 | +++ | (4) | +++ | 1 | |
| Corporate and Eliminations (C&E) | ||||||
| Segment Revenues | 0 | - | - | - | - | - |
| Segment Result | (1) | - | (1) | - | (1) |
ATV segment revenue was 2 percent down due to seasonal factors, decreasing from €867 million in the final quarter of the preceding year to €846 million in the first quarter of the current fiscal year. The slight decline was caused by inventory level adjustments made by customers at the end of the calendar year, particularly in conventional fields of application induced by the weakness of the global vehicle market in the December quarter. Segment Result developed accordingly, declining from €127 million to €117 million. The Segment Result Margin came in at 13.8 percent, compared to 14.6 percent one quarter earlier.
IPC segment revenue during the first quarter of the current fiscal year totaled €352 million, 2 percent down on the previous quarter's figure of €361 million. Demand in home appliances and industrial drives declined slightly due to seasonal factors, whereas – contrary to usual seasonal trends – revenue in wind remained almost unchanged and revenue in photovoltaics even grew. Rising demand was also registered in the traction business. Segment Result decreased from €73 million to €69 million quarter-on-quarter. The Segment Result Margin came in at 19.6 percent, compared to 20.2 percent in the previous quarter.
For the Business and Trade Press: INFXX201902-33e
Bernd Hops (Headquarters) Sian Cummings (Americas) Chi Kang David Ong (Asia-Pacific) Zhu Lin (Greater China) Yoko Sasaki (Japan)
Tel.: +49 89 234 23888 Tel.: +1 310 252 7148 Tel.: +65 6876 3070 Tel.: +85 2161019199 Tel.: +81 3 5745 7340
[email protected] [email protected] [email protected] [email protected] [email protected]
PMM segment revenue decreased by 5 percent from €651 million to €617 million, reflecting lower demand for DC-DC power supplies and the normal seasonal decline in mobile devices. Revenue from AC-DC power supplies increased slightly. Segment Result for the first quarter of the current fiscal year totaled €155 million, compared to €181 million in the final quarter of the previous fiscal year. The Segment Result Margin came in at 25.1 percent, down from 27.8 percent in the preceding three-month period.
DSS segment revenue decreased by 9 percent from €163 million to €149 million quarter-on-quarter. Revenue in authentication declined significantly due to seasonality. Revenue in payment was also slightly down on the previous quarter, while government ID revenue increased slightly. Segment Result declined from €24 million to €16 million quarter-on-quarter. The Segment Result Margin came in at 10.7 percent, compared to 14.7 percent in the preceding quarter.
Infineon will host a telephone conference call including a webcast for analysts and investors (in English only) on 5 February 2019 at 9:30 am (CET), 3:30 am (EST). During the call, the Infineon Management Board will present the Company's results for the first quarter and the outlook for the second quarter of the 2019 fiscal year. In addition, the Management Board will host a telephone press conference with the media at 11:00 am (CET), 5:00 am (EST). It can be followed over the Internet in both English and German. Both conferences will also be available live and for download on Infineon's website at www.infineon.com/investor.
The Q1 Investor Presentation is available (in English only) at: http://www.infineon.com/cms/en/corporate/investor/reporting/
| 21 Feb 2019 | Annual General Meeting, Munich |
|---|---|
| 25 – 27 Feb 2019 | Mobile World Congress; Barcelona |
| 14 Mar 2019 | Bryan, Garnier & Co. 4th Annual Technology Conference, |
| Paris |
For the Business and Trade Press: INFXX201902-33e
Bernd Hops (Headquarters) Sian Cummings (Americas) Chi Kang David Ong (Asia-Pacific) Zhu Lin (Greater China) Yoko Sasaki (Japan)
Tel.: +49 89 234 23888 Tel.: +1 310 252 7148 Tel.: +65 6876 3070 Tel.: +85 2161019199 Tel.: +81 3 5745 7340
[email protected] [email protected] [email protected] [email protected] [email protected]
| 5 Apr 2019 | Bankhaus Lampe Conference, Baden-Baden |
|---|---|
| 7 May 2019* | Earnings Release for the Second Quarter of the 2019 |
| Fiscal Year | |
| 8 May 2019 | PCIM trade show; IPC Business Update by Dr. Peter Wawer, |
| Division President IPC and Dr. Peter Friedrichs, Technology | |
| Development Silicon Carbide, Nuremberg | |
| 4 Jun 2019 | Equita 14th European Conference, Milan |
| 4 Jun 2019 | Berenberg Innovation Conference, Zurich |
| 5 Jun 2019 | Deutsche Bank German, Swiss & Austrian Conference, Berlin |
| 11 Jun 2019 | Exane 21st European CEO Conference, Paris |
| 1 Aug 2019* | Earnings Release for the Third Quarter of the 2019 |
| Fiscal Year | |
| 29 Aug 2019 | Commerzbank Sector Conference, Frankfurt |
| 23 Sep 2019 | Berenberg Goldman Sachs German Corporate Conference, |
| Unterschleißheim nearby Munich | |
| 24 Sep 2019 | Baader Investment Conference, Munich |
| 7 – 8 Oct 2019 | ATV Presentation by Peter Schiefer, Division President ATV, |
| London | |
| 12 Nov 2019* | Earnings Release for the Fourth Quarter and the 2019 |
| Fiscal Year | |
Infineon Technologies AG is a world leader in semiconductor solutions that make life easier, safer and greener. Microelectronics from Infineon is the key to a better future. In the 2018 fiscal year (ending 30 September), the Company reported sales of €7.6 billion with about 40.100 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).
Further information is available at www.infineon.com This press release is available online at www.infineon.com/press
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For the Business and Trade Press: INFXX201902-33e
Bernd Hops (Headquarters) Sian Cummings (Americas) Chi Kang David Ong (Asia-Pacific) Zhu Lin (Greater China) Yoko Sasaki (Japan)
Tel.: +49 89 234 23888 Tel.: +1 310 252 7148 Tel.: +65 6876 3070 Tel.: +85 2161019199 Tel.: +81 3 5745 7340
[email protected] [email protected] [email protected] [email protected] [email protected]
With effect from the beginning of 2019 fiscal year, Infineon is applying IFRS 15 (Revenue from Contracts with Customers) and IFRS 9 (Financial Instruments) using the modified retrospective approach. As a result, prior periods are not adjusted to the new accounting policies. Overall, the first-time application of these Standards has not had any material impact.
| € in millions; except for the per share data | 3 months ended | ||
|---|---|---|---|
| 31 Dec 18 | 30 Sep 18 | 31 Dec 17 | |
| Revenue | 1,970 | 2,047 | 1,775 |
| Cost of goods sold | (1,191) | (1,233) | (1,129) |
| Gross profit | 779 | 814 | 646 |
| Research and development expenses | (236) | (223) | (195) |
| Selling, general and administrative expenses | (218) | (227) | (205) |
| Other operating income | 11 | 17 | 6 |
| Other operating expenses | (9) | (11) | (4) |
| Operating income | 327 | 370 | 248 |
| Financial income | 6 | 5 | 3 |
| Financial expenses | (19) | (21) | (17) |
| Loss from investments accounted for using the equity method | (4) | - | - |
| Income from continuing operations before income taxes | 310 | 354 | 234 |
| Income tax | (56) | (54) | (28) |
| Income from continuing operations | 254 | 300 | 206 |
| Loss from discontinued operations, | |||
| net of income taxes | - | (159) | (1) |
| Net income | 254 | 141 | 205 |
| Attributable to: | |||
| Shareholders of Infineon Technologies AG | 254 | 141 | 205 |
| Basic earnings per share (in euro) attributable to shareholders of | |||
| Infineon Technologies AG:1 | |||
| Weighted average shares outstanding (in million) – basic | 1,131 | 1,131 | 1,130 |
| Basic earnings per share (in euro) from continuing operations | 0.22 | 0.27 | 0.18 |
| Basic loss per share (in euro) from discontinued operations | - | (0.14) | - |
| Basic earnings per share (in euro) | 0.22 | 0.13 | 0.18 |
| Diluted earnings per share (in euro) attributable to shareholders of | |||
| Infineon Technologies AG:1 | |||
| Weighted average shares outstanding (in million) – diluted | 1,133 | 1,134 | 1,134 |
| Diluted earnings per share (in euro) from continuing operations | 0.22 | 0.27 | 0.18 |
| Diluted loss per share (in euro) from discontinued operations | - | (0.14) | - |
| Diluted earnings per share (in euro) | 0.22 | 0.13 | 0.18 |
1 The calculation of earnings per share is based on unrounded figures.
For the Business and Trade Press: INFXX201902-33e
Bernd Hops (Headquarters) Sian Cummings (Americas) Chi Kang David Ong (Asia-Pacific) Zhu Lin (Greater China) Yoko Sasaki (Japan)
Tel.: +49 89 234 23888 Tel.: +1 310 252 7148 Tel.: +65 6876 3070 Tel.: +85 2161019199 Tel.: +81 3 5745 7340
[email protected] [email protected] [email protected] [email protected] [email protected]
Investor Relations: Tel.: +49 89 234 26655 [email protected]
Segment Result is defined as operating income (loss) excluding certain impairments (such as goodwill impairments), impact on earnings of restructuring measures and closures , share-based compensation expense, acquisition related depreciation/amortization and other expenses, gains (losses) on sales of businesses, or interests in subsidiaries and other income (expense), including the costs of legal proceedings.
| € in millions | 3 months ended | |||||
|---|---|---|---|---|---|---|
| 31 Dec 18 | 30 Sep 18 | 31 Dec 17 | ||||
| Segment Result | 359 | 400 | 283 | |||
| Plus/minus: | ||||||
| Impairments (such as on goodwill), net of reversals1 | - | 4 | - | |||
| Impact on earnings of restructuring and closures, net | - | - | - | |||
| Share-based compensation expense | (2) | (3) | (5) | |||
| Acquisition-related depreciation/amortization and other expenses | (30) | (29) | (30) | |||
| Gains on sales of businesses, or interests in subsidiaries, net2 | - | 1 | - | |||
| Other income and expense, net | - | (3) | - | |||
| Operating income | 327 | 370 | 248 |
1 Since 1 Oktober 2018 impairments/reversal of impairments on assets are generally shown in segment result (excluding
impairments for Goodwill). The previous period's figures were not adjusted.
2 Without gains and losses from the disposal of assets since 1 October 2018. The previous period's figures were not adjusted.
Earnings per share in accordance with IFRS are influenced by amounts relating to purchase price allocations for acquisitions (in particular International Rectifier) as well as by other exceptional items. To enable better comparability of operating performance over time, Infineon computes adjusted earnings per share (diluted) as follows:
| € in millions (unless otherwise stated) | 3 months ended | ||
|---|---|---|---|
| 31 Dec 18 | 30 Sep 18 | 31 Dec 17 | |
| Net income from continuing operations attributable to shareholders of Infineon Technologies AG – diluted |
300 | 206 | |
| Plus/minus: | |||
| Impairments (such as on goodwill), net of reversals1 | - | (4) | - |
| Impact on earnings of restructuring and closures, net | - | - | - |
| Share-based compensation expense | 2 | 3 | 5 |
| Acquisition-related depreciation/amortization and other expenses | 30 | 29 | 30 |
| Gains on sales of businesses, or interests in subsidiaries, net2 | - | (1) | - |
| Other income and expense, net | - | 3 | - |
| Tax effects on adjustments | (7) | (36) | (8) |
| Revaluation of deferred tax assets resulting from the annually updated earnings forecast | (5) | 24 | (7) |
| Adjusted net income from continuing operations attributable to shareholders of Infineon Technologies AG – diluted |
274 | 318 | 226 |
| Weighted-average number of shares outstanding (in million) – diluted | 1,133 | 1,134 | 1,134 |
| Adjusted earnings per share (in euro) – diluted3 | 0.24 | 0.28 | 0.20 |
1 Since 1 Oktober 2018 impairments/reversal of impairments on assets are generally shown in segment result (excluding impairments for Goodwill). The previous period's figures were not adjusted.
2 Without gains and losses from the disposal of assets since 1 October 2018. The previous period's figures were not adjusted.
3 The calculation of the adjusted earnings per share is based on unrounded figures.
Adjusted net income and adjusted earnings per share (diluted) should not be seen as a replacement or superior performance indicator, but rather as additional information to the net income and earnings per share (diluted) determined in accordance with IFRS.
For the Business and Trade Press: INFXX201902-33e
Bernd Hops (Headquarters) Sian Cummings (Americas) Chi Kang David Ong (Asia-Pacific) Zhu Lin (Greater China) Yoko Sasaki (Japan)
Tel.: +49 89 234 23888 Tel.: +1 310 252 7148 Tel.: +65 6876 3070 Tel.: +85 2161019199 Tel.: +81 3 5745 7340
[email protected] [email protected] [email protected] [email protected] [email protected]
Investor Relations: Tel.: +49 89 234 26655 [email protected]
The cost of goods sold and the gross margin in accordance with IFRS are influenced by amounts relating to purchase price allocations for acquisitions (in particular International Rectifier) as well as by other exceptional items. To enable better comparability of operating performance over time, Infineon computes the adjusted gross margin as follows:
| € in millions | 3 months ended | |||||
|---|---|---|---|---|---|---|
| 31 Dec 18 | 30 Sep 18 | 31 Dec 17 | ||||
| Cost of goods sold | 1,191 | 1,233 | 1,129 | |||
| Plus/minus: | ||||||
| Share-based compensation expense | - | (1) | (1) | |||
| Acquisition-related depreciation/amortization and other expenses | (16) | (17) | (17) | |||
| Adjusted cost of goods sold | 1,175 | 1,215 | 1,111 | |||
| Adjusted gross margin | 40.4% | 40.6% | 37.4% |
Adjusted cost of goods sold and the adjusted gross margin should not be seen as a replacement or superior performance indicator, but rather as additional information to cost of goods sold and the gross margin determined in accordance with IFRS.
| Revenue € in millions | 3 months ended | 3 months ended | |||||
|---|---|---|---|---|---|---|---|
| 31 Dec 18 | 31 Dec 17 +/- in % | 31 Dec 18 | 30 Sep 18 +/- in % | ||||
| Automotive | 846 | 770 | 10 | 846 | 867 | (2) | |
| Industrial Power Control | 352 | 296 | 19 | 352 | 361 | (2) | |
| Power Management & Multimarket | 617 | 545 | 13 | 617 | 651 | (5) | |
| Digital Security Solutions | 149 | 162 | (8) | 149 | 163 | (9) | |
| Other Operating Segments | 6 | 2 | +++ | 6 | 5 | 20 | |
| Corporate and Eliminations | - | - | - | - | - | - | |
| Total | 1,970 | 1,775 | 11 | 1,970 | 2,047 | (4) |
| Segment Result € in millions | 3 months ended | 3 months ended | ||||||
|---|---|---|---|---|---|---|---|---|
| 31 Dec 18 | 31 Dec 17 +/- in % | 31 Dec 18 | 30 Sep 18 +/- in % | |||||
| Automotive | 117 | 103 | 14 | 117 | 127 | (8) | ||
| Industrial Power Control | 69 | 48 | 44 | 69 | 73 | (5) | ||
| Power Management & Multimarket | 155 | 107 | 45 | 155 | 181 | (14) | ||
| Digital Security Solutions | 16 | 25 | (36) | 16 | 24 | (33) | ||
| Other Operating Segments | 3 | 1 | +++ | 3 | (4) | +++ | ||
| Corporate and Eliminations | (1) | (1) | - | (1) | (1) | - | ||
| Total | 359 | 283 | 27 | 359 | 400 | (10) | ||
| Segment Result Margin (in%) | 18.2% | 15.9% | 18.2% | 19.5% |
| 31 Dec 18 | 30 Sep 18 | 31 Dec 17 | |
|---|---|---|---|
| Infineon | 41,020 | 40,098 | 38,229 |
| thereof: Research and development | 7,444 | 7,161 | 6,547 |
Bernd Hops (Headquarters) Sian Cummings (Americas) Chi Kang David Ong (Asia-Pacific) Zhu Lin (Greater China) Yoko Sasaki (Japan)
Tel.: +49 89 234 23888 Tel.: +1 310 252 7148 Tel.: +65 6876 3070 Tel.: +85 2161019199 Tel.: +81 3 5745 7340
[email protected] [email protected] [email protected] [email protected] [email protected]
Investor Relations: Tel.: +49 89 234 26655 [email protected]
| € in millions | 31 Dec 18 | 30 Sep 181 |
|---|---|---|
| ASSETS: | ||
| Cash and cash equivalents | 827 | 732 |
| Financial investments | 1,479 | 1,811 |
| Trade receivables | 867 | 971 |
| Inventories | 1,591 | 1,480 |
| Income tax receivable | 60 | 52 |
| Contract Asset | 105 | - |
| Other current assets | 440 | 366 |
| Assets classified as held for sale | 11 | 11 |
| Total current assets | 5,380 | 5,423 |
| Property, plant and equipment | 3,193 | 3,038 |
| Goodwill and other intangible assets | 1,736 | 1,596 |
| Investments accounted for using the equity method | 33 | 37 |
| Deferred tax assets | 631 | 648 |
| Other non-current assets | 156 | 137 |
| Total non-current assets | 5,749 | 5,456 |
| Total assets | 11,129 | 10,879 |
| LIABILITIES AND EQUITY: | ||
| Short-term debt | 22 | 25 |
| and current maturities of long-term debt | ||
| Trade payables | 1,190 | 1,181 |
| Short-term provisions | 429 | 590 |
| Income tax payable | 134 | 117 |
| Other current liabilities | 331 | 269 |
| Total current liabilities | 2,106 | 2,182 |
| Long-term debt | 1,511 | 1,507 |
| Pension plans and similar commitments | 555 | 552 |
| Deferred tax liabilities | 15 | 9 |
| Long-term provisions | 46 | 46 |
| Other non-current liabilities | 139 | 137 |
| Total non-current liabilities | 2,266 | 2,251 |
| Total liabilities | 4,372 | 4,433 |
| Shareholders' equity: | ||
| Ordinary share capital | 2,274 | 2,274 |
| Additional paid-in capital | 4,489 | 4,486 |
| Accumulated deficit | (41) | (333) |
| Other reserves | 72 | 56 |
| Own shares | (37) | (37) |
| Equity attributable to shareholders of Infineon Technologies AG | 6,757 | 6,446 |
| Total liabilities and equity | 11,129 | 10,879 |
1 No prior period adjustments are required as a result of the new valuation and accounting methods arising from our chosen transition approach in accordance with IFRS 15 and IFRS 9.
For the Business and Trade Press: INFXX201902-33e
Bernd Hops (Headquarters) Sian Cummings (Americas) Chi Kang David Ong (Asia-Pacific) Zhu Lin (Greater China) Yoko Sasaki (Japan)
Tel.: +49 89 234 23888 Tel.: +1 310 252 7148 Tel.: +65 6876 3070 Tel.: +85 2161019199 Tel.: +81 3 5745 7340
[email protected] [email protected] [email protected] [email protected] [email protected]
Investor Relations: Tel.: +49 89 234 26655 [email protected]
| € in millions | 3 months ended | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 31 Dec 18 | 30 S ep 18 | 31 Dec 17 | |||||||
| Revenue: | |||||||||
| Europe, Middle East, Africa | 560 | 28% | 611 | 30% | 576 | 33% | |||
| therein: Germany | 268 | 14% | 293 | 14% | 277 | 16% | |||
| Asia-Pacific (excluding Japan, Greater China) | 309 | 16% | 311 | 15% | 259 | 14% | |||
| Greater China | 690 | 35% | 729 | 36% | 619 | 35% | |||
| therein: China | 530 | 27% | 535 | 26% | 462 | 26% | |||
| Japan | 150 | 8% | 145 | 7% | 117 | 7% | |||
| Americas | 261 | 13% | 251 | 12% | 204 | 11% | |||
| therein: USA | 215 | 11% | 206 | 10% | 163 | 9% | |||
| Total | 1,970 | 100% | 2,047 | 100% | 1,775 | 100% |
The following table reconciles the gross cash position and net cash position (i.e. after deduction of debt). Since some liquid funds are held in the form of financial investments, which, for IFRS purposes, are not considered to be "cash and cash equivalents", Infineon reports on its gross and net cash positions in order to provide investors with a better understanding of Infineon's overall liquidity. The gross and net cash positions are determined as follows from the Consolidated Statement of Financial Position:
| 31 Dec 18 | 30 Sep 18 | 31 Dec 17 |
|---|---|---|
| 827 | 732 | 745 |
| 1,479 | 1,811 | 1,567 |
| 2,306 | 2,543 | 2,312 |
| 22 | 25 | 316 |
| 1,511 | 1,507 | 1,493 |
| 1,533 | 1,532 | 1,809 |
| 773 | 1,011 | 503 |
Infineon reports the free cash flow figure, defined as net cash provided by and/or used in operating activities and net cash provided by and/or used in investing activities, both from continuing operations, after adjusting for cash flows related to the purchase and sale of financial investments. Free cash flow serves as an additional performance indicator, since Infineon holds part of its liquidity in the form of financial investments. This does not mean that the free cash flow calculated in this way is available to cover other disbursements, since dividend, debt-servicing obligations and other fixed disbursements are not deducted. Free cash flow should not be seen as a replacement or superior performance indicator, but rather as an additional useful piece of information over and above the disclosure of the cash flow reported in the Consolidated Statement of Cash Flows, and as a supplementary disclosure to other liquidity performance indicators and other performance indicators derived from the IFRS figures. Free cash flow includes only amounts from continuing operations, and is derived as follows from the Consolidated Statement of Cash Flows:
| € in million | 3 months ended | ||
|---|---|---|---|
| 31 Dec 18 | 30 Sep 18 | 31 Dec 17 | |
| Net cash provided by operating activities from continuing operations | 310 | 641 | 158 |
| Net cash used in investing activities from continuing operations | (195) | (379) | (267) |
| Purchases of (proceeds from sales of) financial investments, net | (336) | (35) | (26) |
| Free Cash Flow | (221) | 227 | (135) |
Bernd Hops (Headquarters) Sian Cummings (Americas) Chi Kang David Ong (Asia-Pacific) Zhu Lin (Greater China) Yoko Sasaki (Japan)
Tel.: +49 89 234 23888 Tel.: +1 310 252 7148 Tel.: +65 6876 3070 Tel.: +85 2161019199 Tel.: +81 3 5745 7340
[email protected] [email protected] [email protected] [email protected] [email protected]
Investor Relations: Tel.: +49 89 234 26655 [email protected]
| € in millions | 3 months ended | ||
|---|---|---|---|
| 31 Dec 18 | 30 Sep 18 | 31 Dec 17 | |
| Net income | 254 | 141 | 205 |
| Plus: income from discontinued operations, net of income taxes | - | 159 | 1 |
| Adjustments to reconcile net income to net cash provided by operating activities: | |||
| Depreciation and amortization | 230 | 226 | 204 |
| Income tax | 56 | 54 | 28 |
| Net interest result | 10 | 9 | 13 |
| Dividends received from joint ventures | - | 2 | 6 |
| Impairment charges | - | (4) | - |
| Other non-cash result | 4 | 8 | 3 |
| Change in trade receivables | 110 | (23) | 53 |
| Change in inventories | (143) | (91) | (45) |
| Change in trade payables | (5) | 170 | (72) |
| Change in provisions | (161) | 37 | (158) |
| Change in other assets and liabilities | 5 | 39 | (9) |
| Interest received | 6 | 4 | 4 |
| Interest paid | (20) | (7) | (19) |
| Income tax paid | (36) | (83) | (56) |
| Net cash provided by operating activities from continuing operations | 310 | 641 | 158 |
| Net cash provided by (used in) operating activities from discontinued operations | (1) | 2 | 6 |
| Net cash provided by operating activities | 309 | 643 | 164 |
| Purchases of financial investments | (467) | (1,026) | (497) |
| Proceeds from sales of financial investments | 803 | 1,061 | 523 |
| Acquisitions of businesses, net of cash acquired | (123) | - | - |
| Purchases of intangible assets and other assets | (39) | (49) | (37) |
| Purchases of property, plant and equipment | (369) | (368) | (256) |
| Proceeds from sales of property, plant and equipment and other assets | - | 3 | - |
| Net cash used in investing activities from continuing operations | (195) | (379) | (267) |
| Net cash used in investing activities from discontinued operations | - | - | - |
| Net cash used in investing activities | (195) | (379) | (267) |
| Net change in related party financial receivables and payables | (13) | - | - |
| Proceeds from issuance of long-term debt | 1 | - | - |
| Repayments of long-term debt | (8) | (302) | (13) |
| Change in cash deposited as collateral | - | - | (1) |
| Proceeds from issuance of ordinary shares | 1 | 2 | 1 |
| Net cash used in financing activities from continuing operations | (19) | (300) | (13) |
| Net cash used in financing activities from discontinued operations | - | - | - |
| Net cash used in financing activities | (19) | (300) | (13) |
| Net change in cash and cash equivalents | 95 | (36) | (116) |
| Effect of foreign exchange rate changes on cash and cash equivalents | - | (3) | 1 |
| Cash and cash equivalents at beginning of period | 732 | 771 | 860 |
| Cash and cash equivalents at end of period | 827 | 732 | 745 |
For the Business and Trade Press: INFXX201902-33e
Bernd Hops (Headquarters) Sian Cummings (Americas) Chi Kang David Ong (Asia-Pacific) Zhu Lin (Greater China) Yoko Sasaki (Japan)
Tel.: +49 89 234 23888 Tel.: +1 310 252 7148 Tel.: +65 6876 3070 Tel.: +85 2161019199 Tel.: +81 3 5745 7340
[email protected] [email protected] [email protected] [email protected] [email protected]
Investor Relations: Tel.: +49 89 234 26655 [email protected]
This press release is a Quarterly Group Statement according the Frankfurt Stock Exchange's stock exchange regulation 53 paragraph.
This press release contains forward-looking statements about the business, financial condition and earnings performance of the Infineon Group.
These statements are based on assumptions and projections resting upon currently available information and present estimates. They are subject to a multitude of uncertainties and risks. Actual business development may therefore differ materially from what has been expected.
Beyond disclosure requirements stipulated by law, Infineon does not undertake any obligation to update forwardlooking statements.
Due to rounding, numbers presented throughout this press release and other reports may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.
For the Business and Trade Press: INFXX201902-33e
Bernd Hops (Headquarters) Sian Cummings (Americas) Chi Kang David Ong (Asia-Pacific) Zhu Lin (Greater China) Yoko Sasaki (Japan)
Tel.: +49 89 234 23888 Tel.: +1 310 252 7148 Tel.: +65 6876 3070 Tel.: +85 2161019199 Tel.: +81 3 5745 7340
[email protected] [email protected] [email protected] [email protected] [email protected]
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