Investor Presentation • Sep 22, 2010
Investor Presentation
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Peter Bauer CEO
Sale of Infineon Wireless Solutions Business
Infineon's New Focus Areas and Outlook
Infineon sells Wireless Solutions business (WLS) for approximately US\$ 1.4 bn to Intel.
WLS to become a standalone business within Intel.
About 3,400 WLS employees to transfer.
Sale to be finalized with closing – presumably in Q1 CY 2011. WLS reported as discontinued operations from Q4 FY10 onwards.
The cash inflow of USD 1.4bn will occur only at closing which is expected for Q1 CY 2011.
Shareholders should participate appropriately in the success of the company, net income and free cash flow permitting; dividends and share buy-backs as possible means.
Use of proceeds: superior value generation for shareholders possible if used within the company.
Uses of cash: Organically: growth of low cost manufacturing capacity, in particular in Kulim. Invest in 300mm power thin-wafer manufacturing ("Power300"). Anorganically: solid balance sheet provides flexibility to use opportunities to reinforce ATV, IMM and CCS. Corporate strategy includes pursuit of M&A options that ensure value accretion for shareholders, provide a strategic fit and fit target margin model.
This will require capacity investments, including additional cleanroom space, within the next 2-3 years. As a result, the invest-to-sales ratio will increase to a low teens percentage.
To further improve our leading position in cost and performance in the area of power semiconductors we will invest in 300mm power manufacturing. The higher productivity of 300mm will also lead to lower invest to sales ratios.
Copyright © Infineon Technologies 2010. All rights reserved. 22 September 2010 Page 6
Sale of Infineon Wireless Solutions Business
Infineon's Strategy, Focus Areas and Outlook
Sum of corporate measures turned FY 2007 operating loss into > 10% Segment Result margin in FY 2010, despite ~40% lower revenues.
Source: Strategy Analytics, May 2010
August 2010
July 2009
Automotive
Industrial & Multimarket
Chip Card & Security
Introducing the new focus area "Mobility" reflects:
| Electrification of powertrain |
|---|
| Best-in-class powertrain products System and application know-how Optimized hybrid and electric drivetrain products Energy management concepts |
| Replacement of relais and mechanical functions by electrification |
22 September 2010
FY00 to FY07: EBIT margin based on US-GAAP. FY08 to FY10: Segment Result margin based on IFRS. Qimonda deconsolidated in FY08. WLC (Lantiq) deconsolidated in FY09. Figures for FY10 based on consensus numbers.
| FY 2009 | Q3 FY10 | Target excl. WLS |
|
|---|---|---|---|
| Revenues | EUR 3.03bn | EUR 1.209bn | > EUR 4.0bn |
| Gross Margin | 21.8% | 34.7% | low 40ies % |
| R&D-to-sales | 15.5% | 12.2% | low to mid teens % |
| SG&A-to-sales | 13.0% | 10.0% | low teens % |
| Segment Result margin |
-5.5% | 13.5% | high teens % |
| ATV, IMM Remain Very Strong WLS Booming |
|||||
|---|---|---|---|---|---|
| Outlook Q4 FY10* (compared to Q3 FY10) |
Outlook FY 2010* (compared to FY 2009) |
||||
| Infineon Revenue |
Revenue to increase by approx. 15%. (compared to "increase by a high single-digit percentage" before) |
Revenue to increase by approx. 50%. (compared to "mid to high 40's percentage" before) |
|||
| Combined Segment Result Margin |
Margin to reach 18% to 20%. (compared to "increase by one to two %-points" before) |
Margin to reach 13% to 14%. (compared to "low teens percentage" before) |
* Guidance includes WLS business.
Portfolio capable of outgrowing predicted semiconductor market growth of ~10%.
Target operating model of gross margin in the low 40ies % and high teens % Segment Result margin at ~EUR 4bn of sales.
Corporate Vice President Corporate Development & Investor Relations +49 89 234-26153
Joachim Binder Senior Director, Investor Relations +49 89 234-25649 [email protected]
Aleksandar Josic Manager, Investor Relations +49 89 234-83045 [email protected]
This presentation was prepared as of September 20, 2010 and is current only as of that date.
This presentation 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 growth targets, the resolution of Qimonda's insolvency proceedings and the liabilities we may face as a result of Qimonda's insolvency, the potential disposition or closure of our ALTIS joint venture, the benefits of research and development alliances and activities, our planned levels of future investment, the introduction of new technology at our facilities, our continuing ability to offer commercially viable products, and our expected or projected future results.
These forward-looking statements are subject to a number of uncertainties, such as broader economic developments, including the sustainability of recent improvements in the market environment; 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 continued availability of adequate funds; any mergers, acquisitions or dispositions we may undertake; the outcome of antitrust investigations and litigation matters; and the resolution of Qimonda's insolvency proceedings; as well as the other factors mentioned in this presentation and those described in the "Risk Factors" section of our most recent annual report on Form 20-F on file with the U.S. Securities and Exchange Commission.
As a result, Infineon's actual results could differ materially from those contained in or suggested by these forward-looking statements. You are cautioned not to place undue reliance on these forwardlooking 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.
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