Interim / Quarterly Report • Aug 4, 2011
Interim / Quarterly Report
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1 January – 30 June
| in 1 million | Q2 / 2011 | Q2 / 2010 | Change | 6M / 2011 | 6M / 2010 | Change |
|---|---|---|---|---|---|---|
| Continuing operations | ||||||
| Order entry | 32.1 | 50.6 | -36.6 % | 80.4 | 82.9 | -3.0 % |
| Order backlog as of 06/ 30 | -- | -- | -- | 109.8 | 89.9 | 22.1 % |
| Total sales | 52.7 | 37.7 | 39.8 % | 84.7 | 59.6 | 42.1 % |
| Sales margin | 11.2 % | 4.8 % | 6.4 %-points | 9.8% | 1.8 % | 8.0 %-points |
| Gross profit | 20.2 | 13.3 | 51.9 % | 33.9 | 20.1 | 68.7 % |
| Gross margin | 38.3 % | 35.3 % | 3.0 %-points | 40.0% | 33.7 % | 6.3 %-points |
| Cost of sales | 32.5 | 24.4 | 33.2 % | 50.8 | 39.5 | 28.6 % |
| R&D costs | 3.3 | 1.8 | 83.3 % | 5.6 | 3.3 | 69.7 % |
| Continuing operations | ||||||
| EBITDA | 9.8 | 5.2 | 88.5 % | 13.7 | 6.8 | 101.5 % |
| EBITDA margin | 18.6 % | 13.8 % | 4.8 %-points | 16.2% | 11.4 % | 4.8 %-points |
| EBIT | 8.1 | 3.5 | 131.4 % | 10.6 | 3.5 | 202.9 % |
| EBIT margin | 15.4 % | 9.3 % | 6.1%-points | 12.5% | 5.9 % | 6.6%-points |
| Earnings after tax | 5.9 | 1.8 | 227.8 % | 8.3 | 1.1 | >250.0 % |
| Earnings per share (in 1) basic | 0.31 | 0.10 | 210.0 % | 0.44 | 0.06 | >250.0 % |
| Continuing and discontinued operations | ||||||
| Earnings after tax | 5.9 | 1.6 | >250.0 % | 8.3 | 0.5 | >250.0 % |
| Earnings per share (in 1) basic | 0.31 | 0.09 | >250.0 % | 0.44 | 0.03 | >250.0 % |
| Balance sheet and cash flow | ||||||
| Equity | -- | -- | -- | 114.2 | 96.6 | 18.2 % |
| Equity ratio | -- | -- | -- | 59.6% | 59.6 % | 0.0 %-points |
| Return on equity | 5.2 % | 1.7 % | 3.5%-points | 7.3% | 0.5 % | 6.8%-points |
| Balance sheet total | -- | -- | -- | 191.7 | 162.1 | 18.3 % |
| Net cash | -- | -- | -- | 35.5 | 25.6 | 38.7 % |
| Free cash flow(1) | -0.3 | 7.3 | -104.1 % | -2.5 | 6.0 | -141.7 % |
| Further key figures | ||||||
| Investments (2) | 1.2 | 0.6 | 100.0 % | 2.5 | 1.2 | 108.3 % |
| Investment ratio | 2.3 % | 1.6 % | 0.7 %-points | 3.0% | 2.0 % | 1.0 %-points |
| Depreciation | 1.6 | 1.6 | 0.0 % | 3.1 | 3.3 | -6.1 % |
| Employees as of 06/ 30 | -- | -- | -- | 632 | 581 | 8.8 % |
Before consideration of purchase or sale of available-for-sale securities and before consideration of extraordinary items from purchase or sale of subsidiaries
(2) Before consideration of the HamaTech acquisition and the purchase of the production site in Sternenfels
4 Foreword by the Management Board
7 Highlights 2011
Overall, the first half of the 2011 fiscal year continued to be significantly influenced by the relocation and integration of the Bonder activities at the Sternenfels site in Germany. As a result of this consolidation, the number of SUSS MicroTec production sites was reduced from four to two. In addition, the move of the North American service and sales organization and applications center from Waterbury, VT, to Silicon Valley in California was completed. But even with these relocation activities, we did not neglect the foundation of our growth and success, namely innovation and product development.
The basis for the profitable development of our Company is a strong market position. We have become the market leader in three out of four product areas. This was made possible by continuous innovation and a product portfolio which perfectly conforms to the requirements of international customers. An example for this is our MA100e Gen2 from the Mask Aligner range, which has gained market leadership in LED exposure. For advanced packaging applications, the Cluster ASC300 Gen2 Coater /Developer is the preferred equipment for coating and developing photo resist layers. On the Substrate Bonder side, the XBC 300 is the only Bonder production equipment to support a variety of temporary bonding/debonding processes for 3D integration.
We also entered into another important cooperative agreement in the first half of the year: a strategic collaboration with the NanoScale Science & Technology Facility (CNF) of Cornell University, which is located in North America. As part of the cooperation, Cornell staff will perform research on already existing as well as new lithography systems from SUSS MicroTec, including innovative Mask Aligner toolkits and the Gamma-series Spray Coater.
There are many encouraging developments in the capital markets to report in the first half of the year. March saw SUSS MicroTec return to the TecDAX, the technology index of the Deutsche Börse (German Stock Exchange), after five years. In addition, towards the end of the quarter the share resumed an upward trajectory simultaneously characterized by high trading volumes, after a very volatile six-month period.
The second quarter of 2011 went well for our Company from a financial point of view as well. However, the high demand for SUSS MicroTec equipment, which was particularly evident in the first quarter of 2011 and the three preceding quarters, subsided somewhat in the second quarter, as previously announced. Thus order entry amounted to 1 32.1 million in the months from April to June 2011, against 1 50.6 million in the same period of the previous year. By contrast, sales developed very positively in the second quarter. They totaled 1 52.7 million, surpassing the amount in the previous year's quarter by approximately 40% (Q2 2010: 1 37.7 million).
Considering the entire first half of the year, there was scarcely any change in order entry. In the first half of 2010 order entry was 1 82.9 million and in the first half of 2011 it was 1 80.4 million. Sales in the first half of the year, totaling 1 84.7 million, climbed significantly by more than 42% from the previous year's level (H1 2010: 1 59.6 million). The order backlog as of June 30, 2011 thus amounted to 1 109.8 million (June 30, 2010: 1 89.9 million).
left: Michael Knopp CFO
right: Frank Averdung CEO
The gross profit margin developed very positively for SUSS MicroTec Group, rising to 40.0% (H1 2010: 33.7%). It should be taken into account here that in the second quarter of 2010 low-margin Bonder systems were delivered for strategic reasons, putting pressure on the gross profit margin.
Earnings before interest and taxes (EBIT) of 1 10.6 million were much higher than the 1 3.5 million of the previous year. EBIT in the first half of 2010 was influenced by various extraordinary effects, which had an overall positive impact of 1 1.5 million. By contrast, EBIT in the first half of 2011 was burdened by approximately 1 1.3 million of restructuring costs for the relocation of Bonder activities, resulting in adjusted EBIT of 1 11.9 million. Earnings after taxes (EAT) amounted to 1 8.3 million, compared with 1 1.1 million in the previous year. Another significant increase in basic earnings per share (EPS) was achieved, amounting to 1 0.44 (H1 2010: 1 0.06).
Free cash flow before consideration of securities and extraordinary effects from M&A activities as of the end of the first half came to 1 -2.5 million, after 1 6.0 million in the corresponding period of the previous year. As of June 30, 2011, the SUSS MicroTec Group therefore had cash and interest-bearing securities of 1 50.6 million (06/30/2010: 1 37.1 million). The net cash position increased in comparison to the end of June 2010 1 25.6 million to 1 35.5 million as of the end of the quarter.
We reiterate our forecast that in the current fiscal year the Company will achieve sales of over 1 170 million as well as an improved EBIT compared to the previous year and an EBIT margin between 10% and 15%, and a positive free cash flow. For the third quarter we expect an order intake of 1 30 – 40 million and a sales level of 1 35 - 40 million.
Garching, Germany, August 2011
Frank Averdung Michael Knopp Chief Executive Officer Chief Financial Officer
In the second quarter of the current fiscal year – to be precise, in April 2011 – the relocation of the Substrate Bonder division from Waterbury, Vermont, USA, to Sternenfels, Germany, was successfully completed. The goal of consolidating the Substrate Bonder, Coater /Developer, and Photomask Equipment product lines was to leverage synergies in the area of research and development, manufacturing, and procurement as well as to simplify the corporate structure. With the consolidation, the number of SUSS MicroTec production sites was reduced from four in 2010 to two highly efficient manufacturing centers in 2011. In addition, the move of the North American service and sales organization and applications center from Waterbury to Silicon Valley in California was completed. With this new, lean corporate structure, we are hoping not only for cost savings through synergies, but also for new impetus in the area of research and development through the closer cooperation of R&D engineers.
Besides the activities at the Sternenfels facility, the sales and service structures have been evaluated and adjusted to accomodate future demands. The US sales and service activities have been relocated from Vermont to Silicon Valley, California. In the second quarter the new North American application and demonstration center started its operations.
Since May 6, 2011, SMT Inc. has been integrated in the SUSS MicroTec SAP system. The replacement of the previously used ERP system represents an additional integration of business processes at SUSS MicroTec. The activation of the SAP modules for logistics, finance, and controlling means comprehensive support for business processes within SMT Inc. as well as in exchange with other organizational units of the Company. It represents an additional step in optimizing business processes. For example, in the future the complex tax system in the US, which consists of various combinations of local and federal taxes, will be handled by linking to an external SAP tax software module. Customer and sales invoice data will be sent to the external tax software and reintegrated in SAP following processing.
Our shareholders approved all of the resolution proposals presented by the Management Board and the Supervisory Board at the ordinary Shareholders' Meeting on June 21, 2011. In total, approximately 100 shareholders, shareholder and bank representatives, and guests joined the Company at this year's meeting in Munich. Around 23% of the Company's equity capital was present.
Uncertainty about the outcome of the debt crisis in Greece unsettled and weighed on the capital markets in May and June. Since the approval of a comprehensive austerity package in Greece, enabling additional assistance from the European Union, the situation has eased somewhat for the moment. Nevertheless, many securities have endured significant price fluctuations or even severe price declines. 150
The SUSS MicroTec share began the 2011 fiscal year at a price of 1 9.44. The share price rally that began as early as fall 2010 continued with unabated speed in the first two months of the 2011 fiscal year. This was followed by in part very severe price volatility in March, which settled down somewhat by the end of the month. However, over the course of the second quarter the share had to face sharp price declines. Along with the tense debt situation in Greece and actually throughout the Eurozone, one reason may have been overall concerns about a change in trends in the semiconductor cycle beginning in 2012. Unfortunately, the positive figures from the first quarter, which were published at
the beginning of May, could not stop this downward trend. The SUSS MicroTec share had to endure sharp price declines, which at times saw its value fall below the level at the beginning of the year.
However, at the end of June a significant rebound in the markets was evident. A reason for this could have been the approval of comprehensive austerity packages in Greece and Italy, which coincided with a general calming of the capital markets. In addition, the SUSS MicroTec AG Management Board confirmed the outlook for the first half of the year and the full year of 2011 at the Shareholders' Meeting on June 21, 2011. After experiencing extreme volatility in the first six months, our share finally closed the first half of 2011 at a price of 1 10.02, representing a gain of 10% since the end of 2010. The TecDAX and the Prime IG Semiconductor ended the first half of the year with respective gains of about 5%.
The average daily trading volume of SUSS MicroTec shares on all German stock exchanges increased in the first half of 2011 to 264,214 shares (H1 2010: average daily trading volume of 105,375 shares).
| Aktien | Optionen | |
|---|---|---|
| Management Board |
||
| Frank Averdung | 77,500 | - |
| Michael Knopp | 35,000 | 41,400 |
| Supervisor y Board |
||
| Dr. Stefan Reineck | 9,600 | 40,000 |
| Jan Teichert | 0 | 0 |
| Gerhard Pegam | 0 | 0 |
On June 21, 2011, the ordinary Shareholders' Meeting of SUSS MicroTec AG was held at the Haus der Bayerischen Wirtschaft (House of the Bavarian Economy) in Munich. The shareholders approved all of the resolution proposals presented by the Management Board and the Supervisory Board at the Shareholders' Meeting. In total, more than 100 shareholders, shareholder and bank representatives, and guests accepted the Company's invitation to the event in Munich. As a result, attendance was greater than in the previous year. This is another sign of the heightened interest in the SUSS MicroTec share. Approximately 23% of the equity capital of the Company was thus present at the Shareholders' Meeting.
In addition to discharging the Management Board and Supervisory Board from liability for the 2010 fiscal year and appointing auditors for the individual and consolidated financial statements, an amendment of the articles of incorporation reflecting the planned conversion to registered shares was on the agenda. In addition, a resolution was adopted to create new approved capital of 1 6,500,000.00 with authorization for a partial subscription rights exclusion and a corresponding change in the articles of incorporation. An additional resolution was adopted for a profit and loss transfer agreement between SUSS MicroTec AG as the controlling company and SUSS MicroTec Lithography GmbH as the subordinate company. Finally, a special election to the Supervisory Board was held. Mr. Gerhard Pegam, CEO of EPCOS AG, was elected as the successor to Mr. Sebastian Reppegather.
Highlights
of SUSS MicroTec AG
As previously announced in the outlook for the first half and second quarter of 2011, the high order entry of recent quarters has weakened significantly. In the second quarter of 2011, orders amounting to 1 32.1 million were recorded, which corresponded to a decline of 37% from the previous year (Q2 2010: 1 50.6 million). In contrast, sales rose significantly from the previous year's quarter to 1 52.7 million (Q2 2010: 1 37.7 million).
Considering the first half of the year, there was scarcely any change in order entry. In the first half of 2010 order entry was 1 82.9 million and in the first half of 2011 it was 1 80.4 million. Sales in the first half of the year climbed significantly by more than 42% to 1 84.7 million compared with the previous year's level (H1 2010: 1 59.6 million). The order backlog as of June 30, 2011 thus amounted to 1 109.8 million (June 30, 2010: 1 89.9 million).
The gross profit margin developed very positively for SUSS MicroTec Group, rising to 40.0% (H1 2010: 33.7%). It should be taken into account here that in the second quarter of 2010 low-margin Bonder systems were delivered for strategic reasons, putting pressure on the gross profit margin.
Earnings before interest and taxes (EBIT) of 1 10.6 million were much higher than the 1 3.5 million of the previous year. EBIT in the first half of 2010 was influenced by various extraordinary effects, which had an overall positive impact of 1 1.5 million. By contrast, EBIT in the first half of 2011 was burdened by 1 1.3 million restructuring costs for the relocation of Bonder activities, resulting in an adjusted EBIT of 1 11.9 million. Earnings after taxes (EAT) amounted to 1 8.3 million, compared with 1 1.1 million in the previous year. Another significant increase in basic earnings per share (EPS) was achieved, amounting to 1 0.44 (H1 2010: 1 0.06).
Free cash flow before consideration of securities and extraordinary effects from M&A activities as of the end of the first half came to 1 -2.5 million, after 1 6.0 million in the corresponding period of the previous year. As of June 30, 2011, the SUSS MicroTec Group therefore had cash and interest-bearing securities of 1 50.6 million (06/30/2010: 1 37.1 million). The net cash position rose from 1 25.6 million as of June 30, 2010 to 1 35.5 million at the end of the quarter.
The regional distribution of orders displays the following picture: While the regions of Europe and North America endured declines of 40% and 37%, respectively, it was possible to increase order entry in the regions of Japan and the Rest of Asia. However, overall a slight decline of 3% was recorded from the same period of the previous year.
Sales demonstrated significant growth in all regions. While the region North America achieved an increase of more than 50%, Europe was able to record growth of 38%. Japan grew by almost 70%, and sales increased in the Rest of Asia by more than 30% from the same period of the previous year.
Order Entry by Region in 3 million
The Lithography division includes the development, manufacture, and sale of the Mask Aligner, Developer, and Coater product lines. These product lines are manufactured and produced in Germany at the locations in Garching near Munich and since the beginning of 2010 in Sternenfels.
The Lithography division recorded a slight rise in both order entry and sales in the first six months of the 2011 fiscal year. Order entry of 1 56.3 million was approximately 3% higher than its total of 1 54.9 million a year earlier. Division sales in the first half year of 2011 amounted to 1 52.5 million after 1 38.5 million in the previous year. The division earnings improved from 1 7.0 million to 1 13.1 million.
The Substrate Bonder division comprises the development, production, and sale of the Substrate (Wafer) Bonder product line and, following the relocation of production activities, is now housed at the Sternenfels site in Germany. Production at the new site commenced as early as the fourth quarter of the 2010 fiscal year.
In the first half of the new fiscal year, the Substrate Bonder division recorded an 11% decline in order entry from the previous year. Sales also declined from the corresponding period of the previous year. While order entry sank to 1 9.3 million (H1 2010: 1 10.5 million), sales fell by 36% from 1 12.1 million to 1 7.7 million. Division earnings deteriorated by mid-year to 1 -5.0 million (H1 2010: 1 -4.1 million).
The Photomask Equipment division includes the development, manufacture, and sale of the HMx, ASx, and MaskTrack product lines of HamaTech APE GmbH & Co. KG, which was acquired on February 15, 2010. The development and production of specialized systems for the cleaning and processing of photomasks for the semiconductor industry are also conducted at the Sternenfels site.
The Photomask Equipment division recorded order entry of 1 11.4 million in the first half of 2011 as well as division sales of 1 20.7 million (H1 2010: 1 6.1 million). It should be considered that in the Q1 2010 period of 2010, the Photomask Equipment division was consolidated for only one month due to the acquisition on February 15, 2010. Division earnings in the first half showed a profit of 1 4.3 million (H1 2010: 1 -0.2 million).
The Others division comprises the Mask business in Palo Alto, California (USA) that caters to the semiconductor industry and the Micro-optics activities at the Neuchâtel, Switzerland location as well as the C4NP business as well as costs for central Group functions that generally cannot be attributed to the main divisions.
While division sales of 1 3.8 million increased from the previous year (+31%), order entry declined slightly by 3% to 1 3.4 million (H1 2010: 1 3.5 million). Division earnings of 1 -1.9 million fell short of the 1 0.7 million in the previous year. However, the first half of the previous year included a negative goodwill of 1 1.4 million, which arose from the Hama Tech acquisition.
Due to the high order backlog at the beginning of the year, the SUSS MicroTec Group was able to achieve record sales in the second quarter of 2011: it exceeded the threshold of 1 50 million and reached quarterly sales of 1 52.6 million. Sales for the first half of 2011 totaled 1 84.7 million, significantly above the 1 80 million planned for this half of the year. It was possible to record sales growth of approximately 42% compared with the first half of 2010.
EBIT in the first half of 2011 amounted to 1 10.6 million (continuing operations). Restructuring expenses of 1 1.3 million were accrued in the first half of 2011 in connection with the relocation of the Substrate Bonder division and the North American sales and service organization from Waterbury, Vermont (USA), to Sternenfels and California. EBIT adjusted for these effects amounted to 1 11.9 million, which corresponds to an EBIT margin of 14.0%. Compared with the first half of 2010, EBIT adjusted for extraordinary effects increased by approximately 1 aaa million or 9.9 million or 495%
As in previous quarters, the largest sales driver was the Lithography division, which produced sales of 1 52.5 million and an EBIT of 1 13.1 million. In the first half of the previous fiscal year, the SUSS MicroTec Group's Lithography division generated sales of 1 38.5 million and an EBIT of 1 7.0 million.
Sales in the Substrate Bonder division declined as a result of the relocation activities from Vermont (USA) to Sternenfels and California. In the first six months of the current fiscal year, sales came to 1 7.7 million (compared with 1 12.1 million in the first half of 2010). The result in the Substrate Bonder division was impaired by high write-downs on capitalized development costs and high development costs associated with thin wafer handling. In addition, the result reflects restructuring expenses related to the relocation of the Substrate Bonder division of 1 1.3 million (after 1 0.9 million in the first half of 2010). As a result of these high expenses and lower sales, the EBIT deteriorated further and amounted to 1 -5.0 million (after 1 -4.1 million in the corresponding period of the previous year).
Sales development in the Photomask Equipment division was very encouraging. Sales generated in the first half of 2011 amounted to approximately 1 20.7 million. In 2010, the Photomask Equipment division contributed 1 6.1 million to Group sales in the months from March (time of initial consolidation) to June. The EBIT of the Photomask Equipment division totaled 1 4.3 million in the first half of 2011 (March to June 2010: 1 -0.2 million). This shows that last year's acquisition of HamaTech APE GmbH & Co. KG has clearly paid off.
The cost of sales included write-downs on capitalized development costs of 1 1.2 million. As such, writedowns on capitalized development costs were approximately 1 1.1 million higher than new capitalizations, which totaled only 1 0.1 million in the first six months of the current fiscal year. Similarly, in the first half of 2010 only 1 0.1 million of capitalizations were carried out. As a result, write-downs also exceeded new capitalizations by more than 1 1 million in the previous year.
The gross profit increased compared with the previous year's period by 1 13.8 million, amounting to 1 33.9 million in the first half of 2011. The gross profit margin improved from 33.7% in the same period of the previous year to 40.0%. The increase in the gross profit margin in the first half of 2011 was partially attributable to the positive development in the Lithography division, which could report a much improved gross profit margin as a result of several high-margin orders in the Aligner area. In addition, the average gross profit margin in the Photomask Equipment division, which also improved significantly compared with the first half of 2010, developed very favorably. By contrast, the gross profit margin in the Substrate Bonder division was impaired by restructuring expenses and high write-downs for capitalized development costs.
It was possible to keep administrative and selling costs at a low level due to the systematic ongoing implementation of the cost-saving program. Overall, administrative and selling costs of 1 17.4 million were incurred, representing an expense ratio of 21% relative to sales generated. In the same period of the previous year, corresponding costs of 1 16.4 million were recorded, representing approximately 28% of sales generated.
Research and development costs totaled 1 5.6 million in the first half of 2011, compared with 1 3.3 million in the same period of the previous year. The increase demonstrated the intensified activities of SUSS MicroTec in this area and involved several projects, primarily in the Lithography and Substrate Bonder divisions.
Other operating income of 1 2.3 million consisted primarily of foreign currency gains. In the same period in the previous year, other operating income of 1 5.5 million included – in addition to foreign currency gains and other income – the recognition in profit or loss of negative goodwill of 1 2.7 million, which resulted from the initial consolidation of HamaTech APE GmbH & Co. KG and the retroactive purchase price adjustment. Other operating expenses of 1 2.7 million primarily comprised foreign currency losses. Also in the first half of 2010, other operating expenses of 1 2.4 million resulted primarily from foreign currency losses.
The financial result in the first half of 2011 came to 1 0.7 million (compared with 1 -0.5 million in the previous year's period) and included accounting profits of 1 0.8 million resulting from the sale of Cascade shares in the first quarter of 2011. The balance of interest income and expense amounted to approximately 1 -0.1 million.
In the first half of 2011, a tax expense of 1 2.9 million was recognized. This resulted in a consolidated tax rate that significantly exceeded the average consolidated tax rate of approximately 28%. This development is essentially due to the fact that it was not possible to recognize deferred tax assets for the losses incurred by foreign subsidiaries.
In the first half of 2011, SUSS MicroTec AG, Garching, and SUSS MicroTec Lithography GmbH, Garching, agreed to a profit and loss transfer agreement retroactive to January 1, 2011. According to the agreement, SUSS MicroTec Lithography GmbH will transfer its accounting profit to SUSS MicroTec AG beginning in the 2011 fiscal year. This arrangement will make use of corporate income tax and trade tax loss carryforwards available at SUSS MicroTec AG.
In the first half of 2011, the SUSS MicroTec Group succeeded again in slightly expanding its net cash position – the balance from cash and cash equivalents, interest-bearing securities, and financial liabilities – to 1 35.5 million. Compared with December 31, 2010, this meant an improvement of 1 0.9 million.
Before consideration of securities purchases and sales, free cash flow of 1 -2.5 million was negative in the first half of the year. The reasons for this were low cash flow from operating activities and negative cash flow from investing activities. In the first half of 2010, free cash flow was distinctly positive: it totaled 1 6.0 million, adjusted for extraordinary effects (the acquisition of HamaTech, including the land and buildings at Sternenfels and the sale of the Test Systems business) and before consideration of securities purchases.
Cash flow from operating activities was restrained primarily by a Group-wide increase in inventory, which reflected the still high order backlog at midyear. The purchase of inventories resulted in the outflow of approximately 1 15 million in cash and cash equivalents. This was offset by a build-up in other liabilities and provisions of approximately 1 4 million, which resulted primarily from an increase in customer down payments. The conclusion of the profit and loss transfer agreement between SUSS MicroTec AG and SUSS MicroTec Lithography GmbH also had a positive impact. It enables the Company to avoid tax payments of approximately 1 1.6 million (using the available loss carryforwards at SUSS MicroTec AG). Despite the high profit, however, it was only possible to achieve overall cash flow from operating activities of about zero.
Cash flow from investing activities totaled 1 -2.5 million, excluding investments in securities. The largest capital expenditure items in the first half of 2011 involved various renovations and expansions of the Sternenfels facility, the acquisition of machinery and tools, and the purchase of licenses. In addition, a cleanroom was constructed in the newly leased building in California.
Cash flow from financing activities reflected proceeds from the exercise of stock options. This was offset (in total) by a reduction in bank debt and other financial liabilities, resulting in overall cash flow from financing activities of nearly zero.
Besides cash and cash equivalents of 1 14.4 million (12/31/2010: 1 36.5 million), the Group had credit and guarantee lines of approximately 1 13.7 million as of the half-year reporting date, which were predominantly secured in line with banking practice and were not bound to financial covenants. The utilization of these credit lines amounted to 1 7.6 million as of the half-year reporting date and primarily related to down payment guarantees for customer down payments. Thus, the Group has sufficient funds at its disposal to finance the operational business.
Noncurrent assets totaled 1 41.4 million as of the half-year reporting date and were thus 1 2.9 million lower than on 12/31/2010. Intangible assets, which fell in value due to amortization by approximately 1 2.0 million, accounted for most of this decline. Capital expenditure of approximately 1 0.5 million in this area had an offsetting effect. In 2011 only slight exchange rate effects were recorded in the area of intangible assets, since most of these assets are capitalized in euros. Tangible assets increased by approximately 1 0.4 million as a result of various capital expenditure. Deferred tax assets were reduced primarily as a result of the reversal of a portion of the deferred tax assets related to the loss carryforwards of SUSS MicroTec AG since these deferred tax assets were offset against the earnings of SUSS MicroTec Lithography GmbH, consistent with the profit and loss transfer agreement.
Current assets rose by 1 13.2 million from 1 137.2 million (12/31/2010) to 1 150.4 million as of the half-year reporting date. This was largely due to an inventory increase of 1 14.2 million to 1 78.6 million. Materials and supplies, which rose by approximately 1 6.3 million compared with 12/31/2010, accounted for most of this increase. The build-up in these inventories corresponds to the still very high order backlog as of mid-year. Inventories of tools, which had already been delivered to customers but for which final acceptance was still outstanding, similarly climbed by approximately 1 5.9 million compared with 12/31/2010. The revaluation of foreign currency-denominated inventories due to changes in exchange rates had an offsetting effect, however, and led to an overall write-down of Group inventories by approximately 1 1.4 million.
Trade receivables also showed a slight decline of 1 15.7 million (12/31/2010) to 1 14.7 million. The decline was primarily attributable to changes in exchange rates for foreign currency receivables, which led to an impairment of 1 0.8 million.
The SUSS MicroTec Group's portfolio of securities increased in the first six months of the current fiscal year from 1 16.0 million to 1 36.2 million. In the past half year, securities were acquired for approximately 1 24.9 million with available cash and cash equivalents. Securities valued at approximately 1 2.0 million reached their maturity date in this half of the year and were redeemed. The securities recognized consist of corporate and government bonds as well as commercial papers. Also in the first quarter of 2011, SUSS MicroTec AG sold 747,530 shares of Cascade Microtech Inc., Beaverton, Oregon (USA), which were recorded at 1 2.4 million as of 12/31/2010.
Highlights
The shareholders' equity of the SUSS MicroTec Group has grown since 12/31/2010 by 1 7.8 million to 1 114.2 million. The equity ratio rose slightly from 58.6% to 59.6%.
Noncurrent liabilities declined by 1 1.0 million from 1 20.8 million to 1 19.8 million. The decline resulted primarily from slightly lower deferred tax liabilities as well as less noncurrent financial debt.
In the first half of 2011, current liabilities grew by 1 3.3 million to 1 57.7 million. The level of down payments, which amounted to approximately 1 27.7 million as of June 30, 2011 (compared with 1 23.5 million as of 12/31/2010), accounted for most of this increase. The change in exchange rates led to an impairment of 1 0.4 million for down payments denominated in foreign currencies.
Trade payables declined in the first half of 2011 by approximately 1 0.3 million. This decline, which led to an impairment of 1 0.4 million, was attributable to the revaluation of foreign currency-denominated liabilities due to changes in exchange rates.
Current provisions declined by 1 1.0 million to 1 3.7 million. The decline was primarily attributable to utilizing most of the provisions for restructuring, which fell from 1 1.5 million as of 12/31/2010 to 1 0.4 million currently.
The tax liabilities include tax provisions set up for individual Group companies on the basis of the positive half-year result in 2011.
As of 06/30/2011, the Group had 632 employees within the individual companies (06/30/2010: 581 employees). The increase was attributable in part to the relocation of the Substrate Bonder division from Waterbury to Sternenfels. SUSS MicroTec Lithography GmbH hired a total of 45 employees for the new site in the last 12 months, predominantly in the areas of research and development and production. Conversely, the number of employees at SMT Inc. dropped significantly due to the closure of the Waterbury site and the relocation of the sales organization to California. In July, the number of employees at SMT Inc. will decline further, as the remaining employees from Waterbury leave the Company as of June 30, 2011. Due to the growing business in Asia, several employees were hired in the Asian sales organizations in the area of sales and service.
Global activities in the field of high technology yield general and current risks for the Company. The Management Board has taken appropriate measures for the purpose of monitoring risks in order to identify developments that may threaten the continued existence of the SUSS MicroTec Group early on. The risk management system has long been a component of corporate management for the purpose of recognizing and controlling risks, and for meeting legal requirements.
In risk monitoring, a fundamental distinction is made between general business and industry risks, operating risks, and financial market risks.
The Company identifies general business risks as underlying political and economic conditions, cyclical market fluctuations and developments, market positioning, and dependence on the expertise of individuals. These risks are described in the Company's most recent Annual Report in the corresponding Risk Report section.
On March 11, 2011, Japan was hit by a severe earthquake and a tsunami. In the 2010 Annual Report, we explained that SUSS MicroTec would generate approximately 5% to 7% of its planned total sales with Japanese customers in the 2011 fiscal year and that to this extent the events in Japan could have a negative effect on achieving the goals for 2011 (sales, order entry). In the first half of 2011, we could not detect any reductions in order entry or sales with Japanese customers. Therefore, we estimate the risk of not achieving our goals for the second half of 2011 as a result of the earthquake, as quite minimal.
There were no substantial changes to the risks and opportunities outlined in the most recent Annual Report during the first half of the current fiscal year.
SUSS MicroTec regards operating risks as those which have an impact on the Group's assets and earnings position as a result of potentially necessary writedowns in the consolidated statement of financial position due to the difficult economic environment. Pricing pressure and legal risks, in particular liability risks, represent additional operating risks. Each of these risk types was outlined in detail in the most recent Annual Report.
In the last Annual Report, several risks were discussed which SUSS MicroTec considered possible to occur in connection with the relocation of the Substrate Bonder division and the North American sales and service organization from Waterbury, Vermont (USA), to Sternenfels and California. The relocation to both new sites has now been completed. The risk scenarios still thought possible at the beginning of the year have not occurred.
Highlights
The relocation of the research and development division, production, and product management to Sternenfels was completed in April 2011. During the relocation process, many employees from Germany temporarily worked at the Waterbury site in order to acquire as much of the available knowledge and experience as possible. SUSS MicroTec also succeeded in persuading ten employees to move from Waterbury to Sternenfels for a period of 6 to 15 months in order to actively support the reorganization of the Substrate Bonder division in Germany with their experience and knowledge. As a result, it was possible to minimize any loss of expertise.
Similarly, the relocation of the North American sales and service organization to Sunnyvale, California, was completed by the end of the first quarter of 2011. During the first quarter of 2011, many new employees were hired in California who would in future assume responsibility for sales, service, and administration at SUSS MicroTec Inc. Through early recruitment and hiring, the new employees could be thoroughly trained by their former colleagues from Waterbury and familiarized with the Company's processes and workflows. This ensured a seamless transfer and maintenance of business operations even after the move from Vermont to California.
Our customers responded positively to the relocation of the Substrate Bonder division's production to Sternenfels. The good order entry in the second quarter and the high order backlog at mid-year also confirm this. There have been no cancellations of orders and no indication of reluctance to issue new orders.
Since the production of Substrate Bonders has been located in Sternenfels, supply relationships have been strengthened between SUSS MicroTec Lithography GmbH and US suppliers, who have been active for many years as suppliers for the Substrate Bonder division. SUSS MicroTec Lithography GmbH has supported these suppliers in processing export transactions and transnational formalities and adapted individual internal processes to the new circumstances. As a result, the supply chain could be maintained despite large geographical distances and transnational differences. Deliveries by US suppliers are functioning smoothly.
Since SUSS MicroTec Lithography GmbH (Sternenfels) assumed control of the Substrate Bonder division's research and development, production, and product management, SUSS MicroTec Inc. was designated as representative for the Lithography, Substrate Bonder, and Photomask Equipment divisions in an agreement made on May 1, 2011. Simultaneously, SAP was introduced at SUSS MicroTec Inc. (Sunnyvale, California) on May 1, 2011 and the company was connected to the Group-wide ERP management system. Due to sound and extensive preparation and support from Germany, the conversion to the new system was carried out without difficulties.
Regarding other operating risks, there were no substantial changes to the risks and opportunities outlined in the 2010 Annual Report in the first half of 2011.
At the SUSS MicroTec Group, financial market risks encompass credit risks, liquidity risks, and market price risks. The 2010 Annual Report provided an extensive description of these risks.
No substantial changes to these risks and opportunities occurred in the first half of the year.
No risks that threaten the Company's existence were identified within the Group in the first half of the 2011 fiscal year. The continued existence of the Company was at no time endangered from a material assets and liquidity point of view.
The risk management system described in the 2010 Annual Report continued to be used in the first half of 2011.
The deadline for exercising stock options from the 2008 stock option plan had not yet expired as of June 30, 2011. In July 2011, 12,250 additional options were exercised. As a result, the common stock and additional paid-in capital of SUSS MicroTec AG and SUSS MicroTec Group were increased accordingly.
No additional material events requiring disclosure occurred after the end of the interim reporting period.
In the first half of 2011 and the 2010 fiscal year, there were no material transactions with related parties subject to the disclosure requirements of IAS 24. Regarding transactions with related parties requiring disclosure, which arose in the 2009 fiscal year, we refer to the explanations in the 2010 Annual Report.
Highlights
The business environment in which SUSS MicroTecAG operates is influenced by regional and global economic conditions as well as industry developments. The following forecast report provides a short explanation of internal and external factors that both the Company and leading market and industry observers regard as essential for the development of the Company.
After the rapid recovery of the global economy in 2010, growth slowed somewhat in the first half of 2011, but it can still be characterized as extremely dynamic. However, according to an economic forecast by the IFO Institute for Economic Research, Munich, the global economy weakened somewhat in the second quarter of 2011. While the expansion in the emerging countries remains above average, the advanced economies will display much less momentum. Overall, the IFO Institute projects global economic growth of 4.2% for 2011. However, the World Bank is forecasting global growth of only 3.2% for 2011, but it anticipates an increase of 3.6% in 2012. Overall, the economic forecasting institutes agree that growth will continue in 2011.
Continued, albeit much more moderate, growth is expected in the eurozone as well. The IFO Institute currently assumes growth of 2.0% in 2011 and 1.8% in 2012. Strong domestic demand and a significant improvement in the labor market situation are cited as reasons for continued growth. However, it should be observed here that the debt situation in Greece and in other European countries represents a risk for the continued economic development of the eurozone and particularly for the common currency. An additional factor is the sustained high provision of liquidity through the central banks, which makes a further rise in inflation worldwide, and particularly in Europe, probable.
With respect to Germany, the conclusion can be drawn that here as well, signs point to continued growth. In June 2011, RWI in Essen, Germany, raised its overall annual forecast for economic growth in the current fiscal year from 2.9% to 3.7%. The IFO Institute is forecasting economic growth of 3.3% in Germany for 2011. Also in Germany, not only exports but also much higher domestic demand and continued very favorable financing conditions will contribute to growth. Here too, the IFO Institute views the ongoing debt crisis as the key risk for the German economy.
Gartner and iSuppli, two market research institutes, currently project global sales growth in the semiconductor market of 5.1% or 7.2% to a level of US\$ 315 billion or US\$ 326 billion, respectively. As a reason for the positive outlook, Gartner and iSuppli cited demand for tablet PCs, smartphones, and consumer electronics that has already risen sharply and continues to rise. In these industry sectors, the growth rates were over 15%. The much smaller industrial electronics sector is projected to grow by 7.3% in 2011. Surprisingly, the natural disaster in Japan had only a very short-lived effect on the semiconductor industry, according to iSuppli. In the third quarter, a few effects on the supply chain might still be noticeable, but they should disappear by the end of the year, Gartner surmises.
The Semi and Gartner market research institutes anticipate growth of approximately 10% in the area of semiconductor equipment in 2011. As a result, the overall market would grow to approximately US\$ 44 billion. In particular, the so-called integrated device manufacturers (IDMs) are expected to invest considerable capital in new capacity. Following a slight decline of -2.6% in 2012, Gartner expects the market to resume growth with 8.9% in 2013. However, when evaluating the figures, it should be noted that they reflect markets critical for major front-endbased manufacturers such as Applied Materials and ASML. SUSS MicroTec, on the other hand, is only active with Photomask Equipment in the classic front-end of chip manufacturers. The Company primarily operates as an innovative, specialized equipment manufacturer in back-end semiconductor manufacturing and particularly in the niche markets of MEMS, advanced packaging, compound semiconductors, and 3D integration. Here Gartner expects overall growth of 3.6% in the equipment area in 2011, whereby they also stated clearly that much higher growth rates are possible, for example, for providers of back-end process solutions.
As an innovative, specialized equipment manufacturer, SUSS MicroTec is primarily focused on the niche markets of advanced packaging, 3D integration, microelectromechanical systems (MEMS), and LEDs. The projected development of these niche markets is detailed on pages 70–71 of the 2010 Annual Report. As of mid-2011, there have been no substantial changes to the assessments on the expected development of the niche markets.
According to a recent study, iSuppli expects renewed strong growth for the MEMS market in 2011. In particular, applications in tablet PCs and smartphones will propel rapid growth. While growth of approximately 10% is foreseen for the entire MEMS market, the so-called new applications in tablet PCs and similar devices will grow by more than 150% this year, according to iSuppli. Viewed in absolute terms, this area is still relatively small, but due to extremely high rates of growth it is expected to constitute approximately 40% of the entire MEMS market by 2014. Nothing has changed regarding the statements that were made in the 2010 Annual Report about the advanced packaging and 3D integration markets. Once again estimates have been slightly raised for the LED market. The Semi market research institute now expects LED manufacturing capacity to expand by approximately 40% in 2011, whereas in 2010 growth of approximately 30% per year was being projected. However, a lower growth rate is assumed for 2012.
Aside from the condition of the markets, the innovation potential of our product range is also a critical factor for our success. This includes not only the continuous expansion of the product range but also close cooperation with other companies and research institutes via collaborative agreements.
In the first half of 2011, SUSS MicroTec began a strategic collaboration with the NanoScale Science & Technology Facility (CNF) of Cornell University, which is located in North America. As part of the cooperation, Cornell staff will perform research on already existing as well as new lithography systems from SUSS MicroTec, including innovative Mask Aligner toolkits and the Gamma-series Spray Coater.
The first half of 2011 saw the market launch of the MA 100e Gen2-based Mask Aligner MA 150e Gen2, which was customized for the high brightness LED market. This new device is capable of processing LED substrates up to 6'' in size. The fully automated system was optimized in order to adapt to the existing cost structures in the rapidly growing LED area and to support industry's move in the direction of larger substrate sizes.
The global economy continued to grow in the first half of 2011 and all of the economic research institutes are signaling growth for the second half of the year also. The same applies to the area of semiconductors and semiconductor industries, according to leading market research institutes. Even though these forecasts refer to markets that are crucial to large front-endbased manufacturers and are, therefore, less relevant for the SUSS MicroTec Group, we are able to confirm our forecast for the whole of 2011, taking into account the good orders position in the first half of the year. We still expect annual sales from continuing operations of more than 1 170 million, as well as improved earnings before interest and taxes (EBIT) in comparison with the previous year. The EBIT margin will range between 10% and 15%. For the third quarter we expect an order intake of 1 30 - 40 million and a sales level of 1 35 - 40 million.
Furthermore, we assume that we will be able to generate a positive free cash flow in 2011 as well.
This Interim Report contains information and forecasts that refer to the future developments of the SUSS MicroTec Group and its companies. The forecasts are assessments that the Company has made based on all of the information available to it at the present time. Should the assumptions on which these forecasts are based not occur or the risks – as addressed in the risk report – arise, the actual results may deviate from those currently expected.
Garching, Germany, August 3, 2011
The Management Board
Frank Averdung Michael Knopp Chief Executive Officer Chief Financial Officer
Highlights
| in 1 thousand | 04/01/2011 - 06/30/2011 | 04/01/2010 - 06/30/2010 |
|---|---|---|
| Sales | 52,638 | 37,739 |
| Cost of sales | -32,487 | -24,443 |
| Gross profit | 20,151 | 13,296 |
| Selling costs | -4,373 | -4,288 |
| Research and development costs | -3,277 | -1,843 |
| Administration costs | -4,137 | -5,036 |
| Other operating income | 996 | 2,983 |
| Other operating expenses | -1,246 | -1,610 |
| Analysis of net income from operations (EBIT) | ||
| EBITDA (Earnings before Interest and Taxes, Depreciation and Amortization) | 9,787 | 5,151 |
| Depreciation and amortization of tangible assets, intangible assets and investments in subsidiaries |
-1,673 | -1,649 |
| Net income from operations (EBIT) | 8,114 | 3,502 |
| Financial income/expense | -46 | -223 |
| Profit from continuing operations before taxes | 8,068 | 3,279 |
| Income taxes | -2,184 | -1,464 |
| Profit from continuing operations | 5,884 | 1,815 |
| Loss from discontinued operations (after taxes) | 0 | -206 |
| Net profit | 5,884 | 1,609 |
| Thereof equity holders of SUSS MicroTec | 5,861 | 1,596 |
| Thereof minority interests | 23 | 13 |
| Earnings per share (basic) | ||
| Basic earnings per share from continuing operations in 1 | 0.31 | 0.10 |
| Basic earnings per share from discontinued operations in 1 | 0.00 | -0.01 |
| Earnings per share (diluted) | ||
| Diluted earnings per share from continuing operations in 1 | 0.31 | 0.10 |
| Diluted earnings per share from discontinued operations in 1 | 0.00 | -0.01 |
| in 1 thousand | 01/01/2011 - 06/30/2011 | 01/01/2010 - 06/30/2010 |
|---|---|---|
| Sales | 84,662 | 59,632 |
| Cost of sales | -50,777 | -39,522 |
| Gross profit | 33,885 | 20,110 |
| Selling costs | -9,066 | -7,654 |
| Research and development costs | -5,572 | -3,342 |
| Administration costs | -8,310 | -8,715 |
| Other operating income | 2,292 | 5,467 |
| Other operating expenses | -2,654 | -2,415 |
| Analysis of net income from operations (EBIT) | ||
| EBITDA (Earnings before Interest and Taxes, Depreciation and Amortization) | 13,719 | 6,768 |
| Depreciation and amortization of tangible assets, intangible assets and investments in subsidiaries |
-3,144 | -3,317 |
| Net income from operations (EBIT) | 10,575 | 3,451 |
| Financial income/expense | 689 | -495 |
| Profit from continuing operations before taxes | 11,264 | 2,956 |
| Income taxes | -2,938 | -1,851 |
| Profit from continuing operations | 8,326 | 1,105 |
| Loss from discontinued operations (after taxes) | -21 | -570 |
| Net profit | 8,305 | 535 |
| Thereof equity holders of SUSS MicroTec | 8,216 | 512 |
| Thereof minority interests | 89 | 23 |
| Earnings per share (basic) | ||
| Basic earnings per share from continuing operations in 1 | 0.44 | 0.06 |
| Basic earnings per share from discontinued operations in 1 | 0.00 | -0.03 |
| Earnings per share (diluted) | ||
| Diluted earnings per share from continuing operations in 1 | 0.44 | 0.06 |
| Diluted earnings per share from discontinued operations in 1 | 0.00 | -0.03 |
| in 1 thousand | 01/01/2011 - 06/30/2011 | 01/01/2010 - 06/30/2010 | |||
|---|---|---|---|---|---|
| Net profit | 8,305 | 535 | |||
| Fair value fluctuations of available for sale securities | -43 | 390 | |||
| Foreign currency adjustment | -1,023 | 3,548 | |||
| Cash flow hedges | 60 | 0 | |||
| Deferred taxes | -6 | -640 | |||
| Total income and expenses recognized in equity | -1,012 | 3,298 | |||
| Total income and expenses reported in the reporting period | 7,293 | 3,833 | |||
| Thereof equity holders of SUSS MicroTec | 7,183 | 3,779 | |||
| Thereof minority interests | 110 | 54 |
| Ass ets in 1 thousand |
06/30/2011 12/31/2010 |
||||
|---|---|---|---|---|---|
| -CURREN T ASSETS |
41,363 | 44,312 | |||
| Intangible assets | 10,333 | ||||
| Goodwill | 13,599 | 13,599 | |||
| Tangible assets | 9,967 | 9,356 | |||
| Noncurrent tax assets | 108 | 108 | |||
| Other assets | 603 | 485 | |||
| Deferred tax assets | 6,753 | 8,873 | |||
| CURREN T ASSETS |
150,357 | 137,248 | |||
| Inventories | 78,586 | 64,431 | |||
| Trade receivables | 14,691 | 15,659 | |||
| Other financial assets | 734 | 640 | |||
| Securities | 36,249 | 15,977 | |||
| Current tax assets | 1,220 | 620 | |||
| Cash and cash equivalents | 14,350 | 36,525 | |||
| Other assets | 4,527 | 3,396 | |||
| TOTAL ASSETS |
191,720 | 181,560 |
Highlights
| 12/31/2010 | 06/30/2011 | Liabilities & shareholders' equity in 1 thousand | |||
|---|---|---|---|---|---|
| 106,404 | 114,180 | Equity | |||
| 106,006 | 113,672 | Total equity attributable to shareholders of SUSS MicroTec AG | |||
| 18,721 | 19,057 | Subscribed capital | |||
| 87,944 | 96,307 | Reserves | |||
| -659 | -1,692 | Accumulated other comprehensive income | |||
| 398 | 508 | Minority interests | |||
| 20,775 | 19,796 | -CURREN T LIA BILITIES |
|||
| 2,919 | 2,826 | Pension plans and similar commitments | |||
| 508 | 460 | Provisions | |||
| 14,367 | 13,702 | Financial debt | |||
| 240 | 242 | Other financial liabilities | |||
| 2,741 | 2,566 | Deferred tax liabilities | |||
| 54,381 | 57,744 | CURREN T LIA BILITIES |
|||
| 4,613 | 3,658 | Provisions | |||
| 5,412 | 5,056 | Tax liabilities | |||
| 1,119 | 1,358 | Financial debt | |||
| 6,458 | 5,985 | Other financial liabilities | |||
| 9,746 | 9,489 | Trade payables | |||
| 27,033 | 32,198 | Other liabilities | |||
| 181,560 | 191,720 | TOTAL LIA BILITIES AND SHAREHOLDER S' EQUI TY |
| in 1 thousand | 01/01/2011 – 06/30/2011 | 01/01/2010 – 06/30/2010 | |
|---|---|---|---|
| Net profit or loss (after taxes) | 8,305 | 535 | |
| Amortization of intangible assets | 2,022 | 2,080 | |
| Depreciation of tangible assets | 1,122 | 1,251 | |
| Profit or loss on disposal of intangible and tangible assets | 118 | 10 | |
| Profit on disposal of Cascade shares | -833 | 0 | |
| Change of reserves on inventories | -555 | -80 | |
| Change of reserves for bad debts | 121 | 45 | |
| Non-cash stock based compensation | 47 | 93 | |
| Non-cash income from the reversal of provisions | -9 | -196 | |
| Other non-cash effective income and expenses | 506 | -1,826 | |
| Gain on bargain purchase arising from acquisition HamaTech | 0 | -2,678 | |
| Gain from deconsolidation of SMTTS | 0 | -781 | |
| Change in inventories | -14,951 | -7,642 | |
| Change in trade receivables | 94 | 1,812 | |
| Change in other assets | -1,943 | -877 | |
| Change in pension provisions | -93 | 257 | |
| Change in trade payables | 154 | 4,425 | |
| Change in other liabilities and other provisions | 3,973 | 8,527 | |
| Change in dererred taxes | 1,945 | 1,501 | |
| Cash flow from operating activities | 23 | 6,456 |
| in 1 thousand | 01/01/2011 – 06/30/2011 | 01/01/2010 – 06/30/2010 | |
|---|---|---|---|
| Disbursements for tangible assets | -1,962 | -1,016 | |
| Disbursements for intangible assets | -515 | -206 | |
| Purchases of current available-for-sale securities | -24,948 | -8,092 | |
| Proceeds from redemption of available-for-sale securities | 2,099 | 1,014 | |
| Proceeds from redemption of Cascade shares | 3,333 | 0 | |
| Payments for purchase of HamaTech | 0 | -8,771 | |
| Proceeds from disposal of Test business | 0 | 2,708 | |
| Cash flow from investing activities | -21,993 | -14,363 | |
| Repayment of bank loans | -180 | 0 | |
| Change in current bank liabilities | 419 | -759 | |
| Change in other financial debt | -665 | -452 | |
| Proceeds from exercise of stock options | 437 | 0 | |
| Proceeds from share capital contribution | 0 | 6,808 | |
| Payments for expense related to capital contribution | 0 | -205 | |
| Cash flow from financing activities | 11 | 5,392 | |
| Adjustment to funds caused by exchange rate fluctuations | -216 | 1,212 | |
| Change in cash and cash equivalents | -22,175 | -1,303 | |
| Funds at beginning of the year * | 36,525 | 20,799 | |
| Funds at end of the period | 14,350 | 19,496 | |
| Cash flow from operating activities includes: | |||
| Interest paid during the period | 199 | 52 | |
| Interest received during the period | 392 | 253 | |
| Tax paid during the period | 1,271 | 218 | |
| Tax refunds during the period | 0 | 64 |
* Cash and cash equivalents as of January 01, 2010 also include liquid funds of 1178 thousand attributable to assets held for sale and to discontinued activities.
| Subscribed capital | Additional paid-in capital | Earnings reserve | |
|---|---|---|---|
| 17,019 | 93,094 | 433 | |
| 1,702 | 4,959 | ||
| 93 | |||
| 18,721 | 98,146 | 433 | |
| 18,721 | 98,225 | 433 | |
| 336 | 101 | ||
| 46 | |||
| 19,057 | 98,372 | 433 | |
| Equity | Minority interests | Total equity attributable to shareholders of Suss MicroTec AG |
Accumulated other Comprehensive Income |
Retained Earnings |
|---|---|---|---|---|
| 86,059 | 201 | 85,858 | -743 | -23,945 |
| 6,661 | 6,661 | |||
| 93 | 93 | |||
| 535 | 23 | 512 | 512 | |
| 3,298 | 31 | 3,267 | 3,267 | |
| 96,646 | 255 | 96,391 | 2,524 | -23,433 |
| 106,404 | 398 | 106,006 | -659 | -10,714 |
| 437 | 437 | |||
| 46 | 46 | |||
| 8,305 | 89 | 8,216 | 8,216 | |
| -1,012 | 21 | -1,033 | -1,033 | |
| 114,180 | 508 | 113,672 | -1,692 | -2,498 |
| Lithography | Substrate Bonder | Photomask Equipment | ||||
|---|---|---|---|---|---|---|
| in 1 thousand | 6M / 2011 | 6M / 2010 | 6M / 2011 | 6M / 2010 | 6M / 2011 | 6M / 2010 |
| External Sales | 52,462 | 38,498 | 7,713 | 12,060 | 20,730 | 6,053 |
| Internal Sales | 0 | 0 | 0 | 0 | 0 | 0 |
| Total Sales | 52,462 | 38,498 | 7,713 | 12,060 | 20,730 | 6,053 |
| Result per segment (EBIT) | 13,119 | 7,012 | -4,968 | -4,084 | 4,307 | -172 |
| Income before taxes | 13,071 | 7,005 | -4,970 | -4,087 | 4,305 | -172 |
| Significant non-cash items | -409 | -444 | -1,242 | -1,005 | -149 | 58 |
| Segment assets | 68,951 | 55,691 | 31,706 | 34,460 | 16,094 | 8,622 |
| thereof Goodwill | 13,599 | 13,599 | 0 | 0 | 0 | 0 |
| Unallocated assets | ||||||
| Total assets | ||||||
| Segment liabilities | -29,391 | -20,740 | -8,147 | -10,463 | -6,981 | -3,753 |
| Unallocated liabilities | ||||||
| Total liabilities | ||||||
| Depreciation and amortization | 750 | 876 | 972 | 1,385 | 312 | 326 |
| thereof scheduled | 750 | 801 | 972 | 1,252 | 312 | 326 |
| thereof impairment loss | 0 | 75 | 0 | 133 | 0 | 0 |
| Capital expenditure | 934 | 281 | 781 | 373 | 203 | 1,973 |
| Workforce at June 30 | 330 | 319 | 134 | 125 | 108 | 84 |
| Sales | Capital expenditure | Assets | |||||
|---|---|---|---|---|---|---|---|
| in 1 thousand | 6M / 2011 | 6M / 2010 | 6M / 2011 | 6M / 2010 | 6M / 2011 | 6M / 2010 | |
| Europe | 18,787 | 13,767 | 1,410 | 6,700 | 110,737 | 72,028 | |
| North-America | 14,736 | 9,730 | 703 | 559 | 10,166 | 32,379 | |
| Japan | 7,674 | 5,454 | 1 | 21 | 3,594 | 2,249 | |
| Rest of Asia | 43,535 | 31,991 | 58 | 74 | 3,482 | 1,578 | |
| Rest of world | 0 | 114 | 0 | 53 | 0 | 0 | |
| Consolidation effects | 0 | 0 | 0 | 0 | -803 | 1,890 | |
| Total | 84,732 | 61,056 | 2,172 | 7,407 | 127,176 | 110,124 |
| High lights |
|---|
| Total | Consolidation effects | Discontinued Operations (Test business) |
Continuing operations | Other | |||||
|---|---|---|---|---|---|---|---|---|---|
| 6M / 2010 | 6M / 2011 | 6M / 2010 | 6M / 2011 | 6M / 2010 | 6M / 2011 | 6M / 2010 | 6M / 2011 | 6M / 2010 | 6M / 2011 |
| 61,056 | 84,732 | - | - | 1,424 | 70 | 59,632 | 84,662 | 3,021 | 3,757 |
| 0 | -2,829 | -3,600 | 0 | 0 | 2,829 | 3,600 | 2,829 | 3,600 | |
| 61,056 | 84,732 | -2,829 | -3,600 | 1,424 | 70 | 62,461 | 88,262 | 5,850 | 7,357 |
| 2,880 | 10,554 | - | - | -571 | -21 | 3,451 | 10,575 | 695 | -1,883 |
| 2,384 | 11,243 | - | - | -572 | -21 | 2,956 | 11,264 | 210 | -1,142 |
| -1,435 | -1,875 | - | - | 37 | 0 | -1,472 | -1,875 | -81 | -75 |
| 110,124 | 127,176 | - | - | 0 | 0 | 110,124 | 127,176 | 11,351 | 10,425 |
| 13,599 | 13,599 | - | - | 0 | 0 | 13,599 | 13,599 | 0 | 0 |
| 52,014 | 64,544 | ||||||||
| 162,138 | 191,720 | ||||||||
| -37,164 | -46,167 | - | - | 0 | 0 | -37,164 | -46,167 | -2,208 | -1,648 |
| -28,328 | -31,373 | ||||||||
| -65,492 | -77,540 | ||||||||
| 3,331 | 3,144 | - | - | 14 | 0 | 3,317 | 3,144 | 730 | 1,110 |
| 3,123 | 3,144 | - | - | 14 | 0 | 3,109 | 3,144 | 730 | 1,110 |
| 0 | - | - | 0 | 0 | 208 | 0 | 0 | 0 | |
| 7,407 | 2,477 | - | - | 0 | 0 | 7,407 | 2,477 | 4,780 | 559 |
| 632 | - | - | 0 | 0 | 581 | 632 | 53 | 60 |
to the Interim Report of SUSS MicroTec AG as of June 30, 2011
The consolidated financial statements of SUSS Micro-Tec AG as of December 31, 2010 have been prepared in accordance with the International Financial Reporting Standards (IFRSs) applied by the International Accounting Standards Board (IASB) as of the closing date. In the consolidated interim financial statements as of June 30, 2011, which were prepared on the basis of International Accounting Standards (IAS) 34 "Interim Financial Reporting," the same accounting methods were applied as in the consolidated financial statements for the 2010 fiscal year.
All of the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) in effect as of June 30, 2011 have been applied.
For additional information about specific accounting and measurement methods, please see the consolidated financial statements of SUSS MicroTec AG as of December 31, 2010.
The Group auditor, KPMG AG Wirtschaftsprüfungsgesellschaft, has neither audited nor reviewed the interim financial statements.
The consolidated financial statements include the financial statements of SUSS MicroTec AG and of all material companies over which, independent of the level of its participatory investment, the proprietary company can exercise control (i.e. the control principle).
Compared with the consolidated financial statements as of December 31, 2010, there were no changes to the scope of consolidation.
SUSS MicroTec Group has various credit facilities with national and international banks and insurance companies. The credit line of 1 6 million provided by a bank consortium led by BayernLB remained in effect until March 31, 2011. With the credit agreement of March 30–31, 2011, new credit agreements were arranged with the same bank consortium. As a result of the new credit agreements, the credit line was increased to a total of 1 8 million. The credit line, whose term runs until March 31, 2012, was issued without covenants. Its primary purpose is to serve as backing for down payment guarantees.
With the agreement of April 1 /April 5, 2011, SUSS MicroTec AG and SUSS MicroTec Lithography GmbH concluded a general credit agreement with DZ BANK AG, which made available a credit line of 1 2 million. The credit line runs until March 31, 2012 and was issued without covenants. Its primary purpose is to serve as backing for down payment guarantees.
The relocation of the Substrate Bonder division from Waterbury, Vermont (USA), to Germany was completed in April 2011. In the course of the restructuring, the research and development, production, and product management functions for the Bonder product lines were moved to the site in Sternenfels, Germany. The North American customer service and sales activities as well as the applications center were moved from Waterbury, VT, to Silicon Valley in California.
As of December 31, 2010, expenses of 1 3.9 million had accrued. In the first half of 2011, additional restructuring expenses arose amounting to approximately 1 1.3 million. As of June 30, 2011, provisions for restructuring came to 1 0.4 million. For the rest of the year, additional extraordinary costs of approximately 1 0.7 million are anticipated.
The securities held as available for sale recognized in the statement of financial position include – as in the previous year – corporate and government bonds as well as commercial papers with a term of up to three months. The securities have been measured at market prices. Any fluctuations in the market price are recognized in accumulated other comprehensive income and therefore do not affect profit and loss.
Disclosed under this item in the statement of financial position as of December 31, 2010 are the 747,530 Cascade shares – with a fair value of 1 2.4 million as of December 31, 2010 – obtained through the sale of the Test Systems division. The Cascade shares were sold in the first quarter of 2011 for a total of approximately 1 3.3 million. The sale resulted in a disposal gain of 1 0.8 million, which was recognized in the financial result.
SAP was introduced at SUSS MicroTec Inc., Sunnyvale, California (USA), on May 1, 2011 and the company was connected to the Group-wide ERP management system. Expenses for introducing SAP totaled approximately 1 0.1 million. They were capitalized and will be written down over a useful life of five years.
In the second quarter of 2011, our employees and Members of the Management Board exercised 336,240 stock options from the 2008 stock option plan. As a result, SUSS MicroTec received proceeds totaling 1 0.4 million. The common stock and additional paid-in capital of SUSS MicroTec AG and the SUSS MicroTec Group increased accordingly.
Other issues influencing assets, liabilities, shareholders' equity, the result for the period, or cash flows and unusual in terms of their nature, magnitude, or frequency, did not arise during the interim reporting period.
The presentation of the consolidated financial statements as of June 30, 2011 is analogous to the presentation as of December 31, 2010. There were no changes in presentation.
To the extent that estimates were made in the interim reports, the methodology underlying the estimates remained fundamentally the same during the fiscal year and in comparison to the previous fiscal year.
In a departure from the approach used at the end of the fiscal year, income tax expense in each interim reporting period is recorded on the basis of the best estimate of the weighted average annual income tax rate which is expected for the entire fiscal year.
SUSS MicroTec AG currently assumes that the annual income tax rate will deviate from the expected tax rate of approximately 28%. The primary reason for this is that the deferred tax assets for losses accrued by foreign subsidiaries cannot be capitalized.
Otherwise there are no changes requiring disclosure which would have a material impact on the current interim reporting period.
In connection with the exercise of 336,240 stock options from the 2008 stock option plan, a total of 336,240 new shares were issued until June 30, 2011. In July 2011, an additional 12,250 stock options were exercised and the same number of new shares were issued. No additional issuances, repurchases, or repayments occurred involving either bonds or equity securities.
During the reporting report, no dividend was distributed nor was such a distribution proposed.
In July 2011, another 12,250 options were exercised – in addition to the stock options already exercised as of June 30, 2011. As a result, the common stock and paidin capital of SUSS MicroTec AG and SUSS MicroTec Group were increased accordingly.
No additional material events occurred after the end of the interim reporting period.
There are no contingent receivables. There were no substantial changes in contingent liabilities since the previous reporting date of December 31, 2010.
Basic earnings per share are calculated by dividing the net profit or loss for the period (net of minority interests) by the average number of shares.
In order to calculate diluted earnings per share, the profit or loss for the period attributable to shareholders (net of minority interests) and the weighted average of outstanding shares are adjusted for the impact of all potential dilutive shares.
The following table shows the calculation of the basic and diluted earnings per share:
| in 1 thousand | 6M / 2011 | 6M / 2010 |
|---|---|---|
| Profit from continuing operations | 8,326 | 1,105 |
| Less minority interests | -89 | -23 |
| Profit from continuing operations attributable to shareholders of SUSS MicroTec AG | 8,237 | 1,082 |
| Weighted average number of outstanding shares | 18,735,982 | 17,414,045 |
| Effect of the (potential) exercise of stock options (number of options) | 58,260 | 0 |
| Adjusted weighted average number of outstanding shares | 18,794,242 | 17,414,045 |
| Earnings per share in 3 from continuing operations – basic – | 0.44 | 0.06 |
| Earnings per share in 3 from continuing operations – diluted – | 0.44 | 0.06 |
"To the best of our knowledge, and in accordance with the applicable reporting principles, the consolidated interim financial statements give a true and fair view of the assets, liabilities, financial position, and profit or loss of the Group, and the Group Interim Management Report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group over the remainder of the fiscal year."
Garching, August 3, 2011
Frank Averdung Michael Knopp CEO CFO
Highlights
Holding Company Production Sales Other / Non-operating
*formerly operated under the name Image Technology Inc.
| Interim Report 2011 | August 4 |
|---|---|
| TMT Conference Commerzbank, Frankfurt | August 31 |
| UBS Best of Germany Conference, New York | September 14/ 15 |
| Berenberg Investment Conference, Paris | September 15 |
| UniCredit Investment Conference, Munich | September 27 |
| Nine-month Report 2011 | November 8 |
| TMT Conference Morgan Stanley, Barcelona | November 17 |
| German Equity Forum Fall 2011 | Novemer 21 - 23 |
SUSS MicroTec AG Schleißheimer Straße 90 85748 Garching, Deutschland Fon: +49 (0)89-32007-0 E-Mail: [email protected]
Investor Relations Fon: +49 (0)89-32007-161 E-Mail: [email protected]
Published by: SUSS MicroTec AG Edited by: Finance, Julia Natterer Investor Relations, Franka Schielke Concept and design: Whitepark GmbH & Co., Hamburg Photography: Michael Lange, SUSS MicroTec AG
Forward-looking statements: These reports contain forward-looking statements. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. These statements are based oncurrent plans, estimates, and projections,and should be understood as such. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update any of them in light of new information or future events. Forward-looking statements involve inherent risks and uncertainties. We caution readers that a number of important factors could cause actual results or outcomes to differ materially from those expressed in any forward-looking statement.
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