Interim / Quarterly Report • Aug 7, 2012
Interim / Quarterly Report
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1 January – 30 June
| in 1 million | Q2 / 2012 | Q2 / 2011 | Change | 6M / 2012 | 6M / 2011 | Change |
|---|---|---|---|---|---|---|
| Continuing operations | ||||||
| Order entry | 41.4 | 32.1 | 29.0 % | 80.4 | 80.4 | 0.0 % |
| Order backlog as of 06/ 30 | -- | -- | -- | 107.2 | 109.8 | -2.4 % |
| Total sales | 36.3 | 52.6 | -31.0 % | 67.5 | 84.7 | -20.3 % |
| Sales margin | 1.7 % | 11.2 % | -9.5 %-points | 0.6 % | 9.8 % | -9.2 %-points |
| Gross profit | 13.6 | 20.2 | -32.7 % | 24.9 | 33.9 | -26.5 % |
| Gross margin | 37.5 % | 38.3 % | -0.8 %-points | 36.9 % | 40.0 % | -3.1 %-points |
| Cost of sales | 22.7 | 32.5 | -30.2 % | 42.6 | 50.8 | -16.1 % |
| R&D costs | 2.0 | 3.3 | -39.4 % | 4.4 | 5.6 | -21.4 % |
| Continuing operations | ||||||
| EBITDA | 3.3 | 9.8 | -66.3 % | 4.8 | 13.7 | -65.0 % |
| EBITDA margin | 9.1 % | 18.6 % | -9.5 %-points | 7.1 % | 16.2 % | -9.1 %-points |
| EBIT | 1.6 | 8.1 | -80.2 % | 1.5 | 10.6 | -85.8 % |
| EBIT margin | 4.4 % | 15.4 % | -11.0 %-points | 2.2 % | 12.5 % | -10.3 %-points |
| Earnings after tax | 0.6 | 5.9 | -89.8 % | 0.4 | 8.3 | -95.2 % |
| Earnings per share (in 1) basic | 0.03 | 0.31 | -90.3 % | 0.02 | 0.44 | -95.5 % |
| Continuing and discontinued operations | ||||||
| Earnings after tax | 0.6 | 5.9 | -89.8 % | 1.9 | 8.3 | -77.1 % |
| Earnings per share (in 1) basic | 0.03 | 0.31 | -90.3 % | 0.10 | 0.44 | -77.3 % |
| Balance sheet and cash flow | ||||||
| Equity | -- | -- | -- | 122.3 | 114.2 | 7.1 % |
| Equity ratio | -- | -- | -- | 60.4 % | 59.6 % | 0.8 %-points |
| Return on equity | 0.5 % | 5.2 % | -4.7 %-points | 0.3 % | 7.3 % | -7.0 %-points |
| Balance sheet total | -- | -- | -- | 202.5 | 191.7 | 5.6 % |
| Net cash | -- | -- | -- | 30.1 | 35.5 | -15.2 % |
| Free cash flow* | -7.4 | -0.3 | <-100.0 % | -7.1 | -2.5 | <-100.0 % |
| Further key figures | ||||||
| Investments ** | 1.9 | 1.2 | 58.3 % | 2.5 | 2.5 | 0.0 % |
| Investment ratio | 5.2 % | 2.3 % | 2.9 %-points | 3.7 % | 3.0 % | 0.7 %-points |
| Depreciation | 1.8 | 1.6 | 12.5 % | 3.3 | 3.1 | 6.5 % |
| Employees as of 06/ 30 | -- | -- | -- | 689 | 632 | 9.0 % |
* Before consideration of purchase or sale of available-for-sale securities and before consideration of extraordinary items from purchase or sale of subsidiaries.
** without consideration of purchase of subsidiaries.
Foreword by the Management Board
Highlights Q2 2012
Service
Macroeconomic and political developments in Europe and the world have once again had a strong impact in recent weeks and months. The business climate has again perceptibly cooled, particularly during May and June, according to a study by the ifo Institute. The sustained uncertainty about the further course of the European debt crisis is the primary reason for the increasingly gloomy economic outlook. Although the economic and political measures that have been taken have temporarily eased the situation, the structural problems remain unresolved. Consequently, a possible escalation of the European debt crisis poses the main risk for economic development in the foreseeable future.
This indirectly affects the behavior of our customers, also outside of Europe. There is a tangible sense of uncertainty, causing a very careful ordering behavior. Thanks to our diverse and innovative product portfolio, however, we have succeeded in increasing order entry over the previous year despite the challenging conditions.
We have maintained our research and development activities at a high level in order to continue to be able to offer technologically leading products. As a result, we were able to introduce important product innovations in the first half of 2012 with the market launch of Bond Cluster XBC300 Gen2, the RCD8 Coater / Developer platform, and ACS200 Gen3. In addition, we announced a collaboration with Dow Corning on temporary wafer bonding for 3D (TSV) integration. This once again underscores the flexibility of our devices, which support a variety of bonding processes, since different applications ultimately require different processes. In May 2012, we acquired the still outstanding 15% of the shares of SUSS MicroOptics, Neuchâtel, in order to further simplify our organizational structure and tie the company more closely to SUSS MicroTec.
Frank Averdung Chief Executive Officer
Michael Knopp Chief Financial Officer
While positive sentiment in the capital markets still provided us with significant share price gains in the first quarter of 2012, the second quarter was again influenced by highly uncertain macroeconomic conditions. Many shares, including ours, had to endure share price losses, in some cases significant ones, after the first quarter. Nevertheless, we were able to close the first half of the year with a gain of approximately 60% over the end of 2011.
The second quarter of 2012 went well. Demand for SUSS MicroTec equipment increased slightly from the previous quarter. As a result, order entry from April to June 2012 was 1 41.4 million after 1 39.0 million in the first quarter of 2012, corresponding to an increase of approximately 6%. Compared to the previous year, order entry actually rose by 29%. Sales developed well in the second quarter, reaching 1 36.3 million. However, that amount fell short of the extremely strong figure of 1 52.6 million in the previous year.
Considering the entire first half of the year, there was no change in total order entry. In the first half of 2011 and the first half of 2012, order entry was 1 80.4 million. Sales of 1 67.5 million in the first half of the year were 20% below the previous year's level (H1 2011: 1 84.7 million). The order backlog as of June 30, 2012, thus amounted to 1 107.2 million (June 30, 2011: 1 109.8 million).
The gross profit margin for SUSS MicroTec Group declined in the first half of the year to 36.9% (H1 2011: 40.0%). One important reason for this decline was the diminished margin in the Photomask Equipment division. Another was the fact that the margin in the Lithography division stabilized at a normal level after an extremely strong 2011.
Earnings before interest and taxes (EBIT) came to 1 1.5 million in the first half of 2012, well below the previous year's level of 1 10.6 million. EBIT in the first half of 2012 included one-time currency effects of 1 -0.4 million. This resulted from the settlement of Company-internal foreign currency credits of SUSS MicroTec AG to SUSS MicroTec Inc. in connection with the acquisition of Tamarack in March 2012. Earnings after taxes (EAT) amounted to 1 0.4 million for continuing operations, compared to 1 8.3 million in the previous year. Earnings after taxes (EAT) amounted to 1 1.9 million for continuing and discontinued operations, compared to 1 8.3 million in the previous year. This includes a tax-free amount of 1 1.5 million, which resulted from the sale of the Test Systems division in 2010. Basic earnings per share (EPS) from continuing and discontinued operations amounts to 1 0.10 (previous year: 1 0.44).
Cash flow from operating activities in the first half of the year was 1 -4.5 million, compared to 1 0.02 million in the previous year. Free cash flow, excluding the effects of M&A activities and securities purchases and sales, totaled 1 -7.1 million (previous year: 1 -2.5 million). As of June 30, 2012, the SUSS MicroTec Group therefore had cash and interest-bearing securities of 1 43.9 million (June 30, 2011: 1 50.6 million). The net cash position of 1 30.1 million was lower than the 1 38.5 million as of March 31, 2012 (June 30, 2011: 1 35.5 million).
Due to the strong order intake in the first half of 2012, we raise our sales forecast to 1 160– 170 million for the full year. So far we expected sales to come in above 1 155 million and an EBIT-margin at the lower end of a 5–10% bandwidth. In this context we update our guidance for the full year and expect EBIT to be between 1 5 –10 million. The current EBIT expectation reflects a 1 2.5 million burden caused by the acquisition of Tamarack Scientific, of which 0.6 million are attributable to the purchase price allocation. For the fiscal year 2012 we have guided for a Free Cash Flow of a mid-single digit million 1 amount. Due to the strategic increase in working capital we now expect the Free Cash Flow to be in the low-single digit million 1 range.
For the third quarter of 2012, we expect order entry in the range of 1 30 million to 1 40 million.
Garching, Germany, August 2012
Frank Averdung Michael Knopp Chief Executive Officer Chief Financial Officer
Since May 2012, SUSS MicroTec has a new company appearance. A major part of this is the new corporate website. The new style guide has been redesigned with a fresh new look, a modular and intuitive navigation and improved structure. It has been updated with information about our product portfolio and services to better provide support and information to answer our customer's most common questions.
On May 14, 2012, SUSS MicroTec AG has increased its shareholding in SUSS MicroOptics S.A., Neuchâtel, Switzerland, from formerly 85 percent to now 100 percent. SUSS MicroOptics is a leading company for high-quality refractive and diffractive micro-optics. The know-how comprises profound experience in optical design, micro-fabrication and metrology. The company provides the highest quality components through leading edge manufacturing techniques, based on 200mm wafer technology in Quartz and Silicon, and its innovative advances in technology make SUSS MicroOptics a market leader in its segment. By acquiring the remaining 15 percent of SUSS MicroOptics, SUSS MicroTec has undertaken another step towards streamlining the organizational structure and has tied the company, which masters key technologies, close to the SUSS MicroTec group.
This year's ordinary Shareholders' Meeting was held on June 20, 2012 at the Haus der Bayerischen Wirtschaft. The shareholders voted in favor of all resolution proposals put forward by the Management Board and Supervisory Board at this year's ordinary Shareholders' Meeting. In total, more than 100 shareholders, shareholder and bank representatives, and guests joined the company at the meeting in Munich. Thus, 29 percent of the company's equity capital was represented. In addition to discharging the Management Board and Supervisory Board from liability for the 2011 fiscal year and appointing new auditors for the individual and consolidated financial statements, the term of office of all members of the Supervisory Board (Dr. Stefan Reineck, Jan Teichert and Gerhard Pegam) ended and new elections were held. All members of the Supervisory Board were reelected.
Dow Corning and SUSS MicroTec announced their collaboration on a temporary bonding solution for 3D through-silicon via (TSV) semiconductor packaging on June 25, 2012. As part of this non-exclusive agreement, the companies are developing a material and equipment system solution for high volume manufacturing of 3D TSV packaged devices. Comprised of both an adhesive and release layer, the Dow Corning siliconebased material is optimized for simple processing with a bi-layer spin coating and bonding process. Combined with SUSS MicroTec equipment, the total solution offers the benefits of simple processing using standard manufacturing methods, provides compatibility with thermal and chemical requirements for via middle and interposer TSV processing, as well as safe room temperature de-bonding required for advanced packaging applications.
The successful approval of the bailout packages at the European and international level have led in early 2012 to a certain easing of tensions in the financial markets, which in turn has led to partially rising share prices. For example, the German leading index, DAX, was able to gain a total of 14% in the first quarter. However, the situation in the bond markets, particularly for government bonds, remained tense.
Despite the introduced savings measures in several countries and the electoral victory of the pro-European party in Greece in the second quarter 2012 the uncertainty about the course of the debt crisis in Europe brought back insecurity and volatility to the capital markets.
Our share began the 2012 fiscal year with an XETRA closing price of 1 5.83 on January 2. In the first quarter of 2012, the price of the SUSS MicroTec share almost doubled since then and was once again able to surpass the 1 10 threshold. This price increase, which was even more rapid than the price increase in the first quarter of the previous year, was accompanied by volatility that is typical for technology stocks. Ultimately, the SUSS MicroTec share closed the first quarter of 2012 with a price of 1 10.76, which corresponded to an increase of more than 90% from the beginning of 2012. This positive trend was broken in April 2012. The TecDAX and the Prime IG Semiconductor have experienced continuous price declines since then. The SUSS MicroTec share also displayed price declines during the second quarter 2012, but in comparison to the end of 2011, the SUSS MicroTec share ended the first half year with a plus of more than 60 percent.
SUSS MicroTec Share Performance in 2012 (SUSS MicroTec share price on December 30, 2011: 1 5.63
The two benchmark indexes TecDAX and Prime IG Semiconductor also performed well at the beginning of 2012. The TecDAX closed the first half year with a gain of approximately 9 percent, while the Prime IG Semiconductor recorded a decrease in the second quarter leading to a total decrease within the first six months of one percent. Thus, the SUSS MicroTec share once again outperformed both benchmark indexes in the first half year of 2012.
The average daily trading volume of SUSS MicroTec shares on all German stock exchanges in the first half of 2012 amounted to approximately 152k shares (H1 2011: average daily trading volume of approximately 264k shares). A consideration here, however, is that extraordinarily high trading volumes were recorded in the first quarter of 2011 prior to the share's inclusion in the TecDAX.
The Ordinary Shareholders' Meeting took place at the Haus der Bayerischen Wirtschaft on June 20, 2012. The shareholders of SUSS MicroTec AG voted in favor of all resolution proposals put forward by the Management Board and Supervisory Board at this year's ordinary Shareholders' Meeting. In total, more than 100 shareholders, shareholder and bank representatives, and guests joined the company at the meeting in Munich. Thus, 29 percent of the company's equity capital was represented.
In addition to discharging the Management Board and Supervisory Board from liability for the 2011 fiscal year and appointing new auditors for the individual and consolidated financial statements, the term of office of all members of the Supervisory Board (Dr. Stefan
Share Ownership by Officers and Related Parties as of June 30, 2012
| Shares | Options | |
|---|---|---|
| Management Board |
||
| Frank Averdung | 83,200 | 0 |
| Michael Knopp | 22,500 | 0 |
| Supervisor y Board |
||
| Dr Stefan Reineck | 9,600 | 0 |
| Jan Teichert | 0 | 0 |
| Gerhard Pegam | 0 | 0 |
Reineck, Jan Teichert and Gerhard Pegam) ended and new elections were held. All members of the Supervisory Board were reelected.
of SUSS MicroTec AG
Order entry in the second quarter of 2012 not only stabilized but even increased slightly from the good previous quarter. Thus, orders of 1 41.4 million were recorded in the second quarter of 2012, corresponding to an increase of more than 5% from the previous quarter. This represented a gain of more than 28% from the previous year (Q2 2011: 1 32.1 million). Compared to the strong corresponding quarter of the previous year, sales declined to 1 36.3 million (Q2 2011: 1 52.6 million).
Considering the entire first half of the year, there was no change in order entry. In the first halves of 2011 and 2012, order entry was 1 80.4 million. Sales of 1 67.5 million in the first half of the year could not match the high level of the previous year and were approximately 20% below the corresponding figure in the previous year (H1 2011: 1 84.7 million). The order backlog as of June 30, 2012, thus amounted to 1 107.2 million (June 30, 2011: 1 109.8 million).
The gross profit margin for SUSS MicroTec Group declined in the first half of the year to 36.9% (H1 2011: 40.0%). One important reason for this decline was the diminished margin in the Photomask Equipment division. Another was the fact that the margin in the Lithography division stabilized at a normal level after an extremely strong 2011. In addition, the higher share of sales from the Substrate Bonder Segment had a negative effect on the margin.
Earnings before interest and taxes (EBIT) of 1 1.5 million were much lower than the 1 10.6 million of the previous year. EBIT in the first half of 2011 was burdened by approximately 1 2 million of final restructuring costs for the relocation of Bonder activities. EBIT in the first half of 2012 included one-time currency effects of 1 -0.4 million. This resulted from the settlement of Company-internal foreign currency credits of SUSS MicroTec AG to SUSS MicroTec Inc. in connection with the acquisition of Tamarack in March 2012. Earnings after taxes (EAT) for continuing operations amounted to 1 0.4 million, compared to 1 8.3 million in the previous year. Earnings after taxes (EAT) amounted to 1 1.9 million for continuing and discontinued operations, compared to 1 8.3 million in the previous year. This includes a tax-free amount of 1 1.5 million, which resulted from the sale of the Test Systems division in 2010. Basic earnings per share (EPS) from continuing and discontinued operations amounts to 1 0.10 (previous year: 1 0.44).
Cash flow from operating activities in the first half of the year was 1 -4.5 million, compared to 1 0.02 million in the previous year. Free cash flow, excluding the effects of M&A activities and securities purchases and sales, totaled 1 -7.1 million (previous year: 1 -2.5 million). As of June 30, 2012, the SUSS MicroTec Group therefore had cash and interest-bearing securities of 1 43.9 million (June 30, 2011: 1 50.6 million). The net cash position of 1 30.1 million was lower than the 1 38.5 million as of March 31, 2012 (June 30, 2011: 1 35.5 million).
The regional distribution of orders displays the following picture: While the regions of Europe and North America recorded significant increases of 54% and 113%, respectively, the regions of Japan and the rest of Asia had to endure declines in order entry of 23% and 22%, respectively.
Sales in all regions except Japan displayed declines. The regions of North America, Europe, and Rest of Asia recorded declines in sales of 3%, 6%, and 40%, respectively. However, sales in Japan rose by approximately 20%.
| H1 2011 | H1 2012 | |
|---|---|---|
| Europe | ||
| 18.8 17.8 |
||
| North America | 14.7 14.2 |
|
| Japan | 7.6 9.1 |
|
| Rest of Asia | 43.5 |
26.4
Sales by Region * in 1 million
| Order Entry by Region * in 1 million |
|---|
| H1 2011 H1 2012 |
| Europe |
| 9.4 |
| 14.5 |
| North America |
| 7.7 |
| 16.4 |
| Japan |
| 5.2 |
| 4.0 |
| Rest of Asia |
| 58.1 |
| 45.5 |
The Lithography division includes the development, manufacture, and sale of the Mask Aligner, Developer, and Coater product lines. These product lines are manufactured in Germany at the locations in Garching near Munich and, since the beginning of 2010, in Sternenfels. The Lithography division was strengthened in the first quarter of 2012 by the acquisition of Tamarack Scientific Co., Inc. The company was founded in 1966 and has its headquarters in Corona in southern California (USA). Tamarack is a leading provider of UV projection lithography devices as well as laser-based microstructuring systems.
The Lithography division recorded a slight decline in both order entry and sales in the first six months of the 2012 fiscal year. Order entry of 1 53.6 million was approximately 5% below its total of 1 56.3 million in the previous year. Division sales in the first quarter of 2012 amounted to 1 49.2 million after 1 52.5 million in the first half of the previous year. Division earnings deteriorated from 1 13.1 million to 1 10.2 million, reflecting the negative impact of the Tamarack acquisition in the first half of the year. The purchase price allocation and Tamarack's negative operating result reduced earnings by approximately 1 0.8 million. Despite this adverse impact on earnings, the division generated an EBIT margin of 20.6%.
The Substrate Bonder division comprises the development, production, and sale of the Substrate (Wafer) Bonder product line and is located at our main production site in Sternenfels (Germany).
In the first half of the year, the Substrate Bonder division recorded a 23% decline in order entry from 1 9.3 million to 1 7.2 million in 2012. Compared to the same period of the previous year, sales rose from 1 7.7 million to 1 8.8 million. Division earnings deteriorated slightly by mid-year to 1 -6.1 million (H1 2011: 1 -5.0 million).
The Photomask Equipment division comprises the development, manufacture, and sale of the HMx, ASx, and MaskTrack product lines. 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.
In the first half of 2012, the Photomask Equipment division recorded order entry of 1 17.2 million, 51% above the previous year's level (previous year: 1 11.4 million). Division sales declined from 1 20.7 million in 2011 to 1 7.4 million in 2012. Since this division is very cyclical, noticeable fluctuations in order entry, sales, and thus profitability are to be expected in the future as well. Division earnings in the first half showed a loss of 1 -1.3 million (H1 2011: 1 4.3 million).
The Others division comprises Micro-optics activities at the Neuchâtel, Switzerland, location, the C4NP business, as well as the costs for central Group functions that generally cannot be attributed to the main divisions. At the end of 2011, the Mask business for the semiconductor industry in Palo Alto, USA, was sold. Ownership of the Micro-optics business was boosted to 100% in the first half of the year. In this way, the company, which commands important enabling technologies, will be even more closely tied to SUSS MicroTec.
Division sales of 1 2.0 million declined from the previous year (-46%), while order entry declined by 29% to 1 2.4 million (H1 2011: 1 3.4 million). Division earnings of 1 -1.3 million improved from 1 -1.9 million in the previous year.
In the first half of 2012, sales of the SUSS MicroTec Group totaled approximately 1 67.5 million, or 20.2% less than in the first half of 2011 (1 84.7 million). EBIT in the first half of 2012 amounted to 1 1.5 million (continuing operations). In the first half of 2011, SUSS MicroTec still managed to achieve EBIT of 1 10.6 million. The sale of the Test division, which occurred in the first quarter of 2010, produced additional proceeds of 1 1.5 million in January 2012, which are recognized under profit from discontinued operations.
As in previous quarters, the largest sales driver was the Lithography division, which resulted in sales of 1 49.2 million and an EBIT of 1 10.2 million. The Lithography division thus contributed nearly 73% of Group sales. In the first half of the previous fiscal year, the SUSS MicroTec Group's Lithography division generated sales of 1 52.5 million and an EBIT of 1 13.1 million.
Sales in the Substrate Bonder division increased by approximately 15% compared to the first half of the previous year. As of June 30, 2012, this division had been able to generate sales of approximately 1 8.8 million (H1 2011: 1 7.7 million). The result in the Substrate Bonder division continued to be impaired by high write-downs on capitalized development costs and high development costs associated with thin wafer handling. As a result of these high expenses, the EBIT deteriorated further and amounted to 1 -6.1 million (after 1 -5.0 million in the corresponding period of the previous year).
Sales in the Photomask Equipment division in the first half of 2012 were unable to match the record level achieved in the same period of the previous year. As of June 30, 2012, this division generated sales of 1 7.4 million, while in the same period of the previous year it had produced sales of 1 20.7 million. In the first half of 2012, EBIT in the Photomask Equipment division was negative at 1 -1.2 million and it was characterized by much lower sales combined with a lower gross profit margin. In the first half of 2011, EBIT of 1 4.3 million could still be achieved.
The cost of sales included write-downs for capitalized development costs of 1 1.3 million, while only minor capitalizations in the five-digit range were carried out in the first half of 2012. In the first half of 2011, 1 0.1 million of capitalizations were carried out. As a result, write-downs also exceeded new capitalizations by 1 1.1 million in the previous year.
The gross profit decreased by 1 9.0 million compared with the previous year's period, amounting to 1 24.9 million in the first half of 2012. The gross profit margin declined from 40.0% in the same period of the previous year to 36.9%. The lower gross profit margin was partially attributable to a slight decline in the margin in the Lithography division, which reported a much higher gross profit margin in the first half of 2011 as a result of several high-margin orders in the Aligner business. In addition, the average gross profit margin in the Photomask Equipment division declined significantly. The gross profit margin of the Substrate Bonder division continues to be impaired by high write-downs for capitalized development costs and low-margin orders, which were taken for strategic reasons.
It was possible to keep administrative and selling costs at a low level through the systematic and continued implementation of the cost-saving program. Overall, administrative and selling costs of 1 18.1 million were incurred, representing an expense ratio of 26.8% relative to sales generated. In the same period of the previous year, corresponding costs of 1 17.4 million were recorded, representing approximately 21% of sales generated.
Research and development costs totaled 1 4.4 million in the first half of 2012, compared with 1 5.6 million in the same period of the previous year. Nevertheless, the operations of this division were approximately at the level of the previous year. In the first half of 2012, they involved several projects primarily in the Lithography and Substrate Bonder divisions. However, portions of development costs in the first half of 2012 were booked directly to customer projects. Thus, a lower amount was disclosed for research and development costs in the reporting period.
Other operating income of 1 1.7 million consisted primarily of foreign currency gains. During the corresponding period of the previous year, other operating expenses similarly recognized 1 2.3 million of primarily foreign currency gains. Other operating expenses of 1 2.6 million primarily comprised foreign currency losses. Also in the first half of 2011, other operating expenses of 1 2.7 million resulted primarily from foreign currency losses.
The financial result for the first half of 2012 amounted to 1 0.1 million, reflecting interest income and expenses. The financial result of 1 0.7 million in the previous year's corresponding period included not only interest income and expenses but also accounting profits of 1 0.8 million resulting from the sale of Cascade shares in the first quarter of 2011.
In the first half of 2012, a tax expense of 1 1.3 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.
As a result of the sale of the Test Systems business on January 28, 2010, a total of 1 2.5 million of the purchase price was placed in escrow. Release was dependent on certain conditions that SUSS MicroTec had to fulfill after the transaction. At the beginning of 2012, the escrow accounts reported a remaining amount of 1 1.5 million. On January 27, 2012 (24 months after the conclusion of the purchase contract), the relevant conditions were deemed fulfilled. The amount of 1 1.5 million was released to SUSS MicroTec AG in February 2012 and recognized with effect on net income. The income is recognized under profit from discontinued operations.
The SUSS MicroTec Group's net cash position – the balance from cash and cash equivalents, interest-bearing securities, and financial liabilities – fell by approximately 1 11.9 million when compared with December 31, 2011, to approximately 1 30.1 million.
Before consideration of securities purchases and sales as well as acquisitions of subsidiaries, free cash flow was negative in the first half of the year at 1 -7.1 million. One reason for this was negative cash flow from operating activities, which was driven primarily by a strong build-up of inventories. Another reason was that cash flow from investing activities was negative. In the first half of 2011, free cash flow was also negative at 1 -2.5 million.
Cash flow from operating activities was primarily impaired by a Group-wide increase in inventories, particularly of tools, which had already been delivered to customers but for which final acceptance was still outstanding. In addition, inventories of demonstration equipment (both in the Lithography and Substrate Bonder divisions) increased significantly. The purchase of inventories resulted in the outflow of approximately 1 16.7 million in cash and cash equivalents. An offsetting factor was a reduction in trade receivables by approximately 1 5.3 million, which resulted primarily from the Photomask Equipment division and was attributable to lower sales in this division. It was possible to increase the amount of customer down payments in the first half of 2012, leading to inflows of approximately 1 6.3 million. However, this positive effect was offset by the high tax payments of all Group companies, which summed up to approximately 1 7.0 million in the first half of 2012. In the first half of 2012, total cash flow from operating activities was 1 -4.5 million.
Cash flow from investing activities totaled 1 -2.6 million, excluding investments in securities and the acquisition of subsidiaries. The largest capital expenditure items in the first half of 2012 involved various renovations and expansions of the Sternenfels facility, the acquisition of business and office equipment, and the purchase of administrative software. In addition, a cleanroom was installed in the newly leased building of SUSS MicroOptics S.A., Neuchâtel (Switzerland), which required outlays of approximately 1 0.9 million by the reporting date.
Cash flow from financing activities reflected the repayment of a bank loan and the reduction of other financial liabilities.
Besides cash and cash equivalents of 1 13.6 million (12 / 31 / 2011: 1 37.0 million), the Group had credit and guarantee lines of 1 11.2 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 3.9 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 45.3 million as of the halfyear reporting date and were thus 1 7.6 million higher than on 12 / 31 / 2011. The preliminary initial consolidation of Tamarack Scientific Inc., which resulted in goodwill of approximately 1 4.0 million, accounted for most of this increase. In addition, the initial consolidation added approximately 1 3.1 million to intangible assets, while tangible assets increased by approximately 1 1.5 million. Other investments in the first half of 2012 accounted for 1 0.4 million of intangible assets. Ongoing investments in tangible assets amounted to approximately 1 2.0 million, including the installation of a cleanroom at SUSS MicroOptics S.A., Neuchâtel (Switzerland), whose outlays totaled 1 0.9 million as of the reporting date. Write-downs of intangible assets of 1 2.3 million and tangible assets of 1 1.0 million had an offsetting effect. Deferred tax assets were reduced primarily as a result of the reversal 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 of the Group rose by 1 7.0 million from 1 150.1 million (12 / 31 / 2011) to 1 157.1 million as of the half-year reporting date. This was largely attributable to an inventory increase of 1 23.2 million to 1 94.8 million. An increase of 1 6.7 million in inventories of tools, which had already been delivered to customers but for which final acceptance was still outstanding, accounted for most of this rise. Inventories of demonstration equipment also rose by 1 4.9 million from the end of 2011. Inventories of materials and supplies grew by 1 2.9 million, while inventories of unfinished goods increased by 1 1.9 million. In addition, the preliminary initial consolidation of Tamarack Scientific Inc. resulted in an increase in inventories of 1 9.0 million, which primarily involved inventories of unfinished tools, materials and supplies, as well as demonstration equipment. In the first six months of the current year, write-downs of inventory reserves increased by a total of 1 2.2 million, whereby the majority was attributable to the depreciation of demonstration equipment.
Trade receivables also showed a significant decline from 1 17.8 million (12 / 31 / 2011) to 1 13.2 million. The decline occurred primarily in the Photomask Equipment division, which generated much lower sales in the current fiscal year than in the previous year.
The SUSS MicroTec Group's portfolio of securities increased in the first six months of the current fiscal year from 1 19.4 million to 1 30.3 million. In the past half-year, securities were acquired for approximately 1 14.9 million with available cash and cash equivalents. Securities valued at approximately 1 4.0 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 paper.
The shareholders' equity of the SUSS MicroTec Group has grown since 12 / 31 / 2011 by 1 1.9 million to 1 122.3 million. The equity ratio declined from 64.1% to 60.4%.
With the purchase agreement dated May 14, 2012, SUSS MicroTec acquired 15% of the shares of SUSS MicroOptics S.A., Neuchâtel (Switzerland), thereby boosting its majority stake from 85% to 100%. The purchase price for the shares came to a converted amount of 1 1.1 million. In accordance with IAS 27, the acquisition was recognized as an equity transaction. As a result, equity of 1 0.7 million, which had been assigned to minority shareholders until May 14, 2012, was cleared from the accounts. The amount of 1 0.4 million in excess of the purchase price was recognized under consolidated capital surplus.
Additional details about the development of consolidated equity are presented in the equity reconciliation statement.
Noncurrent liabilities rose by 1 5.0 million from 1 10.5 million to 1 15.5 million. The increase resulted primarily from the preliminary initial consolidation of Tamarack Scientific Inc., which led to the deferral of a noncurrent earn-out liability of 1 3.4 million and deferred tax liabilities of 1 1.6 million.
In the first half of 2012, current liabilities grew by 1 7.8 million to 1 64.7 million. The level of down payments, which amounted to approximately 1 30.3 million as of June 30, 2012 (compared with 1 18.4 million as of 12 / 31 / 2011), accounted for most of this increase. Through the preliminary initial consolidation, Tamarack Scientific Inc. contributed approximately 1 5.3 million to received down payments. The 1 4.8 million reduction in tax liabilities to 1 0.9 million had an offsetting effect: The companies of the SUSS MicroTec Group paid approximately 1 7.0 million in taxes in the first half of the year.
As of 6/ 30/ 2012, the Group had 689 employees within the individual companies (06/ 30/ 2011: 632 employees). During the past 12 months, the change in the number of employees was driven by restructuring: In the third quarter of 2011, the Waterbury site was closed and several remaining employees of SMT Inc., who were working in the Substrate Bonder division, consequently left the Group. At the same time, SMTL in Germany hired several new employees. As a result of the sale of the Mask business, which was carried out in the fourth quarter of 2011, 19 employees left the Group. However, in the first quarter of 2012, the number of employees increased significantly once again: With the acquisition of Tamarack Scientific Inc., the number of employees in the Group rose by 59. In addition, several employees were hired in the area of sales and service in the Asian sales organizations, in order keep up with growing business in Asia.
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.
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 connection with the relocation of the Substrate Bonder division from Waterbury (USA) to Sternenfels, SUSS MicroTec has reorganized its relationships with suppliers to some extent. In 2011, this led to delays in the procurement of parts and thus extended delivery times for customers. It was possible to completely overcome these start-up problems in the first half of 2012. Delivery times for both procurement and our customers are now in the normal range.
In the next several years, SUSS MicroTec expects significant growth in the Substrate Bonder division and is reckoning with long-term, robust growth in sales as well as increased profitability. However, we recognize that there is a risk that delays could occur with the introduction of 3D technology and, in turn, with demand for thin wafer handling solutions, if certain process steps do not allow for manufacturing readiness in a timely manner or the business climate deteriorates further in coming quarters. Should the anticipated orders and sales in this division not materialize or occur in later periods, the Substrate Bonder division would continue to post a loss.
In March 2012, SUSS MicroTec acquired 100% of the shares in Tamarack Scientific Inc., Corona (USA). The UV projection lithography devices and laser microstructuring systems developed by Tamarack offer SUSS MicroTec the possibility of expanding its own product range. SUSS MicroTec expects that, given the technologies developed by Tamarack, it will be possible to approach more customers, especially in the area of advanced packaging, 3D integration, and MEMS as well as tap into new businesses. There is the risk that entry into new markets may be delayed if our customers' willingness to invest subsides. However, the acquisition of Tamarack has resonated well with numerous SUSS MicroTec customers so that we continue to expect the prompt and successful integration of Tamarack technology into our product portfolio.
Regarding other operating risks, there were no substantial changes to the risks and opportunities outlined in the 2011 Annual Report in the first half of 2012.
At the SUSS MicroTec Group, financial market risks encompass credit risks, liquidity risks, and market price risks. The 2011 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 2012 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 2011 Annual Report continued to be used in the first half of 2012.
No material events requiring disclosure occurred after the end of the interim reporting period.
In the first half of 2012 and the 2011 fiscal year, there were no material transactions with related parties subject to the disclosure requirements of IAS 24.
The business environment in which SUSS MicroTec AG 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.
Despite the European debt crisis, the economy began 2012 on a positive note. This led to share price gains on world stock exchanges. However, the structural problems in Europe and several other countries around the world remain unresolved. Consequently, macroeconomic uncertainty is still a decisive factor for the economy. According to an economic forecast by the ifo Institute in Munich, the business climate deteriorated significantly in the months of May and June. The World Bank also noted a significant increase in market uncertainty in its "Global Economic Prospects" from June 2012. According to its report, the World Bank expects a 2.5% rise in global output in 2012 after 2.7% in 2011. By contrast, the ifo Institute currently anticipates global growth of 3.2%. The 2011 fall report from the German economic research institutes projected growth of 1.1% for the eurozone. Today, both the World Bank and the ifo Institute expect a decline in the gross domestic product of the eurozone of -0.5% and -0.3%, respectively. However, it is repeatedly emphasized that forecasting uncertainty is currently very high. Today's economy is much more dependent on political decisions in individual countries and at the EU level. Nevertheless, adjustments to forecasts since the end of 2011 clearly indicate a worsened global outlook.
The economy in Germany should grow by approximately 0.7% in 2012 and somewhat faster in 2013 at a rate of 1.3%. The ifo Institute expects a period of weak business conditions during the summer months, which was already signaled by the gloomy business climate index from May and June 2012. The primary reason for the darkened outlook is the sustained political and economic uncertainty regarding the further course of the European debt crisis.
As early as the second half of 2011, worsening macroeconomic conditions had a demonstrable impact on order entry in the semiconductor industry. At the end of 2011, the Gartner market research institute estimated the worldwide growth of the semiconductor industry at 2.2% for 2012. In March 2012, Gartner increased the estimates and now assumes growth of approximately 4% for the current fiscal year, corresponding to a total market volume of US\$ 316 billion. Semiconductor sales to the computer industry are expected to increase by 4.7%, while sales of semiconductor components for cellular telephones should rise by as much as 6.7%. Gartner is generally expecting an increase beginning in the second half of 2012.
According to the Gartner market research institute, the semiconductor equipment industry recorded growth of approximately 13% in 2011. The estimate for 2012 was improved in June 2012. At the beginning of the year, the assumption had been a decline of almost 20%, whereas a decline of approximately 13% is currently projected for semiconductor equipment manufacturers. In particular, higher sales of complex mobile devices have driven the demand for new equipment more than originally expected. Gartner is again much more optimistic for 2013, as it anticipates an increase of approximately 7% over the previous year.
Gartner expects a slight decline in sales of approximately 5% in 2012 for the specialty area of packaging and assembly. However, renewed robust growth of more than 34% is expected for 2013.
The market for microelectromechanical systems (MEMS) will also experience strong growth in the future, according to estimates by Yole Dèveloppement. According to the estimates, approximately 20% annual growth in volume is expected on average in the coming years. This growth in volume translates into MEMS market growth of approximately 13% annually. By 2017, the total market should have reached a size of approximately US\$ 17 billion. Motion sensors and microfluidics should account for the largest share of this market. In addition, the market for new MEMS applications and combinations of different sensors – for example for humidity measurement, pressure sensor technology, or energy management – will gain in importance.
However, when interpreting market figures, it should be noted that the equipment market in this segment is not growing as quickly as the MEMS market itself. This is due to the fact that the higher degree of productivity of the systems enables an ever-increasing number of MEMS components to be produced per tool.
For wafer-level packaging (advanced packaging), researchers from Yole Developpement are forecasting an average annual growth rate of approximately 12% for the period from 2010 to 2016. However, that is lower than the estimate from 2010, which still anticipated average annual growth of 22%.
The expected growth rates for 3D integration are expected to be significantly higher. According to a 2011 study by the Yole Dèveloppement market research institute, the equipment market for temporary wafer bonding is anticipated to reach a volume of approximately US\$ 300 million by 2016. Over the same period, the equipment market for permanent bonding is forecast to reach a volume of more than US\$ 500 million. Much of this growth will be driven by 3D integration.
In the market for compound semiconductors, SUSS MicroTec focuses on the growth segment of lightemitting diodes (LEDs) and, with its product solutions, is particularly targeting manufacturers of high-end light-emitting diodes, i.e. high brightness (HB) and ultra-high brightness (UHB) LEDs. SUSS MicroTec is actively involved in the latest generations of technology, which specifically require thin wafer handling.
After a generally challenging year in 2011, the LED market showed signs of stabilization at a low level in the first half of 2012. The overcapacities that have developed will be reduced slowly but steadily. The market research institute Yole Dèveloppement again anticipates rising sales leading to a renewed investment cycle in the LED sector beginning in 2013. This development will be driven by the trend toward general illumination using high and ultra-high brightness LEDs. The costs per lumen must be reduced further in order for this technology to achieve broad acceptance.
Aside from market conditions, the innovation potential of our Company is also a critical factor for our success. In the first half of 2012, we consistently pursued activities in this regard. With XBC300 Gen2, we introduced a new device platform for 3D processes in volume production to the market. This latest generation of bonding equipment can be configured for the permanent bonding of wafers or for the debonding and cleaning of 200mm and 300mm wafers. The area of application for XBC300 Gen2 encompasses both production and process development. In addition, March 2012 saw the market launch of RCD8, a new manual device platform for the coating and developing of substrates. The new platform is characterized by a high degree of application area flexibility combined with lower investment costs.
We strengthened our position on the product and technology front with the acquisition of Tamarack Scientific, Corona, USA. Tamarack develops, manufactures, and distributes UV projection lithography devices as well as laser-based microstructuring systems. It focuses on the advanced packaging, 3D integration, MEMS, and LED markets. With the acquisition of Tamarack, SUSS MicroTec is pursuing a consolidation strategy at the semiconductor back-end and is expanding its existing expertise in lithography with projection lithography, a complementary technology.
In 2012, we also entered into various cooperative agreements, notably including collaboration with GenISys and Dow Corning.
Uncertainty among consumers has led to a significant darkening of the economic outlook since the second half of 2011. In addition, politicians have not presented any practical solution for the debt crisis in Europe thus far. Aside from the macroeconomic landscape, however, we see that the trends driving SUSS MicroTec's business remain in place.
Due to the strong order intake in the first half of 2012, the sales forecast is raised to 1 160– 170 million for the full year. So far the Company expected sales to come in above 1 155 million and an EBIT-margin at the lower end of a 5 – 10% bandwidth. In this context SUSS MicroTec updates the guidance for the full year and expects EBIT to be between 1 5 – 10 million. The current EBIT expectation reflects a 1 2.5 million burden caused by the acquisition of Tamarack Scientific, of which 0.6 million are attributable to the purchase price allocation. For the fiscal year 2012 the Company has guided for a Free Cash Flow of a mid-single digit million 1 amount. Due to the strategic increase in working capital it now expects the Free Cash Flow to be in the low-single digit million 1 range.
For the third quarter of 2012, SUSS MicroTec expects an order entry in the range of 1 30 million to 1 40 million.
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 6, 2012
The Management Board
Frank Averdung Michael Knopp
Chief Executive Officer Chief Financial Officer
of SUSS MicroTec AG
| in 1 thousand | Q2 2012 | Q2 2011 | 01/01/2012 – 06/30/2012 |
01/01/2011 – 06/30/2011 |
|---|---|---|---|---|
| Sales | 36,304 | 52,638 | 67,512 | 84,662 |
| Cost of sales | -22,673 | -32,487 | -42,596 | -50,777 |
| Gross profit | 13,631 | 20,151 | 24,916 | 33,885 |
| Selling costs | -5,103 | -4,373 | -9,555 | -9,066 |
| Research and development costs | -1,977 | -3,277 | -4,366 | -5,572 |
| Administration costs | -4,506 | -4,137 | -8,495 | -8,310 |
| Other operating income | 951 | 996 | 1,680 | 2,292 |
| Other operating expenses | -1,413 | -1,246 | -2,639 | -2,654 |
| Analysis of net income from operations (EBIT): | ||||
| EBITDA (Earnings before Interest and Taxes. Depreciation and Amortization) | 3,340 | 9,787 | 4,812 | 13,719 |
| Depreciation and amortization of tangible assets, intangible assets and investments in subsidiaries |
-1,757 | -1,673 | -3,271 | -3,144 |
| Net income from operations (EBIT) | 1,583 | 8,114 | 1,541 | 10,575 |
| Financial income | 245 | 260 | 465 | 1,309 |
| Financial expense | -138 | -306 | -361 | -620 |
| Financial result | 107 | -46 | 104 | 689 |
| Proft from continuing operations before taxes | 1,690 | 8,068 | 1,645 | 11,264 |
| Income taxes | -1,090 | -2,184 | -1,290 | -2,938 |
| Profit from continuing operations | 600 | 5,884 | 355 | 8,326 |
| Net profit or loss from discontinued operations (after taxes) | 0 | 0 | 1,507 | -21 |
| Net profit | 600 | 5,884 | 1,862 | 8,305 |
| Thereof equity holders of SUSS MicroTec | 596 | 5,861 | 1,832 | 8,216 |
| Thereof minority interests | 4 | 23 | 30 | 89 |
| Earnings per share (undiluted) | ||||
| Basic earnings per share from continuing operations in EUR | 0.03 | 0.31 | 0.02 | 0.44 |
| Basic earnings per share from discontinued operations in EUR | 0.00 | 0.00 | 0.08 | 0.00 |
| Earnings per share (diluted) | ||||
| Basic earnings per share from continuing operations in EUR | 0.03 | 0.31 | 0.02 | 0.44 |
| Basic earnings per share from discontinued operations in EUR | 0.00 | 0.00 | 0.08 | 0.00 |
| in 1 thousand | 01/01/2012 – 06/30/2012 | 01/01/2011 – 06/30/2011 |
|---|---|---|
| Net profit or loss | 1,862 | 8,305 |
| Fair value fluctuations of available for sale securities | 94 | -43 |
| Foreign currency adjustment | 1,183 | -1,023 |
| Cash flow hedges | -105 | 60 |
| Deferred taxes | -29 | -6 |
| Total income and expenses recognized in equity | 1,143 | -1,012 |
| Total income and expenses reported in the reporting period | 3,005 | 7,293 |
| Thereof equity holders of SUSS MicroTec | 2,966 | 7,183 |
| Thereof minority interests | 39 | 110 |
| Assets in 1 thousand | 06/30/2012 | 12/31/2011 |
|---|---|---|
| NON -CURREN T ASSE TS |
45,344 | 37,691 |
| Intangible assets | 9,959 | 8,568 |
| Goodwill | 17,642 | 13,599 |
| Tangible assets | 11,948 | 9,462 |
| Current tax assets | 87 | 87 |
| Other assets | 801 | 592 |
| Deferred tax assets | 4,907 | 5,383 |
| CURREN T ASSE TS |
157,143 | 150,055 |
| Inventories | 94,782 | 71,632 |
| Trade receivables | 13,165 | 17,790 |
| Other financial assets | 768 | 756 |
| Securities | 30,299 | 19,362 |
| Current tax assets | 1,519 | 686 |
| Cash and cash equivalents | 13,600 | 37,036 |
| Other assets | 3,010 | 2,793 |
| TOTAL ASSE TS |
202,487 | 187,746 |
| Liabilities & shareholders' equity in 1 thousand | 06/30/2012 | 12/31/2011 |
|---|---|---|
| Equity | 122,290 | 120,393 |
| Total equity attributable to shareholders of SUSS MicroTec AG | 122,290 | 119,704 |
| Subscribed capital | 19,115 | 19,101 |
| Reserves | 103,054 | 101,616 |
| Accumulated other comprehensive income | 121 | -1,013 |
| Minority interests | 0 | 689 |
| NON -CURREN T LIA BILITIES |
15,484 | 10,500 |
| Pension plans and similar commitments | 2,959 | 2,872 |
| Provisions | 358 | 348 |
| Financial debt | 4,002 | 4,279 |
| Other financial liabilities | 3,845 | 244 |
| Deferred tax liabilities | 4,320 | 2,757 |
| CURREN T LIA BILITIES |
64,713 | 56,853 |
| Provisions | 3,257 | 3,322 |
| Tax liabilities | 862 | 5,734 |
| Financial debt | 9,755 | 10,131 |
| Other financial liabilities | 7,199 | 5,995 |
| Trade payables | 7,914 | 7,582 |
| Other liabilities | 35,726 | 24,089 |
| TOTAL LIA BILITIES AND SHAREHOLDERS ' EQUITY |
202,487 | 187,746 |
| in 1 thousand | 01/01/2012 – 06/30/2012 | 01/01/2011 – 06/30/2011 |
|---|---|---|
| Net profit (after taxes) | 1,862 | 8,305 |
| Amortization of intangible assets | 2,285 | 2,022 |
| Depreciation of tangible assets | 986 | 1,122 |
| Profit or loss on disposal of intangible and tangible assets | 0 | 118 |
| Profit on disposal of Cascade shares | 0 | -833 |
| Change of reserves on inventories | 2,634 | -555 |
| Change of reserves for bad debts | 129 | 121 |
| Non-cash stock based compensation | 0 | 47 |
| Non-cash income from the reversal of provisions | 0 | -9 |
| Other non-cash effective income and expenses | 212 | 506 |
| Acquisition costs Tamarack | 242 | 0 |
| Gain from subsequent purchase price payment Test business | -1,507 | 0 |
| Change in inventories | -16,656 | -14,951 |
| Change in trade receivables | 5,289 | 94 |
| Change in other assets | -959 | -1,943 |
| Change in pension provisions | 87 | -93 |
| Change in trade payables | 7 | 154 |
| Change in other liabilities and other provisions | 405 | 3,973 |
| Change of deferred taxes | 453 | 1,945 |
| Cash flow from operating activities | -4,531 | 23 |
| in 1 thousand | 01/01/2012 – 06/30/2012 | 01/01/2011 – 06/30/2011 |
|---|---|---|
| Disbursements for tangible assets | -1,978 | -1,962 |
| Disbursements for intangible assets | -549 | -515 |
| Purchases of current available-for-sale securities | -14,875 | -24,948 |
| Proceeds from redemption of available-for-sale securities | 4,031 | 2,099 |
| Proceeds from redemption of Cascade shares | 0 | 3,333 |
| Proceeds from disposal of intangible and tangible assets | 1,507 | 0 |
| Payments for purchase of SMO shares | -1,126 | 0 |
| Payments for purchase of Tamarack | -5,426 | 0 |
| Cash flow from investing activities | -18,416 | -21,993 |
| Repayment of bank loans | -180 | -180 |
| Change in current bank liabilities | -196 | 419 |
| Change in other financial debt | -277 | -665 |
| Proceeds from exercise of subscription rights | 18 | 437 |
| Cash flow from financing activities | -635 | 11 |
| Adjustments to funds caused by exchange-rate fluctuations | 146 | -216 |
| Change in cash and cash equivalents | -23,436 | -22,175 |
| Funds at beginning of the year | 37,036 | 36,525 |
| Funds at end of the period | 13,600 | 14,350 |
| Cash flow from operating activities includes: | ||
| Interest paid during the period | 114 | 199 |
| Interest received during period | 555 | 392 |
| Tax paid during the period | 7,010 | 1,271 |
| Tax refunds during the period | 0 | 0 |
| in 1 thousand | Subscribed capital | Additional paid-in capital |
Earnings reserve | |
|---|---|---|---|---|
| As of 01 January 2011 | 18,721 | 98,225 | 433 | |
| Exercise of subsription rights | 336 | 101 | ||
| Issuance of subscription rights | 46 | |||
| Net profit | ||||
| Total income and expenses recognized in equity | ||||
| As of June 30, 2011 | 19,057 | 98,372 | 433 | |
| As of 01 January 2012 | 19,101 | 98,384 | 433 | |
| Exercise of stock options | 14 | 4 | ||
| Net profit in equity | ||||
| Total income and expenses recognized | ||||
| Purchase of minority interest SMO | -398 | |||
| As of June 30, 2012 | 19,115 | 97,990 | 433 |
| Equity | Minority interests | Total equity attributable to shareholders of Suss MicroTec AG |
Accumulated other Comprehensive Income |
Retained Earnings |
|---|---|---|---|---|
| 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 |
| 120,393 | 689 | 119,704 | -1,013 | 2,799 |
| 18 | 18 | |||
| 1,862 | 30 | 1,832 | 1,832 | |
| 1,143 | 9 | 1,134 | 1,134 | |
| -1,126 | -728 | -398 | ||
| 122,290 | 0 | 122,290 | 121 | 4,631 |
| Lithography | Substrate Bonder | Photomask Equipment | |||||
|---|---|---|---|---|---|---|---|
| in 1 thousand | 6M / 2012 | 6M / 2011 | 6M / 2012 | 6M / 2011 | 6M / 2012 | 6M / 2011 | |
| External Sales | 49,246 | 52,462 | 8,834 | 7,713 | 7,398 | 20,730 | |
| Internal Sales | 0 | 0 | 0 | 0 | 0 | 0 | |
| Total Sales | 49,246 | 52,462 | 8,834 | 7,713 | 7,398 | 20,730 | |
| Result per segment (EBIT) | 10,168 | 13,119 | -6,071 | -4,968 | -1,263 | 4,307 | |
| Income before taxes | 10,162 | 13,071 | -6,071 | -4,970 | -1,264 | 4,305 | |
| Significant non-cash items | -538 | -409 | -1,590 | -1,242 | -392 | -149 | |
| Segment assets | 86,459 | 68,951 | 35,565 | 31,706 | 15,200 | 16,094 | |
| thereof Goodwill | 17,642 | 13,599 | 0 | 0 | 0 | 0 | |
| Unallocated assets | |||||||
| Total assets | |||||||
| Segment liabilities | -35,247 | -29,391 | -6,129 | -8,147 | -6,847 | -6,981 | |
| Unallocated liabilities | |||||||
| Total liabilities | |||||||
| Depreciation and amortisation | 1,050 | 750 | 1,091 | 972 | 306 | 312 | |
| thereof scheduled | 1,050 | 750 | 1,091 | 972 | 306 | 312 | |
| thereof impairment loss | 0 | 0 | 0 | 0 | 0 | 0 | |
| Capital expenditure | 5,442 | 934 | 132 | 781 | 31 | 203 | |
| Workforce at June 30 | 411 | 330 | 132 | 134 | 105 | 108 | |
| Sales (continuing operations) | Capital expenditure | Assets | ||||
|---|---|---|---|---|---|---|
| in 1 thousand | 6M / 2012 | 6M / 2011 | 6M / 2012 | 6M / 2011 | 6M / 2012 | 6M / 2011 |
| Europe | 17,761 | 18,787 | 2,064 | 1,410 | 104,235 | 110,737 |
| North-America | 14,246 | 14,736 | 5,018 | 703 | 22,280 | 10,166 |
| Japan | 9,148 | 7,604 | 0 | 1 | 2,774 | 3,594 |
| Rest of Asia | 26,357 | 43,535 | 20 | 58 | 1,759 | 3,482 |
| Consolidation effects | 0 | 0 | 0 | 0 | 16,448 | -803 |
| Total | 67,512 | 84,662 | 7,102 | 2,172 | 147,496 | 127,176 |
| Other | Continuing operations | Discontinued Operations (Test business) |
Consolidation effects | Total | |||||
|---|---|---|---|---|---|---|---|---|---|
| 6M / 2012 | 6M / 2011 | 6M / 2012 | 6M / 2011 | 6M / 2012 | 6M / 2011 | 6M / 2012 | 6M / 2011 | 6M / 2012 | 6M / 2011 |
| 2,034 | 3,757 | 67,512 | 84,662 | 0 | 70 | - | - | 67,512 | 84,732 |
| 4,172 | 3,600 | 4,172 | 3,600 | 0 | 0 | -4,172 | -3,600 | 0 | 0 |
| 6,206 | 7,357 | 71,684 | 88,262 | 0 | 70 | -4,172 | -3,600 | 67,512 | 84,732 |
| -1,293 | -1,883 | 1,541 | 10,575 | 1,507 | -21 | - | - | 3,048 | 10,554 |
| -1,182 | -1,142 | 1,645 | 11,264 | 1,507 | -21 | - | - | 3,152 | 11,243 |
| 5 | -75 | -2,515 | -1,875 | 0 | 0 | - | - | -2,515 | -1,875 |
| 10,272 | 10,425 | 147,496 | 127,176 | 0 | 0 | - | - | 147,496 | 127,176 |
| 0 | 0 | 17,642 | 13,599 | 0 | 0 | - | - | 17,642 | 13,599 |
| 54,991 | 64,544 | ||||||||
| 202,487 | 191,720 | ||||||||
| -2,682 | -1,648 | -50,905 | -46,167 | 0 | 0 | - | - | -50,905 | -46,167 |
| -29,292 | -31,373 | ||||||||
| -80,197 | -77,540 | ||||||||
| 824 | 1,110 | 3,271 | 3,144 | 0 | 0 | - | - | 3,271 | 3,144 |
| 824 | 1,110 | 3,271 | 3,144 | 0 | 0 | - | - | 3,271 | 3,144 |
| 0 | 0 | 0 | 0 | 0 | 0 | - | - | 0 | |
| 1,497 | 559 | 7,102 | 2,477 | 0 | 0 | - | - | 7,102 | 2,477 |
| 41 | 60 | 689 | 632 | 0 | 0 | - | - | 689 | 632 |
of SUSS MicroTec AG as of June 30, 2012
The consolidated financial statements of SUSS Micro-Tec AG as of December 31, 2011, 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, 2012, 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 2011 fiscal year.
All of the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) in effect as of June 30, 2012, 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, 2011.
The Group auditor 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). By purchase agreement dated March 29, 2012, SUSS MicroTec Group acquired 100% of the shares in Tamarack Scientific Co. Inc. (Corona, CA, USA). The purchase price consists of a fixed component of US\$ 9.34 million as well as a variable component, which depends on the development of revenues in the next three fiscal years. As of June 30, 2012, provisions were set aside for the potential earn-out. Based on the existing corporate plans for Tamarack, the amount of the total earnout liability was estimated to be approximately US\$ 6.8 million. In the second quarter of 2012, a preliminary purchase price allocation was carried out that led to the realization of undisclosed reserves of US\$ 5.2 million. At the same time, deferred tax liabilities of US\$ 2.1 million were recognized. The purchase price allocation resulted in total preliminary goodwill of US\$ 5.1 million, which will be tested for impairment once a year in the future or whenever there are unusual events. Goodwill related to the acquisition will be allocated to the Lithography division. Additional acquisition costs currently amounting to 1 263 thousand were directly recognized under expenses.
With the purchase agreement dated May 14, 2012, SUSS MicroTec acquired 15% of the shares of SUSS Micro-Optics S.A., Neuchâtel (Switzerland), in the process boosting its stake from 85% to 100%. The purchase price totaled CHF 1.35 million and was paid in May 2012.
Compared with the consolidated financial statements as of December 31, 2011, there were no additional changes to the scope of consolidation.
SUSS MicroTec Group has various credit facilities with national and international banks and insurance companies. The credit and guarantee line of 1 8 million provided by a bank consortium led by BayernLB remained in effect until March 31, 2012. In addition, DZ Bank AG provided a credit and guarantee line of 1 2 million, which also had a term until March 31, 2012.
Upon expiration of the previous credit agreements, the bank consortium was expanded to include not only BayernLB as the lead manager and Deutsche Bank, but also DZ Bank AG, as of April 1, 2012. SUSS MicroTec AG and SUSS MicroTec Lithography GmbH concluded new credit agreements with the new bank consortium in March 2012. The new credit agreements resulted in credit and guarantee lines totaling 1 7.5 million. The credit lines, whose term runs until March 31, 2013, were issued without covenants. Their primary purpose is to serve as backing for down payment guarantees.
By purchase agreement dated March 29, 2012, SUSS MicroTec Inc. (Sunnyvale, California, USA) acquired 100% of the shares in Tamarack Scientific Co. Inc. based in Corona, California, USA.
The acquisition of the shares and assets or liabilities is recorded in the consolidated financial statements of SUSS MicroTec AG in accordance with the International Financial Reporting Standards as a business combination, as stipulated in IAS 27 (rev. 2008) and IFRS 3 (rev. 2008). In this context, the acquired assets, liabilities, and contingent liabilities (with a few exceptions) are to be recognized at fair value at the time of acquisition (IFRS 3.18). In accordance with the guidelines of IFRS 3 in connection with IAS 38, not only assets appearing in the statement of financial position are to be taken into account, but also not yet recognized intangible assets.
In view of this, a preliminary purchase price allocation was conducted for the acquired assets and liabilities. The acquired assets and liabilities were recognized at the time of initial consolidation on March 31, 2012, as follows:
| in USD million | Book Value according to IFRS |
Value at time of acquisition |
|---|---|---|
| Intangible assets | 1.2 | 4.2 |
| Tangible assets | 1.7 | 1.9 |
| Other non-current assets | 0.3 | 0.3 |
| Current assets | 12.8 | 14.8 |
| Total assets | 16.0 | 21.2 |
| Non-current financial liabilities | 0.0 | 2.1 |
| Current financial liabilities | 9.2 | 9.2 |
| Total liabilities | 9.2 | 11.3 |
| Net assets | 6.8 | 9.9 |
| Acquisition costs | 9.3 | |
| Provisions for earn-out | 5.7 | |
| Goodwill | 5.1 | |
At the time of initial consolidation, previously unrecognized intangible assets of approximately US\$ 3.0 million, which primarily related to the acquired technology, were capitalized. The measurement of the technology is based on planning for the years 2012 to 2020 and the resulting cash flows. In addition, hidden reserves within tangible assets of US\$ 0.2 million were disclosed. Hidden reserves of approximately US\$ 2.0 million, which related to tools and unfinished goods in inventory reserves, were recognized in current assets.
Under noncurrent liabilities, deferred tax liabilities of US\$ 2.1 million were recognized as a result of the initial consolidation. The tax rate of approximately 40% for Tamarack Scientific Co., Inc. (Corona, USA) is relevant for the calculation.
Aside from the fixed purchase price of approximately US\$ 9.34 million, a variable purchase price component, which depends on the development of sales and margins in the next three years, has been agreed upon. The amount of the anticipated earn-out liability was estimated to be approximately US\$ 6.8 million, based on existing corporate plans. At the time of initial consolidation, appropriate (noncurrent) provisions of US\$ 5.7 million were recognized as liabilities.
Goodwill, which amounts to approximately US\$ 5.1 million, is allocated to the Lithography division. Goodwill will be tested for impairment in the future once a year or whenever there are unusual events.
Please note that the figures arising from the purchase price allocation are preliminary. The purchase price allocation will be finalized at the latest on December 31, 2012.
Additional acquisition costs currently amounting to 1 263 thousand were recognized under expenses.
Tamarack Scientific Co., Inc.'s income and expenses in the months from April to June 2012 are recorded in the consolidated statement of income. In this period, Tamarack Scientific Co., Inc. contributed sales of US\$ 0.3 million and earnings of US\$ -0.8 million to consolidated earnings after taxes. If SUSS MicroTec Group had already acquired Tamarack at the beginning of the reporting period, consolidated sales would have totaled 1 70.7 million and consolidated earnings after taxes 1 -2.6 million (continuing operations). Here it should be taken into account that Tamarack Scientific Inc. had to recognize several extraordinary effects in income at the time of the acquisition. As a result, deferred tax assets of US\$ 1.8 million had to be deleted.
With the purchase agreement dated May 14, 2012, SUSS MicroTec acquired 15% of the shares of SUSS MicroOptics S.A., Neuchâtel (Switzerland), in the process boosting its stake from 85% previously to 100%. The purchase price of the acquired shares amounts to CHF 1.35 million and was paid to the sellers in May 2012. In the consolidated financial statements of SUSS MicroTec AG, the share purchase was recorded as an equity transaction in accordance with IAS 27. The difference in amount between the paid purchase price and the lower carrying value of the acquired minority shares came to approximately 1 0.4 million and was recognized under consolidated additional paid-in capital.
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 six 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.
In connection with the sale of the Test Systems division in January 2010, portions of the agreed purchase price were placed in escrow. Release was dependent on certain conditions. As of December 31, 2011, these escrow accounts reported a remaining amount of 1 1.5 million. The conditions were deemed to be fulfilled in January 2012. As a result, in February 2012 the total amount of 1 1.5 million was paid out to SUSS MicroTec AG and recognized with effect on profit and loss. The income is recognized as of June 30, 2012, under profit from discontinued operations.
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, 2012, is analogous to the presentation as of December 31, 2011. 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 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 14,510 stock options from the 2008 stock option plan, a total of 14,510 new shares were issued until June 30, 2012. 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.
No 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, 2011.
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 / 2012 | 6M / 2011 |
|---|---|---|
| Profit from continuing operations | 355 | 8,326 |
| Less minority interests | -30 | -89 |
| Profit from continuing operations attributable to shareholders of SUSS MicroTec AG |
325 | 8,237 |
| Weighted average number of outstanding shares |
19,101,749 | 18,735,982 |
| Effect of the (potential) exercise of stock options (number of options) |
0 | 58,260 |
| Adjusted weighted average num ber of outstanding shares |
19,101,749 | 18,794,242 |
| Earnings per share in 3 from conti nuing operations – basic – |
0.02 | 0.44 |
| Earnings per share in 3 from conti nuing operations – diluted – |
0.02 | 0.44 |
"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 6, 2012
Frank Averdung Michael Knopp CEO CFO
Holding Company Production
Sales Other / Non-operating
| Commerzbank TMT Conference | August 29 |
|---|---|
| Deutsche Bank Technologie Conference, Las Vegas | September 11 |
| UBS Best of Germany Conference, New York | September 12 / 13 |
| UniCredit /Kepler Investment Conference, Munich | September 25 / 26 |
| Baader Investment Conference, Munich | September 27 |
| German Equity Forum, Frankfurt /Main | November 12 –14 |
| Nine-month Report 2012 | November 8 |
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.
SUSS MicroTec AG Schleißheimer Straße 90 85748 Garching, Germany Fon: +49 (0)89-32007-0 E-Mail: [email protected]
www.suss.com
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