DGAP-News: Infineon Technologies AG: Q1 FY 2020: REVENUE DECLINE AS PREDICTED, SEGMENT RESULT MARGIN DEVELOPED POSITIVELY, COST-REDUCTION MEASURES TAKING EFFECT, OUTLOOK FOR 2020 FISCAL YEAR CONFIRMED

2020. február 05., szerda, 07:30







DGAP-News: Infineon Technologies AG


/ Key word(s): Quarter Results/Forecast






Infineon Technologies AG: Q1 FY 2020: REVENUE DECLINE AS PREDICTED, SEGMENT RESULT MARGIN DEVELOPED POSITIVELY, COST-REDUCTION MEASURES TAKING EFFECT, OUTLOOK FOR 2020 FISCAL YEAR CONFIRMED








05.02.2020 / 07:30




The issuer is solely responsible for the content of this announcement.




 



- Q1 FY 2020: REVENUE OF €1,916 MILLION; SEGMENT RESULT OF €297 MILLION; SEGMENT RESULT MARGIN OF 15.5 PERCENT



- OUTLOOK FOR FY 2020: BASED ON AN ASSUMED EXCHANGE RATE OF US$ 1.13 TO THE EURO, REVENUE STILL EXPECTED TO GROW AT 5 PERCENT YEAR-ON-YEAR (PLUS OR MINUS 2 PERCENTAGE POINTS), WITH SEGMENT RESULT MARGIN OF ABOUT 16 PERCENT AT MID-POINT OF REVENUE GUIDANCE. INVESTMENTS OF AROUND 1.3 BILLION EUROS PLANNED. FREE CASH FLOW IN RANGE OF €500 TO €700 MILLION ANTICIPATED



- OUTLOOK FOR Q2 FY 2020: BASED ON AN ASSUMED EXCHANGE RATE OF US$ 1.13 TO THE EURO, QUARTER-ON-QUARTER REVENUE GROWTH OF 5 PERCENT (PLUS OR MINUS 2 PERCENTAGE POINTS); SEGMENT RESULT MARGIN OF ABOUT 14 PERCENT PREDICTED AT MID-POINT OF REVENUE GUIDANCE



- CYPRESS ACQUISITION: TRANSACTION EXPECTED TO CLOSE TOWARDS THE END OF THE CURRENT QUARTER OR AT THE BEGINNING OF THE FOLLOWING QUARTER



Neubiberg, Germany, 5 February 2020 - Infineon Technologies AG is today reporting results for the first quarter of the 2020 fiscal year (period ended 31 December 2019).



"Our well-diversified business performed robustly at the beginning of the fiscal year. Under difficult conditions, revenue fell in line with expectations. Our cost reduction measures are beginning to take effect. Those measures and several non-recurring factors caused the Segment Result to come in slightly better than expected," said Dr. Reinhard Ploss, CEO of Infineon. "Demand for the latest generation of our silicon microphones is growing dynamically. We are also seeing signs of improvement in individual areas such as the server business. Overall, however, we do not expect to see a broad based recovery of demand before the second half of the fiscal year. Our long-term growth drivers remain intact and we are making a crucial contribution to shaping the future of mobility and energy efficiency."



























































































Euro in millions Q1 FY20 Q4 FY19 +/- in %
       
Revenue 1,916 2,062 (7)
Segment Result 297 311 (5)
Segment Result Margin 15.5% 15.1%  
Income (loss) from continuing operations 210 163 29
Income (loss) from discontinued operations, net of income taxes - (2) +++
Net income 210 161 30
       
in Euro      
Basic earnings (loss) per share from continuing operations1 0.16 0.13 23
Basic earnings (loss) per share from discontinued operations1 - - -
Basic earnings per share1 0.16 0.13 23
       
Diluted earnings (loss) per share from continuing operations1 0.16 0.13 23
Diluted earnings (loss) per share from discontinued operations1 - - -
Diluted earnings per share1 0.16 0.13 23
       
Adjusted earnings per share diluted2 0.17 0.19 (11)
       
Gross margin 37.0% 35.5%  
Adjusted gross margin2 37.9% 36.3%  

 

1 The calculation for earnings per share and for adjusted earnings per share is based on unrounded figures.



2 The reconciliation of net income to adjusted net income and adjusted earnings per share as well as of cost of goods sold to adjusted cost of goods sold and adjusted gross margin can be found in the quarterly information at www.infineon.com.



With effect from the beginning of 2020 fiscal year, Infineon is applying IFRS 16 (Leases) using the modified retrospective approach. As a result, prior periods are not adjusted to the new accounting policy. Overall, the first-time application of this Standard has not had any material impact.

GROUP PERFORMANCE IN THE FIRST QUARTER OF THE 2020 FISCAL YEAR

In the first three months of the 2020 fiscal year, revenue decreased by 7 percent from €2,062 million to €1,916 million quarter-on-quarter. In the Automotive (ATV), Industrial Power Control (IPC) and Power Management & Multimarket (PMM) segments, the decline was roughly in line with Group average. Revenue recorded by the Digital Security Solutions (DSS) segment was only slightly down.


The gross margin improved quarter-on-quarter from 35.5 percent to 37.0 percent. This includes acquisition-related depreciation and amortization as well as other expenses totaling €18 million, mainly relating to the acquisition of International Rectifier. The adjusted gross margin improved from 36.3 percent to 37.9 percent. The first-quarter Segment Result amounted to €297 million, compared to €311 million in the final quarter of the preceding fiscal year. The Segment Result Margin increased from 15.1 percent to 15.5 percent. The improvement in gross margin and Segment Result Margin, despite lower revenue, was influenced by a positive non-recurring effect of approximately €36 million arising in connection with the refined allocation of centralized, production-related overhead costs across the various stages of the manufacturing process, thereby affecting the valuation of inventories of work in progress and finished goods. Excluding this exceptional factor, the Segment Result Margin would have been 13.6 percent.



The first-quarter non-segment result improved to a net loss of €31 million, compared to a net loss of €65 million for the previous three-month period. The first-quarter non-segment result included €18 million of cost of goods sold, €13 million of selling, general and administrative expenses and €1 million of research and development expenses. In addition, net other operating income amounting to €1 million arose in the first quarter.



Operating income increased from €246 million to €266 million quarter-on-quarter.



The financial result improved from a net expense of €18 million in the final quarter of the 2019 fiscal year to a net expense of €13 million in the first quarter of the 2020 fiscal year.



Income tax expense fell from €64 million to €43 million quarter-on-quarter.



Income from continuing operations amounted to €210 million, up from €163 million in the previous three-month period. Income from discontinued operations for the first quarter was nil, compared to a loss of €2 million reported for the final quarter of the previous fiscal year. Thus, first-quarter net income improved to €210 million, up from €161 million one quarter earlier.



Earnings per share from continuing operations for the period under report amounted to €0.16 (basic and diluted), compared to €0.13 in the previous quarter. First-quarter adjusted earnings per share3 (diluted) amounted to €0.17, down from €0.19 quarter-on-quarter.



Investments - which Infineon defines as the sum of purchases of property, plant and equipment, purchases of intangible assets, and capitalized development costs - amounted to €255 million in the first quarter of the 2020 fiscal year, down from €350 million in the preceding three-month period. Depreciation and amortization increased slightly from €244 million to €250 million quarter-on-quarter. The figure for the first three months of the current fiscal year for the first time includes €13 million relating to the amortization of right-to-use assets following the adoption of IFRS 16, which governs the accounting treatment of leases.



First-quarter free cash flow from continuing operations was a negative amount of €86 million, compared to a positive amount of €334 million in the previous three-month period. Net cash provided by operating activities from continuing operations amounted to €183 million, down from €682 million in the final quarter of the 2019 fiscal year, with the €499 million decrease mainly attributable to the change in working capital and the payout of variable annual remuneration components.



The gross cash position increased from €3,779 million at 30 September 2019 to €4,859 million at the end of the first quarter of the 2020 fiscal year. The net cash position rose from €2,223 million to €3,328 million over the same period. The increase in cash positions mainly reflected the receipt of proceeds on 1 October 2019 arising from the issue of a hybrid bond with a nominal value of €1.2 billion to refinance the planned acquisition of Cypress.



OUTLOOK FOR THE 2020 FISCAL YEAR EXCLUDING CYPRESS

Based on an assumed exchange rate of US$ 1.13 to the euro and its current scope of business, Infineon continues to expect revenue growth of 5 percent (plus or minus 2 percentage points) in the 2020 fiscal year and a Segment Result Margin of about 16 percent at the mid-point of the revenue guidance. Revenue growth in the Power Management & Multimarket segment is expected to be higher than the Group average. Automotive segment revenue growth is likely to be in line with the Group average. Growth in the Industrial Power Control segment is forecast to be slightly below the Group average, while Digital Security Solutions revenue is expected to remain flat or grow only slightly.



Investments in property, plant and equipment, intangible assets and capitalized development costs are planned at approximately €1.3 billion for the 2020 fiscal year. Of this amount, approximately one third relates to manufacturing buildings (including infrastructure) and office buildings. Depreciation and amortization are expected to be in the region of €1 billion, whereby approximately €60 million of that amount relates to amortization resulting from purchase price allocations, primarily for International Rectifier. Free cash flow is forecast to improve considerably year-on-year and reach an amount of between €500 million and €700 million.



This outlook is based on the assumption that the coronavirus outbreak will not have a significantly negative impact on the development of our business in the 2020 fiscal year.



EXPECTED DEVELOPMENT OF INFINEON GROUP INCLUDING CYPRESS IN THE 2020 FISCAL YEAR

The outlook for Infineon including Cypress, as presented on page 82 of the Annual Report 2019, remains unchanged. The acquisition is expected to be finalized and closed towards the end of the current quarter or at the beginning of the following quarter.

OUTLOOK FOR THE SECOND QUARTER OF THE 2020 FISCAL YEAR EXCLUDING CYPRESS

Based on an assumed exchange rate of US$ 1.13 to the euro and provided that the consequences of the coronavirus outbreak do not significantly impact the development of our business during the March quarter, Infineon expects revenue to grow by 5 percent (plus or minus 2 percentage points) in the second quarter of the 2020 fiscal year. Revenue in the Automotive and Industrial Power Control segments is expected to increase at above the Group average. Revenue growth in the Power Management & Multimarket segment is expected to be slightly lower than the Group average, while Digital Security Solutions revenue is forecast to remain more or less unchanged. At the mid-point of the revenue guidance, the Segment Result Margin is expected to come in at about 14 percent.



3 Adjusted net income and adjusted earnings per share (diluted) should not be seen as a replacement or superior performance indicator, but rather as additional information to the net income and earnings per share (diluted) determined in accordance with IFRS.



Infineon"s segments" performance in the first quarter and the 2020 fiscal year can be found in the quarterly information at www.infineon.com.



All figures in this quarterly information are preliminary and unaudited.



ANALYST TELEPHONE CONFERENCE AND TELEPHONE PRESS CONFERENCE

The Management Board of Infineon will host a telephone conference call including a webcast for analysts and investors (in English only) on 5 February 2020 at 9:30 am (CET), 3:30 am (EST). During the call, the Infineon Management Board will present the Company"s results for the first quarter and the outlook for the second quarter and the 2020 fiscal year. In addition, the Management Board will host a telephone press conference with the media at 11:00 am (CET), 5:00 am (EST). It can be followed over the Internet in both English and German. Both conferences will also be available live and for download on Infineon"s website at www.inineon.com/investor.



The Q1 Investor Presentation is available (in English only) at:
https://www.infineon.com/cms/en/about-infineon/investor/reports-and-presentations/



INFINEON FINANCIAL CALENDAR (* preliminary)



- 13 Feb 2020 Goldman Sachs Technology & Internet Conference, San Francisco



- 20 Feb 2020 Annual General Meeting, Munich



- 24 - 26 Feb 2020 Investor Meetings at Mobile World Congress, Barcelona



- 10 - 11 Mar 2020 UBS Technology One-on-One Conference, London



- 12 Mar 2020 ODDO BHF 4th TMT Forum, Paris



- 18 Mar 2020 Bernstein EV Conference, London



- 24 Mar 2020 JPMorgan Global ESG Conference, Paris



- 25 Mar 2020 Société Générale European ESG/SRI Conference, Paris



- 26 Mar 2020 Lampe Bank Deutschland Konferenz, Baden-Baden



- 5 May 2020* Earnings Release for the Second Quarter of the 2020

Fiscal Year



- 7 May 2020 Industrial Power Control Business Update at PCIM, Nuremberg



- 27 May 2020 Equita Conference 2020, Milan



- 3 - 4 Jun 2020 Deutsche Bank German, Swiss & Austrian Conference, Berlin



- 9 - 10 Jun 2020 Exane 22nd European CEO Conference, Paris



- 4 Aug 2020* Earnings Release for the Third Quarter of the 2020

Fiscal Year



- 21 Sep 2020 Berenberg Goldman Sachs German Corporate Conference, Unterschleißheim (nearby Munich)



- 22 Sep 2020 Baader Investment Conference, Munich



- 6 Oct 2020 Automotive Call



- 9 Nov 2020* Earnings Release for the Fourth Quarter and the 2020

Fiscal Year




ABOUT INFINEON

Infineon Technologies AG is a world leader in semiconductor solutions that make life easier, safer and greener. Microelectronics from Infineon is the key to a better future. In the 2019 fiscal year (ending 30 September), the Company reported sales of €8.0 billion with around 41.400 employees worldwide. Infineon is listed on the Frankfurt Stock Exchange (ticker symbol: IFX) and in the USA on the over-the-counter market OTCQX International Premier (ticker symbol: IFNNY).



Further information is available at www.infineon.com

This press release is available online at www.infineon.com/press



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D I S C L A I M E R

This press release contains forward-looking statements about the business, financial condition and earnings performance of the Infineon Group.



These statements are based on assumptions and projections resting upon currently available information and present estimates. They are subject to a multitude of uncertainties and risks. Actual business development may therefore differ materially from what has been expected.



Beyond disclosure requirements stipulated by law, Infineon does not undertake any obligation to update forward-looking statements.



Due to rounding, numbers presented throughout this press release and other reports may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.






Contact:

Bernd Hops, Media Relations, phone: +49 89 234-24123, fax: +49 89 234-154123














05.02.2020 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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Language: English
Company: Infineon Technologies AG

Am Campeon 1-15

85579 Neubiberg

Germany
Phone: +49 (0)89 234-26655
Fax: +49 (0)89 234-955 2987
E-mail: investor.relations@infineon.com
Internet: www.infineon.com
ISIN: DE0006231004
WKN: 623100
Indices: DAX, TecDAX
Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange
EQS News ID: 967487





 
End of News DGAP News Service





967487  05.02.2020 



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