Infineon Announces First Quarter Fiscal 2012 Financial Results

Revenue for the quarter was Euro 946 million, down from Euro 1.038 billion in the previous quarter.

Outstanding growth rate and profitability: In 2011, Infineon's growth rate reached 14%, which greatly exceeded the average of 3% in the industry (excluding memory and microprocessors);

The total operating profit rate for the quarter was 14.9%, which basically reached the goal of getting out of the economic downturn.

Unremitting efforts to ensure future success: Relying on 294 million euros of counter-cyclical investment, we will enter the highly competitive 300mm wafer manufacturing sector and maintain high R&D investment and sales expenses;

Significant gains: The return on capital used in this quarter was 27%; the number of fully diluted shares was 1.0%;

Outlook for the second quarter of fiscal 2012: Revenues will remain flat or slightly lower; total operating margin will decline by 1 percentage point.

Infineon Technologies AG recently released its financial data for the first quarter of fiscal year 2012 up to December 31, 2011.

Peter Bauer, CEO of Infineon Technologies AG, stated: "In the light of the weak economic environment, Infineon still shows strong profitability. We will focus on more stable and more profitable businesses. The strategy has begun to play a prominent role, and the company’s higher sales than its peers are proof.To ensure that the company will achieve profitable growth in the energy efficiency, mobility and safety markets in the future, we will continue to invest in improving the level of research and development and improving customers. Relationship, increase production capacity."

Infineon's financial results for the first quarter of fiscal year 2012 Infineon's revenue for the first quarter of fiscal 2012 was 946 million euros, which was lower than the 1.038 billion euros in the fourth quarter of fiscal year 2011. This was mainly due to the uncertain economic situation in the world. Cause customers to be cautious.

Total operating profit for the quarter was EUR 141 million, down from EUR 195 million in the previous quarter. The total operating margin for the quarter fell from 18.8% in the previous quarter to 14.9%, but it was basically the same as the growth target of 15% for the group out of the economic downturn. The decline in total operating profit and total operating profitability was mainly due to lower sales. Due to slightly lower operating expenses (especially R&D spending) than expected and the previous quarter, the company's total operating profit margin for this quarter was slightly higher than previously expected.

Infineon’s continuing operating revenue for the quarter decreased from EUR 247 million in the previous quarter to EUR 104 million. In addition to the decline in total operating profit, following the tax benefit of 75 million euros recorded in the previous quarter, taxation expenses of 20 million euros were included in continuing operations revenue for the quarter. During the quarter, the company’s basic operating income and diluted earnings per share decreased from 0.23 euros and 0.22 euros in the previous quarter to 0.10 euros, respectively.

Infineon's shut-down business losses for the quarter have been significantly reduced from €122 million in the fourth quarter of the previous fiscal year to €8 million. The basic and diluted loss per share of the shut-down business was reduced from 0.11 euro in the previous quarter to 0.01 euro.

Net income for the quarter was 96 million euros, down from 125 million euros in the previous quarter. Basic and diluted earnings per share were both 0.09 euros, while basic and diluted earnings per share for the previous quarter were 0.12 euros and 0.11 euros, respectively.

Infineon defines the investment as the total amount paid for acquisition of real estate, factories and equipment, intangible assets, and R&D assets. The company's investment in the first quarter of fiscal year 2012 was 294 million euros, up from 273 million euros in the previous quarter, accounting for about one-third of the annual investment budget.

Depreciation and amortization for the quarter was EUR 97 million, which was basically the same as EUR 98 million in the previous quarter. Although the high investment in recent quarters has pushed up the depreciation amount, in the first quarter of fiscal 2012, this factor was effectively offset by the end of the depreciation period for old equipment at the Kulin plant in Malaysia.

In the first quarter of fiscal 2012, Infineon’s free cash flow from its ongoing operations was negatively adjusted to EUR 214 million, which was much lower than EUR 97 million in the previous quarter. This is a combined result of declining performance, an investment of 294 million euros, and an increase in working capital of 202 million euros.

Free cash flow was negative, capital gains reached 70 million euros, and net debt reductions amounted to 23 million euros, which together contributed to Infineon’s gross/net cash position from the previous quarter (as of September 30, 2011) ) Of the 2.692 billion euros and 2.387 billion euros, they fell to 2.337 billion euros and 2,068 million euros.

Based on the capital return plan, Infineon repurchased a €17 million mature 2014 mature convertible bond for €50 million this quarter, reducing the number of fully diluted shares outstanding by 8 million shares. It is 0.7%. In addition, the company also fulfilled the stock repurchase plan by selling options, and repurchased 3 million shares with a cash flow of 20 million euros, which is equivalent to a reduction of approximately 0.3% of the fully diluted shares outstanding.

Infineon's Board of Supervisors and Management Committee will propose a dividend payout plan of 0.12 Euros per share at the Annual General Meeting of Shareholders, an increase of 20% over the previous fiscal year. On November 23, 2011, the Infineon Management Committee and the Board of Supervisors decided that the upcoming The annual general meeting of shareholders proposed to increase the dividend paid to each eligible common stock from the 0.10 euro in the previous fiscal year by 20% to 0.12 euro. If the dividend is approved at the annual general meeting of shareholders held on March 8, 2012, the company’s dividend will be as high as approximately 130 million euros, depending on the number of eligible stocks.

Product and innovation highlights Adhering to the philosophy of counter-cyclical investment, we are committed to fully exploiting future growth opportunities. Even in challenging times, Infineon still maintains a high level of investment, R&D and sales expenses.

One example is that in the first quarter of fiscal 2012, Infineon’s investment amounted to 294 million euros. On the one hand, the initiative aims to capture future growth opportunities brought about by long-term trends such as renewable energy, electric vehicles, inverters, or high-efficiency power conversion systems for electrical equipment; on the other hand, Infineon invests heavily. To ensure and expand long-term competitiveness – including the 300-mm wafer fab in Dresden, Germany, and the construction of a second 200-mm wafer fab in a highly cost-effective location in Culin, Malaysia, and the Czgrad power supply in Hungary Module capacity expansion, as well as many automation and quality engineering.

The following example reflects Infineon's focus on innovation. The goal is to achieve differentiation and improve customer effectiveness to achieve market success:

Near field communication (NFC) is an example. Relying on NFC contactless communication, smart phones and other mobile devices can be used as payment instruments, bus cards and keys. Looking ahead, NFC technology is bound to achieve rapid growth. As stated in a research report released by IMS Research in January 2012, Infineon became the leader in the NFC secure MCU market in 2011 with a market share of 51.5%.

At the same time, Infineon has released ARM based on a long time ago? The 32-bit XMC4000 microcontrollers are optimized for industrial applications such as motors, factory automation, and solar inverters. With these new devices, customers will benefit from Infineon's leading system technology, software development advantages and maximum flexibility.

Outlook for the second quarter of fiscal 2012 As automotive customers' confidence continues to rise, coupled with early signs of stabilization in the chip card and low-power markets, Infineon expects revenue for the second quarter of fiscal 2012. It is basically the same as or slightly lower than the first quarter. Based on this expectation, sales of Automotive Electronics (ATV) are expected to increase, while the sales of Smart Cards and Security Chips (CCS) will be roughly flat. At the same time, sales of Power Management and Diversified Marketing (PMM) are expected to decline due to seasonal weakness. Due to the slower pace of market recovery, the turnover of the Industrial Power Control Department (IPC) is expected to continue to decline.

The company's total operating margin in the second quarter is expected to drop by about 1 percentage point. In view of the company's growth prospects, Infineon plans to slightly increase R&D and SG&A expenditures on the basis of the previous quarter in the second quarter of fiscal 2012.

As announced earlier, Infineon has split the IMM into two new divisions since January 1, 2012: Industrial Power Control (IPC) and Power Supply Management and Diversity of Electronic Markets (PMM). Since the second quarter of fiscal 2012, the company will prepare financial statements based on the new organization.

In the first quarter of fiscal year 2012, ATV revenue fell 1% to 391 million euros, ATV's operating profit was 55 million euros, operating margin was 14%, and operating profit and operating profit margin in the previous quarter were 66 million euros and 17%. The decline in operating margins is the combined result of a slight decrease in sales and an increase in operating and manufacturing costs.

In the first quarter of fiscal 2012, the IMM revenue was 418 million euros, down from 472 million euros in the previous quarter. After experiencing strong revenue growth from strong demand in several quarters, the demand for power and non-power products has declined. Among them, the demand for power semiconductors for industrial applications such as inverters, traction or renewable energy, and the weak performance of the Chinese market. Due to the decline in revenue, the IMM's operating profit fell from EUR 113 million in the previous quarter to EUR 79 million. The IMM's operating profit margin was 19%.

During the quarter, CCS revenue fell from EUR 116 million to EUR 97 million due to seasonal factors, weak payment application, and the impact of Thai floods on the company’s e-ID business. Under the impetus of declining revenue, the operating profit of the CCS department also dropped from 16 million euros in the previous quarter to 6 million euros. Operating profit margin was reduced to 6%.