Infineon Provides Update on its Outlook and Adds to Provisions in Connection with Qimonda Insolvency Proceedings
Neubiberg, Germany – October 14, 2011 – Infineon Technologies AG (FSE: IFX / OTCQX: IFNNY) today announces preliminary results for the fourth quarter of the 2011 fiscal year, the outlook for the first quarter of the 2012 fiscal year and additional provisions relating to the insolvency of its subsidiary Qimonda AG.
According to preliminary results for the quarter ended September 30, 2011, sales of Euro 1.038 billion came in essentially flat with the previous quarter. Total Segment Result stood at Euro 195 million, down from Euro 212 million in the third quarter of the 2011 fiscal year. The company’s guidance given on July 28, 2011 called for at least flat turnover and for broadly unchanged Total Segment Result relative to the third quarter of the 2011 fiscal year.
Economic uncertainty in light of the European debt crisis and resulting financial market turmoil drove increasing caution on the part of Infineon’s customers over the course of the quarter. As a result, Infineon was not able to record revenue growth for the quarter. In addition, service agreements expired, under which Infineon provided services for its former wireless mobile phone business. Both factors combined caused the sequential decline in Segment Result.
For the first quarter of the 2012 fiscal year, whilst demand in the automotive markets should remain benign, Infineon expects customer caution to characterize business in the Industrial & Multimarket and now also Chip Card & Security end markets. In total, Infineon anticipates a mid to high single-digit percentage sequential revenue decline at a mid teens percentage for Total Segment Result margin.
“In an increasingly challenging market environment we are holding up well operationally as compared to our peers in the last quarter,” says Peter Bauer, CEO of Infineon Technologies AG. “We closed an excellent financial year at all time high revenues and margins. Our focus on energy efficiency, mobility and security will allow us to perform very solidly in the now running fiscal year and throughout the entire economic cycle.”
Finally, Infineon Technologies AG today announces that it has taken additional provisions within its result from discontinued operations totaling Euro 150 million in connection with the insolvency proceedings of its subsidiary Qimonda AG. These provisions were taken after the insolvency administrator had detailed several claims during the last quarter.
Infineon will provide additional detail on all above matters as well as the outlook for the full 2012 fiscal year when it reports its final results for the fourth quarter and the 2011 fiscal year on November 16, 2011.
This release includes forward-looking statements and assumptions about the future of Infineon's business and the industry in which we operate. These include statements and assumptions relating to general economic conditions, future developments in the world semiconductor market, our ability to manage our costs and to achieve our savings and growth targets, the resolution of Qimonda's insolvency proceedings and the liabilities we may face as a result of Qimonda's insolvency, the benefits of research and development alliances and activities, our planned levels of future investment, the introduction of new technology at our facilities, our ability to continue to offer commercially viable products, and our expected or projected future results.
These forward-looking statements and assumptions are subject to a number of uncertainties, including broader economic developments, trends in demand and prices for semiconductors generally and for our products in particular, as well as for the end-products that incorporate our products, the success of our development efforts, both alone and with partners; the success of our efforts to introduce new production processes at our facilities, the actions of competitors; the continued availability of adequate funds, the outcome of antitrust investigations and litigation matters, and the outcome of Qimonda's insolvency proceedings, as well as other factors such as those mentioned in our quarterly and annual reports.
As a result, Infineon's actual results could differ materially from those contained in these forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements. Beyond our legal obligations Infineon does not undertake to publicly update or revise any forward-looking statements.
Infineon Technologies AG, Neubiberg, Germany, offers semiconductor and system solutions addressing three central challenges to modern society: energy efficiency, mobility, and security. In the 2010 fiscal year (ending September 30), the company reported sales of Euro 3.295 billion with approximately 26,650¹ employees worldwide. With a global presence, Infineon operates through its subsidiaries in the U.S. from Milpitas, CA, in the Asia-Pacific region from Singapore, and in Japan from Tokyo. 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.
¹ Mentioned number of employees contains about 3,075 employees of the wireless mobile phone business (Wireless Solutions), which was sold to Intel Corporation.