Infineon Announces Fiscal Year 2001 and Fourth Quarter Results.Business Editors/High-Tech Writers MUNICH, Germany--(BUSINESS WIRE)--Nov. 13, 2001 Infineon Technologies For the raceway, see . Infineon Technologies AG (ISIN: DE0006231004, FWB: IFX, NYSE: IFX) was founded in April 1999 when the semiconductor operations of parent company, Siemens AG, were spun off to form a separate legal entity. AG (FSE/NYSE:IFX IFX - ["Type Reconstruction with First-Class Polymorphic Values", J. O'Toole et al, SIGPLAN Notices 24(7):207-217 (Jul 1989)]. ) -- Fiscal Year 2001 revenues were Euro 5.67 billion, down 22 percent year-on-year reflecting strong decline of the semiconductor market; revenues in non-memory businesses increased by 10 percent year-on-year -- Annual net loss of Euro 591 million mainly due to significant price erosion especially for memory products and exceptional effects including inventory write downs, restructuring charges and acquisition related expenses -- Fourth quarter revenues were Euro 1.09 billion, down 54 percent year-on-year and 15 percent sequentially due to continued decline in demand and further deterioration of prices; quarterly net loss was Euro 523 million -- Solid net cash position; implementation of cost savings measures expected to save Euro 1 billion through the end of fiscal year 2002 Infineon Technologies AG (FSE/NYSE:IFX), one of the world's leading semiconductor manufacturers, today announced results for its fiscal year 2001 ended September September: see month. 30, 2001, with revenues of Euro 5.67 billion, a decrease of 22 percent from the previous fiscal year. Revenue decrease resulted from a sharp decline in the overall semiconductor market, which market analysts forecast will experience negative growth of more than 30 percent in this calendar year. Revenue decline was driven by weaker demand and deteriorating de·te·ri·o·rate v. de·te·ri·o·rat·ed, de·te·ri·o·rat·ing, de·te·ri·o·rates v.tr. To diminish or impair in quality, character, or value: market conditions particularly for memory and mobile communication products. Annual revenues increased by 10 percent in Infineon's non-memory businesses with significant growth in Wireline Communications, Security & Chip Card ICs and Automotive & Industrial segments, although revenues in most of these segments declined in the fourth quarter of this fiscal year. EBIT EBIT See: Earnings Before Interest and Taxes EBIT See earnings before interest and taxes (EBIT). (earnings before interest and taxes In financial and business accounting, earnings before interest and taxes (EBIT) is a measure of a firm's profitability that excludes interest and income tax expenses.[1] EBIT = Operating Revenue – Operating Expenses + Non-operating Income ) decreased to a loss of Euro 1.02 billion down from a positive EBIT of Euro 1.67 billion in fiscal year 2000. Earnings were negatively affected by strong price erosion, especially for memory products, and costs of carrying currently unused capacity in most non-memory segments. The loss includes charges of Euro 358 million in connection with inventory write-downs, acquisition related expenses of Euro 111 million, restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of Euro 117 million, impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charges of Euro 25 million and gains from the sale of non-core businesses of Euro 235 million. Excluding these write-downs, expenses, charges and gains EBIT amounted to a loss of Euro 648 million. Net loss amounted to Euro 591 million, down from earnings of Euro 1.13 billion last fiscal year. The net loss reflects an income tax benefit of Euro 428 million. Loss per share for fiscal year 2001 was Euro 0.92 compared with earnings per share of Euro 1.83 in fiscal year 2000. "Infineon has delivered a strong performance in its businesses based on our technology leadership and expanded system solutions expertise in a very difficult market environment. However, market conditions significantly deteriorated, especially for memory products and wireless communications wireless communications System using radio-frequency, infrared, microwave, or other types of electromagnetic or acoustic waves in place of wires, cables, or fibre optics to transmit signals or data. , which clearly impacted Infineon's overall business development," commented Dr. Ulrich Ulrich is the name of several historical persons and can be either a surname or given name:
Sport
In addition, Infineon scaled back capital expenditure during the 2001 fiscal year to Euro 2.3 billion from the previously planned Euro 2.8 billion. Capital expenditures for the 2002 fiscal year (started October October: see month. 1, 2001) will be reduced to approximately Euro 900 million. The cuts will not affect Infineon's strong technology leadership and the company's plans to continue investments in its strategic projects. From its capital increase in July July: see month. , Infineon received net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of Euro 1.48 billion. Also in the fourth quarter the company received Euro 653 million from the sale of its infrared An invisible band of radiation at the lower end of the visible light spectrum. With wavelengths from 750 nm to 1 mm, infrared starts at the end of the microwave spectrum and ends at the beginning of visible light. components business and its share of the joint venture with Osram. With the addition of these resources, Infineon had a net cash position of Euro 568 million at the end of the fiscal year 2001. Infineon had a gross margin of 14 percent, a decline from 44 percent in the previous fiscal year due to significantly reduced prices and under-utilization of certain production facilities. Excluding the effect of inventory write-downs, Infineon achieved a gross margin of 20 percent. SG&A expenses of Euro 786 million were 14 percent of total revenues, up from 9 percent in fiscal year 2000. Higher SG&A expenses as a percentage of revenues primarily reflect the decline in sales volume. The increase was also partially due to the expansion of sales activities in Infineon's growth markets, particularly in Asia and Japan, to support the anticipated increase in sales volumes in those regions originally forecasted for fiscal year 2001. R&D expenditures totaled Euro 1.19 billion and were 21 percent of total revenues, an increase from 14 percent in fiscal year 2000. This includes in-process R&D charges of Euro 69 million compared to Euro 26 million in fiscal year 2000. R&D expenditures were focused mainly on the development of next generation products in Infineon's target markets including next generation mobile communications, 10/40 Gigabit optical networking Communications between computers, telephones and other electronic devices using light. An optical network is far more reliable and has far greater potential transmission capacity than networking in the electrical domain. See optical fiber. , DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary products, advanced security solutions and process technologies to increase productivity. Revenues outside Europe constituted 47 percent of total revenues, compared to 55 percent in fiscal year 2000. As of September 30, 2001, Infineon had more than 33,800 employees worldwide, with research and development staff accounting for more than 5,500 of this total. Fourth Quarter Results Fourth quarter revenues were Euro 1.09 billion, a decrease of 54 percent year-on-year and 15 percent from the previous quarter of this fiscal year. The revenue decrease was principally due to continued deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. of market conditions which had a negative impact on all of Infineon's business groups and by further price erosion for memory products. EBIT decreased to a loss of Euro 882 million, down from a positive EBIT of Euro 807 million in the same quarter last year and down from a loss of Euro 598 million in the third quarter of this year. Infineon's loss was due to increasing pricing pressure in all segments, further order cancellations and costs of carrying currently unused capacity. The loss also reflects restructuring charges of Euro 117 million, inventory-write-downs of Euro 142 million, acquisition-related expenses of Euro 67 million, impairment charges of Euro 14 million and gains from the sale of non-core businesses of Euro 33 million. Without these items, EBIT amounted to a loss of Euro 575 million. Net income in the fourth quarter decreased to a loss of Euro 523 million, down from net income of Euro 581 million during the same quarter of the last fiscal year and down from a loss of Euro 371 million in the previous quarter of this year. Loss per share was Euro 0.76 as compared with earnings per share of Euro 0.93 in the fourth quarter of the last fiscal year and loss per share of Euro 0.59 in the third quarter of this year. Infineon had a negative gross margin of 32 percent, down from a positive gross margin of 53 percent in the fourth quarter of last year and a negative gross margin (including the effect of inventory write-downs) of 1 percent in the third quarter of fiscal year 2001. SG&A expenses were 16 percent of total revenues, up from 9 percent in the fourth quarter of fiscal year 2000 but down from 17 percent in the previous quarter of this year. R&D expenditures in the fourth quarter totaled Euro 344 million. R&D expenditures were 32 percent of total revenues, an increase from 25 percent in the previous quarter and from 15 percent year-on-year, primarily due to a further decline in revenues. In absolute terms (Alg.) such as are known, or which do not contain the unknown quantity. See also: Absolute , R&D expenditures were down 1 percent year-on-year and up 8 percent from the previous quarter of this year and also reflect Euro 56 million in-process research and development related to the acquisition of Catamaran catamaran (kăt'əmərăn`), watercraft made up of two connected hulls or a single hull with two parallel keels. Originally used by the natives of Polynesia, the catamaran design was adopted by Western boat builders in the 19th cent. Communications. Business Group Performance Infineon reorganized re·or·gan·ize v. re·or·gan·ized, re·or·gan·iz·ing, re·or·gan·iz·es v.tr. To organize again or anew. v.intr. To undergo or effect changes in organization. certain business units during the 2001 fiscal year to better reflect target customer and market profiles. Effective October 1, 2000, the Other Operating segment includes the results of certain activities previously reported under Corporate and Reconciliation, the image and video and the infrared components businesses (previously reported under Wireline Communications) as well as the gains on these divestments. The prior period segment results have been reclassified to be consistent with the reporting structure and presentation of the 2001 fiscal year, and to facilitate analysis of the current and future operating segment information. Infineon's Wireline Communications group's revenues increased to Euro 768 million in fiscal year 2001, up 15 percent from last year primarily due to the strong demand for traditional access products and fiber optic solutions, particularly in the first half of the fiscal year. EBIT amounted to a loss of Euro 95 million, including the effect of acquisition-related expenses, compared to a positive EBIT of Euro 47 million in fiscal year 2000. Excluding the effect of these expenses, EBIT would have been Euro 16 million in fiscal year 2001, down from Euro 106 million in fiscal year 2000. During the 2001 fiscal year Infineon strengthened its wireline communications business with the acquisition of Catamaran Communications, an emerging leader for the fast growing 10 Gbps segment and next generation 40 Gbps optical networking markets and Ardent (Ardent Software, Inc., Westboro, MA) A database vendor formed in 1998 as the merger of VMARK Software, Unidata and O2 Technology. Its products included the UniVerse and UniData databases and DataStage data warehouse utility. Technologies, a supplier of LAN switching
LAN switching is a form of packet switching used in local area networks. Switching technologies are crucial to network design, or to that minority of LANs that are used outside the home. technologies. Portfolio streamlining was completed with the divestment divestment to strip one's investment from an entity. of non-core business activities including its infrared components and image and video businesses. Major developments in fiscal year 2001 include: -- growing market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" of access broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). communication market with VDSL/10BaseS Ethernet Ethernet Telecommunications networking protocol introduced by Xerox Corp. in 1979. It was developed as an inexpensive way of sending information quickly between office machines connected together in a single room or building, but it rapidly became a standard computer to the home solution primarily in Asia and significant design-in for Infineon's 64 channel DSLAM (DSL Access Multiplexor) A central office (CO) device for ADSL service that intermixes voice traffic and DSL traffic onto a customer's DSL line. It also separates incoming phone and data signals and directs them onto the appropriate carrier's network. See DSL. (ADSL See DSL. ADSL - Asymmetric Digital Subscriber Line linecard) at a major European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and -- strengthened leadership position in optical networking market including Gigabit Ethernet An Ethernet standard that transmits at 1 Gbps. Used mostly to connect high-end workstations and servers as well as for network backbones, Gigabit Ethernet transmits full duplex from point to point using switches and half duplex in a shared environment (CSMA/CD) using a hub. modules, one of the industry's first suppliers of 10 Gigabit Ethernet modules, and advanced parallel fiber optical solutions (Paroli(TM)) product line -- leading 10Gbps SONET/SDH PMD (Polarization Mode Dispersion) The type of dispersion that occurs in singlemode fiber due to a lack of perfect symmetry in the fiber and from external pressures on the cable. Light travels over singlemode fiber in two polarization states. and PHY See physical layer and physical. devices, including the industry's first 40GBps PHY solution, based on Infineon's SiGe process; devices designed into industry leading optical players, including a strategic supplier relationship with Lucent's optical networking division -- maintaining strong position in the traditional telecom infrastructure business with analog linecards and ISDN ISDN in full Integrated Services Digital Network Digital telecommunications network that operates over standard copper telephone wires or other media. access technologies In the fourth quarter the group's revenues were Euro 142 million, down 29 percent from the same quarter last year and down 24 percent from the previous quarter of this year. The group's EBIT decreased to a loss of Euro 138 million, down Euro 125 million from last year's fourth quarter and down Euro 112 million from the previous quarter of this year. The sequential EBIT decline was primarily due to acquisition-related expenses of Euro 67 million, impairment of technology assets acquired from Ardent of Euro 14 million, lower revenues from high margin products and the costs of carrying currently unused capacity. Infineon's Wireless Communications group's annual revenues were Euro 997 million, down 18 percent compared with last year mainly reflecting the significant deterioration of the mobile handset The part of the telephone that contains the speaker and the microphone. On a desktop phone, the part you hold in your hand is the handset. On a cellphone, the entire phone is the handset. See multihandset cordless and headset. market. EBIT decreased to a loss of Euro 178 million down from a positive EBIT of Euro 261 million year-on-year due to strong pricing pressure, lower sales volumes and inventory write-downs. Major developments for fiscal year 2001 include: -- advances in wireless system solution expertise for GSM/GPRS/UMTS -- important contract win with leading mobile handset manufacturer in China -- expansion of leadership in short-range wireless applications with market introduction and certification of advanced Infineon Bluemoon(TM) Bluetooth solutions; start of Bluetooth volume business with key market players in the wireless and consumer market arenas Fourth quarter revenues were Euro 188 million, down 46 percent compared with the fourth quarter of the last fiscal year but up 7 percent from the previous quarter of this year. EBIT in the fourth quarter amounted to a loss of Euro 79 million, down from a positive EBIT of Euro 72 million year-on-year and up from a loss of Euro 176 million in the previous quarter. In the Security & Chip Card ICs group annual revenues reached Euro 588 million, an increase of 57 percent from last year's Euro 375 million. The revenue increase was driven by a shift towards high-end products during the first half of fiscal year 2001. However, sales volume in the second half was negatively affected by the continued downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. in the mobile phone market leading to cancellations of significant orders for security controllers used in SIM-cards. EBIT was Euro 27 million, down from Euro 49 million in the previous fiscal year. The EBIT decline is mainly due to increasing pricing pressure, decreased sales volume and write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of inventory in the second half of the 2001 fiscal year. Major developments in the year include: -- maintaining world leadership in the competitive chip card IC market -- successful market introduction of the world's first 16-bit/64Kbyte SIM card SIM card abbr (= subscriber identity module card) → carte f SIM SIM card n (Tel) (= Subscriber Identity Module card) → SIM-Karte f controller for high-end GSM (Global System for Mobile Communications) A digital cellular phone technology based on TDMA that is the predominant system in Europe, but also used worldwide. Developed in the 1980s, GSM was first deployed in seven European countries in 1992. platforms with industry leaders and strengthened leadership in secure chip card controllers, with the 66plus series achieving highest security certification A certification issued by competent authority to indicate that a person has been investigated and is eligible for access to classified matter to the extent stated in the certification. on the ITSEC See NCSC. scheme -- expanded technology leadership for MultiMediaCard(TM) through strategic contracts with Palm for PDAs, Siemens mobile Siemens cellular telephones were mobile phones, produced by Siemens AG. In 2005 the Taiwanese company BenQ acquired the financially bleeding mobile phone subsidiary from Siemens and gained the exclusive right to use Siemens trademark for 5 years. for MP3-accessory and establishment of the Ingentix joint venture with Saifun Semiconductors Ltd.; initially focusing on MultiMediaCard(TM) storage products and NROM NROM Nitrided Read Only Memory NROM Nitride Read Only Memory NROM Non Volatile Rom technology Fourth quarter revenues were Euro 100 million, a decrease of 16 percent from the fourth quarter of the last fiscal year and a decline of 31 percent from the previous quarter of this fiscal year. EBIT amounted to a loss of Euro 2 million, down from a positive EBIT of Euro 18 million in the fourth quarter of fiscal year 2000, but improved from a loss of Euro 35 million in the previous quarter of this year. The Automotive and Industrial group's annual revenues rose to Euro 1.1 billion, up 25 percent from last year principally due to the strong performance of the group's automotive and industrial power business as well as increased sales of power management and supply solutions. EBIT improved to Euro 145 million, up from Euro 69 million in the previous fiscal year. Major developments in the year include: -- successful introduction of the new AUDO AUDO Asociación Uruguaya de Optimist AUDO Amiga Audio Out 32-bit TriCore(TM) micro-controller generation with design wins at all major automotive suppliers -- strong growth with automotive and industrial power solutions and successful penetration of Japanese automotive market with power ASSP's -- further market penetration with power management and supply solutions for PCs/motherboards and strengthened technology leadership with CoolMOS and SiC based products Quarterly revenues were Euro 270 million, up 7 percent from the fourth quarter of last year and a decrease of 6 percent from the record level of Euro 288 million in the previous quarter of this year. EBIT was Euro 32 million compared to Euro 33 million in the fourth quarter of last year and Euro 38 million in the third quarter of this year. The Memory Products group's revenues in fiscal year 2001 were Euro 1.59 billion, a decrease of 54 percent from Euro 3.47 billion in fiscal year 2000. EBIT decreased to a loss of Euro 931 million down from the positive EBIT of Euro 1.34 billion last year. The sharp decline in revenues and negative EBIT development resulted primarily from a significant weakening weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. of demand in the PC market, which led to a rapid
decline in DRAM prices and further inventory write-downs. Spot market
average selling prices The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. for 128Mbit DRAMs fell from US $15 in September
2000 to slightly above US $1 in September 2001. Price erosion was also
fueled by fierce price competition among leading DRAM manufacturers.Major developments for fiscal year 2001 include: -- maintaining top ranking as strategic supplier at all market leading customers -- maintaining cost leadership position by following an aggressive shrink shrink Vox populi noun A psychiatrist roadmap with full conversion to 0.17 micron micron: see micrometer. One micrometer, which is one millionth of a meter or approximately 1/25,000 of an inch. The tiny elements that make up a transistor on a chip are measured in micrometers and nanometers. See process technology. technology at all memory production sites worldwide and beginning the rapid transition to the next generation 0.14 micron technology Micron Technology ("Micron") NYSE: MU is a multinational company based in Boise, Idaho, USA, best known for producing many forms of semiconductor devices. This includes DRAM, SDRAM, flash memory, and CMOS image sensing chips. for mainstream products (256Mbit SDRAM (Synchronous DRAM) A type of dynamic RAM (DRAM) memory chip that has been widely used since the late 1990s. SDRAM chips eliminated wait states by dividing the chip into two cell blocks and interleaving data between them. ) on 200mm as well as on 300mm wafers wafers compressed roughage in flat plates useful for feeding to animals in transit. -- strengthened market position for new specialty memory products such as RLDRAM (storage) RLDRAM - (Reduced Latency DRAM) A kind of dynamic random access memory. RLDRAM comes in "common IO" and "separate IO" configurations. It supports broadside addressing. It is typically used in networking gear and set-top boxes that require high bandwidth memory. , Mobile-RAM and SGRAM (Synchronous Graphics RAM) A type of dynamic RAM chip that is similar to the SDRAM technology, but includes enhanced graphics features for use with display adapters. for high-performance applications, and for Double-Data-Rate (DDR (Double Data Rate) Refers to an SDRAM memory chip that increases performance by doubling the effective data rate of the frontside bus. For more details, see SDRAM. DDR - Double Data Rate Random Access Memory ) products in Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the server target markets Quarterly revenues amounted to Euro 243 million, a decrease of 81 percent from the fourth quarter of last year and a decrease of 27 percent from the previous quarter of this year. EBIT decreased to a loss of Euro 522 million, down from a positive EBIT of Euro 727 million in the fourth quarter of fiscal year 2000 and down from a loss of Euro 340 million in the previous quarter of this year. In the Other Operating Segments, which include the sales of opto products from OSRAM, revenues were Euro 575 million compared to Euro 579 million in the last year. The sale of Infineon's share in the opto joint venture to Osram does not affect the company's continued sales of these products. EBIT improved to Euro 188 million, up from Euro 27 million in fiscal year 2000 due to the sale of Infineon's image and video as well as infrared components businesses. Fourth quarter revenues were Euro 131 million, down 18 percent year-on-year and down 2 percent compared with the previous quarter. EBIT was Euro 3 million, up from a loss of Euro 2 million year-on-year and a loss of Euro 33 million in the previous quarter. Strategic Highlights Fiscal Year 2001 Infineon continued its strategy to strengthen the company's system expertise based on its broad technology portfolio and to offer system solutions for future applications such as complete turn-key solutions for GSM/GPRS mobile phones. In addition, Infineon is combining expertise in business groups across the company to provide advanced system solutions; for example combining its wireless and automotive technologies Noun 1. automotive technology - the activity of designing and constructing automobiles automotive engineering engineering, technology - the practical application of science to commerce or industry for automotive infotainment (INFOrmation enterTAINMENT) Refers to all the information and entertainment services delivered to the home, which are essentially telephone, TV and Internet access. and navigation systems A GPS-based electronic system in a car or truck that provides a real time map of the vehicle's current location as well as step-by-step directions to a programmed destination. See GPS and vehicle tracking. solutions. Infineon has successfully implemented its aggressive shrink roadmap for memory products. The company has also completed the conversion of logic products from 6 to 8 inch wafer (1) A small, thin continuous-loop magnetic tape cartridge that has been used from time to time for data storage and specialized applications. (2) The base unit of chip making. It is a slice taken from a salami-like silicon crystal ingot up to 12" (300mm) in diameter. production. In addition, Infineon strengthened its world leadership in 300mm production, with the ramp-up of its 300mm module in Dresden according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. plan. The company believes that these technological advances will enable it to maintain its position as one of the lowest cost producers of memory ICs. Outlook for 2002 In fiscal year 2001 market conditions in the semiconductor industry deteriorated significantly. Leading market analysts have again lowered their expectations for the semiconductor market as a whole and currently predict a decline of more than 30 percent for calendar year 2001 as well as a moderate single-digit growth rate for 2002. The market development in the next six months remains uncertain and will be impacted by the slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. of the world economy and the uncertainty of the current global political environment. These factors will impact the overall product demand, the intensity of competition in an already very competitive market environment, continued pricing pressure and excess manufacturing capacity. After the sharp drop in demand for mobile handsets in the beginning of 2001, market conditions further deteriorated and growth estimates from market analysts have been significantly reduced. Infineon anticipates that the introduction of the next GSM/GPRS generation for mobile phones in the first half of 2002 will generate a moderate recovery in mobile phone demand. The ongoing slowdown of the global economy, especially in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , has led to a significant investment decline in telecom infrastructure development which will impact Infineon's Wireline Communications business. Macroeconomic mac·ro·ec·o·nom·ics n. (used with a sing. verb) The study of the overall aspects and workings of a national economy, such as income, output, and the interrelationship among diverse economic sectors. conditions may also lead to a weaker demand in the automobile market, particularly in Europe and Germany. Following the terrorist attacks in September in the United States, the Security & Chip Card IC business has seen increased interest in its security expertise and advanced biometric bi·o·met·rics n. (used with a sing. verb) The statistical study of biological phenomena. bi solutions. Last month Infineon announced that it will supply secure micro-controller chips for the U.S. Department of Defense smart card program. Infineon believes that these markets will have significant long term growth potential as demand grows for heightened security solutions. Market conditions for memory products remain difficult, primarily due to aggressive pricing by leading DRAM manufacturers. Although inventory levels declined towards the end of the fourth quarter, Infineon expects price pressure for memory products to continue during the next quarter. The current macroeconomic uncertainties and current market conditions make it difficult to forecast results for the entire 2002 fiscal year. In light of the difficult semiconductor market environment, Infineon expects to incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. during such time as selling prices for memory products persist at their current low levels and adverse market conditions continue to affect other parts of our business. Infineon believes the company has sufficient liquidity and fiscal flexibility to mitigate mit·i·gate v. To moderate in force or intensity. mit  i·gation n. the effects of the current market
conditions through the successful implementation of our Impact cost
savings and restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). program, the reductions in planned capital
expenditures, available funds and financing opportunities, as well as
the potential for strategic sales of non-core assets."Despite the currently difficult semiconductor market environment and macroeconomic uncertainties, we are well positioned in our target segments. We are successfully focusing on our core competencies A core competency is something that a firm can do well and that meets the following three conditions specified by Hamel and Prahalad (1990):
v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the opportunities of any future upturn," concluded Dr. Schumacher.
FINANCIAL INFORMATION
According to US GAAP - Unaudited
Consolidated statements of operations
3 months ended 12 months ended
in Euro million 09/30/2000 09/30/2001 09/30/2000 09/30/2001
----------------------------------------------------------------------
Net sales 2,380 1,085 7,283 5,671
Cost of goods sold (1,122) (1,427) (4,111) (4,904)
----------------------------------------------------------------------
Gross profit (loss) 1,258 (342) 3,172 767
----------------------------------------------------------------------
Research and
development
expenses (348) (344) (1,025) (1,189)
Selling, general and
administrative
expenses (204) (175) (670) (786)
Restructuring charge -- (117) -- (117)
Other operating
income, net -- 21 2 200
----------------------------------------------------------------------
Operating income (loss) 706 (957) 1,479 (1,125)
----------------------------------------------------------------------
Interest income
(expense), net 44 1 75 (1)
Equity in earnings
(losses) of associated
companies 13 (12) 101 25
Gain on associated
company share issuance 53 11 53 11
Other income, net 35 76 36 65
Minority interests -- 5 (6) 6
----------------------------------------------------------------------
Income (loss) before
income taxes 851 (876) 1,738 (1,019)
----------------------------------------------------------------------
Income tax (expense)
benefit (270) 353 (612) 428
----------------------------------------------------------------------
Net income (loss) 581 (523) 1,126 (591)
----------------------------------------------------------------------
Weighted average of
outstanding shares
- basic and diluted 626 684 614 641
----------------------------------------------------------------------
Earnings (loss)
per share
- basic and diluted 0.93 (0.76) 1.83 (0.92)
----------------------------------------------------------------------
Regional Sales Development
12 months ended
Regional sales in % 09/30/2000 09/30/2001
----------------------------------------------------------
Germany 22% 31%
Other Europe 23% 22%
USA 25% 22%
Asia / Pacific 29% 23%
Other 1% 2%
----------------------------------------------------------
Total 100% 100%
----------------------------------------------------------
Europe 45% 53%
----------------------------------------------------------
Non-Europe 55% 47%
----------------------------------------------------------
Segment results
3 months ended
Net sales in Euro million 09/30/2000(a) 09/30/2001 +/- in %
----------------------------------------------------------------------
Wireline Communications 199 142 (29)
Wireless Communications 351 188 (46)
Automotive and Industrial 253 270 7
Memory Products 1,273 243 (81)
Security and Chip Card ICs 119 100 (16)
Other 160 131 (18)
Corporate and reconciliation 25 11 (56)
----------------------------------------------------------------------
Infineon consolidated 2,380 1,085 (54)
----------------------------------------------------------------------
3 months ended
EBIT in Euro million 09/30/2000(a) 09/30/2001 +/- in %
----------------------------------------------------------------------
Wireline Communications(b) (13) (138) --
Wireless Communications 72 (79) --
Automotive and Industrial 33 32 (3)
Memory Products 727 (522) --
Security and Chip Card ICs 18 (2) --
Other (2) 3 +++
Corporate and reconciliation (28) (176) --
----------------------------------------------------------------------
Infineon consolidated 807 (882) --
----------------------------------------------------------------------
Segment results
12 months ended
Net sales in Euro million 09/30/2000(a) 09/30/2001 +/- in %
----------------------------------------------------------------------
Wireline Communications 665 768 15
Wireless Communications 1,221 997 (18)
Automotive and Industrial 880 1,099 25
Memory Products 3,473 1,588 (54)
Security and Chip Card ICs 375 588 57
Other 579 575 (1)
Corporate and reconciliation 90 56 (38)
----------------------------------------------------------------------
Infineon consolidated 7,283 5,671 (22)
----------------------------------------------------------------------
12 months ended
EBIT in Euro million 09/30/2000(a) 09/30/2001 +/- in %
----------------------------------------------------------------------
Wireline Communications(b) 47 (95) --
Wireless Communications 261 (178) --
Automotive and Industrial 69 145 110
Memory Products 1,337 (931) --
Security and Chip Card ICs 49 27 (45)
Other 27 188 596
Corporate and reconciliation (120) (180) --
----------------------------------------------------------------------
Infineon consolidated 1,670 (1,024) --
----------------------------------------------------------------------
(a) Prior period segment results have been reclassified to be constant
with the current period presentation and organizational structure.
(b) Includes acquisition related expenses (amortization of acquired
intangible assets, goodwill and deferred compensation as well as
in-process R&D) of Euro 53 million and Euro 67 million for the
three months ended 09/30/2000 and 09/30/2001, respectively as well
as of Euro 60 million and Euro 111 million for the financial years
ended 09/30/2000 and 09/30/2001, respectively.
3 months ended
Net sales in Euro million 06/30/2001 09/30/2001 +/- in %
----------------------------------------------------------------------
Wireline Communications 188 142 (24)
Wireless Communications 176 188 7
Automotive and Industrial 288 270 (6)
Memory Products 332 243 (27)
Security and Chip Card ICs 144 100 (31)
Other 133 131 (2)
Corporate and reconciliation 16 11 (31)
----------------------------------------------------------------------
Infineon consolidated 1,277 1,085 (15)
----------------------------------------------------------------------
3 months ended
EBIT in Euro million 06/30/2001 09/30/2001 +/- in %
----------------------------------------------------------------------
Wireline Communications(c) (26) (138) --
Wireless Communications (176) (79) +++
Automotive and Industrial 38 32 (16)
Memory Products (340) (522) --
Security and Chip Card ICs (35) (2) +++
Other (33) 3 +++
Corporate and reconciliation (26) (176) --
----------------------------------------------------------------------
Infineon consolidated (598) (882) --
----------------------------------------------------------------------
(c) Includes acquisition related expenses of Euro 67 million for the 3
months ended 09/30/2001 and Euro 25 million for the three months
ended 06/30/2001.
Consolidated balance sheets
in Euro million 09/30/2000 09/30/2001
----------------------------------------------------------------------
Assets
Current assets:
Cash and cash equivalents 511 757
Marketable securities 498 93
Accounts receivable, net 1,386 719
Related party receivables 439 208
Inventories 841 882
Deferred income taxes 100 39
Other current assets 60 178
----------------------------------------------------------------------
Total current assets 3,835 2,876
----------------------------------------------------------------------
Property, plant and equipment, net 4,034 5,233
Long-term investments, net 432 655
Restricted cash 132 86
Deferred income taxes 166 412
Other assets 254 481
----------------------------------------------------------------------
Total assets 8,853 9,743
----------------------------------------------------------------------
in Euro million 09/30/2000 09/30/2001
----------------------------------------------------------------------
Liabilities and shareholders' equity
Current liabilities:
Short-term debt and current maturities 138 119
Accounts payable 849 1,050
Related party payables 373 239
Accrued liabilities 719 426
Deferred income taxes 75 19
Other current liabilities 300 351
----------------------------------------------------------------------
Total current liabilities 2,454 2,204
----------------------------------------------------------------------
Long-term debt 128 249
Deferred income taxes 178 53
Other liabilities 287 337
----------------------------------------------------------------------
Total liabilities 3,047 2,843
----------------------------------------------------------------------
Total shareholders' equity 5,806 6,900
----------------------------------------------------------------------
Total liabilities and
shareholders' equity 8,853 9,743
----------------------------------------------------------------------
Condensed consolidated cash flow information
3 months ended 12 months ended
in Euro million 09/30/2000 09/30/2001 09/30/2000 09/30/2001
----------------------------------------------------------------------
Net cash provided
by operating
activities 929 97 2,080 211
----------------------------------------------------------------------
Net cash used in
investing activities (1,076) (501) (2,327) (1,813)
----------------------------------------------------------------------
Net cash (used in)
provided by financing
activities (127) 993 728 1,848
----------------------------------------------------------------------
Net (decrease) increase
in cash and cash
equivalents (274) 589 481 246
----------------------------------------------------------------------
Purchase (sale) of
marketable securities 151 (11) 452 (392)
----------------------------------------------------------------------
Free cash flow 4 (415) 205 (1,994)
----------------------------------------------------------------------
Depreciation and
amortization 257 329 834 1,122
----------------------------------------------------------------------
Purchases of property,
plant and equipment (904) (569) (1,571) (2,282)
----------------------------------------------------------------------
Telephone Conference Information The Management Board of Infineon Technologies will conduct a telephone conference with analysts and institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. on November 13, 2001 at 10:00 a.m. Eastern Standard Time (U.S. EST EST electroshock therapy. EST abbr. electroshock therapy ), 4:00 p.m. Central Europe Central Europe is the region lying between the variously and vaguely defined areas of Eastern and Western Europe. In addition, Northern, Southern and Southeastern Europe may variously delimit or overlap into Central Europe. Time (CET CET abbr. Central European Time CET Central European Time CET n abbr (= Central European Time) → hora de Europa central CET abbr ), to discuss operating performance of the fourth quarter and fiscal year 2001. A broadcast of the telephone conference will be available live and for download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. on Infineon's web site at: http://www.infineon.com DISCLAIMER (networking) disclaimer - Statement ritually appended to many Usenet postings (sometimes automatically, by the posting software) reiterating the fact (which should be obvious, but is easily forgotten) that the article reflects its author's opinions and not necessarily those of the This discussion includes forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. about our future business. These forward-looking statements include statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc future developments of the world semiconductor market, especially the market for memory products, Infineon's future growth, the benefits of research and development alliances and activities, our planned levels of future investment in the expansion and modernization modernization Transformation of a society from a rural and agrarian condition to a secular, urban, and industrial one. It is closely linked with industrialization. As societies modernize, the individual becomes increasingly important, gradually replacing the family, of our production capacity, the introduction of new technology at our facilities, the transitioning of our production processes to smaller structures, cost savings related to such transitioning and other initiatives, our successful development of technology based on industry standards, our ability to offer commercially viable products based on our technology, our ability to achieve our cost savings and growth targets. These forward-looking statements are subject to a number of uncertainties, including trends in demand and prices for semiconductors generally and for our products in particular, the success of our development efforts, both alone and with our partners, the success of our efforts to introduce new production processes at our facilities and the actions of our competitors, the availability of funds for planned expansion efforts, as well as the other factors mentioned herein. As a result, our actual results could differ materially from those contained in the forward-looking statements. Note to Editors: Infineon, the stylized styl·ize tr.v. styl·ized, styl·iz·ing, styl·iz·es 1. To restrict or make conform to a particular style. 2. To represent conventionally; conventionalize. Infineon Technologies design are trademarks and servicemarks of Infineon Technologies AG. All other trademarks are the property of their respective owners. For the financial and business press: INFXX200111.009e |
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