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Difficult past financial year - Significant benefits expected from takeover by TDK
2015 results slightly better than expected, sales, however, 15 percent lower than prior year, or 3 percent when calculated in euros
Slightly positive EBIT margin (before exceptional items) for fiscal year 2015
In its publication of the definitive interim result of February 16, 2016, TDK Magnetic Field Sensor G.K. announced an 82.57 per cent acceptance rate, and declared its tender offer successful pending fulfilment of certain offer conditions
As the competence center for sensors within TDK Corporation, Micronas will develop innovative new products that combine TDK’s MR know-how with Micronas Group’s expertise in Hall sensors
In the course of fiscal year 2015 it became apparent that 2015 would be a difficult year for Micronas. At CHF 134.4 million, the Company’s net sales for fiscal 2015 were higher than had been predicted in the press release of October 22, 2015, but were still 15 percent lower than the 2014 figure. Sales and earnings were strongly influenced by a variety of negative factors. In January 2015, the Swiss National Bank decided to abandon the minimum exchange rate between the Swiss franc and the euro. This meant that figures in the income statement and balance sheet were lower after conversion into the Group’s accounting currency, the Swiss franc. The sharp decline in demand for cars in Japan, an important market for Micronas, weakened sales further in the year under review. On top of this, earnings were hit hard again in 2015 by the switch from 6- to 8-inch production, combined with the introduction of new manufacturing facilities and various new product launches and qualifications. Owing to the valuation of cash holdings denominated in foreign currencies, the net result was negative.
On December 17, 2015, TDK Corporation announced its intention to launch a takeover offer for all issued and outstanding Micronas shares in order to grow its magnetic sensor business. The Board of Directors of Micronas unanimously resolved to support TDK’s tender offer and to recommend that Micronas shareholders accept it. The Board of Directors and Management of Micronas firmly believe that the transaction proposed by TDK will bring considerable strategic, operational and financial benefits for Micronas.
In its publication of the definitive interim result on February 16, 2016, TDK Magnetic Field Sensor G.K. announced an acceptance rate of 82.57 percent, equivalent to a total of 23,867,354 Micronas shares, and declared the tender offer successful pending fulfilment of certain offer conditions.
The Micronas Group’s consolidated net sales for 2015 came to CHF 134.4 million, which is 15 percent lower than in the previous year. After adjusting for currency movements, calculated in euros, sales went down 3 percent. A gross margin of 27.4 percent of sales was achieved during the year under review, compared with 31.8 percent in the previous year. CHF 22.9 million was invested in research and development. As a percentage of sales, this R&D spending came to 17 percent. Operating profit before exceptional items amounted to CHF 0.5 million, down from CHF 6.4 million in 2014. The EBIT margin for the 2015 financial year was 0.4 percent of sales. Operating profit after exceptional items (expenses for the public tender offer by TDK) came to CHF -1.7 million.
The result for 2015 after financial income and taxes was a loss of CHF 12.2 million. This loss is due partly to the revaluation of euro-denominated cash holdings at Micronas Semiconductor Holding AG, which caused a book loss of CHF 3.7 million following the removal of the euro minimum rate. Earnings per share came to CHF -0.42. On December 31, 2015, Micronas reported cash, cash equivalents and short-term financial cash deposits of CHF 119.5 million. Shareholders' equity came to CHF 86.2 million, giving an equity ratio of 34 percent.
The share buy-back program announced on February 25, 2015, was carried out as planned and ended on December 15, 2015. A total of 1,493,838 shares, or 5.02 percent of total share capital, were repurchased.
The date of the 21st ordinary Shareholders’ Meeting of Micronas Semiconductor Holding AG will be announced in due course.
Forward Looking Information
This media release contains statements that are, or may be deemed to be, forward-looking statements. In some cases, these forward-looking statements can be identified by the use of forward-looking terminology, including the words "aims", "believes", "estimates", "anticipates", "expects", "intends", "may", "will", "plans", "continue" or "should" or similar terminology. These forward-looking statements include matters that are not historical facts or which may not otherwise be provable by reference to past events. By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events, and/or depend on circumstances that may or may not occur in the future.
This press release does not constitute an offer to sell, or a solicitation of an offer to buy, registered shares of Micronas Semiconductor Holding AG, Zurich ("Micronas" and the registered shares of Micronas the "Micronas Shares") or any other securities. Shareholders of Micronas are urged read the offer documents pertaining to the public tender offer (the "Offer") by TDK Corporation or one of its affiliates (TDK), which are available at http://www.global.tdk.com/news_center/press/document.htm.
The Offer described in the offer documents will not be made, directly or indirectly, in any country or jurisdiction in which the Offer would be considered unlawful or otherwise violate any applicable laws or regulations, or which would require TDK or any of its subsidiaries to change or amend the terms or conditions of the Offer in any manner, to make any additional filing with any governmental or regulatory authority or take any additional action in relation to the Offer. It is not intended to extend the Offer to any such country or jurisdiction. Documents relating to the Offer must neither be distributed in any such country or jurisdiction nor be sent into such country or jurisdiction. Any such documents must not be used for the purpose of soliciting the purchase of any securities of Micronas by any person or entity resident or incorporated in any such country or jurisdiction.
Notice to U.S. Holders
The Offer described in the offer documents will be made for registered shares of Micronas, a Swiss company whose shares are listed on the SIX Swiss Exchange ("SIX"), and is subject to Swiss disclosure and procedural requirements, which are different from those of the United States ("U.S."). The Offer will be made in the U.S. pursuant to Section 14(e) of, and Regulation 14E under, the U.S. Securities Exchange Act of 1934, as amended (the "U.S. Exchange Act"), subject to the exemptions provided by Rule 14d-1(d) under the U.S. Exchange Act, and otherwise in accordance with the requirements of Swiss law. Accordingly, the Offer will be subject to disclosure and other procedural requirements, including with respect to withdrawal rights, settlement procedures and timing of payments that are different from those applicable under U.S. domestic tender offer procedures and laws. U.S. holders of Micronas Shares are encouraged to consult with their own Swiss advisors regarding the Offer.
According to the laws of Switzerland, Micronas Shares tendered into the Offer may generally not be withdrawn after they are tendered except under certain circumstances, in particular in case a competing offer for the Micronas Shares is launched.
In accordance with the laws of Switzerland and subject to applicable regulatory requirements, TDK or their nominees or brokers (acting as agents for TDK) may from time to time after the date hereof, and other than pursuant to the Offer, directly or indirectly purchase, or arrange to purchase, Micronas Shares or any securities that are convertible into, exchangeable for or exercisable for Micronas Shares. These purchases, or arrangements to purchase, may occur either in the open market at prevailing prices or in private transactions at negotiated prices and shall comply with applicable laws and regulations in Switzerland and applicable U.S. securities laws. Any such purchases will not be made at prices higher than the Offer price or on terms more favorable than those offered pursuant to the Offer unless the Offer price is increased accordingly. Any information about such purchases or arrangements to purchase will be publicly disclosed in the U.S. on http://www.global.tdk.com/news_center/press/document.htm to the extent that such information is made public in accordance with the applicable laws and regulations of Switzerland. In addition, the financial advisors to TDK and Micronas may also engage in ordinary course trading activities in securities of Micronas, which may include purchases or arrangements to purchase such securities.
It may be difficult for U.S. holders to enforce their rights and any claim arising out of U.S. securities laws, since each of TDK and Micronas is located in a non-U.S. jurisdiction, and some or all of their officers and directors may be residents of a non-U.S. jurisdiction. U.S. holders may not be able to sue a non-U.S. company or its officers or directors in a U.S. or non-U.S. court for violations of the U.S. securities laws. Further, it may be difficult to compel a non-U.S. company and its affiliates to subject themselves to a U.S. court's judgment.
The receipt of cash pursuant to the Offer by a U.S. holder of Micronas Shares may be a taxable transaction for U.S. federal income tax purposes and under applicable U.S. state and local laws, as well as foreign and other tax laws. Each shareholder of Micronas is urged to consult his or her independent professional advisor immediately regarding the tax consequences of an acceptance of the Offer.
Neither the U.S. Securities and Exchange Commission nor any securities commission of any State of the U.S. has (a) approved or disapproved of the Offer; (b) passed upon the merits or fairness of the Offer; or (c) passed upon the adequacy or accuracy of the disclosure in the offer prospectus that will be published. Any representation to the contrary is a criminal offence in the U.S.
American Depositary Shares and American Depositary Receipts
TDK is aware that there is an “unsponsored” American Depositary Receipt Program concerning Micronas Shares. The Offer described in the offer documents will not be made for American Depositary Shares representing Micronas Shares ("ADSs"), nor for American Depositary Receipts evidencing such ADSs ("ADRs"). However, the Offer will be made for the Micronas Shares that are represented by the ADSs. Holders of ADSs and ADRs are encouraged to consult with the depositary regarding the tender of Micronas Shares that are represented by ADSs. TDK is unaware of whether the depositary will make arrangements to tender the underlying Micronas Shares into the Offer on behalf of holders of ADSs or ADRs.
Holders of ADSs may present their ADSs to the depositary for cancellation and (upon compliance with the terms of the deposit agreements relating to the “unsponsored” American Depositary Receipt Program concerning Micronas Shares, including payment of the depositary’s fees and any applicable transfer fees, taxes and governmental charges) delivery of Micronas Shares to them, in order to become shareholders of Micronas. The Offer may then be accepted in accordance with its terms for the Micronas Shares delivered to holders of ADSs upon such cancellation. Holders of ADSs should be aware, however, that in order to tender in this manner, they may need to have an account in Switzerland into which the Micronas Shares can be delivered.
The communication about the Offer described in the offer documents, including this communication, is directed only at persons in the United Kingdom (U.K.) who (i) have professional experience in matters relating to investments, (ii) are persons falling within article 49(2)(a) to (d) («high net worth companies, unincorporated associations, etc.») of The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or (iii) to whom it may otherwise lawfully be communicated (all such persons together being referred to as «relevant persons»). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons.
Australia and Japan
The Offer described in the offer documents is not being addressed to shareholders of Micronas whose place of residence, seat or habitual abode is in Australia or Japan, and such shareholders may not accept the Offer.
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