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Micronas achieves excellent margin despite Japan crisis and euro weakness
- EBIT margin matches previous year's despite Japan crisis, weakness of euro and additional R&D investments
- Turnover in core Hall sensors business rises after currency adjustments
- Cooperation with X-FAB gives Micronas access to future manufacturing technologies
- Distribution of CHF 0.05 per registered share proposed
- Sales of CHF 80 to 82 million and an EBIT margin of around 13 percent expected for first half of 2012
Micronas can look back on a successful 2011 financial year. "Although the crisis in Japan hit the Company hard owing to the high proportion of sales Micronas generates in this region, and despite the negative impact on sales due to the euro's weakness, we are proud to have once again - like last year - achieved a double-digit EBIT margin", says Micronas CEO Matthias Bopp.
Consolidated net sales for the Micronas Group (Automotive and Consumer) in 2011 came to CHF 158.8 million. This is 17 percent down on the previous year, which is in line with expectations. The fall is mainly due to the weakness of the euro and the planned phasing out of sales of Consumer products and dashboard controllers. The Automotive division achieved sales of CHF 151.8 million, which is 7 percent lower than in 2010; after adjusting for currency movements (euros), Automotive sales were 3 percent higher than in the previous year. Consumer sales were down, as expected, from CHF 26.6 million in the previous year to CHF 7.0 million in 2011; in the final quarter they came to CHF 1.2 million. Despite a strategic increase in investment in research and development, the Micronas Group recorded an operating profit (EBIT) of CHF 20.6 million, which gives an EBIT margin of 13 percent of sales (2010: 13.7 percent).
Owing to the steep fall in the value of the Trident shares that the Company acquired in 2009 when it sold some of its Consumer product lines, Micronas had to make a value adjustment on this shareholding, which it then sold in its entirety in the fourth quarter. This reduced the financial result by a net CHF 9.3 million. After taking financial income and expenses into account, as well as income from deferred taxes of CHF 8.5 million, Micronas reported a profit of CHF 11.5 million for 2011 (2010: CHF 6.7 million). Earnings per share for 2011 came to CHF 0.39 (CHF 0.23). The Board of Directors proposes to the annual Shareholders' Meeting of Micronas Semiconductor Holding AG of March 23, 2012 to distribute to the shareholders CHF 0.05 per registered share from the capital contribution reserve. At the end of 2011, Micronas held cash and cash equivalents of CHF 156.2 million (CHF 165.4 million). Equity capital stood at CHF 129.2 million (CHF 122.7 million). The Company's equity ratio rose to 46 percent (2010: 44 percent).
The Automotive division was hit especially hard in the second and third quarter by the effects of the earthquake in Japan. The Japanese car industry managed to stage a recovery by the end of the third quarter, and Micronas achieved significantly higher sales in the fourth quarter. The floods in Thailand had no significant effect on Micronas.
Automotive sales came to CHF 151.8 million in 2011, compared to CHF 163.7 million in 2010. This was exclusively due to the weakening of the euro against the Swiss franc and reduced sales of dashboard controllers. After adjusting for currency movements (euros), Automotive sales actually increased 3 percent on the previous year, with sales of Hall sensors rising 7 percent. The gross margin improved from 37 percent in 2010 to 38 percent in 2011. In order to further strengthen research and development activities, R&D spending was raised during the period under review to more than 17 percent of sales. Operating profit (EBIT) came to CHF 16.3 million (2010: CHF 21.9 million).
Its further development of Hall sensors puts Micronas in an excellent position. The Company's positive experience at trade fairs during the year confirmed the great interest in its new products based on 3D HAL technology. The main attractions were the HAL 3625 angle sensor, which can determine angles up to 360 degrees with extreme precision, and the HAL 3855 Hall sensor, which accurately measures positions over distances of up to 40 millimeters.
A new and optimized system solution devised by Micronas for the fast-growing market for brushless DC (BLDC) motors was launched in 2011. The embedded HVC 2480B microcontroller controls actuators in combination with an intelligent Hall sensor, for example in motor control applications. An increasing numberof DC and stepper motor applications will in future use brushless motors because of their superiority to traditional motors in terms of energy efficiency, space required, weight, reliability and noise emission.
A major milestone was achieved in the Industrial division with the partnership agreement on gas sensors between Siemens and Micronas. The aim of this cooperation is to develop and launch new types of Siemens fire detection products based on Micronas mySENS technology. This has given Micronas another important key client. The mySENS evaluation platform has also been supplied to other companies working on fire detection technology, as well as to numerous potential clients in the climate control technology and gas sensor sectors.
With an investment of EUR 10 million in, and the related cooperation with, X-FAB Silicon Foundries Group, a leading international foundry group based in Erfurt that specializes in analog and mixed analog-digital semiconductor applications, Micronas has secured access to next generation technologies. Micronas will use X-FAB as a manufacturing partner, support it as a technology partner and retains the option to move over to its own manufacturing in future, thus offering dual sourcing.
The expansion of marketing and sales activities was continued in 2011 and structured along clear lines of responsibility. The positions of Vice President Sales and Chief Technology Officer (CTO), newly created in 2011, were both filled with internationally experienced industry professionals.
In line with expectations, Consumer sales came to CHF 7.0 million (2010: CHF 26.6 million). Operating profit (EBIT) stood at CHF 4.3 million (CHF 4.2 million). Micronas expects to phase out sales of Consumer products completely in 2012.
Owing to the crisis in Japan, capacity utilization at the Freiburg manufacturing facilities went down to 70 percent in the first half-year. During the second six months, capacity then rose continuously to reach around 80 percent. Manufacturing includes the front-end wafer fab and the back-end assembly and testing areas. Short-time work was suspended intermittently in the second half of the year, and by the end of 2011 was being used very little.
In April 2011, Micronas acquired some of the land and buildings it had previously leased in Freiburg. This has helped to permanently reduce costs and improve operating results. In December 2011, a 2000 m2 photovoltaic system was erected on the purchased buildings. With this project Micronas is making a substantial contribution to protecting the environment.
The Board of Directors and the Management expect sales of CHF 80 to 82 million in the first half of 2012, and an EBIT margin of around 13 percent.
Detailed financial information as well as the Annual Report 2011 are available at: www.micronas
This press release contains forward-looking statements, such as projections, forecasts and estimates. Such forward-looking statements are dependent on certain risks and uncertainties which may cause actual results, performance or events to differ materially from those anticipated in this press release. The forward-looking statements contained in this press release are based on Micronas' views and assumptions as of this date and Micronas does not assume any obligation to update or revise this press release. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.
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