Soitec announces half-year results for 2011-2012
• Financial results for first half-year 2011-2012 : Operating loss at 8.5 million Euros – Positive operating margin at constant exchange – Net loss at 12.9 million Euros
• Financial position strengthened from capital increase with Fonds Stratégique d’Investissement and available cash at 381,4 million Euros as of September 30, 2011
• Success in the United States of the Group’s strategic initiative in its solar activities – Immediate implementation of its investment plan dedicated to industrial capacities for its new concentrated photovoltaic technology
• Conservative short-term outlook given the global economic environment
Bernin, France, November 16, 2011 – Soitec (Euronext), world leader in generating and manufacturing revolutionary extreme performance semiconductor materials for electronics and energy, announced today its consolidated results for the first six months of its 2011-2012 fiscal year. In the first half, the Group posted consolidated sales of 162.6 million Euros, up 18.4% compared to the first six months of last year, taking into account a decrease of 10% in the dollar / euro exchange rate. The unfavorable change in the exchange rate, the acceleration in the Research and Development efforts and the strengthening of the organizational structures to meet the new strategic challenges have led to an operating loss of 8.5 million Euros against an operating profit of 2.5 million Euros in the first six months of last year. At constant exchange rates, the operating margin was positive, about 2% of sales. After net financial expenses, net first half-year result (Group share) demonstrates a loss of 12.9 million Euros against a loss of 7.4 million Euros in the first half of 2010-2011. After taking into account funds raised during the recent capital increase, the Group had at its disposal at the end of September 2011, the cash amounting to 381.4 million Euros that will enable it to quickly fulfill its investment plan in its solar activities taking into account the confirmation of the industrial appeal of its concentrated photovoltaic technology (CPV).
| (in millions of Euros- IFRS) | S1 2010-2011 | S1 2011-2012 |
| Sales | 137.3 | 162.6 |
| Gross margin | 34.1 | 36.6 |
| Research & Development | 13.6 | 20.7 |
| SG&A | 15.7 | 20.7 |
| Solar project development cost | 2.2 | 3.7 |
| Current Operating Income | 2.5 | (8.5) |
| Financial Income-Net | (11.4) | (4.5) |
| Net Income - Group share | (7.4) | (12.9) |
| Net earnings per share (Euros – undiluted) | (0.08) | (0.12) |
Positive operating margin at constant exchange – Acceleration of Research and Development efforts and reinforcement of organizational structures to better serve new Group developments
The sales growth has led to a slight increase in the reported gross margin, which rose from 34.2 million Euros (24.9% of sales) in the first half-year of 2010-2011 to 36.6 million Euros (22.5% of sales) in the first half-year 2011-2012. In contrast and at constant exchange rates, the gross margin of the first half-year 2011-2012 was 26.4% of sales, showing a continuous improvement in industrial efficiency.
The Group has expanded their Research and Development effort which has greatly increased with net charge of 20.7 million Euros, or 12.7% of sales, compared to 13.6 million Euros for the first half-year of 2010-2011 or 9.9% of sales. This increase is directly related to the acceleration of strategic programs targeting the development of the substrates for light emitting diodes, for new high efficiency solar cells, and for the Fully Depleted SOI technology. The Group also strengthened its development spending for solar power projects and has adjusted its organization in order to be able to meet the development opportunities of its new businesses. Over the last 12 months, the consolidated workforce increased by 21% to 1379 employees.
The consolidated operating income loss was at 8.5 million Euros. In the first half of 2011-2012, the positive contribution of the Electronics Division amounted to 8.8 million Euros against the negative contribution of 17.3 million Euros from the Solar Energy Division.
The net financial income was reduced to 4.5 million Euros against 11.4 million Euros against in the first half of last year and a net income (loss) (Group share) stood at 12.9 million Euros against a loss of 7.4 million Euros in the first six months of last year.
Significant strengthening of the financial position – capital increase with new shareholder – Fonds Stratégique d’Investissement – available cash will enable to quickly finance the Group’s investment plan
In the first half-year, the cash flow generated from operations was slightly negative in the amount of 6.9 million Euros due to the increase in inventory management. The net cash flow devoted to investment increased to 23.9 million Euros. Building on the success of its recent capital increase, the Group significantly strengthened its consolidated shareholders’ equity that emerged at 635.6 million Euros at September 30, 2011 and its available cash was increased to 381.4 million Euros (cash net 225.3 million Euros).
The entry in the capital of Fonds Stratégique d’Investissement in the amount of 9.9% (13.5% including Caisse des Dépôts), is in line with the medium-term objective of positioning the Group in three major activities (Electronics – Solar – Lighting) coming from a significant effort in Research and Development with very high innovation content, with the desire to bring business opportunities in international markets.
Success in the United States of the Group’s strategic initiative in its solar activities – Immediate implementation of an investment plan dedicated to industrial capacities for its new concentrated photovoltaic technology
The Group has recently received regulatory approval from the CPUC (California Public Utilities Commission), regulatory Commission for public services in the state of California, for its five power purchase agreements concluded with San Diego Gas and Electric (SDG&E). These five projects represent a total capacity of 155 megawatts (MW) of solar energy, the electricity being generated by the solar power plants in the San Diego region thanks to the photovoltaic technology by Soitec’s Concentrix™ (CPV). This announcement represents a milestone in the development program for solar power projects in the United States with positive impact on Soitec’s strategy. At the November 15 meeting, the Board of Directors had decided to immediately implement the investment program relating to set up its solar system production and assembly capacities to be delivered for these different projects. The decision involves the acquisition of an industrial building in San Diego and the purchase of the equipment for an annual assembly capacity of 100 MW with the confirmation that more than 200 MW may be carried, subject to confirmation of other projects expected in the upcoming months.
The Group also recently announced an agreement with Reflexite Energy Solutions to invest in company to develop SoG (Silicone on Glass) and produce Fresnel lenses used in the solar systems in its future San Diego site (USA). It also announced that it successfully increased its research program on the new high-efficiency solar cells and initiated the first investments dedicated to the industrial pilot line at the Bernin site (France) that serves the needs of substrates for solar cells and light emitting diodes. The Group recalls that the assembly capacity at the Freiburg site (Germany) is about to be increased to 80 MW, and is expected in mid-2012.
Conservative short-term outlook
Recent information indicates that the ongoing introduction of new products based on the 32 nm SOI technology whose demand to the Group depends not only on the final demands of the consumers, but also on the evolution of the capacity of partners involved to meet this demand. The general economic uncertainty globally leads the semiconductor industry to be cautious which shall result in a anticipated sequential decrease in the activity of the third quarter of the current fiscal year with visibility which remains limited to the first quarter of the new calendar year. The Group remains confident that its activity will gradually rebound over the next several quarters and points out that the new contracts are anticipated in the solar energy market. It indicates that on its consolidated results for the full-year 2011-2012, its EBIT margin should remain negative.
Agenda
The sales for the third quarter of the 2011-2012 fiscal year will be published on January 16, 2012, after the closing of the Paris stock exchange.
About Soitec
Soitec (Euronext Paris) is an international manufacturing company, at the heart of generating and manufacturing extreme performance semiconductor materials. Soitec’s products encompass substrates for micro and nanoelectronics (most notably SOI : Silicon On Insulator) and concentrating photovoltaic systems (CPV), and company's core technologies Smart Cut™, Smart Stacking™ and Concentrix™, as well as expertise in epitaxy make it a world leader. Soitec delivers enhanced performance and energy efficiency to a broad range of applications including consumer and mobile electronics, telecommunications, automotive electronics, lighting products and solar power plants for large scale utilities. Soitec has manufacturing plants and Research and Development centers in France, Singapore, Germany, and the United States.
For more information, visit www.soitec.com.
For all information, please contact :
French Media Contact
H&B Communication
Marie-Caroline Saro
+33 (0)1 58 18 32 44
mc.saro@hbcommunication.fr
Claire Flin
+33 (0)1 58 18 32 53
c.flin@hbcommunication.fr
Investor Relations
Olivier Brice
+33 (0)4 76 92 93 80
olivier.brice@soitec.com
International Media Contact
Camille Darnaud-Dufour
+33 (0)6 79 49 51 43
camille.darnaud-dufour@soitec.com