Soitec Reports Strong Sales Growth for Q2 and H1 2006-2007 in line with its Full Year Guidance
• New sales record for Q2 at 89.7 million Euros
• Half-year sales growth up 53% in line with full year guidance
• Group anticipates minimum operating margin of 13% for H1
• H1 net income anticipated to be above 10% of sales
Bernin, France, October 16, 2006 - Soitec (Euronext, Paris), the leading manufacturer of silicon-on-insulator (SOI) wafers and other engineered substrates, today announced record consolidated sales of 89.7 million Euros for the second quarter of its 2006-2007 financial year, a growth of 41.5%. Half-year consolidated sales grew 53.0% on a year-on-year basis to 175.3 million Euros, in line with its full year guidance. The Group confidently anticipates that the strong sales growth should result in much higher operating income and an improved operating margin. In addition lower interest costs for the period should have a favourable impact on net income, which is anticipated to be above 10% of sales compared to 3.2% for the same period last year.
| Sales (Euros millions) | 2006-2007 | 2005-2006 | % Change |
| First Quarter | 85.6 | 51.2 | +67.1% |
| Second Quarter | 89.7 | 63.4 | +41.5% |
| Total First Half | 175.3 | 114.6 | +53.0% |
300mm demand continues to sustain high wafer sales growth year-on-year
300mm sales for the quarter were 72% above the same quarter last year at constant exchange rates (65% in absolute terms) and represented 67% of total wafer sales versus 58% last year. Other significant wafer diameters, in particular 200mm, also recorded good growth equal in total to 10% on a year-on-year basis.
Wafer sales in total rose to a record 85.8 million Euros for the quarter, which is an annual growth of 47.5% at constant exchange
rates (42.0% in absolute terms: Fx of 1.27 v 1.22 last year). Sequentially total wafer sales growth over Q1 was 6.7% in performance
or 4.4% in absolute terms.
Turning to the half year, the exchange rate was almost unchanged year on year at 1.26 v 1.25 and total wafer sales recorded annual growth of 54% by rising to 168.0 million Euros. Sequentially the exchange rate was unfavourable at 1.26 v 1.20 leading to growth of 23.9% in performance reduced to 18.5% in absolute terms.
In addition to wafer sales the Group reported royalties of 1.0 million Euros for the second quarter giving 1.7 million Euros for the first half.
The Group’s Picogiga division performed strongly in Q2 recording year-on-year growth of 24.4% for a total of 2.6 million Euros, which means 5.3 million Euros and 57% annual growth for the first half.
Group anticipates significant increase in net income
The Group is confident that the powerful first half sales performance as well as the continuing efficient manufacturing performance should result in much higher operating income at a minimum operating margin of 13% - an improvement over the same period last year.
The anticipated favourable impact on net interest expense arising from the impact of bonds that have converted combined with the cash raised in March means that net income should also be significantly higher than the same period last year. The Group forecasts net income for the first half of the year to be above 10% of sales compared to 3.2% last year.
Positive Outlook confirmed
The Group confirms it’s full year sales guidance of 400 million Euros (at April 2006 exchange rate: about 1.25) being confident that further growth in revenues is supported by the success of its main customers. The Group also confirms its expectation for an improvement to its operating margin for the full financial year. In terms of capacity 300-mm production will continue to ramp in Bernin II in line with customer demand, as already demonstrated by the installation of two additional lines in H1.
Reporting Calendar
Half-year results for the financial year 2006-2007 will be announced on Monday October 30, 2006 after the Paris Stock Exchange closes.
About The Soitec Group
The Soitec Group is the world’s leading innovator and provider of the engineered substrates that serve as the foundation for today’s most
advanced electronic products and nanotechnologies. Headquartered in Bernin, France, the company manufactures its comprehensive portfolio of engineered substrates, including silicon-on-insulator (SOI) and strained SOI (sSOI), using Soitec’s proprietary Smart Cut™ technology—the de facto industry standard. With its strong global presence, patented technology and industry-leading production capacity, Soitec is helping to drive the performance and power advantages that are key to the smaller, more power efficient, and increasingly mobile electronic products favoured by consumers worldwide. Both shares and convertible bonds are listed on Euronext Paris.
Soitec, Smart Cut and UNIBOND are trademarks of S.O.I.TEC Silicon On Insulator Technologies
For further information, please contact:
Iain Murray
Chief Financial Officer
Tel. +33 4 76 92 75 14
E-mail: investors@soitec.fr
Olivier Brice
Investor Relations – Financial Communication
Tel. +33 4 76 92 93 80
E-mail: olivier.brice@soitec.fr