First Half-Year 2005-2006: Soitec Reports Strongly Positive Results
Bernin, France, November 14, 2005 - Soitec (Euronext Paris), the world’s leading supplier of silicon-on-insulator (SOI) wafers and other engineered substrates, today announced the half-year consolidated results for its 2005-2006 financial year, for the first time in accordance with the International Financial Reporting Standards (IFRS). Strong customer demand for SOI wafers resulted in consolidated half-year sales reaching 114.6 million Euros—an increase of 72.6% on a year-on-year basis. Record revenues, combined with continuing cost-structure enhancements, helped drive improvements in operating income, net income and operating cash flow. Operating income rose to 11.5 million Euros compared to a slightly negative result one year ago, while net income increased to 3.7 million Euros compared to a loss of 7.1 million Euros in the same period last year. Operating cash flow of 33.3 million Euros covered investment and financing outflows for the period which with the conversion of 30% of the 2005-2009 bond, resulted in a strengthened balance sheet and a reduction in gearing to 63%.
| (in million Euros) | H1 2004-2005 | H1 2005-2006 |
| Sales | 66.4 | 114.6 |
| Gross profit | 10.6 | 27.4 |
| Research & development | 7.3 | 8.2 |
| SG&A | 3.4 | 7.7 |
| Operating income/(loss) | (0.1) | 11.5 |
| Net financial cost of debt | (6.6) | (6.5) |
| Net income/(loss) | (7.1) | 3.7 |
| EPS* in Euros (diluted) | (0.12) | 0.09 |
Substantial growth in 300-mm SOI wafer sales drives record-breaking revenues
Half-year consolidated sales rose 72.6% on a year-on-year basis to a record-breaking 114.6 million Euros. By comparison, sales were 66.4 million Euros for the same period one year ago and 138.9 million Euros for the entire prior financial year. Wafer sales rose an even stronger 74.2%, during the first half of the year, reaching 109.6 million Euros. Industry demand for 300-mm wafers was especially robust. 300-mm wafer sales surged from 17.5 million Euros to 61.4 million Euros representing 56% of total wafer sales—up from 28% of wafer sales in the prior year’s first half. Further confirming the industry’s aggressive adoption of SOI wafers, licensing revenues increased 64.0%, year-on-year, to 1.6 million Euros. The Group also realized a healthy increase in Picogiga-related sales, with revenues rising 35.6% over the same period last year to 3.4 million Euros.
Group realizes significant improvement in financial results
Record revenues, combined with continuing improvements in manufacturing efficiency, drove a significant gain in operating profitability despite a further 2.55% weakening of the Dollar against the Euro. Increased sales volumes in particular produced the expected favorable leverage on manufacturing costs, resulting in the gross margin increasing to 23.9% of sales versus 16.0% one year ago. Also, as anticipated the operating margin exceeded 8% of sales, reaching 10% or 11.5 million Euros. The operating income more than covered net financial cost of debt, other financial charges and income tax, to leave a net profit of 3.7 million Euros. As a result of the significant growth in business and the Group’s focus on cash management, operating activities generated cash flow of 33.3 million Euros, thereby contributing to the maintenance of a healthy cash position of 106.7 million Euros at the end of the period. Soitec’s balance sheet was strengthened during the period and gearing reduced to 63% versus 95% as of March 31, 2005.
Positive Outlook
Soitec anticipates further growth in revenues, as the industry transition to SOI wafers gains more momentum. The Group is on track to deliver a minimum sales growth for the full year similar to the growth recorded in the first half. In addition the Group remains committed to pursuing cost-efficiencies and strengthening its competitive position through strategic and focused R&D. Increasing revenues combined with a focus on manufacturing efficiency is expected to help drive further improvement in operating income in the second half of the year. Continuing to respond to the accelerating transition to SOI wafers and to take advantage of volume leverage on the cost-structure, the Group will continue to ramp its 300-mm production capacity in Bernin II, in line with customer demand in the course of the next financial year.
“As the world’s leading supplier of SOI wafers and engineered substrates, Soitec continues to benefit from growing demand for SOI wafers,” said André-Jacques Auberton-Hervé, chief executive officer and president of Soitec. “New electronic devices, especially many leading-edge consumer electronic products, place a growing premium on the lower power consumption and higher performance characteristics that SOI technology enables. This growing demand, as well as our strong financial results, validates our business strategy to invest and develop SOI production capacity. Going forward we remain committed to meeting the industry’s rising SOI wafer needs, while also developing the even more advanced engineered substrate technology semiconductor manufacturers will need in the future.”
Reporting Calendar
Third quarter sales of the financial year 2004-2005 will be published on January 16, 2005 after the Paris Stock Exchange closes.
About Soitec: Soitec 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’s comprehensive portfolio of engineered substrates, including SOI and strained SOI, is manufactured 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 favored by consumers worldwide. Both shares and convertible bonds are listed on Euronext Paris.
Smart Cut and UNIBOND are trademarks of S.O.I. TEC Silicon On Insulator Technologies.
For further information, please contact:
Soitec
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