Soitec reports Record Sales for Q2 and H1 2005-2006 Driven by Growing Mainstream Adoption of SOI in Servers, PCs and Consumer Electronics
Bernin, France, October 17, 2005 - Soitec (Euronext, Paris), the leading manufacturer of silicon-on-insulator (SOI) wafers and other engineered substrates, today announced record consolidated sales of 63.4 million Euros for the second quarter of its 2005-2006 financial year. As predicted, increasing adoption of SOI, especially 300mm, in servers, PCs and consumer electronics, drove rising sales. Half-year consolidated sales rose 72.6% on a year-on-year basis to 114.6 million Euros. The combination of volume growth, stable prices and manufacturing efficiencies all contribute to an anticipated return to net profit as early as the first half of the current financial year, despite the unfavourable exchange impact. The Group, having reported year-on-year sales growth for the first half of the year above its full year guidance, is confident that it will outperform a minimum of 60% over the full year.
| Sales (Euros millions) | 2005-2006 | 2004-2005 | % Change (1) |
| First quarter | 51.2 | 32.6 | +57.3 % |
| Second quarter | 63.4 | 33.8 | +87.4 % |
| Total First Half | 114.6 | 66.4 | +72.6% |
(1) Growth percentages are calculated using un-rounded figures.
Recent 300mm capacity investment delivers rapid return
Soitec’s investment earlier this year in additional 300mm capacity in its Bernin II facility has been rapidly validated as the expected increase in demand materialized. 300mm sales for the quarter were three and a half times more than one year ago and represented 58% of total wafer sales in the second quarter versus 32% for the same quarter last year.
Other significant wafer diameters, in particular 200mm, also recorded strong growth equal in total to 17% on a year-on-year basis. Therefore in total, given the stable exchange rate versus the same period last year, Q2 wafer sales rose 87.4% on a year-on-year basis to a record 60.4 million Euros. Sequentially growth was 22.8% over Q1 benefiting from a favourable exchange rate impact of 4.9%.
Licensing revenues also benefited from the industry’s aggressive adoption of SOI. For the second quarter, the Group reported royalties of 0.85 million Euros giving 1.6 million Euros for the first half, which represents annual growth of 64%. The Group’s Picogiga division also performed strongly in Q2 recording sequential growth of 63.6% equal to 2.1 million Euros.
Group anticipates an early return to net profit for the first half of the year
The Group believes that the strong first half sales performance achieved in a pricing environment that remains stable, coupled with an efficient manufacturing performance, should provide a minimum operating margin of 8% of sales and a net profit under IFRS, despite the unfavourable impact of a 2.55% weakening in the Euro/dollar exchange rate during the period.
The Group, having reported year-on-year sales growth for the first half of the year above its full year guidance, is confident that it will outperform a minimum of 60% over the full year.
The Group announces that close to 30% of the 14.85 million convertible bonds 2005-2009 have been converted into ordinary shares as of 30th September 2005.
Recent developments
On September 27, 2005, Soitec and the SEZ Group announced the initiation of a joint development program (JDP) aimed at speeding the industrialization of next-generation strained silicon-on-insulator (sSOI) substrates. Under the terms of the JDP, the two companies will leverage Soitec’s leadership in engineered substrates and SEZ’s leadership in single-wafer, wet-processing technology to develop new wet-etch processes designed to optimize total germanium removal in sSOI manufacturing.
Reporting Calendar
Half-year results for the financial year 2005-2006 will be announced on Monday November 14, 2005 after the Paris Stock Exchange closes. Please note that the results, including the comparison with the prior year, will be issued, for the first time, in accordance with the International Financial Reporting Standards (IFRS).
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 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.
Smart Cut and UNIBOND are trademarks of S.O.I. TEC Silicon On Insulator Technologies.
For further information, please contact:
Investor Relations
Soitec
Iain Murray
Tel. +33 4 76 92 75 14
E-mail: investors@soitec.fr
Financial Communication (Soitec)
Gavin Anderson & Company
Olivier Brice
Tel. +33 1 53 32 61 57
E-mail: obrice@gavinanderson.fr