euro adhoc: austriamicrosystems AG
Financial Figures/Balance Sheet /
austriamicrosystems reports revenues and earnings for fiscal year 2008
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annual report
23.02.2009
Detailed results for fiscal year 2008 and fourth quarter 2008
Unterpremstaetten, Austria (February 23, 2009) austriamicrosystems (SWX: AMS), a leading worldwide designer and manufacturer of high performance analog ICs for communications, industry & medical and automotive applications, recorded audited revenues and earnings for fiscal year 2008 below the previous year. The company´s full year revenue development was strongly affected by the widening economic downturn in the fourth quarter. Net earnings were negatively impacted by a previously announced extraordinary charge from currency hedging activities.
Financials
Group revenues for fiscal year 2008 reached EUR 184.7 million, 4.7% below the previous year´s revenues. On a constant currency basis, full year revenues decreased by only 2.2% compared to the previous year. Revenues for the fourth quarter 2008 were EUR 43.2 million, 27.4% lower than the EUR 59.5 million recorded in the same quarter 2007. On a constant currency basis, revenues for the fourth quarter decreased by 29.7% compared to the same quarter 2007.
Gross margin for the full year 2008 exceeded 50% again at 50.6%, slightly above the previous year´s 50.4%. Full year gross margin remained strong despite a disappointing revenue development given active cost management, a full natural hedge in the production costs and positive efficiency effects. Gross margin was 49.3% in the fourth quarter 2008 compared to 52.2% in the same period 2007, mainly as a result of lower revenues in an increasingly challenging environment.
The IFRS group result from operations (EBIT) for 2008 was EUR 25.0 million or 13.5% of revenues (2007: 14.4% of revenues). EBIT decreased by EUR 3.0 million or 10.7% compared to full year 2007, in line with previous guidance. Investment in research & development was EUR 43.6 million, almost unchanged from 2007, or 23.6% of revenues to support long term product roadmaps. The group EBIT for the fourth quarter 2008 was EUR 4.9 million, compared to EUR 10.9 million in the same period 2007.
The net financial expense for 2008 was EUR -12.5 million, compared to EUR -0.9 million for 2007, reflecting the expected EUR 10 million extraordinary charge due to the revaluation of hedging instruments which had been announced in November 2008, and higher financing costs. The net financial expense for the fourth quarter 2008 was EUR -11.5 million, compared to EUR -0.5 million in the same period 2007.
Net income for the fiscal year 2008 reached EUR 12.3 million, a decrease of 53.2% from EUR 26.3 million in the previous year. Basic and diluted earnings per share for 2008 were CHF 1.78 / EUR 1.13 and CHF 1.77 / EUR 1.12 respectively (2007: CHF 3.98 / EUR 2.42 and CHF 3.96 / EUR 2.41). Net income for the fourth quarter 2008 was EUR -6.2 million, compared to EUR 10.1 million for the same period 2007, mainly due to the negative effect from currency hedging described above. Basic and diluted earnings per share for the fourth quarter were CHF -0.86 / EUR -0.57 and CHF -0.87 / EUR -0.58 respectively (2007: CHF 1.55 / EUR 0.93 and CHF 1.53 / EUR 0.92).
Cash flow from operations in 2008 reached EUR 47.5 million (2007: EUR 27.0 million), driven by reduced capital expenditures and lower accounts receivable. Capital expenditures for 2008 were EUR 14.4 million, 60% lower than EUR 36.0 million recorded in 2007. Total backlog reached EUR 29.8 million at year-end 2008 compared to EUR 41.2 million on December 31, 2007. Total backlog at year-end 2008 does not reflect additional levels of consignment stock held for major customers.
Cash and short term investments stood at EUR 30.7 million on December 31, 2008 compared to EUR 23.1 million at the end of 2007. Further undrawn credit facilities are available to the company. Net debt reached EUR 31.2 million on December 31, 2008, increasing from EUR 27.1 million at year-end 2007 due to long-term financing activities. The equity ratio was 62% at year-end 2008, compared to 63% at the end of 2007. The average number of group employees was 1,129 for fiscal year 2008, compared to 1,071 for the year 2007, and 1,155 for the fourth quarter 2008.
In order to return cash to shareholders on a consistent basis, austriamicrosystems has decided to install a cash dividend policy. The dividend policy calls for regular distribution of 25% of the net result each year and is expected to be implemented this year for the first time based on 2008 earnings. Consequently, the company will propose a dividend of EUR 0.28 per share for 2008.
Business
austriamicrosystems´ business performed below previous expectations in the past year. While business was still on an upward trend through the first nine months, the financial and economic crisis of the fourth quarter had a noticeable negative effect also on austriamicrosystems resulting in lower full year revenues and profitability compared to the year before. austriamicrosystems was still successful in its target markets as a leader in low power consumption, high accuracy and analog performance, building on its analog design expertise. The company launched numerous new products and product families in 2008 with a focus on lighting management, magnetic sensors, RFID, and specialty sensor interfaces.
In Communications, austriamicrosystems saw growth particularly in lighting management applications for handsets and other mobile devices. austriamicrosystems continued to serve Top 5 handset manufacturers with lighting and power management ICs in significant volumes, adding a leading Asian mobile phone vendor to its customer base last year. New products were introduced for LED LCD backlighting and advanced noise cancellation for handsets, and innovative digital camera modules using austriamicrosystems products are being industrialized. MEMS microphone ICs grew strongly as this microphone technology quickly penetrates the global handset and also notebook market.
Industry & Medical was again successful with magnetic encoders and specialized sensor interfaces as well as industrial control products even though the first negative effects from the weak economic situation started to become evident towards year-end. Magnetic encoders continued to show attractive growth, additional products including linear encoders were introduced and new applications opened up for the future. The new RFID reader IC product line met with success in the marketplace, first end products became available last year. Business in medical imaging which comprises digital X-ray, CT and ultrasound sensor interfaces for leading global OEMs continued to increase in 2008.
Automotive showed a positive development for nine months, but was negatively impacted by the sharp automotive industry downturn towards year-end. Still, austriamicrosystems´ customers continued development efforts on next generation technologies where austriamicrosystems offers innovative solutions in areas such as FlexRay data bus, position measurement and battery management. The Full Service Foundry business secured its position as a leading analog foundry focused on specialty processes. austriamicrosystems opened a new design center in Spain to focus on innovative IC solutions for renewable energy generation, a market offering attractive growth potential for the future.
Notwithstanding the difficult market environment, austriamicrosystems broadened its customer base in 2008, adding new accounts and increasing penetration of existing customers based on its strong product portfolio. The company´s international manufacturing model including its Asian test center enabled full natural hedging of production costs in 2008, supporting gross margins in a volatile currency market.
As soon as the effects of the financial crisis became evident, austriamicrosystems identified cost reduction potentials across all areas of the company and implemented corresponding measures beyond its continuous cost optimization efforts. These measures will result in operating cost savings of over EUR 10m in 2009. In this context, the company announced worldwide staff cuts of approximately 70 employees (around 6% of its total), to be completed in Q1 2009. Should the market situation turn even more negative as the year progresses, austriamicrosystems has the ability to implement further cost savings for 2009.
Outlook
Despite the current economic downturn, austriamicrosystems remains well positioned in its target markets Communications, Industry & Medical and Automotive for the longer term, based on a solid business model, excellent products and high quality customers. A strong portfolio of high performance analog solutions and continuing research and development into innovative products offer differentiation in a fast-changing marketplace.
austriamicrosystems nevertheless expects the difficult current environment with extremely limited visibility across markets to persist through 2009. Consequently, austriamicrosystems is not in a position to provide revenue or earnings expectations for full year 2009. austriamicrosystems expects a negative business trend for at least the first quarter and first half of 2009, resulting in a meaningful decline in revenues compared to last year´s first quarter and first half and a negative result on the EBIT and net level.
Additional financial information is available on the austriamicrosystems website at http://www.austriamicrosystems.com/eng/Investor
end of announcement euro adhoc
Further inquiry note:
Moritz M. Gmeiner
Director Investor Relations
Tel: +43 3136 500-5970
Fax: +43 3136 500-5420
Email: investor@austriamicrosystems.com
Branche: Technology
ISIN: AT0000920863
WKN: 632638
Börsen: SWX Swiss Exchange / official dealing