Outlook for the third quarter of the 2017 fiscal year
In the third quarter of the 2017 fiscal year, Infineon expects quarter-on-quarter revenue growth of 3 percent (plus or minus 2 percentage points). This forecast is based on an assumed exchange rate of US$ 1.10 to the euro. At the mid-point of the revenue guidance, the Segment Result Margin is expected to come in at 17.5 percent.
Outlook for the 2017 fiscal year
In line with the ad hoc notification made on 24 March 2017 of an increased outlook for the 2017 fiscal year, Infineon expects year-on-year revenue growth of 8 to 11 percent, with a Segment Result Margin of approximately 17 percent at the mid-point of the revenue guidance. The outlook is based on an assumed EUR/USD exchange rate of 1.10. ATV segment revenue is expected to grow faster than the Group average. Growth in the IPC segment is forecast to be roughly in line with or slightly lower than the Group average. The PMM and CCS segments are both expected to report growth rates below the Group average.
In light of the better than expected development in revenue and orders received, the outlook for investments in property, plant and equipment and intangible assets, including capitalized development costs, has also been raised. It is now forecast that €1,050 million will be invested during the 2017 fiscal year. The figure includes approximately €35 million for the new office building at Infineon’s headquarters in Neubiberg near Munich. Depreciation and amortization is still expected to be in the region of €830 million.
Early market acceptance of silicon carbide MOSFET
The 1,200-volt silicon carbide MOSFET will soon be ready for its market launch. Infineon already provided samples of the innovative, trench-based architecture to customers. Their feedback was quite positive: customers have already placed their first firm orders, which are expected to translate into revenue still in the course of the current fiscal year. Already in this early stage, customer projects with potential revenue of a low triple-digit million Euro amount over the coming years are planned across all industrial applications. These include solar inverters for plants and rooftop systems, charging stations for electric vehicles, uninterruptible power supplies, air conditioning and discrete factory automation.
Automotive segment increases market share
In April, the market research company Strategy Analytics published new estimates for the automotive semiconductor market. According to the analysts, the market for automotive semiconductors expanded by 10.4 percent from US$ 27.4 billion to US$ 30.2 billion in the 2016 calendar year. Automobile production grew by around 4 percent during that year, implying an increase in semiconductor content per vehicle to around 6 percent.
With a market share increase from 10.4 percent in the 2015 calendar year to 10.7 percent in 2016 Infineon cemented its position as number two on the market. In the Automotive power semiconductors sector, the fastest growing of all, Infineon has improved its market position by 0.4 percentage points to 25.6 percent. Infineon recorded its largest gain in the field of sensors, picking up 0.6 percentage points to reach a market share of 12.5 percent in the 2016 calendar year. In microcontrollers, Infineon’s market share increased slightly from 8.6 percent to 8.7 percent in 2016.
On a regional basis, Infineon’s highest market share gain was 2.2 percentage points in China. The market share increase from 8.7 percent in the 2015 calendar year to 10.9 percent in 2016 has improved Infineon’s ranking by one place and it is now also
the second-largest supplier on the Chinese market.
Segment earnings in the second quarter of the 2017 fiscal year
ATV segment revenue grew by 11 percent to €783 million in the second quarter of the 2017 fiscal year, compared with €705 million in the previous three-month period. The increase was attributable to growing demand in all product areas, particularly also for components installed in driver assistance systems as well as hybrid and electric vehicles. Segment Result improved from €114 million in the first quarter to €131 million in the second quarter of the current fiscal year. The Segment Result Margin came in at 16.7 percent, compared with 16.2 percent one-quarter earlier.
IPC segment revenue increased by 11 percent to €293 million in the second quarter of the current fiscal year. The equivalent figure for the previous three-month period was €264 million. Demand was particularly strong in the area of home appliances. Revenue also grew in the fields of traction, electric drives, photovoltaics and wind power. Segment Result grew from €24 million in the first quarter to €44 million in the second quarter of the 2017 fiscal year. The Segment Result Margin improved to 15.0 percent compared with 9.1 percent in the previous quarter.
PMM segment revenue improved from €497 million to €520 million quarter-on-quarter. Strong demand resulted in a 5 percent revenue increase in the fields of AC/DC conversion and DC/DC conversion. Segment Result grew from €81 million in the first quarter to €91 million in the second quarter of the 2017 fiscal year, while the Segment Result Margin increased from 16.3 percent to 17.5 percent.
CCS segment revenue fell by 3 percent to €169 million in the second quarter, compared with €174 million in the previous quarter. Whereas demand was down for conventional SIM cards, it was up for embedded SIM and Trusted Platform Modules. Payment cards business also generated a slight increase, while revenue in the area of government IDs remained more or less unchanged. Segment Result amounted to €29 million, unchanged compared to the previous quarter. The Segment Result Margin improved from 16.7 percent in the first quarter to 17.2 percent in the second.
Analyst and press telephone conference
Infineon will host a telephone conference call for analysts and investors (in English only) on 4 May 2017 at 9:30 am (CEST), 3:30 am (EDT). During the call, the Infineon Management Board will present the Company’s results for the second quarter of the 2017 fiscal year. In addition, the Management Board will host a telephone conference with the media at 11:00 am (CEST), 5:00 am (EDT). It can be followed over the Internet in both English and German. Both conferences will also be available live and for download on Infineon’s website at www.infineon.com/investor.
The Q2 Investor Presentation is available (in English only) at: http://www.infineon.com/cms/en/corporate/investor/reporting/
