Soitec reports total consolidated sales of 120.3 million Euros for H1 2008-2009
• Q2 sales of 60.1 million Euros stable sequentially
• H1 sales below last year by 20.9% with exchange 12.8% unfavourable
• Full year sales guidance revised downwards to reflect current environment
Bernin, France, October 20, 2008 – Soitec (Euronext Paris), the world’s leading supplier of silicon-on-insulator (SOI) wafers and other engineered substrates, today reported sequentially stable second quarter consolidated sales of 60.1 million Euros giving consolidated sales of 120.3 million Euros for the first six months of the year. This represents a headline reduction year on year of 20.9% that should be measured against the unfavourable exchange impact from the Dollar’s move against the Euro of 12.8% over the period.
| Sales (Millions of Euros) | 2008-2009 | 2007-2008 | Change |
| First Quarter | 60.2 | 68.5 | -12.0% |
| Second Quarter | 60.1 | 83.5 | -28.1% |
First Half Total| 120.3 | 152.0 | -20.9% | |
300mm sequential growth confirmed in the second quarter
Demand for 300 mm wafers picked up in the second quarter rising by 10.9% (9.9% at constant exchange) over the first quarter. However total wafer sales in the quarter were stable sequentially at 56.4 million Euros but this is below last year by 30.1% (21.3% at constant exchange). Other wafer sales were reduced by 66.9% year on year taking into account the previously announced fact that a major client switched all 200mm to 300mm production from August 2007.
In the first half of the financial year 300 mm, which represented 81% of total wafer sales, were lower than the prior year by 6.9% but up by 6.9% at constant exchange. Similarly all other wafer sales were down on a year on year basis by 55.5% or 51.8% at constant exchange.
Licensing revenues were 1.0 million Euros for the second quarter and 2.2 million for the half year. Tracit recorded second quarter sales of 0.9 million Euros and 1.4 million Euros for the first half of the year, whilst Picogiga recorded sales of 1.7 million Euros in the quarter and 3.6 million Euros for the first half of the year. Picogiga and Tracit totalled 5.0 million Euros versus 3.3 million Euros last year.
Impact on first half results from lower sales offset by cost reductions
Strong management action has been taken to reduce costs across the organisation to offset the unfavourable impact of lower volumes on fixed manufacturing overhead absorption. However the operating climate has been compounded by the continued rise of the Euro, which moved by 12.8% against the Dollar from 1.35 in the first half of prior year to 1.55 in the first half of the current year. Also the operating result will be impacted by cost of the Singapore fab. Taking these factors into account the Group anticipates reporting an operating loss of the order of 10 million Euros. In terms of operating margin, this would represent an improvement over the first half last year, excluding Singapore, at constant exchange i.e. on a like for like basis. The financial structure of the Group remains strong with significant cash resources.
Sales guidance reduced for the full year
Uncertainty regarding macro economic conditions together with indications of short term demand reductions from some large customers results in an overall lowering of the second half sales revenue guidance in the range of 15 to 20 % lower than H1 at constant exchange rate. This would bring the full year sales revenue lower than last year by some 20% at constant exchange rate.
In terms of operating results, the lower activity now expected in H2 will make it very challenging to improve operating margins. The current expectation is for a full year operating margin similar to last year (on a like for like basis at constant exchange before the cost impact associated with the Singapore fab) because the adverse impact of the reduced activity in H2 should be compensated by the benefits resulting from the cost reduction programs initiated earlier. However we continue to carefully monitor our customers demand forecast for any further downward correction.
The process of customer qualification in Singapore continues in preparation for an upturn in demand and the facility remains focused on improving the effective material cost through the efficient use of silicon.
Agenda
The consolidated results of the first half of the 2008-2009 financial year will be published on 10 November 2008 before opening of the Paris Bourse.
About the Soitec Group:
The Soitec Group is the world’s leading innovator and provider of the engineered substrate solutions that serve as the foundation for today’s most advanced microelectronic products. The group leverages its proprietary Smart Cut™ technology to engineer new substrate solutions, such as silicon-on-insulator (SOI) wafers, which became the first high-volume application for this proprietary technology. Since then, SOI has emerged as the material platform of the future, enabling the production of higher performing, faster chips that consume less power.
Today, Soitec produces more than 80 percent of the world’s SOI wafers. Headquartered in Bernin, France, with two high-volume fabs on-site, Soitec has offices throughout the United States, Japan and Taiwan, and a new production site in the process of customers’ qualification in Singapore.
Two other divisions, Picogiga International (Les Ulis) and Tracit Technologies (Bernin), complete the Soitec Group. Picogiga focuses on delivering advanced substrates solutions, including III-Vs epiwafers and gallium nitride (GaN)-based wafers, to the compound material world for the manufacture of high-frequency electronics and other optoelectronic devices. Tracit, on the other hand, focuses on thin-film layer transfer technologies used to manufacture advanced substrates for power ICs and microsystems, as well as generic circuit transfer technology for applications such as image sensors and 3D-integration. Shares of the Soitec Group are listed on Euronext Paris. For more information, visit www.soitec.com.
Soitec, Smart Cut and UNIBOND are trademarks of S.O.I.TEC Silicon On Insulator Technologies.
For all information, please contact:
Soitec
Iain Murray
Financial Director
Tel: +33 4 76 92 75 14
email: investors@soitec.fr
Soitec
Olivier Brice
Investor Relations – Financial Communication
Tel: +33 4 76 92 93 80
email: olivier.brice@soitec.fr