DGAP-News: Infineon Technologies AG: SUCCESSFUL THIRD QUARTER; STRONG REVENUE GROWTH ESPECIALLY IN THE AUTOMOTIVE SEGMENT; FURTHER INCREASES IN REVENUE AND EARNINGS EXPECTED IN THE FOURTH QUARTER

• Q3 FY 2022: REVENUE €3.618 BILLION, UP 10 PERCENT ON THE PRECEDING QUARTER AND 33 PERCENT YEAR ON YEAR; SEGMENT RESULT €842 MILLION; SEGMENT RESULT MARGIN 23.3 PERCENT; FREE CASH FLOW €440 MILLION
• OUTLOOK FOR Q4 FY 2022: BASED ON AN ASSUMED EXCHANGE RATE OF US$1.05 TO THE EURO, REVENUE OF AROUND €3.9 BILLION IS PREDICTED. ON THIS BASIS, THE SEGMENT RESULT MARGIN IS EXPECTED TO BE ABOUT 25 PERCENT
• OUTLOOK FOR FY 2022: BASED ON THE OUTLOOK FOR Q4 FY 2022, REVENUE FOR THE FULL 2022 FISCAL YEAR IS EXPECTED TO REACH AROUND €14 BILLION (PREVIOUS FORECAST: €13.5 BILLION). ON THIS BASIS, THE SEGMENT RESULT MARGIN IS EXPECTED TO EXCEED 23 PERCENT (PREVIOUSLY EXPECTED TO EXCEED 22 PERCENT). INVESTMENTS OF AROUND €2.4 BILLION ARE PLANNED (UNCHANGED). FREE CASH FLOW IS EXPECTED TO REACH ABOUT €1.4 BILLION (PREVIOUS FORECAST: ABOUT €1.1 BILLION)

Neubiberg, 3 August 2022 – Today, Infineon Technologies AG is reporting results for the third quarter of its 2022 fiscal year (period ended 30 June 2022).

"In a difficult macroeconomic climate, Infineon continues to be well on the way thanks to its differentiating portfolio," said Jochen Hanebeck, Chief Executive Officer of Infineon. "Increases in energy costs, raw material prices and interest rates, the continuing pandemic and geopolitical uncertainties are all impeding economic growth. In some consumer-oriented end markets demand has recently weakened. We are keeping a close eye on market developments and are prepared to act swiftly. However, the structural drivers decarbonization and digitalization continue to cause high demand for semiconductors. The global trend towards electromobility persists. Many countries are now seeking to secure independent energy supplies, which will further accelerate the expansion of renewable energy. We are also benefiting from continuing high levels of investment in communications infrastructure, data centers and cloud computing.”

¹ The calculation for earnings per share and for adjusted earnings per share is based on unrounded figures.

² The reconciliation of net income to adjusted net income and adjusted earnings per share as well as of cost of goods sold to adjusted cost of goods sold and adjusted gross margin can be found in the quarterly information at www.infineon.com.

GROUP PERFORMANCE IN THE THIRD QUARTER OF THE 2022 FISCAL YEAR

In the third quarter of the 2022 fiscal year, Group revenue grew by €320 million or 10 percent to €3,618 million, compared with €3,298 million in the previous three-month period. There was a significant increase in revenue in the Automotive (ATV) and Power & Sensor Systems (PSS) segments, as well as a slight increase in the Industrial Power Control (IPC) and Connected Secure Systems (CSS) segments.

The gross margin in the third quarter of the current fiscal year was 43.2 percent, compared with 42.9 percent in the preceding quarter. The adjusted gross margin remained unchanged at 45.4 percent.

The Segment Result in the third quarter was €842 million, compared with €761 million in the second quarter of the 2022 fiscal year. The Segment Result Margin improved slightly, from 23.1 percent in the second quarter to 23.3 percent in the third quarter.

The third-quarter non-segment result was a net loss of €152 million, compared with a net loss of €143 million in the second quarter. The non-segment result for the third quarter comprised €78 million relating to cost of goods sold, €62 million relating to selling, general and administrative expenses and €7 million relating to research and development expenses. Also included in the total for the third quarter were net other operating expenses of €5 million.

Operating profit for the third quarter of the 2022 fiscal year was €690 million, up from €618 million in the previous three-month period.

The financial result was a net financial loss of €40 million, compared with a net financial loss of €43 million in the second quarter of the 2022 fiscal year.

The tax expense in the third quarter of the current fiscal year was €134 million, compared with €121 million in the preceding quarter.

Profit from continuing operations improved in the third quarter of the current fiscal year to €525 million, up from €469 million in the previous quarter. The result from discontinued operations in the third quarter was a loss of €8 million (second quarter: €0 million). The profit for the period in the third quarter of the 2022 fiscal year was €517 million, up from €469 million in the previous quarter.

Basic earnings per share from continuing operations rose in the third quarter of the current fiscal year to €0.40, compared with €0.36 in the previous quarter. Diluted earnings per share from continuing operations increased from €0.35 in the second quarter to €0.40 in the third quarter. Adjusted earnings per share³ (diluted) improved from €0.44 in the second quarter to €0.49 in the third quarter of the current fiscal year.

Investments – which Infineon defines as the sum of investments in property, plant and equipment, investments in other intangible assets and capitalized development costs – rose to €542 million in the third quarter of the current fiscal year, compared with €494 million in the preceding three-month period. Depreciation and amortization in the third quarter was €422 million, compared with €405 million in the second quarter of the 2022 fiscal year.

Free Cash Flow improved in the third quarter of the 2022 fiscal year to €440 million, up from €120 million in the previous three-month period. Net cash provided by operating activities from continuing operations rose to €996 million, compared with €615 million in the second quarter of the 2022 fiscal year.

The gross cash position at the end of the third quarter of the current fiscal year stood at €3,569 million, up from €3,205 million at 31 March 2022. Financial debt at the end of June 2022 was €6,054 million, compared with €5,881 million at the end of March 2022. Net financial debt decreased from €2,676 million at the end of the second quarter to €2,485 million at the end of the third quarter.

OUTLOOK FOR THE FOURTH QUARTER OF THE 2022 FISCAL YEAR

Based on an assumed exchange rate of US$1.05 to the euro, Infineon expects to generate revenue of around €3.9 billion in the fourth quarter of the 2022 fiscal year. This is equivalent to 8 percent growth compared with the third quarter of the current fiscal year. The rate of growth in the IPC segment should be significantly higher than this. In the ATV and PSS segments, revenue is expected to grow at around the average rate for the Group, while revenue growth in the CSS segment is expected to be within a low single-digit percentage range. At the forecast level of revenue, the Segment Result Margin is expected to be about 25 percent.

OUTLOOK FOR THE 2022 FISCAL YEAR

Based on the revenue that is being forecast for the fourth quarter, the revenue forecast for the full 2022 fiscal year stands at around €14 billion (compared with the previous forecast of €13.5 billion. About €140 million of the expected increase will come from the stronger US dollar). When compared with the prior fiscal year, revenue in the ATV segment is expected to grow at a higher percentage rate than the average growth rate for the Group. The annual revenue growth rate in the CSS segment should be around the average growth rate for the Group, while the PSS segment should grow at a slightly lower rate than the Group average. IPC’s revenue growth is expected to be at about 15 percent. Based on the forecast revenue for the full fiscal year of now around €14 billion, the Segment Result Margin is expected to exceed 23 percent, compared to above 22 percent in the previous forecast.

Investments – which Infineon defines as the sum of investments in property, plant and equipment, investments in other intangible assets and capitalized development costs – of around €2.4 billion are planned for the full 2022 fiscal year. The main focus is on expanding frontend manufacturing capacities to enable Infineon to continue to meet the expected growth in customer demand in the medium term.

Depreciation and amortization are predicted to be between €1.6 billion and €1.7 billion in the 2022 fiscal year, of which approximately €400 million is attributable to depreciation and amortization from purchase price allocations arising mainly from the acquisition of Cypress and to a lesser extent from the acquisition of International Rectifier. Free Cash Flow is now forecast to be about €1.4 billion (previously about €1.1 billion).

Predictability of revenue and earnings is currently strongly limited by various geopolitical and macroeconomic factors, including the war in Ukraine and its potential effects (e.g. on energy supply) as well as current and future measures deployed to contain the spread of the coronavirus pandemic, particularly in Asia.

³ Adjusted net income and adjusted earnings per share (diluted) should not be seen as a replacement or superior performance indicator, but rather as additional information to the net income and earnings per share (diluted) determined in accordance with IFRS.

Infineon’s segments’ performance in the third quarter of the 2022 fiscal year can be found in the quarterly information at www.infineon.com.

All figures in this quarterly information are preliminary and unaudited.

ANALYST TELEPHONE CONFERENCE AND TELEPHONE PRESS CONFERENCE

The Management Board of Infineon will host a telephone conference call including a webcast for analysts and investors (in English only) on 3 August 2022 at 9:30 am (CEST), 3:30 am (EDT). During the call, the Infineon Management Board will present the Company’s results for the third quarter of the 2022 fiscal year as well as the outlook for the fourth quarter and the 2022 fiscal year. In addition, the Management Board will host a telephone press 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 Q3 Investor Presentation is available (in English only) at:

https://www.infineon.com/cms/en/about-infineon/investor/reports-and-presentations/

INFINEON FINANCIAL CALENDAR (* preliminary)

•   30 Aug 2022 UBS Japan in Focus conference (virtual)
•   1 Sep 2022 Deutsche Bank dbAccess European TMT Conference, London
•   8 Sep 2022 Commerzbank and ODDO BHF Corporate Conference, Frankfurt
•   8 – 9 Sep 2022 Citi 2022 Global Technology Conference, New York
•   12 Sep 2022 Goldman Sachs Communacopia & Technology Conference, San Francisco
•   19 Sep 2022 Berenberg-Goldman Sachs German Corporate Conference, Munich
•   20 Sep 2022 Baader 11^th Investment Conference, Munich
•   27 Sep 2022 ExaneBNP 2^nd ESG Conference, Paris
•   4 Oct 2022 ATV presentation with Peter Schiefer head of ATV, London
•   15 Nov 2022* Earnings Release for the Fourth Quarter and the 2022
  Fiscal Year
•   16 – 17 Nov 2022 Morgan Stanley European TMT Conference, Barcelona
•   28 – 29 Nov 2022 Credit Suisse TMT Conference, Scottsdale

ABOUT INFINEON

Infineon Technologies AG is a world leader in semiconductor solutions that make life easier, safer and greener. Microelectronics from Infineon are the key to a better future. With around 50,280 employees worldwide, Infineon generated revenue of about €11.1 billion in the 2021 fiscal year (ending 30 September).

Infineon is listed on the Frankfurt Stock Exchange (ticker symbol: IFX) and in the USA on the over-the-counter market OTCQX International Premier (ticker symbol: IFNNY). Further information is available at www.infineon.com

This press release is available online at www.infineon.com/press

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D I S C L A I M E R

This press release contains forward-looking statements about the business, financial condition and earnings performance of the Infineon Group.

These statements are based on assumptions and projections resting upon currently available information and present estimates. They are subject to a multitude of uncertainties and risks. Actual business development may therefore differ materially from what has been expected.

Beyond disclosure requirements stipulated by law, Infineon does not undertake any obligation to update forward-looking statements.

Due to rounding, numbers presented throughout this press release and other reports may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

All figures mentioned in this press release are preliminary and unaudited.