Infineon Technologies has shared results for the first quarter of the 2020 fiscal year (period ended 31 December 2019).
“Our well-diversified business performed robustly at the beginning of the fiscal year. Under difficult conditions, revenue fell in line with expectations. Our cost reduction measures are beginning to take effect. Those measures and several non-recurring factors caused the Segment Result to come in slightly better than expected,” said Dr. Reinhard Ploss, CEO of Infineon.
He also said, “Demand for the latest generation of our silicon microphones is growing dynamically. We are also seeing signs of improvement in individual areas such as the server business. Overall, however, we do not expect to see a broad based recovery of demand before the second half of the fiscal year. Our long-term growth drivers remain intact and we are making a crucial contribution to shaping the future of mobility and energy efficiency.”
Group performance in the first quarter of the 2020 fiscal year
In the first three months of the 2020 fiscal year, revenue decreased by 7 percent from €2,062 million to €1,916 million quarter-on-quarter. In the Automotive (ATV), Industrial Power Control (IPC) and Power Management & Multimarket (PMM) segments, the decline was roughly in line with Group average. Revenue recorded by the Digital Security Solutions (DSS) segment was only slightly down.
The gross margin improved quarter-on-quarter from 35.5 percent to 37.0 percent. This includes acquisition-related depreciation and amortization as well as other expenses totaling €18 million, mainly relating to the acquisition of International Rectifier.
The adjusted gross margin improved from 36.3 percent to 37.9 percent. The first-quarter Segment Result amounted to €297 million, compared to €311 million in the final quarter of the preceding fiscal year. The Segment Result Margin increased from 15.1 percent to 15.5 percent.
The improvement in gross margin and Segment Result Margin, despite lower revenue, was influenced by a positive non-recurring effect of approximately €36 million arising in connection with the refined allocation of centralized, production-related overhead costs across the various stages of the manufacturing process, thereby affecting the valuation of inventories of work in progress and finished goods. Excluding this exceptional factor, the Segment Result Margin would have been 13.6 percent.
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