- Q2 FY 2023: Revenue €4.119 billion, Segment Result €1.180 billion, Segment Result Margin 28.6 percent
- Outlook for Q3 FY 2023: Based on an assumed exchange rate of US$1.10 to the euro, revenue of around €4 billion with a Segment Result Margin of around 26 percent expected
- Outlook for FY 2023: Despite a change in the assumed exchange rate from US$1.05 to US$1.10 to the euro, the revenue forecast of €15.5 billion
(Plus or minus €500 million) has been raised to €16.2 billion (plus or minus €300 million). At the mid-point of the guided revenue range, an adjusted gross margin of around 47 percent (previously around
45 percent) and a Segment Result Margin of around 27 percent (previously around 25 percent) are now expected. Investments are still anticipated to amount to approximately €3.0 billion. Taking the planned investments in frontend buildings into account, Infineon now expects
Free Cash Flow to be around €1.1 billion (previously €0.8 billion) and an adjusted Free Cash Flow of around €1.8 billion (previously 1.5 billion)
Infineon Technologies AG is reporting results for the second quarter of its 2023 fiscal year (period ended 31 March 2023).
“Infineon is performing very well. We are seeing strong growth in our businesses relating to electromobility, renewable energy generation and energy infrastructure. These are precisely the key applications we are serving in terms of the decarbonization,” says Jochen Hanebeck, CEO of Infineon. “Although an improvement in consumer goods markets such as smartphones, PCs and home appliances is not yet visible, we are nevertheless very confident overall about
Infineon’s future business performance. We are therefore revising our expectations for revenue and profitability in the current fiscal year upwards, as already announced at the end of March.”
Group performance in the second quarter of the 2023 fiscal year
In the second quarter of the 2023 fiscal year, Group revenue was €4,119 million.
Compared with revenue in the prior quarter of €3,951 million, this was an increase of 4 percent. Revenue in the Automotive (ATV) and Green Industrial Power (GIP) 1 segments improved significantly. The Connected Secure Systems (CSS) segment saw a slight increase in revenue, whereas the Power & Sensor Systems (PSS) segment experienced a significant decline as expected. The weaker US dollar compared with the prior quarter had a negative impact on revenue in all segments.
The gross margin in the second quarter of the current fiscal year was 46.6 percent, compared with 47.2 percent in the prior quarter. The adjusted gross margin was
48.6 percent, compared with 49.2 percent in the prior quarter.
The Segment Result increased in the second quarter of the 2023 fiscal year to €1,180 million, from €1,107 million in the prior quarter. The Segment Result Margin was 28.6 percent, compared with 28.0 percent in the first quarter of the current fiscal year.
1 With effect from 1 April 2023, the “Industrial Power Control” segment was renamed “Green Industrial Power”. The change of name has no impact on the organizational structure, strategy or scope of the business.
The second-quarter non-segment result was a net loss of €107 million, compared with a net loss of €141 million in the prior quarter. The non-segment result for the second quarter of 2023 included €81 million relating to cost of goods sold,
€54 million relating to selling, general and administrative expenses and €8 million relating to research and development expenses. In the second quarter, the nonsegment result included a net figure for other operating income of €36 million. This includes a gain from the sale of the HiRel DC-DC converter business to Micross Components, Inc. in February 2023.
Operating profit improved in the second quarter of the 2023 fiscal year to €1,073 million, up from €966 million in the previous three-month period.
The financial result in the second quarter of the current fiscal year was a net loss of €17 million, compared with a net loss of €24 million in the first quarter of the 2023 fiscal year.
The tax expense in the second quarter of the 2023 fiscal year increased to €237 million, compared with €216 million in the prior quarter.
Profit from continuing operations in the second quarter of the 2023 fiscal year rose to €827 million from €729 million in the preceding quarter. As in the first quarter of the current fiscal year, the result from discontinued operations was a loss of €1 million. The profit for the period improved in the second quarter of the 2023 fiscal year to €826 million, up from €728 million in the prior quarter.
Earnings per share from continuing operations in the second quarter of the 2023 fiscal year increased to €0.63, from €0.55 in the preceding quarter (basic and
diluted in each case). Adjusted earnings per share[1] (diluted) rose in the second quarter of the current fiscal year to €0.69, from €0.64 in the first quarter of the 2023 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 – totalled €565 million in the second quarter of the current year, compared with €605 million in the prior quarter. Depreciation and amortization in the second quarter of the 2023 fiscal year amounted to €434 million, compared with €429 million in the first quarter of the 2023 fiscal year.
Free Cash Flow in the second quarter of the current fiscal year increased to
€193 million, compared with €25 million in the preceding quarter. Cash flow from operating activities from continuing operations improved slightly to €647 million, compared with €631 million in the first quarter of the 2023 fiscal year.
The gross cash position at the end of the second quarter of the 2023 fiscal year decreased to €3,446 million, compared with €3,708 million at 31 December 2022. This was mainly due to the dividend pay-out in February of €417 million, which more than offset the positive Free Cash Flow. Financial debt decreased slightly from €5,467 million at the end of the first quarter of the current fiscal year to €5,428 million at 31 March 2023 as a result of exchange rate movements. The net cash position was net financial debt of €1,982 million, compared with net financial debt at the end of the prior quarter of €1,759 million.
Outlook for the third quarter of the 2023 fiscal year
Based on an assumed exchange rate of US$1.10 to the euro, Infineon expects to generate revenue of around €4 billion in the third quarter of the 2023 fiscal year. Revenue growth in the ATV segment is expected to increase slightly compared with the previous quarter. Revenue in the GIP segment should stay at about the level reached in the preceding quarter. In the PSS and CSS segment a revenue decline is forecast compared with the second quarter of the current fiscal year.
Adjusted profit/loss for the period and adjusted earnings per share (diluted) should not be seen as a replacement or as superior performance indicators, but rather as additional information to profit/loss for the period and earnings per share (diluted) determined in accordance with IFRS. The detailed calculation of adjusted earnings per share is presented on page 11.
For the definitions and the calculation of Free Cash Flow and of the gross and net cash positions, please see page 14.
