e6vk
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
April 26, 2006
INFINEON TECHNOLOGIES AG
Am Campeon 1-12
D-85579 Neubiberg/Munich
Federal Republic of Germany
Tel: +49-89-234-0
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F þ                    Form 40-F o
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes o                    No þ
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-                    .
 
 


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This Report on Form 6-K contains a press release of Infineon Technologies AG dated April 26, 2006, announcing the Company’s results for the second quarter and first half of the 2006 financial year.


 

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SIGNATURES


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SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
         
  INFINEON TECHNOLOGIES AG
 
 
Date: April 26, 2006  By:   /s/ Wolfgang Ziebart    
    Dr. Wolfgang Ziebart   
    Member of the Management Board
and Chief Executive Officer 
 
 
         
     
  By:   /s/ Peter J. Fischl    
    Peter J. Fischl   
    Member of the Management Board
and Chief Financial Officer 
 


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(INFINEON LOGO)
(NEWS RELEASE)

Infineon reports results for second quarter and first half of the 2006 financial year
  Infineon achieved positive EBIT in the second quarter after four quarters of losses. EBIT increased significantly to Euro 28 million from an EBIT loss of Euro 122 million in the prior quarter, primarily due to a return to positive EBIT in the Memory Products segment and improved EBIT in the Automotive, Industrial and Multimarket segment.
 
  Second quarter revenues increased strongly to Euro 1.99 billion, up 19 percent sequentially, reflecting significantly higher sales in the Memory Products and the Automotive, Industrial and Multimarket segments.
 
  Net loss in the second quarter was Euro 26 million compared to a net loss of Euro 183 million in the prior quarter.
 
  Total revenues for the first half of the 2006 financial year were Euro 3.67 billion, up 7 percent from Euro 3.42 billion in the same period last year. EBIT in the first half of the 2006 financial year was negative Euro 94 million, a decrease from positive Euro 94 million in the same period last year.
                                         
    3 months   3 months       3 months    
    ended   ended   + / - in %   ended   + / - in %
In Euro million   Mar 31, 2006   Dec 31, 2005   sequential   Mar 31, 2005   year-on-year
Revenues
    1,993       1,674       19 %     1,606       24 %
EBIT
    28       (122 )     +++       (117 )     +++  
Net loss
    (26 )     (183 )     86 %     (114 )     77 %
Loss per share (in Euro)
    (0.03 )     (0.25 )     88 %     (0.15 )     80 %
 
                         
    6 months   6 months    
    ended   ended   + / - in %
In Euro million   Mar 31, 2006   Mar 31, 2005   sequential
Revenues
    3,667       3,422       7 %
EBIT
    (94 )     94       – – –  
Net (loss) income
    (209 )     28       – – –  
Earnings (loss) per share (in Euro)
    (0.28 )     0.04       – – –  
 
Munich, Germany, April 26, 2006 — For the second quarter of the 2006 financial year, Infineon Technologies AG (FSE/NYSE:IFX) reported a 19 percent sequential increase in revenues to Euro 1.99 billion, driven mainly by Memory Products and also by the


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Automotive, Industrial and Multimarket segment. As expected, revenues in the Communication Solutions segment decreased moderately compared to the prior quarter.
EBIT in the second quarter of the 2006 financial year increased significantly compared to the prior quarter, driven primarily by improved EBIT in the Memory Products segment, which achieved positive EBIT after a loss in the first quarter. The company recorded very strong EBIT increase in the Automotive, Industrial and Multimarket segment that more than offset a small increase of the EBIT loss in the Communication Solutions segment.
“Last quarter, we improved our performance significantly. After four quarters of EBIT losses, we are now EBIT positive again,” said Dr. Wolfgang Ziebart, CEO and President of Infineon Technologies AG.
Outlook for the third quarter of the 2006 financial year
In the third quarter of the 2006 financial year, compared to the very high second quarter level especially in the Automotive, Industrial and Multimarket segment, Infineon expects revenues and EBIT in the two logic segments combined to decline. Infineon continues to expect the conclusion of the carve-out of its Memory Products segment on May 1, 2006. Effective May 1, 2006, Qimonda will start operations. Additional details concerning the outlook can be found in the respective segments’ sections.
“The second quarter results demonstrate that both the Memory Products business and the logic business are well-positioned to operate successfully as separate companies in the future,” commented Dr. Wolfgang Ziebart.
Segments’ 2006 second quarter performance and outlook
Automotive, Industrial and Multimarket
                                         
    3 months   3 months       3 months    
    ended   ended   + / - in %   ended   + / - in %
In Euro million   Mar 31, 2006   Dec 31, 2005     sequential     Mar 31, 2005     year-on-year  
 
Revenues
    733       652       12 %     634       16 %
EBIT
    74       51       45 %     36       +++  
 
In the second quarter of the 2006 financial year, revenues in the Automotive, Industrial and Multimarket segment increased significantly compared to the previous quarter, reflecting higher than expected demand and improved operating performance in all business units. This was primarily due to higher sales in power semiconductors, in products from the ASIC & Design Solutions business used in computer peripherals and due to very strong demand and improved product mix in the security and chip-card business. EBIT in the Automotive, Industrial and Multimarket segment increased


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significantly compared to the previous quarter, benefiting from the increased sales with a marked improvement in particular in the EBIT loss of the security and chip-card business. Overall, the segment’s EBIT as a percentage of revenues reached ten percent despite ongoing expenses for the phase-out of production at the Munich-Perlach facility and start-up costs for the new production site in Kulim, Malaysia.
Automotive, Industrial and Multimarket’s outlook for the third quarter of the 2006 financial year
With the last quarter being ahead of expectations and normal seasonality, Infineon anticipates revenues in the Automotive, Industrial and Multimarket segment to normalize in the third quarter of the 2006 financial year and stay within the range of the second quarter. The company expects revenues in its automotive and industrial businesses to reach the second quarter’s high levels. Sales in the security and chip-card business are anticipated to decline slightly to more normal levels compared to the second quarter. In line with more or less flat revenues, the company anticipates the segment’s EBIT to stay within the range of the prior quarter. The EBIT guidance is before taking into account the effect from corporate overhead expenses that will remain with the company’s two logic segments following the legal separation of its Memory Products segment. The exact amounts cannot be quantified at this stage.
Communication Solutions
                                         
    3 months   3 months       3 months    
    ended   ended   + / - in %   ended   + / - in %
In Euro million   Mar 31, 2006   Dec 31, 2005   sequential   Mar 31, 2005   year-on-year
 
Revenues
    308       334       -8 %     332       -7 %
EBIT
    (29 )     (21 )     -38 %     (142 )     80 %
 
In the Communication Solutions segment, revenues decreased compared to the previous quarter, primarily due to a decline in demand for baseband components, which was not fully offset by significantly higher revenues in the company’s broadband access business. The EBIT loss increased sequentially due to the sales decline. In its broadband access business, the company reported another increase in operating results in the second quarter.
Communication Solutions’ outlook for the third quarter of the 2006 financial year
In the third quarter of the 2006 financial year, Infineon expects revenues of its Communication Solutions segment to decline compared to the second quarter. On the one hand, the company will no longer benefit from revenues of Fiber Optics products after the Fiber Optics divestiture. On the other hand, the company also expects a return to more normalized revenue levels in broadband access. With operating results driven predominantly by revenue development, the company anticipates the segment’s EBIT


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loss to increase in the third quarter. The EBIT guidance is before taking into account the effect from corporate overhead expenses that will remain with the company’s two logic segments following the legal separation of its Memory Products segment. The exact amounts cannot be quantified at this stage.
Memory Products
                                         
    3 months   3 months       3 months    
    ended   ended   + / - in %   ended   + / - in %
In Euro million   Mar 31, 2006   Dec 31, 2005   sequential   Mar 31, 2005   year-on-year
 
Revenues
    928       678       37 %     633       47 %
EBIT
    30       (118 )     +++       17       76 %
 
In the second quarter of the 2006 financial year, revenues in the Memory Products segment improved significantly sequentially due to strong growth in bit-shipments and a slight increase in average selling prices. The latter was driven mainly by higher pricing and shipments of DDR2 memories and a higher share of specialty products within the bit-shipments compared to the previous quarter. In the second quarter, Infineon achieved an EBIT turn around from negative Euro 118 million to positive Euro 30 million, resulting from a strong reduction in cost-per-bit as a result of significantly higher bit-shipments and slightly higher average selling prices.
Memory Products’ outlook for the third quarter of the 2006 financial year
In the third quarter of the 2006 financial year, Infineon expects to grow its bit production by approximately 10 percent. The third quarter EBIT will be influenced by benefits from corporate overhead expenses that will remain with the company’s two logic segments following the legal separation of its Memory Products segment, offset in part by the establishment of the Qimonda proprietary corporate infrastructure. The exact amounts cannot be quantified at this stage. The third quarter will also include the dilution gain of approximately Euro 30 million from the Inotera Initial Public Offering in March 2006 as part of non operating income within the segment’s EBIT.
Other Operating Segments
                                         
    3 months   3 months       3 months    
    ended   ended   + / - in %   ended   + / - in %
In Euro million   Mar 31, 2006   Dec 31, 2005   sequential   Mar 31, 2005   year-on-year
 
Revenues
    22       2       +++       4       +++  
EBIT
    (2 )     0       – – –       11       – – –  
 
Revenues of the Other Operating Segments increased sequentially in the second quarter of the 2006 financial year, primarily as a result of the first consolidation of ALTIS, the company’s joint venture with IBM, at the end of the prior quarter. EBIT remained relatively unchanged when compared to the first quarter.


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Corporate and Reconciliation
                                         
    3 months   3 months       3 months    
    ended   ended   + / - in %   ended   + / - in %
In Euro million   Mar 31, 2006   Dec 31, 2005   sequential   Mar 31, 2005     year-on-year  
 
Revenues
    2       8       -75 %     3       -33 %
EBIT
    (45 )     (34 )     -32 %     (39 )     -15 %
 
Sequential EBIT loss of the Corporate and Reconciliation segment increased in the second quarter of the 2006 financial year, primarily due to costs incurred in connection with the carve-out of the company’s Memory Products segment and the move to Infineon’s new headquarters, Campeon.
In the third quarter of the 2006 financial year, the company expects the EBIT loss of the Corporate and Reconciliation segment to increase compared to the second quarter, due to costs incurred in connection with the carve-out of the company’s Memory Products segment.
On March 17, 2006 Inotera Memories, Inc., the company’s joint venture with Nanya Technology Corporation, successfully completed an Initial Public Offering on the Taiwanese stock exchange for an issuance price of NT dollar 33 per share. In conjunction with this Initial Public Offering, the company recorded a dilution gain of approximately Euro 30 million, which will be reflected in non operating income within the Memory Products segment’s EBIT in the third quarter of the 2006 financial year. Infineon’s ownership interest after the Initial Public Offering stands at 41.4 percent.
In addition to the dilution gain, the company expects charges in the third quarter, mainly reflecting restructuring of the joint venture ALTIS as already announced by them, as well as other items. Overall, the company does not expect a major impact on group results out of the above mentioned events.
For major business highlights of Infineon’s segments in the second quarter of the 2006 financial year, go to http://www.infineon.com/news/.


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FINANCIAL INFORMATION
According to US GAAP — Unaudited
Condensed Consolidated Statements of Operations
                                         
    3 months ended   6 months ended
in Euro million   Mar 31, 05   Dec 31, 05   Mar 31, 06   Mar 31, 05   Mar 31, 06
 
Net sales
    1,606       1,674       1,993       3,422       3,667  
Cost of goods sold
    (1,174 )     (1,350 )     (1,467 )     (2,289 )     (2,817 )
 
Gross profit
    432       324       526       1,133       850  
 
Research and development expenses
    (354 )     (311 )     (306 )     (683 )     (617 )
Selling, general and administrative expenses
    (164 )     (173 )     (179 )     (326 )     (352 )
Restructuring charges
    (23 )     (2 )     (3 )     (25 )     (5 )
Other operating expense, net
    (41 )           (12 )     (35 )     (12 )
 
Operating income (loss)
    (150 )     (162 )     26       64       (136 )
 
Interest (expense) income, net
          (21 )     (29 )     5       (50 )
Equity in earnings (losses) of associated companies, net
    25       17       12       26       29  
Other (expense) income, net
    9       24       (6 )     (1 )     18  
Minority interests
    (1 )     (1 )     (4 )     5       (5 )
 
Income (loss) before income taxes
    (117 )     (143 )     (1 )     99       (144 )
 
Income tax (expense) benefit
    3       (40 )     (25 )     (71 )     (65 )
 
Net income (loss)
    (114 )     (183 )     (26 )     28       (209 )
 
Earnings (loss) per share (EPS)
Shares in million
 
Weighted average shares outstanding — basic
    748       748       748       748       748  
 
Weighted average shares outstanding — diluted
    748       748       748       748       748  
 
Earnings (loss) per share — basic and diluted (in Euro)
    (0.15 )     (0.25 )     (0.03 )     0.04       (0.28 )
 
EBIT
    3 months ended   6 months ended
in Euro million   Mar 31, 05   Dec 31, 05   Mar 31, 06   Mar 31, 05   Mar 31, 06
 
Net income (loss)
    (114 )     (183 )     (26 )     28       (209 )
— Income tax expense (benefit)
    (3 )     40       25       71       65  
— Interest expense (income), net
          21       29       (5 )     50  
 
                                       
 
EBIT
    (117 )     (122 )     28       94       (94 )
 
                                         
Infineon defines EBIT as earnings (loss) before interest and taxes. Infineon’s management uses EBIT among other measures to establish budgets and operational goals, to manage the Company’s business and to evaluate its performance. Infineon reports EBIT information because it believes that it provides investors with meaningful information about the operating performance of the Company and especially about the performance of its separate business segments. EBIT is determined as seen above from the condensed consolidated statements of operations, without adjustment to the US GAAP amounts presented.


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Segment Results
                                                 
    3 months ended   6 months ended
Net sales in Euro million   Mar 31, 05   Mar 31, 06   + / - in %   Mar 31, 05   Mar 31, 06   + / - in %
 
Automotive, Industrial and Multimarket
    634       733       16       1,265       1,385       9  
Communication Solutions
    332       308       (7 )     746       642       (14 )
Memory Products
    633       928       47       1,399       1,606       15  
Other Operating Segments
    4       22       +++       7       24       +++  
Corporate and Reconciliation
    3       2       (33 )     5       10       +++  
 
Infineon consolidated
    1,606       1,993       24       3,422       3,667       7  
 
                                                 
    3 months ended   6 months ended
EBIT in Euro million   Mar 31, 05   Mar 31, 06   + / - in %   Mar 31, 05   Mar 31, 06   + / - in %
 
Automotive, Industrial and Multimarket
    36       74       +++       84       125       49  
Communication Solutions
    (142 )     (29 )     80       (161 )     (50 )     69  
Memory Products
    17       30       76       213       (88 )     – – –  
Other Operating Segments
    11       (2 )     – – –       9       (2 )     – – –  
Corporate and Reconciliation
    (39 )     (45 )     (15 )     (51 )     (79 )     (55 )
 
Infineon consolidated
    (117 )     28       +++       94       (94 )     – – –  
 
                         
    3 months ended
Net sales in Euro million   Dec 31, 05   Mar 31, 06   + / - in %
 
Automotive, Industrial and Multimarket
    652       733       12  
Communication Solutions
    334       308       (8 )
Memory Products
    678       928       37  
Other Operating Segments
    2       22       +++  
Corporate and Reconciliation
    8       2       (75 )
 
Infineon consolidated
    1,674       1,993       19  
 
                         
    3 months ended
EBIT in Euro million   Dec 31, 05   Mar 31, 06   + / - in %
 
Automotive, Industrial and Multimarket
    51       74       45  
Communication Solutions
    (21 )     (29 )     (38 )
Memory Products
    (118 )     30       +++  
Other Operating Segments
    – – –       (2 )     – – –  
Corporate and Reconciliation
    (34 )     (45 )     (32 )
 
Infineon consolidated
    (122 )     28       +++  
 


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Regional Sales Development
    3 months ended
Regional sales in %   Mar 31, 05   Dec 31, 05   Mar 31, 06
 
Germany
    21 %     19 %     17 %
Other Europe
    19 %     17 %     18 %
North America
    23 %     22 %     28 %
Asia / Pacific
    30 %     35 %     31 %
Japan
    5 %     5 %     4 %
Other
    2 %     2 %     2 %
 
Total
    100 %     100 %     100 %
 
Europe
    40 %     36 %     35 %
 
Outside-Europe
    60 %     64 %     65 %
 
                         
Condensed Consolidated Balance Sheets
                 
in Euro million   Sep 30, 05   Mar 31, 06
Assets
Current assets:
               
Cash and cash equivalents
    1,148       1,384  
Marketable securities
    858       680  
Trade accounts receivable, net
    952       1,090  
Inventories
    1,022       1,200  
Deferred income taxes
    125       97  
Other current assets
    469       517  
 
Total current assets
    4,574       4,968  
 
Property, plant and equipment, net
    3,751       3,976  
Long-term investments, net
    779       598  
Restricted cash
    88       88  
Deferred income taxes
    550       495  
Other assets
    542       439  
 
Total assets
    10,284       10,564  
 
                 
in Euro million   Sep 30, 05   Mar 31, 06
 
Liabilities and shareholders’ equity
               
Current liabilities:
               
Short-term debt and current maturities of long-term debt
    99       739  
Trade accounts payable
    1,069       1,220  
Accrued liabilities
    497       521  
Deferred income taxes
    17       25  
Other current liabilities
    700       584  
 
Total current liabilities
    2,382       3,089  
 
Long-term debt
    1,566       1,285  
Deferred income taxes
    65       21  
Other liabilities
    642       742  
 
Total liabilities
    4,655       5,137  
 
Total shareholders’ equity
    5,629       5,427  
 
Total liabilities and shareholders’ equity
    10,284       10,564  
 


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Condensed Consolidated Statements of Cash Flows
                                         
    3 months ended   6 months ended
in Euro million   Mar 31, 05   Dec 31, 05   Mar 31, 06   Mar 31, 05   Mar 31, 06
 
Net cash provided by operating activities
    164       102       194       587       296  
 
Net cash (used in) provided by investing activities
    18       (168 )     (239 )     (92 )     (407 )
 
Net cash provided by (used in) financing activities
    (19 )     56       291       17       347  
 
Net increase (decrease) in cash and cash equivalents
    163       (10 )     246       512       236  
 
Depreciation and amortization
    317       338       365       651       703  
 
Purchases of property, plant and equipment
    (385 )     (405 )     (314 )     (841 )     (719 )
 
Gross and Net Cash Position

Infineon defines gross cash position as cash and cash equivalents and marketable securities, and net cash position as gross cash position less short and long-term debt. Since Infineon holds a substantial portion of its available monetary resources in the form of readily marketable securities, which for US GAAP purposes are not considered to be “cash”, it reports its gross and net cash positions to provide investors with an understanding of the Company’s overall liquidity. The gross and net cash position is determined as follows from the condensed consolidated balance sheets, without adjustment to the US GAAP amounts presented:
                         
in Euro million   Mar 31, 05   Dec 31, 05   Mar 31, 06
 
Cash and cash equivalents
    1,120       1,138       1,384  
Marketable securities
    1,229       749       680  
 
Gross Cash Position
    2,349       1,887       2,064  
 
Less: short-term debt
    548       99       739  
long-term debt
    1,469       1,627       1,285  
 
Net Cash Position
    332       161       40  
 
Free Cash Flow

Infineon defines free cash flow as cash from operating and investing activities excluding purchases or sales of marketable securities. Since Infineon holds a substantial portion of its available monetary resources in the form of readily marketable securities, and operates in a capital intensive industry, it reports free cash flow to provide investors with a measure that can be used to evaluate changes in liquidity after taking capital expenditures into account. The free cash flow is determined as follows from the condensed consolidated cash flow statements, without adjustment to the US GAAP amounts presented:
                                         
    3 months ended   6 months ended
in Euro million   Mar 31, 05   Dec 31, 05   Mar 31, 06   Mar 31, 05   Mar 31, 06
 
Net cash provided by operating activities
    164       102       194       587       296  
Net cash (used in) provided by investing activities
    18       (168 )     (239 )     (92 )     (407 )
Thereof: Sale of marketable securities, net
    (379 )     (109 )     (68 )     (749 )     (177 )
 
Free cash flow
    (197 )     (175 )     (113 )     (254 )     (288 )
 
                         
 
Employee Data   Mar 31, 05   Dec 31, 05   Mar 31, 06
 
Infineon worldwide
    36,440       40,673       40,839  
Thereof: Research and Development
    7,401       7,632       7,621  
 


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Analyst and press telephone conferences
Infineon Technologies AG will host a telephone conference (in English only) with analysts and investors on April 26, 2006, 10:00 a.m. Central European Summer Time (CEST), 4:00 a.m. Eastern Daylight Time (U.S. EDT), to discuss operating performance during the second quarter of the 2006 financial year. In addition, the Infineon Management Board will conduct a telephone conference with the media at 11:30 a.m. (CEST), 5:30 a.m. (U.S. EDT). It can be followed in German and English over the Internet. Both conference calls will be available live and for download on the Infineon web site at http://www.infineon.com.
D I S C L A I M E R
This discussion includes forward-looking statements about our future business. These forward-looking statements include statements relating to future developments of the world semiconductor market, especially the market for memory products, Infineon’s future growth, the benefits of research and development alliances and activities, our planned levels of future investment in the expansion and modernization of our production capacity, the introduction of new technology at our facilities, the transitioning of our production processes to smaller structure sizes, cost savings related to such transitioning and other initiatives, our successful development of technology based on industry standards, our ability to offer commercially viable products based on our technology, our ability to achieve our cost savings and growth targets, and the impact of our planned carve-out of the Memory Product business and any further corporate reorganization measures in that regard. These forward-looking statements are subject to a number of uncertainties, including trends in demand and prices for semiconductors generally and for our products in particular, the success of our development efforts, both alone and with our partners, the success of our efforts to introduce new production processes at our facilities and the actions of our competitors, the availability of funds for planned expansion efforts, the outcome of antitrust investigations and litigation matters, as well as the other factors mentioned herein. As a result, our actual results could differ materially from those contained in the forward-looking statements.
Infineon, the stylized Infineon Technologies design are trademarks and service marks of Infineon Technologies AG. All other trademarks are the property of their respective owners.
             
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