* Net sales $409 million
* Adjusted operating loss[1] $207 million
* Key priorities for 2012: enhanced focus on execution and a clear roadmap to
sustainable profitability
Geneva, Switzerland, January 23, 2012 - ST-Ericsson, a joint venture of
STMicroelectronics (NYSE:STM) and Ericsson (NASDAQ:ERIC), reported financial
results for the fourth fiscal quarter ending December 31, 2011.
Sales in the fourth quarter, excluding IP licensing to a third party, grew 1.3%
over prior quarter. The operating loss reported for the fourth quarter was
higher than the previous quarter.
Didier Lamouche, President and CEO, commented: "As the recently appointed CEO of
ST-Ericsson, my aim, and that of the entire organization, will be to ensure that
we meet all of our stakeholders' expectations. As we ramp up our new product
portfolio and build a strong roadmap towards sustainable profitability, our
focus is to effectively deliver on timely execution of our strategic programs
and continue to proliferate design wins.
From a financial perspective, it is clear that both sales and operating results
will continue to be challenging over the coming quarters, due to the reduction
in the short term of new product sales with one of our largest customers. That
is why our immediate priority is to build a strong roadmap to profitability
based on enhancing execution, delivering in volume our leading products and
lowering the break-even point."
2011 fourth quarter financial summary (unaudited)
$ million Q4 2011 Q3 2011 Q4 2010
Income Statement
NET SALES 409 412 577
OPERATING INCOME/(LOSS) ADJUSTED[1] for: (207) (194) (119)
- amortization of acquisition-related intangibles (25) (25) (28)
- restructuring charges (9) (5) (24)
OPERATING INCOME / (LOSS) as reported (241) (224) (171)
NET INCOME / (LOSS) (231) (211) (177)
--------------------------------------------------------------------------
$ million Q4 2011 Q3 2011 Q4 2010
Additional financial data
Net Financial Position
Cash, cash equivalents & short-term deposits/debt, net 2 20 68
Parent companies short-term debt (800) (614) (150)
Net financial position[2]() (798) (594) (82)
Cash flow from operations (182) (149) (101)
-------------------------------------------------------------------------------
Additional financial information
The net financial position[2]( )at the end of the fourth quarter was negative
$798 million. The sequential decrease was mainly a consequence of the operating
loss, partially mitigated by the reduction of working capital. Our shareholders
will continue to support funding our transitional financial needs.
During the fourth quarter the company sold trade receivables without recourse,
of which $144 million were outstanding at the end of the quarter, representing a
sequential decline of $18 million.
Inventory decreased by $58 million reaching $223 million at the end of the
fourth quarter.
Outlook
For the first quarter 2012, ST-Ericsson expects a very significant sequential
decline in net sales, resulting from a combination of higher inventory at some
of our customers, further weakening of legacy product sales, the effect of first
quarter seasonality as well as the reduction, in the short term, of new product
sales with one of our largest customers.
Highlights - products, technology and wins announced in fourth quarter 2011
* Products
* The ST-Ericsson Thor(TM) M7400 modem was selected as a Consumer
Electronics Show Innovations 2012 Design and Engineering Awards honoree
in the Embedded Technologies product category.
* Customers
* Sharp announced three new smartphones in Japan that are based on the ST-
Ericsson Thor(TM) HSPA+ 21 Mbps thin modem.
* Nokia has selected the ST-Ericsson NovaThor(TM) platform for future
devices it plans to introduce based on the Windows Phone mobile
platform.
* The Motorola Atrix(TM) 2, launched in October, uses the ST-Ericsson Thor
HSPA+ 21 Mbps thin modem.
* Partners/technology
* ST-Ericsson, in conjunction with STMicroelectronics, announced their
involvement in the European VENTURI Project, a group of companies that
will work together to develop mobile device platforms and applications
that deliver fully-immersive mobile Augmented Reality experiences.
* ST-Ericsson and CEA-Leti, working with STMicroelectronics and Cadence
Design Systems, have developed WIOMING, a three layer stack of multi-
core system on chip (SoC) devices connected by the same network on chip
(NoC). A proof of concept for a 3D multiprocessor architecture, the
WIOMING 3D stack uses Wide I/Os to connect the SoC devices and a DRAM
memory chip.
Financial results appendix (unaudited)
Annual financial results
2011 2010
$ million ACTUAL ACTUAL
Income Statement
NET SALES 1650 2293
OPERATING INCOME/(LOSS) ADJUSTED[1] for: (732) (436)
- amortization of acquisition-related intangibles (101) (101)
- restructuring charges (34) (74)
OPERATING INCOME / (LOSS) as reported (867) (611)
NET INCOME / (LOSS) (841) (591)
----------------------------------------------------------------
2011 financial results by quarter
$ million Q4 2011 Q3 2011 Q2 2011 Q1 2011
Income Statement
NET SALES 409 412 385 444
OPERATING INCOME/(LOSS) ADJUSTED[1] for: (207) (194) (181) (149)
- amortization of acquisition-related
intangibles (25) (25) (25) (25)
- restructuring charges (9) (5) (15) (4)
OPERATING INCOME / (LOSS) as reported (241) (224) (222) (178)
NET INCOME / (LOSS) (231) (211) (221) (178)
-------------------------------------------------------------------------------
Consolidated balance sheet
In $ million December 31, 2011 December 31, 2010
ASSETS
Current assets:
Cash and cash equivalents 9 68
Trade accounts receivable, net 97 121
Inventories, net 223 275
Deferred tax assets 8 11
Other receivables and assets 102 125
------------------------------------
Total current assets 439 600
Goodwill 745 749
Other intangible assets, net 437 524
Property, plant and equipment, net 364 424
Long-term deferred tax assets 188 120
Other investments and other non-current
assets 70 81
------------------------------------
1,804 1,898
Total assets 2,243 2,498
------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings and current
portion of long-term debt 807 150
Trade accounts payable 175 241
Other payables and accrued liabilities 292 274
Deferred tax liabilities 0 5
Accrued income tax 8 4
------------------------------------
Total current liabilities 1,282 673
Reserve for pension and termination
indemnities 87 51
Long-term deferred tax liabilities 3 5
Other non-current liabilities 25 31
------------------------------------
115 88
Total liabilities 1,397 761
Total equity 846 1,737
------------------------------------
Total equity and liabilities 2,243 2,498
------------------------------------
-------------------------------------------------------------------------------
Footnotes
[1] The adjusted operating income/(loss) is defined as the operating
income/(loss) reported before amortization of acquisition-related intangibles
and restructuring charges and is used by management to help enhance the
understanding of ongoing operations and to communicate the impact of the items
on the operating loss as reported.
[2] Net financial position represents the balance between financial assets,
which comprise cash, cash equivalents and short-term deposits, and financial
debt which includes bank overdrafts and parent companies short-term bridge
credit facilities.
Notes to editors
ST-Ericsson invites journalists, analysts and investors to a conference call
scheduled on January 24 at 5pm CET. Call-in numbers, a live webcast of the
conference call, as well as supporting slides, will be available
atwww.stericsson.com/investors/investors.jsp.
About ST-Ericsson
ST-Ericsson is a world leader in developing and delivering a complete portfolio
of innovative mobile platforms and cutting-edge wireless semiconductor solutions
across the broad spectrum of mobile technologies. The company is a leading
supplier to the top handset manufacturers and generated sales of $1.7 billion in
2011. ST-Ericsson was established as a 50/50 joint venture by STMicroelectronics
(NYSE:STM) and Ericsson (NASDAQ:ERIC) in February 2009, with headquarters in
Geneva, Switzerland.
www.stericsson.com
www.twitter.com/STEricssonForum
FOR FURTHER INFORMATION, PLEASE CONTACT:
Global Communications & Media Relations Investor & Analyst Relations
Claudia Levo, Geneva, Switzerland Fabrizio Rossini, Geneva, Switzerland
Phone: +41 22 929 6973
Email: investor.relations@stericsson.com
Pamela McCracken, Santa Clara, U.S.A.
Phone: +1 408 398 8565
Email:media.relations@stericsson.com
Ericsson Investor Relations STMicroelectronics Investor Relations
Asa Konnbjer, Stockholm, Sweden Tait Sorensen, Phoenix AZ, US
Phone: +46 10 713 3928 Phone: +1 602 485 2064
E-mail:investor.relations@ericsson.com
Celine Berthier, Geneva, Switzerland
Phone: +41 22 929 5812
Email:investors@st.com
###
The ST-Ericsson results reported in this press release do not reflect in their
entirety the results of the Wireless Segment of STMicroelectronics, which
include other activities that are not part of ST-Ericsson.
###
This press release contains forward-looking statements that involve inherent
risks and uncertainties. We have identified certain important factors that may
cause actual results to differ materially from those contained in such forward-
looking statements. For a detailed description of risk factors see
STMicroelectronics' (NYSE:STM) and Ericsson's (NASDAQ:ERIC) filings with the US
Securities and Exchange Commission, particularly each company's latest published
Annual Report on Form 20-F.
[HUG#1579617]
