* Net sales $358 million, in line with outlook
* Adjusted operating loss(1)) $133 million, 55% improvement since Q1 2012
* NovaThor(TM) shipments grew 45% sequentially
Geneva, Switzerland, January 30, 2013 - ST-Ericsson, a joint venture of
STMicroelectronics (NYSE:STM) and Ericsson (NASDAQ:ERIC), reported financial
results for the fourth fiscal quarter ending December 31, 2012.
Sales in the fourth quarter were approximately flat sequentially, in line with
the guidance provided, reflecting growing contribution from NovaThor platform
shipments as well as $43 million revenues from IP licensing. NovaThor ModAp
shipments grew by 45% sequentially to 10.7 million units.
Adjusted operating loss decreased to $133 million as a further result of the
execution of the strategic plan announced in April. Since the first quarter
2012 operating losses have been reduced by 55%, decreasing by $164 million.
Didier Lamouche, President and CEO, commented: "The fourth quarter was again a
quarter of solid execution for us with revenues coming in as expected and a
major growth of the shipments of our NovaThor platform, in part thanks to the
new Samsung GALAXY S III mini. We have continued to execute steadily and
aggressively on our strategy and delivered on our commitments to improve our
financial results, further reducing our losses and controlling expenses.
However, we recognize that the level of losses and use of cash remains very
high."
Samples of ST-Ericsson's first LTE ModAp products became available in December
and the first NovaThor L8580 ModAp platform based on STMicroelectronics'
advanced 28nm FD-SOI process was demonstrated on January 7 at CES.
"We are also continuing to execute relentlessly against our committed roadmap,"
continued Lamouche. "We have reached key maturity milestones with our advanced
LTE modem which is in testing with customers and is anticipated to be
commercialized as part of our NovaThor L8540 ModAp platform in 2013. As promised
less than a year ago we also unveiled our newest chipset - the NovaThor L8580
ModAp - which is the first product to use FD-SOI technology and is the world's
fastest and lowest power integrated LTE modem and application processor
platform, confirming the disruptive nature of FD-SOI technology."
2012 fourth quarter financial summary (unaudited)
$ million Q4 2012 Q3 2012 Q4 2011
Income Statement*
NET SALES 358 359 409
OPERATING INCOME/(LOSS) ADJUSTED(1)) for: (133) (148) (207)
- amortization of acquisition-related intangibles (19) (19) (25)
- restructuring charges (17) (7) (9)
OPERATING INCOME / (LOSS) as reported (169) (174) (241)
NON-GAAP NET INCOME /(LOSS) 71** (190) (231)
--------------------------------------------------------------------------
* Please refer to footnote n. 4 on page 6
** Includes $1531 million gain from shareholders' debt forgiveness and $1060
million charges for impairment of goodwill and intangible assets
$ million Q4 2012 Q3 2012 Q4 2011
Additional financial data
Net Financial Position
Cash, cash equivalents & short-term deposits/debt, net 37 39 9
Parent companies short-term debt 0 (1390) (807)
Net financial position²()) 37 (1351) (798)
Net operating cash flow (3)) (152) (146) (204)
-------------------------------------------------------------------------------
Additional financial information
During the fourth quarter Ericsson and ST waived their credit of $1546 million
under the parents' loan.
Non-GAAP net income in the fourth quarter 2012 was $71 million, including gain
from the debt forgiveness, impairment of intangible assets and write off of
certain deferred tax assets.
The net financial position(2) )at the end of the fourth quarter was positive $37
million, reflecting the cancellation of the parents' loan facility.
Inventory decreased by $33 million reaching $147 million at the end of the
fourth quarter.
Net operating cash flow decreased slightly, reaching a negative $152 million.
The fourth quarter 2012 closing is based on a going concern assumption. In the
month of December 2012 ST-Ericsson shareholders issued press releases about
their future intent with respect to ST-Ericsson. Following the uncertainty
resulting from these announcements we cannot exclude that the ST-Ericsson
Financial Statements could be further negatively affected by ST-Ericsson's
future scenario.
Outlook
For the first quarter 2013, ST-Ericsson expects a very significant sequential
decline in net sales, mainly resulting, in addition to the first quarter
seasonality, from a combination of no revenues from licensing expected in the
quarter and further weakening of legacy product sales.
Highlights - Recent products, technology and wins
* Products
* Samples of ST-Ericsson's first FD-SOI product became available in
December and the NovaThor L8580 ModAp platform was announced on January
7, 2013. The NovaThor L8580 ModAp is a multimode LTE-enabled integrated
smartphone platform which features an eQuad-powered application
processor running at up to 2.5Ghz and includes a full connectivity
suite.
* Customers
* Samsung GALAXY S III mini is powered by an ST-Ericsson NovaThor ModAp,
making it the fourth Samsung smartphone using the NovaThor platform.
* Partners/technology
* With the new NovaThor L8580 ModAp ST-Ericsson introduced eQuad
technology. eQuad is a CPU architecture in which each processor core can
operate as an industry-leading high performance core or a very low-power
core for less computing-intensive tasks running at 0.6V. This is
achieved by transistor-level electrical bias switching to allow each of
two physical cores to run in two different modes, creating an
electrically-enabled quad core. The eQuad processor delivers both the
fastest processor speed at 2.5Ghz as well as by far the industry leading
power efficiency with cores running at 1Ghz at only 0.65V.
* ST-Ericsson tested and demonstrated its VoLTE (Voice over LTE)
technology with key operators during the quarter. A white paper was
published discussing VoLTE battery life and the benefits to be expected
in upcoming modem generations such as ST-Ericsson solutions.
* ST-Ericsson published a white paper on IMS Fusion. Through the invention
of IMS Fusion, ST-Ericsson makes it possible for mobile devices to
support an arbitrary number of downloaded or pre-installed IMS apps.
This solves the problem of multiple IMS registrations without the need
for a new modem API.
* ST-Ericsson announced that it is ready to support Jolla's Sailfish OS in
its NovaThor platforms.
Financial results appendix (unaudited)
Annual financial results
2012 2011
$ million ACTUAL ACTUAL
Income Statement *
NET SALES 1351 1650
OPERATING INCOME/(LOSS) ADJUSTED(1)) for: (814) (732)
- amortization of acquisition-related intangibles (75) (101)
- restructuring charges (89) (34)
OPERATING INCOME / (LOSS) as reported (978) (867)
NON-GAAP NET INCOME / (LOSS) (749)** (841)
-----------------------------------------------------------------------------
2012 financial results by quarter
$ million Q4 2012 Q3 2012 Q2 2012 Q1 2012
Income Statement *
NET SALES 358 359 344 290
OPERATING INCOME/(LOSS) ADJUSTED(1)) for: (133) (148) (235) (297)
- amortization of acquisition-related
intangibles (19) (19) (19) (19)
- restructuring charges (17) (7) (56) (10)
OPERATING INCOME / (LOSS) as reported (169) (174) (309) (326)
NON-GAAP NET INCOME / (LOSS) 71** (190) (318) (312)
-------------------------------------------------------------------------------
* Please refer to footnote n. 4 on page 6
** Includes $1531 million gain from shareholders' debt forgiveness and $1060
million charges for impairment of goodwill and intangible assets
Consolidated balance sheet *
In $ million December 31, 2012 December 31, 2011
ASSETS
Current assets:
Cash and cash equivalents 37 9
Trade accounts receivable, net 35 97
Inventories, net 147 223
Deferred tax assets 1 8
Other receivables and assets 90 102
----------
Total current assets 309 439
Goodwill 0 745
Other intangible assets, net 12 437
Property, plant and equipment, net 286 364
Long-term deferred tax assets 8 188
Other investments and other non-current assets 44 70
------------
349 1,804
Total assets 659 2,243
------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings and current
portion of long-term debt 0 807
Trade accounts payable 155 175
Other payables and accrued
liabilities 253 292
Deferred tax liabilities 0 0
Accrued income tax 6 8
---------------------------------
Total current liabilities 414 1,282
Reserve for pension and
termination indemnities 85 87
Long-term deferred tax
liabilities 0 3
Other non-current liabilities 29 25
---------------
114 115
Total liabilities 528 1,397
Total equity 131 846
---------------
Total equity and liabilities 659 2,243
---------------
------------------------------------------------
* Please refer to footnote n. 4 on page 6
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.
3) Net operating cash flow is defined as net cash from operating activities,
less capital expenditure and less restructuring charges.
4) The fourth quarter 2012 closing is based on a going concern assumption. The
valuation of several items in the financial report is based upon our best
estimate using preliminary information available to us and under this going
concern assumption. In the month of December 2012 ST-Ericsson' shareholders
issued press releases about their future intent with respect to ST-Ericsson, on
December 10(th) by STMicroelectronics and on December 20(th) by Ericsson.
Following the uncertainty resulting from these announcements, the carrying
amounts of goodwill and intangible assets have been substantially impaired. We
cannot exclude that the ST-Ericsson Financial Statements could be further
negatively affected by ST-Ericsson's future scenario.
Notes to editors
ST-Ericsson invites journalists, analysts and investors to a conference call
scheduled on January 31 at 5 p.m. CET. Call-in numbers, a live webcast of the
conference call, as well as supporting slides, will be available at
www.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. 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 Investor & Analyst Relations
Relations Fabrizio Rossini, Geneva, Switzerland
Claudia Levo, 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.
Forward looking statements contained in this press release and the fourth
quarter 2012 closing are based on a going concern assumption. In the month of
December 2012 ST-Ericsson' shareholders issued press releases about their future
intent with respect to ST-Ericsson, on December 10(th) by STMicroelectronics and
on December 20(th) by Ericsson.
Please read this press release in conjunction with this information.
[HUG#1674392]
