A CHALLENGING QUARTER

"Our financial performance in Q2 was not satisfactory. There was a significant adverse impact from the pending customer complaint. The technical investigation into the complaint is nearing its conclusion, and shipment of replacement wafers has begun. We have obtained qualification of our new 200 mm float zone silicon wafers by a large, potential automotive customer in Japan and have recently shipped the next version, 150 mm float zone products, to several customers for qualification.” Kalle Hvidt Nielsen, CEO

| Source: Cemat A/S Cemat A/S

Highlights of the quarter

  • The technical investigation into the complaint is nearing its conclusion. Shipment of the first replacement wafers to the customer was begun after the end of the reporting period. 
  • Topsil's revenue was DKK 65.3 million in Q2 2014 against DKK 87.3 million in Q2 2013. Revenue was adversely affected by the customer complaint, which has had the effect that a large customer chose to temporarily suspend all silicon supplies from Topsil. Q2 2013 was positively affected by silicon sales to a number of one-off projects. 
  • The contribution margin was 42.3% in Q2 2014 against 48.7% in Q2 2013. The contribution margin was adversely affected by the decline in sales, changes in the sales mix and extra irradiation expenditure. 
  • Other external costs and staff costs totalled DKK 32.7 million, up from DKK 30.9 million in Q2 2013. The increase mainly related to additional production staff and costs related to the establishment and operation of a sales office in Japan.
  • EBITDA was a loss of DKK 5.0 million in Q2 2014 against a profit of DKK 11.6 million in Q2 2013. 
  • Working capital stood at DKK 136.1 million at 30 June 2014, representing a reduction of DKK 19.5 million compared to 30 June 2013.
     
  • Cash flows from operating activities were an inflow of DKK 7.3 million in Q2 2014 against an outflow of DKK 9.1 million in the year-earlier period. The cash flows for investing activities were DKK 2.6 million, which was a reduction of DKK 3.4 million compared to Q2 2013. 
  • Next-generation float zone silicon wafers (200 mm) were qualified by a large potential automotive customer in Japan. Test wafers of the next version, 150 mm float zone silicon wafers, were submitted for customer qualification.
  • After the end of the period, a change of sales management was announced.
  • Topsil signed an agreement with its principal bankers.

 

Outlook for 2014

Topsil's guidance is unchanged from the profit warning of 3 July 2014 of revenue in the range of DKK 270-290 million and EBITDA in the range of DKK 0-10 million.  

 

This announcement has been prepared in a Danish-language and an English-language version. In the event of any discrepancies, the Danish version shall prevail.

The announcement is attached in PDF.

 

         Please direct any questions regarding this announcement to the Company's CEO and CFO through Ms. Christina Fris Bjørling, Communications Manager, tel.: +45 2152 1011, cfb@topsil.com.
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Attachments

12-14_Q2_2014_UK.pdf