Not for publication, release or distribution directly or indirectly in the United States, Canada, Australia or Japan. This press release is not an offer of securities, or a solicitation for purchase, subscription or sale of securities in the United States or in any other jurisdiction in which it would be unlawful to do so.
RESULTS FOR THE FIRST NINE MONTHS OF FY 2015-2016
- In the context of the announced proposed capital increases, Soitec is exceptionally reporting its financial statements for the first nine months of the fiscal year 2015-2016 ending on December 31, 2015
- The interim financial report for the first nine months of fiscal year 2015-2016 is available on Soitec's website
Bernin, France, April 25, 2016 - Soitec (Euronext Paris), a world leader in generating and manufacturing revolutionary semiconductor materials, today announced its unaudited consolidated results for the first nine months of the 2015-2016 financial year. The auditors have issued a limited review report (revue limitée) on these results which is included in the interim financial report for the first nine months of fiscal year 2015-2016 available on Soitec's website.[1]
Key financials for the first nine months of the fiscal year 2015-2016
Income statement
As already published on January 20th, 2016 (http://soitec.com/en/investors/financial-press-releases/article-1818/), total Consolidated Revenues for the first nine months of FY 15-16 amounted to €171.7 million, a 49% increase (a 27% increase at constant exchange rates) from €115.4 million for the first nine months of FY 14-15, restated to exclude the Solar activities[2]. [3]
The growth of the Gross Profit, which reached €42.4 million (25% of Sales), compared to €10.7 million for the first nine months of FY 14-15, results from an increase in volume and the positive evolution of exchange rates.
Current Operating Income was positive, amounting to €8.4 million, compared to the Current Operating Loss of €34.9 million recorded for the first nine months of FY 14-15 (i.e., an increase of €43.3 million).
As a result of Other Operating Expenses of €29.2 million mainly related to impairment test charges and Restructuring Expenses, Operating Income was negative, amounting to €19.7 million (compared to a €36.4 million loss for the first nine months of FY 14-15).
The main impact results from a €20.1 million depreciation, recorded at the close of the first nine months of FY 15-16, with respect to the clean room in Singapore and the impairment tests on non-current assets recorded on Altatech's asset values (€2.2 million on the basis of the price paid for the shares, it being specified that Soitec sold its entire stake in Altatech at the end of March 2016).[4]
Consolidated Net Loss for the first nine months amounted to €69.1 million (compared to a consolidated net loss of €115.2 million for the first nine months of FY 14-15), taking into account the net financial expenses amounting to €20.9 million and the net loss related to discontinued operations reported under discontinued operations (Solar activities) of €26.3m.
Cash generation
Net Cash used by operating activities (including restructuring costs of the Solar activities) for the first nine months of FY 15-16 amounted to €16.7 million (compared with a positive net cash generation of €8.1 million in the first nine months of FY 14-15 mostly resulting from working capital variations). Group EBITDA for the first nine months of FY 15-16 was negative, amounting to - €18.0 million (compared to - €51.9 million in the first nine months of FY 14-15). However, EBITDA generated by continuing operation was positive at €19.9 million, compared to - €14.1 million for the first nine months of FY 14-15
Net Cash generated by investment activities and asset disposals amounted to €26.3 million in the first nine months of FY 15-16 (compared to a consumption of €23.7 million for the first nine months of FY 14-15), thanks to €32 million in proceeds from the sale of the San Diego building, equipment from San Diego and Freiburg and two solar power plants.
Net Cash generated by financing activities amounted to €19.4 million (compared to €4.6 million for the first nine months of FY 14-15), mainly as a result of:
- €65.4 million in new financing including a loan of €30 million from Shin Etsu Handotai (SEH), a major wafer supplier and longstanding shareholder in the Company, a loan of €15 million from Bpifrance Participations, another shareholder, a loan of €9 million from the CEA, Soitec's technology partner, and a €11 million financial lease.
- the repayments of €46,1 million in borrowings and interest, including the repayment of a €17.1 million loan related to discontinued activities.
Balance sheet
The Group's Cash and Cash Equivalents improved during the first nine months of FY 15-16 to reach €51.8 million on 31 December 2015, representing an increase of €22.9 million compared to March 31, 2015. The main factor underpinning this improvement was the new financing arranged with Soitec's partners. Therefore Soitec's total Gross Financial Debts increased from €173.0 million on March 31, 2015 to €217.5 million on December 31, 2015. Consequently, Net Debt reached €165.7 million at the end of December 2015 compared to €150 million on March 31, 2015. As a result of the net loss generated over the period Soitec's consolidated equity declined from €50.0 million to €-0.8 million. As already publicly announced, the Company is in the process of strengthening its equity through capital increases designed to ensure the continuity of its business and the restructuring of its financial debt.
Outlook concerning the Electronics business
For FY 15-16 (ending on March 31, 2016), Soitec forsees an EBITDA margin (EBITDA/revenues) of approximately 15% for the Electronics business.
For FY 16-17, growth in demand for products used in radio-frequency applications (RF) and power applications should be robust and compensate the impact associated with the end of the lifecycle of PD-SOI. If this is the case, the Company would target (at constant exchange rates) a single-digit revenue growth for the Electronics business from FY2015-2016 and an EBITDA margin of the Electronics business of the same order than in FY 15-16. Regarding more specifically the first quarter of FY 16-17, Soitec expects its Electronics revenues to be substantially in line with those generated in the first quarter of FY 15-16 at constant exchange rates (i.e., a sequential decrease of approximately 15% compared with the fourth quarter of FY 15-16).
Also, in the longer run, Soitec intends to benefit from attractive perspectives associated with the adoption of FD-SOI on a large scale in the semiconductor industry.
For more details on the forecasts, objectives and trends for FY 15-16, FY 16-17 and subsequent years, please refer to the information set forth in sections 12 and 13 of the update to Soitec's 2014-2015 registration document filed with the French stock market authority (Autorité des Marchés Financiers, the "AMF") on March 7, 2016 under number D.15-0587-A01 as well as in sections B.4.a and B.9 of the summary of the prospectus approved by the AMF on March 18, 2016 under no. 16-085 (the "Prospectus"). Soitec S.A. draws the public's attention to the "Risk factors" sections of the Prospectus, set out in chapter 4 of the registration document filed with the AMF on June 10, 2015 under no. D.15-0587 and in chapter 4 of the update filed to the registration document with the AMF on March 7, 2016 under no. D-15-0587-A01 as well as in chapter 2 of the securities note forming part of the Prospectus. The realization of all or part of these risks is likely to have a material adverse effect on the business, assets, financial situation, results or prospects of the Soitec group as well as on the market price of the Soitec S.A. shares.
Agenda
Shareholders will be invited to meet at an Extraordinary General Meeting on second notice on April 29, 2016.
Given the current capital increase project, the date of publication of the FY 15-16 results has not yet been decided.
Important Notice
The press release contains information regarding the objectives of Soitec and of the companies within its scope of consolidation (the "Group") and prospective statements regarding in particular its present or future projects. This information is sometimes identified by the use of the future or conditional and prospective terms such as "believe", "expect", "may", "reckon", "consider", "aim", "intend", "wish", "envisage", "anticipate", "should" or, where applicable, the negative form of these terms, or any other variation or similar terminology. This information is not historic data and should not be interpreted as guarantees that the given facts and data will occur. This information is likely to be affected by known and unknown risks, and to evolve or be amended because of uncertainties and other factors related in particular to the economic, financial, competitive and regulatory environment which could have the effect that the future results, performances and profits of the Group are significantly different from the objective expressed or suggested. The information in this press release is information as at the date of this press release. Except for any applicable legal or regulatory obligation, the Group makes no undertaking to publish updates to the prospective information contained in this press release in order to reflect any change affecting the objectives or events, conditions or circumstances on which the prospective information contained in this press release is based, noting that none of this prospective information constitutes a guarantee of the actual results.
This press release contains information on the markets of the Group and its competitive positions, including information relating to the size of its markets. Unless otherwise stated, this information is estimates of the Group and is provided for information purposes only. The estimates of the Group are based on information obtained from clients, suppliers, professional organizations and other stakeholders in the markets in which the Group operates. Although the Group considers that these estimates are appropriate as of the date of this press release, it cannot guarantee the completeness or accuracy of the data on which these estimates are based, or that its competitors have the same definition of the markets in which they operate.
This document constitutes an advertisement and not a prospectus.
No communication or other information related to this transaction or to Soitec S.A. may be transmitted to the public in a country in which any approval or registration is required. No steps to such end have been taken or will be taken by Soitec S.A. in any country in which such steps would be required (other than France).
This press release and the information contained herein do not constitute and cannot be construed as a public offer, an offer to sell or subscribe or a solicitation of an order to purchase or subscribe securities in any country, other than France.
This press release does not constitute an offer or a solicitation to sell or subscribe for securities requiring a prospectus within the meaning of Directive 2003/71/EC of the European Parliament and Council dated November 4, 2003, as amended, including by Directive 2010/73/EU (together, the "Prospectus Directive", such expression including any relevant implementing measure in each member State of the European Economic Area).
With respect to the member states of the European Economic Area other than France (each a "Member State") having implemented the Prospectus Directive, no action has been or will be taken in order to permit a public offer of the securities which would require the publication of a prospectus in any Member State. In each Member State, the information contained herein is addressed solely to persons who are "qualified investors" within the meaning of the Prospectus Directive.
The securities mentioned in this press release have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"), and may not be offered, or sold in the United States in the absence of such registration or an applicable exemption from the registration requirement under the Securities Act. Soitec S.A. does not intend to register any portion of the planned offering in the United States or to conduct a public offering of securities in the United States.
This press release is neither an invitation nor an inducement to engage in investment activity for the purpose of Section 21 of the Financial Services and Markets Act 2000, as amended ("FSMA"). This press release is directed only at (i) persons outside the United Kingdom, (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"), (iii) persons referred to in Article 49(2) (a) to (d) of the Order (high net worth entities, non-registered associations, etc.) and (iv) other persons to whom this document may be lawfully communicated (all persons listed in (i), (ii), (iii) and (iv) above being referred to as "Relevant Persons"). The securities of Soitec S.A. described herein are available only to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, Relevant Persons. Any person who is not a Relevant Person must not act or rely on this document or any of its contents.
The release, publication or distribution of this press release in certain jurisdictions may be restricted by laws or regulations. Persons physically located in such jurisdictions into which this press release is released, published or distributed must inform themselves about and comply with such laws or regulations.
This press release must not be published, released or distributed, directly or indirectly, in the United States, Australia, Canada or Japan.
About Soitec
Soitec (Euronext, Paris) is a world leader in designing and manufacturing high performance semiconductor materials. The company uses its unique technologies to serve the electronics and energy markets. With 3,600 patents worldwide, Soitec's strategy is based on disruptive innovation to respond to its customers' needs for high performance, energy efficiency and cost competitiveness. Soitec has manufacturing facilities, R&D centers and offices in Europe, US and Asia. For more information, please visit www.soitec.com.
For all information, please contact:
| Investor relations Steve Babureck +1 858 519 6230 or +33 6 16 38 56 27 steve.babureck@soitec.com | Media Marylen Schmidt +33 (0)6 21 13 66 72 marylen.schmidt@soitec.com DDB Financial Fabrice Baron +33(0)1 53 32 61 27 fabrice.baron@ddbfinancial.fr Isabelle Laurent +33 (0)1 53 32 61 51 isabelle.laurent@ddbfinancial.fr |
Consolidated income statement
for the first nine months of fiscal year 2015-2016*
| (in thousands of euros) | Nine months ended December 31, 2015 | Nine months ended December 31, 2014 |
| Sales | 171,675 | 115,446 |
| Cost of sales | (129,248) | (104,747) |
| Gross profit | 42,427 | 10,699 |
| Sales and marketing expenses | (6,660) | (5,904) |
| Research and development costs | (13,771) | (24,213) |
| Solar power plant project development costs | - | |
| General and administrative expenses | (13,563) | (15,503) |
| Current operating income/(loss) | 8,432 | (34,921) |
| Other operating income | 1,065 | 2,343 |
| Other operating expenses | (29,233) | (3,783) |
| Operating loss | (19,736) | (36,362) |
| Financial income | 2,325 | 20,931 |
| Financial expense | (23,230) | (29,222) |
| Net financial expense | (20,905) | (8,291) |
| Loss before tax | (40,641) | (44,653) |
| Income tax | (1,986) | (8) |
| Share of loss of equity-accounted companies | (207) | (2,583) |
| Net loss from continuing operations | (42,834) | (47,244) |
| Net loss from discontinued operations | (26,256) | (67,983) |
| Consolidated net loss for the period | (69,091) | (115,227) |
| Non-controlling interests | - | |
| Net loss (attributable to owners of the parent) | (69,091) | (115,227) |
| Basic loss per share in euros | (0.30) | (0.51) |
| Of which continuing operations | (0.18) | (0.20) |
| Of which discontinued operations | (0.11) | (0.30) |
| Diluted loss per share in euros | (0.30) | (0.51) |
| Of which continuing operations | (0.18) | (0.20) |
| Of which discontinued operations | (0.11) | (0.30) |
* Unaudited information
Results for the Electronics segment *
| (in thousands of euros) | Electronics | Electronics | % Change |
| 9m FY15-16 | 9m FY14-15 | ||
| Sales | 167,762 | 111,876 | 50% |
| Gross profit/(loss) | 42,690 | 10,084 | 323% |
| in % of sales | 25.4% | 9.0% | |
| Net research and development costs | -10,104 | -19,156 | -47% |
| in % of sales | -6.0% | -17.1% | |
| Sales and marketing expenses | -4,000 | -3,980 | 1% |
| in % of sales | -2.4% | -3.6% | |
| General and administrative expenses | -12,893 | -14,684 | -12% |
| in % of sales | -7.7% | -13.1% | |
| Current operating income/(loss) | 15,692 | -27,734 | |
| in % of sales | 9.4% | -24.8% | |
| Other operating income and expenses, net | -26,652 | -1,440 | |
| EBIT | -10,961 | -29,174 | |
| EBITDA | 27,292 | -8,294 | |
| in % of sales | 16.3% | -7.4% |
* Unaudited information
Results for the Other segment*
| (in thousands of euros) | Other Activities | Other Activities | % Change |
| 9m FY15-16 | 9m FY14-15 | ||
| Sales | 3,913 | 3,570 | 9.6% |
| Gross profit/(loss) | -263 | 615 | -142.8% |
| in % of sales | -6.7% | 17.2% | |
| Net research and development costs | -3,667 | -5,057 | -27.5% |
| Sales and marketing expenses | -2,660 | -1,924 | 38.3% |
| General and administrative expenses | -670 | -820 | -18.3% |
| Current operating income/(loss) | -7,259 | -7,187 | |
| Net income/(loss) from discontinued operations | |||
| Other operating income | 1065 | - | |
| Other operating expenses | -2,581 | - | |
| Other operating income and expenses, net | -1,516 | - | |
| EBIT | -8,775 | -7,187 | |
| EBITDA | -7,322 | -5,779 |
* Unaudited information
Balance sheet at the end of December 31, 2015*
| Assets (in thousands of euros) | December 31, 2015 | March 31, 2015 |
| Non-current assets: | ||
| Goodwill and intangible assets | 4,323 | 8,842 |
| Capitalized development projects | 1,944 | 2,226 |
| Property, plant and equipment | 123,930 | 156,736 |
| Solar power plant projects | - | 1,600 |
| Deferred tax assets | - | - |
| Investments in equity-accounted companies | - | - |
| Non-current financial assets | 9,417 | 5,739 |
| Other non-current assets | 22,225 | 28,961 |
| Total non-current assets | 161,839 | 204,104 |
| Current assets: | ||
| Inventories | 36,484 | 33,073 |
| Trade receivables | 36,455 | 43,812 |
| Other current assets | 20,221 | 18,894 |
| Current financial assets | 1,330 | 1,311 |
| Cash and cash equivalents | 51,757 | 22,911 |
| Total current assets | 146,247 | 120,001 |
| Assets held for sale | 21,827 | 69,435 |
| Assets related to discontinued operations | 6,259 | - |
| Total assets | 336,172 | 393,540 |
| Equity and liabilities (in thousands of euros) | December 31, 2015 | March 31, 2015 |
| Equity: | ||
| Share capital | 23,132 | 23,119 |
| Share premium | 781,382 | 782,058 |
| Treasury shares | (475) | (475) |
| Retained earnings | (813,239) | (737,473) |
| Other reserves | 8,389 | (17,270) |
| Equity attributable to owners of the parent | (811) | 49,958 |
| Non-controlling interests | - | |
| Total equity | (811) | 49,958 |
| Non-current liabilities: | ||
| Long-term debt | 156,507 | 123,552 |
| Deferred tax liabilities | - | - |
| Provisions and other non-current liabilities** | 14,920 | 17,543 |
| Total non-current liabilities | 171,427 | 141,095 |
| Current liabilities: | ||
| Short-term debt | 60,980 | 49,455 |
| Trade payables | 36,402 | 52,279 |
| Provisions and other current liabilities** | 40,820 | 83,902 |
| Total current liabilities | 138,202 | 185,635 |
| Liabilities held for sale | - | 16,852 |
| Liabilities related to discontinued operations | 27,354 | - |
| Total equity and liabilities | 336,172 | 393,540 |
* Unaudited information
Statement of cash flows for the first nine months of fiscal year 2015-2016*
| (in thousands of euros) | Nine months ended December 31, 2015 | Nine months ended December 31, 2014 |
| Net loss from continuing operations | (42,834) | (47,244) |
| Net loss from discontinued operations | (26,256) | (67,983) |
| Consolidated net loss for the period | (69,091) | (115,227) |
| Elimination of non-cash items: | ||
| Share of profit/(loss) of equity-accounted companies | 207 | 2,583 |
| (Reversal)/Impairment of investments in equity-accounted companies | ||
| Depreciation and amortization expenses | 20,665 | 25,835 |
| Impairment of non-current assets and accelerated depreciation/amortization | 20,283 | 572 |
| Provisions, net | (1,354) | (377) |
| Provision for retirement benefit obligations | 396 | 317 |
| Proceeds from disposals of assets | (28) | (3,297) |
| Change in taxes | 1,986 | 8 |
| Net financial income | 20,904 | 8,296 |
| Share-based payments | (254) | 28 |
| Impact of IFRIC 21 (included in operating income/loss) | (795) | |
| Non-cash items relating to discontinued operations | (11,747) | 30,169 |
| Total non-cash items | 51,057 | 63,340 |
| Of which continuing operations | 62,804 | 33,170 |
| EBITDA | (18,033) | (51,887) |
| Of which continuing operations | 19,970 | (14,073) |
| Increase/(decrease) in cash relating to: | ||
| Inventories | (8,973) | (8,599) |
| Trade receivables | (2,061) | 13,798 |
| Other receivables | (1,395) | 6,367 |
| Trade payables | (10,641) | 3,631 |
| Other liabilities | 3,694 | 7,975 |
| Change in working capital related to discontinued operations | 20,707 | 36,852 |
| Change in working capital | 1,331 | 60,025 |
| Of which continuing operations | (19,376) | 23,173 |
| Net cash generated by/(used in) operating activities | (16,702) | 8,138 |
| Of which continuing operations | 594 | 9,100 |
| Purchases of intangible assets | (473) | (369) |
| Purchases of property, plant and equipment | (4,934) | (5,903) |
| Proceeds from sales of intangible assets and property, plant and equipment | 312 | 5,706 |
| (Acquisition) and disposal of financial assets (1) | (827) | (4,115) |
| Capital contribution to an equity-accounted company | (2,521) | |
| Investment/divestment flows related to discontinued operations (2) | 32,222 | (16,465) |
| Net cash generated by/(used in) investing activities | 26,301 | (23,667) |
| Of which continuing operations | (5,921) | (7,202) |
| Proceeds from shareholders: capital increases and exercise of stock options (3) | 474 | 79,450 |
| ABSAAR redeemable warrants | (675) | |
| Issuance of debt (4) | 65,427 | 11,000 |
| Drawdowns of credit lines | 173 | 7,200 |
| Repayment of borrowings (including finance leases) (5) | (23,687) | (99,936) |
| Interest received | 95 | 4,255 |
| Interest paid | (5,232) | (10,059) |
| Financing flows related to discontinued operations (6) | (17,183) | 3,504 |
| Net cash generated by/(used in) financing activities | 19,393 | (4,586) |
| Of which continuing operations | 36,576 | (8,090) |
| Effects of exchange rate fluctuations | (146) | 3,800 |
| Change in net cash | 28,846 | (16,315) |
| Cash at beginning of the period | 22,911 | 44,728 |
| Cash at end of the period | 51,757 | 28,413 |
* Unaudited information
[1] This report of the auditors contains an observation as follows: "Without calling into question the conclusion expressed above, we draw attention to Note 7.2.4 to the appendices, specifying the assumptions underlying the maintenance of the principle of the Group's operating continuity".
[2] In accordance with the Group's decision in January 2015 to withdraw from the Solar activities, the related income and expenses are reported under discontinued operations. The financial statements for the first nine months of FY 14-15 have thus been restated to ensure comparability with the financial statements for the first nine months of FY 15-16.
3 For the consolidated revenues of the fourth quarter of FY 15-16, please refer to the press release published by the Company on April 13, 2016 (http://www.soitec.com/en/investors/financial-press-releases/article-1826/).
[4] For purposes of the financial statements for the first nine months of the fiscal year 2015-2016, the Company has completed impairment tests that are usually conducted for its full year financial statements.
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