The Board of Directors of Topsil Semiconductor Materials A/S has today considered and adopted the interim report for the three months ended 30 September 2011. The highlights of the interim report, which is unaudited, are:
SUMMARY
Sales and market conditions
Topsil's revenue decreased by 25.5% from DKK 115.6 million in Q3 2010 to DKK 86.1 million in Q3 2011. For the year to date, accumulated revenue amounted to DKK 281.7 million, equal to a drop of 15.0%.
The decline was primarily attributable to a market-driven decline in the NTD area and to the fact that orders in the range of DKK 6m, originally placed for shipment in Q3, were postponed by customers for shipment in Q4 2011. Topsil is making a dedicated effort to increase sales.
Despite revenue which in 2011 will be below last year's level, Topsil believes that the company will maintain its market share in an increasingly aggressive market and that the underlying market for high-voltage products, both FZ and CZ products, in the longer term will attain the previously forecast, more favourable growth rates.
Raw materials
Topsil remains affected by inconsistent quality of raw materials for NTD production from one of Topsil's two suppliers, resulting in a lower degree of utilisation and a longer production process and, by extension, higher production costs. Topsil is still negotiating with the supplier and expects a satisfactory solution in the near future.
Product launches and R&D
Topsil is continuing its dedicated efforts to obtain approval of PFZ and CZ-EPI for new and existing customers. The new PFZ products are currently being tested by 5-10 customers, resulting in expected orders approval Q1 2012. 2012 is expected to be positively affected hereof.
The development of an 8’’ crystal is progressing according to plan, aiming for approval and actual market introduction in 2012, however 2012 is not expected to generate 8’’ revenue.
Other matters
With effect from 31 October 2011, Keld Lindegaard Andersen resigned the position as Managing Director of Topsil. The recruitment process is well underway, and Topsil expects to announce the name of its new managing director relatively soon. During the reporting period, Topsil made a number of staff reductions and stepped up its efforts to achieve further synergies between its Danish and Polish locations. The activities will result in cost savings in the range of DKK 10m in 2011, increasing to DKK 20m in 2012.
As a result of the lower level of activity and impaired quality of FZ raw materials, the group posted EBITDA of DKK 5.5 million in Q3 2011 against DKK 26.4 million in Q3 2010, equal to an EBITDA margin of 6.4% against 22.9% for the year-earlier period. For the year to date, EBITDA was DKK 24.5 million against DKK 70.0 million last year.
Outlook for 2011
For 2011, Topsil expects a revenue around DKK 370m and EBITDA of around DKK 35 million, corresponding to the level of expectations by Q2 less costs in the range of DKK 5m in connection with management changes in the group. In line with the investment programme previously adopted, the company expects to invest around DKK 120 million in 2011 and DKK 80 million in 2012, mainly in relation to the new plant. The financing is secured within the existing framework.
Further information
Questions regarding stock exchange announcement may be addressed to:
Jens Borelli-Kjær, Chairman, tel. +45 40 16 14 82
Jens Faarup, CFO, tel. +45 41 10 21 10
