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Micronas achieves a turnaround in 2010

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– Positive result after four years of losses
– Consistent focus on automotive business has been successful
– Micronas benefits from improvement in the global car market
– Expansion of development, marketing and sales activities
– Further growth in Hall sensor business expected in 2011
After four years of losses, Micronas achieved a turnaround in 2011 and generated a positive result again. “Thanks to the Company-s strict focus on automotive business, and a rigorous savings drive, the recovery came quicker than originally planned,” explains Micronas CEO Matthias Bopp.
Consolidated net sales for the Micronas Group (Automotive and Consumer) in 2010 came to CHF 190.3 million. This is 21 percent down on the previous year. Net sales in the Automotive division increased by 29 percent to CHF 163.7 million, while Consumer sales fell as expected by 77 percent to CHF 26.6 million. The operating profit (EBIT) for the Micronas Group in 2010 came to CHF 26.1 million, following an operating loss before exceptional items of CHF 63.5 million in the previous year. This gave an EBIT margin for 2010 of 13.7 percent of sales.
Having posted a loss of CHF 179.0 million in 2009 after taking financial items and taxes into account, in 2010, Micronas achieved a profit of CHF 6.7 million. This profit includes exceptional items amounting to CHF 2.2 million. These resulted firstly from liquidations and the subsequent deconsolidation of group companies, and secondly from current IFRS rules that require equity items to be derecognized through the income statement. These derecognitions have no effect on the cash position, equity capital, operating profit (EBIT) or income tax. Even if these exceptional items were excluded, profit for 2010 would still come to CHF 4.5 million. Earnings per share were at CHF 0.23. At the end of 2010, Micronas held cash and cash equivalents of CHF 165.4 million (CHF 188.4 million in 2009). With shareholders- equity at CHF 122.7 million (CHF 127.0 million in the previous year) the Company-s equity ratio rose to 44 percent.
In 2010 the Automotive division-s net sales increased 29 percent on the previous year to CHF 163.7 million (2009: CHF 126.7 million). Operating profit (EBIT) came to CHF 21.9 million, following an operating loss of CHF 17.7 million in the previous year.
The Automotive business profited from a revival in car markets last year. Asian markets in particular, especially China and Japan, recovered very quickly, as did America. In Europe, incentive programs came to an end, which resulted in a declining number of new registrations. A decisive factor for Micronas was that its major German and Japanese customers did well in the more dynamic international markets.
After years of cautious investment, all manufacturers are now investing heavily again in research and development. Electric and hybrid vehicles are becoming increasingly important, while conventional engine design is also focusing more on efficiency. Close cooperation with key clients has been intensified. One of the results of this is that the Company-s most important client decided to use Micronas solutions for its next generation of products.
In the Industrial division, greater marketing activities have led to new business. As well as marketing existing Hall sensor products and embedded microcontrollers, new products, including the mySENS gas sensor technology, have also been launched. In white goods, Micronas has won important new sales platforms, including its production of Hall switches for the brushless DC motors produced by a large American manufacturer.
In order to keep pace with rising demand for newly developed products, Micronas has decided to build up research and development activities at its existing sites, and to form an additional R&D team of around 15 people in Munich. At the same time, it is expanding its worldwide marketing and sales team.
In the Consumer sector, a steady stream of orders helped to improve capacity utilization at the wafer factory. Sales fell as expected in 2010 to CHF 26.6 million (previous year CHF 114.5 million).
Operating profit (EBIT) came to CHF 4.2 million (previous year CHF -151.7 million). Further orders are expected in 2011, though at a reduced level.
Utilization of production capacity at our Freiburg production facility climbed back to 75 percent over the course of the year. This capacity includes the front-end wafer fab and the back-end assembly and testing areas. Short-time working was suspended during the summer months, though some production areas returned to shorter hours in Q4 2010.
The repositioning of the Company led to some changes in the Management Board and Board of Directors. On January 1, 2010, Matthias Bopp took over as CEO of Micronas. At the ordinary Shareholders- Meeting on March 26, 2010, Lucas A. Grolimund, Dieter G. Seipler and Stefan Wolf were re-elected to the Board for a one-year term up to the next ordinary Shareholders- Meeting.
“Thanks to its focus on the automotive sector and its solid financial foundations, we will be able to continue taking Micronas forward over the years to come,” says Heinrich W. Kreutzer, Chairman of the Board of Directors of Micronas.
From 2011 Micronas will only be publishing its half-year results in the form of the familiar report to shareholders. Quarterly numbers for the first and third quarters will be announced in a short press release with interim figures.
The Board of Directors and Management Board anticipate further growth of the core Hall sensors business in the 2011 financial year. For the first half of 2011, the Micronas Group expects sales of around CHF 85 million (of which the Automotive division should contribute CHF 82 million), with an EBIT margin of 10 percent.
Disclaimer
This press release contains forward-looking statements, such as projections, forecasts and estimates. Such forward-looking statements are dependent on certain risks and uncertainties which may cause actual results, performance or events to differ materially from those anticipated in this press release. The forward-looking statements contained in this press release are based on Micronas- views and assumptions as of this date and Micronas does not assume any obligation to update or revise this press release. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.

Micronas (SIX Swiss Exchange: MASN), a semiconductor designer and manufacturer with worldwide operations, is a leading supplier of cutting-edge sensor and IC system solutions for automotive and industrial electronics. Micronas offers a wide range of Hall-effect sensors and embedded microcontrollers for automotive and industrial applications, for instance in drive trains, chassis frames, engine management and in convenience functions.