The Board of Directors of Topsil Semiconductor Materials A/S today considered and adopted the interim report for the three months ended 31 March 2012. The highlights of the interim report, which is unaudited, are shown below:
SUMMARY
Sales and market conditions
Topsil generated revenue of DKK 78.5 million in Q1 2012 against 92.0 million in the year-earlier period, corresponding to a decline of 15.0%. The decline was attributable to the slowdown in the power market in mid 2011 and an increasingly competitive market. Topsil currently has less order visibility than it has had for a number of years. Topsil is making a number of dedicated efforts to increase sales, for example, by launching a range of new products.
The lower level of activity is the main reason for the group's operating profit decline in Q1 from DKK 12.3 million last year (corresponding to an EBITDA margin of 13.4%) to DKK 9.1 million this year (corresponding to an EBITDA margin of 11.5%).
Product launches and R&D
The first customer qualifications of the new PFZ product for the medium-voltage segment have now been completed, and Topsil has received the first orders; a wide range of additional customer qualifications are in progress. The number of new customer qualifications for the PFZ and CZ-EPI products is expected to grow during the year, which will have a minor positive impact in 2012 and a major positive impact later on.
The development of an 8-inch crystal continues, and Topsil plans to initiate customer qualifications of the new product at the end of 2012, but is not expecting the product to generate revenue until in 2013.
New plant
The construction of our new plant in Frederikssund, Denmark, was initiated in April 2011 and is proceeding according to plan. The installation of new machinery and equipment was initiated as planned in Q1 2012. New production equipment will be installed during the year, and deliveries of the initial test products to undergo customer qualification are expected towards the end of the year. As a result of initiating the plant relocation, Topsil's capital tie-up for 2012 as a whole will be higher than usual.
Total assets and interest-bearing debt
Net working capital at the balance sheet date amounted to DKK 121.1 million, which was a decline of DKK 6.9 million compared to a year earlier. The net working capital declined by DKK 17.8 million from the end of Q4 2011 primarily due to declining receivables and other payables, whereas inventories and trade payables increased.
Other matters
The Company reduced its headcount in 2011 and strengthened its efforts to achieve further synergies between the two operating facilities in Denmark and Poland respectively, in order to adjust costs to the lower activity level. The cost reduction programme will continue in 2012.
Outlook for 2012
Expectations for 2012 remain unchanged, and Management continuously expects the market to gradually pick up towards the end of the year. From then on, market terms are expected to gradually improve at a rate of approximately 5-10% p.a.
For 2012, the Company expects revenue to be 5-10% lower than in 2011. This expectation is based on the assumption of a fall of about 25% in the first half of the year followed by slight growth in the second half of the year.
EBITDA is expected to be approximately DKK 40-50 million against DKK 35 million in 2011. The cost reductions implemented will have full-year effect in 2012, albeit moderately offset by the costs of operating in two locations in Denmark.
Any queries regarding this stock exchange announcement may be addressed to the Company's CEO and CFO through: Christina Fris Bjørling, Communications, tel.: +45 2152 1011
