Seven percent sales growth (includes Key figures in PDF) (0125)

Report on the third quarter of 2001

The third quarter of 2001 brought the first signs of stabilization for the Micronas Group as sales increased by 7 percent compared with the second quarter, bucking the overall market trend. However, the tight squeeze on earnings continued, with capacity loading as low as 60 percent. To ensure effective market penetration and safeguard our short- to-medium-term innovation potential we continued our programme of investments in R&D and marketing despite the continuing weakness of the market.

Consolidated net sales reached CHF 138.8 million in the third quarter of 2001 compared with CHF 119.1 million in the corresponding period of last year and CHF 129.9 million in the second quarter of the current year. In the first nine months of 2001 overall sales reached CHF 422.5 million. In the comparable period of 2000 sales were CHF 335.9 million. This represents a drop in sales of 16 percent after adjustment for acquisitions and currency translation.

Operating profit (EBIT) in the third quarter was CHF 2.4 million compared with CHF 28.3 million in the corresponding period of last year. The operating profit for the first nine months of 2001 reached the amount of CHF 43.9 million. The operating profit before amortization of goodwill (EBITA) was CHF 62.5 milli on, while operating profit before depreciation and amortization of goodwill (EBITDA) totalled CHF 106.3 million.

The third quarter of 2001 saw a small net loss of CHF 3.9 million. Net profit for the first nine months of 2001 was CHF 20.7 million compared with CHF 52.5 million for the corresponding period of last year. Earnings per share, adjusted for amortization of goodwill after tax, amounted to CHF 1.47.

Our production sectors responded to the cyclically weak order situation by adjusting their projec t prioritization. Investments in capacity expansion were shelved. Cost reduction programmes were implemented in all production areas.

Micronas is confident of being able to meet the forecasted targets for the year as a whole despite an extremely difficult market environment.

The Micronas Group is an internationally active manufacturer of application-specific chip systems in the areas of multimedia, consumer and automotive electronics. Its shares are listed on SWX Swiss Exchange and the Neuer Markt in Frankfurt.

Zurich, 26 October 2001 Micronas Semiconductor Holding AG