Encouraging growth in first nine months (0418)

Key data for third quarter 2004

Despite the difficult business climate, the Micronas Group achieved a further modest sales increase in the third quarter of 2004. On the other hand, the slowdown in new orders that became apparent in the second quarter of the year could not be reversed. Net profit for the first nine months was around 60 percent higher than in the same period a year ago.

In the reporting period the Micronas Group posted consolidated net sales of CHF 251.6 million, a 0.4 percent rise over the previous quarter; adjusted for currency effects the growth in net sales was also 0.4 percent. Net sales for the first nine months of the current year totaled CHF 739.3 million, 34.4 percent up on the same period of 2003.

Operating profit before depreciation and amortization of goodwill (EBITDA) reached CHF 76.6 million in the third quarter of 2004, a fall of 10.9 percent compared with the previous quarter. The cumulated EBITDA for the first nine months of 2004 totalled CHF 247.0 million, 38.8 percent higher than for the same period a year ago.

The operating profit (EBIT) was CHF 42.2 million, 22.6 percent lower than in the previous quarter. For the nine-month period as a whole, however, the operating profit was CHF 149.8 million, 64.3 percent higher than in the same period a year ago.

Net profit in the reporting period failed to match the record levels achieved in the previous quarters of 2004, dropping 21.5 percent to CHF 28.1 million. In the first nine months of the current business year net profit amounted to CHF 101.3 million; this was 59.5 percent higher than the same period of 2003. Earnings per share for the first three quarters of 2004 were CHF 3.16; adjusted for amortization of goodwill after tax this figure was CHF 3.53.

The Micronas Group's production plants continued to operate at full capacity throughout the summer months, partly in response to the high level of sales and partly to improve delivery capability. In the reporting period about half of wafer production was outsourced. Over the years Micronas has developed a close working relationship with high-grade manufacturing partners, ensuring a large measure of production flexibility.

In the reporting period, we presented a series of promising new audio and video system solutions to our customers. These segments are the focus for our development activities, which we are currently intensifying; in the medium term this could result in an increase in our R&D spending from around 11 to 14 percent to between 13 and 16 percent of sales. In the present state of the market, the potential for M&A transactions is limited.

For the fourth quarter we expect sales of between CHF 210 and 225 million. For the 2004 business year as a whole we expect sales growth in the region of 25 percent, with a net profit in percent of net sales in excess of 11 percent.

The Micronas Group is a leading independent supplier of innovative application-specific semiconductor solutions for consumer and automotive electronics. Its shares are listed on the SWX Swiss Exchange and on the Prime Standard segment (TecDAX) in Frankfurt.