Micronas burdened by restructuring measures and crisis in car manufacturing (PR0906)

Zurich, April 28, 2009 – In the first quarter of 2009, Micronas (SIX Swiss Exchange: MASN) suffered from the fall-out of the economic crisis and the consequent collapse in car sales. The extensive restructuring measures announced in February took CHF 129.5 million off the results. Consolidated net sales for first three months of 2009 came to CHF 80.4 million, which is 34.3 percent down on the fourth quarter of 2008. The operating loss before exceptional items deteriorated from CHF 10.8 million in the previous quarter to CHF 29.4 million for the first quarter of this year, mainly as a result of low capacity utilization at the Company's production facilities. The operating loss after restructuring costs (EBIT) came to CHF 158.9 million. The overall loss for the first quarter of 2009 was CHF 156.1 million. On March 27, 2009, Micronas held cash and cash equivalents of CHF 274.9 million and shareholders' equity of CHF 147.7 million. Consumer activities not included in the partial sale to Trident Microsystems will be shut down by the end of the year. The Automotive division will carry on as before, while the Company's promising diversification into new markets, such as industrial products and white goods, will be continued selectively. Micronas' aim with these restructuring measures is to maintain its capacity to act and to create a platform from which the Company can continue its successful development once the economy starts to recover.

The Automotive division suffered greatly from the crisis in the car-making industry in the first quarter. Japanese and European carmakers saw sales fall by up to 40 percent and are currently sitting on large stocks of unsold vehicles. Many car manufacturers and suppliers have shed staff, introduced short-time working and temporarily closed individual plants. Micronas has inevitably felt the effects of these developments, with orders at a low level in the first quarter. The sales figure of CHF 35.7 million was 16.2 percent down on the previous quarter, while operating profit (EBIT) slumped from CHF 10.7 million in the fourth quarter of 2008 to CHF 0.3 million. This deterioration is mainly due to the decline in sales and lower capacity utilization at the production facility in Freiburg (unabsorbed costs of CHF 4.6 million). After having suspended production for 16 days in the first quarter, short-time working was introduced in Freiburg in mid-April in an attempt to mitigate the effects of continuing low demand.

The Consumer division's sales were down 43.9 percent on the previous quarter to CHF 44.7 million. The loss before exceptional items was CHF 29.7 million, of which CHF 14.5 million was due to low capacity utilization. During the first quarter, CHF 129.5 million of provisions were charged to the income statement for restructuring, leading to an operating loss (EBIT) of CHF 159.2 million.

Developments within the Consumer division were dominated by the cost-saving and restructuring measures announced on February 5, 2009. As stated at the time, talks were held with potential buyers interested in taking over parts of the division together with the relevant employees. These came to a successful conclusion at the end of March. On April 1, it was announced that the American semiconductor company Trident Microsystems was acquiring the FRC (Frame Rate Converter), demodulator and audio product lines from Micronas. Provided the necessary conditions are fulfilled (e.g. certain regulatory approvals), the planned sale should be completed by June 30, 2009. This will preserve the jobs of around 100 employees outside and 80 employees within Germany.

We are continuing with the closure of those parts of the Consumer division not taken over by Trident. By the end of June most of the employees concerned should have left the Company; restructuring will be complete by the end of 2009.

Micronas' transition to a leaner organization with no consumer activities is progressing at all levels. The manufacturing organization in Freiburg is also being restructured. During the first quarter, utilization of the installed machine capacity fell to around 50 percent. To avoid an increase in stocks, production was suspended for 16 days in February. In addition, short-time working was introduced for about 750 employees in Freiburg from mid-April until further notice.

Zurich, April 28, 2009