Interim Report. 1st quarter 2009

Transcription

1 Interim Report 1st quarter 2009

2 Nordic Semiconductor ASA 1st quarter 2008 Revenue in the first quarter was 71.5, an increase of 12% over Q EBITDA was 8.3 MNOK in the first quarter compared to 0.7 MNOK in Q The global financial crises led to a generally difficult market in Q1, with a significant decline in consumer demand and inventory reductions by major customers A strong volume growth in wireless technology components for low cost mice and keyboard and continued conversion from 27MHz to 2.4 GHz led to a volume growth of 23% for Q1 year on year Key financial figures Operating revenue in the 1st quarter 2009 amounted to MNOK 71.5 which is 12% above the revenue for the same period in 2008 (MNOK 63.6). A substantial increase in sales volume of wireless components supported by a stronger USD exchange rate contributed to the growth. The gross margin for the 1st quarter was MNOK 42.6 with a gross margin ratio of 60% compared with MNOK 30.5 and 48% in the 1st quarter The positive margin development was caused by the customer mix and strong dollar movements in the preceding quarter. R&D expenses in the 1st quarter totaled MNOK 14.0, of which MNOK 12.7 was expensed and MNOK 1.3 was capitalized on the balance sheet. The corresponding figures for the 1st quarter 2008 were total R&D expenses of MNOK 11.8 with expensing and capitalization of MNOK 9.9 and MNOK 1.9 respectively. Other operating expenses in the 1st quarter 2009 totaled MNOK 21.6, compared with MNOK 19.9 for the corresponding period in The increased cost level is attributed to an increase in the number of employees from 107 Q to 120 at the end of this quarter. EBITDA in the first quarter 2009 was MNOK 8.3 which is MNOK 7.6 above Q108 (0.7). After deductions for depreciation of MNOK 3.7, the operating profit in the first quarter 2009 was MNOK 4.6 compared with MNOK -2.4 in the same period of Net financial items for the first quarter of 2009 were MNOK -1.9, compared with MNOK -1.0 for the same period in Income before taxes in the 1st quarter 2009 was MNOK 2.7 versus MNOK -3.4 in Q As of 31 March 2009, Nordic Semiconductor had a balance sheet totaling MNOK 307.9, which represents a reduction of MNOK 7.7 during the quarter. The company s cash and cash equivalents totaled MNOK (43% of total assets) at the end of Q108. Equity as at 31 March 2009 totaled NOK 238.1, which represents an equity ratio of 77%. The company had no interest-bearing debt. Net cash flow was MNOK -4.3 in the 1st quarter 2009 corresponding to a cash flow of MNOK -9.0 in the same period in The component order back log was MNOK 50.7 at the end of the 1st quarter, on par with the corresponding period last year when the back log was MNOK Component orders received during the quarter was MNOK 84.7 which is 52% above Q108 (MNOK 55.8) with a bookto-bill of 1.2. The Board believes that the company is financially well positioned for growth. Market segments Revenue per segment 1st quarter FY MNOK PC accessories Game controllers Intelligent sports equipm Audio devices 3.1 (0.1) 19.8 Industrial applications Other Total components Consulting Nordic Semiconductor PC accessories Operating revenue totaled MNOK 38.8 for the quarter compared with MNOK 15.1 in the 1st quarter of 2008, an increase of 157%. The consumer markets in important regions like the US and Europe were very weak through the quarter. Nordic Semiconductor has performed well with sales to low cost products in the Chinese market. The volume increase in this market more than compensated volume loss in other markets. Game controllers The game controller segment had a slow first quarter with operating revenues totaling MNOK 0.3 compared with MNOK 7.9 in the same period in last year. The quarter is strongly affected by low consumer sales in important markets and inventory reductions by a few major customers. Intelligent sports equipment Operating revenue for the first quarter increased by MNOK 0.5, from MNOK 4.4 in Q108 to MNOK 4.9 in Q109. Following a slow start, shipments to two major customers picked up towards the end of the quarter. Audio equipment The sale of components for equipment in the Audio equipment segment was MNOK 3.1 in the 1st quarter 2009 compared with MNOK -0.1 in the same period last year. Increased sales to one customer contributed positively.

3 Industrial applications Operating revenue in the first quarter was MNOK 12.7 which is MNOK 10.0 lower than Q1 of last year. Lower end customer sales caused by the global financial crises have reduced Nordic Semiconductor sales. Other segments Revenue in the 4th quarter 2008 was MNOK 7.0 in Q vs. MNOK 9.8 in The Lower sales to smaller customers with varying market positions in a soft consumer market affect Nordic Semiconductor s revenue in this quarter as in the fourth quarter. Geographical distribution of revenue Revenue per region 1st quarter FY MNOK Norway Europe USA/Canada Apac Other Nordic Semiconductor Share and shareholders Nordic Semiconductor s 10 largest shareholders at the end of the quarter: Shareholder No. of shares %of total DNB NOR Luxembourg SA % Verdipapirfondet Odin Norge % Folketrygdfondet % Ferd AS Invest % Orkla ASA % INAK 2 AS % Goldman Sachs Int. Equity % KLP LK Aksjer % Tore Engebretsen % Nordic Semiconductor ASA % 10 largest shareholders % Other % Total no. of shares % Nordic Semiconductor purchased 74,500 own shares in the first quarter of 2008 through a stock broker at NOK per share. Nordic Semiconductors held a total of 1,276,800 own shares at the end of the quarter. The transactions were completed in accordance with the power of attorneys given at the Annual General Meeting on 8 May, The Annual General Meeting for 2009 will be held in Nordic Semiconductor s offices in Otto Nielsens street 12, Trondheim, Thursday 7 May, 2009, at 12:00. Outlook The ongoing financial crisis has continued to affect Nordic Semiconductor s operation in the first quarter of The financial contraction has reduced consumer buying power and caused important customers to reduce inventories. The technology conversion (27 MHz to 2.4 GHz) and adaptation of wireless technology in consumer electronics have, however, continued. This trend is expected to persist and most of Nordic Semiconductor s leading customers continue to add new designs based on 2.4 GHz technology to their product range. Estimates for the semiconductor industry sales in 2009 vary greatly, but Nordic Semiconductor sees new business opportunities in the current market. In the first quarter, Nordic Semiconductor has produced an early version of the company s Bluetooth Low Energy component based on the current specification. Nordic Semiconductor has a leading position in Bluetooth Low Energy and is the first company globally to launch a single mode component in the market; Nordic Semiconductor μblue. Nordic Semiconductors μblue is designed for optimal use in peripherals and watches intended to communicate with mobile phones. This μblue Bluetooth radio will fully comply with the specifications and communicate with the Low Energy dual mode components in the mobile phone. μblue will have the market s lowest power consumption and use a button cell battery for power. The Bluetooth SIG expects to complete the specification work on Low Energy in the second half of The Board of Nordic Semiconductor expects this initiative to contribute significantly to the company s revenue growth when the market for this component is established. The company s turnover is affected by general seasonal fluctuations and follows the customers sales cycles. With a growing share of revenue from consumer products, this effect will increase. This interim report has been prepared in accordance with IFRS and Nordic Semiconductor's accounting policies, which are stated in the annual report for Oslo, 30 April 2009 The Board of Directors of Nordic Semiconductor ASA Tore Engebretsen (Chairman of the Board) Annfrid Standal Terje Rogne Kjell Bråthen Anne-Cecilie Fagerlie Jon Helge Nistad Lars Sundell Svenn-Tore Larsen (Chief Executive Officer)

4 Income Statements 1st quarter 1st quarter Amounts in NOK million (unaudited) Year 2008 Orders received Operating revenue Operating revenue Cost of materials Direct project costs Gross profit Other operating expenses Research and development EBITDA Depreciations EBIT Net financial items Profit before tax Taxes Net profit Earnings. pr share Diluted earnings. pr share Balance sheet Amounts in NOK million (unaudited) Intangible assets Property, plant and equipment Non-current assets Inventories Accounts receivables Other short term receivables Cash and cash equivalents Current assets TOTAL ASSETS Shareholders' equity Long-term liabilities Tax payable Other current liabilities TOTAL EQUITY AND LIABILITIES Change in equity Amounts in NOK million (unaudited) Equity as of Net income (loss) Changes, Treasury stock Translation differences Equity as of end of period

5 Statements of cash flows Amounts in NOK million (unaudited) 1st quarter st quarter 2008 Year 2008 Net income (loss) before tax Taxes paid for the period Depreciations Gains from sales of property, plant and equipment Change in inventories, trade receivables/payables and other Other operational related adjustments Net cash provided by (used in) operating activities Capital expenditures Proceeds from sales of property, plant and equipment Capitalized intangible assets Net cash provided by (used in) investing activities Changes, Treasury stock Net cash provided by (used in) financing activities Effekt av valutakursendringer Net change in cash and cash equivalents Net change in cash and cash equivalents from discontinued operations Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Quarterly key figures Amounts in NOK million (unaudited) Q1 09 Q4 08 Q3 08 Q2 08 Q1 08 Q4 07 * Q3 07 * Q2 07 * Orders received Operating revenue Contribution margin Contribution margin ratio (%) Operating income before R&D costs Expensed research and development Operating income (loss) Operating margin (%) Income (loss) before tax Net margin (%) Equity ratio (%) Earnings pr. share (NOK) Diluted earnings pr. share (NOK) Cash flow pr. share (NOK) *Adjusted for the sale of Data Converter assets

6 Notes to the interim report 1 st quarter 2009 Note 1 - General The condensed financial statements for the 1 st quarter of 2009 were approved for publication by the Board of Directors 29 April The Group is listed on the Oslo Stock Exchange and is a joint stock company registered in Norway. Note 2 Confirmation of the financial framework The Group accounts for Nordic Semiconductor ASA and its wholly-owned subsidiary, together called the Group have been prepared in accordance with IAS 34 Interim Financial Statements. The financial statements for the 1 st quarter of 2009 do not include all the information required for the full year financial statements and shall be read in conjunction with the Group annual accounts for Note 3 Important accounting principles The accounting principles for 2008 are described in the Group annual accounts for The group accounts for 2008 were prepared in accordance with International Financial Reporting Standards (IFRS) laid down by the EU, relevant interpretations of this, additional Norwegian disclosure requirements described in the Norwegian GAAP and the Norwegian Securities Trading Act that were used in the preparation of the annual accounts per Note 4 Use of estimates In the financial statements for the first quarter of 2009, evaluations, estimates and assumptions have been applied that may affect the use of accounting principles, book values of assets and liabilities, revenues and expenses. Actual values may differ from these estimates. The major assumptions applied in the financial statements for the first quarter of 2009 and the major sources of uncertainty in the statements are similar to those found in the annual accounts for 2008.