Continued operations:
Change in financial reporting
The sale of EPCOS' Tantalum Capacitors Business Unit to KEMET has the following consequences for EPCOS' financial reporting practice:
Although the sale is not expected to be closed until spring 2006, EPCOS has made its continued operations – i.e. excluding its tantalum capacitor activities – the focus of its reporting effective October 1, 2005. In accordance with US GAAP, the discontinued tantalum activities will be reported separately in the statements of income both for the current fiscal year and for the same period in the previous year.
Also effective October 1, 2005, the Capacitors and Inductors and Ferrites business segments have been combined to form a new segment entitled Capacitors and Inductors.
New orders and sales (continued operations)
New orders were up for the fourth time in a row in Q1 2006 (October 1 – December 31, 2005). The book-to-bill ratio (the ratio of new orders to sales) improved to 1.10 (against 0.96 in the previous quarter and 0.99 in Q1 2005).
Comparison with Q4 2005
New orders rose by 10% to EUR 335 million in Q1, up from EUR 305 million in the previous quarter. Orders from component distributors, manufacturers of consumer electronics equipment and industrial electronics customers all posted double-digit growth. While the order intake from the telecom industry also increased, orders from the automotive electronics industry were slightly below the previous quarter’s level. New orders rose sharply in all key regions. In percentage terms, double-digit growth was realized in Europe without Germany and in the NAFTA region.
Sales have not yet followed the pattern of new orders and stood at EUR 305 million, 4% below the previous quarter’s good level of EUR 318 million. This decline was influenced by factors such as the Christmas holiday season and the end of the fiscal year for many customers. Sales to customers in automotive electronics and industrial electronics and via the component distribution channel were affected most by these influences.
Regional analysis shows an increase in sales in the NAFTA area.
Sales in the Surface Acoustic Wave (SAW) Components business segment fell 3% sequentially from EUR 101 million in the previous quarter to EUR 98 million in Q1 2006. For Ceramic Components, sales dropped by 10% from EUR 108 million to EUR 97 million in the same period. Besides the above-mentioned influences, declining sales in these two segments are related to the especially high proportion of turns business in the preceding quarter, much of which was serviced out of inventories.
At EUR 109 million, sales in the Capacitors and Inductors segment remained on a par with the figure for the previous quarter.
