Earnings (continuing operations)
Earnings at the EPCOS Group (EUR million)
| Q3 2005 | | Q2 2006 | Q3 2006 |
| EBIT | + 3.9 | | + 11.7 | + 15.0 |
| Net income | - 4.3 | | + 8.3 | + 13.9 |
| Earnings per share (in eurocents) | - 7 | | + 13 | + 21 |
A further substantial improvement in earnings was recorded in Q3 2006, largely on account of the higher sales volume. In Q3 2006, earnings before interest and tax (EBIT) thus rose to plus EUR 15 million. Net income in the period under review was plus EUR 14 million. Earnings per share were plus 21 eurocents.
Earnings by business segment
EBIT by business segment (EUR million)
| Q3 2005 | | Q2 2006 | Q3 2006 |
| Capacitors and Inductors | + 0.2 | | - 1.8 | - 0.4 |
| Ceramic Components | - 2.2 | | + 1.4 | + 3.0 |
| SAW Components | + 5.9 | | + 12.1 | + 12.4 |
A further gain in sales improved earnings for the Capacitors and Inductors segment in the quarter under review. Relocation of some of the plastic film capacitor production from Brazil and Spain to China and India is now in progress. This move will strengthen the cost position and the competitiveness for these products.
At Ceramic Components, EBIT rose to EUR 3 million. Positive stimulus came from a further improvement in the production yield for piezo actuators, and from a better earnings position in the business with multilayer ceramic products.
In Q3 2006, SAW Components with earnings of approximately EUR 12 million once again made the largest contribution to consolidated EBIT.
Key data for the EPCOS Group (including discontinued operations)
Total Group business (EUR million)
| Q3 2005 | | Q2 2006 | Q3 2006 |
| Net income | - 7.6 | | + 4.2 | + 9.9 |
| Earnings per share (in eurocents) | - 12 | | + 6 | + 15 |
Total net income in the quarter under review was EUR 10 million. For the last time, this figure also includes a loss of EUR 4 million for the tantalum capacitor business, which was transferred to KEMET effective April 13, 2006.
Net cash flow was plus EUR 98 million in Q3 2006. This figure contains a cash inflow of EUR 68 million from the sale of the tantalum capacitor business. Net cash flow for the first nine months of fiscal 2006 thus totals plus EUR 85 million – a very significant improvement on the figure of minus EUR 105 million posted a year ago.
Outlook (continuing operations)
In light of another strong order intake in Q3 2006, EPCOS now expects to post double-digit percentage sales growth for fiscal 2006 as a whole. In Q4, sales and EBIT should remain on a similar level as in Q3 of fiscal 2006.
About EPCOS
EPCOS AG, a manufacturer of passive electronic components headquartered in Munich, is market leader in Europe and number two worldwide. With its very broad portfolio EPCOS offers a comprehensive range of products from a single source. The EPCOS Group has design, manufacturing and marketing facilities in Europe, the Americas and Asia.
Passive electronic components are found in every electrical and electronic product – from automotive and industrial electronics through information and communications to consumer electronics. Components from EPCOS store electrical energy, select frequencies, and protect against overvoltage and overcurrent.
In fiscal 2005 (October 1, 2004, to September 30, 2005), EPCOS posted sales of EUR 1.24 billion. At September 30, 2005, the company employed about 16,100 people worldwide.
N.B. All financial data has been compiled to US GAAP and is not audited except for data at September 30, 2005.
Live transmission of conference call
On August 1, 2006, the Management Board of EPCOS will inform analysts and investors of business performance in the third quarter of fiscal 2006 at a conference call starting at 12 noon, Central European Time, 6 a.m., US Eastern Standard Time. This conference can be followed live at the EPCOS corporate website (www.epcos.com/conferencecall ).
A transcript of the speeches will be available for downloading after the end of the conference call.
Further dates
Results for the fourth quarter of fiscal 2006 will be published at the Annual Press Conference on November 16, 2006.
This document may contain forward-looking statements with respect to EPCOS’ financial condition, results of operations, business, strategy and plans. In particular, statements using the words “expects”, “anticipates” and similar expressions, and statements with regard to management goals and objectives, expected or targeted revenue and expense data, or trends in results of operations or margins are forwardlooking in nature. Such statements are based on a number of assumptions that could ultimately prove inaccurate, and are subject to a number of risk factors, including changes in our customers’ industries, slower growth in significant markets, changes in our relationships with our principal shareholders, the ability to realize cost reductions and operating efficiencies without unduly disrupting business operations, currency fluctuations, unforeseen environmental obligations, and general economic and business conditions. EPCOS does not assume any obligation to update publicly any forward-looking statement, whether as a result of new information, future events or otherwise. Further information on factors which could affect the Company’s financial results is provided in documents filed with the Bundesanstalt für Finanzdienstleistungsaufsicht and the US Securities and Exchange Commission.
