Report on fiscal 2008
- Sales up: plus 3 percent
- Improvement in EBIT: plus 22 percent
- Combination of EPCOS with TDK’s electronic components business successfully driven forward
Report on first half of fiscal 2009
- Economic crisis a heavy burden: Sales down 25 percent year on year;
net loss of EUR 81 million - Continual adjustment of resource planning and input factors
- Combination with TDK’s components business proceeding according to plan
Agenda/ excerpts
- Dividend of EUR 0.30
- Domination agreement between TDK and EPCOS
- Transfer of minority interest shares in EPCOS to TDK
Fiscal 2008
Successful overall performance
In fiscal 2008 (October 1, 2007, through September 30, 2008), EPCOS maintained the pattern of growth experienced since 2006. Sales increased and earnings improved again.
“Although an increasingly adverse economic climate made it more and more difficult for us to hit our sales and earnings targets, we still reached the goals we had set ourselves in 2008,” President and Chief Executive Officer Gerhard Pegam told today’s Annual General Meeting in Munich. “We were also able to successfully drive forward the combination of EPCOS with TDK’s electronic components business.”
Sales were up 3 percent to about EUR 1.48 billion (previous year: EUR 1.44 billion). EBIT rose 22 percent to plus EUR 105 million (previous year: plus EUR 86 million). The EBIT margin improved by one percentage point to 7 percent. Net income increased by 25 percent to EUR 64 million (previous year: EUR 51 million). Earnings per share were up 27 percent to EUR 0.99 (previous year: EUR 0.78).
Net cash flow improved by 39 percent to plus EUR 43 million (previous year: EUR 31 million).
First half of fiscal 2009
Economic crisis a heavy burden
EPCOS felt the full force of the global economic crisis in the first half of fiscal 2009 (October 1, 2008, through March 31, 2009).
All the major industries served by EPCOS suffered from weak demand and as a result significantly cut back production. Worst affected was the automotive electronics industry, which accounted for about 27 percent of EPCOS’ total sales in 2008. Customers in the information and communication technology, consumer electronics and – after a short time-lag – industrial electronics industries likewise scaled back production, substantially in some cases.
Customers’ sales problems triggered a huge decline in demand for electronic components. As a result, EPCOS’ sales dropped 25 percent to EUR 546 million in the period under review (previous year: EUR 729 million). We also posted a net income of minus EUR 81 million (previous year: net income of plus EUR 36 million).
Continual adjustment of resource planning and input factors
In all the industries we serve there is still no sign of an end to the recession, which is affecting EPCOS primarily in Germany – and here especially in the automotive and industrial electronics industries. At the present time, it is therefore not possible to forecast when demand will return to normal levels. It is assumed that, by now, many customers have reduced their inventories of components to a minimum. This, at least, could lead to a moderate improvement in EPCOS’ sales in the second half of fiscal 2009.
EPCOS has therefore prepared itself for an extremely difficult year. EPCOS is constantly reviewing our resource planning and adjusting input factors to changing conditions whenever and wherever this is possible. One change EPCOS has made is that, from a present perspective, it will invest only about EUR 110 million in property, plant and equipment in fiscal 2009 – considerably less than in the previous year (EUR 155 million). About EUR 75 million has been set aside for research and development, slightly less than in the previous year (EUR 81 million). In the first half of fiscal 2009, it was also unavoidable to reduce the number of people who work for EPCOS worldwide by about 6,100 to 22,200. Temporary staff and subcontractors comprised about 60 percent of this reduction, while EPCOS’ own employees accounted for the remaining 40 percent.
Combination with TDK’s components business proceeding according to plan
TDK and EPCOS are on schedule and making good progress as they move toward a joint future within the framework of a new company yet to be founded. Working groups comprising representatives of both companies are being guided by a steering committee with equal representation. These working groups are driving the integration process forward and have already achieved positive results.
Going forward, the time frame remains unchanged. Not least in view of the difficult economic climate, both companies are doing everything in their power to maintain the pace of the combination effort. Everyone involved remains convinced that TDK’s Annual General Meeting in June 2009 will approve the carve-out of the relevant components business from the TDK Group. The founding of the new company, which will then also hold TDK’s stake in EPCOS, is to take place on October 1, 2009.
The combination of EPCOS with TDK’s electronic components business will create a global leading manufacturer of electronic components, modules and systems with a strong competitive position in all key markets. The outlook for the new company is very promising indeed as the components business activities of TDK and EPCOS complement each other very well, both in terms of technologies and products and with regard to sales market and customer coverage. EPCOS thus has every chance of enlarging the foundation for our future growth and tapping new business opportunities together.
