Q03.2012
Consolidated Statements IFRS as of 09/30/12 (unaudited)
Report Third Quarter 2012 Optical Disc Solar Semiconductor Future
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Business Trends and Situation of the SINGULUS TECHNOLOGIES Group
> Negative result of the first half-year impacts 9-month and full-year results > Q3 positive before extraordinary charges > Balance sheet with still solid structure > Positive earnings forecast for the business year 2013
The development of the three segments Semiconductor, Solar and Optical Disc were mixed in the current business year. In particular, the Semiconductor segment has developed very favorably. In the Solar segment we were able to achieve many goals in the area of CIGS/CIS production machines. Generally, a market recovery in the photovoltaics market did not occur in the year 2012 and in particular for the manufacturers of siliconbased solar cells a difficult market situation is projected by market researchers for 2013 as well. Despite a high level of utilization in the disc production no major investments into the Blu-ray production will be realized in the Optical Disc segment in the current year. This has on overall negative impact on the trends of the business results of the SINGULUS TECHNOLOGIES AG (SINGULUS) for the first nine months of 2012 as well as on the full-year results.
During the first nine months of the current business year SINGULUS recorded sales of € 83.5 million and is thus below the level of the prior-year period in the amount of € 121.8 million. The operating result (EBIT) in the first nine months 2012 amounted to € -10.9 million (before extraordinary charges) compared with € 6.3 million in the first nine months of 2011. Including extraordinary charges the EBIT in the period under review stood at € -54.2 million. In the period under review the EBITDA totaled € -29.9 million (previous year: € 14.7 million). The order intake in the first nine months of the business year 2012 amounted to € 110.6 million (previous year: € 137.0 million). The order backlog amounted to € 53.9 million as of September 30, 2012 (previous year: € 50.8 million).
Sales in the 3rd quarter amounted to € 39.9 million (previous year: € 57.2 million). Including extraordinary charges totaling € 43.3 million the operating result stood at negative € 41.8 million. Accordingly in the quarter under review the result adjusted for extraordinary charges amounted to € 1.5 million. Due to the disappointing development of the Optical Disc division as well as the still difficult situation on the market for equipment for the production of solar cells, SINGULUS had to implement a couple of measures, which had an additional negative impact on the key financial figures. SINGULUS is gradually implementing a structural change from a pure supplier of machines in Optical Disc to a leading provider for vacuum
technology in different segments such as Optical Disc, Solar and Semiconductor. On the one hand, capacities have to be adjusted accordingly. On the other hand, investments in industries of the future and expansions into new work areas are made. Due to the business situation the Executive Board resolved drastic measures for the segments to be restructured. In the Optical Disc segment this mainly affects the foreign subsidiaries and the product segment Mastering. Furthermore, the work area of machines for wet-chemical production steps at the subsidiary SINGULUS STANGL SOLAR GmbH is affected by the decline in the market for siliconbased solar cells. Overall, in the Solar segment structures and capacities in the wet-chemical division as well as capitalized development expenses for traditional coating technology are therefore further adjusted. Accordingly, at the end of the business year 2012 the headcount at the Fürstenfeldbruck site will be reduced by about 40 %.
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The impairment review of all balance sheet items resulted in provisions, write-offs on inventories and on accounts receivable as well as writedowns in the amount of € 43.3 million for the current quarter 2012 (“Extraordinary charges” hereinafter). The majority of these balance sheet adjustments do not result in additional cash outflows. SINGULUS has sufficient liquid funds. The balance sheet continues to remain stable and is still very solid with an equity ratio of approximately 40 %. The described measures will lead to an overall negative result including extraordinary charges in a range from € -54.0 to -56.0 million for 2012. On a favorable note, the course of business in the third quarter only (excluding extraordinary charges) resulted in positive earnings, however.
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Optical Disc – Blu-ray Disc continues to grow at doubledigit rates – SINGULUS unrivaled in Blu-ray Despite the weak sales of production equipment in 2012 we view the principle development for 2013 and the following years as favorably. The market for Blu-ray Discs continues to grow. For the current year a growth rate of 35 % is forecast for the sale of Blu-ray Discs. Additional positive stimuli will be provided by the launch of the Nintendo gaming console with Blu-ray drive as well as a new gaming console by Microsoft, which will also be equipped with a Blu-ray drive. The growth and the entire
> OPTICAL DISC No way without Blu-ray.
life cycle of the Blu-ray Discs will be prolonged significantly with these new applications. The “Full-HD-Revolution” is followed by the “4K Era” (i.e. devices with a high resolution of 3,840 x 2,160 pixels): With the high resolution 4K-images will eclipse the formerly known picture quality. Sony and Philips announced the market launch of the first Blu-ray players able to scale the 1,080 pixel material to a resolution of 3,840 x 2,160 pixels. Many years will pass until the transmission of TV signals in UHD (Ultra High Definition) format will be realized. However, the Blu-ray Disc will already enable this visual experience.
We still have a leading market position as a provider for Blu-ray production machines. There is no other supplier worldwide offering production equipment for 50 gigabyte Blu-ray Discs. Solar – expansion into the next growth stage The solar market is still characterized by global excess capacity in 2012 and is currently in a stage of complete transition. The continuing, controversial political and media discussions make the situation particularly difficult in Germany. Even though the market for production machines for solar cells has not recovered in 2012 and uncertainties still remain for the business year 2013, we are firmly convinced of the potential of solar energy. SINGULUS is following a clear strategy to position itself as a development partner and supplier of production machines at the top for the coming growth in photovoltaics worldwide.
With the new process and production technologies cell manufacturers are enabled to profitably manufacture solar cells at required market prices. Especially during a stage of industry consolidation we succeed in taking relevant positions with new developments. The goals of the new machine concepts and process technologies are the increase in efficiency and the reduction of production costs for thin-film and silicon solar cells. For the manufacturing of PERC (Passivated Emitter and Rear Cell) solar cells SINGULUS has developed a new line for the wet-chemical polishing of the cell rear side with an industrial partner. The first machine was delivered a couple of days ago. In order to achieve 20 % efficiency for PERC cells, an additional dielectric passivation layer on the rear side of the cells is required. The coating machine SINGULAR was further developed for this task. To integrate the existing cell production lines SINGULUS offers an upgrade package under the product name PERCEUS consisting of a LINEA, a SINGULAR XP as well as a laser.
With its numerous new machines SINGULUS increasingly positions itself as a leading provider of production solutions for efficient CIGS thin-film solar cells. In the future SINGULUS will offer all important manufacturing steps for the CIGS production: > Cleaning machines of the VITRUM type > Vacuum cathode sputtering equipment > Vacuum deposition machines > Selenization machines of the CISARIS type > Machines for buffer layer coating of the TENUIS type
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The market consolidation will continue to reduce the number of machine suppliers. With important key orders in the segment of CIGS solar technology from Germany, Korea, India, South Africa and the USA SINGULUS today has taken relevant starting points for projects in the coming years. SINGULUS is therefore at an excellent starting point for growth in the next couple of years.
> SOLAR integrated production steps for tomorrow’s cell manufacturing.
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Semiconductor – growth in 2012 – expansion in the coming years SINGULUS sees its strategy in the Semiconductor segment confirmed and intends to further expand its position as a provider for vacuum coating equipment for the semiconductor sector. In the reporting period for 2012 SINGULUS already booked several TIMARIS coating systems with different configurations as orders, which exceeded an overall volume of € 22.5 million. In total, there are still seven machines in the order backlog.
> semiconductor nano-coating technology for the next generation of wafers.
Based on the TIMARIS platform a new universal vacuum coating machine is introduced to the market under the product name ROTARIS. The ROTARIS machine has been designed especially for the application research in the semiconductor industry and will be presented at the Semicon Japan trade fair in December 2012.
Key financial figures Order intake and order backlog During the first nine months of the business year 2012 the order intake of € 110.6 million (previous year: € 137.0 million) was below the comparable figures one year ago. In the quarter under review the order intake increased to € 23.6 million (previous year: € 22.0 million). The order backlog as per September 30, 2012 amounted to € 53.9 million and was thus slightly above the comparable level as of September 30, 2011 (€ 50.8 million).
Sales Sales of € 39.9 million in the 3rd quarter 2012 were below the previous year’s level (Q3 2011: € 57.2 million). Sales in the first nine months amounted to € 83.5 million, less than the 2011-level (€ 121.8 million). This development is mainly due to lower sales in the segments Optical Disc (€ -23.0 million) and Solar (€ -19.9 million). The Semiconductor segment with sales of € 7.5 million was considerably better than the prior-year level (€ 2.9 million). The regional breakdown of sales during the first nine months was as follows: Europe 30.4 % (previous year: 28.8 %), Asia 26.1 % (previous year: 33.2 %), North and South America 39.8 % (previous year: 36.4 %) as well as Africa and Australia 3.7 % (previous year: 1.6 %).
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The percentage regional breakdown of sales for the 3rd quarter 2012 was as follows: Europe 26.3 % (previous year: 26.5 %), Asia 26.3 % (previous year: 38.5 %), North and South America 42.9 % (previous year: 34.3 %) as well as Africa and Australia 4.5 % (previous year: 0.7 %). Gross margin The gross margin was significantly burdened by the recognized extraordinary charges in the 3rd quarter. Excluding these extraordinary write-offs the gross margin amounted to 28.7 % in the quarter under review, including the one-off charges the gross margin only stood at 16.7 %. The prior-year level came to 33.9 %.
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In the first nine months of the business year 2012 a gross margin in the amount of 21.0 % (previous year: 30.5 %) was achieved. Excluding the booked extraordinary charges the margin stood at 26.7 %. Operating expenses The operating expenses come to € 48.4 million in the 3rd quarter of the business year 2012 (previous year: € 12.3 million). This includes extraordinary charges in the amount of € 38.5 million. Specifically, general and administrative expenditure amounted to € 8.7 million in the year under review (previous year: € 2.2 million). This item was burdened by extraordinary expenses in the amount of
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€ 6.0 million. This is mainly tied to write-offs of development activities for traditional coating technologies in the Solar segment. The expenses for marketing & sales and customer service amounted to € 4.4 million (previous year: € 5.8 million) and € 3.1 million (previous year: € 3.2 million) for general, administrative expenses. The other operating expenses/ income came to € 3.8 million (previous year: € 1.1 million). In the period under review this mainly includes extraordinary expenses for write-offs and accounts receivable in the amount of € 4.3 million. In addition, charges for restructurings and impairments in the amount of € 28.4 million were recognized in the quarter under review. This mainly
concerns the reevaluation of the mastering activities amounting to € 10.4 million. Moreover, extraordinary charges in the connection with the STANGL investment in the amount of € 15.1 million were booked. In connection with the restructuring of additional subsidiaries restructuring charges in the amount of € 2.8 million were incurred. During the first nine months of the year under review the operating expenses totaled € 71.6 million (previous year: € 30.2 million). This includes expenses for research and development at € 15.1 million (previous year: € 7.8 million), sales and marketing and customer service at € 13.2 million (previous year: € 14.6 million), general administrative expenses at € 8.5 million (previous year: € 9.1 million) as well as other operating expenses at € 6.4 million (previous year: income of € 1.3 million).
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Wet chemical polishing of the rear of the cell for PERC solar cells
In addition to the expenses due to write-offs on accounts receivable (€ 4.8 million) the other operating expenses also include expenses relating to the additional payment in connection with the HamaTech shareholder action (€ 1.5 million) and foreign exchange losses (€ 0.6 million). Overall, within the course of the review of the entire balance sheet items, expenses for restructurings and impairments in the amount of € 28.4 million were recognized.
Segment Reporting
Earnings The earnings before interest and taxes (EBIT) before the consideration of extraordinary charges in the first nine months of 2012 were negative at € 10.9 million (previous year: € 6.3 million). Taking into account the extraordinary items a negative EBIT in the amount of € 54.2 million resulted. In the quarter under review the EBIT before one-time charges amounted to € -1.5 million.
Segment ”Optical Disc“ 2012
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Including the extraordinary expenses SINGULUS posted a negative EBIT totaling € 41.8 million in the 3rd quarter (previous year: € 6.5 million). In detail, the break-down of sales and the operating result are split between the segments as follows:
Segment ”Solar“ 2012
2011
Segment ”Semiconductor“ 2012
2011
SINGULUS Group 2012
2011
2011
[EUR m]
[EUR m]
[EUR m]
[EUR m]
[EUR m]
[EUR m]
[EUR m]
[EUR m]
53.6
76.6
22.4
42.3
7.5
7.5
83.5
121.8
Revenue (gross) Sales deduction and direct selling costs
-0.5
-1.1
-0.1
-1.2
0.0
0.0
-0.6
-2.3
Revenue (net)
53.1
75.5
22.3
41.1
7.5
2.9
82.9
119.5 0.0
Restructuring expenses/impairment
-13.3
0.0
-15.1
0.0
0.0
0.0
-28.4
Operating income (EBIT)
-20.7
10.1
-33.5
-2.4
0.0
-1.4
-54.2
6.3
-8.3
-4.6
-15.7
-3.7
-0.3
-0.1
-24.3
-8.4
-12.4
14.7
-17.8
1.3
0.3
-1.3
-29.9
14.7
Amortizationen, depreciation and impairment EBITDA
Segment ”Optical Disc“ 2012 3rd quarter Revenue (gross)
Segment ”Solar“ 2012
2011
Segment ”Semiconductor“ 2012
2011
SINGULUS Group 2012
2011
2011
[EUR m]
[EUR m]
[EUR m]
[EUR m]
[EUR m]
[EUR m]
[EUR m]
[EUR m]
25.8
36.1
10.4
20.9
3.7
0.2
39.9
57.2
Sales deduction and direct selling costs
-0.2
-0.7
-0.1
-1.0
0.0
0.0
-0.3
-1.7
Revenue (net)
25.6
35.4
10.3
19.9
3.7
0.2
39.6
55.5
Restructuring expenses/impairment
-13.3
0.0
-15.1
0.0
0.0
0.0
-28.4
0.0
Operating income (EBIT)
-14.5
6.0
-27.7
0.7
0.4
-0.2
-41.8
6.5
Amortizationen, depreciation and impairment
-5.4
-1.6
-12.8
-1.2
-0.1
0.0
-18.3
-2.8
EBITDA
-9.1
7.6
-14.9
1.9
0.5
-0.2
-23.5
9.3
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Balance Sheet and Liquidity The long-term assets amounted to € 52.5 million and were therefore significantly below previous year’s level (previous year: € 76.7 million). Specifically, capitalized other intangible assets declined by € 8.4 million and capitalized development expenses dropped by € 10.4 million. The decline of these intangible assets is mainly due to the extraordinary write-offs performed in the quarter under review. Furthermore, the long-term accounts receivable dropped by € 5.3 million compared with the prior-year level.
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Property, plant and equipment amounted to € 8.1 million and were therefore slightly below previous year’s level (previous year: € 9.9 million). The capital expenditure in property, plant and equipment amounted to € 0.4 million in the 3rd quarter of 2012 (previous year: € 0.3 million). Most of the spending was used for replacement investments. Current assets increased by € 56.8 million during the period under review. This is mainly due to the issuance of the SINGULUS bond with a total volume of € 60.0 million. Taking into account additional cashrelevant effects cash and cash equivalents rose by € 47.6 million on balance and thus amounted
to € 65.4 million as of September 30, 2012. Furthermore, accounts receivable due within one year rose by € 1.4 million. In addition, inventories increased by € 3.9 million and correspondingly amounted to € 45.7 million as of the end of the period under review. The short-term liabilities rose by € 30.2 million compared with the year-end level of 2011. This increase is mainly due to the formation of provisions for restructuring measures in the amount of € 13.7 million. Furthermore, prepayments received rose by € 0.5 million as well as the liabilities from
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New sputtering system for thinfilm solar cells
production orders by € 9.6 million. In addition, interest liabilities stemming from the issuance of the bond in the amount of € 2.5 million were recognized in the business year. Accounts payable increased by € 1.8 million. The other short-term liabilities increased by € 1.4 million, the other provisions rose by € 0.7 million. The long-term liabilities increased by € 55.1 million, mainly due to the repayment obligation in the amount of € 58.6 million from the issuance of the bond. In contrast, the deferred tax liabilities declined by € 1.8 million as well as the bank liabilities by € 1.9 million in connection with the scheduled repayment of the KfW loan.
Shareholders’ equity The shareholders’ equity in the Group declined by € 52.7 million in the quarter under review and stood at € 85.2 million as of September 30, 2012 (December 31, 2011: € 137.9 million). Equity in the amount of € 83.1 million is attributable to the shareholders of the parent company and € 2.1 million to minorities. This decline is mainly due to the negative result in the period under review. Accordingly, the equity ratio amounts to 39.6 % (December 31, 2011: 75.6 %).
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Cash Flow In the first nine months 2012 the operating cash flow in the Group was negative at € 1.5 million and thus around the previous year’s level (€ -0.2 million). The cash flow from financing showed a contrasting trend in connection with the issuance of the corporate bond. Net of issue expenses the company received € 58.4 million. As a result, the cash flow from financing activities came to € 54.2 million (previous year: € 6.3 million). The cash flow from investing activities came to € -5.3 million (previous year: € -5.7 million). Overall, the liquid funds in the first nine months increased by € 47.6 million in the period under review and amount to € 65.4 million as of September 30, 2012.
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Risk Report In the shareholder action in connection with the merger of the HamaTech AG to the Singulus Technologies AG the Higher Regional Court Munich on July 26, 2012 determined an additional cash payment of € 0.79 per share of the HamaTech AG. In total, 1,840,785 shares of the HamaTech AG, which were exchanged to shares of the Singulus Technologies AG in course of the merger, are entitled to this payment. The shareholder action was performed since after the entry into force of the merger on February 24, 2009 several shareholders of the HamaTech AG filed motions at the Regional Court NurembergFürth for a court review of the appropriateness of the exchange
ratio determined in the merger agreement as of October 31, 2007. The Regional Court Nuremberg-Fürth had rejected the motions per resolution on May 5, 2011. Some of the plaintiffs filed an immediate appeal against this ruling at the Higher Regional Court Munich, which granted the appeal. The decision of the Higher Regional Court Munich is legally binding. The Higher Regional Court Munich based its decision on the reasoning that the exchange ratio has to be determined on the basis of the stock exchange price and not based on the earnings of the companies involved. The Singulus Technologies AG deems this incorrect in the present case and has filed a constitutional appeal against this ruling at the German Federal Constitutional Court.
In this connection the company recognized other liabilities in the amount of € 1.8 million in the 2nd quarter 2012. The expenses were booked as other operating expenses (€ 1.5 million) as well as financing expenses (€ 0.3 million). During the first nine months of the business year 2012 there were no additional changes compared with the risks depicted in the Annual Report for the year 2011. A valuation of the risks within the different business units resulted in extraordinary charges in the amount of € 43.3 million.
Development of costs and prices In the first nine months of the business year the selling prices developed as expected. Material and personnel expenses excluding one-off effects also developed according to our budgets. Research and development At € 6.2 million the expenditures for developments in the first nine months of 2012 were slightly above the prior-year level (previous year: € 5.2 million). The expenditures for development activities came to € 2.4 million (previous year: € 1.5 million) in the quarter under review.
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Employees
The SINGULUS Stock
The number of employees in the SINGULUS Group declined slightly from 465 employees as of September 30, 2011 to 420 employees as of September 30, 2012. 443 employees were employed on average in the group of companies (previous year: 461 employees) during the first nine months of 2012.
In the course of the most recent scheduled review of the stock indices on September 5, 2012 the Deutsche Börse AG decided to remove the SINGULUS TECHNOLOGIES AG from the technology index TecDAX with effect from September 24, 2012. The main reason for Deutsche Börse AG’s decision is the currently too low market capitalization and trading volume of the stock compared with other companies. The stock price of the SINGULUS TECHNOLOGIES AG closed at € 1.46 on September 28, 2012.
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Outlook SINGULUS TECHNOLOGIES solidly financed for the future - good prospects for breakingeven in Optical Disc, Solar and Semiconductor - growth through new business areas
> Future SINGULUS develops coating technology. Our innovative scientists and engineers work on additional new product developments, which enable SINGULUS TECHNOLOGIES to expand into new, attractive market segments.
In the business year 2011 SINGULUS completely repaid its liability owed to banks. Except for a loan from the KfW in the amount of â‚Ź 4.8 million there are currently no more bank liabilities. With the issue of a corporate bond on March 12, 2012 with a volume of â‚Ź 60 million and a term to maturity of five years SINGULUS ensured that the financing of current projects, the growth in the existing divisions as well as the expansion into new work areas rests on a secure and stable foundation. With the proceeds from the issue SINGULUS TECHNOLOGIES is able to finance larger projects in the Solar segment, the expansion of the system partnership with producers of thin-film solar cells, the development of new products in the Solar division and the development of manufacturing equipment for the next generation of Blu-ray Discs. With a considerable amount of the proceeds from the bonds SINGULUS intends
to set-up new business areas in the vacuum coating technology through research and development as well as through acquisitions of companies and company divisions.
> OPTICAL DISC Since the market for Blu-ray Disc continues to grow at double-digit rates in 2012, we expect stable sales and earnings contributions again.
To strengthen SINGULUS’ existing business segments the Executive Board has elaborated a detailed portfolio strategy and is currently reviewing several concrete acquisition opportunities. It goes without saying that the Executive Board is analyzing the potential targets with the required diligence.
> SOLAR In the thin-film technology CIGS/ CIS SINGULUS is excellently positioned. Larger investment projects have already been announced for 2013. If they are realized according to plan, SINGULUS will surely succeed in delivering a significant number of machines.
SINGULUS’ Executive Board sees a good chance for the existing segments Optical Disc, Solar and Semiconductor to generate positive earnings in the next year again.
In a difficult market for crystalline solar cells we see us very well positioned technologically due to the good development efforts in the past years. The upgrade business in the area of crystalline solar cells to the PERC standard promises new demand for this specialized production equipment in 2013.
The trends in the individual segments are projected as follows:
Q u a r t e r ly r e p o r t Q 0 3 . 2 0 12
> Semiconductor The Semiconductor division will make positive earnings contributions this year. The potential of the various application areas for the machines suggests a further uptrend in the coming business years. The Executive Board works on the structural changes of the company together with the entire workforce and is convinced that SINGULUS will generate sufficient internal and external growth to initiate a sustainable growth stage from 2013 onwards. Please put your trust in us for this path.
SINGULUS TECHNOLOGIES AG The Executive Board
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Consolidated Balance Sheet as of September 30, 2012 and December 31, 2011 (IFRS unaudited) Assets
Sept. 30, 2012
Sept. 30, 2011
[EUR m]
[EUR m]
65.4
17.8
Trade receivables
26.8
25.4
Receivables from construction contracts
10.2
9.4
Other receivables and other assets
14.4
11.3
Cash and cash equivalents
51.4
46.1
Raw materials, consumables and supplies
19.4
16.8
Work in process
26.3
25.0
45.7
41.8
Total receivables and other assets
Total inventories Total current assets
162.5
105.7
Trade receivables
3.9
9.2
Loans
0.4
0.0
Property, plant and equipment
8.1
9.9
Capitalized development costs
6.7
17.1
Goodwill
21.7
21.7
Other intangible assets
9.6
18.0
Deferred tax assets Total non-current assets
Total assets
2.1
0.8
52.5
76.7
215.0
182.4
Liabilities
Q u a r t e r ly r e p o r t Q 0 3 . 2 0 12
Sept. 30, 2012
Sept. 30, 2011
[EUR m]
[EUR m]
10.2
8.4
2.5
2.5
3.8
3.3
10.5
0.9
Trade payables
Current bank liabilities
Prepayments
Liabilities from construction contracts
Current financial liabilities from bond issue
2.5
0.0
Other current liabilities
13.9
12.5
Provisions from restructuring measures
13.7
0.0
Tax provisions
0.4
0.4
Other provisions Total current liabilities
3.0
2. 3
60.5
30.3
58.6
0.0
Non-current financial liabilities from bond issue
Non-current bank liabilities
2.3
4.2
Pension provisions
7.7
7.5
Deferred tax liabilities
0.7
2.5
Total non-current liabilities
69.3
14.2
Total liabilities
129.8
44.5
Subscribed capital
48.9
48.9
Capital reserves
77.2
77.2
2.4
1.3
Other reserves Retained earnings Equity attributable to owners of the parent Minority interests Total equity Total equity and liabilities
-45.4
8.2
83.1
135.6
2.1
2.3
85.2
137.9
215.0
182.4
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Consolidated Income Statement as of September 30, 2012 and 2011 (IFRS unaudited) 3rd Quarter 2011
Revenue (gross) Sales deductions and direct selling costs Revenue (net) Cost of sales Gross profit on sales
9 Months 2011
2010
2010
[EUR m]
[in %]
[EUR m]
[in %]
[EUR m]
[in %]
[EUR m]
[in %]
39.9
100.8
57.2
103.1
83.5
100.7
121.8
101.9
-0.3
-0.8
-1.7
-3.1
-0.6
-0.7
-2.3
-1.9
39.6
100.0
55.5
100.0
82.9
100.0
119.5
100.0
-33.0
-83.3
-36.7
-66.1
-65.5
-79.0
-83.0
-69.5 30.5
6.6
16.7
18.8
33.9
17.4
21.0
36.5
Research and development
-8.7
-22.0
-2.2
-4.0
-15.1
-18.2
-7.8
-6.5
Sales and customer service
-4.4
-11.1
-5.8
-10.5
-13.2
-15.9
-14.6
-12.2
General administration
-3.1
-7.8
-3.2
-5.8
-8.5
-10.3
-9.1
-7.6
Other operating expenses/income
-3.8
-9.6
-1.1
-2.0
-6.4
-7.7
1.3
1.1
Impairment and restructuring expenses
-28.4
-71.7
0.0
0.0
-28.4
-34.3
0.0
0.0
Total operating expenses
-48.4
-122.2
-12.3
-22.2
-71.6
-86.4
-30.2
-25.3
-41.8
-105.6
6.5
11.7
-54.2
-65.4
6.3
5.3
0.5
1.3
0.0
0.0
1.0
1.2
1.1
0.9
-1.4
-3.5
0.0
0.0
-3.4
-4.1
-2.5
-2.1
-42.7
-107.8
6.5
11.7
-56.6
-68.3
4.9
4.1
1.2
3.0
-0.1
-0.2
2.8
3.4
-1.2
-1.0
-41.5
-104.8
6.4
11.5
-53.8
-64.9
3.7
3.1
EBIT
Finance income
Finance costs EBT
Tax income Profit or loss for the period
Thereof attributable to: -41.4
6.6
-53.6
4.0
-0.1
-0.2
-0.2
-0.3
Basic earnings per share based on the profit for the period (in EUR) attributable to owners of the parent
(0.85)
0.13
(1.10)
0.09
Diluted earnings per share based on the profit for the period (in EUR) attributable to owners of the parent
(0.85)
0.13
(1.10)
0.09
Basic number of shares, pieces
48,930,314
48,930,314
48,930,314
43,910,333
Diluted number of shares, pieces
48,930,314
48,930,314
48,930,314
43,910,333
Owners of the parent
Minority interests
Q u a r t e r ly r e p o r t Q 0 3 . 2 0 12
Statement of Changes in Consolidated Equity as of September 30, 2012 and 2011 (IFRS unaudited) Equity attributable to owners of the parent Subscribed capital [EUR m] As of January 1, 2011
Capital reserves [EUR m]
Other reserves [EUR m]
Retained earnings [EUR m]
Total [EUR m]
Minority interests [EUR m]
Equity [EUR m]
41.1
59.9
0.4
2.1
103.5
2.7
106.2 -0.5
Other comprehensive incomes
0.0
0.0
-0.4
0.0
-0.4
-0.1
Profit or loss for the period
0.0
0.0
0.0
4.0
4.0
-0.3
3.7
Total comprehensive income
0.0
0.0
-0.4
4.0
3.6
-0.4
3.2
7.9
17.3
0.0
0.0
25.2
0.0
25.2
As of September 30, 2011
Capital increase*
48.9
77.2
0.0
6.1
132.2
2.3
134.5
As of January 1, 2012
137.9
48.9
77.2
1.3
8.2
135.6
2.3
Other comprehensive income
0.0
0.0
1.1
0.0
1.1
0.0
1.1
Profit or loss for the period
0.0
0.0
0.0
-53.6
-53.6
-0.2
-53.8
Total comprehensive income As of September 30, 2012
0.0
0.0
1.1
-53.6
-52.5
-0.2
-52.7
48.9
77.2
2.4
-45.4
83.1
2.1
85.2
*after transaction costs
Consolidated Statement of Comprehensive Income as of September 30, 2011 and 2010 (IFRS unaudited) (IFRS ungepr端ft)
2012
2011
[EUR m]
[EUR m] -53.8
3.7
Exchange differences in the fiscal year
1.1
-0.5
Other comprehensive income
1.1
-0.5
Total comprehensive income
-52.7
3.2
Profit or loss for the period
Thereof attributable to:
Owners of the parent
Minority interests
-52.5
3.6
-0.2
-0.4
19
2 0
Q u a r t e r ly r e p o r t Q 0 3 . 2 0 12
Consolidated Cash Flow Statement as of September 30, 2012 and 2011 (IFRS unaudited) Sept. 30, 2012
Sept. 30, 2011*
[EUR m]
[EUR m]
Cash flows from operating activities
-53.8
Profit or loss for the period
3.7
Adjustment to reconcile profit or loss for the period to net cash flow 24.3
8.4
0.2
-0.1
Other non-current expenses/income
13.9
-1.2
Non-cash interest and costs of bond
2.6
0.0
Deferred taxes
-3.1
-0.4
Trade receivables
-0.6
-6.6
8.8
-6.3
Amortization, depreciation and impairment of non-current assets
Net reversal of/allocation to pension provisions
Construction contracts
-0.8
0.5
-12.3
-3.3
Trade payables
1.8
0.9
Other liabilities
2.7
1.2
Prepayments
0.7
2.3
Loans to customers
-0.4
0.0
0.1
0.5
Other receivables and other assets
Inventories
Tax provisions
Provisions from restructuring measures
Other provisions Net cash from/used in operating activities* * previous year adjusted
13.7 0.7
0.0 52.3 -1.5
0.2
-3.9 -0.2
Q u a r t e r ly r e p o r t Q 0 3 . 2 0 12
Sept. 30, 2012
Sept. 30, 2011
[EUR m]
[EUR m]
Cash flows from investing activities Cash paid for investments in development projects*
-3.3
Cash paid for investments in intangible assets and property, plant and equipment
-1.0
Cash paid for the acquisition of Oerlikon’s Blu-ray business
-1.0
Net cash used in investing activities*
-3.5 -0.9 -5.3
-1.3
-5.3
-5.7 -5.7
Cash flows from financing activities
Cash received from bond issue
58.4
0.0
Cash received from/paid for the raising/redemption of loans
-1.9
-18.5
Cash received from capital increases
Cash and cash equivalents with restrictions on disposal
0.0 -2.3
25.2 54.2
-0.4
6.3
Net cash from/used in financing activities
54.2
6.3
Decrease in cash and cash equivalents
47.4
0.4
0.2
0.0
Cash and cash equivalents at the beginning of the fisc al year
17.8
12.3
Cash and cash equivalents at the end of the period
65.4
12.7
Effect of exchange rate changes
* previous year adjusted
21
2 2
Q u a r t e r ly r e p o r t Q 0 3 . 2 0 12
Notes to the interim results (unaudited) The SINGULUS TECHNOLOGIES Aktiengesellschaft (hereinafter also “SINGULUS” or the “Company”) is an exchange-listed stock corporation domiciled in Germany. The consolidated financial accounts presented for the interim reporting of the SINGULUS TECHNOLOGIES AG and its subsidiaries (the “Group”) for the first three quarters of the business year 2012 were approved for publication by decision of the Executive Board as of November 5, 2012. The consolidated financial accounts were drawn up in Euro (EUR/€). If not stated otherwise, all figures are in millions of Euro (million €). Due to statements in million € differences in rounding may occur. Accounting and valuation principles The preparation of the abbreviated consolidated interim results for the period from January 1 to September 30, 2012 was made pursuant to IAS 34 “Interim Financial Reporting”. The abbreviated consolidated interim results do not include all of the notes and information required for the reporting for the full business year and should be read in conjunction with the consolidated financial accounts as of December 31, 2011. The preparation of the annual results pursuant to IAS 34 requires estimates and assumptions by the management, affecting the level of the reported assets, liabilities, income, expenses as well as contingent liabilities. These assumptions and estimates mainly affect the Groupconsistent determination of useful life expectancy, the write-offs of assets, the valuation of provisions, the
recoverability of receivables, the determination of realizable terminal values in the area of inventories as well as the realizability of future tax relieves. The actual values can differ from the assumptions and estimates made on a case by case basis. Changes are recognized affecting earnings at the time of the knowledge gained. The accounting and valuation methods applied in the consolidated accounts for the interim reporting correspond to those applied for the most recent consolidated financial report as of the end of the business year 2011. For a detailed description of the accounting principles please refer to the notes of the consolidated financial statements of our Annual Report 2011. With the reporting as of December 31, 2011, the payouts for capitalized development projects were no longer reported as components of the cash flow from operating activities, but pursuant to IAS 7.16 separately reported under the cash flows from investing activities. Pursuant to IAS 8.42 the figures for the year 2011 were adjusted accordingly. Scope of consolidation In addition to the SINGULUS TECHNOLOGIES AG the consolidated financial statements include all companies, which are legally or factually controlled by the company. In the interim report as of September 30, 2012, in addition to the SINGULUS TECHNOLOGIES AG in total one domestic and 14 foreign subsidiaries were included. No companies have been added or deleted from the scope of consolidation in the current business year.
Accounts receivable The accounts receivable (including accounts receivable from production orders) as of September 30, 2012 are split as follows:
Accounts receivable short-term Accounts receivable long-term Less write-offs
Sept. 30, 2012
Sept. 30, 2011
EUR m
EUR m
41.7
38.8
4.9
9.2
-5.7
-4.0
40.9
44.0
Intangible assets Capitalized development expenses, goodwill as well as concessions, intellectual property rights and other intangible are included under intangible assets. The capitalized development expenses amounted to € 6.7 million (December 31, 2011: € 17.1 million). In the first nine months of 2012 the investments in developments totaled € 3.3 million (previous year: € 3.5 million). Scheduled write-offs and amortization on capitalized development expenses amounted to € 4.6 million (previous year: € 4.0 million). In the quarter under review development expenses amounted to € 1.4 million (previous year: € 1.4 million), the scheduled amortization for the respective period amounted to € 1.6 million (previous year: € 1.4 million).
Q u a r t e r ly r e p o r t Q 0 3 . 2 0 12
In addition, extraordinary write-offs on capitalized development expenses in the amount of € 9.0 million were recognized in the quarter under review. Thereof an amount of € 3.0 million was incurred in the Optical Disc segment and concern the mastering activities of the company. On amount of € 6.0 million is due to the Solar segment, specifically in particular capitalized development expenses were written down in connection with the traditional coating technologies. During the first nine months of the business year scheduled depreciation on other intangible assets amounted to € 3.1 million (previous year: € 3.2 million). In the quarter under review scheduled depreciation amounted to € 1.0 million (previous year: € 1.1 million). In addition, predominantly in connection with the revaluation of the business activities at the SINGULUS STANGL SOLAR GmbH extraordinary write-offs on the intangible assets customer base (€ 3.6 million) as well as brand (€ 1.6 million) were performed. Property, plant & equipment In the first nine months of the business year 2012 € 0.8 million were invested in property, plant & equipment (previous year: € 0.6 million). During the same period scheduled depreciation amounted to € 1.2 million (previous year: € 1.4 million). In the quarter under review capital expenditure amounted to € 0.4 million (previous year: € 0.3 million), the scheduled amortization for the respective period amounted to € 0.4 million (previous year: € 0.5 million). Furthermore, the extraordinary write-offs in connection with the restructuring of the mastering activities (€ 0.4 million) as well as the joint venture in China (€ 0.3 million) were included.
23
2 4
Q u a r t e r ly r e p o r t Q 0 3 . 2 0 12
Corporate bond SINGULUS successfully placed its first corporate bond in Germany, Austria and Luxembourg as well as through a private placement in bordering countries. The issue volume of € 60.0 million was already achieved on the first subscription day, March 12, 2012, thanks to strong demand. The corporate bond has an annual coupon of 7.75 % and a term to maturity of five years. The bond was in demand by institutional as well as private investors. On March 14, 2012, trading at the Open Market of Deutsche Börse AG in the “Entry Standard for Bonds” segment at the Frankfurt Stock Exchange commenced. The corporate bonds’ identifiers are: DE000A1MASJ4 / A1MASJ. Issue and value date was March 23, 2012. Shareholders’ equity With consent of the Supervisory Board on May 27, 2011 the Executive Board of the SINGULUS TECHNOLOGIES AG decided on May 27, 2011 to increase the nominal capital of the company upon using the Authorized Capital I and III from € 41,050,111 divided into 41,050,111 common bearer shares with a nominal value of € 1.00 each by an amount of up to € 7,880,203 and therefore 7,880,203 shares to up to € 48,930,314 against payment in cash. The new shares were offered to the shareholders of the SINGULUS TECHNOLOGIES AG with a ratio of 16 to 3 in the course of indirect subscription rights with a subscription price of € 3.30 per new share. The subscription period started on June 4, 2011 and ended on June 17, 2011 (including).
The placement of the shares was successfully concluded on June 20, 2011. 7,880,203 shares with profit entitlement from January 1, 2011 were issued. This resulted in a cash inflow of € 25.2 million for the company. This capital increase was entered into the commercial register of the SINGULUS TECHNOLOGIES AG at the Local Court Aschaffenburg on June 22, 2011. Bank loans As of September 30, 2012 bank loans totaled € 4.8 million (December 31, 2011: € 6.7 million). These liabilities concern a loan in the amount of € 10.0 million from the Kreditanstalt für Wiederaufbau (KfW) filed for in January 2010. The cash inflow took place in the 2nd quarter 2010 and is tied to the payment of the remaining purchase price liability to acquire the remaining 49 % of the shares of former Stangl Semiconductor AG. These funds were spent in July 2010. The fair value of the bank loans mainly corresponded to the book values as of September 30, 2012 as well as at the same period one year ago. Financial liabilities accounted for at net book value resulted in a net loss of € 2.9 million in the nine-months period (previous year: € 1.4 million). For the quarter under review the net loss amounted to € 1.3 million (previous year: € 0.2 million). The net losses are exclusively attributable to interest payments.
Contingent liabilities and other financial obligations The contingent liabilities and other financial obligations not included in the consolidated accounts amount to € 41.4 million (December 31, 2011: € 40.3 million) and mainly include rent and leasing obligations (€ 29.9 million), guarantees for prepayments received (€ 9.0 million) as well as guarantees (€ 1.4 million). Management does not have knowledge about facts that could have a materially adverse impact on the business operations, the financial situation or the business results of the company. Geographical breakdown of sales
Geographic information as of Sept. 2012
Germany
Rest of Europe
North and South America
Asia
Africa and Australia
Mio. €
Mio. €
Mio. €
Mio. €
Mio. €
Sales by country of origin
61.0
4.4
10.8
7.3
0.0
Country of destination
12.9
12.5
33.2
21.8
3.1
Germany
Rest of Europe
North and South America
Asia
Africa and Australia
Mio. €
Mio. €
Mio. €
Mio. €
Mio. €
106.2
3.8
7.9
3.9
0.0
21.0
14.1
44.3
40.4
2.0
Geographic information as of Sept. 2012 Sales by country of origin Country of destination
Sales reductions and individual selling expenses The sales reductions include cash discounts granted. The individual selling expenses are mainly composed of expenses for packaging, freight and commissions.
Q u a r t e r ly r e p o r t Q 0 3 . 2 0 12
General administrative expenses The administrative expenses include the expenses for the management, personnel expenses, the finance and accounting departments as well as the corresponding expenses for rent and company cars. Furthermore, they include the ongoing IT expenses, legal and consulting fees, expenses for investor relations activities, the Annual General Meeting and the annual financial statements. Research and development expenses In addition to the research and non-capitalized development expenses, the research and development expenses in the 3rd quarter of 2012 include the scheduled amortization of capitalized development expenses in the amount of € 1.6 million (previous year: € 1.4 million). Also in the quarter under review this item includes extraordinary write-offs in the amount of € 6.0 million. These mainly concern capitalized development expenses for the traditional coating technology of silicon solar cells. In the period of the first nine months of the business year the scheduled depreciation amounted to € 4.6 million in total (previous year: € 4.0 million). Other expenses/income The other expenses predominantly concern allowances for doubtful accounts (€ 4.8 million). Restructuring charges/impairment This mainly concerns the reevaluation of the mastering activities amounting to € 10.4 million. Moreover, extraordinary charges in the connection with the SINGULUS STANGL SOLAR GmbH investment in the amount of € 15.1 million were booked. In connection with the restructuring of additional subsidiaries restructuring charges in the amount of € 2.8 million were incurred.
25
2 6
Q u a r t e r ly r e p o r t Q 0 3 . 2 0 12
Financial income and financing expenses The interest income/ expenses are composed as follows: Sept. 30, 2012
Sept. 30, 2011
EUR m
EUR m
Interest income from long-term customer receivables
0.5
1.0
Interest income from time deposits / sight deposits
0.5
0.1
Financing expenses
-3.4
-2.5
Financing result
-2.4
-1.4
Earnings per share For the calculation of the undiluted earnings per share the earnings attributable to the bearers of the common shares of the parent company are divided by the weighted average number of shares in circulation during the period under review. For the calculation of the diluted earnings per share the earnings attributable to the bearers of the common shares of the parent company (after subtracting interest on the convertible preference shares) are divided by the weighted average number of common shares in circulation during the period under review in addition to the weighted average number of shares resulting from the conversion of all potential common shares with dilution effect into common shares.
Dilution effects were neither recorded in the period under review nor in the same period one year ago. In the period from the balance sheet date until the drawing up of the consolidated financial statements there were no additional transactions of common shares or potential common shares. Litigation In the shareholder action in connection with the merger of the HamaTech AG to the Singulus Technologies AG the Higher Regional Court Munich on July 26, 2012 determined an additional cash payment of â‚Ź 0.79 per share of the HamaTech AG. In total, 1,840,785 shares of the HamaTech AG, which were exchanged to shares of the Singulus Technologies AG in course of the merger, are entitled to this payment. The shareholder action was performed since after the entry into force of the merger on February 24, 2009 several shareholders of the HamaTech AG filed motions at the Regional Court Nuremberg-FĂźrth for a court review of the appropriateness of the exchange ratio determined in the merger agreement as of October 31, 2007. The Regional Court Nuremberg-FĂźrth had rejected the motions per resolution on May 5, 2011. Some of the plaintiffs filed an immediate appeal against this ruling at the Higher Regional Court Munich, which granted the appeal. The decision of the Higher Regional Court Munich is legally binding.
The Higher Regional Court Munich based its decision on the reasoning that the exchange ratio has to be determined on the basis of the stock exchange price and not based on the earnings of the companies involved. The Singulus Technologies AG deems this incorrect in the present case and has filed a constitutional appeal against this ruling at the German Federal Constitutional Court. In this connection the company recognized other liabilities in the amount of € 1.8 million in the 2nd quarter of the current business year. The expenses were booked as other operating expenses (€ 1.5 million) as well as financing expenses (€ 0.3 million). Events after the Balance Sheet Date The consolidated financial statements for the 3rd quarter 2012 were adopted by the Executive Board on November 5, 2012 and forwarded to the Supervisory Board for review. Shareholdings of Board members As of the balance sheet date, the members of the Executive and Supervisory Boards of the SINGULUS TECHNOLOGIES AG held the following number of shares, convertible bonds and stock options: The following members of the Supervisory Board are shareholders of the company: 30.09.2012 shares Dr.-Ing. Wolfhard Leichnitz
24,344
Günter Bachmann
20,000
Total
44,344
Q u a r t e r ly r e p o r t Q 0 3 . 2 0 12
Furthermore, at the end of the quarter under review members of the Executive Board had themselves purchased the following number of shares of the SINGULUS TECHNOLOGIES AG: 30.09.2012 shares Dr.-Ing. Stefan Rinck Markus Ehret Total
9,619 3,000 12,619
Affirmation of the Legal Representatives “We assert to our best knowledge and belief that pursuant to the applicable accounting principles for the interim financial reporting the consolidated financial statements reflect the true situation of the asset, financial and earnings situation of the Group. The consolidated interim status report depicts the course of business including the financial results and the situation of the Group in a way reflecting the true situation and describing the material opportunities and risks of the foreseeable developments of the Group during the remainder of the business year.” Kahl am Main, November 2012 SINGULUS TECHNOLOGIES AG The Executive Board
27
0 2 8 Q u a r t e r ly r e p o r t Q 0 3 . 2 0 12
2010
2011
2012
Revenue (gross)
Euro m
31.6
57.2
39.9
Order intake
Euro m
29.9
22.0
23.6
EBIT
Euro m
-72.9
6.5
-41.8
EBITDA
Euro m
-20.9
9.3
-23.5
Earnings before taxes
Euro m
-74.0
6.5
-42.7
Profit/loss for the period
Euro m
-68.3
6.4
-41.5
Research & development expenditures
Euro m
1.9
1.5
2.4
Consolidated Key Figures 9 Months 2010-2012 2010
2011
2012
Revenue (gross)
Mio. €
81.0
121.8
83.5
Order intake
Mio. €
97.3
137.0
110.6
Order backlog (09/30)
Mio. €
43.7
50.8
53.9
EBIT
Mio. €
-80.9
6.3
-54.2
EBITDA
Mio. €
-20.0
14.7
-29.9
Earnings before taxes
Mio. €
-84.2
4.9
-56.6
Profit/loss for the period
Mio. €
-76.2
3.7
-53.8
Operating cash flow
Mio. €
-12.5
-0.2
-1.5
Shareholders’ equity
Mio. €
105.7
134.5
85.2
Balance sheet total
Mio. €
184.5
194.0
215.0
Research & development expenditures
Mio. €
5.2
5.2
6.2
454
465
420
40,092,241
43,910,333
48,930,314
-1.90
0.09
-1.10
Employees (09/30) Weighted number of shares, basic Earnings per share, basic
€
Corporate Calendar 2012/13 November November 8
Q3/2012 Report
March March 27
Annual Press Conference/ Analyst Conference
May
Q1/2013 Report
May 8
June June 6
Annual Shareholders Meeting
August
Q2/2013 Report
August 13
Future-oriented statements and forecasts This report contains future-oriented statements based on the current expectations, assessments and forecasts of the Executive Board as well as on the currently available information to them. Known as well as unknown risks, uncertainties and impacts could cause the actual results, the financial situation or the development to differ from the statements made in this report. We assume no obligation to update the futureorientedstatementsmade in this report.
SINGULUS TECHNOLOGIES AG Hanauer Landstrasse 103 D-63796 Kahl am Main Phone +49 6188 440-0 Fax +49 6188 440-110 Internet: www.singulus.de
Investor Relations Maren Schuster Tel. +49 6188 440-612 Fax +49 6188 440-110 investor.relations@singulus.de
MetaCom 11/2012
At a glance – Consolidated Key Figures 3rd Quarter 2009-2011