Infineon Concludes Very Profitable 1Q 2023

Infineon Technologies AG reported results for the first quarter of its 2023 fiscal year (period ended Dec 31, 2022). First quarter 2023 revenue was €3.951 billion, segment result €1.107 billion, and segment result margin 28%.

Despite a now assumed exchange rate of US$1.05 to the euro (previously US$1.00), Infineon continues to anticipate revenues of around €15.5 billion (plus or minus €500 million), with an adjusted gross margin of around 45% and a segment result margin of now around 25% (previously around 24%) at the mid-point of the guided revenue range. Investments are still expected to amount to approximately €3 billion.

Taking the planned investments in frontend buildings into account, Infineon continues to expect free cash flow of around €0.8 billion and adjusted free cash flow of around €1.5 billion

“Infineon is staying on course in choppy waters, and the first quarter of our 2023 fiscal year has been very profitable. Substantial parts of our business have proved robust even in a weaker macroeconomic environment,” said Jochen Hanebeck, CEO of Infineon.

“In particular, the energy transition and expansion of electromobility are causing a continuously high need for our solutions in industrial and automotive applications. In contrast, we are seeing significantly weaker demand in areas such as smartphones, PCs and data centers. We are continuing to navigate carefully in these challenging times and remain flexible in our approach to market dynamics. All in all, we are increasing our guidance slightly for the fiscal year, adjusting for currency effects.”
 
In the first quarter of the 2023 fiscal year, group revenue was €3,951 million. Compared with revenue in the prior quarter of €4,143 million, this was a decline of 5%. Revenue fell in the Automotive (ATV), Industrial Power Control (IPC) and Power & Sensor Systems (PSS) segments but grew in the Connected Secure Systems (CSS) segment. The somewhat weaker US dollar compared with the prior quarter had a slightly adverse impact on revenue.

The gross margin rose in the first quarter of the current fiscal year to 47.2%, from 44.4% in the preceding quarter. The adjusted gross margin also improved, from 46.3% in the fourth quarter of the 2022 fiscal year to 49.2% in the current quarter. The segment result increased in the first quarter of the 2023 fiscal year to €1,107 million, from €1,058 million in the prior quarter. The Segment Result Margin improved from 25.5% in the fourth quarter of the 2022 fiscal year to 28.0% in the current quarter. Earnings performance in the first quarter is mainly related to positive pricing and mix effects.