February 13, 2008
Annual General Meeting 2008
- EPCOS increases earnings before interest and tax (EBIT) by 76 percent
- Double-digit sales growth once again
- Q1 EBIT improved by more than 30 percent
Trend toward greater energy efficiency driving growth
Annual General Meeting
- Dividend increased to EUR 0.30
- Authorization to purchase shares
EPCOS maintains its pattern of profitable growth
EPCOS continued its positive business development in fiscal 2007 (October 1, 2006, through September 30, 2007).
The company recorded double-digit sales growth once again and increased EBIT by 76 percent year on year. “After 2006, we gained further momentum in 2007 and strengthened our company in a number of crucial areas,” President and Chief Executive Officer Gerhard Pegam told today’s Annual General Meeting in Munich. “EPCOS is healthier today than at any time since the boom years of 2000 and 2001!”
Sales were up 10 percent to EUR 1.44 billion (previous year: EUR 1.31 billion). EBIT came to plus EUR 83 million (previous year: plus EUR 47 million). Net income tripled to EUR 64 million (previous year: plus EUR 21 million). Earnings per share were EUR 0.98 (previous year: EUR 0.32).
Net cash flow totaled EUR 31 million (previous year: EUR 98 million, of which EUR 68 million came from the sale of the company’s tantalum capacitors business).
Q1 EBIT up by more than 30 percent
The generally good demand experienced in preceding quarters was sustained through Q1 2008 (October 1 through December 31, 2007).
Sequentially, sales rose 10 percent to EUR 367 million. Nearly all industries served contributed to this positive development. Based on IFRS first-quarter EBIT was EUR 28 million, an increase of 30 percent on the same period a year ago. Net income tripled to EUR 19 million.
This fiscal year, EPCOS aims to strengthen its competitive position and tap new business opportunities. The company expects sales to grow by about 5 percent and Group EBIT to improve to about EUR 110 million in 2008.
To hit these targets, EPCOS is focusing heavily on its innovative strength and on sustaining the quality and cost-cutting programs. In 2008, the company will again seek to exploit new business opportunities by means of acquisitions and cooperations. The aim is to strengthen its position in booming markets such as China and India without neglecting EPCOS core business and its presence on its domestic European market. The restructuring of the Film Capacitors division will be another priority.
Trend toward greater energy efficiency – a key driver of growth
EPCOS generates two thirds of its sales with industries that are less sensitive to short-term economic fluctuations and that are thus more stable than consumer electronics, for example. “That is one of the reasons why we look to the future with a certain confidence, despite the economic risks that prevail right now,” explained President and Chief Executive Officer Gerhard Pegam.
The trend toward greater energy efficiency in electrical equipment and systems is constantly growing in importance and is increasingly emerging as a crucial growth driver. More than a quarter of our Group sales are already achieved with products that contribute directly or indirectly to reducing energy consumption and losses in power distribution. Examples include piezo actuators for fuel-saving injection systems in automobile engines, capacitors for wind and solar power generators and components for energy-saving lamps. “This is how EPCOS is helping to protect our environment,” said Pegam.
Annual General Meeting
Dividend increased to EUR 0.30
EPCOS wants its shareholders participate in the company’s positive business development in fiscal 2007 and therefore proposes to the Annual General Meeting that a dividend of EUR 0.30 per share be paid out for fiscal 2007. This proposal constitutes a 50 percent increase in the dividend, which was EUR 0.20 in fiscal 2006.
Based on the dividend for fiscal 2007, this amounts to a total payout of EUR 19.6 million. Remaining net income of EPCOS AG of EUR 78.7 million (out of a total of EUR 98.3 million) would be carried forward to the current fiscal year.
Authorization to purchase shares
A further proposal will request the Annual General Meeting to authorize EPCOS to buy its own shares. Although EPCOS focuses primarily on financing growth, the possibility of buying back shares could in the future be a suitable way to pass on excess liquidity to shareholders. In addition, authorization to repurchase its own shares would give EPCOS the option of using these shares to finance acquisitions or to service warrant-linked and convertible bonds it has issued or guaranteed.
EPCOS AG is a leading manufacturer of electronic components, modules and systems headquartered in Munich. With its broad portfolio EPCOS offers a comprehensive range of products from a single source and focuses on fast-growing and technologically demanding markets, in particular in the areas of information and communication technology, automotive electronics, industrial electronics and consumer electronics. The EPCOS Group has design and manufacturing locations and sales offices in Europe, Asia, and in North and South America.
Electronic components are found in every electrical and electronic product and are indispensable for their flawless operation. Products from EPCOS store electrical energy, select frequencies, and protect against overvoltage and overcurrent.
In fiscal 2007 (October 1, 2006, to September 30, 2007), EPCOS posted sales of EUR 1.44 billion. At the end of the fiscal year, the company employed about 18,300 people worldwide.
Results for the second quarter of fiscal 2008 will be published on May 5, 2008.
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.