Infineon Q3 2024 $IFX (-1.35%)

Financial performance:

• Revenue: Infineon generated revenue of €3.919 billion in the fourth quarter of the 2024 fiscal year, an increase of 6% compared to the previous quarter, but a decrease of 6% year-on-year. For the full 2024 fiscal year, revenue amounted to EUR 14.955 billion, a decrease of 8% compared to the previous year.
• Segment result: The segment result in the fourth quarter of 2024 amounted to EUR 832 million, with a segment result margin of 21.2%. For the financial year as a whole, the segment result amounted to EUR 3.105 billion, with a margin of 20.8%.

Balance sheet overview:

• Total assets: As at September 30, 2024, total assets amounted to 28.639 billion euros.
• Total liabilities: Total liabilities amounted to 11.420 billion euros.
• Equity: Total equity amounted to 17.219 billion euros.

Details of the profit and loss account:

• Profit/loss: Profit from continuing operations in the fourth quarter of 2024 amounted to 384 million euros. However, the total loss for the quarter amounted to EUR 84 million, which is attributable to significant losses from discontinued operations.
• Earnings per share: Basic earnings per share from continuing operations amounted to EUR 0.29.

Cash flow overview:

• Free cash flow: Free cash flow improved significantly in the fourth quarter to 1.145 billion euros, compared to 393 million euros in the previous quarter.
• Adjusted free cash flow: For the full financial year, adjusted free cash flow amounted to 1.690 billion euros.

Key figures and profitability metrics:

• Gross margin: The adjusted gross margin in the fourth quarter of 2024 was 42.2%, constant compared to the previous quarter.
• Return on investment: The return on capital for the financial year 2024 was 8.5%.

Segment information:

• Automotive Division (ATV): Sales in the fourth quarter of 2024 amounted to EUR 2.149 billion, with a segment result margin of 25.6%.
• Connected Secure Systems (CSS): Sales increased to 406 million euros, with a segment result margin of 15.3 %.
• Power & Sensor Systems (PSS): Sales amounted to 861 million euros, with a segment result margin of 12.2%.

Competitive position: Infineon's strategic focus is on growth areas such as artificial intelligence and silicon carbide, with a focus on innovation and targeted investments to strengthen its competitive position.

Outlook and management commentary:

• Outlook for FY 2025: A slight decline in revenue compared to FY 2024 is expected, with an adjusted gross margin of around 40% and a segment result margin in the mid to high teens.
• Outlook for Q1 FY 2025: Sales are forecast at around EUR 3.2 billion, with a segment result margin in the mid-teens.

Risks and opportunities:

• Risks: Ongoing inventory corrections and macroeconomic uncertainties are likely to weigh on short-term performance.
• Opportunities: Growth potential in the areas of AI and silicon carbide as well as strategic partnerships offer significant opportunities.

Positive aspects:

• Strong sales growth of 6% in the fourth quarter compared to the previous quarter.
• Significant improvement in free cash flow in the fourth quarter.
• Leading position in silicon carbide and artificial intelligence.
• Successful cost management and structural improvements.
• High segment result margin in the automotive sector.

Negative aspects:

• 8% decline in total revenue for the 2024 financial year.
• Losses from discontinued operations impact overall profitability.
• Ongoing inventory corrections impair transparency and demand.
• Expected slight decline in sales in the 2025 financial year.
• Return on capital employed below company targets.