IQE plc : Trading Update
Cardiff, UK. 21st January 2014: IQE plc (AIM: IQE; "IQE", "the Group"), the leading global supplier of advanced wafer products and wafer services to the semiconductor industry, provides a trading update for the year ended 31 December 2013.
Trading in H2 2013 is expected to show sequential growth, despite weak guidance for Q4 2013 and Q1 2014 from a number of IQE's wireless customers, and a significantly strengthening sterling/dollar exchange rate.
As a result, revenue for full year 2013 is expected to be at least £126.0m (2012: £88.0m), representing a new record and an increase of over 43% compared with the prior year. Strong sales growth and improved operational efficiencies are expected to deliver a record EBITDA of at least £24.5m (2012: £16.4m). Adjusted fully diluted EPS is therefore expected to be approximately 2p (2012: 1.51p), an increase of over 32% compared with 2012.
The Group's high conversion of operating profit into cash is expected to reduce net debt to below £35.0m at year end (June 2013: £37.7m), even after the payment of approximately £14.0m during 2013 in deferred consideration relating to prior acquisitions. The amount of deferred consideration payable in 2014 is expected to reduce from this level.
Towards the end of 2013, in addition to successfully renewing its existing contractual relationships with key wireless customers, IQE also extended its contractual share of future business. As anticipated, the group continues to diversify its business across non-wireless applications.
In particular, the Group demonstrated:
- strong progress in photonics (VCSELs) through a major contractual agreement with Philips, announced in October 2013;
- continuing qualifications and technical progress on CPV, where a powerful supply chain has been established and is being fully qualified;
- continued growth in infrared products; and
- excellent progress on power and LED materials employing gallium nitride (GaN) on Silicon (Si) technology.
In addition, since year-end IQE's powerful position in GaN on Si has been further endorsed by its inclusion in a significant US energy initiative announced on 15 January 2014 by US President Obama.
The Board remains confident that the Group can continue to deliver increased free cash flow over the coming year and beyond, as the business continues to diversify, and cost synergies from recent acquisitions are realised.
Dr Drew Nelson, CEO and President of IQE plc, said:
"I am very pleased to announce that we expect to report a record level of revenue and earnings for 2013 as a result of IQE's increasingly strong position within the Compound Semiconductor Industry, and our rapidly strengthening product portfolio. As a result of strong cash flows we have also successfully reduced net debt and the deferred consideration owing on prior acquisitions.
"We look forward to further increasing cash flows and earnings during the current year and beyond as we maintain our strong position in wireless and continue to leverage opportunities to exploit our products in other high-growth markets."
CONTACTS:
IQE plc
+44 (0) 29 2083 9400
Drew Nelson
Phil Rasmussen
Chris Meadows
Espirito Santo Investment Bank
+44 (0) 20 7456 9191
John Llewellyn-Lloyd
Canaccord Genuity
+44 (0) 20 7523 8000
Simon Bridges
Cameron Duncan
College Hill
+44 (0) 20 7457 2020
Adrian Duffield
Kay Larsen
NOTE TO EDITORS
ABOUT IQE
www.iqep.com
IQE is the leading global supplier of advanced semiconductor wafers with products that cover a diverse range of applications, supported by an innovative outsourced foundry services portfolio that allows the Group to provide a 'one stop shop' for the wafer needs of the world's leading semiconductor manufacturers.
IQE uses advanced crystal growth technology (epitaxy) to manufacture and supply bespoke semiconductor wafers ('epiwafers') to the major chip manufacturing companies, who then use these wafers to make the chips which form the key components of virtually all high technology systems. IQE is unique in being able to supply wafers using all of the leading crystal growth technology platforms.
IQE's products are found in many leading-edge consumer, communication, computing and industrial applications, including a complete range of wafer products for the wireless industry, such as mobile handsets and wireless infrastructure, Wi-Fi, base stations, GPS, and satellite communications; and optical communications.
The Group also manufactures advanced optoelectronic and photonic components such as semiconductor lasers, vertical cavity surface emitting lasers (VCSELs) and optical sensors for a wide range of applications including optical fibre communications, optical storage (CD, DVD, BluRay), thermal imaging, leading-edge medical products, pico-projection, finger navigation ultra-high brightness LEDs, and high efficiency concentrated photovoltaic (CPV) solar cells.
The manufacturers of these chips are increasingly seeking to outsource wafer production to specialist foundries such as IQE in order to reduce overall wafer costs and accelerate time to market.
IQE also provides bespoke R&D services to deliver customised materials for specific applications and offers specialist technical staff to manufacture to specification either at its own facilities or on the customer's own sites. The Group is also able to leverage its global purchasing volumes to reduce the cost of raw materials. In this way, IQE's outsourced services, provide compelling benefits in terms of flexibility and predictability of cost, thereby significantly reducing operating risk.
IQE operates a number of manufacturing and R&D facilities across Europe, Asia and the USA. The Group also delivers its products and services through regional sales offices located in major economic centres worldwide
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: IQE plc via Globenewswire
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