After a Record 2022 Fiscal Year, Infineon Significantly Increases its Long-Term Financial Targets; Positive Outlook for 2023

• Future target operating model: More than 10 percent revenue growth (previously 9 percent +), 25 percent Segment Result Margin (previously 19 percent), 10 to 15 percent adjusted Free Cash Flow^[1] of revenue, in each case over the cycle
• Expansion of manufacturing: Supervisory board approves further planning for the construction of a new factory for 300-millimeter analog/mixed-signal and power semiconductors for about €5 billion; planned location is Dresden (Germany), subject to adequate public funding
• Q4 FY 2022: Revenue €4.143 billion, Segment Result €1.058 billion, Segment Result Margin 25.5 percent, Free Cash Flow €709 million
• FY 2022: Revenue €14.218 billion, up 29 percent on the prior year; Segment Result €3.378 billion, up 63 percent year on year; Segment Result Margin 23.8 percent (previous year: 18.7 percent); Free Cash Flow €1.648 billion (previous year: €1.574 billion).
• Outlook for Q1 FY 2023: Based on an assumed exchange rate of US$1.00 to the euro, revenue of around €4.0 billion predicted. On this basis, Segment Result Margin forecast to be around 25 percent
• Outlook for FY 2023: Based on an assumed exchange rate of US$1.00 to the euro, revenue of around €15.5 billion (plus or minus €500 million) anticipated for the 2023 fiscal year, with an adjusted gross margin of around 45 percent and a Segment Result Margin of around 24 percent at the mid-point of the guided revenue range. Investments of approximately €3.0 billion planned. Taking the planned expansion in frontend buildings into account, Free Cash Flow is expected to be around €0.8 billion, adjusted Free Cash Flow should come in around €1.5 billion
• Dividend proposal for FY 2022: Increase from €0.27 to €0.32 per share

Infineon Technologies AG is increasing its target operating model and reporting its results for the fourth quarter and for the full fiscal year, both of which ended on 30 September 2022.

“Decarbonization and digitalization are causing structurally increasing demand for semiconductors. Infineon will benefit disproportionately from this development thanks to its strategic positioning. This dynamic has further accelerated, so now is the right time for us to define an even more ambitious target operating model,” says Jochen Hanebeck, Chief Executive Officer of Infineon. “Furthermore, by the planned investment in a new factory we are continuing the consistent execution of our strategy and are broadening the base for our accelerated profitable growth trajectory in a forward-looking way. We are pleased to have political support for an investment at the Dresden site (Germany) and we are counting on adequate funding through the European Chips Act. We concluded the challenging 2022 fiscal year very successfully, with an excellent fourth quarter. The 2023 fiscal year has also started well. In view of ongoing macroeconomic and geopolitical uncertainties, heightened vigilance is required in the coming quarters. We are prepared to act swiftly and flexibly if necessary.”

In its target markets automotive, industrial and IoT applications, as well as renewable energies Infineon sees increasing dynamic and strong structural growth drivers. The company is therefore upgrading its target operating model, which defines financial targets over the cycle. In future, based on an exchange rate of US$1.00 to the euro, the expected average rate of revenue growth will be more than 10 percent, increased from 9 percent + previously. Growth will in particular be driven by electromobility, autonomous driving, renewable energies, data centers and IoT, such growth being accompanied by a significant improvement in profitability: the Segment Result Margin is expected to reach an average level of 25 percent, compared with 19 percent to date. The main factors influencing the rise in earnings will be an increasing proportion of system solutions, a higher-value product/technology mix due to portfolio management, the expansion of cost-effective 300-millimeter production, and operational expenses rising at a lower rate than revenue due to digitalization and economies of scale.

For more information, visit: http://www.infineon.com/