At this year’s Annual General Meeting of Infineon Technologies, CEO Dr. Reinhard Ploss presented the shareholders with a result that exceeded expectations. He also took the opportunity to call for policy makers to address demands focusing on Germany and Europe as industrial centers.
Infineon plans to invest Euro 650 million during the course of the current fiscal year, a sum that represents 15 percent of the expected revenue. The majority of these investments will be in Germany, owing to its favorable investment environment. “However, we should not be too complacent. Our country needs to do more if we wish to continue to be successful and maintain our leading position,” Ploss added. The EU initiative ECSEL was the right way to address the Asian challenge, in his opinion. Nonetheless, it was not enough to support only small and medium-sized companies. “If global industrial standards are to continue to come from Europe, we need to think on a larger scale and cooperate on a European level. It is only then that we can achieve the critical mass with which we not only serve markets but can define them as well,” Ploss said. He pointed out that this had, for instance, worked in the past with the mobile radio standard GSM.
The cost of energy
Besides coordinated industrial policy, the CEO also requested Germany policy makers not to burden the nation’s industry excessively with energy costs. He pointed out that the energy turnaround had resulted in an uneven distribution of costs that was leading to unfair competition. “While some industries are exempt from the apportionment of costs resulting from the German Renewable Energy Act (EEG), High-Tech companies have had to shoulder an additional burden. But it is these companies that form the backbone of a sustainable, future-oriented economy,” Ploss continued. It was the healthy industrial base that gave the German and European economy the strength to confront the global competition and overcome the crises of the past. That is why the CEO expressly welcomed the initiative of the EU Commission to reindustrialize Europe. He saw it as a step in the right direction.
The semiconductor manufacturer generated revenue of Euro 3.84 billion and a segment result of Euro 377 million in the fiscal year 2013 that ended on September 30, 2013. The Segment Result Margin was 9.8 percent. Ploss regards the lower figures in the year-on-year comparison to be successful because even during the lowest demand period the company still remained profitable thanks to good cycle management. He added, “It certainly paid off that, despite all our cost-cutting measures, we still maintained our ability to react to new demand requirements at all times.”
This enabled production to be ramped up quickly in the second half of fiscal year 2013 when the markets recovered. The shareholders are also to profit from this success. The Supervisory Board and Board have thus proposed a dividend of Euro 0.12 per dividend-entitled share. The CEO is convinced that Infineon’s business model has a long-term future. The profitability of the company is made possible even in economically difficult times thanks to its high-margin portfolio, which is less susceptible to fluctuations in the markets.