DGAP-News

Infineon Technologies AG: INFINEON REPORTS STRONG Q2 FY14 SALES AND SEGMENT RESULT - Seite 2

order books are filling up nicely. Thanks to our prior investments, we are
in a favorable position to outgrow the market in this fiscal year", says
Dr. Reinhard Ploss.

REVIEW OF GROUP FINANCIALS FOR THE SECOND QUARTER OF THE 2014 FISCAL YEAR
Second-quarter Group revenue increased 7 percent from EUR984 million to
EUR1,051 million, with all four operating segments contributing to growth.

Segment Result improved by 26 percent from EUR116 million in the preceding
quarter to EUR146 million in the second quarter of the current fiscal year.
The Segment Result Margin increased to 13.9 percent, compared with the
first quarter's margin of 11.8 percent. The improvement in Segment Result
was influenced partly by higher revenue and partly by multiple nonrecurring
effects. Starting in the second quarter of the 2014 fiscal year,
centralized production-related overhead costs are allocated on a more
differentiated basis with reference to front-end and back-end added value
for inventory valuation purposes. This results in a positive one-time
effect on earnings of EUR25 million related to work in progress
inventories. A number of other factors, however, worked in the opposite
direction. Excluding all these effects, Segment Result Margin would have
been approximately 13 percent.

Income from continuing operations rose to EUR114 million in the second
quarter, compared with EUR85 million in the previous quarter.
Second-quarter income from discontinued operations increased from EUR2
million to EUR10 million.

Net income for the second quarter of the 2014 fiscal year improved to
EUR124 million, compared with EUR87 million in the preceding quarter.
Earnings per share (basic and diluted) increased from EUR0.08 to EUR0.11.

Investments - which the Company defines as the sum of purchases of
property, plant and equipment, purchases of intangible assets and
capitalized development costs - increased quarter-on-quarter from EUR129
million to EUR154 million. Depreciation and amortization rose from EUR120
million in the first quarter to EUR126 million in the second.

Free cash flow from continuing operations improved quarter-on-quarter from
EUR30 million to EUR51 million, reflecting the fact that the significantly
higher level of net cash provided by operating activities was only partly
offset by increased cash used in investing activities.

The gross cash position at March 31, 2014 decreased to EUR2,198 million,
mainly as a result of the dividend of EUR129 million paid during the second
quarter. At the end of December 2013, the gross cash position had been