FY2011 results: continued growth in sales and profits

21 March 2012

Continued growth in sales and profits

IQE plc (AIM: IQE, “IQE” or the “Group”), the leading global supplier of advanced wafer products and wafer services to the semiconductor industry, announces its final results for the year ended 31 December 2011.
Financial highlights

  • Revenues up 4% to £75.3m (2010: £72.7m) despite H2 inventory correction
  • Continued improvement in gross margins, up from 22.8% to 24.1%
  • EBITDA up 6% to £14.0m (2010: £13.1m)
  • Pre-tax profit up 9% to £6.9m (2010: £6.3m)
  • Retained profit up 12% to £8.4m (2010: £7.5m)
  • Adjusted EPS of 1.86p (2010: 1.91p); basic EPS of 1.62p (2010: 1.63p)
  • Capital expenditure of £17.4m (2010 £5.6m) reflects capacity expansion to meet anticipated sales growth
  • Cash generated from operations of £10.8m (2010: £10.3m)
  • Net debt of £3.9m (2010: Net funds £7.0m)

Operational highlights

  • Excellent progress on qualification programmes to underpin continued revenue growth across broad customer base
  • Capacity expansion progressing well providing customers with confidence over our ability to satisfy their increasing demand and surge requirements

Dr Drew Nelson, IQE Chief Executive, said:
“Our strong growth momentum was temporarily impacted in the fourth quarter by inventory corrections at two of our major wireless customers. Despite this, I am pleased to report a year on year increase to record revenues and profits. These inventory corrections continued into the first quarter, but as anticipated, customer forecasts now reflect a return to growth as expected for Q2 and onwards.
“New product qualifications have progressed very well, with newly qualified products now ramping into production and other qualifications nearing completion. Furthermore, our capacity expansion programme remains on track, which is providing customers with a high degree of confidence in IQE as a key supplier as they keep their allocation of supplier shares under review.
“Our optoelectronics business has a number of near term opportunities which have progressed well during 2011 and which could result in a number of key products ramping to volume production as early as 2013. Following the year end, we announced a strategic investment in Solar Junction Corporation and an exclusive long-term supply agreement, a move that will accelerate our penetration into the exciting, third generation CPV solar market.
“The Board remains confident that IQE is well positioned for strong growth in 2012 and beyond.”

 Please click here to download the full results in PDF format (780kB)


IQE plc (+44 29 2083 9400) Drew Nelson Phil Rasmussen Chris Meadows
Espirito Santo Investment Bank (+44 20 7456 9191) Richard Crawley James Bromhead

Canaccord Genuity (+44 20 7050 6500) Simon Bridges Cameron Duncan
College Hill (+44 20 7457 2020) Adrian Duffield Kay Larsen


Note to Editors 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 'epi-wafers' 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, WiMAX, base stations, GPS, and satellite communications; optical communications, optical storage (CD, DVD), laser optical mouse, laser printers & photocopiers, thermal imagers, leading-edge medical products, barcode, ultra high brightness LEDs, a variety of advanced silicon based systems and high efficiency concentrator 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 global manufacturing and R&D facilities: Cardiff, Milton Keynes and Bath in the United Kingdom; Bethlehem, Pennsylvania, Somerset, New Jersey and Spokane, Washington in the USA; and Singapore. The Group also has 11 sales offices located in major economic centres worldwide.