2009 Full Year results: Strong H2 secures £3.0m full year operating profit and £3.7m free cash flow

24 March 2010

IQE plc (AIM: IQE, “IQE” or the “Group”), the leading global supplier of advanced wafer products and wafer services to the semiconductor industry, publishes audited results for the year ended 31 December 2009.

Financial highlights

  • Record H2 revenues of £31.2m result in full-year revenues of £52.7m (2008: £60.5m)  
  • Sequential revenue growth of 46% in H2 demonstrates strong recovery after  industry wide inventory adjustments in H1
  • Improved efficiency boosts gross margins to 22% resulting in £11.6m of gross profit (2008: 19%, £11.8m*)
  • High operational gearing and tight cost control delivers second half EBITDA of £6.1m - full year EBITDA £8.1m (2008: £8.4m*)
  • Pre-tax profit £2.1m (2008: loss £1.4m)
  • Basic EPS of 0.47p (2008: loss 0.32p per share)
  • Capital expenditure of £1.4m (2008: £6.6m) - normal maintenance levels following conclusion of  2008 major capital programme
  • Strong trading performance and cash management generated free cash flow* of £3.7m (2008: £0.7m)
  • Net debt reduced to £14.9m (2008: £18.1m)

 * Stated before exceptional costs and cash flows relating to relocation and restructuring undertaken in 2008

Operational highlights

  • Fulfilled goal of qualifying with all major wireless  chip manufacturers
  • NanoGaN acquisition brings valuable IP, accelerates high power LED  and     blue/green laser development
  • Significant new patents in solar and advanced electronics secured

Dr Drew Nelson, IQE Chief Executive, said:
“We made excellent progress in 2009 on all fronts - strategic, operational and financial.  We continue to build on our market leadership, and by continued investment in R&D throughout the downturn.  We now have a product range that addresses almost all of the rapidly growing markets for compound semiconductor materials.
"We demonstrated a high degree of operational and financial resilience through a challenging year thanks to proactive management, and a committed and professional workforce. This has enhanced our customers’ confidence in us and builds on the strong relationships that we enjoy with them.  We believe that this positions us well to continue to grow our market share.
“I am extremely pleased with our progress on developing intellectual property for the solar power and advanced electronics markets.   These advances are keeping us at the forefront of emerging markets, and give me confidence that we will emerge as a clear leader as these markets move from development phase into production.
“We are at a very exciting time in the Group’s history. We continue to make excellent progress in our core wireless business, whilst at the same time are building an IP rich advanced semiconductor ‘power house’ that is uniquely positioned to take advantage of the high growth markets that are rapidly emerging in areas such as solid state lighting (SSL), CPV solar cells and consumer electronics.We are confident that IQE is well positioned to achieve continued growth in sales in 2010.”

Please click here to download the full results in PDF format (220KB)


IQE plc (+44 29 2083 9400) Drew Nelson Phil Rasmussen Chris Meadows
Execution Noble & Company Limited (+44 20 7456 9191) John Llewellyn-Lloyd Sam Reynolds
College Hill (+44 20 7457 2020) Adrian Duffield Carl Franklin


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 six manufacturing facilities located in Cardiff (two) and Milton Keynes in the UK; in Bethlehem, Pennsylvania and Somerset, New Jersey in the USA; and Singapore. The Group also has 11 sales offices located in major economic centres worldwide.