Melexis Q3 2019 results - Third quarter sales of 123.3 million EUR

Intermediate declaration by the Board of Directors
Ieper, Belgium - October 23rd, 2019, 07.00 hrs CET

Sales for the third quarter of 2019 were 123.3 million EUR, a decrease of 16% compared to the same quarter of the previous year and an increase of 3% compared to the previous quarter.
The EUR/USD exchange rate evolution had a positive impact on sales of 2% compared to the same quarter of last year and a positive impact of 1% compared to the previous quarter.
The gross result was 49.3 million EUR or 40.0% of sales, a decrease of 28% compared to the same quarter of last year and a decrease of 1% compared to the previous quarter.
R&D expenses were 16.1% of sales, G&A was at 6.2% of sales and Selling was at 3.0% of sales.
The operating result was 18.2 million EUR or 14.7% of sales, a decrease of 51% compared to the same quarter of last year and a decrease of 1% compared to the previous quarter.
The net result was 15.4 million EUR or 0.38 EUR per share, a decrease of 49% compared to 30.1 million EUR or 0.74 EUR per share in the third quarter of 2018 and a decrease of 1% compared to the previous quarter.

Sales for the first nine months of 2019 were 359.8 million EUR, a decrease of 16% compared to the first nine months of 2018.
The EUR/USD exchange rate evolution had a positive impact of 3% compared to the first nine months of 2018.
The gross result was 145.8 million EUR or 40.5% of sales, a decrease of 26% compared to the same period last year. R&D expenses were 16.4% of sales, G&A was at 6.4% of sales and Selling was at 3.2% of sales.
The operating result was 52.3 million EUR or 14.5% of sales, a decrease of 51% compared to 106.6 million EUR in the same nine months of 2018.
The net result was 44.9 million EUR or 1.11 EUR per share, a decrease of 48% compared to 87.0 million EUR or 2.15 EUR per share in the first nine months of 2018.

Outlook
Melexis expects sales in the fourth quarter of 2019 to be in the range of 123-129 million euro, with a gross profit margin around 40% and an operating margin around 15% at the midpoint of the sales guidance. This results in a full year 2019 sales outlook of 483-489 million euro, a gross profit margin around 40% and an operating margin around 15%.

Business comment - Françoise Chombar, CEO:
“Melexis sales in the third quarter of 2019 came out at the upper end of the guidance. In the context of a continuing downward trend in global car sales and the uncertain economic and geopolitical situation caused by global trade tensions, this is a solid performance. We can now state that the severe inventory corrections we have experienced in the last nine months are clearly ebbing away. As customer order behavior is also improving step by step, we expect a further sequential sales increase in the last quarter of 2019. Continued low utilization of test capacity and a less advantageous product mix compared to the second quarter resulted in a slightly lower gross margin, while operating costs remain well under control. In the third quarter, we continued to see strong growth in our pressure sensor product line, which leverages the trend of electrification in cars. Other outperforming product lines were temperature sensors and optical sensors.
Sales to automotive customers represented 91% of total sales in the third quarter of 2019. The portion of standard product (ASSP) sales represented 65% of total sales in the third quarter of 2019.”

Financial calendar

Dividend pay date: October 24, 2019 (ex coupon on October 22, 2019)
Publication FY 2019 Results: February 5, 2020 (at 7 hrs CET)
Publication Q1 Results 2020: April 29, 2020 (at 7 hrs CET)
Publication Q2 Results 2020: July 29, 2020 (at 7 hrs CET)
Publication Q3 Results 2020: October 28, 2020 (at 7 hrs CET)
Publication FY 2020 Results: February 3, 2021 (at 7 hrs CET)

The company’s results will be discussed in a conference call on Wednesday, October 23rd, 2019 at 17 hrs CET. The conference call will be in English. You have to register for this conference call in advance. You can register by clicking on the following link and filling out the requested information:
http://emea.directeventreg.com/registration/7191107
Conference ID: 7191107.

After registration, you will receive the conference call number, a participant user pin, conference pin and instructions on how to join the conference call. For security purposes all participants must register individually if they wish to join the call. A replay number for this call is available for 7 days after the end of the conference call. The replay number for this call is +44 33 33 00 97 85, access code: 7191107.

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