The cooperation between Elmos Semiconductor AG (FSE: ELG) and Fraunhofer Institute for Microelectronic Circuits and Systems (IMS) in Duisburg will end on June 30, 2020 in accordance with the agreed contract period.
Elmos intended to continue the contract under existing conditions. However, the future technological orientation of the IMS and the progression in research priorities offer common interests in limited areas only. Therefore, despite intensive efforts, no continuation of the cooperation on mutually acceptable terms could be agreed upon.
"Elmos regrets the expiration of the cooperation with the IMS in Duisburg. We will deal with the consequences of the expiring contract in a socially responsible manner. In addition, we will support the affected employees in their professional reorientation with various measures," says Dr. Anton Mindl, CEO of Elmos Semiconductor AG. "Thanks to the high efficiency of our production in Dortmund and our long established international partnerships, we will have a stable, future-proof production network even after the cooperation expires", Mindl continues.
Elmos currently employs around 90 permanent employees in Duisburg. About 25 temporary contracts expire at the end of the cooperation period. Elmos Semiconductor AG currently employs about 1,300 people worldwide, 900 of whom work at the headquarters in Dortmund.
The social plan agreed with the works council applies to the employees concerned. The severance payment is calculated by multiplying the gross monthly salary by the years of service and a factor of 1.25, which is significantly higher than the statutory minimum requirement of 0.5. In addition, Elmos offers to the employees concerned support in their professional reorientation, e.g. in the form of external advice through workshops, individual advice and support as well as job fairs. Further measures are also planned for cases of hardship.
The termination of this agreement will result in restructuring expenses in the amount of about 11 million Euro for Elmos. The corresponding provisions will be recognized in the 2019 financial year. The operating EBIT margin, excluding the one-off effects of the sale of the subsidiary SMI as of September 30, 2019 and the above-mentioned provisions, is expected to remain unchanged at 13% to 17% of sales for fiscal year 2019. Apart from the restructuring expenses, the expiration of the cooperation will not have any significant impacts on operating earnings in the future.
The guidance for 2020 will be announced in the course of the analyst conference and the publication of the preliminary figures for 2019, which is planned to take place on February 18, 2020.
Elmos develops, produces and markets semiconductors and sensors, primarily for use in the automotive industry. Our components communicate, measure, regulate and control safety, comfort, powertrain and network functions. For over 30 years, Elmos innovations have been bringing new functions to life and making mobility worldwide safer, more comfortable and more energy efficient.
This release contains forward-looking statements based on assumptions and estimates made by the management of Elmos. Although we assume that the expectations contained in these forward-looking statements are realistic, we cannot guarantee that they will prove to be correct. The assumptions may involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that could cause such differences include, among others, changes in the economic and business environment, fluctuations in exchange rates and interest rates, the introduction of competing products, lack of acceptance of new products and changes in business strategy. Elmos does not plan to update the forward-looking statements, nor does it assume any obligation to do so.
Elmos Semiconductor AG
Janina Rosenbaum, Head of Investor Relations, Tel: +49-231‐7549‐287
Mathias Kukla, Press Relations, Tel: +49-231-7549-199