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year 2000 was a record-setting period for STMicroelectronics
in which we posted strong operating results across all major
applications, product groups and geographies. This excellent
performance was characterized by the highest annual revenues,
gross profit, operating profit and net earnings in our history.
Importantly, ST is now at a new level in terms of market position
and recognition, giving us a broader platform from which to
compete successfully in our strategically targeted applications.
To put this in perspective, ST's revenues increased 54.5% in
2000 to over $7.8 billion, a growth rate that significantly
outpaced that of the semiconductor industry, which gained approximately
37% on a year-over-year basis.
Profitability growth was even greater, further evidence of the
operating leverage that ST has enjoyed during the last several
years. Gross profit reached a record $3.6 billion, an increase
of 79.7% over 1999 levels, and gross margin was 46% for the
year, significantly above the 39.6% reported for 1999. The substantial
progress made at the gross margin level in 2000 illustrated
two important strengths: our ability to enrich our portfolio
with new and more value-added applications; and the efficiency
of our worldwide manufacturing machine which continues to be
a very strong competitive advantage for the Company. |
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Operating
profit grew by 165.5% to almost $1.8 billion, and represented
22.8% of net revenues. This was achieved after absorbing record
Research and Development expenditures of over $1 billion, or
13.1% of net revenues.
Net earnings for the year 2000 reached over $1.4 billion, up
163% from 1999 levels and equating to earnings per diluted share
of $1.58, a 155% year-over-year increase. Return on equity was
a record 27.2%, significantly above the average ROE of 19.5%
that was achieved in the years since the Company became public.
In 2000, we took advantage of strong market conditions to make
important investments to fuel the Company's future growth. In
addition to the ongoing research and development spending focused
on developing new technologies, ST invested a record $3.3 billion
in 2000 to expand and modernize our global manufacturing machine
and upgrade our IT systems and infrastructure. Taken as a percentage
of sales, ST's 2000 capital expenditures were probably the highest
in the semiconductor industry. Additionally, we completed acquisitions
last year for a total consideration of $240 million, adding
to the Company's already extensive intellectual property portfolio.
Thus, ST entered 2001 with significant investments and start-up
costs behind it, as well as a strong balance sheet to support
continued market share growth. We also bring an exceptional
level of strategic customer alliances which accounted for 43.5%
of ST's 2000 net revenues and an excellent product mix, illustrated
by differentiated product revenues of $4.95 billion in 2000,
or 63.3% of the Company's total net revenues for the year. |
