Nxp Semiconductors N.v. · NASDAQ:NXPI
Nxp Semiconductors — Q3 2023 Earnings Presentation
31 slides from Nxp Semiconductors's earnings presentation, Nov 7, 2023
Slide 1: NXP Investor Presentation Third Quarter 2023
NXP Investor Presentation Third Quarter 2023 November 2023 PUBLIC NXP, THE NXP LOGO AND NXP SECURE CONNECTIONS FOR A SMARTER W ORLD ARE TRADEMARKS OF NXP B.V. ALL OTHER PRODUCT OR SERVICE NAMES ARE THE PROPERTY OF THEIR RESPECTIVE OW NERS. © 2021 NXP B.V.
Slide 2: Forward Looking Statements
F O R WA R D L O O K I N G S TAT E M E N T S This document includes forward-looking statements which include statements regarding NXP’s business strategy, financial condition, results of operations, market data, as well as any other statements which are not historical facts. By their nature, forward
Slide 3: NXP Investment Thesis
NXP Investment Thesis Market leader with Proven financial model with Reliable capital return policy of strong revenue growth resilient profitability robust free cash flow PUBLIC 2
Slide 4: NXP: A Rich History of Innovation
NXP: A Rich History of Innovation High Performance Mixed-Signal Focus Secure Edge Processing Marvell Connectivity $201 Asset Acquired Average $174 Share Price Freescale Merger $122 Non-GAAP $109 36.3% Operating $101 $101 $92 $86 Margin % IPO 32.9% Phillips Semi. $63 26.6% 29.4% 28.7% Leveraged 29.0%
Slide 5: Macrotrends Driving Waves of Semi Growth
Macrotrends Driving Waves of Semi Growth (1) Rise of Secure Edge Smart connected devices Smartphones Smart factories and homes Data-center servers Smart connected cars Laptop, Game Consoles Desktop, Home Audio Mobiles HiFi… Semiconductor TAM ($B) 2000 2005 2010 2015 2020 2025E 2030E 1. Omdia Applica
Slide 6: Semiconductor Industry – a $1 Trillion Opportunity in 2030
Semiconductor Industry – a $1 Trillion Opportunity in 2030 Global Semiconductor market value by vertical, indicative, $billion Growth contribution per vertical, 2021-30, % CAGR, 2021-30, % 7 1,065 60 Wired communication 5 95 Consumer electronics 10 130 Industrial electronics 15 6 7 Automotive electr
Slide 7: NXP's Unrivaled Technology Portfolio for the Secure Edge
NXP’s Unrivaled Technology Portfolio for the Secure Edge SENSE THINK CONNECT ACT Everything Everything Everything Everything Aware Smart Connected Efficient Everything safe and secure Easy to implement scalable system solutions PUBLIC 6
Slide 8: NXP Addresses Major End Markets
NXP Addresses 4 Major End Markets Communications Automotive Industrial & IoT Mobile Infrastructure Safety, Electrification & Edge Processing, Virtualized Secure Capex-driven Wireless Driver Interaction Connectivity & Security Transactions & Access Infrastructure Market System solutions Scalable proc
Slide 9: Accelerating Profitable Growth of 8-12% CAGR
Accelerating Profitable Growth of 8-12% CAGR (1.2,3,4) Communications Automotive Industrial & IoT Mobile Infrastructure 50% of Total 22% of Total 13% of Total 16% of Total +9 to 14% 3–yr. CAGR +9 to 14% 3–yr. CAGR +8 to 10% 3–yr. CAGR +2 to 6% 3–yr. CAGR Leader in sensing, Leader in connected Leader
Slide 10: Our Secular Growth Drivers Expected to Scale Rapidly
Our Secular Growth Drivers Expected to Scale Rapidly (1,2,3,4) 2022 Revenue Revenue by end-market exposure by business type ~$15B Accelerated $6B Growth Drivers ~$11B 20-25% $9.4B 2021-24 CAGR ~$3B 52% $1.6B Automotive High RMS ~$9B Core Businesses ~$8B ~5% $7.8B 2021-24 CAGR 2018 2021 2024E 12% 21%
Slide 11: Accelerating Secular Profitable Revenue Growth
Accelerating Secular Profitable Revenue Growth 1,2,3,4 Automotive Industrial & IoT 9 - 14% CAGR 9 – 14% CAGR ~$7.7B $5.5B ~20% CAGR ~$3.3B $2.4B ~25% CAGR ~6% CAGR ~5% CAGR 2021 2024E 2021 2024E Mobile Comm. Infrastructure 8 - 10% CAGR 2 - 6% CAGR ~$2.0B ~$1.8B $1.8B $1.4B ~70% CAGR ~15% CAGR ~4% CA
Slide 12: NXP End Market Relative Market Share
NXP End Market Relative Market Share (“RMS”) (1,2) ’22 Total NXP Product Revenue ’22 Automotive ’22 Industrial & IoT True Leader Leader ’22 Sales ’22 Sales RMS >1.5x RMS 1.0 – 1.5x $6.9B $2.7B ’22 Sales $13.2B ’22 Mobile ’22 Com. Infra. & Others Focused Contender ’22 Sales ’22 Sales RMS <0.5x $1.6B
Slide 13: Diverse End-Customer Base with High Barriers to Entry
Diverse End-Customer Base with High Barriers to Entry (1) Top 20 End-customers are less than 45% of 2022 Revenue >25,000 Total Customers No 10% Customers Automotive Mobile Comm. Infra. & Other PUBLIC 12 1. Reflects 2022 sales through all channels
Slide 14: Driving Profitable Growth in Excess of Addressable Market
Driving Profitable Growth in Excess of Addressable Market (1,2,3) As Reported Revenue Non-GAAP Gross Profit / Non-GAAP Gross Margin Up 14% 3-yr. CAGR ($B) Up 17% 3-yr. CAGR ($B) 53.5% 51.1% 56.1% 57.9% $8.9 $8.6 $11.1 $13.2 $4.7 $4.4 $6.2 $7.6 2019 2020 2021 2022 2019 2020 2021 2022 Non-GAAP Operati
Slide 15: Annual Revenue by End Market
Annual Revenue by End Market ($B) (1) Automotive Industrial & IoT Up 18% 3-yr. CAGR ($B) Up 19% 3-yr. CAGR ($B) $4.2 $3.8 $5.5 $6.9 $1.6 $1.8 $2.4 $2.7 2019 2020 2021 2022 2019 2020 2021 2022 Mobile Communication Infrastructure & Other Up 11% 3-yr. CAGR ($B) Up 2% 3-yr. CAGR ($B) $1.2 $1.2 $1.4 $1.6
Slide 16: Recent Quarterly Business Trends
Recent Quarterly Business Trends (1,2) As Reported Revenue ($M) Non-GAAP Gross Profit / Non-GAAP Gross Margin 58.0% 58.0% 58.2% 58.4% 58.5% 3,445 3,312 3,121 3,299 3,434 1,999 1,922 1,816 1,926 2,010 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Non-GAAP Operating Profit / Non-GAAP Ope
Slide 17: Quarterly Revenue by End Market
Quarterly Revenue by End Market ($M) (1) Automotive 1% Q-Q Industrial & IoT 5% Y-Y 5% Q-Q (15%) Y-Y $1,804 $1,805 $1,828 $1,866 $1,891 $713 $605 $504 $578 $607 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Mobile Communication Infrastructure & Other (2%) Q-Q 33% Q-Q 8% Y-Y (8%) Y-Y $41
Slide 18: Debt Summary at the End of 3Q23
Debt Summary at the End of 3Q23 (1,2) Sr. Sr. Sr. Sr. Sr. Sr. Sr. Sr. Sr. Sr. Sr. Sr. Sr. Sr. Sr. Revolving Debt Instrument Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Credit Notes Notes Notes N
Slide 19: Working Capital Ratios
Working Capital Ratios (1,2,3) DSO DPO 27 26 31 29 25 69 77 68 63 60 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 DIO Cash Conversion Cycle 99 116 135 137 134 57 65 98 103 99 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 DSO = (91.25 x AR) / Revenue DIO = (91.25 x Invent
Slide 20: Proven, Resilient and Profitable Financial Model
Proven, Resilient and Profitable Financial Model (1.2,3,4) Analyst Day 2018 Actual Performance Financial Metrics Forecast 2018 – 2021A Total NXP revenue growth +5 to 7% 5.6% Non-GAAP gross margin 53 – 57% 56.1% Non-GAAP R & D % 14 – 16% 16.0% Non-GAAP SG & A % 6 – 8% 7.2% Non-GAAP operating profit g
Slide 21: Updated Financial Model
Updated Financial Model (1,2,3) Analyst Day 2021 2021 – 2024 CAGR NXP growth +8 to 12% Non-GAAP gross margin 55 to 58% Non-GAAP R&D ~16% Non-GAAP SG&A ~7% Non-GAAP operating margin 32 to 36% Non-GAAP cash taxes ‘22:~15%; ’23; ~18%; ’24; ~18% Non-controlling interest $35M to $45M Net capex 6 to 8% St
Slide 22: Guidance for the Fourth Quarter of 2023
Guidance for the Fourth Quarter of 2023 (1,2,3,4,5) GAAP Reconciliation Non-GAAP Low Mid High Low Mid High Total Revenue 3,300 3,400 3,500 3,300 3,400 3,500 Q-Q -4% -1% 2% -4% -1% 2% Y-Y 0% 3% 6% 0% 3% 6% Gross Profit 1,866 1,941 2,017 (48) 1,914 1,989 2,065 Gross Margin 56.5% 57.1% 57.6% 58.0% 58.5
Slide 23: Annual Financial Reconciliation (GAAP to non-GAAP)
Annual Financial Reconciliation (GAAP to non-GAAP) (1) ($ in millions, unless otherwise stated) 2019 2020 2021 2022 Total Revenue 8,877 8,612 11,063 13,205 GAAP Gross Profit 4,618 4,235 6,067 7,517 Gross profit adjustments (131) (165) (138) (126) Non - GAAP Gross Profit 4,749 4,400 6,205 7,643 GAAP
Slide 24: Annual Cash Flow Overview
Annual Cash Flow Overview ($M) (1) ($ in millions, unless otherwise stated) 2019 2020 2021 2022 Net cash provided by (used for) operating activities 2,373 2,482 3,077 3,895 Net cash provided by (used for) investing activities (2,284) (418) (934) (1,249) Net cash provided by (used for) financing acti
Slide 25: Annual Adjusted EBITDA
Annual Adjusted EBITDA ($M) (1) ($ in millions, unless otherwise stated) 2019 2020 2021 2022 GAAP Net income (loss) 272 80 1,906 2,833 Reconciling items to EBITDA (Non-GAAP) Financial (income) expense 350 417 403 434 (Benefit) provision for income taxes 20 (83) 272 529 Depreciation 518 547 551 605 A
Slide 26: Quarterly Financial Reconciliation (GAAP to non-GAAP)
Quarterly Financial Reconciliation (GAAP to non-GAAP) (1) Q3 Q4 Q1 Q2 Q3 ($ in millions, unless otherwise stated) 2022 2022 2023 2023 2023 Total Revenue 3,445 3,312 3,121 3,299 3,434 GAAP Gross Profit 1,967 1,891 1,770 1,881 1,965 Gross profit adjustments (32) (31) (46) (45) (45) Non - GAAP Gross Pr
Slide 27: Quarterly Cash Flow Overview
Quarterly Cash Flow Overview ($M) (1) Q3 Q4 Q1 Q2 Q3 ($ in millions, unless otherwise stated) 2022 2022 2023 2023 2023 Net cash provided by (used for) operating activities 1,144 1,076 632 756 988 Net cash provided by (used for) investing activities (360) (272) (351) (255) (273) Net cash provided by
Slide 28: Quarterly Adjusted EBITDA
Quarterly Adjusted EBITDA ($M) (1,2) Q3 Q4 Q1 Q2 Q3 ($ in millions, unless otherwise stated) 2022 2022 2023 2023 2023 Net income (loss) 750 734 623 704 792 Reconciling items to adjusted net income Financial (income) expense 98 103 82 74 75 (Benefit) provision for income taxes 149 137 118 158 123 Dep
Slide 29: Notable Public Press Announcements
Notable Public Press Announcements • NXP Honored with Prestigious Automotive Awards • TSMC, Bosch, Infineon, and NXP Establish Joint Venture to Bring Advanced Semiconductor Manufacturing to Europe • Leading Semiconductor Industry Players Join Forces to Accelerate RISC-V PUBLIC 28
Slide 30: NXP Investment Thesis
NXP Investment Thesis Market leader with Proven financial model with Reliable capital return policy of strong revenue growth resilient profitability robust free cash flow PUBLIC 29
Slide 31: Secure Connections for a Smarter World
SECURE CONNECTIONS FOR A SMARTER WORLD