Infineon Technologies Ag · XETR:IFX
Infineon Technologies — Q3 FY2017 Earnings Presentation
54 slides from Infineon Technologies's earnings presentation, Sep 6, 2017
Slide 1: Third Quarter FY 2017 Quarterly Update
Third Quarter FY 2017 Quarterly Update Infineon Technologies AG Investor Relations
Slide 2: Table of Contents
Table of Contents 1 Infineon at a Glance 2 Quarterly Highlights 3 Growth Drivers 4 Selected financial figures Please regard the “Notes” and “Glossary” at the end of the presentation. Disclaimer: This presentation contains forward-looking statements about the business, financial condition and earning
Slide 3: Infineon at a glance
Infineon at a glance Business Segments Power represents ~60% of revenue Industrial Power [EUR m] Automotive Control (IPC) 766 18% 557 (ATV) Power Manage- 321 30% 185 42% ment & Multi- market (PMM) ATV IPC PMM CCS 10% Chip Card & Power Non-Power* revenue in Q3 FY17: €1,831m incl. OOS and C&E of €2m S
Slide 4: Our strategy is targeted at value creation through sustainable organic growth
Our strategy is targeted at value creation through sustainable organic growth Focus Technology leadership System understanding Auto Power RF and sensors Security System leader #1; system and Broad RF and sensor Leader in in automotive technology leader technology portfolio security solutions Average
Slide 5: Infineon increased relative market share in power and outperformed chip card market
Infineon increased relative market share in power and outperformed chip card market Automotive Power discretes microcontroller-based semiconductors and modules Smart Card ICs total market in 2016: $30.2bn total market in 2016: $15.9bn total market in 2016: $2.79bn NXP 14.0% Infineon 18.5% Infineon 2
Slide 6: Tight customer relationships are based on system know-how and app understanding
Tight customer relationships are based on system know-how and app understanding ATV IPC PMM CCS EMS partners Distribution partners 2017-09-06 Copyright © Infineon Technologies AG 2017. All rights reserved. 6
Slide 7: Infineon's organic revenue development clearly outperformed total semi market
Infineon‘s organic revenue development clearly outperformed total semi market [EUR m] organic CAGR(99-16): ~+9% 7500 CAGR(99-16): +5.1% 6000 4500 6,059 (incl. IRF**) 300,000 5,100 (excl. IRF) 3000 126,895 1,200 200,000 296,383 295,996 1500 2,916 1,681 2,045 1,821 1,995 2,289 2,366 2,701 2,906 2,128
Slide 8: Organic RoCE as the key value metric typically amounts to ~2x WACC
Organic RoCE as the key value metric typically amounts to ~2x WACC 20% 10% 0% FY14 FY15 FY16 Q1 FY17 Q2 Q3 Q4 RoCE (excluding PPA and Deferred Tax Effects) RoCE (reported) 2017-09-06 Copyright © Infineon Technologies AG 2017. All rights reserved. 8
Slide 9: Our promise to investors: Continued value creation through growth
Our promise to investors: Continued value creation through growth Earnings-per-share (EPS) development [EUR cent] +26% 30 + 38% 20 24 22 19 20 21 21 EPS basic 17 18 16 10 14 EPS adjusted 0 Q3 FY16 Q4 Q1 FY17 Q2 Q3 Total cash return to shareholders [EUR m] 1,526 › Policy of sustainable 308 248 divide
Slide 10: Outlook for Q4 FY17 and FY17
Outlook for Q4 FY17 and FY17 Outlook FY17* Outlook Q4 FY17* (compared to FY16) Increase of Revenue ~€1,830m 8% to 11% Segment At the mid-point of the Result ~18% revenue guidance: ~17% Margin Investments in FY17 About €1,050m** About €815m*** D&A in FY17 (prev.: €830m) * Based on a new assumed avera
Slide 11: Table of Contents
Table of Contents 1 Infineon at a Glance 2 Quarterly Highlights 3 Growth Drivers 4 Selected financial figures 2017-09-06 Copyright © Infineon Technologies AG 2017. All rights reserved. 11
Slide 12: Q3 FY17 Group and Division Performance
Q3 FY17 Group and Division Performance Revenue: Segment Result: Segment Result Margin: IFX €1,831m (+12% y-y) €338m (+33% y-y) 18.5% ATV* IPC* PMM* CCS* [EUR m] [EUR m] [EUR m] [EUR m] 783 766 +10% 677 691 705 +15% 557 +7% 507 533 497 520 +13% 321 280 279 264 293 17% 19% 16% 18% 23% 14% 16% 16% 17%
Slide 13: Most recent design-win successes confirms Infineon's strong market position in xEV
Most recent design-win successes confirms Infineon‘s strong market position in xEV xEV design-win volume › Design-win momentum for xEV is accelerating [based on EUR] › In Q1-Q3 FY17, design-wins in xEV almost doubled compared with total FY16 › In the last three years, cumulated xEV design- wins reac
Slide 14: SiC shows high growth rate but silicon remains the bread-and-butter business
SiC shows high growth rate but silicon remains the bread-and-butter business › In the next couple of years, Si-based IGBTs and modules will remain the mainstream technology for all applications including xEV Total market development xEV market development [USD bn] 5.9% 9.1% 19.2% SiC share › In the
Slide 15: In May 2017, first SiC power module for electro-mobility demonstrated at PCIM show
In May 2017, first SiC power module for electro-mobility demonstrated at PCIM show Infineon demonstrated SiC power module for automotive applications › 3-phase half-bridge module › Power density doubled compared to IGBT › HybridPACK™ Drive compatible › Target applications: › Main inverter (300 kW) ›
Slide 16: Ultra high-power charging stations will use Infineon CoolSiC MOSFET technology
Ultra high-power charging stations will use Infineon CoolSiC™ MOSFET technology First OEM has chosen Infineon CoolSiC™ MOSFET technology for ultra high-power charging stations to shrink size and weight driver IC The project › A consortium of German OEMs have signed MoU to create highest-powered char
Slide 17: Infineon leads the transition of the photovoltaic inverter market to SiC
Infineon leads the transition of the photovoltaic inverter market to SiC 2016 market share KACO new energy SMA by revenue (1) SMA (2) Huawei (3) SolarEdge (4) Sungrow (5) TMEIC Courtesy: KACO new energy (6) ABB › KACO new energy selected › SMA and Infineon are closely the Infineon CoolSiC™ collabora
Slide 18: Table of Contents
Table of Contents 1 Infineon at a Glance 2 Quarterly Highlights 3 Growth Drivers 4 Selected financial figures 2017-09-06 Copyright © Infineon Technologies AG 2017. All rights reserved. 18
Slide 19: Reference to web presentations
Reference to web presentations 29 Jun 2017: PMM Division Call by Andreas Urschitz Division President Power Management & Multimarket www.infineon.com/pmm-call 11 May 2017: Deutsche Bank AutoTech Conference by Dr. Jürgen Rebel, CVP Investor Relations www.infineon.com/db-autotech 16 Mar 2017: Bernstein
Slide 20: Infineon benefits from industrial and auto, the by far fastest growing segments
Infineon benefits from industrial and auto, the by far fastest growing segments CAGR 2016 – 2021 by Semiconductor Industry Segment Automotive 7.5% $32bn* Industrial 7.0% $44bn* Data Processing 6.4% $112bn* Consumer 5.8% $36bn* Total Semi Market 5.7% $352bn* Communications 4.1% $129bn* Chip Card ICs*
Slide 21: Infineon is system leader in automotive; making cars clean, safe and smart
Infineon is system leader in automotive; making cars clean, safe and smart #2 with market share gains in power and sensors: › #1 in power semiconductors* › #2 in sensors* › #4 in microcontrollers* (#1 in powertrain**) Infineon is ideally Most balanced portfolio with sensors, micro- positioned to con
Slide 22: Infineon's position in the automotive semiconductor universe
Infineon's position in the automotive semiconductor universe Automotive semiconductors 2016 total market size: $30.2bn NXP* 14.0% Market share trend Infineon 10.7% +0.3%-pt – Infineon benefits disproportionately Renesas 9.8% from the two mega trends Texas Instr. 7.8% – clean cars STMicro 7.4% – ADAS
Slide 23: Key market trends significantly drive increasing semiconductor content per car
Key market trends significantly drive increasing semiconductor content per car ADAS/AD Clean cars Connectivity/security › ADAS and AD are › To reach CO2 emission › Advanced connectivity critical enabler to goals, the automotive is driven by making reduce the number of industry has to focus the car p
Slide 24: ADAS/AD semi growth driven by radar and camera sensor modules over the next 5 years
ADAS/AD semi growth driven by radar and camera sensor modules over the next 5 years Average semiconductor content per car by level of automation* Level 2 (today) Level 3 (~2025) Level 4/5 (2030+) 55$ 680$ $30 $400 240$ $50 8% $140 $0 25$ 165$ $180 $60 $0 $0 $100 195$ $40 modules modules modules Actu
Slide 25: Infineon's product portfolio fosters revenue growth in ADAS/AD for the next decade
Infineon's product portfolio fosters revenue growth in ADAS/AD for the next decade Today 2020 2025 Driver $ $ $ $ $ Monitoring Front $ $ $ $ $ Rear/surround $ SiGe 77 GHz $ $ $ $ $ $ $ $ SiGe 24 GHz $ $ $ $ $ $ $ $ RF CMOS $ $ $ Sensor fusion $ $ $ $ Others Lidar $ $ $ $ $ Actuators $ $ Sense Comput
Slide 26: All types of xEV will significantly increase power semiconductor content per car
All types of xEV will significantly increase power semiconductor content per car Average xEV semiconductor content by degree of electrification Mild hybrid / 48 V PHEV / HEV EV In contrast to micro hybrid systems, Adder for DC-DC conversion, inverter, these systems support aside from onboard charger
Slide 27: Power semiconductor demand for different levels of electrification
Power semiconductor demand for different levels of electrification incremental power semi 400 V .. 800 V content for drive train EV, Fuel Cell EV - energy recovery ~$300 Plug-in HEV - onboard charger Full HEV - start-stop start-stop only - energy recovery - start-stop - coasting, sailing Hybrid - en
Slide 28: Infineon has all elements and unparalleled package expertise for all xEV applications
Infineon has all elements and unparalleled package expertise for all xEV applications Bare die Discretes Scalable products Plug-n-Play HybridPACK™ solutions Si IGBT Si bare dies HybridPACK™ Double- Easy modules Sided Cooling SiC bare dies SiC MOSFET SiC optimized package solution 2017-09-06 Copyrigh
Slide 29: Infineon is well positioned globally to benefit disproportionately from xEV boom
Infineon is well positioned globally to benefit disproportionately from xEV boom 1 Premium OEM Soul EV Bolt A3 e-tron Kangoo V60, Q5 A6 S60, XC90 FCEV Passat, Golf 1 Premium OEM Jetta Focus Optima/Sonata Ray EV Grandeur Zoe Ampera-e ix35 E-Class S-Class e-Golf e-up EV160 1 Premium OEM LaCrosse, Rega
Slide 30: ADAS/AD, clean cars, and adoption of premium features drive growth
ADAS/AD, clean cars, and adoption of premium features drive growth Drivers for semiconductor content per car Vehicle production Clean cars ADAS/AD Comfort, premium › Driven by legislation › Today: › Premium cars are › crash avoidance early adopters of › Improvements of ICE › ADAS high-end comfort an
Slide 31: Infineon is #1 and technology leader in power semiconductors
Infineon is #1 and technology leader in power semiconductors #1 in the market* for MOSFETs, discrete IGBTs, IGBT-based modules and total market Broad product and technology portfolio Infineon is ideally positioned to gain Addressing broadest range of applications further market share and earn 300 mm
Slide 32: Ramp of 300 mm thin-wafer manufacturing technology on schedule
Ramp of 300 mm thin-wafer manufacturing technology on schedule Advantages of 300 mm manufacturing of power semiconductors › When fully loaded, frontend manufacturing cost per unit will be 20 – 30% lower than on 200 mm › Capital intensity is 30% lower than for 200 mm Current status of Dresden 300 mm
Slide 33: Efficiency, productivity and legislation are main market drivers for power applications
Efficiency, productivity and legislation are main market drivers for power applications IPC Drives Renewables MHA Traction › Energy efficiency › Legislation › Energy efficiency › Growing population › Automation › Growing share of › Growing VSD in mega cities › Productivity increase renewables as par
Slide 34: PMM's growth is built on many applications from different sectors
PMM‘s growth is built on many applications from different sectors PMM Computing Industrial Consumer / Misc Communications › Server › Industrial power › Pedelecs / eBikes › Handsets › PC supplies › Multicopter › Wearables › Notebook › xEV charger › Aviation › Cellular › Peripherals › PV roof-top inve
Slide 35: Product-to-System approach opens growth opportunities beyond MOSFETs
Product-to-System approach opens growth opportunities beyond MOSFETs Essential parts of any electronic system (e.g. in an SMPS); can be realized with separate components or as an integrated power stage as system-on-chip Controller Driver MOSFET releases low-power translates it into high- signal to s
Slide 36: Strengthening IC business allows for faster growth in power than market average
Strengthening IC business allows for faster growth in power than market average Average through-cycle growth of power business: 8% p.a. 2-3%-pt p.a. from power ICs + 5-6%-pt p.a. from MOSFETs Expand product portfolio Maintain technology leadership Bundle with MOSFETs Capitalize on scale advantage Ta
Slide 37: PMM is a leader in core technologies for ambient sensing, thus driving innovation
PMM is a leader in core technologies for ambient sensing, thus driving innovation MEMS Radar Time of Flight › #2 in the market (31.1%) › 60 GHz radar sensors e.g. › REAL3™ image sensor for for silicon microphones for gesture sensing AR/VR applications in › World’s best signal-to- (example: Google So
Slide 38: Growth in RF & Sensing is driven by broader product portfolio and emerging applications
Growth in RF & Sensing is driven by broader product portfolio and emerging applications 2016 2021 SiMic RF discretes SiMiC/ambient sensors RF discretes 3D image sensor radar ICs TAM: $5bn* industrial consumer TAM: $1.5bn* smartphone smartphone * Infineon estimates › SiMic: Integrating additional amb
Slide 39: Tailored growth strategies help maintain leadership position in both major segments
Tailored growth strategies help maintain leadership position in both major segments Power RF & Sensing Current position Growth based on 3-layer-model MEMS Compound semis › Scale and technology leader in power MOSFETs › Broadest portfolio: 25V – 900V › Addressing all applications › #1 holding ~1/3 of
Slide 40: Infineon is the leader in security solutions for the connected world
Infineon is the leader in security solutions for the connected world #1 in microcontroller-based smart card ICs* #1 in embedded digital security** Infineon is ideally positioned to Complete portfolio of hardware, software, benefit from the services and turnkey solutions growth trends in the security
Slide 41: CCS is enabling security for the connected world
CCS is enabling security for the connected world Smart card applications Embedded security applications Infineon holds leading positions in security solutions markets #1* market size: $2.79bn #1** market size: $698m microcontroller-based Embedded secure smart card ICs microcontrollers › Smart card p
Slide 42: Infineon's long-term growth is based on sustainable growth drivers
Infineon‘s long-term growth is based on sustainable growth drivers ATV IPC PMM CCS Courtesy: Hyundai › CO2 reduction › Energy efficiency › Energy efficiency › Security as a › Advanced Driver › Automation › Power density function Assistance › Productivity › BLDC motors › Mobile payments Systems incre
Slide 43: Table of Contents
Table of Contents 1 Infineon at a Glance 2 Quarterly Highlights 3 Growth Drivers 4 Selected financial figures 2017-09-06 Copyright © Infineon Technologies AG 2017. All rights reserved. 43
Slide 44: OPEX level right on target
OPEX level right on target S and G&A* R&D** [EUR m] 220 208 209 200 196 196 197 200 195 200 192 180 15% 180 160 14% 140 120 13% 100 12.3% 12.2% 11.9% 12.1% 80 11.7% 11.8% 11.4% 12% 10.7% 60 10.9% 40 10.6% 11% 20 0 10% Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 FY16 FY17 FY16 FY17 General & Administration Selling
Slide 45: Increase in inventories due to more raw material and work in progress
Increase in inventories due to more raw material and work in progress Working capital* Inventories [EUR m] [EUR m] [days] 1,198 1,191 1,249 1,228 1,245 1200 120 1000 922 1000 791 865 822 100 800 739 800 107 104 100 99 99 80 600 600 60 400 40 400 200 20 200 0 0 0 Q3 FY16 Q4 Q1 FY17 Q2 Q3 Q3 FY16 Q4 Q
Slide 46: Investments at about €1,050m due to full-year growth above trendline
Investments at about €1,050m due to full-year growth above trendline Investments* D&A [EUR m] ~1,050** 1000 890 30% 826 833 ~815 785 760 800 22.8% 668 20% 600 231 514 15.5% 466 202 378 12.8% 428 13.1% 400 14.8%** 12.1% 11.5% 13.5% 12.9% 219 11.9% 10% 11.0% 205 9.8% 200 204 200 0 0% FY12 FY13 FY14 FY
Slide 47: Gross and Net Cash increased due to strong Free Cash Flow
Gross and Net Cash increased due to strong Free Cash Flow Liquidity development [EUR m] 1,769 1,859 1,784 2,043 299 2,017 2,083 2,240 2,209 2,049 2,217 166 471 358 32 Q3 Q4 Q1 Q2 Q3 FY16 FY17 Gross Cash Debt Net Cash › Free Cash Flow from continuing operations was €301m. › Debt decreased by €158m du
Slide 48: Infineon has a balanced maturity profile and a solid investment grade rating (BBB) from S&P
Infineon has a balanced maturity profile and a solid investment grade rating (BBB) from S&P Maturity profile [EUR m; US$ m] €500 $350 $350 €300 $235 €171 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 Campeon 8-year 10-year 12-year Eurobond final re- Eurobond USPP USPP USPP Sep 2018 payment
Slide 49: Part of your life. Part of tomorrow. Infineon
Part of your life. Part of tomorrow. Infineon
Slide 50: Infineon is a long-standing member of Europe's leading sustainability indices
Infineon is a long-standing member of Europe's leading sustainability indices Infineon’s most recent achievements › Sep 2016: Infineon is listed in the STOXX® Global ESG Leaders Indices, which serves as an indicator of the quality of Infineon’s performance in the governance, social and environmental
Slide 51: Financial calendar
Financial calendar Date Location Event 31 Aug 2017 Frankfurt Commerzbank Sector Conference 6 – 7 Sep 2017 New York Citi Global Technology Conference Berenberg Bank and Goldman Sachs German Corporate 18 Sep 2017 Munich Conference 20 Sep 2017 Munich Baader Investment Conference 28 Sep 2017 London Bern
Slide 52: Notes
Notes Investments = 'Purchase of property, plant and equipment' + 'Purchase of intangible assets and other assets' incl. capitalization of R&D expenses Capital Employed = 'Total assets' – 'Cash and cash equivalents' Please note: All positions in ' ' refer to the – 'Financial investments' respective
Slide 53: Glossary
Glossary micro- vehicles using start-stop systems and limited AD automated driving hybrid recuperation mild- vehicles using start-stop systems, recuperation, DC- ADAS advanced driver assistance system hybrid DC conversion, e-motor AEB automatic emergency braking OBC onboard charger BoM bill of mater
Slide 54: Institutional Investor Relations contacts
Institutional Investor Relations contacts Dr. Jürgen Rebel Corporate Vice President +49 89 234-21626 Investor Relations juergen.rebel@infineon.com Joachim Binder Senior Director +49 89 234-25649 Investor Relations joachim.binder@infineon.com Holger Schmidt Senior Manager +49 89 234-22332 Investor Re
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