Infineon Technologies Ag · XETR:IFX

Infineon Technologies — Q3 FY2019 Earnings Presentation

63 slides from Infineon Technologies's earnings presentation, Aug 1, 2019

Slide 1: Third Quarter FY 2019 Quarterly Update
Third Quarter FY 2019 Quarterly Update Infineon Technologies AG Investor Relations
Slide 2: Agenda
Agenda 1 Infineon at a glance 2 Quarterly highlights 3 Automotive 4 Industrial Power Control 5 Power Management & Multimarket 6 Digital Security Solutions 7 Selected financial figures 2019-08-01 Copyright © Infineon Technologies AG 2019. All rights reserved. 2
Slide 3: Infineon at a glance: strong financials, leading market positions
Infineon at a glance: strong financials, leading market positions FY18 revenues by segment FY18 revenues by product category [EUR m] Digital Security 3,284 Solutions (DSS) 9% 2,318 Power Manage- Automotive 1,323 ment & Multi- 31% 43% (ATV) market (PMM) 664 ATV IPC PMM DSS 17% Revenue in FY18: Indust
Slide 4: 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 › Feb 2019: Infineon is listed in › Sep 2018: Infineon is listed in › Mar 2019: Sustainalytics the Sustainability Yearbook the DJS Europe Index for the rated Infineon as an Out- for the
Slide 5: 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 › Focus on fastest growing › Leverage core competencies › Create value for customers segments of semi market in different end markets to through system under- › Tackle globa
Slide 6: Well diversified exposure to end-markets and applications provide resilient growth model
Well diversified exposure to end-markets and applications provide resilient growth model FY18 revenue of €7,599m by target application embedded security smart card solutions solutions; 3% powertrain excl. xEV (e.g. government ID, payment); 6% 12% other PMM 2% xEV 5% industrial DSS 10% 9% safety excl
Slide 7: Tight customer relationships, based on system know-how and application understanding
Tight customer relationships, based on system know- how and application understanding ATV IPC PMM DSS EMS partners Distribution partners 2019-08-01 Copyright © Infineon Technologies AG 2019. All rights reserved. 7
Slide 8: Infineon holds a leading position in its target markets
Infineon holds a leading position in its target markets Automotive Power discretes semiconductors and modules Security ICs total market in 2018: $37.7bn total market in 2017: $18.5bn total market in 2017: $3.3bn NXP 12.0% Infineon 18.6% Infineon 24.2% Infineon 11.2% ON Semi 9.0% Renesas 8.9% STMicro
Slide 9: Outlook for Q4 FY19 and FY19
Outlook for Q4 FY19 and FY19 Outlook Q4 FY19* Outlook FY19* (compared to Q3 FY19) Increase of 1% Revenue €8.0bn +/- 2%-points Segment At the mid-point of the revenue guidance: Result ~16% Margin ~14.5% Investments in FY19 ~€1.5bn D&A in FY19 ~€1.0bn** * Based on an assumed average exchange rate of $
Slide 10: Agenda
Agenda 1 Infineon at a glance 2 Quarterly highlights 3 Automotive 4 Industrial Power Control 5 Power Management & Multimarket 6 Digital Security Solutions 7 Selected financial figures 2019-08-01 Copyright © Infineon Technologies AG 2019. All rights reserved. 10
Slide 11: Hyundai has chosen Infineon's CoolSiC products for their next generation EVs
Hyundai has chosen Infineon’s CoolSiC products for their next generation EVs CoolSiC™: Success at Hyundai General CoolSiC™ value contribution to customers Higher mileage with the same battery capacity › Trench based SiC devices increase power efficiency compared to alternative technologies Easy scal
Slide 12: Infineon is new partner in Volkswagen's strategic supplier network FAST
Infineon is new partner in Volkswagen’s strategic supplier network FAST › FAST (Future Automotive Supply Tracks) was established in 2015 › Today, FAST includes 66 partners › FAST intensifies cooperation of VW with its most important suppliers and partners in central areas of innovation › Appreciatio
Slide 13: Automotive
Automotive
Slide 14: Infineon's position in the automotive semiconductor universe
Infineon's position in the automotive semiconductor universe Automotive semiconductors total market in 2018: $37.7bn NXP 12.0% Market share trend: Infineon Infineon 11.2% +0.4%-pt benefits disproportionately from the two mega trends Renesas 8.9% › electro-mobility: power, drivers, µC TI 8.2% › autom
Slide 16: xEV growth driven by emission regulation; EU about to force CO2 reduction
xEV growth driven by emission regulation; EU about to force CO2 reduction to -37.5% by 2030 vs 2021 CO2 emission development and regulations for main regions 200 CO2 emission values [g/km], normalized to NEDC Japan 2020: 150 122 g CO2/km* US 2020: 125 g CO2/km 100 China 2020 : -15% EU 2021: 117 g CO
Slide 17: The incremental demand of power semi-conductors is a significant opportunity
The incremental demand of power semi-conductors is a significant opportunity 2018 average xEV semiconductor content by degree of electrification 48 V / MHEV (in 2018) FHEV / PHEV (in 2018) BEV (in 2018) $95 $750 $25 $740 $300 $455 $75 $0 $475 $20 $375 $15 $375 $5 $20 $120 $80 sensors ICE power* powe
Slide 19: For Automated Driving more compute power but also a higher security and safety is needed
For Automated Driving more compute power but also a higher security and safety is needed Sense Interpret & decide Act Driver Sensors Actuators Controllers, algorithms, software Camera inside specialized driving domain Automated car sensor controller processors Radar Radar Camera outside sensor Ultra
Slide 20: Increased sensor requirements drive the content in the next 5 years and beyond
Increased sensor requirements drive the content in the next 5 years and beyond More sensors required for any next level of automation NCAP 5 Star, AD L2 AD L3 AD L4/L5 Automatic emergency brake/ forward collision warning Application* Parking assist Valet parking Lane keep assist Highway assist Highw
Slide 21: ADAS/AD semi growth driven by radar and camera sensor modules
ADAS/AD semi growth driven by radar and camera sensor modules over the next 5 years Average semi content per car by level of automation at the given years NCAP 5 Star/AD L2 (~2020) AD L3 (~2025) AD L4/L5 (~2030) L2 vehicles in 2020: ~6m L3 vehicles in 2025: ~3m L4/L5 vehicles in 2030: ~4m $55 $970 $
Slide 23: Infineon's portfolio covers the entire range of power and frequency
Infineon's portfolio covers the entire range of power and frequency What is a power switch? How are power switches categorized? 10 MW When turned on power  current flows = When turned off 1 MW  current is blocked IGBT Module What counts? 100 kW › Losses in on-state (R(DS)on) SiC › Heat dissipation
Slide 24: Infineon's discrete power portfolio is basically separated by voltage classes
Infineon's discrete power portfolio* is basically separated by voltage classes Silicon-based power switches Compound semicondcutors 6,500 V IPC territory 4,500 V SiC MOSFET IGBT 3,300 V (CoolSiC™) modules roadmap 1,700 V discrete IGBTs 1,200 V SiC MOSFET today IGBTs (discrete, modules) high-voltage
Slide 25: Three strategic levers to outgrow the power semi market: core – adjacent – new
Three strategic levers to outgrow the power semi market: "core – adjacent – new"  Adjacent  Core Controller Gate driver switch application translates e.g. motion triggers low-power signal signal into control, power appropriate conversion gate input  Grow in adjacent fields  Strengthen core › Inv
Slide 26: Four key success factors: Infineon well positioned to defend its leadership in power semis
Four key success factors: Infineon well positioned to defend its leadership in power semis also in SiC 1.) Substrate 2.) Device 3.) Module 4.) System SiC planar trench Source Gate n+ n+ p G p+ p+ n n+ Courtesy: Kaco and pv magazine Drain 2008 2011 2016 2018 100 kW 50 kW 50 kW 125 kW 1129 kg 151 kg 7
Slide 27: Industrial Power Control
Industrial Power Control Infineon
Slide 28: Clear leader in discrete IGBTs and IGBT modules; IPMs improved from #4 to #3
Clear leader in discrete IGBTs and IGBT modules; IPMs improved from #4 to #3 Discrete IGBTs IPMs IGBT modules* total market in 2017: $1.10bn total market in 2017: $1.57bn total market in 2017: $2.63bn Infineon 38.5% Mitsubishi 36.4% Infineon 32.6% Fuji Electric 12.0% ON Semi 18.7% Fuji Electric 10.5
Slide 29: Due to the extensive power module portfolio Infineon can address the whole range of drives applications
Due to the extensive power module portfolio Infineon can address the whole range of drives applications Servo drives Low-power drives* Mid- and high-power drives 370 W 75 kW 370 W 500 kW 500 kW 10 MW Requirements › high positioning accuracy › performance and reliability › safety › fast response with
Slide 30: Infineon is a key player in the PV market providing solutions to leading inverter manufacturers
Infineon is a key player in the PV market providing solutions to the leading inverter manufacturers Infineon is present at top-10* Global installed PV capacity1 inverter manufacturers (2017)2 China CAGR(18-23): 9%  [GW] Rest of World 1 | Huawei 160 2 | Sungrow  50.5 3 | SMA  CAGR(18-23): 2% 4 | T
Slide 31: Infineon is the leading power semiconductor supplier for the wind turbine industry
Infineon is the leading power semiconductor supplier for the wind turbine industry Infineon is present at top-10* wind Global installed wind capacity1 turbine manufacturers (2018)2 China CAGR(18-23): 6% [GW] Rest of World 1 | Vestas  67.5 2 | Goldwind  3 | Siemens Gamesa  50.2 CAGR(18-23): 5% 26.
Slide 32: What comes next? Mid- to long-term structural growth opportunities
What comes next? Mid- to long-term structural growth opportunities Core Adjacent New area Courtesy: Shakti pumps Courtesy: Alstom new material solar pumps fuel cell Courtesy: Courtesy: McKinsey Siemens AG EV charging energy storage eMarine Courtesy: Lilium GmbH collaborative robots eDelivery vehicle
Slide 33: Power Management & Multimarket
Power Management & Multimarket
Slide 34: PMM's growth is built on many applications from different sectors in power and non-power
PMM's growth is built on many applications from different sectors in power and non-power Computing Industrial Consumer / Misc Communications › Data Center › Power supplies › eBikes › Handsets › PC, Notebook › EV on-board charger › Multicopter › Wearables › Peripherals › PV inverter › Aviation › 5G m
Slide 36: Infineon is the clear leader in MOSFETs; growth potential in power ICs
Infineon is the clear leader in MOSFETs; growth potential in power ICs Discrete Power MOSFET market Power IC market total market in 2017: $6.65bn total market in 2017: $23.6bn Infineon 26.3% (+0.3%-pt) TI 15.9% ON Semi 12.8% Qualcomm 8.1% Renesas 9.2% Infineon 7.6% (+0.3%-pt) Toshiba 7.4% ADI 7.4% S
Slide 37: Technology leadership in MOSFETs and digital power: highest efficiency and power density
Technology leadership in MOSFETs and digital power: highest efficiency and power density Adjacent Core Controller Driver IC MOSFET triggers low-power translates signal into high- signal to switch on current gate input switches on, current flows Power management solutions reduce TCO More efficient se
Slide 38: Four interrelated trends drive power semiconductor BoM in battery-powered applications
Four interrelated trends drive power semiconductor BoM in battery-powered applications Interrelated trends for battery-powered applications  From corded to From brushed DC  Trend towards higher power  New applications cordless power to brushless DC and higher battery voltage with trend towards t
Slide 39: Transition from 3G/4G to 5G drives demand in power semis for antennas and power supplies
Transition from 3G/4G to 5G drives demand in power semis for antennas and power supplies 5G base station New! Massive MIMO DC-DC (MOSFET, ICs) 5G mmWave antenna New! AC-DC, DC-DC (MOSFET, ICs) Cloud Computing AC-DC, DC-DC (MOSFET, ICs) New! Base station power supply AC-DC, DC-DC (MOSFET, ICs) Fog Co
Slide 40: What comes next? Mid- to long-term structural growth opportunities
What comes next? Mid- to long-term structural growth opportunities Core Adjacent New area Courtesy: Nissan 5G infrastructure on-board charger collaborative robots hyperscale AI data center wireless charging smart speaker new material power tools class D audio 2019-08-01 Copyright © Infineon Technolo
Slide 42: RF and Sensing devices enable new services and will shape the way we live and work
RF and Sensing devices enable new services and will shape the way we live and work Various use cases are enabled by a small set of versatile core technologies Courtesy: BMW Augmented Reality Voice-controlled devices Gesture control Commercial and consumer Industrial robotics multicopters 2019-08-01
Slide 43: We focus on MEMS sensors and target to become the leader in 3D sensing and radar
We focus on MEMS sensors and target to become the leader in 3D sensing and radar Microphone Pressure Environmental 3D radar 3D ToF World Highest No Best-in-class Best-in-class smallest form energy distortions resolution resolution 6x6mm² factor efficiency Receive Measure clear audio Measure CO2 Biom
Slide 44: Digital Security Solutions
Digital Security Solutions Infineon
Slide 45: Continuous stream of new topics aging and exiting
Continuous stream of new topics aging and exiting maturity Emerging Growing Maturing Pay TV SIM Card  Smart card form factor  Embedded form factor Contact-based Payment TPM for Computing Government ID Embedded Secure Element (NFC) Transport Ticketing Authentication Contactless Payment eSIM for Aut
Slide 46: Infineon first to offer automotive-qualified TPM for the connected car
Infineon first to offer automotive-qualified TPM for the connected car; Volkswagen among first customers › OPTIGA™ TPM 2.0 (Trusted Platform Module) is especially for use in › central gateway › telematics unit (e.g. secure software updates over-the-air) › infotainment system › Volkswagen decided to
Slide 47: Agenda
Agenda 1 Infineon at a glance 2 Target operating model (TOM) 3 Quarterly highlights 4 Automotive 5 Industrial Power Control 6 Power Management & Multimarket 7 Digital Security Solutions 8 Selected financial figures 2019-08-01 Copyright © Infineon Technologies AG 2019. All rights reserved. 47
Slide 48: Revenue growth +4% y-y
Revenue growth + 4% y-y Revenue development [EUR m] +4% › Revenue up 2% q-q 2,047 1,941 1,970 1,983 2,015 › Slight increases in revenue for all four segments 39.8% 39.5% › Segment Result down -5% q-q 38.2% 37.8% › Underutilization charges burden 36.5% gross margin and segment result › Cost containme
Slide 49: Q3 FY19 Division Performance
Q3 FY19 Division Performance ATV IPC PMM DSS [EUR m] [EUR m] [EUR m] [EUR m] +6% 867 846 875 888 +3% 836 651 617 580 591 598 +2% 349 361 352 347 357 -5 % 27.8 25.1 23.6 22.3 24.2 20.3 20.2 19.6 19.3 175 163 14.4 14.6 13.8 12.8 15.4 149 164 167 11.0 16.6 14.7 120 127 117 112 98 71 73 69 67 55 137 181
Slide 50: Organic RoCE as the key value metric typically amounts to ~2x WACC
Organic RoCE as the key value metric typically amounts to ~2x WACC RoCE and adjusted RoCE 30% 20% 10% 0% FY15 FY16 FY17 FY18 Q1 FY19 Q2 Q3 Q4 RoCE (excluding PPA, Deferred Tax Effects, RF power sale, Cypress) RoCE (reported) 2019-08-01 Copyright © Infineon Technologies AG 2019. All rights reserved.
Slide 51: Our commitment to investors: Continued value creation through growth
Our commitment to investors: Continued value creation through growth Development of earnings-per-share (EPS) from continuing operations [EUR cent] 27 28 22 24 22 24 22 24 23 EPS basic 20 EPS adjusted Q3 FY18 Q4 Q1 FY19 Q2 Q3 Total cash return to shareholders [EUR m] 2,114 308 305 › Policy of sustain
Slide 52: Opex within target range
Opex within target range Selling, General & Administration Research & Development* [EUR m] 236 236 243 227 223 218 212 214 218 210 12.0% 12.1% 11.9% 11.2% 11.1% 11.1% 10.9% 10.8% 10.7% 10.6% Q3 FY18 Q4 Q1 FY19 Q2 Q3 Q3 FY18 Q4 Q1 FY19 Q2 Q3 General & Administration Selling R&D % of sales [rhs] * In
Slide 53: Inventories main driver for Working Capital increase
Inventories main driver for Working Capital increase Working capital* Inventories [EUR m] [EUR m] [days] 1,452 1,475 1,706 1,758 1,591 1,480 1,388 991 979 120 124 124 104 108 712 Q3 FY18 Q4 Q1 FY19 Q2 Q3 Q3 FY18 Q4 Q1 FY19 Q2 Q3 Inventories DOI* Trade receivables Trade payables [EUR m] [days] [EUR m
Slide 54: Investments and D&A trending up due to growth
Investments and D&A trending up due to growth Investments* Depreciation & Amortization [EUR m] ~€1.5bn 1,254 1,022 ~1,000 861 ~90 785 826 833 812 760 140 103 668 129 114 18.8% 514 8 15.5% 16.5% 14.5% 13.5% 12.8% 11.9% 13.1% 12.9% 11.5% 11.3% 12.5% 506 646 693 683 759 ~910 FY14 FY15 FY16 FY17 FY18 FY
Slide 55: Healthy gross cash and net cash position
Healthy gross cash and net cash position Liquidity development [EUR m] 1,535 1,532 1,829 1,533 1,549 1,011 1,900 773 2,621 2,543 2,306 1,882 792 3,435 333 Q3 Q4 Q1 Q2 Q3* FY18 FY19 Gross Cash Debt Net Cash › Operating cash flow from continuing operations was €396m in Q3 FY 2019 › Free Cash Flow from
Slide 56: Infineon has a balanced maturity profile and a solid investment grade rating
Infineon has a balanced maturity profile and a solid investment grade rating (BBB)* from S&P Maturity profile [EUR m; US$ m; nominal values] €500 $350 $350 $235 €171 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 Campeon 8-year 10-year 12-year final re- Eurobond USPP USPP USPP payment Mar 2022 No
Slide 57: Glossary (1 of 2)
Glossary (1 of 2) AC alternating current EPS electric power steering AC-DC alternating current - direct current eSIM embedded subscriber identity module AD automated driving eSIM embedded SIM ADAS advanced driver assistance system EV electric vehicle AEB automatic emergency braking FPGA field progra
Slide 58: Glossary (2 of 2)
Glossary (2 of 2) IPM intelligent power module PV photovoltaic iPol image processing line RF radio frequency IRF International Rectifier rhs right-hand scale LSEV low-speed electric vehicle Si silicon LSPS LS Power Semitech Co. Ltd. SiC silicon carbide µC microcontroller SiGe silicon germanium MEMS
Slide 59: Disclaimer
Disclaimer Disclaimer This presentation contains forward-looking statements about the business, financial condition and earnings performance of the Infineon Group. These statements are based on assumptions and projections resting upon currently available information and present estimates. They are s
Slide 60: Financial calendar
Financial calendar Date Location Event 29 Aug 2019 Frankfurt Commerzbank Sector Conference 4 – 5 Sep 2019 New York Citi Global Technology Conference 6 Sep 2019 London Deutsche Bank European TMT Conference Unterschleißheim 23 Sep 2019 Berenberg Goldman Sachs German Corporate Conference (nearby Munich
Slide 61: 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' – 'Financial investments' – 'Assets classified as held for sale – ('Total Current li
Slide 62: Institutional Investor Relations contacts
Institutional Investor Relations contacts Alexander Foltin Corporate Vice President Finance, Treasury & Investor Relations +49 89 234-23766 alexander.foltin@infineon.com Joachim Binder Isabell Diel Senior Director Investor Relations Manager Investor Relations +49 89 234-25649 +49 89 234-38297 joachi
Slide 63: Cinfineon
Cinfineon Part of your life. Part of tomorrow.

Infineon Technologies — Q3 FY2019 Earnings Presentation on 6ix

Infineon Technologies — Q3 FY2019 Earnings Presentation

Slide 1: Third Quarter FY 2019 Quarterly Update

Slide 2: Agenda

Slide 3: Infineon at a glance: strong financials, leading market positions

Slide 4: Infineon is a long-standing member of Europe's leading sustainability indices

Slide 5: Our strategy is targeted at value creation through sustainable organic growth

Slide 6: Well diversified exposure to end-markets and applications provide resilient growth model

Slide 7: Tight customer relationships, based on system know-how and application understanding

Slide 8: Infineon holds a leading position in its target markets

Slide 9: Outlook for Q4 FY19 and FY19

Slide 10: Agenda

Slide 11: Hyundai has chosen Infineon's CoolSiC products for their next generation EVs

Slide 12: Infineon is new partner in Volkswagen's strategic supplier network FAST

Slide 13: Automotive

Slide 14: Infineon's position in the automotive semiconductor universe

Slide 15: Electro-mobility

Slide 16: xEV growth driven by emission regulation; EU about to force CO2 reduction

Slide 17: The incremental demand of power semi-conductors is a significant opportunity

Slide 18: Automated Driving

Slide 19: For Automated Driving more compute power but also a higher security and safety is needed

Slide 20: Increased sensor requirements drive the content in the next 5 years and beyond

Slide 21: ADAS/AD semi growth driven by radar and camera sensor modules

Slide 22: Infineon's Power Strategy

Slide 23: Infineon's portfolio covers the entire range of power and frequency

Slide 24: Infineon's discrete power portfolio is basically separated by voltage classes

Slide 25: Three strategic levers to outgrow the power semi market: core – adjacent – new

Slide 26: Four key success factors: Infineon well positioned to defend its leadership in power semis

Slide 27: Industrial Power Control

Slide 28: Clear leader in discrete IGBTs and IGBT modules; IPMs improved from #4 to #3

Slide 29: Due to the extensive power module portfolio Infineon can address the whole range of drives applications

Slide 30: Infineon is a key player in the PV market providing solutions to leading inverter manufacturers

Slide 31: Infineon is the leading power semiconductor supplier for the wind turbine industry

Slide 32: What comes next? Mid- to long-term structural growth opportunities

Slide 33: Power Management & Multimarket

Slide 34: PMM's growth is built on many applications from different sectors in power and non-power

Slide 35: PMM – Power

Slide 36: Infineon is the clear leader in MOSFETs; growth potential in power ICs

Slide 37: Technology leadership in MOSFETs and digital power: highest efficiency and power density

Slide 38: Four interrelated trends drive power semiconductor BoM in battery-powered applications

Slide 39: Transition from 3G/4G to 5G drives demand in power semis for antennas and power supplies

Slide 40: What comes next? Mid- to long-term structural growth opportunities

Slide 41: PMM – RF and Sensing

Slide 42: RF and Sensing devices enable new services and will shape the way we live and work

Slide 43: We focus on MEMS sensors and target to become the leader in 3D sensing and radar

Slide 44: Digital Security Solutions

Slide 45: Continuous stream of new topics aging and exiting

Slide 46: Infineon first to offer automotive-qualified TPM for the connected car

Slide 47: Agenda

Slide 48: Revenue growth +4% y-y

Slide 49: Q3 FY19 Division Performance

Slide 50: Organic RoCE as the key value metric typically amounts to ~2x WACC

Slide 51: Our commitment to investors: Continued value creation through growth

Slide 52: Opex within target range

Slide 53: Inventories main driver for Working Capital increase

Slide 54: Investments and D&A trending up due to growth

Slide 55: Healthy gross cash and net cash position

Slide 56: Infineon has a balanced maturity profile and a solid investment grade rating

Slide 57: Glossary (1 of 2)

Slide 58: Glossary (2 of 2)

Slide 59: Disclaimer

Slide 60: Financial calendar

Slide 61: Notes

Slide 62: Institutional Investor Relations contacts

Slide 63: Cinfineon