Infineon Technologies Ag · XETR:IFX

Infineon Technologies — Q3 FY2012 Earnings Presentation

39 slides from Infineon Technologies's earnings presentation, Jul 31, 2012

  1. Slide 1: Third Quarter FY 2012 Quarterly Update

    Third Quarter FY 2012 Quarterly Update Infineon Technologies AG Investor Relations

  2. Slide 2: Table of Contents

    Table of Contents  Infineon at a Glance  Growth Outlook  Results and Outlook 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

  3. Slide 3: Revenue Split by Division

    Revenue Split by Division Q3 FY 2012 revenue: EUR 990m ATV IPC € 428m € 177m PMM CCS € 233m € 122m OOS+ C&E* € 30m * Other Operating Segments; Corporate & Eliminations. 31 July 2012 Copyright © Infineon Technologies 2012. All rights reserved. Page 3

  4. Slide 4: Decreasing Segment Result Margin due to High Investment

    Decreasing Segment Result Margin due to High Investment [EUR m] Q3 FY11 Q2 FY12 Q3 FY12 Revenue 1,043 986 990 Segment Result 212 144 126 SR Margin 20.3% 14.6% 12.7% [EUR m] Net Income* 190 111 82 986 990 Investment 319 192 158 FCF from cont. 144 -8 -10 -22 126 operations Gross Cash 2,585 2,190 2,150

  5. Slide 5: Tight Customer Relationships are Based on System Knowhow and App Understanding

    Tight Customer Relationships are Based on System Knowhow and App Understanding ATV IPC PMM CCS Distributors 31 July 2012 Copyright © Infineon Technologies 2012. All rights reserved. Page 5

  6. Slide 6: Infineon Holds Top Positions in All Target Markets

    Infineon Holds Top Positions in All Target Markets Automotive Power Chip Card #2 #1 #1 Renesas 14% Infineon 11% Infineon 27% Infineon 10% Toshiba 7% Samsung 21% STMicro 9% STMicro 7% NXP 21% Freescale 8% Mitsubishi 7% STM 18% NXP 6% Vishay 6% Renesas 8% Calendar Year 2011. Calendar Year 2010. Calend

  7. Slide 7: Table of Contents

    Table of Contents  Infineon at a Glance  Growth Outlook  Results and Outlook 31 July 2012 Copyright © Infineon Technologies 2012. All rights reserved. Page 7

  8. Slide 8: New Era: Multiple Factors Driving Demand for Power Semiconductors

    New Era: Multiple Factors Driving Demand for Power Semiconductors '90 – '10 '10 – '30 Changes  Electrification of powertrain fuels demand for high-power semis in cars and doubles silicon content. Courtesy: Tesla  Shift towards renewable energies requires orders of magnitude more high-power semis p

  9. Slide 9: Despite Near-Term Outlook Cuts, Long-Term Prospect Still Healthy

    Despite Near-Term Outlook Cuts, Long- Term Prospect Still Healthy Global car production (cars ≤ 6t) [units m] CAGR(11-15) = 4.8% 97.0 100.3 92.9 82.3 87.6 8 8 76.8 80.7 8 74.4 8 24 10 8 23 9 8 22 59.5 20 21 17 19 8 16 12 39 41 44 29 31 33 36 28 21 16 19 20 19 19 20 21 22 22 2009 2010 2011 2012 2013

  10. Slide 10: Rising Semiconductor Value Per Car Drives Market

    Rising Semiconductor Value Per Car Drives Market Semiconductor value per car Semiconductor market by segment [USD per car] [USD bn] 228 CAGR Brazil 176 +6.7% 8.4 CAGR Powertrain 5.1 +11.2% 241 CAGR China 189 +6.3% 11.3 CAGR 379 CAGR Safety South Korea 6.7 +10.9% 324 +4.0% 475 CAGR 7.1 Japan CAGR 408

  11. Slide 11: Every Electricity Conversion Step Requires Infineon Components

    Every Electricity Conversion Step Requires Infineon Components 1 Generation Grid Consumption Wind AC DC AC DC AC turbine [Hz] Generation to Grid Generation Grid 2 Solar inverter Generation Grid 3 [Hz] Variable speed drive Grid to Consumption Grid Consumption 4 [V] Power supply Grid 50/60 Hz 5 [V] DC

  12. Slide 12: About 10% Growth p.a. for Cycle Average Expected for Infineon

    About 10% Growth p.a. for Cycle Average Expected for Infineon ATV IPC + PMM CCS Courtesy: Hyundai ATV growth: IPC + PMM growth: CCS growth: ~10% p.a. > 10% p.a. ~5-7% p.a. Growth target Infineon: ~10% growth p.a. cycle average 31 July 2012 Copyright © Infineon Technologies 2012. All rights reserved.

  13. Slide 13: Table of Contents

    Table of Contents  Infineon at a Glance  Growth Outlook  Results and Outlook 31 July 2012 Copyright © Infineon Technologies 2012. All rights reserved. Page 13

  14. Slide 14: After Record Revenues in 2011, Sales in 2012 Are Almost Flat

    After Record Revenues in 2011, Sales in 2012 Are Almost Flat Revenue and Segment Result [EUR m] FY 2011 revenue split -5% by product category 1043 1038 986 990 946 20% 19% 15% 15% 13% 212 195 Power eControl others 141 144 126 Q3 Q4 Q1 Q2 Q3 FY11 FY12 Revenue Segment Result Segment Result margin 31 J

  15. Slide 15: All-Time-High in Revenues in ATV; Slight Recovery in PMM

    All-Time-High in Revenues in ATV; Slight Recovery in PMM Courtesy: Hyundai ATV IPC PMM CCS [EUR m] [EUR m] [EUR m] [EUR m] +4% 410 396 425 428 391 -13% -13% 268 256 222 227 233 +14% 204 216 196 20% 17% 14% 15% 13% 174 177 26% 25% 18% 14% 14% 107 116 97 112 122 23% 23% 20% 16% 15% 13% 14% 6% 13% 15%

  16. Slide 16: Automotive: Infineon Biggest Market Share Gainer Amongst All Players in 2011

    Automotive: Infineon Biggest Market Share Gainer Amongst All Players in 2011 Worldwide Automotive Semiconductor Ranking for 2011 9.8% 1. Renesas 13.8%  -0.3%-pt 2. Infineon 9.8%  +1.0%-pt 8.2% Infineon 3. STM 8.7%  +0.4%-pt strengthened 5.7% 4. Freescale 7.9%  -0.5%-pt world‘s #2 postion; 5. NXP

  17. Slide 17: London Hybrid Buses Powered by Infineon's EconoDUAL™3 and PrimePACK™ IGBT Module

    London Hybrid Buses Powered by Infineon’s EconoDUAL™3 and PrimePACK™ IGBT Module London hybrid-electrical buses  Transport is responsible for ~20% of London’s CO2 emission.  London has been building up a fleet of environmentally-friendly hybrid-electrical buses.  Olympic athletes and visitors are

  18. Slide 18: Infineon's CoolSiC™ And SiC JFET Driver Lift Inverter Efficiency to > 99%

    Infineon’s CoolSiC™ And SiC JFET Driver Lift Inverter Efficiency to > 99% Infineon entering the Japanese photovoltaic market with SiC products  Japan formally implemented new feed- in-tariffs for the PV industry in July 2012 as part of the new clean energy policy.  Infineon’s Japanese customer bui

  19. Slide 19: Social Networks and Cloud Computing Driving Demand for Highest Efficient Power Supplies

    Social Networks and Cloud Computing Driving Demand for Highest Efficient Power Supplies Digital power management (DPM) gaining traction in server market  Globally, we see one new data center per week with up to 100 MW of power consumption.  Efficiency of power supply (AC/DC, DC/DC) of utmost impor

  20. Slide 20: Infineon Supplies Security Chips to Malaysia and South Africa

    Infineon Supplies Security Chips to Malaysia and South Africa Malaysia’s national ID card “MyKad” South Africa’s smart card project  MyKad is one of first multi-  Largest chip-based Government application national electronic ID smart card project in South card projects implemented Africa. worldwid

  21. Slide 21: Guidance for Q4 and FY 2012

    Guidance for Q4 and FY 2012 Outlook Q4 FY12* Outlook FY 2012* (compared to Q3 FY12) (compared to FY 2011) Declining approximately Revenue flat Revenue 3 percent. to down slightly previously: Low single-digit percentage decline. Segment Segment Result margin Approximately Result between 13 and 14 per

  22. Slide 22: Superior Growth and Profitability Allow Sustained Investments Over the Cycle

    Superior Growth and Profitability Allow Sustained Investments Over the Cycle Superior growth and profitability  Focus on secular growth drivers, e.g. renewables, e-mobility, energy efficiency.  Leading market share and competitive strengths.  Financial targets (on average over the cycle): ■ 10% g

  23. Slide 23: Infineon

    Cinfineon Innovative semiconductor solutions for energy efficiency, mobility and security.

  24. Slide 24: Target to Sustain 15% Cycle-Average Segment Result Margin

    Target to Sustain 15% Cycle-Average Segment Result Margin #1 #2 #3 #4 Infineon's core Semiconductors Value of semis High barriers to competencies: enable high small relative to entry Power and functionality end product eControl ATV IPC PMM CCS Courtesy: Hyundai SR profitability Total target margins

  25. Slide 25: Reasons for Sustainable Profitability: #1 High Barriers to Entry

    4 Reasons for Sustainable Profitability ─ #1 High Barriers to Entry Long product System knowhow Strong quality and life cycles and understanding reliability req's Courtesy: Siemens Courtesy: BMW  For many markets we  Both deep and wide know-  Products need to reliably address, deliveries of how a

  26. Slide 26: #2 Semiconductors – Core Enablers of Innovation and Higher Functionality

    #2 Semiconductors – Core Enablers of Innovation and Higher Functionality Energy Efficiency Mobility Security  Power supplies  Recuperation  Identification More advanced power Implemented in trains for Chip-based passports and semiconductors allow years; brought to cars by national ID cards allow

  27. Slide 27: Semis Represent a Negligible Part of the Value of the End Product

    Semis Represent a Negligible Part of #3 the Value of the End Product Example 1: mid-range car Example 2: high-speed train Courtesy: Volkswagen Courtesy: Siemens €25,000 €10,000,000 EUR 6m Semi BoM: 1.0% Semi BoM: 1.0% of of product product €250 value €100,000 value 31 July 2012 Copyright © Infineon

  28. Slide 28: Infineon's Core Competencies – Power Semiconductors and eControl

    Infineon's Core Competencies ─ #4 Power Semiconductors and eControl Design and manufacturing of Core competence power power semis tightly coupled  Thin-wafer technology  Super-junction MOSFETs  Silicon-Carbide (SiC)  IGBT module packaging Manu- facturing Core competence eControl Design  Automot

  29. Slide 29: OpEx In-line With Target Operating Model

    OpEx In-line With Target Operating Model S and G&A R&D [EUR m] 15% 119 118 119 116 120 117 114 110 110 109 106 14% 100 80 13% 60 12% 40 11% 20 0 10% Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 FY11 FY12 FY11 FY12 General & Administration Selling R&D % of sales 31 July 2012 Copyright © Infineon Technologies 2012.

  30. Slide 30: Working Capital

    Working Capital Working capital* Inventories [EUR m] [EUR m] [days] 507 539 521 546 Q3 FY11 Q4 Q1 FY12 Q2 Q3 80 0 400 60 -200 40 -400 n.a.** 200 n.a.** -332 20 -460 -422 -600 0 0 -663 Q3 Q4 Q1 FY12 Q2 Q3 -800 Inventories DOI* Trade and other receivables Trade and other payables [days] 735 [days] [EU

  31. Slide 31: Investments Remain High to Exploit Growth Potential

    Investments Remain High to Exploit Growth Potential Investments* D&A [EUR m] 887 ~ flat Q1 Q2 453 ~ 430 364 325 Q3 336 115 Q4 FY 2009 FY 2010 FY 2011 Guidance FY 2009 FY 2010 FY 2011 Guidance FY 2012 FY 2012 Guidance for investments: Guidance for D&A:  FY13: significantly lower than in FY12.  FY13

  32. Slide 32: High Gross Cash and Net Cash Position Maintained

    High Gross Cash and Net Cash Position Maintained Liquidity Development [EUR m] Gross Cash Debt Equity-linked Net Cash 114 127 191 100 212 101 103* 169 162 140 2692 2585 2387 2337 2246 2190 2150 2068 1927 1907 Q3 Q4 Q1 Q2 Q3 FY11 FY12 * Consists of convertible bond (nominal value EUR 118m; book value

  33. Slide 33: Value Creation of Infineon by Sustainably High RoCE Above WACC

    Value Creation of Infineon by Sustainably High RoCE Above WACC RoCE history 100% 80% FY11: 62% 82% 60% 64% 59% WACC: low teens % 40% FY10: 30% 53% 46% 20% 27% 31% 27% 25% -9% 20% 0% Q1 FY10 Q2 Q3 Q4 Q1 FY11 Q2 Q3 Q4 Q1 FY12 Q2 Q3 -20% Capital Employed history 2,000 [EUR m] 1,889 1,760 1,629 1,496 1,

  34. Slide 34: End of Capital Return Program

    Average Price Per Underlying Share Below Volume Weighted Average Share Price Total share buyback history via convertible bond and put options [shares m] [EUR] 8 12 End of Capital Return Program 10 7.05 4 6.82 3 6,72 7 6.81 6.68 6.74 8 on 31 March 2013. 6.70 6.40 6.23 6.55 6.27 6.20 6 6,11 6.25 6 4 2

  35. Slide 35: Total Gross Capital Returns

    Total Gross Capital Returns Total gross capital returns history [EUR m] 350 308 300 250 109 200 200 26 150 130 100 109 173 26 20 130 20 50 80 16 50 50 50 27 00 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY11 FY12 FY11 FY12 CB 2014 share buyback (via put options) dividends 31 July 2012 Copyright © Infineon Technolo

  36. Slide 36: Notes

    Notes Investments = 'Purchase of property, plant and equipment‘ + 'Purchase of intangible assets and other assets' incl. capitalization of R&D expenses RoCE = NOPAT / Capital Employed = ('Income from continuing operations' – 'financial income' – 'financial expense') / ('Total assets' – 'Cash and cas

  37. Slide 37: Infineon Has a Long Track Record in Responsibility and Sustainability

    Infineon Has a Long Track Record in Responsibility and Sustainability UN Global Compact Initiative Certifications  As one of the first semiconductor companies worldwide, Infineon joined the Global Compact Initiative of the United Nations in 2004. Dow Jones Sustainability Index  Based on our effort

  38. Slide 38: Financial Calendar

    Financial Calendar Date Location Event 29 Aug 2012 Frankfurt Commerzbank Sector Conference Week 26 Sep 2012 Munich Baader Investment Conference 14 Nov 2012* Q4 FY12 Results 15-16 Nov 2012 Barcelona Morgan Stanley TMT Conference Company Roadshow – including presentation by Dr. Helmut 20 – 21 Nov 2012

  39. Slide 39: Institutional Investor Relations Contact

    Institutional Investor Relations Contact Ulrich Pelzer Corporate Vice President  +49 89 234-26153 Finance, Treasury & Investor Relations  ulrich.pelzer@infineon.com Joachim Binder Senior Director  +49 89 234-25649 Investor Relations  joachim.binder@infineon.com Holger Schmidt Manager  +49 89 23

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