Nordic Semiconductor Asa · OSL:NOD

Nordic Semiconductor Asa — Q1 2023 Earnings Presentation

23 slides from Nordic Semiconductor Asa's earnings presentation, Apr 20, 2023

  1. Slide 1: Quarterly Presentation Q1 2023

    Quarterly Presentation Q1 2023 April 20, 2023

  2. Slide 2: Disclaimer

    © Nordic Semiconductor Disclaimer The following presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated (“relevant persons”). Any person who is not a relevant person should not act or rely on this presentation or any of its contents

  3. Slide 3: Revenue decline in tougher market

    © Nordic Semiconductor Revenue decline in tougher market Q1 2023: Revenue, gross profit and EBITDA (USDm)  Revenue of USD 145 million (-21%)  Bluetooth decline of -13% 183  Inventory reductions across the whole value chain 145 Revenue -21%  Gross margin 53.3% and EBITDA margin at 10% Outlook: 10

  4. Slide 4: Tier-1s continue to take a larger share

    © Nordic Semiconductor Tier-1s continue to take a larger share Bluetooth revenue composition (USDm) 700 63% 60% 600 58% 50% 500 44% 46%  Increased share to tier-1 40% 38% 39% 400 38% customers although lower sales 34% 29% than expected in Q1 300  Top-10 accounted for ~50% of 200 Bluetooth revenue

  5. Slide 5: Order backlog

    © Nordic Semiconductor Order backlog Backlog and revenue development (USDm) 1,800 1,600  Weaker demand and order 1,400 cancellations 1,200 1,000  Reduced lead times for all customers 800 600  Discontinuing reporting of order 400 backlog as APM with effect from Q2 200 2023, due to the limited info

  6. Slide 6: Steady and high certification market share

    © Nordic Semiconductor Steady and high certification market share Significantly increasing value per design Bluetooth Low Energy end-product certifications, last 12 months Nordic 1500 end-product certifications 1200 Other Q1’23 46% 43% Qualcomm 108 designs 41% 42% 900 39% 42% 41% Infineon 46% mkt sh

  7. Slide 7: New customer-product launches in Q1

    © Nordic Semiconductor New customer-product launches in Q1 Aptener Mechatronics Cellular Tracking Samsung Electronics Enua Connected Sensors Helmet Comms Technologies SmartTag smart tracker EV charger water sensor nRF52840 & nRF21540 animal tracker nRF52833 nRF9160 + nRF52840 nRF9160 (Bluetooth and

  8. Slide 8: Cellular IoT

    © Nordic Semiconductor Cellular IoT Cellular IoT revenue last 12 months (USDm) 24 22  Large base of ~350 projects, with several beginning to gain commercial traction  Uncertainty regarding project timing in the current economic climate 7 2 Q1’20 Q1‘21 Q1‘22 Q1’23 8

  9. Slide 9: Strong pipeline of Wi-Fi designs

    © Nordic Semiconductor Strong pipeline of Wi-Fi designs Building out the ecosystem and drive design pipeline  Building out the Module partner ecosystem  Stand alone nRF7002 modules and combo- modules of nRF5340+nRF7002  Modules from providers like Fanstel and MinewSemi with more to come  Pipelin

  10. Slide 10: Raising the bar once again

    © Nordic Semiconductor Raising the bar once again

  11. Slide 11: Nordic announces nRF54H20

    © Nordic Semiconductor Nordic announces nRF54H20 Next level connectivity solutions – enabling IoT for the future  First product in the new nRF54 Series  nRF54H20 - 4th generation of multiprotocol Bluetooth LE System-on-Chip (SoC)  GlobalFoundries 22FDX® leading process node  Shipped nRF54H20 kit

  12. Slide 12: nRF54H Series - a disruptive product

    © Nordic Semiconductor nRF54H Series - a disruptive product A foundation for a new wave of revolutionary IoT end-products

  13. Slide 13: Financials

    Financials Pål Elstad, CFO

  14. Slide 14: Bluetooth accounts for 90% of revenue

    © Nordic Semiconductor Bluetooth accounts for 90% of revenue Bluetooth revenue (USDm) Proprietary revenue (USDm) Cellular IoT revenue (USDm) Quarterly Quarterly Quarterly 200 179 168 172 150 150 136 50 50 131 40 40 100 30 27 26 30 25 20 20 50 13 12 8 9 10 10 6 7 5 5 5 0 0 0 Q4 Q1 Q2 Q3 Q4 Q1 Q4 Q1 Q

  15. Slide 15: Robust revenue in non-consumer markets

    © Nordic Semiconductor Robust revenue in non-consumer markets Group Consumer Industrial Healthcare Others USDm USDm USDm USDm USDm 145.4 69.8 45.4 23.6 5.6 -21% -24% -43% -36% +14% -12% +66% +6% -4% -15% y-o-y q-o-q y-o-y q-o-q y-o-y q-o-q y-o-y q-o-q y-o-y q-o-q 150 126 126 Others 4% 122 125 109 10

  16. Slide 16: Gross margin

    © Nordic Semiconductor Gross margin 70%  y-o-y comparison distorted by 59.7% 60% 57.3% positive effect of price increase in Q1 55.4% 52.7% 53.3% 2022 50%  Expecting gross margin >52% for Q2 2023 40%  Reiterating long-term ambition to maintain gross margin >50% 30% Q1 2022 Q2 2022 Q3 2022 Q4 2022

  17. Slide 17: Operating model performance Q1 2023

    © Nordic Semiconductor Operating model performance Q1 2023 Gross margin 53.3% Q1 2023 Q1 2022 Δ USD USD Revenue -20.6% Revenue impacted by market slowdown 145.4m 183.1m R&D short-range 53.3% 59.7% 17.2% Gross margin -6.4pp Q1’22 margins had positive effect of price increase USD 77.6m USD 109.3m 17.2

  18. Slide 18: Balancing investments and cost awareness

    © Nordic Semiconductor Balancing investments and cost awareness Cash OPEX* (USDm) Cash cost increase vs. Q4’22 due to continued increase in number of employees 45 Salary: 37 42 40 38  Employees increased by 20% y-o-y to 1,513  Currency reduced payroll cost in Q1’23 by USD >4m compared to Q1’22 rat

  19. Slide 19: Capex intensity remains low

    © Nordic Semiconductor Capex intensity remains low Capex (USDm) 10 8 6 4.4 %  Capex of USD 5.5 million in Q1 3.6 % 3.8 % 4  Overall capex intensity 3.4% for LTM 2.3 % 2.2 % 2 0 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Capex Capex/Revenue 19

  20. Slide 20: Cash position affected by prepayment and NWC

    © Nordic Semiconductor Cash position affected by prepayment and NWC Cash position and Cash Flow Q1 2023 (USDm)  Negative cash flow from operations excluding prepayment of USD 30 million  Increased NWC  Mainly due to inventory and accounts payables  NWC/Revenue LTM of 28.2%  Other items mainly i

  21. Slide 21: Summary and Outlook

    Summary and Outlook Svenn-Tore Larsen, CEO

  22. Slide 22: Flat q-o-q revenue expected in Q2

    © Nordic Semiconductor Flat q-o-q revenue expected in Q2 Q2 2023 guidance Revenue Gross margin  Continued inventory adjustments across USDm the value chain 140-160m >52%  Expect return to year-on-year revenue -20% to -30% -4% to +10% y-o-y q-o-q growth towards the end of the year 22

  23. Slide 23: aaa

    —7 aaa ) ° a o- =e oe. of - NORDIC

Nordic Semiconductor — Q1 2023 Earnings Presentation on 6ix