Nxp Semiconductors N.v. · NASDAQ:NXPI
Nxp Semiconductors — Q3 2024 Earnings Presentation
34 slides from Nxp Semiconductors's earnings presentation, Nov 5, 2024
Slide 1: NXP Investor Presentation Third Quarter 2024
NXP Investor Presentation Third Quarter 2024 November 2024 | Public | NXP and the NXP logo are trademarks of NXP B.V. All other product or service names are the property of their respective owners. © 2024 NXP B.V.
Slide 2: 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 2 | NXP | Public
Slide 3: Forward Looking Statements
Forward Looking Statements 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-looking statement
Slide 4: NXP: A Rich History of Innovation
NXP: A Rich History of Innovation High Performance Mixed-Signal Focus Secure Edge Processing $228 $230 Year-end Share Marvell Price Connectivity Asset Acquired Freescale $159 $158 Merger $117 $127 Non-GAAP $98 36.3% 35.1% Operating $84 Margin % IPO $76 $73 32.9% 26.6% 29.4% 28.7% $46 29.0% Phillips
Slide 5: Macrotrends Driving Waves of Semi Growth
Macrotrends Driving Waves of Semi Growth (1) Rise of Secure Edge Smart connected devices Smart factories and homes Smart connected cars Smartphones Data-center servers Laptop, Game Consoles Desktop, Home Audio Semiconductor TAM ($B) Mobiles HiFi… 2000 2005 2010 2015 2020 2025E 2030E 5 | NXP | Public
Slide 6: Auto & Industrial Lead Growth at the Intelligent Edge within a $1.3T Opportunity
Auto & Industrial Lead Growth at the Intelligent Edge within a $1.3T Opportunity Global Semiconductor market value by vertical, $billion Growth contribution per vertical 2021-30 $B ( % of Total) CAGR, % 9% ~ 1,300 ~ 700 300 300 (43%) GenAI 60 80 140 8% 5% 30 (4%) Wired 140 30 (4%) Consumer 10% 100%
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 7 | NXP | Public
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: Analyst Day 2021: Accelerating Profitable Growth of 8-12% CAGR
Analyst Day 2021: Accelerating Profitable Growth of 8-12% CAGR (1.2,3,4) Communications Automotive Industrial & IoT Mobile Infrastructure 56% of Total 18% of Total 10% 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 i
Slide 10: Analyst Day 2021: Our Secular Growth Drivers Expected to Scale Rapidly
Analyst Day 2021: Our Secular Growth Drivers Expected to Scale Rapidly (1,2,3,4) 2023 revenue: $13.3B Revenue by end-market exposure by business type ~$15B Accelerated $6B Growth Drivers ~$11B 20-25% 56% $9.4B 2021-24 CAGR Automotive ~$3B $1.6B High RMS Core Businesses ~$8B ~$9B $7.8B ~5% 2021-24 CA
Slide 11: Analyst Day 2021: Accelerating Secular Profitable Revenue Growth
Analyst Day 2021: Accelerating Secular Profitable Revenue Growth (1,2,3,4) Automotive Industrial & IoT 9 - 14% CAGR ~$7.7B 9 – 14% CAGR $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 ~$1.8B $1.8B ~$2.0B $1.4B ~70% C
Slide 12: NXP Semiconductors – At a Glance
NXP Semiconductors – At a Glance (1,2,3) 2023 Geographic Revenue Ship-To by Region 2023 Revenue Ship-To by Channel EMEA, Americas, $3.1B, 23% $2.1B, 16% Direct & Other, Distribution, $6.1B, 46% $7.2B, 54% Asia Pacific ex-China, China, $$3.7B, 28% $4.4B, 33% Hybrid Manufacturing - Front-end Sourcing
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 2023 Revenue >25,000 Total Customers No 10% Customers Automotive Industrial & IoT Mobile Comm. Infra. & Other 13 | NXP | Public 1. Reflects 2023 sales through all channels
Slide 14: NXP End Market Relative Market Share (RMS)
NXP End Market Relative Market Share (“RMS”) (1,2) ’23 Total NXP Product Revenue ’23 Automotive ’23 Industrial & IoT True Leader Leader RMS >1.5x RMS 1.0 – 1.5x ’23 Sales ’23 Sales $7.5B $2.4B ’23 Sales $13.3B ’23 Mobile ’23 Com. Infra. & Others ’23 Sales ’23 Sales Focused Contender RMS <0.5x $1.3B
Slide 15: Driving Profitable Growth in Excess of Addressable Market
Driving Profitable Growth in Excess of Addressable Market (1,2) As Reported Revenue Non-GAAP Gross Profit / Non-GAAP Gross Margin Up 16% 3-yr. CAGR ($B) Up 21% 3-yr. CAGR ($B) 51.1% 56.1% 57.9% 58.5% $8.6 $11.1 $13.2 $13.3 $4.4 $6.2 $7.6 $7.8 2020 2021 2022 2023 2020 2021 2022 2023 Non-GAAP Operatin
Slide 16: Annual Revenue by End Market ($B)
Annual Revenue by End Market ($B) (1) Automotive Industrial & IoT Up 25% 3-yr. CAGR ($B) Up 9% 3-yr. CAGR ($B) $3.8 $5.5 $6.9 $7.5 $1.8 $2.4 $2.7 $2.4 2020 2021 2022 2023 2020 2021 2022 2023 Mobile Communication Infrastructure & Other Up 2% 3-yr. CAGR ($B) Up 7% 3-yr. CAGR ($B) $1.2 $1.4 $1.6 $1.3 $
Slide 17: Recent Quarterly Business Trends
Recent Quarterly Business Trends (1,2) As Reported Revenue ($M) Non-GAAP Gross Profit / Non-GAAP Gross Margin 4% Q-Q (5%) Y-Y 58.5% 58.7% 58.2% 58.6% 58.2% 58.2% 58.4% 3,434 3,422 3,126 3,127 3,250 2,010 2,010 1,818 1,833 1,892 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Non-GAAP Ope
Slide 18: Quarterly Revenue by End Market ($M)
Quarterly Revenue by End Market ($M) (1) Automotive Industrial & IoT 6% Q-Q (3%) Y-Y (9%) Q-Q (7%) Y-Y $1,891 $1,899 $1,804 $1,728 $1,829 $607 $662 $574 $616 $563 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Mobile Communication Infrastructure & Other 18% Q-Q 3% Q-Q 8% Y-Y (19%) Y-Y $
Slide 19: A Robust Shareholder Centric Capital Return Policy
A Robust Shareholder Centric Capital Return Policy (1,2) Capital Return ($B) Capital Return Policy: Increased 39% 6-yr. CAGR • Return All Excess non-GAAP FCF 107% • Cumulative Capital Return 2017 – 2023: 102% • $17.1B or 98% of non-GAAP FCF 98% 95% 95% • Capital Return Growth of 39% CAGR $5.1B 85% 1
Slide 20: Debt Summary at the End of 3Q24
Debt Summary at the End of 3Q24 (1,2) Sr. Sr. Sr. Sr. Sr. Sr. Sr. Sr. Sr. Sr. Sr. Sr. Sr. Sr. Revolving Debt Instrument Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Credit Notes Notes Notes Notes Notes Not
Slide 21: Working Capital Ratios ($M)
Working Capital Ratios($M) (1,2) DSO DPO 25 24 26 27 30 60 72 65 64 60 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 DIO Cash Conversion Cycle 134 132 144 148 149 99 84 105 111 119 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 DSO = (91.25 x AR) / Revenue DIO = (91.25 x I
Slide 22: Proven, Resilient and Profitable
Proven, Resilient and Profitable (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 growth 8 – 14% 10
Slide 23: Financial Model
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 $45M Net capex 6 to 8% Stock base
Slide 24: Guidance for the Fourth Quarter of 2024
Guidance for the Fourth Quarter of 2024 (1,2,3,4,5) GAAP Reconciliation Non-GAAP Low Mid High Low Mid High Total Revenue 3,000 3,100 3,200 3,000 3,100 3,200 Q-Q -8% -5% -2% -8% -5% -2% Y-Y -12% -9% -6% -12% -9% -6% Gross Profit 1,674 1,746 1,820 (35) 1,709 1,781 1,855 Gross Margin 55.8% 56.3% 56.9%
Slide 25: NXP Sustainability Mission
NXP Sustainability Mission Strategy Guiding Principles Goals Push boundaries Innovate advancements that Develop higher-performing, and explore new approaches to enable a better, safer, more energy-efficient solutions that develop innovative and secure and more sustainable positively impacts the plan
Slide 26: NXP 2023 Sustainability Progress
NXP 2023 Sustainability Progress Scope 1 Scope 2 Scope 3 Additional Progress: Upstream and Direct sources Indirect sources downstream sources 28% decrease 1% decrease 29% decrease non-GHG electricity PFC emissions emissions consumption from 2022 from 2022 from 2022 2% decrease 57% decrease 24% decre
Slide 27: NXP Sustainability Ratings
NXP Sustainability Ratings BB AA AAA AAA 2020 2021 2022 2023 Low Risk Low Risk Medium Risk Low Risk 19.4 19.8 21.6 19.8 2020 2021 2022 2023 Climate: D Climate: D Climate: D Climate: C Water: D Water: D Water: D Water: B- 2020 2021 2022 2023 C+ C+ C+ B- Prime Prime Prime Prime 2020 2021 2022 2023 27
Slide 28: GAAP Condensed Consolidated Statement of Operations ($M)
GAAP Condensed Consolidated Statement of Operations ($M) (1) ($ in millions, unless otherwise stated) Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Revenue 3,434 3,422 3,126 3,127 3,250 Cost of Revenue (1,469) (1,485) (1,343) (1,335) (1,384) Gross Profit 1,965 1,937 1,783 1,792 1,866 Research and developm
Slide 29: Quarterly GAAP to non-GAAP Reconciliation ($M)
Quarterly GAAP to non-GAAP Reconciliation ($M) (1) Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 ($ in millions, unless otherwise stated) 2023 2023 2024 2024 2024 2023 2023 2024 2024 2024 GAAP Gross Profit 1,965 1,937 1,783 1,792 1,866 GAAP Net income (loss) attributable to stockholders 787 697 639 658 718 PPA Effe
Slide 30: Quarterly Cash Flow Overview ($M)
Quarterly Cash Flow Overview ($M) (1) Q3 Q4 Q1 Q2 Q3 ($ in millions, unless otherwise stated) 2023 2023 2024 2024 2024 Net cash provided by (used for) operating activities 988 1,137 851 761 779 Net cash provided by (used for) investing activities (273) (629) (274) (239) (371) Net cash provided by (u
Slide 31: Quarterly Adjusted EBITDA ($M)
Quarterly Adjusted EBITDA ($M) (1) Q3 Q4 Q1 Q2 Q3 ($ in millions, unless otherwise stated) 2023 2023 2024 2024 2024 Net income (loss) 792 703 644 664 729 Reconciling items to adjusted net income Financial (income) expense 75 78 70 75 82 (Benefit) provision for income taxes 123 124 141 154 173 Deprec
Slide 32: Notable Product Announcements
Notable Product Announcements ESMC Breaks Ground on Dresden Fab VIS and NXP Announce Establishment of VSMC Joint Venture NXP Combines Ultra-Wideband Secure Ranging and Short-Range Radar to Enable Autonomous Industrial and IoT Applications NXP’s MC33777 Revolutionizes Battery Pack Monitoring Technolo
Slide 33: 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 33 | NXP | Public
Slide 34: nxp.com
nxp.com | Public | NXP and the NXP logo are trademarks of NXP B.V. All other product or service names are the property of their respective owners. © 2024 NXP B.V.