Infineon Technologies Ag · XETR:IFX
Infineon Technologies — Q3 FY2016 Earnings Presentation
51 slides from Infineon Technologies's earnings presentation, Aug 2, 2016
Slide 1: Third Quarter FY 2016 Quarterly Update
Third Quarter FY 2016 Quarterly Update Infineon Technologies AG Investor Relations
Slide 2: Table of Contents
Table of Contents 1 Infineon at a Glance 2 Planned acquisition of Wolfspeed 3 Growth Drivers 4 Results and Outlook 2016-08-02 Copyright © Infineon Technologies AG 2016. All rights reserved. 2
Slide 3: Infineon at a glance
Infineon at a glance Business Segments Power represents ~60% of revenue Industrial Power [EUR m] 676 Automotive 17% Control (IPC) 509 (ATV) Power Manage- 280 172 41% 31% ment & Multi- market (PMM) ATV IPC PMM CCS 11% Chip Card & Power Non-Power* revenue in Q3 FY16: €1,632m incl. OOS & C&E of -€5m Se
Slide 4: Technology leadership and system understanding fosters growth and profitability
Technology leadership and system understanding fosters growth and profitability Competitive advantages Average-cycle financial targets system leader in Auto automotive Revenue Growth: ~8% Power #1, system and technology leader Segment Result Margin: broadest technology ~15% portfolio;#1 in SiGe; bec
Slide 5: Infineon's Revenue Development Outperformed Total Semi Market
Infineon‘s Revenue Development (excl. IRF) Outperformed Total Semi Market [EUR m] CAGR(99-15): ~9% 6000 CAGR(99-15): +5.4% 4500 126,895*** 3000 300,000 5,100 (excl. IRF) 1,200** 200,000 1500 296,383 100,000 1,681 2,045 1,821 1,995 2,289 2,366 2,701 2,906 2,916 2,128 3,103 3,780 3,774 3,815 4,303 0 1
Slide 6: Our promise to investors: Continued value creation through growth (I)
Our promise to investors: Continued value creation through growth (I) Q3 FY16 revenue y-y growth ~3%, despite shrinking market [EUR m] +3% [EUR bn] -8% Revenue 80 1500 1,598 1,611 1,632 1,586 1,556 76.6 Segment 75.9 75.7 1000 Result 18% 70 15% 71.0 16% 14% 14% 70.0 Total 500 semiconductor market * 2
Slide 7: Our promise to investors: Continued value creation through growth (II)
Our promise to investors: Continued value creation through growth (II) RoCE as key value metric RoCE impacted by acquisition of International Rectifier WACC: low teens % 30% FY14: 20% 20% FY15: 13% 10% 17% 21% 24% 24% 18% 6% 9% 26% 12% 15% 15% 0% Q1 FY14 Q2 Q3 Q4 Q1 FY15 Q2 Q3 Q4 Q1 FY16 Q2 Q3 Q4 To
Slide 8: 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 and Smart Card ICs semiconductors modules total market in 2015: $2.72bn total market in 2015: $27.4bn total market in 2015: $14.8bn NXP 14.2% Infineon 18.6% NXP 30.5% Infineon 10.4% Mitsubi
Slide 9: 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 2016-08-02 Copyright © Infineon Technologies AG 2016. All rights reserved. 9
Slide 10: Table of Contents
Table of Contents 1 Infineon at a Glance 2 Planned acquisition of Wolfspeed 3 Growth Drivers 4 Results and Outlook 2016-08-02 Copyright © Infineon Technologies AG 2016. All rights reserved. 10
Slide 11: Key facts of the deal
Key facts of the deal › Transaction perimeter: ´s SiC wafer substrate business (excluding LED) › Revenues of US$173m in LTM* ending 27 March 2016 › Purchase price: US$ 850m › Transaction type: cash and debt free › Financing: US$ 720m bank loans US$ 130m cash-on-hand › Expected closing date: ~ end of
Slide 12: Deal rationale at a glance
Deal rationale at a glance › Become #1 in RF power amplifier market by ~2020 with most complete technology portfolio by capitalizing on technology disruption in cellular infrastructure › #1 in silicon carbide for power, strengthen automotive and industrial and accelerate market introduction with cut
Slide 13: Table of Contents
Table of Contents 1 Infineon at a Glance 2 Planned acquisition of Wolfspeed 3 Growth Drivers 4 Results and Outlook 2016-08-02 Copyright © Infineon Technologies AG 2016. All rights reserved. 13
Slide 14: Infineon benefits from industrial, auto and security, the by far fastest growing segments
Infineon benefits from industrial, auto and security, the by far fastest growing segments CAGR 2015 – 2020 by Semiconductor Industry Segment Industrial 7.8% $42bn* Automotive 5.7% $29bn* Chip Card ICs** 4.8% $3.7bn* Total Semi Market 1.9% $347bn* Data Processing 1.1% $45bn* Consumer 0.7% $108bn* Com
Slide 15: 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* Infineon is ideally › #3 in microcontrollers* (#1 in powertrain**) positioned to Most balanced portfolio with sensors, micro- ben
Slide 16: Infineon is system leader with most balanced portfolio in the market
Infineon is system leader with most balanced portfolio in the market Infineon covers the entire control loop in powertrain, safety/ADAS, and comfort/body sensors microcontrollers power total market in 2015: $4.2bn total market in 2015: $6.5bn total market in 2015: $7.1bn Bosch 18.1% Renesas 32.7% In
Slide 17: Four megatrends are shaping the automotive market
Four megatrends are shaping the automotive market, significantly increasing the semi content per vehicle ADAS/Autonomous driving xEV/eMobility › From ADAS to semi-automated › Mandated CO2 reductions make and finally autonomous driving electrification of powertrain › Every world region is striving fo
Slide 18: ADAS system chipset coverage by Infineon
ADAS system chipset coverage by Infineon Sense Compute Actuate Camera Inside Powertrain Graphics Domain Processor LIDAR Controller Radar Camera Sensor Safety Outside Fusion Domain Ultrasonic µC Controller Partially covered by Infineon Fully covered by Infineon 2016-08-02 Copyright © Infineon Technol
Slide 19: Infineon market leader in radar; 20m sensor chips sold
Infineon market leader in radar; 20m sensor chips sold; ~50% CAGR16-21 based on design wins* 2015 radar sensor market share** NXP Infineon 21% Vision Zero 43% + Autonomous Driving 36% Innovation for performance STM next gen. of Innovation for cost mid- and long- range radar mid- & long- AURIX™ 3rd g
Slide 20: ADAS semi growth driven by radar and camera sensor modules
ADAS semi growth driven by radar and camera sensor modules Average ADAS semiconductor content per level of automation Level 2 Level 3 Level 4 $550 $400 10% 8% 0% 5% 35% 30% 20% 12% 45% 35% 60% 0% 0% $100 40% Lidar Lidar Lidar Sensor Sensor Sensor Radar Radar Radar Actuators Camera Actuators Camera C
Slide 21: xEV growth driven by power semis
xEV growth driven by power semis Average xEV semiconductor content by degree of electrification 48 V HEV / PHEV EV Adder for DC-DC and starter/generator Adder for DC-DC, inverter, onboard charger $709 Others $704 µC $60 $190 $15 Power $15 µC Others Sensors Power $49 $414 $77 $372 Sensors Power $29 $
Slide 22: Infineon is well positioned globally to benefit disproportionally from xEV boom
Infineon is well positioned globally to benefit disproportionally from xEV boom 1 Premium OEM Soul EV Kangoo A3 e-tron V60, Q5 A6 S60, XC90 Passat, Golf FCEV Bolt Jetta Focus Ray EV Zoe Ampera-e ix35 Optima/Sonata E-Class Grandeur S-Class e-Golf e-up EV160 1 Premium OEM LaCrosse, Regal, 1 Mass Marke
Slide 23: Infineon is ideally positioned to benefit most from megatrends ADAS, xEV, and security
Infineon is ideally positioned to benefit most from megatrends ADAS, xEV, and security ADAS/autonomous xEV/e-mobility Security semi market driving semi market semi market [$m] [$m] [$m] 6,700 4,740 3,827 3,050 1,801 1,380 ~80% ~45% ~80% 700 ~40% 200 ~30% ~80% 15 100% 2015 2020 2025 2015 2020 2025 20
Slide 24: ADAS, CO2 reduction and adoption of premium features drive Infineon growth
ADAS, CO2 reduction and adoption of premium features drive Infineon growth Drivers for semiconductor content per car Vehicle production CO2 reduction Advanced safety Comfort, premium Courtesy: BMW Courtesy: Audi › ~2% growth p.a. › Driven by legislation › Current: › Premium cars are crash avoidance
Slide 25: Infineon is #1 and technology leader in power semiconductors
Infineon is #1 and technology leader in power semiconductors #1 in the market* Broadest product and technology portfolio Infineon is ideally positioned to gain Addressing broadest range of applications further market share and earn 300 mm thin-wafer manufacturing for power superior margins semicondu
Slide 26: As system leader in power, Infineon has broadest application and technology reach
As system leader in power, Infineon has broadest application and technology reach Covering the entire power chain Generation Transmission Consumption Main IPC markets Main PMM power markets System competence for highest reliability and highest efficiency Stacks Modules MOSFETs/IGBTs Drivers Controll
Slide 27: Infineon further strengthened its market positions
Infineon further strengthened its market positions IGBT components* Discrete standard (discretes and modules) MOSFETs total market in 2015: $3.94bn therein: IPMs total market in 2015: $5.48bn total market in 2015: $1.10bn Stronger #1 position New #4 position rms** unchanged Infineon 27.6% Mitsubishi
Slide 28: Infineon continuously improved relative market share in power
Infineon continuously improved relative market share in power Relative market share* of 3 in the total power semiconductor market 20% 19.2% 18.6% 3.00 3 15% 2.74 11.9% 11.8% 12.3% 10.7% 11.2% 9.4% 9.7% 10.2% 10% 8.4% 8.5% 8.1% 2 Int. Rectifier Int. Rectifier Int. Rectifier 1.65 1.69 1.49 Mitsubishi
Slide 29: Strong #1 position in power allows driving of key areas of differentiation and innovation
Strong #1 position in power allows driving of key areas of differentiation and innovation Unique 300 mm Compound thin wafer power semiconductors semiconductor GaN and SiC manufacturing Digitalization of Functional the power control integration of loop IGBT modules 2016-08-02 Copyright © Infineon Tec
Slide 30: Efficiency and digitalization are main market drivers for power applications
Efficiency and digitalization are main market drivers for power applications IPC PMM Drives Renewables Traction MHA AC-DC DC-DC › Energy › Legislation › Growing › Energy › Energy › Energy efficiency › Growing population in efficiency efficiency efficiency › Automation share of metropolitan › Growing
Slide 31: Sensors drive multimarket segment in PMM: 60 GHz radar transceiver for gesture sensing
Sensors drive multimarket segment in PMM: 60 GHz radar transceiver for gesture sensing 4 receive Presented at “Google I/O 2016”* antennas RF frontend, baseband, ADC, state machine, memory Courtesy: Google ATAP 2 transmit › 1.8 V for the complete chip set antennas › 54 mW power consumption in sensing
Slide 32: Infineon REAL3 image sensor is first to meet Google Tango specification
Infineon REAL3™ image sensor is first to meet Google Tango specification Lenovo PHAB2 Pro first smartphone based on Google Tango › depth perception of the surrounding in real-time › motion tracking which responds to physical movements › area learning capability which enables the device to recall the
Slide 33: Infineon is the leader in security solutions for the connected world
Infineon is the leader in security solutions for the connected world #2 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 turn-key solutions growth trends in the securit
Slide 34: 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 #2 market size: $2.72bn #1* market size: $698m microcontroller-based Embedded secure smart card ICs microcontrollers › Mobile device
Slide 35: Recent design-wins underline Infineon's #1 position in embedded digital security
Recent design-wins underline Infineon‘s #1 position* in embedded digital security Recent design-wins for OPTIGA™ family products › Servers and gateways › Notebooks, e.g. Lenovo ThinkPad Courtesy: Lenovo › Industry PCs › Tablets, e.g. Microsoft Surface Pro 4 › Smart home hub, e.g. Google OnHub Courte
Slide 36: 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: BMW Group › CO2 reduction › Energy efficiency › Energy efficiency › Security as a › Advanced Driver › Automation › Power density function Assistance › Productivity › BLDC motors › Mobile payments Systems inc
Slide 37: Table of Contents
Table of Contents 1 Infineon at a Glance 2 Planned acquisition of Wolfspeed 3 Growth Drivers 4 Results and Outlook 2016-08-02 Copyright © Infineon Technologies AG 2016. All rights reserved. 37
Slide 38: Strong growth in ATV due to ADAS and electro-mobility
Strong growth in ATV due to ADAS and electro-mobility ATV* IPC* PMM* CCS* [EUR m] [EUR m] [EUR m] [EUR m] +9% -2% 670 676 621 613 614 517 535 510 496 509 +4% 0% 269 271 249 265 280 19% 21% 15% 15% 16% 13% 17% 13% 14% 15% 172 181 173 180 172 11% 14% 9% 10% 15% 20% 21% 20% 20% 19% 79 102 81 94 104 30
Slide 39: Guidance for Q4 FY16 and total FY16
Guidance for Q4 FY16 and total FY16 Outlook Q4 FY16* Outlook FY16 (compared to Q3 FY16) (compared to FY15) Based on the outlook for Increase of 3% Revenue Q4 FY16, revenue growth +/- 2%-points and Segment Result Margin for FY16 are expected to Segment At the mid-point of the finish within the range
Slide 40: Part of your life. Part of tomorrow. Infineon
Part of your life. Part of tomorrow. Infineon
Slide 41: Solid Investment Grade rating assigned by S&P
Solid Investment Grade rating assigned by S&P in connection with revised capital structure targets Revised capital structure targets announced by Infineon in February 2016: a.) Gross Cash b.) Gross Debt › “€1bn plus 10% to 20% of revenue” › “less than 2.0x EBITDA” Infineon‘s revised capital structur
Slide 42: Infineon has a well balanced maturity profile
Infineon has a well balanced maturity profile Maturity profile [EUR m; US$ m] €500 new debt in case of closing of the Wolfspeed acquisition $350 $350 €300 $250 $250 $235 €200 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 3-year 4-year 5-year 8-year 10-year 12-year Eurobond $-term €-term $-t
Slide 43: SG&A still includes noticeable acquisition-related costs
SG&A still includes noticeable acquisition- related costs that are incrementaly declining S and G&A* R&D** [EUR m] 215 220 210 200 195 200 201 197 198 195 197 200 15% 180 160 14% 140 120 13% 100 80 12% 60 40 11% 20 0 10% Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 FY15 FY16 FY15 FY16 General & Administration Sell
Slide 44: Improved working capital due to increased payables
Improved working capital due to increased payables Working capital Inventories [EUR m] [EUR m] [days] 1,129 1,190 1,165 1,198 1,040 125 1000 911 1000 100 761 791 800 800 631 75 550 600 600 50 400 400 200 25 200 0 0 0 Q3 FY15 Q4 Q1 FY16 Q2 Q3 Q3 FY15 Q4 Q1 FY16 Q2 Q3 Inventories DOI* Trade receivable
Slide 45: Investments on target of ~13% of sales; D&A stable at ~13% of sales
Investments on target of ~13% of sales; D&A stable at ~13% of sales Investments* D&A [EUR m] 1000 30% 887 890 ~850 ~850 800 22.8% 785 760 668 22.2% 20% 600 15.5% 514 220 466 206 378 428 400 13.5% 13.1% 364 13.1% 13.1% 12.1% 11.9% 10% 11.0% 9.8% 163 9.1% 213 200 167 211 0 0% FY11 FY12 FY13 FY14 FY15
Slide 46: Net cash increased due to €277m Free Cash Flow
Net cash increased due to €277m Free Cash Flow Liquidity development [EUR m] 1,784 1,793 1,790 299 220 1,793 204 1,776 1,842 2,013 1,994 1,803 2,083 27 49 Q3 Q4 Q1 Q2 Q3 FY15 FY16 Gross Cash Debt Net Cash › Free Cash Flow from continuing operations was €277m, significantly up from €45m in Q2. This i
Slide 47: RoCE expected to increase in FY16 vs FY15
RoCE expected to increase in FY16 vs FY15 RoCE* history RoCE impacted by acquisition of International Rectifier WACC: low teens % 30% FY14: 20% 20% FY15: 13% 10% 17% 21% 24% 24% 18% 6% 9% 26% 12% 15% 15% 0% Q1 FY14 Q2 Q3 Q4 Q1 FY15 Q2 Q3 Q4 Q1 FY16 Q2 Q3 Q4 Capital Employed* history [EUR m] 6000 520
Slide 48: 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 49: 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 2015: Infineon was listed in the STOXX® Global ESG Leaders Indices, which serves as an indicator of the quality of Infineon’s performance in the governance, › Jan 2016: Infineon is
Slide 50: Financial calendar
Financial calendar Date Location Event 01 Sep 2016 Frankfurt Commerzbank Sector Week 06 – 07 Sep 2016 New York Citi Global Technology Conference 08 – 09 Sep 2016 London Deutsche Bank European TMT Conference Berenberg Bank and Goldman Sachs German 19 Sep 2016 Munich Corporate Conference 21 Sep 2016 M
Slide 51: 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 Manager +49 89 234-22332 Investor Relations
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