Nxp Semiconductors N.v. · NASDAQ:NXPI
Nxp Semiconductors — Investor Presentation (July 2019)
25 slides from Nxp Semiconductors's investor presentation, July 2019
Slide 1: NXP Investor Presentation Second Quarter 2019
NXP Investor Presentation Second Quarter 2019 July 2019 SECURE CONNECTIONS FOR A SMARTER WORLD
Slide 2: Forward-Looking Statement
Forward-Looking Statement This presentation includes forward-looking statements which include statements regarding NXP’s business strategy, financial condition, results of operations, and market data, as well as any other statements which are not historical facts. By their nature, forward-looking st
Slide 3: NXP Investment Thesis
NXP Investment Thesis Market Leader in Focused on Strong Growing Markets Profitable Growth Shareholder All Excess Cash Friendly Returned to Shareholders 2
Slide 4: Secure Connections for the Smarter World… has Evolved
Secure Connections for the Smarter World… has Evolved Preprocessing Focus Verticals Cloud IoT Edge Enabling Infrastructure Technologies Home Automotive Gateway Industrial Controller Machine Learning Authentication Auto Smart Industrial & IoT Processing Gateway City Mobile Connectivity Services Data
Slide 5: NXP Addresses 4 Major End Markets
NXP Addresses 4 Major End Markets Automotive Industrial & IoT ADAS + Electrification Fragmented customer base System solutions innovation with OEMs Processing needs are transforming markets Increased content drives growth Scalable solutions as a differentiator Mobile Communication Large mobile and a
Slide 6: Focused Leadership – End Markets
Focused Leadership – End Markets 1,2,3 NXP 2018 Revenue by End-market Exposure Broad end market exposure • Long product life cycles • High barriers to entry • Application expertise 48% Automotive Recognized leadership in • Automotive 19% • MCU and application processors Industrial & • Mobile transac
Slide 7: Growth Opportunity Driven by Focus End Markets
Growth Opportunity Driven by Focus End Markets 1 Growth by End Market Percent 2018A – 2021E $10.9B - $11.6B End Market 2018 3-yr. CAGR Revenue 5-7% 3-Yr CAGR Automotive 48% Up 7 to 10% $9.4B Industrial & IoT 19% Up 8 to 11% Mobile 12% Up 4 to 6% Comm. Infra. & Other 19% 0 to up 2% Total Up 5 - 7% 20
Slide 8: Automotive – NXP Leads, Accelerates in New Areas
Automotive – NXP Leads, Accelerates in New Areas 1,2 Revenue 7-10% 3-Yr CAGR Growth drivers $4.5B • New business – above market growth − ADAS / radar, vehicle networks, electrification • Core business – at market growth − Connected infotainment, powertrain, 2018A 2021E secure car access Market 5-7%
Slide 9: Industrial & IoT – Highly Diversified
Industrial & IoT – Highly Diversified 1,2,3,4 Revenue 8-11% 3-Yr CAGR Growth drivers $1.8B • Processing − 32bit microcontrollers & cross-overs − IoT application processors − Analog mixed-signal & connectivity 2018A 2021E Market 3-5% $127B 3-Yr CAGR Value proposition • Broad, scalable solutions • Com
Slide 10: Mobile – Specialty Supplier with High Moats
Mobile – Specialty Supplier with High Moats 1,2,3,4 Revenue 4-6% 3-Yr CAGR $1.2B Growth drivers • Mobile payment adoption • New use cases (transit, access, etc.) • High-speed mixed-signal interface 2018A 2021E Market 4-7% Value proposition 3-Yr CAGR $71B • Technology innovator and leadership • Recog
Slide 11: Comm. Infra. & Other – Cyclical and Project Oriented
Comm. Infra. & Other – Cyclical and Project Oriented 1,2,3 Revenue 0-2% $1.8B 3-Yr CAGR Growth drivers • 5G basestation deployment will result in − Adoption of mMIMO − Continued leadership in LDMOS − Transition to GaN 2018A 2021E • Leadership in transit, access and retail 3-5% − MIFARE and RFID Mark
Slide 12: Diverse Customer Base - Top 20 Customers > 40% of Revenue
Diverse Customer Base - Top 20 Customers > 40% of Revenue 1 15% >25,000 Total Customers 0% Automotive Mobile Comm. Infra. 11 1. Reflects 2018 sales through all channels
Slide 13: Driving Profitable Growth in Excess of Addressable Market
Driving Profitable Growth in Excess of Addressable Market 1,2,3,4 2 As Reported Revenue Up 16% 3-yr. CAGR ($B) Non-GAAP Gross Profit up 18% 3-yr. CAGR ($B) $6.1 $9.5 $9.3 $9.4 $3.0 $4.8 $4.9 $5.0 2015 2016 2017 2018 2015 2016 2017 2018 2 2 Non-GAAP EBIT Profit up 17% 3-yr. CAGR ($B) Non-GAAP Free Ca
Slide 14: Recent Quarterly Business Trends
Recent Quarterly Business Trends 1,2 As Reported Revenue ($M) Non-GAAP Gross Margin 2,269 2,290 2,445 2,403 2,094 2,217 52.9% 52.8% 53.0% 53.1% 52.7% 53.3% Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Non-GAAP Operating Margin Non-GAAP Adj. EBITDA Margin 27.2% 27.0% 30.0%
Slide 15: Revenue by End Market Trend ($M)
Revenue by End Market Trend($M) 1 Automotive Industrial & IoT ~flat Q-Q (10%) Y-Y 6% Q-Q (14%) Y-Y $1,131 $1,143 $1,121 $1,112 $1,036 $1,031 $426 $454 $498 $435 $368 $390 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Mobile Communication Infrastructure & Other 11% Q-Q 19% Y
Slide 16: Debt Summary End of 2Q19
Debt Summary End of 2Q19 1 Cash Sr. Unsecured Sr. Unsecured Sr. Unsecured Sr. Unsecured Sr. Unsecured Sr. Unsecured Sr. Unsecured Sr. Unsecured Sr. Unsecured Sr. Unsecured Revolving Debt Instrument Convertible Notes(2) Notes Notes Notes Notes Notes Notes Notes Notes Notes Credit Facility Notes Matur
Slide 17: Working Capital Ratios
Working Capital Ratios 1,2 DSO DPO 32 31 32 30 35 32 83 90 74 80 74 67 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 DIO(2) Cash Conversion Cycle 106 111 100 102 113 100 55 52 58 52 74 65 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 DSO = (91.25 x
Slide 18: Guidance for the Third Quarter of 2019
Guidance for the Third Quarter of 2019 1 Guidance Range GAAP Reconciliation non-GAAP Low Mid High Low Mid High Total Revenue $ 2,210 $ 2,240 $ 2,270 $ - $ 2,210 $ 2,240 $ 2,270 Q-Q 0% 1% 2% 0% 1% 2% Y-Y -10% -8% -7% -10% -8% -7% Gross Profit $ 1,151 $ 1,173 $ 1,196 $ (29) $ 1,180 $ 1,202 $ 1,225 Gro
Slide 19: Financial Model
Financial Model 1 2018A – 2021E Focused Market Growth(1) 3 - 5% NXP Growth(1) 5 - 7% Non-GAAP Gross Margin 53 - 57% Non-GAAP R&D 14 - 16% Non-GAAP SG&A 6 - 8% Non-GAAP Operating Margin 31 - 34% Non-GAAP Operating Income Growth ~8 - 14% 18 1. 3 Year CAGR from 2018 actuals through 2021E internal NXP e
Slide 20: Updated Modeling Items
Updated Modeling Items 1,2 2Q19A 3Q19E 2019E 2020E 2021E Cash Tax on Ongoing $30M $41M 5.0% 7.0% 11.0% Operations Incidental Cash Taxes $36M $11M $250M $85M - Stock Based $87M $87M $352M $365M $350M Compensation Non-Controlling Interest $5M $10M $30M $45M $45M 1. Updated since Analyst Day 2018 (Sept
Slide 21: Quarterly Financial Reconciliation (GAAP to non-GAAP)
Quarterly Financial Reconciliation (GAAP to non-GAAP) 1 Q2 Q1 Q2 Other Information ($ in millions, unless otherwise stated) 2019 2019 2018 • PPA effects: ($377M) Total Revenue 2,217 2,094 2,290 GAAP Gross Profit 1,151 1,072 1,180 • Restructuring: ($5M) Gross profit adjustments (30) (32) (30) • Stock
Slide 22: Quarterly Cash Flow Overview ($M)
Quarterly Cash Flow Overview ($M) 1 Q2 Q1 Q2 ($ in millions, unless otherwise stated) 2019 2019 2018 Net cash provided by (used for) operating activities 517 296 403 Net cash provided by (used for) investing activities (144) (136) (132) Net cash provided by (used for) financing activities 463 (756)
Slide 23: Quarterly Adjusted EBITDA ($M)
Quarterly Adjusted EBITDA ($M) 1 Q2 Q1 Q2 ($ in millions, unless otherwise stated) 2019 2019 2018 Net income (loss) 46 (16) 66 Reconciling items to adjusted net income Financial (income) expense 89 83 71 (Benefit) provision for income taxes 21 (9) 4 Depreciation 128 124 119 Amortization 378 378 377
Slide 24: End-market to Operating Segment Map
End-market to Operating Segment Map 1 2018A-2021E Auto SCD SI&I SIS 3-Year CAGR SCD Automotive • Entire Auto • Infotainment AP Auto 7 – 10% CAGR SII Industrial • Industrial & IoT MCU • High perf. analog • Industrial & IoT AP & IoT • AC-DC power • Low power connectivity SCD 8 – 11% CAGR • Specialty A
Slide 25: Value Proposition
Value Proposition Driving RMS Multiple High Solutions World-class Leadership Growth Markets Core Competency Expertise & Team Focused on RMS Profitable growth Resolving customer Customer focused > 1.5X pain-points passion to win Maximize Shareholder Value Strong cash flow generation 24
NXP Semiconductors — Investor Presentation (July 2019) on 6ix