Intel Corporation · NASDAQ:INTC
Intel — Investor Day (May 2010)
51 slides from Intel's investor day presentation, May 12, 2010
Slide 1: Investor Meeting 2010
INVESTOR MEETING 2010 Exhibit 99.2
Slide 2: Stacy J. Smith, SVP and Chief Financial Officer, May 11, 2010
Investor Meeting Stacy J. Smith Senior Vice President Chief Financial Officer May 11, 2010
Slide 3: 2009/2010 Actions
INVESTOR MEETING 2010 2009/2010 Actions • Drive efficiency and reduce spending as a percent of revenue • Extend our product leadership • Reduce costs by segment • Deliver on capital efficiency and reuse with 32nm • •
Slide 4: Revenue Growth, Margin Growth, Spending Efficiency, New Business Growth, Cash and ROIC
INVESTOR MEETING 2010 Revenue Growth Margin Growth Spending Efficiency New Business Growth Cash and ROIC
Slide 5: Revenue Growth
INVESTOR MEETING 2010 Revenue Growth Margin Growth Spending Efficiency New Business Growth Cash and ROIC
Slide 6: Platform Ingredients Revenue by Product
INVESTOR MEETING 2010 Platform Ingredients Revenue by Product Source: Intel
Slide 7: Revenue Growth Drivers
INVESTOR MEETING 2010 Revenue Growth Drivers • Strength of consumer market • Shift to notebooks / Netbooks • Emerging markets • Data center • Strength of our product portfolio across the compute continuum Source: Intel
Slide 8: Revenue Growth Drivers: Low Double Digit Growth
INVESTOR MEETING 2010 Revenue Growth Drivers Forward looking statements specified are preliminary based on current expectations, and are subject to change without notice Source: Intel Low Double Digit Revenue Growth for the Next Few Years • Strength of consumer market • Shift to notebooks / Netbooks
Slide 9: Margin Growth
INVESTOR MEETING 2010 Margin Growth Revenue Growth Spending Efficiency New Business Growth Cash and ROIC
Slide 10: Fab Capacity Percent Loaded
INVESTOR MEETING 2010 Fab Capacity Percent Loaded 100% 80% 60% 40% 20% 0% Forecast Source: Intel
Slide 11: Manufacturing Startup Costs
INVESTOR MEETING 2010 Manufacturing Startup Costs $ Forecast Fab 68 0 Source: Intel
Slide 12: Inventory Controls
INVESTOR MEETING 2010 Inventory Controls Inventories Reserves as % of Gross Inventories Quarterly 2006 - Q1 2010 Quarterly 2006 - Q1 2010 Source: Intel
Slide 13: Capital Intensity Increases Generation to Generation
INVESTOR MEETING 2010 Capital Intensity Increases Generation to Generation Forecast Source: Intel
Slide 14: Capital Savings
INVESTOR MEETING 2010 Capital Savings Spending Avoided Through Reuse $B 2009 Investor Meeting data Current 32nm forecast Spending avoided ($B) (%) Spending avoided ($B) (%) Source: Intel
Slide 15: Manufacturing Efficiency
INVESTOR MEETING 2010 Manufacturing Efficiency 32nm 100 1000 Gate Pitch (nm) 0.0 0.5 1.0 1.5 2.0 1.0 V, 100 nA I OFF 45nm 32nm 65nm 90nm 130nm Source: Intel Responsiveness Efficiency Velocity 65% FAB CYCLE TIME REDUCTION Days Q3’06 Q1 ‘10 Week of Ramp 3X 2007 50% REDUCTION IN ORDER TO DELIVERY TIME
Slide 16: Increasing Capital Efficiency at Wafer Start Peaks
INVESTOR MEETING 2010 Increasing Capital Efficiency at Wafer Start Peaks Capital Spending per Wafer Start $ 0 ku 0 Source: Intel Forecast
Slide 17: Capital Intensity
INVESTOR MEETING 2010 Capital Intensity Capital Spending as Percentage of Cost of Sales Note: stock based compensation expense began in 2006 Source: Intel
Slide 18: Capital Intensity
INVESTOR MEETING 2010 Capital Intensity Capital Spending as Percentage of Cost of Sales Note: stock based compensation expense began in 2006 Source: Intel Theoretical Without Improvements
Slide 19: Capital Intensity Forecast
INVESTOR MEETING 2010 Capital Intensity Capital Spending as Percentage of Cost of Sales Forecast Note: stock based compensation expense began in 2006 Source: Intel Theoretical Without Improvements
Slide 20: Weighted Average Die Size: CPU + Chipset
INVESTOR MEETING 2010 Weighted Average Die Size: CPU + Chipset mm 2 Forecast Source: Intel
Slide 21: Average Platform Unit Costs
INVESTOR MEETING 2010 Average Platform Unit Costs Combined CPU and Chipset $ 1.0x 0.5 x 0.75 x Source: Intel
Slide 22: Average Platform Unit Costs Quarterly Forecast
INVESTOR MEETING 2010 Average Platform Unit Costs Combined CPU and Chipset Quarterly Forecast $ Source: Intel
Slide 23: Average Platform Unit Costs vs 2009 Investor Meeting Forecast
INVESTOR MEETING 2010 Average Platform Unit Costs Combined CPU and Chipset Quarterly Forecast $ 2009 Investor Meeting forecast Source: Intel
Slide 24: Percent of Client Stack
INVESTOR MEETING 2010 Percent of Client Stack Client = Desktop and Mobile Forecast Source: Intel
Slide 25: Price and Unit Cost
INVESTOR MEETING 2010 Price and Unit Cost CPU + Chipset ASPs and Unit Costs Quarterly 2006-Q1 2010 $ 0 ASP Cost Source: Intel
Slide 26: Price, Unit Cost, and Product Margin
INVESTOR MEETING 2010 Price, Unit Cost, and Product Margin CPU + Chipset ASPs, Unit Costs, and Product Margin% Quarterly 2006-Q1 2010 $ 0 Product Margin % ASP Cost Note: Product margin excludes startup and shutdown costs, excess capacity charges, inventory write-offs and certain period costs such as
Slide 27: Memory Impact to Intel Gross Margin
INVESTOR MEETING 2010 Memory Impact to Intel Gross Margin Figures specified are preliminary based on current expectations and are subject to change without notice NOR Business Divested + NAND Business Improvements 2-3pts. GM% improvement ‘08 to ‘10
Slide 28: Intel Gross Margin Model
INVESTOR MEETING 2010 Intel Gross Margin Model Forecast Source: Intel
Slide 29: Intel Gross Margin Model: 55%-65% Range
INVESTOR MEETING 2010 Intel Gross Margin Model Forecast 64% in 2010 represents the midpoint of the 2010 full year outlook range Forecast range is based on current expectations and is subject to change without notice Source: Intel 55%-65% Gross Margin Range For The Next Few Years
Slide 30: Spending Efficiency
INVESTOR MEETING 2010 Spending Efficiency Revenue Growth Margin Growth New Business Growth Cash and ROIC
Slide 31: Spending % of Revenue
INVESTOR MEETING 2010 Spending* % of Revenue * MG&A + R&D spending. 2000 through 2005 adjusted to include stock based compensation expense ** Not an Intel forecast. Consensus Revenue of $43.033B from 5/7/2010 and $12.4B for R&D + MG&A ( the midpoint of Intel Outlook) Source: Intel
Slide 32: Intel's Approach to Spending Reduction
INVESTOR MEETING 2010 Intel’s Approach to Spending Reduction Significant Improvements in Underlying Efficiency. MANUFACTURING: Maintain world class yields while reducing cash wafer cost and improving factory responsiveness R&D Improve design productivity through modularity and reuse, resulting in sm
Slide 33: Spending % of Revenue
INVESTOR MEETING 2010 Spending* % of Revenue * MG&A + R&D spending. 2000 through 2005 adjusted to include stock based compensation expense ** Not an Intel forecast. Consensus Revenue of $43.033B from 5/7/2010 and $12.4B for R&D + MG&A (the midpoint of Intel Outlook) Source: Intel
Slide 34: New Business Growth
INVESTOR MEETING 2010 New Business Growth Revenue Growth Margin Growth Spending Efficiency Cash and ROIC
Slide 35: Other Operating Segments Profit Improvement
INVESTOR MEETING 2010 Other Operating Segments Profit Improvement $M Forecast Includes “other Intel architecture operating segments” and “other operating segments” - Other Intel architecture operating segments includes microprocessors and related chipsets for embedded applications and products desig
Slide 36: NAND Improvements
INVESTOR MEETING 2010 NAND Improvements • Process technology and cost leadership – Leadership continues with 25nm • Aligned supply with demand • SSDs launched to critical acclaim; ramping • Result: NAND profitability Cost/GB $ 0 Source: Intel 50nm 34nm
Slide 37: Intel Atom Processor Based Businesses
INVESTOR MEETING 2010 Intel ® Atom™ Processor Based Businesses Revenue > $1B in 2010 Profit Trend vs. 2008 Profitable in 2010 Operating Margin Leverage Netbooks Yes Significant growth Very Very High Embedded* Yes Growth Very High Handhelds No Flat/Investing No High Consumer Electronics No Flat/Inves
Slide 38: Cash and ROIC
INVESTOR MEETING 2010 Cash and ROIC Revenue Growth Margin Growth Spending Efficiency New Business Growth
Slide 39: Cash Generation
INVESTOR MEETING 2010 Cash Generation Cash from Operations $B Forecast * 2010 Annualized figure of cash from operations is Q1 2010 cash from operations multiplied by four Source: Intel
Slide 40: Uses of Cash
INVESTOR MEETING 2010 Uses of Cash Capital Spending, Dividend, and Acquisitions $B Forecast * Based on midpoint of 2010 capital expenditure Outlook 2010 Annualized figure for dividend is not an Intel forecast but represents the March 2010 dividend multiplied by four 2010 Annualized figure of cash fr
Slide 41: Steadily Increasing Dividend
INVESTOR MEETING 2010 Steadily Increasing Dividend Dividends per Share • $3.1 B of dividends paid in 2009 • 34% dividend CAGR from 2003 • Dividend Yield = 3.0%*^ $ *2010 Annualized figure for dividend is not an Intel forecast but represents the March 2010 dividend multiplied by four. ^ represents $2
Slide 42: Stock Repurchases and Dilution
INVESTOR MEETING 2010 Stock Repurchases and Dilution Repurchases, Exercises, and Vesting Repurchases • Modulate cash balance by returning cash to stockholders *Shares repurchased under the common stock repurchase program Source: Intel
Slide 43: ROIC Progress Report
INVESTOR MEETING 2010 ROIC Progress Report Intel Top 20% S&P 500 See Appendix B for Intel ROIC reconciliation to GAAP. * 2010 Annualized figure of ROIC is Q1 2010 ROIC multiplied by four Source: Intel Long Term Goal to Rank Among Top ROIC Performers
Slide 44: Double Earnings CAGR for Next Few Years
INVESTOR MEETING 2010 Double Earnings CAGR for Next Few Years * 2003 adjusted to include stock based compensation expense, ** Figures specified are preliminary based on current expectations, and are subject to change without notice Source: Intel EPS CAGR Increase in revenue CAGR + Improvement in cap
Slide 45: Appendix A: Share-Based Compensation and Earnings per Share
INVESTOR MEETING 2010 INTEL CORPORATION RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS Appendix A: Share-Based Compensation and Earnings per Share • In addition to disclosing financial results calculated in accordance with United States (U.S.) generally accepted accounting principles (GAAP), this prese
Slide 46: Appendix A: Share-Based Compensation and Earnings per Share (Continued)
INVESTOR MEETING 2010 INTEL CORPORATION RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS Appendix A: Share-Based Compensation and Earnings per Share (Continued) Source: Intel (In millions, except per-share amounts) 2000 2001 2002 2003 2004 2005 GAAP SPENDING (R&D PLUS MG&A) $ 8,986 $ 8,260 $ 8,368 $ 8,63
Slide 47: Appendix B: Historic ROIC
INVESTOR MEETING 2010 INTEL CORPORATION RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS Appendix B: Historic ROIC • We define Return on Invested Capital (ROIC) as adjusted net operating profit after taxes divided by beginning invested capital. Management believes that ROIC provides greater visibility in
Slide 48: Appendix B: Historic ROIC (Continued)
INVESTOR MEETING 2010 INTEL CORPORATION RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS Appendix B: Historic ROIC (Continued) Source: Intel
Slide 49: Appendix B: Historic ROIC (Continued)
INVESTOR MEETING 2010 INTEL CORPORATION RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS Appendix B: Historic ROIC (Continued) Source: Intel
Slide 50: Forward-looking statements and risk factors
INVESTOR MEETING 2010 The above statements and any others in this document that refer to plans and expectations for the second quarter, the year and the future are forward-looking statements that involve a number of risks and uncertainties. Many factors could affect Intel’s actual results, and varia
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