Infineon Technologies Ag · XETR:IFX

Infineon Technologies — Q1 FY2012 Earnings Presentation

40 slides from Infineon Technologies's earnings presentation, Feb 1, 2012

  1. Slide 1: First Quarter FY 2012 Quarterly Update

    First Quarter FY 2012 Quarterly Update Infineon Technologies AG Investor Relations

  2. Slide 2: Infineon at a Glance

     Infineon at a Glance  Growth Outlook and Margin Resilience  Results and Outlook 01 Feb 2012 2011 All rights reserved. Copyright © Infineon Technologies 2010. Page 2

  3. Slide 3: Revenue Split by Division

    Revenue Split by Division Q1 FY 2012 revenue: EUR 946m ATV € 391m IMM IPC € 418m PMM CCS € 97m OOS+C&E* € 40m * Other Operating Segments; Corporate & Eliminations. 01 Feb 2012 2011 All rights reserved. Copyright © Infineon Technologies 2010. Page 3

  4. Slide 4: Segment Result Margin of 15% Despite Sales Decline

    Segment Result Margin of 15% Despite Sales Decline [EUR m] Q1 FY11 Q4 FY11 Q1 FY12 Revenue 922 1,038 946 Total Segment 177 195 141 Result Total SR Margin 19.2% 18.8% 14.9% [EURm] 1038 Net Income* 232 125 96 946 Investment 131 273 294 FCF from cont. 4 97 -234 operations 195 141 Gross Cash 1,669 2,692

  5. Slide 5: Tight Customer Relationships are Based on System Knowhow and App Understanding

    Tight Customer Relationships are Based on System Knowhow and App Understanding ATV IPC PMM CCS Distributors 01 Feb 2012 2011 All rights reserved. Copyright © Infineon Technologies 2010. Page 5

  6. Slide 6: Infineon Holds Top Positions in All Target Markets

    Infineon Holds Top Positions in All Target Markets Automotive Power Chip Card #2 #1 #1 Renesas 14% Infineon 11% Infineon 27% Infineon 9% Toshiba 7% Samsung 21% Freescale 8% STMicro 7% NXP 21% STMicro 8% Mitsubishi 7% STM 18% NXP 7% Vishay 6% Renesas 8% Calendar Year 2010. Calendar Year 2010. Calenda

  7. Slide 7: Growth Outlook and Margin Resilience

     Infineon at a Glance  Growth Outlook and Margin Resilience  Results and Outlook 01 Feb 2012 2011 All rights reserved. Copyright © Infineon Technologies 2010. Page 7

  8. Slide 8: New Era: Multiple Factors Driving Demand for Power Semiconductors

    New Era: Multiple Factors Driving Demand for Power Semiconductors '90 – '10 '10 – '30 Changes  Electrification of powertrain fuels demand for high-power semis in cars and doubles silicon content. Courtesy: Tesla  Shift towards renewable energies requires orders of magnitude more high- power semis

  9. Slide 9: Growth: Rising Global Car Production and Silicon Content Drive Market

    Growth: Rising Global Car Production and Silicon Content Drive Market Global car production Semi market by segment [units m] [USD bn] CAGR(11-16) Source: IHS, Jan. 2012 = 5.0% 8.8 CAGR Cars ≤ 6t Powertrain 5.4 +10.1% 94.2 97.7 84.2 89.3 11.9 CAGR 74.4 76.6 79.6 8 9 Safety 7.5 +9,8% 70.6 67.6 8 8 8 8

  10. Slide 10: By Region, Main Growth Drivers are BRIC Markets and Recovery in North America

    By Region, Main Growth Drivers are BRIC Markets and Recovery in North America Automotive semiconductor market forecast [USD bn] CAGR(11-16) = 9% 36.3 34.4 32.1 CAGR 12% Brazil, Russia, RoW 29.1 28% +14% 26.0 28% CAGR 23.6 APAC w/o Japan +14% 13% CAGR Europe 26% +5% 21% Japan CAGR 13% +7% 26% CAGR 21

  11. Slide 11: Electric Vehicles and Hybrid Electric Vehicles Drive Semiconductor Demand

    Electric Vehicles and Hybrid Electric Vehicles Drive Semiconductor Demand ICE vs. EV/HEV Semiconductor BOM  Fuel cost, CO2 reduction and price are 9 xEV semiconductor BOM 800 main drivers for EVs and HEVs. 7.5 8 700 $750 6.7 7 5.8 $613 600  Semiconductor BOM of an EV/HEV is 2 6 2.7x 4.8 1.8x 500 t

  12. Slide 12: Infineon is Involved in Every Electrical Energy Conversion Step

    Infineon is Involved in Every Electrical Energy Conversion Step 1 Generation Grid Consumption Wind AC DC AC DC AC turbine [Hz] Generation to Grid Generation Grid 2 Solar inverter Generation Grid [Hz] 3 Variable speed drive Grid to Consumption Grid Consumption 4 [V] Power supply Grid 50/60 Hz [V] 5 D

  13. Slide 13: About 10% Growth p.a. for Cycle Average Expected for Infineon

    About 10% Growth p.a. for Cycle Average Expected for Infineon ATV IPC + PMM CCS Courtesy: Hyundai ATV growth: IPC + PMM growth: CCS growth: ~10% p.a. > 10% p.a. ~5-7% p.a. Growth target Infineon: ~10% growth p.a. cycle average 01 Feb 2012 Copyright © Infineon Technologies 2011. All rights reserved.

  14. Slide 14: Sustainable Profitability: Targeting 15% Segment Result Margin for Cycle Average

    Sustainable Profitability: Targeting 15% Segment Result (SR) Margin for Cycle Average #1 #2 #3 #4 Infineon's core Semiconductors Value of semis High barriers to competencies: enable high small relative entry1 Power and functionality1 to end product1 eControl1 SR target margins ATV SR margin: IPC + P

  15. Slide 15: Target Operating Model

    Target Operating Model FY 2011 FY 2012e Longer term Decreasing by ~10% growth Revenue EUR 3.997bn mid single-digit % p.a. Flat or increasing Gross margin 41.4% < 40% vs FY 2012 11.0% Increasing Low-to-mid R&D of sales by 5 – 10% teens % of sales 11.2% Increasing Low-teens % SG&A of sales by 5 – 10%

  16. Slide 16: Results and Outlook

     Infineon at a Glance  Growth Outlook and Margin Resilience  Results and Outlook 01 Feb 2012 2011 All rights reserved. Copyright © Infineon Technologies 2010. Page 16

  17. Slide 17: Q1 FY12: Maintained Solid Total Segment Result Margin

    Q1 FY12: Maintained Solid Total Segment Result Margin Revenue and Segment Result [EUR m] FY 2011 revenue split +3% by product category 1043 1038 994 922 946 19% 20% 20% 19% 15% 177 202 212 195 141 Power eControl ASICs, others Q1 Q2 Q3 Q4 Q1 FY11 FY12 Revenue Total Segment Result Total SR margin 01 F

  18. Slide 18: All Segments Contribute to Total Segment Result

    All Segments Contribute to Total Segment Result ATV IMM CCS [EUR m] [EUR m] [EUR m] +10% - 1% 472 472 423 433 418 392 410 396 391 354 - 1% 25% 25% 25% 24% 19% 17% 19% 20% 17% 14% 98 107 107 116 97 13% 14% 10% 6% 59 74 80 66 55 107 108 116 113 79 13% Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 FY11

  19. Slide 19: ATV: Automotive Environment Remained Solid

    ATV: Automotive Environment Remained Solid Revenue and SR Highlights [EUR m]  Sales into the automotive end market remained solid. 400 30% 396 391  The small revenue decline was related to the usual 25% inventory management of our customers at the end of their fiscal year. 300 20%  Segment Result

  20. Slide 20: IMM: Both Low- and High-Power Demand Affected by Inventory Correction

    IMM: Both Low- and High-Power Demand Affected by Inventory Correction Revenue and SR Highlights [EUR m]  Revenue decline driven by lower demand for both 500 30% power and non-power products. 472  SR decline mainly result of weaker top line. 25% 400 418  Power products: weaker demand spread also t

  21. Slide 21: CCS: NFC Leader and Working on Shrink Roadmap

    CCS: NFC Leader and Working on Shrink Roadmap Revenue and SR Highlights [EUR m]  Revenue decline driven by typical seasonality, lower 120 30% demand from payment applications and the negative 116 impact of the Thailand flood on government ID. 25%  Segment Result decline mainly result of weaker top

  22. Slide 22: Guidance for Q2 and FY 2012

    Guidance for Q2 and FY 2012 Outlook Q2 FY12 Outlook FY 2012 (compared to Q1 FY12) (compared to FY 2011) Revenue to be Mid-single digit Revenue flat to down slightly percentage decline. quarter-on-quarter Total Segment Down broadly Low-to-mid Result 1 percentage-point. teens percentage. Margin 01 Feb

  23. Slide 23: Superior Growth and Profitability Allow Sustained Investments Over the Cycle

    Superior Growth and Profitability Allow Sustained Investments Over the Cycle Superior growth and profitability 1  Focus on secular growth drivers, e.g. renewables, e-mobility, energy efficiency.  Leading market share and competitive strengths.  10% growth and 15% SR margin on average over the cyc

  24. Slide 24: Infineon: Innovative semiconductor solutions for energy efficiency, mobility and security

    Cinfineon Innovative semiconductor solutions for energy efficiency, mobility and security.

  25. Slide 25: Reasons for Sustainable Profitability: High Barriers to Entry

    4 Reasons for Sustainable Profitability ─ #1 High Barriers to Entry Long product System knowhow Strong quality and life cycles and understanding reliability req's Courtesy: Siemens Courtesy: BMW  For many markets we  Both deep and wide  Products need to address, deliveries of know-how and reliabl

  26. Slide 26: Semiconductors – Core Enablers of Innovation and Higher Functionality

    #2 Semiconductors – Core Enablers of Innovation and Higher Functionality Energy Efficiency Mobility Security  Power supplies  Recuperation  Identification More advanced power Implemented in trains Chip-based passports semiconductors allow for years; brought to and national ID cards smaller, dense

  27. Slide 27: Semis Represent a Negligible Part of the Value of the End Product

    #3Semis Represent a Negligible Part of the Value of the End Product Example 1: mid-range car Example 2: high-speed train Courtesy: Volkswagen Courtesy: Siemens €25,000 €10,000,000 EUR 6m Semi BoM: 1.0% Semi BoM: 1.0% of product of product value value €250 €100,000 01 Feb 2012 Copyright © Infineon Te

  28. Slide 28: Infineon's Core Competencies: Power Semiconductors and eControl

    Infineon's Core Competencies ─ #4 Power Semiconductors and eControl Design and manufacturing of Core competence power power semis tightly coupled  Thin-wafer technology  Super-junction MOSFETs  Silicon-Carbide (SiC) Manu-  IGBT module packaging facturing Core competence eControl Design  Automot

  29. Slide 29: IMM Split Into Two New Divisions as of January 2012

    IMM Split Into Two New Divisions as of 1 January 2012 Industrial & Multimarket (IMM) Industrial Power Control (IPC) Power Management & Multimarket (PMM)  Industry-oriented applications  Power conversion and RF applications Applications  Drives and traction  Power supplies computer and server  H

  30. Slide 30: Pro-Forma Historical Figures for IPC and PMM

    Pro-Forma Historical Figures for IPC and PMM IPC PMM [EUR m] 300 30% 28.3% 25.7% 28.0% 25.0% 250 23.2% 22.3% 25% 22.7% 268 23.0% 237 256 19.9% 242 222 200 216 20% 204 191 196 186 18.0% 150 15% 100 10% 50 69 64 5% 52 54 49 55 54 47 39 40 0 0% Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 FY11 FY12 FY11 FY12 IPC rev

  31. Slide 31: OpEx In-line With Target Operating Model

    OpEx In-line With Target Operating Model S and G&A R&D [EUR m] 15% 119 118 120 113 114 112 109 110 108 106 103 14% 100 80 13% 60 12% 40 11% 20 0 10% Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 FY11 FY12 FY11 FY12 General & Administration Selling R&D % of sales 01 Feb 2012 2011 All rights reserved. Copyright © Inf

  32. Slide 32: Working Capital

    Working Capital Working capital* Inventories [EUR m] [EUR m] [days] Q1 FY11 Q2 Q3 Q4 Q1 FY12 80 0 400 60 -200 Comparable Comparable historical figures 40 -400 historical figures 200 not available. 20 not available. -600 0 0 Q1 FY11 Q2 Q3 Q4 Q1 FY12 -800 Inventorys DOI* Trade and other receivables Tr

  33. Slide 33: Investments Remain High to Exploit Growth Potential

    Investments Remain High to Exploit Growth Potential Investments* D&A [EUR m] 887 ~ flat Q1 Q2 ~ 440 325 336 364 Q3 Q4 294 97 FY 2010 FY 2011 Guidance FY 2010 FY 2011 Guidance FY 2012 FY 2012 Guidance for investments: Guidance for D&A:  FY13: below investments in FY12  FY13: increase compared to FY

  34. Slide 34: High Gross and Net Cash Position Maintained

    High Gross and Net Cash Position Maintained Liquidity Development [EUR m] Gross Cash Debt Equity-linked Net Cash 129 114 227 127 191 212 100 * 169 133 2692 2691 2585 243 2387 2337 2335 2246 2068 1669 1293 Q1 Q2 Q3 Q4 Q1 FY11 FY11 FY12 * Consists of Convertible Bond 2014 (nominal value EUR 118m; book

  35. Slide 35: Capital Returns Through Convertible Bond 2014 Buy Back

    Capital Returns Through Convertible Bond 2014 Buy Back Repurchase history of Convertible Bond 2014 [EUR m nominal] EUR 0m in FY09 and FY10 EUR 58.6m in FY11 EUR 18.9m in FY12 200 total repurchases 84m shares underlying 28 8 4 150 78 19 19 51.3m shares 100 underlying 50 196 196 196 168 160 156 137 11

  36. Slide 36: Notes

    Notes Investments = 'Purchase of property, plant and equipment‘ + 'Purchase of intangible assets and other assets' incl. capitalization of R&D expenses Working Capital = ('Total current assets‘ – 'Cash and cash equivalents‘ – ‘Financial investment‘ – 'Assets classified as held for sale') – ('Total c

  37. Slide 37: Infineon Has a Long Track Record in Responsibility and Sustainability

    Infineon Has a Long Track Record in Responsibility and Sustainability UN Global Compact Initiative Certifications  As one of the first semiconductor companies worldwide, Infineon joined the Global Compact Initiative of the United Nations in 2004. Dow Jones Sustainability Index  Based on our effort

  38. Slide 38: Financial Calendar

    Financial Calendar Date Location Event * preliminary date 08 Mar 2012 Munich Annual General Meeting 03 May 2012* Q2 FY12 Results 15-17 May 2012 Boston JPMorgan Global TMT Conference 5 Jun 2012 Zurich DZ Bank Sustainability Technologies Conference 31 Jul 2012* Q3 FY12 Results 29-30 Aug 2012 Frankfurt

  39. Slide 39: Institutional Investor Relations Contact

    Institutional Investor Relations Contact Ulrich Pelzer Corporate Vice President, Corporate Finance & Treasury, Investor Relations  +49 89 234-26153  ulrich.pelzer@infineon.com Joachim Binder Senior Director, Investor Relations  +49 89 234-25649  joachim.binder@infineon.com Aleksandar Josic Manag

  40. Slide 40: Disclaimer

    Disclaimer This presentation was prepared as of 1 February 2012 and is current only as of that date. This presentation includes forward-looking statements and assumptions about the future of Infineon’s business and the industry in which we operate. These include statements and assumptions relating t

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