Nordic Semiconductor Asa · OSL:NOD

Nordic Semiconductor Asa — Q2 2021 Earnings Presentation

30 slides from Nordic Semiconductor Asa's earnings presentation, Jul 13, 2021

1. Slide 1: Quarterly Presentation Q2 2021

   Quarterly Presentation Q2 2021 July 13, 2021

2. Slide 2: Disclaimer

   © Nordic Semiconductor Disclaimer The following presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated (“relevant persons”). Any person who is not a relevant person should not act or rely on this presentation or any of its contents

3. Slide 3: Strong demand in all end-user markets

   © Nordic Semiconductor Strong demand in all end-user markets Growth capped by wafer supply  Revenue on par with the previous Revenue Gross margin quarter and +67% year-on-year  Bluetooth revenue USD 123.0m (+75%) USDm 147.6m 50.9 %  Proprietary revenue USD 17.7m (+8%)  Cellular IoT revenue USD 4

4. Slide 4: Order backlog keeps increasing

   © Nordic Semiconductor Order backlog keeps increasing Backlog (USDm) 1,400  Order backlog USD 1,253m, >6x Q2 2020 1 253 1,200  Increased demand from both major customers and the broad market 1,000 803  Bluetooth Low Energy and multiprotocol 800 solutions account for 91% 600 492  Timing of delive

5. Slide 5: Strong growth across all verticals

   © Nordic Semiconductor Strong growth across all verticals Driven by both consumer and industrial/retail customers  Consumer electronics Short-range revenue by end-user markets, last 12 months (USD) 600 remains the largest area  Building/Retail shows 500 Others the highest growth 400 Healthcare  H

6. Slide 6: Platform providers driving growth

   © Nordic Semiconductor Platform providers driving growth Etc…  Platform providers and tier- 1s drive volumes and generate increasing demand from their ecosystem partners  Nordic leverages on strong relations built over years Consumer Wearables Building/ Retail Healthcare Others Electronics 6

7. Slide 7: Launched Apple 'Find My' network support

   © Nordic Semiconductor Launched Apple ‘Find My’ network support  ‘Find My’ network support in Nordic’s SDK enable third-party use of the ‘Find My’ app  Apple’s ecosystem ensures vast tracking coverage, helping consumers find their devices  ‘Find My’ support can be added to both new and existing N

8. Slide 8: Nordic a strong contributor to 'Matter'

   © Nordic Semiconductor Nordic a strong contributor to ‘Matter’ Securing interoperability across devices and ecosystems  Rebranded as ‘Matter’, the Project Connected Home over IP is supported by Amazon, Apple, Google and others including Nordic  Nordic’s nRF Connect SDK offers support for Matter 

9. Slide 9: Launching the 'Nordic Partner Program'

   © Nordic Semiconductor Launching the ‘Nordic Partner Program’  Nordic’s new ‘Design Partner’ and ‘Solution Partner’ program assist customers by providing products, services, and solutions helping to accelerate ‘time-to-market’  Complements the hardware, firmware, development tools and reference de

10. Slide 10: New product launches in Q2

    © Nordic Semiconductor New product launches in Q2 Aptar Pharma Toshiba Corporation Stel Life Braveridge SparkFun Electronics Smart Inhaler Bluetooth module Healthcare gateway Monitoring System Development board nRF52810 nRF52811 nRF9160/nRF52840 nRF9160 nRF9160 Connected Device for World smallest Fo

11. Slide 11: Steady and high certification market share

    © Nordic Semiconductor Steady and high certification market share Significantly increasing value per design Bluetooth Low Energy end-product certifications, last 12 months 1500 End-product certifications, 1200 Other Nordic Q2 21 Qualcomm 46% 43% 43% Infineon 900 40% 40% Dialog 153 TI 42 % mkt share

12. Slide 12: Nordic's first power management IC (PMIC)

    © Nordic Semiconductor Nordic’s first power management IC (PMIC)  The nPM1100 PMIC is a complementary product to nRF52/nRF53 Series – same sale, more components  Extremely small form factor and low power usage “Over the past decade, we have made it easy for the world to  Suitable for small re-cha

13. Slide 13: Developer kit shipments continue to grow

    © Nordic Semiconductor Developer kit shipments continue to grow Kit shipments Total kit shipments +23% in H1 21 100,000 94,911 90,000 86,989 • High installed base of reusable kits 80,000 • Significant contribution from nRF52840 70,000 64,784 development kits 60,000 53,053 50,000 46,252 • Close to 15

14. Slide 14: Cellular IoT volumes beginning to ramp up

    © Nordic Semiconductor Cellular IoT volumes beginning to ramp up Regulatory certifications overview for nRF9160  Certified by T-Mobile US, and continuing to expand certification for global coverage  Volumes are ramping-up despite continued supply constraints  Several customers moving into volume

15. Slide 15: Financials

    Financials Pål Elstad, CFO

16. Slide 16: Revenue growth of 67%

    © Nordic Semiconductor Revenue growth of 67% Quarterly revenue (USDm) 175  Y-o-Y growth across all technologies 148 150 143  Bluetooth +75% to USD 123.0 million 127 119 125  Proprietary +8% to USD 17.7 million 100 89  Cellular IoT +289 % to USD 4.6 million 75  Stable Q-on-Q development 50  Vol

17. Slide 17: Revenue growth in all markets

    © Nordic Semiconductor Revenue growth in all markets Consumer Building/ Group Electronics Wearables Retail Healthcare Others USDm USDm USDm USDm USDm USDm 147.6 51.1 16.0 41.5 15.5 16.5 +67% +3% +73% Flat +13% -20% +120% +17% +11% -4% +64% -8% y-o-y q-o-q y-o-y q-o-q y-o-y q-o-q y-o-y q-o-q y-o-y q-

18. Slide 18: Gross margin within the guidance range

    © Nordic Semiconductor Gross margin within the guidance range Gross margin (%) 56% Gross margin at 50.9% 54.1%  Q-o-Q uptick reflecting favorable 54% 52.7% 51.9% product mix 52% 50.9% 50.2%  Gross margin expected at 50%-51% 50% in Q3 2021 48%  Reiterating medium-term gross margin 46% range of 48%

19. Slide 19: Operating model performance Q2 2021

    © Nordic Semiconductor Operating model performance Q2 2021 Gross margin 50.9% Q2 2021 Q2 2020 R&D Revenue USD 147.6m USD 88.5m +66.7% Growth in all technologies and markets short-range 12.6% 50.9% 51.9% Gross margin -1.0pp Change in customer mix USD 75.1m USD 45.9m R&D cellular IoT 6.6% 12.6% 13.2%

20. Slide 20: Cash operating expenses

    © Nordic Semiconductor Cash operating expenses Cash cost increase mainly due to increased Cash OPEX* (USDm) number of employees, acquisition and FX Salary:  Number of employees increased by 32% to 1 087 over the past last 12 months 32.6  Wi-Fi acquisition added 81 employees 36.0 29.9 26.9 Other OP

21. Slide 21: Sharp year-on-year EBITDA improvement

    © Nordic Semiconductor Sharp year-on-year EBITDA improvement EBITDA (USDm) and margin (%), Quarterly EBITDA (USDm) and margin (%), Last 12 months 35 35% 140 35% 30.9 % 29.0 % 28.4 % 28.4 % 30 30% 120 27.9 % 30% 26.8 % 26.0 % 25.7 % 25.3 % 24.0 % 25 25% 100 22.5 % 25% 21.1 % 20.4 % 19.8 % 20.2 % 18.9

22. Slide 22: Capex development

    © Nordic Semiconductor Capex development Capex (USDm)  High capex of USD 9.6 million in Q2 12.0  Continuing to invest in additional test 10.0 capacity to finalize end-products 6.5 % 8.0 quickly when we receive wafers 5.7 %  Expecting overall capex intensity in 6.0 4.2 % 3.8 % 2021 at the same lev

23. Slide 23: Continued strong cash position

    © Nordic Semiconductor Continued strong cash position Cash position and Cash Flow Q2 2021 (USDm) Operating cash flow of USD 54.6m in Q2 Declining net working capital due to reduction of accounts receivable  NWC/Revenue LTM down to 19.3% from 26.9%, at the end of Q1 2021 Continued disciplined cash s

24. Slide 24: Summary and Outlook

    Summary and Outlook Svenn-Tore Larsen, CEO

25. Slide 25: Nordic is on a long-lasting growth journey

    © Nordic Semiconductor Nordic is on a long-lasting growth journey 550 Innovation unlocking new Widespread IoT adoption → market waves 500 450 400 Emerging IoT markets → 350 Revenue, USDm 300 250 Wearables → 200 150 PC peripherals → 100 50 Game controllers → 0 2000 2001 2002 2003 2004 2005 2006 2007

26. Slide 26: Demand supports long-term growth plan…

    © Nordic Semiconductor Demand supports long-term growth plan… Backlog (USDm) Solid market position 1,400 1,253  Market leader in Bluetooth LE 1,200  Positioned to take lead in cellular IoT 1,000  Complementing portfolio with Wi-Fi 800 and PMIC 600 Accelerating demand growth through 2020-21 400 20

27. Slide 27: …but wafer supply limits near-term growth

    © Nordic Semiconductor …but wafer supply limits near-term growth  Current wafers commitments allow for Q3 2021 revenue guiding of USD 130-150 million, with the wide range reflecting continued supply risk  Efforts continue to advance wafer deliveries, and Nordic expects suppliers to maintain wafer

28. Slide 28: Expect solid Q3 despite supply challenges

    © Nordic Semiconductor Expect solid Q3 despite supply challenges  Continuing to working 24/7 to support Q3 2021 guidance our customers  Risks and uncertainties remain Revenue Gross margin + Fast technology adoption continues to USDm strengthen long-term growth potential 130-150 ~50%-51% – Supply c

29. Slide 29: Thank you and welcome to Q3 presentation and CMD

    Thank you and welcome to Q3 presentation and CMD October 21, 2021

30. Slide 30: Q&A

    Q&A NORDIC SEMICONDUCTOR

Nordic Semiconductor — Q2 2021 Earnings Presentation on 6ix