Nordic Semiconductor Asa · OSL:NOD

Nordic Semiconductor Asa — Q2 2022 Earnings Presentation

28 slides from Nordic Semiconductor Asa's earnings presentation, Jul 12, 2022

  1. Slide 1: Quarterly Presentation Q2 2022

    Quarterly Presentation Q2 2022 July 12, 2022

  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: Record revenue in turbulent environment

    © Nordic Semiconductor Record revenue in turbulent environment  Revenue of USD 200 million (+36%) Revenue, gross profit and EBITDA (USDm)  Severely impacted by wafer supply Revenue +36%  Gross margin 55.4% 200  EBITDA of USD 51.9 million 148  Stable outlook for Q3 with 111 Gross profit +48% con

  4. Slide 4: Continuing to align backlog to capacity

    © Nordic Semiconductor Continuing to align backlog to capacity Backlog (USDm) 1,800 1687  Order backlog >> delivery capabilities 1,600 1537 given current supply chain constraints 1395 1,400 1316 1253  Backlog development currently no 1,200 indication of revenue or demand 1,000 803 800  Actively w

  5. Slide 5: Continued low inventories throughout the supply chain

    © Nordic Semiconductor Continued low inventories throughout the supply chain Nordic inventory/Revenue quarterly 1.0 0.9 0.8  No signs of inventory build-up 0.7  Low product inventories both at 0.6 0.5 Nordic and distributors 0.4 0.3 0.2 0.1 0.0 Q2 2020 Q2 2021 Q2 2022 Inventory/Revenue 5

  6. Slide 6: 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 Nordic Q2 2022 Other Qualcomm 46% 43% 43% Infineon 900 35% 40% 40% 41% Dialog 101 TI 39 %

  7. Slide 7: First smart watch with cellular IoT

    © Nordic Semiconductor First smart watch with cellular IoT Holmbergs iSiTech Aovx August International SECO Child car seat safety Animal tracker cellular IoT tracker Smartwatches Smart plug nRF52840 nRF52840 + nRF21540 nRF9160 nRF9160 nRF9160 Sends safety alerts from Avoiding livestock theft Tracker

  8. Slide 8: Accelerating the development of next generation wireless audio projects

    © Nordic Semiconductor Accelerating the development of next generation wireless audio projects  Launched nRF5340 Audio Development Kit  Taking advantage of Bluetooth LE Audio’s sound quality, low power consumption, and broadcast capabilities (Auracast™)  Uses Nordic’s flagship SoC nRF5340 – the i

  9. Slide 9: Fastest route to innovative IoT products

    © Nordic Semiconductor Fastest route to innovative IoT products Launched Nordic Thingy:53  A multi-sensor prototyping platform with multi-protocol short range wireless connectivity  Support for embedded machine learning –key to advanced IoT edge processing  Uses the nRF5340, nRF21540 range extend

  10. Slide 10: cIoT supply challenges resolved ahead of H2

    © Nordic Semiconductor cIoT supply challenges resolved ahead of H2 Expecting significant revenue pick-up Cellular IoT revenue last 12 months (USDm) 23  Delivery capacity and revenue affected by unavailability of a specially adapted filter in H1  New and updated filter qualified and available in vo

  11. Slide 11: Creating next generation of cIoT innovators

    © Nordic Semiconductor Creating next generation of cIoT innovators  “The Smart IoT Product Challenge” - competition for innovators to demonstrate solutions using the nRF9160 SiP-powered Tributech OEM module  Winners announced  SENDANCE – SMART INSOLE FOR DIABETIC FOOT  CARPLOYEE – MOBILITY TRACK

  12. Slide 12: Simplifying IoT Standard Essential Patent (SEP) licensing

    © Nordic Semiconductor Simplifying IoT Standard Essential Patent (SEP) licensing  Huawei and Nordic signing groundbreaking and highly innovative cellular IoT SEP licensing agreement on a component level  Huawei licenses the rights directly to Nordic, and all Nordic’s nRF9160 customers are covered

  13. Slide 13: Ultra-low power memory enabling energy harvesting

    © Nordic Semiconductor Ultra-low power memory enabling energy harvesting  Technology acquisition of Mobile Semiconductor  Market-proven track record of delivering ultra-low power- performance-optimized, leading-edge static RAM (SRAM) memory technology for various MCUs and SoCs  Small team based i

  14. Slide 14: Financials

    Financials Pål Elstad, CFO

  15. Slide 15: Revenue growth of 36% y-o-y

    © Nordic Semiconductor Revenue growth of 36% y-o-y Quarterly revenue (USDm) 225 200 200 183  Y-o-y growth despite severe wafer supply 171 175 constraints and cellular IoT component 148 148 150 unavailability 125  Bluetooth +36 % to USD 168 million 100  Proprietary +45 % to USD 26 million 75  Cel

  16. Slide 16: Revenue by Technology

    © Nordic Semiconductor Revenue by Technology Proprietary revenue (USDm) Bluetooth revenue (USDm) Cellular IoT revenue (USDm) Quarterly Quarterly Quarterly 50 200 10 175 168 40 150 8 150 136 7 123 124 6 30 27 125 6 5 25 26 5 100 5 20 18 18 4 75 50 10 2 25 0 0 0 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4

  17. Slide 17: Strong growth in non-consumer

    © Nordic Semiconductor Strong growth in non-consumer Group Consumer Industrial Healthcare Others USDm USDm USDm USDm USDm 200.2 126.4 48.2 16.8 8.8 +36% +9% +35% +3% +28% +21% +74% +18% +86% +33% 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-o-q  Market classifications now includes Short

  18. Slide 18: Strong gross margin

    © Nordic Semiconductor Strong gross margin 70% 65%  Continued high margins reflect product 59.7% 58.9% 60% allocations under constrained supply 55.4% 55% 53.1%  Positive effects of product and 50.9% customer mix 50% 45% 40% Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 18

  19. Slide 19: Operating model performance Q2 2022

    © Nordic Semiconductor Operating model performance Q2 2022 Gross margin 55.4% Δ Q2 2022 Q2 2021 R&D Revenue USD 200.2m USD 147.6m +35.6% Volume, price and product mix short-range 12.2% 55.4% 50.9% Gross margin +4.5pp Price, product and customer mix R&D cellular IoT USD 110.8m USD 75.1m 6.1% R&D Wi-F

  20. Slide 20: Investing for growth

    © Nordic Semiconductor Investing for growth Cash cost increase mainly due to increased Cash OPEX* (USDm) number of employees Salary:  Number of employees increased by 19.9% to 1 303 over the past last 12 months 37 Other OPEX: 41 40 33 37  Varying with pace of product introductions  High tape-out

  21. Slide 21: Hiring top talent

    © Nordic Semiconductor Hiring top talent Employees More than doubled the organization over the 1303 past five years 1197  Proven ability to attract talent from a 897 scarce talent pool 767 Investing in our future workforce 685 601  117 active students in Norway, Finland, Sweden, UK and Poland over

  22. Slide 22: Low capex intensity

    © Nordic Semiconductor Low capex intensity Capex (USDm) 10 9 8 6.5 % 7 6  Low capex of USD 4 million in Q2 5 4 3.5 %  Overall capex intensity below 3% for the 3 2.7 % 2.2 % full year 2022 2 2.3 % 1 0 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Capex Capex/Revenue 22

  23. Slide 23: Continued strong cash position

    © Nordic Semiconductor Continued strong cash position Cash position and Cash Flow Q2 2022 (USDm)  Operating cash flow of USD 29.8m in Q2  Increasing net working capital mainly due to accounts receivables  NWC/Revenue LTM up to 21.9% from 17.8% at YE 2021 – still at low level  Continued disciplin

  24. Slide 24: Summary and Outlook

    Summary and Svenn-Tore Outlook Larsen, CEO

  25. Slide 25: Expect stable Q3 with continued severe supply challenges

    © Nordic Semiconductor Expect stable Q3 with continued severe supply challenges Q3 2022 guidance  Reduced demand in some consumers verticals but total demand >> supply Revenue Gross margin  Revenue guidance reflects current wafer USDm 190-210 >54% allocations for Q3 2022  Higher wafer supply expe

  26. Slide 26: Expanding capacity through multi-sourcing

    © Nordic Semiconductor Expanding capacity through multi-sourcing Delivering features that IoT requires in the future  Developing new technology platform across short-range, Wi-Fi and cellular IoT  R&D innovation with high customer involvement  Multi-year project with large R&D teams on multiple s

  27. Slide 27: The outlook stands firm

    © Nordic Semiconductor The outlook stands firm Revenue (USDm) >25% CAGR ~28% CAGR  USD 1bn revenue target in 2023 1bn  Aiming to more than double revenue in 2023-2026 611 2021 2023 2026 27

  28. Slide 28: aaa

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Nordic Semiconductor — Q2 2022 Earnings Presentation on 6ix