Infineon Technologies Ag · XETR:IFX
Infineon Technologies — Q1 FY2016 Earnings Presentation
45 slides from Infineon Technologies's earnings presentation, Feb 2, 2016
Slide 1: First Quarter FY 2016 Quarterly Update
First Quarter FY 2016 Quarterly Update Infineon Technologies AG Investor Relations
Slide 2: Table of Contents
Table of Contents 1 Infineon at a Glance 2 Growth Drivers 3 Results and Outlook Disclaimer: This presentation contains forward-looking statements about the business, financial condition and earnings performance of the Infineon Group. These statements are based on assumptions and projections resting
Slide 3: Leadership in system understanding will foster future growth and profitability
Leadership in system understanding will foster future growth and profitability Competitive advantages Average-cycle financial targets System leader in Revenue Growth: Automotive ~8% Segment Result Margin: #1 and technology leader in Power ~15% Investment-to-Sales: Leader in Security Solutions ~13% 2
Slide 4: Solid Investment Grade rating assigned by S&P's in connection with revised capital structure targets
Solid Investment Grade rating assigned by S&P’s in connection with revised capital structure targets Revised capital structure targets announced by Infineon in February 2016: a.) Gross Cash b.) Debt › “€1bn plus 10% to 20% of revenue” › “less than 2.0x EBITDA” Financial flexibility based on a solid
Slide 5: Automotive and power are the two major pillars of Infineon's businesses
Automotive and power are the two major pillars of Infineon‘s businesses Q1 FY16 revenue: EUR 1,556m Revenue split by Segment Power represents ~60% of revenue [EUR m] 614 IPC ~16% 510 PMM ATV ~33% 249 ~40% 173 CCS ~11% OOS + C&E ATV IPC PMM CCS Power Non-Power 2016-02-08 Copyright © Infineon Technolo
Slide 6: Infineon is growing faster than the market in automotive and is clear leader in power
Infineon is growing faster than the market in automotive and is clear leader in power Automotive Power Smart Card ICs semiconductors semiconductors total market in 2014: total market in 2014: total market in 2014: $2.63bn $27.5bn $16.2bn Infineon Renesas 12.0% 19.2% NXP 30.5% (incl. IRF) Infineon 10
Slide 7: Tight customer relationships are based on system know-how and app understanding
Tight customer relationships are based on system know-how and app understanding ATV IPC PMM CCS EMS partners Distribution partners 2016-02-08 Copyright © Infineon Technologies AG 2016. All rights reserved. 7
Slide 8: Table of Contents
Table of Contents 1 Infineon at a Glance 2 Growth Drivers 3 Results and Outlook 2016-02-08 Copyright © Infineon Technologies AG 2016. All rights reserved. 8
Slide 9: Infineon benefits from auto, industrial and security, the by far fastest growing segments
Infineon benefits from auto, industrial and security, the by far fastest growing segments CAGR 2015 – 2019 by Semiconductor Industry Segment Industrial 8.1% $43bn* Automotive 6.4% $29bn* Chip Card ICs** 4.6% $3.1bn* Total Semi Market 2.6% $352bn* Data Processing 1.7% $109bn* Consumer 1.2% $46bn* Com
Slide 10: Infineon is system leader in automotive; making cars clean, safe and smart
Infineon is system leader in automotive; making cars clean, safe and smart #2 with strongest market share gains in 2014: › #1 in power semiconductors* › #2 in sensors* › #3 in microcontrollers* (#1 in powertrain**) Most balanced portfolio with sensors, micro- Infineon is ideally controllers and powe
Slide 11: Infineon holds leading positions in system-crucial automotive product categories
Infineon holds leading positions in system- crucial automotive product categories Infineon’s position 2014 Infineon covers Sensors (#2) 11.5% the entire µC (#3) 8.7% control loop Power (#1) 24.8% 2014 automotive semiconductor market by product category ($27.5bn) › “Power” and “Sensors” are among the
Slide 12: Four megatrends are shaping the automotive market
Four megatrends are shaping the automotive market, significantly increasing the semi content per vehicle ADAS/Autonomous driving xEV/eMobility › From ADAS to semi-automated › Mandated CO2 reductions make and finally autonomous driving electrification of powertrain › Every world region is striving fo
Slide 13: Infineon is the market leader in Radar
Infineon is the market leader in Radar, 10 million chips shipped already Others Vision Zero + Autonomous Driving Freescale Innovations for driver, road and Infineon STM Next Generation pedestrian safety Dual-Chip Radar Solution 600 GHz RF, Dual-Chip Radar AURIXTM 3rd Gen, Solution power supply 1st c
Slide 14: Semiconductor content itemized to automation levels
Semiconductor content itemized to automation levels Average ADAS semiconductor content per level of automation Level 2 Level 3 Level 4 10% $550 20% 5% 25% 8% $400 12% 35% 40% 45% 60% $100 40% Actuators Sensor Fusion Camera Radar Lidar Total BOM Radar Radar Sensor Fusion Camera Camera Sensor Fusion T
Slide 15: Semiconductor content of EV/HEV vehicles falls right into Infineon's core competence
Semiconductor content of EV/HEV vehicles falls right into Infineon's core competence Average semiconductor content Other $704 Other $710 µC 16% Power 4% 4% 27% Sensors µC 7% 76% $372 Power 11% Sensors Other $338 43% µC 13% 55% $338 Sensors Power 23% 21% Courtesy: BMW Internal Combustion Engine Add-o
Slide 16: EV/HEV: China shows strong momentum; Infineon is well positioned globally
EV/HEV: China shows strong momentum; Infineon is well positioned globally 1 Premium OEM Soul EV Kangoo A3 e-tron V60, 1 Mass Market Twingo Q5 A6 S60, XC90 Passat, Golf FCEV OEM Jetta Focus Ray EV Zoe ix35 E-Class S-Class e-Golf Optima/Sonata e-up Grandeur 1 Premium OEM LaCrosse, Regal, 2 Mass Market
Slide 17: ADAS, CO2 reduction and adoption of premium features drive Infineon growth
ADAS, CO2 reduction and adoption of premium features drive Infineon growth Drivers for semiconductor content per car Vehicle production CO2 reduction Advanced safety Comfort, premium Courtesy: BMW Courtesy: Audi › ~2% growth per › Driven by legislation › Current: › Premium cars are annum crash avoid
Slide 18: Infineon is #1 and technology leader in power semiconductors
Infineon is #1 and technology leader in power semiconductors #1 in the market* Broadest product and technology portfolio Infineon is ideally positioned to gain Addressing broadest range of applications further market share and earn 300mm thin-wafer manufacturing for power superior margins semiconduc
Slide 19: As system leader in power Infineon offers solutions to a wide spectrum of applications
As system leader in power Infineon offers solutions to a wide spectrum of applications Covering the entire power chain Generation Transmission Consumption Main IPC markets Main PMM power markets System competence for highest reliability and highest efficiency Controllers Drivers MOSFETs/IGBTs Module
Slide 20: Infineon continuously improved market share in power while competitors remained flat
Infineon continuously improved market share in power while competitors remained flat Development on Infineon’s market share and relative market share* in the total power semiconductor market 20% 19.2%** 3 2.74** 15% 11.9% 11.8% 12.3% 11.2% 9.7% 10.2% 10.7% 10% 9.4% 2 8.1% 8.4% 8.5% 1.65 1.69 Int. Re
Slide 21: IRF and LSPS lift Infineon to top-5 position in fast-growing IPM market
IRF and LSPS lift Infineon to top-5 position in fast-growing IPM market for the first time IGBT components* Discrete standard (discretes and modules) MOSFETs total market in 2014: $4.45bn therein: IPMs total market in 2014: $5.83bn total market in 2014: $1.26bn Infineon Infineon 26.5% Mitsubishi 46.
Slide 22: IPC: Increasing Inverterization Drives Power Semiconductors in Home Appliances
IPC: Increasing Inverterization Drives Power Semiconductors in Home Appliances IGBT modules in home appliances [US$ m] CAGR(13-17) = 15.1% 748 1,315 2013 2017 › Biggest home appliances market Penetration of VSD for IGBT modules is room air [units m] 2011 2016 CAGR conditioning › Efficiency programs
Slide 23: Efficiency and digitalization are main market drivers for power applications
Efficiency and digitalization are main market drivers for power applications IPC PMM Drives Renewables Traction MHA AC-DC DC-DC › Energy › Legislation › Growing › Energy › Energy › Energy efficiency › Growing population in efficiency efficiency efficiency › Automation share of metropolitan › Growing
Slide 24: Infineon is the leader in security solutions for the connected world
Infineon is the leader in security solutions for the connected world #2 in microcontroller-based smart card ICs* Complete portfolio of hardware, software, services and turn-key solutions Infineon is ideally positioned to Infineon Security Partner Network (ISPN) benefit from the easy implementation
Slide 25: Barcelona Improves Smart Mobility System with CIPURSE-based Security Solutions
Barcelona Improves Smart Mobility System with CIPURSE™-based Security Solutions Infineon supplies security chips for „T-Mobilitat“ infrastructure in Barcelona › The metropolitan transportation authority ATM will switch the electronic ticketing system of the metropolitan region of Barcelona from magn
Slide 26: eSE design-win at Lenovo strengthening IFX's position in APAC mobile payment market
eSE design-win at Lenovo strengthening IFX’s position in APAC mobile payment market Embedded Secure Lenovo Element (eSE) Samsung Lenovo Vibe P1 Courtesy: Lenovo › Infineon supplies its SLE Courtesy: Samsung 97 eSE for Lenovo Vibe X3 › latest Lenovo smartphone models Vibe P1, Vibe X3 › all Samsung Ge
Slide 27: Strong momentum in TPM continues with design-wins at notebook makers and Microsoft
Strong momentum in TPM continues with design-wins at notebook makers and Microsoft Trusted Platform Notebooks Module (TPM) Microsoft Microsoft Surface Book › Microsoft uses OPTIGA™ Courtesy: Microsoft TPMs for its latest personal computing Microsoft Surface Pro 4 › Infineon has been devices: selecte
Slide 28: CCS is well positioned to grow faster than the market as leader in security solutions
CCS is well positioned to grow faster than the market as leader in security solutions Government High-end Mobile Payment IoT Security Identification Communications › Transition to chip- › Adoption of › Rise of smart › Greater adoption of based payment electronic homes, connected NFC technologies car
Slide 29: Infineon's long-term growth is based on sustainable growth drivers
Infineon‘s long-term growth is based on sustainable growth drivers ATV IPC PMM CCS Courtesy: BMW Group › CO2 reduction › Energy efficiency › Energy efficiency › Security as a › Advanced Driver › Automation › Power density function Assistance › Productivity › BLDC motors › Mobile payments Systems inc
Slide 30: Table of Contents
Table of Contents 1 Infineon at a Glance 2 Growth Drivers 3 Results and Outlook 2016-02-08 Copyright © Infineon Technologies AG 2016. All rights reserved. 30
Slide 31: Strong y-y growth due to organic growth and integration of International Rectifier
Strong y-y growth due to organic growth and integration of International Rectifier Revenue and Segment Result* [EUR m] +38% 1,586 1,598 239 1,556 1,483 1,128 15% 13% 15% 18% 14% 169 198 245 286 220 Q1 FY15 Q2 FY15 Q3 FY15 Q4 FY15 Q1 FY16 Revenue Segment Result Segment Result Margin * Including Inter
Slide 32: ATV, IPC, PMM boosted by Int. Rectifier business; CCS growth solely organically
ATV, IPC, PMM boosted by Int. Rectifier business; CCS growth solely organically ATV*,** IPC*,** PMM*,** CCS** [EUR m] [EUR m] [EUR m] [EUR m] +19% +82% 621 613 614 598 518 517 535 510 464 +31% +31% 269 271 249 280 241 181 173 182 172 15% 16% 19% 21% 16% 15% 12% 13% 17% 13% 190 132 14% 7% 11% 14% 9%
Slide 33: Guidance for Q2 FY16 and total FY16
Guidance for Q2 FY16 and total FY16 Outlook Q2 FY16* Outlook FY16* (compared to Q1 FY16) (compared to FY15) Increase of 3% Increase of 13% Revenue +/- 2%-points +/- 2%-points Segment At the mid-point of the At the mid-point of the revenue guidance: revenue guidance: Result Margin 13% 16% Investments
Slide 34: Part of your life. Part of tomorrow.
Part of your life. Part of tomorrow. infineon
Slide 35: Infineon's Revenue Development (excl. IRF) Outperformed Total Semi Market
Infineon‘s Revenue Development (excl. IRF) Outperformed Total Semi Market [EUR m] CAGR(99-15): ~9% 6000 CAGR(99-15): +5.4% 4500 126,895*** 3000 300,000 5,100 (excl. IRF) 1,200** 200,000 1500 296,383 100,000 1,681 2,045 1,821 1,995 2,289 2,366 2,701 2,906 2,916 2,128 3,103 3,780 3,774 3,815 4,303 0 1
Slide 36: Opex stable in target range; SG&A still including noticeable acquisition-related costs
Opex stable in target range; SG&A still including noticeable acquisition-related costs S and G&A* R&D** [EUR m] 218 215 220 210 200 201 197 198 200 180 15% 180 160 136 139 14% 140 120 13% 100 80 12% 60 40 11% 20 0 10% Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 FY15 FY16 FY15 FY16 General & Administration Selling
Slide 37: Increase in inventories in light of expected growth in Q2 FY16
Increase in inventories in light of expected growth in Q2 FY16 Working capital* Inventories* [EUR m] [EUR m] [days] 800 759 761 1,129 1,190 755 1,012 1,040 125 631 1000 600 550 100 490 800 75 400 600 400 50 200 200 25 0 0 0 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 FY15 FY16 FY15 FY16 Inventories DOI* Trade rec
Slide 38: Investments on target of 13% of sales; D&A stable at 13% of sales
Investments on target of 13% of sales; D&A stable at 13% of sales Investments* D&A [EUR m] 1000 30% 887 890 ~850 ~850 800 785* 22.8% 760 668 22.2% 20% 600 15.5% 514 378 466 428 400 13.5% 13.0% 364 13.1% 13.0% 12.1% 11.9% 10% 11.0% 9.8% 9.1% 200 167 211 0 0% FY11 FY12 FY13 FY14 FY15 FY16e FY11 FY12 F
Slide 39: Dividend increase of €0.02 expected in February 2016 after increase of €0.06 in 2015
Dividend increase of €0.02 expected in February 2016 after increase of €0.06 in 2015 Total gross capital returns history [EUR m] 1,278 › Increase of 308 dividend from €0.18 to €0.20 109 will be proposed 225 to AGM on 212 202 18 Feb 2016. 26 167 164 130 › Payout of 129 129 202 225 ~€225m will 173 fol
Slide 40: Net cash expected to grow in coming quarters; in Q2 FY16 ~€225m cash out due to dividend
Net cash expected to grow in coming quarters; in Q2 FY16 ~€225m cash out due to dividend Liquidity development [EUR m] 190 1,793 1,790 1,793 1,832 220 1,917 2,107 1,656 1,842 2,013 1,994 204 -176 49 Q1 Q2 Q3 Q4 Q1 FY15 FY16 Gross Cash Debt Net Cash Net Debt › In Q1 FY16, no significant changes on ca
Slide 41: RoCE expected to increase in FY16 vs FY15
RoCE expected to increase in FY16 vs FY15 RoCE* history WACC: low teens % 30% FY14: 20% 20% FY15: 13% 17% 10% 21% 24% 24% 18% 6% 9% 26% 12% 0% Q1 FY14 Q2 Q3 Q4 Q1 FY15 Q2 Q3 Q4 Q1 FY16 Q2 Q3 Q4 Capital Employed* history [EUR m] 6000 5213 5176 5377 5009 4000 2969 2194 2232 2327 2452 2000 0 Q1 FY14 Q2
Slide 42: Notes
Notes Investments = 'Purchase of property, plant and equipment' + 'Purchase of intangible assets and other assets' incl. capitalization of R&D expenses Capital Employed = 'Total assets' – 'Cash and cash equivalents' Please note: All positions in ' ' refer to the – 'Financial investments' respective
Slide 43: Infineon is a long-standing member of Europe's leading sustainability indices
Infineon is a long-standing member of Europe's leading sustainability indices Infineon’s most recent achievements › Sep 2015: Infineon was listed in the STOXX® Global ESG Leaders Indices, which serves as an indicator of the quality of Infineon’s performance in the governance, › Jan 2016: Infineon is
Slide 44: Financial calendar
Financial calendar Date Location Event 09 Mar 2016 London UBS European Technology Conference 03 May 2016* Q2 FY16 Results 30 May 2016 Copenhagen Danske Bank German Corporate Day Deutsche Bank German, Suisse & Austrian 08 – 09 June 2016 Berlin Conference 15 – 16 June 2016 Paris Exane European CEO Con
Slide 45: Institutional Investor Relations contacts
Institutional Investor Relations contacts Dr. Jürgen Rebel Corporate Vice President +49 89 234-21626 Investor Relations juergen.rebel@infineon.com Joachim Binder Senior Director +49 89 234-25649 Investor Relations joachim.binder@infineon.com Holger Schmidt Manager +49 89 234-22332 Investor Relations
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