Infineon Technologies AG · XETR:IFX
Infineon Technologies — Q2 FY2004 Earnings Presentation
34 slides from Infineon Technologies's earnings presentation, Apr 29, 2004
Slide 1: Infineon Roadshow Presentation
Infineon Roadshow Presentation April 29 – 30, 2004 Peter J. Fischl Executive Vice President & CFO Roadshow Presentation Infineon Technologies AG April 2004 Copyright © Infineon Technologies 2004. All rights reserved. Slide 1
Slide 2: Disclaimer
Disclaimer Please note that while you are reviewing this information, this presentation was created as of the date listed, and reflected management views as of that date. This presentation contains certain forward-looking statements that are subject to known and unknown risks and uncertainties that
Slide 3: Agenda
Agenda Group Group Business Business Update Update & & Financials Financials MP MP –– Memory Memory Products Products SMS SMS –– Secure Secure Mobile Mobile Solutions Solutions COM COM –– Wireline Wireline Communications Communications AI AI –– Automotive Automotive & & Industrial Industrial Electro
Slide 4: Agenda
Agenda Group Group Business Business Update Update & & Financials Financials MP MP –– Memory Memory Products Products SMS SMS –– Secure Secure Mobile Mobile Solutions Solutions COM COM –– Wireline Wireline Communications Communications AI AI –– Automotive Automotive & & Industrial Industrial Electro
Slide 5: Accelerated Growth in 2004
Accelerated Growth in 2004 Forecasts Forecasts 2004 2004 2005 2005 [USD bn] IC IC Insights Insights +27.1% +27.1% -- 5.7% 5.7% Dataquest Dataquest +20.1% +20.1% +17.7% +17.7% SIA SIA +19.4% +19.4% ++ 5.8% 5.8% WSTS WSTS +19.4% +19.4% +12.6% +12.6% In-Stat In-Stat +25.9% +25.9% +13.5% +13.5% 237 211
Slide 6: IFX: Fastest Growing Top 10 Semiconductor Company
IFX: Fastest Growing Top 10 Semiconductor Company CY 2003 vs. -10% 0% 10% 20% 30% 40% CY 2002 Infineon 32.3% TI 20.2% Toshiba 17.9% Overall Market Growth Intel 14.1% 18.3% Source: WSTS STM 13.9% Samsung 10.6% NEC 8.7% Philips 3.5% Motorola -3.7% Renesas n.a. Roadshow Presentation April 2004 Slide 6
Slide 7: 2Q Financial Highlights
2Q Financial Highlights ! Increased revenues, greater productivity, and cost reductions leading to positive 2Q results. ! Record sales in Automotive & Industrial. ! Significant improvement of EBIT margin in Secure Mobile Solutions. ! Increased revenues at Access segment in Wireline. ! Significant bi
Slide 8: Recent Operational Highlights
Recent Operational Highlights Memory Memory Products Products ! Decision to ramp up 300mm fab in Richmond. ! First functional memory chips based on 90nm. Wireline Wireline Communications Communications ! Legal carve-out of Fiber Optics completed by April 1, 2004. ! Optical Networking activities re-f
Slide 9: Profitable Growth
Profitable Growth [EUR mn] Q1 FY 04 Q2 FY 04 Change 1H FY 03 1H FY 04 Change Net sales 1,623 1,671 + 48 2,925 3,294 + 369 Growth (%) 3% 13% Gross Margin 32% 33% 21% 33% R&D 276 304 28 519 580 61 in % of sales 17% 18% 18% 18% SG&A 174 176 2 336 350 14 in % of sales 11% 11% 11% 11% EBIT 70 71 1 (250)
Slide 10: Operating and Free Cash Flow Significantly Improved
Operating and Free Cash Flow Significantly Improved 3 months ended Mar Mar 31, 31, 2003 2003 Dec Dec 31, 31, 2003 2003 Mar Mar 31, 31, 2004 2004 [EUR mn] Operating Operating cash cash flow flow 101 101 320 320 463 463 Capex Capex (230) (230) (216) (216) (253) (253) Other Other investments investment
Slide 11: Solid Financial Position
Solid Financial Position Gross Gross cash cash Financial Financial debt debt [as of March 31, 2004 in EUR mn] 2,867 2,456 Convertible note due 990 in Feb. 2007 Convertible note due in June 2010 Bank loan due in Sept. 687 2005 Other long-term 450 debt 171 Short-term debt 158 Roadshow Presentation Apr
Slide 12: Agenda
Agenda Group Group Business Business Update Update & & Financials Financials MP MP –– Memory Memory Products Products SMS SMS –– Secure Secure Mobile Mobile Solutions Solutions COM COM –– Wireline Wireline Communications Communications AI AI –– Automotive Automotive & & Industrial Industrial Electro
Slide 13: Memory Products Significant EBIT Improvement Year-over-Year
Memory Products Significant EBIT Improvement Year-over-Year Revenue Revenue share share Revenues Revenues and and EBIT EBIT Margin Margin Q2 FY04 Q2 FY04 765 643 665 609 569 542 18% 9% 2% 1% 40% 6% -22% Q1 Q2 Q3 Q4 Q1 Q2 FY03 FY04 ! Revenues improved by 3% q-o-q mainly driven by a 22% increase in bi
Slide 14: Market Development and Current Market Drivers
Market Development and Current Market Drivers Supply ! Estimated 40% bit growth in 2004 ! Low capex in 2001 to 2003 ! Delayed introduction of 300mm by competition ! Stronger shift towards Logic and Flash ! Industry delay for 110nm node ! Slower shift to DDR2 Demand ! Estimated 50% bit growth in 2004
Slide 15: Ramp-up 300mm Fab in Richmond: Key Facts
Ramp-up 300mm Fab in Richmond: Key Facts ! ! Approximately Approximately USD USD 1bn 1bn invest invest for for initial initial phase: phase: –– Approx. Approx. USD USD 750mn 750mn in in FY FY 2005 2005 –– Approx. Approx. USD USD 250mn 250mn in in FY FY 2006 2006 –– Approx. Approx. USD USD 40mn 40mn
Slide 16: Ramp-up 300mm Fab in Richmond: Strategic Rationale
Ramp-up 300mm Fab in Richmond: Strategic Rationale ! Offsetting ! Offsetting reduced reduced internal internal bit bit growth growth from from rapid rapid conversion conversion of of DRAM DRAM to to other other products. products. ! Richmond ! Richmond preferred preferred site site due due to: to: –
Slide 17: The Richmond Site: Synergies through Infrastructure Sharing
The Richmond Site Synergies through Infrastructure Sharing Gas CUB 2 Pad IWT CUB 1 FAB 2 PATM FAB 1 Admin Comp lex FAB: Wafer Manufacturing PATM: Probe, Assembly, Test, Modules CUB: Central Utility Building Roadshow Presentation IWT: Industrial Waste Treatment April 2004 Copyright © Infineon Technol
Slide 18: Top DRAM Player in 2003
Top 3 DRAM Player in 2003 28.6% 1. Samsung 32.2% 19.1% 2. Micron 18.1% 2003 16.3% 3. 12.7% 2002 14.7% based on Trench technology 4. Hynix 12.7% 4.6% 5. Nanya 5.5% 4.3% 6. Elpida 4.0% 4.2% Top 10 in 2002: 93.8% Market share 7. MVI 2.0% therein 25.2% Trench based 2.7% Top 10 in 2003: 97.1% Market shar
Slide 19: Agenda
Agenda Group Group Business Business Update Update & & Financials Financials MP MP –– Memory Memory Products Products SMS SMS –– Secure Secure Mobile Mobile Solutions Solutions COM COM –– Wireline Wireline Communications Communications AI AI –– Automotive Automotive & & Industrial Industrial Electro
Slide 20: Secure Mobile Solutions Steady EBIT Margin Improvement
Secure Mobile Solutions Steady EBIT Margin Improvement Revenue Revenue share share Revenues Revenues and and EBIT EBIT Margin Margin Q2 FY04 Q2 FY04 464 465 461 405 381 369 28% 6% 1% 3% -5% -7% -7% Q1 Q2 Q3 Q4 Q1 Q2 FY03 FY04 ! Revenues almost flat q-o-q as strong sales in the security business offs
Slide 21: A New Streamlined, Market Oriented Organization
A New Streamlined, Market Oriented Organization Mobile Mobile Wireless Wireless Discrete Discrete Security Security Solutions Solutions Infrastructure Infrastructure Semiconductors Semiconductors ! Mobile ! Mobile ! Power ! Power ! Chip ! Chip card card ICs ICs ! Transistors ! Transistors platforms
Slide 22: After the Market Downturn in 2001 Infineon Increased Market Shares
After the Market Downturn in 2001 Infineon Increased Market Shares Total Total handset handset market market GSM* GSM* // W-CDMA W-CDMA IFX RF IFX RF [units [units IFX BB IFX BB mn] mn] 600 520 600 500 407 423 500 401 400 400 344 272 300 300 248 249 200 200 100 100 0 0 CY00 CY01 CY02 CY03 CY00 CY01
Slide 23: Undisputed Leader in Fast Growing Chip Card Market
Undisputed Leader in Fast Growing Chip Card Market Total Total chip chip card card IC IC market market CY02 CY02 Chip Chip card card IC IC market market development development [EUR bn] 3.5 STM Philips 3.0 Hitachi 15% 14% 14% 3.0 CAGR Others 22% Pay-TV 2.5 Identification Finance Atmel Transport 10%
Slide 24: Significant Cost Reductions Expected in Chip Card ICs
Significant Cost Reductions Expected in Chip Card ICs Microslim Microslim technology technology 130nm 130nm shrink shrink ! Volume ! Volume roll-out roll-out of of microslim microslim ! Volume ! Volume roll-out roll-out of of first first chip chip card card technology technology (66PE (66PE family)
Slide 25: Agenda
Agenda Group Group Business Business Update Update & & Financials Financials MP MP –– Memory Memory Products Products SMS SMS –– Secure Secure Mobile Mobile Solutions Solutions COM COM –– Wireline Wireline Communications Communications AI AI –– Automotive Automotive & & Industrial Industrial Electro
Slide 26: Wireline Communications Strategic Measures Initiated to Achieve Profitability
Wireline Communications Strategic Measures Initiated to Achieve Profitability Revenue Revenue share share Revenues Revenues and and EBIT EBIT Margin Margin Q2 FY04 Q2 FY04 112 119 122 106 107 109 7% -7% -14% -17% -40% -35% -83% Q1 Q2 Q3 Q4 Q1 Q2 FY03 FY04 ! Revenues increased 2% q-o-q, mainly due to
Slide 27: Wireline Communications Q2 Highlights
Wireline Communications Q2 Highlights Access Access ! Announced agreement to acquire ADMtek. ! Continued to gain design wins for ADSL2+ solution at the major DSLAM manufacturers, particularly in China. ! First design win for Analog Telefon Adapter with our Vinetic, voice over IP processor, and netwo
Slide 28: Acquisition of ADMtek Targeting End-to-End Solutions for Broadband Access
Acquisition of ADMtek Targeting End-to-End Solutions for Broadband Access ! Services supported: - Triple play Fast Internet, Video and Voice - Advanced security features - Wireless LAN - VoIP DSLAM CPE DSL-CPE-Market [USD mn] DSL-CO-Market [USD mn] 956 CAGR CAGR 21% 10% 566 444 382 Roadshow Presenta
Slide 29: Agenda
Agenda Group Group Business Business Update Update & & Financials Financials MP MP –– Memory Memory Products Products SMS SMS –– Secure Secure Mobile Mobile Solutions Solutions COM COM –– Wireline Wireline Communications Communications AI AI –– Automotive Automotive & & Industrial Industrial Electro
Slide 30: Automotive & Industrial Margins Stabilizing at High Levels
Automotive & Industrial Margins Stabilizing at High Levels Revenue Revenue share share Revenues Revenues and and EBIT EBIT Margin Margin Q2 FY04 Q2 FY04 361 359 379 341 357 356 23% 13% 14% 14% 12% 14% 14% Q1 Q2 Q3 Q4 Q1 Q2 FY03 FY04 ! Revenues increased 6% q-o-q driven by improved unit volume, despi
Slide 31: Automotive & Industrial Q2 Highlights
Automotive & Industrial Q2 Highlights ! Increase of worldwide bookings, especially in Power Management & Supply business. ! Major design wins in body application at a premium automotive supplier, as well as in safety and vehicle dynamics at volume suppliers. ! Launch of a TriCore-based microcontroll
Slide 32: Agenda
Agenda Group Group Business Business Update Update & & Financials Financials MP MP –– Memory Memory Products Products SMS SMS –– Secure Secure Mobile Mobile Solutions Solutions COM COM –– Wireline Wireline Communications Communications AI AI –– Automotive Automotive & & Industrial Industrial Electro
Slide 33: Outlook for Fiscal Year 2004
Outlook for Fiscal Year 2004 ! ! Expectations Expectations for for continued continued stable stable growth growth in in revenues revenues and and overall overall profitability. profitability. ! ! Growing Growing confidence confidence for for automotive automotive electronics electronics due due to
Slide 34: To create Semiconductor Solutions, enabling the Technology Lifestyle
To create Semiconductor Solutions, enabling the Technology Lifestyle of the Individual in the 21st Century. Roadshow Presentation April 2004 Copyright © Infineon Technologies 2004. All rights reserved. Slide 34
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