Slide 1: Full year 17 results
Full year 17 results June 2017
Slide 2: Disclaimer
Disclaimer This document was prepared by Soitec (the “Company”) on June 14, 2017 in connection with the announcement of the fiscal year end 2017 results. This document is provided for information purposes only. It is public information only. The Company’s business operations and financial position i
Slide 3: Agenda
Agenda 1 FY’17 highlights 2 FY’17 financials 3 Business review: promising prospects in Electronics 4 Outlook 5 Appendix 6/15/2017 3 SOITEC FY’17 RESULTS – JUNE 2017
Slide 4: Agenda
Agenda 1 FY’17 highlights 2 FY’17 financials 3 Business review: promising prospects in Electronics 4 Outlook 5 Appendix 6/15/2017 4 SOITEC FY’17 RESULTS – JUNE 2017
Slide 5: Soitec: engineered substrates at the heart of everyday life
Soitec: engineered substrates at the heart of everyday life Data Centers IoT and wearables Automotive Consumer Multimedia Intensified Challenges Outstanding Longer battery $$ $ Optimized cost life High reliability Performance enabled by Soitec technologies We deliver innovative substrates & process
Slide 6: FY'17 overview (1/2): strengthened balance sheet
FY’17 overview (1/2): strengthened balance sheet A significant strengthening of the balance sheet thanks to € 150m equity raised in Q1’17 A decisive Shareholder’s A stronger realignment A significant equity cash position of the deleveraging restored to support shareholder future growth structure Thr
Slide 7: FY'17 overview (2/2): further operating leverage thanks to Electronics business
FY’17 overview (2/2): further operating leverage thanks to Electronics business profitable growth Solid organic growth and a significant surge in profitability in FY’17 Bernin I (200mm) operating at full capacity thanks to the sustained demand in RF-SOI and Power-SOI Bernin II (300mm) still under-ut
Slide 8: Substantial improvement in operating profitability achieved in FY'17
Substantial improvement in operating profitability achieved in FY’17 Sales growth (Electronics) Significant increase in gross margin +4% 31.5% in €m at constant 26.7% exchange rates as a % of sales 246 77.4 233 Gross profit in €m 62.2 FY'16 FY'17 FY'16 FY'17 restated restated Increase in current ope
Slide 9: Agenda
Agenda 1 FY’17 highlights 2 FY’17 financials 3 Business review: promising prospects in Electronics 4 Outlook 5 Appendix 6/15/2017 9 SOITEC FY’17 RESULTS – JUNE 2017
Slide 10: FY'17: revenue breakdown
FY’17: revenue breakdown In million euros Change Change at FY’16 Q1’17 Q2’17 Q3’17 Q4’17 FY’17 vs FY’16 constant FX 200mm wafer sales 170.5 42.7 44.7 47.9 47.2 182.5 +7% +6% 300mm wafer sales 53.6 11.4 10.7 13.4 21.3 56.7 +6% +5% Royalties and IP 9.1 1.4 1.3 1.8 2.0 6.6 (28)% (29)% revenues Total sa
Slide 11: Group consolidated P&L (1/2)
Group consolidated P&L (1/2) FY’16 In million euros FY’17 Change restated Sales 245.7 233.2 +5% Gross profit 77.4 62.2 +24% As a % of sales 31.5% 26.7% See detail Research and development expenses (18.7) (16.7) +12% on slide 13 As a % of sales 7.6% 7.1% See detail Selling, general and administrative
Slide 12: Continuous improvement in manufacturing margin
Continuous improvement in manufacturing margin 140 In million euros Steady 1 revenue growth over 120 35% the last quarters 35 31% 100 31 29% 22 200mm: industrial 23 productivity 27% 2 26 further improved 80 in Bernin I 22% 34 300mm: increased 60 utilization of Bernin II 25 18 3 capacity in H2 (29% 9
Slide 13: FY'17 operating expenses
FY’17 operating expenses FY’16 R&D expenses (in million euros) FY’17 restated Gross R&D expenses (45.2) (43.1) Prototype sales and other 4.4 5.5 Subsidies and income tax credit 22.1 20.9 Total net R&D expenses (18.7) (16.7) As a % of sales (7.6%) (7.1%) FY’16 SG&A expenses (in million euros) FY’17 r
Slide 14: Group consolidated P&L (2/2)
Group consolidated P&L (2/2) FY’16 In million euros FY’17 restated Current operating income 27.7 22.4 Other operating income and expenses (8.2) (29.4) Operating income 19.5 (7.0) See detail Net financial income/(expense) (11.6) (22.5) on slide 15 Income tax (0.7) (4.1) Net profit / (loss) from conti
Slide 15: FY'17 net financial result
FY’17 net financial result FY’16 In million euros FY’17 Restated Interest expense on OCEANE 2018 (4.7) (10.2) One-off charge related to the repurchase of OCEANE 2018 (2.2) - Interest expense on loans and credit lines (0.8) (3.3) Interest expense on leasing (1.1) (1.3) Non recurring financial expense
Slide 16: Net profit from discontinued operations
Net profit from discontinued operations Directly reported at the bottom of consolidated P&L FY’16 In million euros FY’17 restated Sales 0.8 26.8 Expenses (0.6) (35.0) Current operating income/(loss) 0.2 (8.2) Other operating income and expenses (5.0) (2.7) Operating income/(loss) (4.8) (10.9) Net fi
Slide 17: FY'17 net cash generated by operating activities
FY’17 net cash generated by operating activities FY’16 In million euros FY’17 restated Net profit / (loss) 8.4 (72.2) of which continuing activities 7.2 (33.6) of which discontinued activities 1.1 (38.7) Non cash items 23.8 50.1 of which continuing activities 33.8 69.9 of which discontinued activiti
Slide 18: FY'17 strong cash generation
FY’17 strong cash generation Change in net cash = + € 60.2m in €m 11.0 (114.4) Continuing activities 143.8 Discontinued activities Group Net cash Net cash generated used by by operating investing activities = activities = € 31.6m € (2.4)m (7.8) (0.2) 83.1 (1.3) 109,4 109.3 3.4 39.3 (7.7) 8.2 2.1 (5.
Slide 19: Major strengthening of the balance sheet during FY'17
Major strengthening of the balance sheet during FY’17 Shareholders’ equity Gross debt in €m in €m 219 149 121 -8 31 March 16 31 March 17 31 March 16 31 March 17 Cash and cash equivalents Net debt in €m in €m 170 109 49 12 31 March 16 31 March 17 31 March 16 31 March 17 6/15/2017 19 SOITEC FY’17 RESU
Slide 20: Simplified consolidated balance sheet
Simplified consolidated balance sheet 31 March 2017 31 March 31 March 31 March 31 March In million euros 2017 2016 In million euros 2017 2016 Total equity 149.1 (7.9) Intangible assets 4.0 5.7 Long-term financial debt 104.7 160.0 Tangible assets and other non current assets 157.0 154.2 Provisions an
Slide 21: Agenda
Agenda 1 FY’17 highlights 2 FY’17 financials 3 Business review: promising prospects in Electronics 4 Outlook 5 Appendix 6/15/2017 21 SOITEC FY’17 RESULTS – JUNE 2017
Slide 22: Soitec in the value chain
Soitec in the value chain G S Si D Buried Oxide Base material SOI transistor Smart Cut TM technology IC Silicon die with millions of Starting transistors wafers SOI processed PCB wafer with multiple raw dice per wafer SOI substrates (Silicon on insulator) 6/15/2017 22 SOITEC FY’17 RESULTS – JUNE 201
Slide 23: Soitec products well positioned in high growth markets today and tomorrow
Soitec products well positioned in high growth markets today and tomorrow 2020 + 5G World 2017 + Electronics for Everyday Use SINCE 2010 Mobile, Automobile & Industry 2000-2010 PC, Gaming & Automobile Main Soitec product: PD-SOI Main Soitec products: RF-SOI, Power-SOI Main Soitec products: FD-SOI, R
Slide 24: Solutions addressing specific applications and markets
Solutions addressing specific applications and markets Data Center Smartphones IoT Automotive Cloud Computing Semiconductors Semiconductors Semiconductors Semiconductors requirements requirements requirements requirements $ $ $ $ $ $ $ $ More performance Lower power High reliability Lower cost 6
Slide 25: Soitec products addressing large markets with strong customer base
Soitec products addressing large markets with strong customer base RF Front-end Processor & Photonics Imagers Power Module connectivity SoC Power-SOI RF-SOI FD-SOI Photonics-SOI Imager-SOI Customers Key Market Direct players 6/15/2017 25 SOITEC FY’17 RESULTS – JUNE 2017
Slide 26: Soitec footprint FY'17
Soitec footprint FY’17 Photonics-SOI Interconnect 100G On-board optics 400G MPU, Switching Memory 4G / LTE / WIFI WIFI, BT, RF-SOI LTE GPS FD-SOI GPS APU, MCU, LTE APU, ISP ECU Wifi, BT Memory APU, MCU Memory Memory Power Mgt Power-SOI Power Mgt Power Mgt Sensors Sensors Sensors (MEMS, radar, camera
Slide 27: RF-SOI is the standard addressing requirements of LTE/4G and 5G
RF-SOI is the standard addressing requirements of LTE/ 4G and 5G Increased complexity to deliver Growing RF-SOI content: higher data rates migration to new LTE standards 2016 2021 LTE A PRO & 5G <6GHZ 3X higher data rate 2X more antennas 2021 Iphone 5S Iphone 6 Iphone 7 Samsung 50X more carrier aggr
Slide 28: 4G has long way to go
4G has long way to go Most of 2017 phones are at lowest 4G specs only Source: Skyworks Supplier Day, April 2017 Very strong RF roadmap for coming years will further grow RF-SOI content 6/15/2017 28 SOITEC FY’17 RESULTS – JUNE 2017
Slide 29: Power-SOI
Power-SOI Semi content drivers for automotive and Power SOI content in automotive industrial applications More electronic content per vehicle Average SOI content in every car IVN network, Safety, Infotainment >100mm² 2021 New energy efficiency standard 80mm² 2015 Next generation of “white goods” Ind
Slide 30: FD-SOI brings huge differentiation in mobile, IoT, 5G & automotive markets
FD-SOI brings huge differentiation in mobile, IoT, 5G & automotive markets Mobility IoT Best Power/Perf/Cost Perfect fit for wireless & ULP solution for / ULL IoT clients in need of : Low-mid tier Baseband + AP On-demand processing performance 4G transceiver integration Integrated RF 5G mmWave desig
Slide 31: The FD-SOI revolution has started in consumer & automobile
The FD-SOI revolution has started in consumer & automobile Consumer: a game changer technology for Automotive : best power efficiency allowing better battery life simpler integration and enhanced reliability FD-SOI technology unlocks battery-powered FD-SOI - reference technology for ADAS device pote
Slide 32: NXP – First mass multi-market FD-SOI adoption
NXP – First mass multi-market FD-SOI adoption From very simple (IoT) to very Ability to adjust performance and complex (automotive) devices power consumption Flexible platform integrating key functionalities Source: NXP presentation at SOI Consortium, Santa Clara, April 2017 6/15/2017 32 SOITEC FY’1
Slide 33: FD-SOI – A mainstream solution with many choices
FD-SOI – A mainstream solution with many choices Performance & density at Cost-effective & performance for any cost - for Servers, networking & Low-power applications High-end Mobile FD-SOI 12 nm FinFET 7nm FD-SOI FinFET 18 nm 10 nm eMRAM FinFET FD-SOI 16/14nm Flexible platform integrating 22 nm key
Slide 34: FD-SOI: ecosystem getting stronger
Latest Announcements FD-SOI: ecosystem getting stronger GLOBALFOUNDRIES GLOBALFOUNDRIES and the Chengdu municipality to invest 100M$ to build a world-class FD-SOI ecosystem including multiple design centers and accelerate adoption of 22 FD-SOI (FDX) in China A rapidly growing FD-SOI ecosystem Increa
Slide 35: Emerging SOI for Data Centers and Imager markets
Emerging SOI for Data Centers and Imager markets Silicon Photonics Imagers Growth drivers Growth drivers CISCO 100G LR4 CPAK 100Gb Ethernet interconnection standard in Next generation imagers for: data centers Enhanced augmented & virtual reality High speed interconnection of ASIC experience Solutio
Slide 36: Soitec products growing adoption in strategic end-markets
Soitec products growing adoption in 4 strategic end-markets Photonics-SOI Interconnect 100G Photonics-SOI Interconnect 100G On-board optics 400G Photonics-SOI On-board optics 400G MPU, Switching MPU, Switching Memory Memory FY17 FY22 WIFI, BT, WIFI, BT, LTE RF-SOI LTE APU, MCU, APU, MCU, ECU FD-SOI
Slide 37: Agenda
Agenda 1 FY’17 highlights 2 FY’17 financials 3 Business review: promising prospects in Electronics 4 Outlook 5 Appendix 6/15/2017 37 SOITEC FY’17 RESULTS – JUNE 2017
Slide 38: Soitec global manufacturing capacity
Soitec global manufacturing capacity 200mm SOI Soitec Bernin I, France HVM 300mm SOI Soitec Bernin II, France HVM Total 200mm 850 kwfrs/yr capacity capacity = 1 Mwfrs/yr by Simgui, China Pasir Ris, Singapore FY’19 Ramp to HVM Ready HVM 650 kwfrs/yr capacity of which FD-SOI capacity will be increased
Slide 39: Capex
Capex Decision to go ahead with Bernin II capex has been made € 40m long-planned investment at Bernin II to be spread between FY’18 and FY’19 Process has actually started - first part of capex already incurred Cash at hand Will progressively boost Bernin II FD-SOI production capacity from 100k wafer
Slide 40: FY'18 Guidance
FY’18 Guidance FY’18 sales expected to grow by around 25% at constant exchange rates Demand remains robust for RF-SOI products driven by the growing adoption of LTE Advanced standard in the new generation of smartphones Sustained demand for Power-SOI products to be maintained, driven by automotive a
Slide 41: Agenda
Agenda 1 FY’17 highlights 2 FY’17 financials 3 Business review: promising prospects in Electronics 4 Outlook 5 Appendix 6/15/2017 41 SOITEC FY’17 RESULTS – JUNE 2017
Slide 42: FY'17 – from Electronics EBITDA to net profit
FY’17 – from Electronics EBITDA to net profit In million euros 41.0 (21.5) 19.5 (11.6) 1.1 8.4 (0.7) 7,2 7.2 EBITDA Depreciation Operating Net financial Income tax Net profit Net profit Net profit continuing and other non income expense continuing discontinued Group share operations cash items opera
Slide 43: FY'17 cash flow statement
FY’17 cash flow statement FY’16 In million euros FY’17 restated Net cash generated by / (used in) operating activities 31.6 (12.5) of which continuing activities 39.3 20.4 Net cash generated by / (used in) investing activities (2.4) 26.9 of which continuing activities (5.8) (7.3) Share capital incre
Slide 44: Consolidated balance sheet
Consolidated balance sheet 31 March 2017 31 March 31 March 31 March 31 March In million euros 2017 2016 In million euros 2017 2016 Goodwill and intangible assets 2.5 3.8 Share capital 60.6 23.1 Capitalized development projects 1.5 1.9 Share premium 887.5 780.4 Property, plant and equipment 113.5 120
Slide 45: Smartphones – Our #1 end market (~60% of revenues)
Smartphones – Our #1 end market (~60% of revenues) Solid growth drivers for RF front-end modules RF-SOI products established as the standard solution for antenna switches Semiconductor content to increase with the number of aggregated bands and design complexity 5G opportunities with “mmWave” to ena
Slide 46: Automotive – 2nd largest end market (~20% of revenues)
Automotive – 2nd largest end market (~20% of revenues) Overall semiconductor content for automotive continues to increase Semiconductors enable 80% of innovation in automotive Annual content increase (mid-single digit) driven by electric vehicles, infotainment, autonomous driving, etc. Soitec revenu
Slide 47: Internet of Things (IoT) – Growing opportunities, multiple verticals
Internet of Things (IoT) – Growing opportunities, multiple verticals IoT offers multiple growth opportunities Many consumer or industrial applications: smartwatch, fitness trackers, drones, head-mounted displays, Industry 4.0 devices, etc. Large semiconductor opportunity with high level of integrati
Slide 48: Datacenters, Cloud computing – Revolution is underway
Datacenters, Cloud computing – Revolution is underway On-board optics 400G Major growth driver: data traffic FY22 Photonics-SOI Interconnect 100G Photonics-SOI On-board optics 400G MPU, Switching Memory Soitec products to enable disruption in FY17 computing and interconnect technologies Photonics-SO
Slide 49: Thank you
Thank you Steve.babureck@soitec.com Steve Babureck, Investor Relations Officer