Infineon Technologies Ag · XETR:IFX
Infineon Technologies — Q1 FY2018 Earnings Presentation
58 slides from Infineon Technologies's earnings presentation, Jan 31, 2018
Slide 1: First Quarter FY 2018 Quarterly Update
First Quarter FY 2018 Quarterly Update Infineon Technologies AG Investor Relations
Slide 2: Agenda
Agenda 1 Infineon at a glance 2 Quarterly highlights 3 Growth drivers Automotive Power Management Security 4 Selected financial figures Please regard the “Notes” and “Glossary” at the end of the presentation. 2018-02-01 Copyright © Infineon Technologies AG 2018. All rights reserved. 2
Slide 3: Infineon at a glance
Infineon at a glance Business Segments Power represents ~65% of revenue Industrial Power [EUR m] 770 Automotive Control (IPC) 17% 545 (ATV) Power Manage- 296 31% 162 43% ment & Multi- market (PMM) ATV IPC PMM CCS 9% Chip Card & Power Non-Power* revenue in Q1 FY18: €1,775m incl. OOS and C&E of €2m Se
Slide 4: Our strategy is targeted at value creation through sustainable organic growth
Our strategy is targeted at value creation through sustainable organic growth Focus Technology leadership System understanding › Focus on fastest growing › Leverage core competencies › Create value for customers segments of semi market in different end markets to through system under- › Tackle globa
Slide 5: Infineon increased relative market share in power and outperformed the chip card market
Infineon increased relative market share in power and outperformed the chip card market Automotive Power discretes microcontroller-based semiconductors and modules Smart Card ICs total market in 2016: $30.2bn total market in 2016: $15.9bn total market in 2016: $2.79bn NXP 14.0% Infineon 18.5% Infine
Slide 6: Tight customer relationships, based on system know-how and application understanding
Tight customer relationships, based on system know-how and application understanding ATV IPC PMM CCS EMS partners Distribution partners 2018-02-01 Copyright © Infineon Technologies AG 2018. All rights reserved. 6
Slide 7: Infineon's organic revenue development clearly outperformed the total semi market
Infineon‘s organic revenue development clearly outperformed the total semi market [EUR m] organic CAGR(99-17): ~+9% 7500 CAGR(99-17): +5.9% 6000 4500 300,000 5,100 (excl. IRF) 6,059 (incl. IRF) 3000 126,895 1,200 200,000 296,383 295,996 353,884 1500 1,995 4,303 1,681 2,045 1,821 2,289 2,366 2,701 2,
Slide 8: Organic RoCE as the key value metric typically amounts to ~2x WACC
Organic RoCE as the key value metric typically amounts to ~2x WACC 30% 20% 10% 0% FY15 FY16 FY17 Q1 FY18 Q2 Q3 Q4 RoCE (excluding PPA and Deferred Tax Effects) RoCE (reported) 2018-02-01 Copyright © Infineon Technologies AG 2018. All rights reserved. 8
Slide 9: Our commitment to investors: Continued value creation through growth
Our commitment to investors: Continued value creation through growth Earnings-per-share (EPS) development [EUR cent] +18% 30 +29% 20 24 22 22 21 20 EPS basic 17 18 18 16 10 14 EPS adjusted 0 Q1 FY17 Q2 Q3 Q4 Q1 FY18 Total cash return to shareholders [EUR m] 308 1,809 › Policy of sustainable 283* div
Slide 10: Outlook for Q2 FY18 and FY18
Outlook for Q2 FY18 and FY18 Outlook FY18* Outlook Q2 FY18* (compared to FY17) Increase of 4% Increase of 5% Revenue +/- 2%-points +/- 2%-points (prev.: “Increase of 9% +/- 2%-points“**) Segment At the mid-point of the At the mid-point of the revenue guidance: revenue guidance: Result ~16.5% Margin
Slide 11: Agenda
Agenda 1 Infineon at a glance 2 Quarterly highlights 3 Growth drivers Automotive Power Management Security 4 Selected financial figures 2018-02-01 Copyright © Infineon Technologies AG 2018. All rights reserved. 11
Slide 12: Q1 FY18 Group and Division Performance
Q1 FY18 Group and Division Performance Revenue: Segment Result: Segment Result Margin: IFX €1,775m (+8% y-y) €283m (+15% y-y) 15.9% ATV IPC PMM CCS [EUR m] [EUR m] [EUR m] [EUR m] 783 766 736 770 +10% 705 +12% 557 573 545 497 520 -7% +9% 321 328 296 264 293 16.3 17.5 23.2 22.0 19.6 16.2 16.7 15.7 14
Slide 13: We are part of world's 1st series production car with L3 autonomous driving features
We are part of world‘s 1st series production car with L3 autonomous driving features Infineon AURIX™ Infineon supplies key components for Audi A8. Examples: › 77 GHz radar sensor chips of our RASIC™ family are installed in the front and corner radar › Audi‘s zFAS („zentrales Fahrerassistenzsystem“ =
Slide 14: Innovative drivetrain topologies push demand for more power semiconductors, see NIO ES8
Innovative drivetrain topologies push demand for more power semiconductors, see NIO ES8 Front and rear motor with total 480 kW system performance Courtesy: NextEV › End of 2017, NIO launched its first mass 2x HybridPACK™ Drive 2x HybridPACK™ Drive production car, the ES8 electric SUV for 6-phase fro
Slide 15: Infineon secured SiC design-win for ultra high-power charging station network
Infineon secured SiC design-win for ultra high- power charging station network SiC-based 350 kW ultra high-power charging point rack #1 › 400 amps (3x Easy 2B + 2x Easy 1B) › 800 volt rack #2 rack #3 rack #4 › 20 min charging time 6 racks (60 kW each) rack #5 › water-cooled charging cable rack #6 ›
Slide 16: PMM is unlocking further growth potential by extending its power IC portfolio
PMM is unlocking further growth potential by extending its power IC portfolio Latest example: XDP™ – solution for digital power control Adapters and chargers Commercial lighting More than 60m pieces shipped since market launch in 2015; shipment of another 60m pieces expected in FY18 › XDP™ is addres
Slide 17: Agenda
Agenda 1 Infineon at a glance 2 Quarterly highlights 3 Growth drivers Automotive Power Management Security 4 Selected financial figures 2018-02-01 Copyright © Infineon Technologies AG 2018. All rights reserved. 17
Slide 18: Reference to web presentations
Reference to web presentations 10 Oct 2017: ATV Division Call by Peter Schiefer, Division President Automotive www.infineon.com/atv-call 29 Jun 2017: PMM Division Call by Andreas Urschitz Division President Power Management & Multimarket www.infineon.com/pmm-call 11 May 2017: Deutsche Bank AutoTech
Slide 19: Infineon benefits from industrial and auto, the by far fastest growing segments
Infineon benefits from industrial and auto, the by far fastest growing segments CAGR 2017 – 2021** by Semiconductor Industry Segment Automotive 7,2% $38bn* Industrial 6,7% $50bn* Chip Card ICs*** 4,1% $3.4bn* Consumer 3,9% $40bn* Total Semi Market 3,3% $429bn* Data Processing 2,9% $147bn* Communicat
Slide 20: 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: Hyundai › CO2 reduction › Energy efficiency › Energy efficiency › Security as a function › Advanced Driver › Automation › Power density Assistance › Mobile payments › Productivity › BLDC motors Systems incre
Slide 21: Agenda
Agenda 1 Infineon at a glance 2 Quarterly highlights 3 Growth drivers Automotive Power Management Security 4 Selected financial figures 2018-02-01 Copyright © Infineon Technologies AG 2018. All rights reserved. 21
Slide 22: 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 market share gains in power and sensors: › #1 in power semiconductors* › #2 in sensors* › #4 in microcontrollers* (#1 in powertrain**) Infineon is well Most balanced portfolio with sensors, micro- positioned to contro
Slide 23: Infineon's position in the automotive semiconductor universe
Infineon's position in the automotive semiconductor universe Automotive semiconductors 2016 total market size: $30.2bn NXP* 14.0% Market share trend Infineon 10.7% +0.3%-pt – Infineon benefits disproportionately Renesas 9.8% from the two mega trends Texas Instr. 7.8% – ADAS/AD STMicro 7.4% – clean c
Slide 24: Megatrends shaping the automotive market; significantly increasing semi content per car
Megatrends shaping the automotive market; significantly increasing semi content per car Connectivity Automated Driving eMobility Enabling the communication of cars Advanced Security ADAS/AD and clean cars will generate half of the 8% trendline growth of ATV Enabling safety Enabling CO2 Enabling secu
Slide 25: ADAS/AD semi growth driven by radar and camera sensor modules over the next 5 years
ADAS/AD semi growth driven by radar and camera sensor modules over the next 5 years Average semiconductor content per car by level of automation Level 2 (~2020) Level 3 (~2025) Level 4/5 (~2030) Sense Compute Actuate $55 $860 $190 $30 $580 $110 $190 $70 $190 $230 $180 $195 $90 $0 $20 $150 $40 radar
Slide 26: More sensors required for any next level of automation will lead to sensor cocoon in L4/5
More sensors required for any next level of automation will lead to sensor cocoon in L4/5 Level of automation Level 2 Level 3 Level 4/5 Automatic emergency brake/ forward collision warning Application* Parking assist Valet parking Lane keep assist Highway assist Highway and urban chauffeur Radar # o
Slide 27: CO2 emission targets are the key triggering points for increase in semiconductors
CO2 emission targets are the key triggering points for increase in semiconductors National fleet emissions CO2 drives three major trends 200 historical performance (1) Higher efficiency of the ‘classic’ ICE: enacted targets 180 › EPS (electric power steering) proposed targets China › start-stop Gram
Slide 28: The incremental demand of power semiconductors is a significant opportunity
The incremental demand of power semi- conductors is a significant opportunity 2017 average xEV semiconductor content by degree of electrification 48 V / MHEV HEV / PHEV BEV Sense Compute Actuate $55 $695 $190 $695 $250 $380 $75 $455 $20 $355 $5 $20 $355 $15 $50 $75 semi BoM semi BoM ICE sensors sens
Slide 29: With the transition from ICE to xEV the power semi content in powertrain increases by ~15x
With the transition from ICE to xEV the power semi content in powertrain increases by ~15x Average semiconductor content by type of car [USD] 695 265 355 17 130 Courtesy: Hyundai 38 300 300 Courtesy: Volkswagen ICE HEV, PHEV, BEV other features (power and non-power semi) drivetrain non-power semi dr
Slide 30: Power semiconductor demand for all different levels of electrification
Power semiconductor demand for all different levels of electrification incremental power semi 400 V .. 800 V content for drive train BEV, Fuel Cell EV ~$300 - energy recovery - onboard charger start-stop only Plug-in HEV Full HEV Hybrid - start-stop - start-stop ~$200 - energy recovery - energy reco
Slide 31: Infineon has unparalleled package expertise for high-power main inverter applications
Infineon has unparalleled package expertise for high-power main inverter applications Bare die Discretes Scalable products Plug-n-Play HybridPACK™ solutions Si IGBT Si bare dies HybridPACK™ Double- Easy modules Sided Cooling SiC bare dies SiC MOSFET SiC optimized package solution 2018-02-01 Copyrigh
Slide 32: ADAS/AD, clean cars, and adoption of premium features drive growth
ADAS/AD, clean cars, and adoption of premium features drive growth Drivers for semiconductor content per car Vehicle production Clean cars ADAS/AD Comfort, premium › Legislation › Today: › Premium cars are › crash avoidance early adopters of › Improvements of ICE › ADAS high-end comfort and › 2% gro
Slide 33: Agenda
Agenda 1 Infineon at a glance 2 Quarterly highlights 3 Growth drivers Automotive Power Management Security 4 Selected financial figures 2018-02-01 Copyright © Infineon Technologies AG 2018. All rights reserved. 33
Slide 34: Infineon is #1 and technology leader in power semiconductors
Infineon is #1 and technology leader in power semiconductors #1 in the market* for MOSFETs, discrete IGBTs, IGBT-based modules and total market Broad product and technology portfolio Infineon is well positioned to gain further market Addressing broadest range of applications share and earn 300 mm th
Slide 35: Efficiency, productivity and legislation are main market drivers for power applications
Efficiency, productivity and legislation are main market drivers for power applications IPC Drives Renewables MHA Traction › Energy efficiency › Legislation › Energy efficiency › Growing population › Automation › Growing share of › Growing VSD in mega cities › Productivity increase renewables as par
Slide 36: IPC is perfectly positioned to outperform traditional markets and leverage emerging ones
IPC is perfectly positioned to outperform tradi- tional markets and leverage emerging ones Traditional markets with <5% p.a. Emerging markets with >5% p.a. › Portfolio for automation application to › Comprehensive offering and expertise compensate low demand in drives in innovative material SiC › St
Slide 37: PMM's growth is built on many applications from different sectors
PMM‘s growth is built on many applications from different sectors PMM Computing Industrial Consumer / Misc Communications › Server › Industrial power › Pedelecs / eBikes › Handsets › PC supplies › Multicopter › Wearables › Notebook › xEV charger › Aviation › Cellular › Peripherals › PV roof-top inve
Slide 38: Product-to-System approach opens growth opportunities beyond MOSFETs
Product-to-System approach opens growth opportunities beyond MOSFETs Essential parts of any electronic system (e.g. in an SMPS); can be realized with separate components or as an integrated power stage as system-on-chip Controller Driver MOSFET releases low-power translates it into high- signal to s
Slide 39: Strengthening IC business allows for faster growth in power than market average
Strengthening IC business allows for faster growth in power than market average Average through-cycle growth of power business: 8% p.a. 2-3%-pt p.a. from power ICs + 5-6%-pt p.a. from MOSFETs Expand product portfolio Maintain technology leadership Bundle with MOSFETs Capitalize on scale advantage Ta
Slide 40: PMM is a leader in core technologies for ambient sensing, thus driving innovation
PMM is a leader in core technologies for ambient sensing, thus driving innovation MEMS Radar Time of Flight › #2 in the market (33.5%) › 60 GHz radar sensors e.g. › XENSIV™ REAL3™ image for silicon microphones* for gesture sensing sensor for AR/VR › World’s best signal-to- (example: Google Soli) app
Slide 41: Tailored growth strategies help maintain leadership position in both major segments
Tailored growth strategies help maintain leadership position in both major segments Power RF & Sensing Current position Growth based on 3-layer-model › Scale and technology leader in MEMS Compound semis power MOSFETs › Broadest portfolio: 25 V – 900 V › Addressing all applications › #1 holding ~1/3
Slide 42: Agenda
Agenda 1 Infineon at a glance 2 Quarterly highlights 3 Growth drivers Automotive Power Management Security 4 Selected financial figures 2018-02-01 Copyright © Infineon Technologies AG 2018. All rights reserved. 42
Slide 43: Infineon is the leader in security solutions for the connected world
Infineon is the leader in security solutions for the connected world #1 in microcontroller-based smart card ICs* Infineon is well Complete portfolio of hardware, software, positioned to services and turnkey solutions benefit from the growth trends in the security Leading in growth segments payment,
Slide 44: Tailored embedded security µC portfolio for applications in the hyper-connected IoT world
Tailored embedded security µC portfolio for applications in the hyper-connected IoT world › Infineon AURIX™ microcontroller with HSM for onboard communication › Security microcontrollers (e.g. eSIMs, TPMs) enable various functions like eCall, software over-the-air, vehicle-to-infrastructure, and on-
Slide 45: Infineon is the leading supplier of eSIM for emergency call (eCall) system for cars
Infineon is the leading supplier of eSIM for emergency call (eCall) system for cars eSIM › Emergency call function (eCall) will be mandatory for all new registered cars in the EU as of 31 March 2018 › Infineon is world’s leading supplier of embedded SIMs (eSIMs) used for eCall function Courtesy: Aut
Slide 46: Agenda
Agenda 1 Infineon at a glance 2 Quarterly highlights 3 Growth drivers Automotive Power Management Security 4 Selected financial figures 2018-02-01 Copyright © Infineon Technologies AG 2018. All rights reserved. 46
Slide 47: Opex level right on target
Opex level right on target S and G&A* R&D** [EUR m] 208 209 206 205 196 200 192 195 200 195 189 15% 175 150 14% 125 13% 100 12.2% 11.9% 11.8% 75 11.4% 11.3% 11.5% 12% 10.9% 11.0% 50 10.6% 11% 10.4% 25 0 10% Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 FY17 FY18 FY17 FY18 General & Administration Selling R&D % of s
Slide 48: Increase in trade payables due to high investments
Increase in trade payables due to high investments Working capital* Inventories [EUR m] [EUR m] [days] 1,249 1,228 1,245 1,240 1,282 1200 120 1000 865 922 1000 822 841 100 800 621 800 107 99 99 102 80 98 600 600 60 400 40 400 200 20 200 0 0 0 Q1 FY17 Q2 Q3 Q4 Q1 FY18 Q1 FY17 Q2 Q3 Q4 Q1FY18 Inventor
Slide 49: Investments between €1.1bn and €1.2bn due to strong underlying growth in demand
Investments between €1.1bn and €1.2bn due to strong underlying growth in demand Investments* D&A [EUR m] 1,100 – 1,200 1,022 1000 30% ~880 826 833 812 785 760 ~100 800 668 140 129 114 20% 600 15.5% 15.5% 514 466 8 12.9% 11.9% 378 7 400 14.5% 13.5% 12.8% 13.1% 12.1% 11.9% 11.5% 10% 9.8% 200 293 459 5
Slide 50: Healthy gross cash and net cash position
Healthy gross cash and net cash position Liquidity development [EUR m] 1,834 1,809 1,859 358 2,043 2,017 2,312 2,209 2,049 2,217 2,452 166 618 503 32 Q1 FY17 Q2 Q3 Q4 Q1 FY18 Gross Cash Debt Net Cash › Operating cash flow from continuing operations was €158m › Free Cash Flow from continuing operatio
Slide 51: Infineon has a balanced maturity profile and a solid investment grade rating (BBB) from S&P
Infineon has a balanced maturity profile and a solid investment grade rating (BBB) from S&P Maturity profile [EUR m; US$ m; nominal values] €500 $350 $350 €300 $235 €171 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 Campeon 8-year 10-year 12-year Eurobond final re- Eurobond USPP USPP USPP S
Slide 52: Part of your life. Part of tomorrow.
Part of your life. Part of tomorrow. infineon
Slide 53: Disclaimer
Disclaimer 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 upon currently available information and present estimates. They are
Slide 54: 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 2016: Infineon is listed in the STOXX® Global ESG Leaders Indices, which serves as an indicator of the quality of Infineon’s performance in the governance, social and environmental
Slide 55: Financial calendar
Financial calendar Date Location Event 22 Feb 2018 Munich Annual General Meeting 26 – 28 Feb 2018 Barcelona Mobile World Congress 03 May 2018* Q2 FY18 Results 12 June 2018 London Capital Markets Day “IFX Day 2018” 01 Aug 2018* Q3 FY18 Results 30 Aug 2018 Frankfurt Commerzbank Sector Conference Unter
Slide 56: 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 57: Glossary
Glossary AD automated driving MHA major home appliances micro- vehicles using start-stop systems and limited ADAS advanced driver assistance system hybrid recuperation mild- vehicles using start-stop systems, recuperation, DC- AEB automatic emergency braking hybrid DC conversion, e-motor AR augmente
Slide 58: 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 Senior Manager +49 89 234-22332 Investor Re
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