Nxp Semiconductors N.v. · NASDAQ:NXPI
Nxp Semiconductors — Q2 2022 Earnings Presentation
29 slides from Nxp Semiconductors's earnings presentation, July 2022
Slide 1: NXP Investor Presentation Second Quarter 2022
NXP Investor Presentation Second Quarter 2022 July 2022 PUBLIC NXP, THE NXP LOGO AND NXP SECURE CONNECTIONS FOR A SMARTER W ORLD ARE TRADEMARKS OF NXP B.V. ALL OTHER PRODUCT OR SERVICE NAMES ARE THE PROPERTY OF THEIR RESPECTIVE OW NERS. © 2021 NXP B.V.
Slide 2: Forward Looking Statements
F O R WA R D L O O K I N G S TAT E M E N T S This presentation or the subsequent discussion period includes forward-looking statements which include statements regarding NXP’s business strategy, financial condition, results of operations, market data and expectations, outlooks, projections, estimate
Slide 3: NXP Investment Thesis
NXP Investment Thesis Market leader with Proven financial model with Reliable capital return policy of strong revenue growth resilient profitability robust free cash flow PUBLIC 2
Slide 4: Macrotrends Driving Waves of Semi Growth
Macrotrends Driving Waves of Semi Growth (1) Rise of Secure Edge Smart connected devices Smartphones Smart factories and homes Data-center servers Smart connected cars Laptop, Game Consoles Desktop, Home Audio Mobiles HiFi… Semiconductor TAM ($B) 2000 2005 2010 2015 2020 2025E 2030E 1. Omdia Applica
Slide 5: Semiconductor Industry – a $1 Trillion Opportunity in 2030
Semiconductor Industry – a $1 Trillion Opportunity in 2030 Global Semiconductor market value by vertical, indicative, $billion Growth contribution per vertical, 2021-30, % CAGR, 2021-30, % 7 1,065 60 Wired communication 5 95 Consumer electronics 10 130 Industrial electronics 15 6 7 Automotive electr
Slide 6: NXP's Unrivaled Technology Portfolio for the Secure Edge
NXP’s Unrivaled Technology Portfolio for the Secure Edge SENSE THINK CONNECT ACT Everything Everything Everything Everything Aware Smart Connected Efficient Everything safe and secure Easy to implement scalable system solutions PUBLIC 5
Slide 7: NXP Addresses Major End Markets
NXP Addresses 4 Major End Markets Communications Automotive Industrial & IoT Mobile Infrastructure Safety, Electrification & Edge Processing, Virtualized Secure Capex-driven Wireless Driver Interaction Connectivity & Security Transactions & Access Infrastructure Market System solutions Scalable proc
Slide 8: Accelerating Profitable Growth of 8-12% CAGR
Accelerating Profitable Growth of 8-12% CAGR (1.2,3,4) Communications Automotive Industrial & IoT Mobile Infrastructure 50% of Total 22% of Total 13% of Total 16% of Total +9 to 14% 3–yr. CAGR +9 to 14% 3–yr. CAGR +8 to 10% 3–yr. CAGR +2 to 6% 3–yr. CAGR Leader in sensing, Leader in connected Leader
Slide 9: Our Secular Growth Drivers Expected to Scale Rapidly
Our Secular Growth Drivers Expected to Scale Rapidly (1,2,3,4) 2021 Revenue Revenue by end-market exposure by business type ~$15B Accelerated $6B Growth Drivers ~$11B 20-25% $9.4B 2021-24 CAGR ~$3B 50% $1.6B Automotive High RMS ~$9B Core Businesses ~$8B ~5% $7.8B 2021-24 CAGR 2018 2021 2024E 13% 22%
Slide 10: Accelerating Secular Profitable Revenue Growth
Accelerating Secular Profitable Revenue Growth 1,2,3,4 Automotive Industrial & IoT 9 - 14% CAGR 9 – 14% CAGR ~$7.7B $5.5B ~20% CAGR ~$3.3B $2.4B ~25% CAGR ~6% CAGR ~5% CAGR 2021 2024E 2021 2024E Mobile Comm. Infrastructure 8 - 10% CAGR 2 - 6% CAGR ~$2.0B ~$1.8B $1.8B $1.4B ~70% CAGR ~15% CAGR ~4% CA
Slide 11: NXP End Market Relative Market Share
NXP End Market Relative Market Share (“RMS”) (1,2) ’21 Automotive ’21 Industrial & IoT True Competitive Leader > True Leader 0.5 - 1.0x 1.5x > 1.5x '21 Total NXP Focused Contender Leader <0.5x 1.0 - 1.5x True Leader Leader Competiti Focused Contender ve 0.5 - >1.5x 1.0 – 1.5x 1.0x <0.5x ’21 Mobile ’
Slide 12: Diverse End-Customer Base with High Barriers to Entry
Diverse End-Customer Base with High Barriers to Entry (1,2) Top 20 End-customers <45% of 2021 Revenue >25,000 Total Customers No 10% Customers 1. Reflects 2021 sales through all channels PUBLIC 11 2. Reflects spin out of Vitesco Technologies from Continental AG
Slide 13: Driving Profitable Growth in Excess of Addressable Market
Driving Profitable Growth in Excess of Addressable Market (1,2,3) As Reported Revenue Non-GAAP Gross Profit / Non-GAAP Gross Margin Up 6% 3-yr. CAGR ($B) Up 8% 3-yr. CAGR ($B) 56.1% 52.9% 53.5% 51.1% $9.4 $8.9 $8.6 $11.1 $5.0 $4.7 $4.4 $6.2 2018 2019 2020 2021 2018 2019 2020 2021 Non-GAAP Operating
Slide 14: Annual Revenue by End Market ($B)
Annual Revenue by End Market ($B) (1) Automotive Up 7% 3-yr. CAGR ($B) Industrial & IoT Up 10% 3-yr. CAGR ($B) $4.5 $4.2 $3.8 $5.5 $1.8 $1.6 $1.8 $2.4 2018 2019 2020 2021 2018 2019 2020 2021 Mobile Up 7% 3-yr. CAGR ($B) Communication Infrastructure & Other Down 1% 3-yr. CAGR ($B) $1.2 $1.2 $1.2 $1.4
Slide 15: Recent Quarterly Business Trends
Recent Quarterly Business Trends (1,2) As Reported Revenue ($M) Non-GAAP Gross Profit / Non-GAAP Gross Margin 57.6% 57.8% 57.3% 56.5% 56.1% 2,596 2,861 3,039 3,136 3,312 1,456 1,617 1,740 1,807 1,915 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Non-GAAP Operating Profit / Non-GAAP Ope
Slide 16: Quarterly Revenue by End Market ($M)
Quarterly Revenue by End Market ($M) (1) Automotive 10% Q-Q Industrial & IoT 36% Y-Y 5% Q-Q 25% Y-Y $1,262 $1,455 $1,547 $1,557 $1,713 $571 $607 $661 $682 $713 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Mobile Communication Infrastructure & Other - Q-Q (3%) Q-Q 20% Y-Y 12% Y-Y $347
Slide 17: Debt Summary at the End of 2Q22
Debt Summary at the End of 2Q22 (1,2) Sr. Sr. Sr. Sr. Sr. Sr. Sr. Sr. Sr. Sr. Sr. Sr. Sr. Sr. Sr. Revolving Debt Instrument Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Credit Notes Notes Notes N
Slide 18: Working Capital Ratios
Working Capital Ratios (1,2) DSO DPO 35 31 28 27 27 92 83 87 93 94 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 DIO Cash Conversion Cycle 88 85 83 89 94 31 33 24 23 27 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 DSO = (91.25 x AR) / Revenue DIO = (91.25 x Inventory) /
Slide 19: Proven, Resilient and Profitable Financial Model
Proven, Resilient and Profitable Financial Model (1.2,3,4) Analyst Day 2018 Actual Performance Financial Metrics Forecast 2018 – 2021A Total NXP revenue growth +5 to 7% 5.6% Non-GAAP gross margin 53 – 57% 56.1% Non-GAAP R & D % 14 – 16% 16.0% Non-GAAP SG & A % 6 – 8% 7.2% Non-GAAP operating profit g
Slide 20: Updated Financial Model
Updated Financial Model (1,2,3) Analyst Day 2021 2021 – 2024 CAGR NXP growth +8 to 12% Non-GAAP gross margin 55 to 58% Non-GAAP R&D ~16% Non-GAAP SG&A ~7% Non-GAAP operating margin 32 to 36% Non-GAAP cash taxes ‘22:~15%; ’23; ~18%; ’24; ~18% Non-controlling interest $35M to $45M Net capex 6 to 8% St
Slide 21: Guidance for the Third Quarter of 2022
Guidance for the Third Quarter of 2022 (1,2,3,4,5,6) GAAP Reconciliation Non-GAAP Low Mid High Low Mid High Total Revenue 3,350 3,425 3,500 3,350 3,425 3,500 Q-Q 1% 3% 6% 1% 3% 6% Y-Y 17% 20% 22% 17% 20% 22% Gross Profit 1,886 1,943 2,004 (35) 1,921 1,978 2,039 Gross Margin 56.3% 56.7% 57.3% 57.3% 5
Slide 22: Annual Financial Reconciliation (GAAP to non-GAAP)
Annual Financial Reconciliation (GAAP to non-GAAP) (1) ($ in millions, unless otherwise stated) 2018 2019 2020 2021 Total Revenue 9,407 8,877 8,612 11,063 GAAP Gross Profit 4,851 4,618 4,235 6,067 Gross profit adjustments (129) (131) (165) (138) Non - GAAP Gross Profit 4,980 4,749 4,400 6,205 GAAP G
Slide 23: Annual Cash Flow Overview ($M)
Annual Cash Flow Overview ($M) (1) ($ in millions, unless otherwise stated) 2018 2019 2020 2021 Net cash provided by (used for) operating activities 4,369 2,373 2,482 3,077 Net cash provided by (used for) investing activities (522) (2,284) (418) (934) Net cash provided by (used for) financing activi
Slide 24: Annual Adjusted EBITDA ($M)
Annual Adjusted EBITDA ($M) (1) ($ in millions, unless otherwise stated) 2018 2019 2020 2021 Net income (loss) 2,258 272 80 1,906 Reconciling items to adjusted net income Financial (income) expense 335 350 417 403 (Benefit) provision for income taxes 176 20 (83) 272 Depreciation 478 518 547 551 Amor
Slide 25: Quarterly Financial Reconciliation (GAAP to non-GAAP)
Quarterly Financial Reconciliation (GAAP to non-GAAP) (1) Q2 Q3 Q4 Q1 Q2 Other Information for Q2 2022: ($ in millions, unless otherwise stated) 2021 2021 2021 2022 2022 • PPA effects: ($149M) Total Revenue 2,596 2,861 3,039 3,136 3,312 GAAP Gross Profit 1,422 1,583 1,707 1,777 1,882 • Restructuring
Slide 26: Quarterly Cash Flow Overview ($M)
Quarterly Cash Flow Overview ($M) (1) Q2 Q3 Q4 Q1 Q2 ($ in millions, unless otherwise stated) 2021 2021 2021 2022 2022 Net cash provided by (used for) operating activities 636 924 785 856 819 Net cash provided by (used for) investing activities (189) (248) (316) (329) (288) Net cash provided by (use
Slide 27: Quarterly Adjusted EBITDA ($M)
Quarterly Adjusted EBITDA ($M) (1) Q2 Q3 Q4 Q1 Q2 ($ in millions, unless otherwise stated) 2021 2021 2021 2022 2022 Net income (loss) 406 526 610 666 683 Reconciling items to adjusted net income Financial (income) expense 100 93 123 105 128 (Benefit) provision for income taxes 65 95 72 114 129 Depre
Slide 28: NXP Investment Thesis
NXP Investment Thesis Market leader with Proven financial model with Reliable capital return policy of strong revenue growth resilient profitability robust free cash flow PUBLIC 27
Slide 29: Secure Connections for a Smarter World
SECURE CONNECTIONS FOR A SMARTER WORLD