Infineon Technologies Ag · XETR:IFX
Infineon Technologies — Q4 FY2015 Earnings Presentation
48 slides from Infineon Technologies's earnings presentation, Nov 26, 2015
Slide 1: Fourth Quarter FY 2015 Quarterly Update
Fourth Quarter FY 2015 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: Automotive and power are the two major pillars of Infineon's businesses
Automotive and power are the two major pillars of Infineon‘s businesses Q4 FY15 revenue: EUR 1,598m Revenue split by Segment Power represents ~60% of revenue [EUR m] 614 IPC ~17% 534 PMM ATV ~33% 271 ~39% 181 CCS ~11% ATV IPC PMM CCS OOS + C&E ~0% Power Non-Power 2015-11-26 Copyright © Infineon Tech
Slide 5: 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 6: Strategic rationale of the International Rectifier deal has proven true
Strategic rationale of the International Rectifier deal has proven true Adding to scope Adding to scale › Rounding out the product portfolio › Exploiting overhead synergies › Increasing breadth and depth of › Selling breadth application understanding › Operational synergies › Capability to drive R
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 2015-11-26 Copyright © Infineon Technologies AG 2015. All rights reserved. 7
Slide 8: Table of Contents
Table of Contents 1 Infineon at a Glance 2 Growth Drivers 3 Results and Outlook 2015-11-26 Copyright © Infineon Technologies AG 2015. 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 2014 – 2019 by Semiconductor Industry Segment Industrial 9.6% $41bn* Automotive 5.6% $29bn* Chip Card ICs** 5.4% $2.6bn* Total Semi Market 2.3% $355bn* Communications 1.2% $122bn* Data Processing 0.5% $114
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 millions 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
Slide 14: Infineon REAL3 3D image sensor elementary for driver assistance systems
Infineon REAL3™ 3D image sensor elementary for driver assistance systems Infineon REAL3™ – 3D depth sensing based on time-of-flight › Most robust detection of head position, head orientation and eye closure › Observe the state of the driver and passengers › Optimize head-up displays and augmented re
Slide 15: Redundancy in safety-critical applications drives semiconductor demand
Redundancy in safety-critical applications drives semiconductor demand › ADAS/semi-autonomous driving is forcing requirements for safety-critical applications (e.g. electric power steering): › safety, availability, reliability, security › A common solution is redundancy, e.g. multiple sensors › Infi
Slide 16: 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 17: 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 Courtesy: BMW Group µC 7% 76% $372 Power 11% Sensors Other $338 43% µC 13% 55% $338 Sensors Power 23% 21% Courtesy: Hyundai Internal
Slide 18: Infineon is best positioned to benefit from EV/HEV car ramp
Infineon is best positioned to benefit from EV/HEV car ramp 1 Premium OEM Soul EV Kangoo A3 e-tron V60, Twingo Q5 A6 S60, XC90 1 Mass Market FCEV Passat, Golf 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 Malibu OEMs 3
Slide 19: 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 › ~2% growth per › Driven by legislation › Current: › Premium cars are annum crash avoidance early adopters of › Impr
Slide 20: 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 21: 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 22: 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 23: 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: $1.26bn Infineon Infineon 26.5% Mitsubishi 46.
Slide 24: Efficiency and digitalization are main market drivers for power applications
Efficiency and digitalization are main market drivers for power applications IPC PMM Drives Renewables Traction MHA AC/DC DC/DC › Energy › Legislation › Growing › Energy › Energy › Energy efficiency › Growing population efficiency efficiency efficiency › Automation share of in metro- › Growing › Cha
Slide 25: IPC: Increasing Inverterization Drives Power Semiconductors in Home Appliances
IPC: Increasing Inverterization Drives Power Semiconductors in Home Appliances IGBT modules in home appliances [US$ 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 26: IPC: Chinese government promotes electric busses to reduce air pollution
IPC: Chinese government promotes electric busses to reduce air pollution › To reduce air pollution Chinese government announced to increase number of electric busses in use by factor of 20: from today’s 10k to 200k in 2020 › Infineon EconoDual IGBT modules are qualified for CAV* applications › Sever
Slide 27: PMM: Silicon microphone: strong market success due to outstanding characteristics
PMM: Silicon microphone: strong market success due to outstanding characteristics Continued market share gains 2014 market share 34.3% Knowles 47.4% 29.8% 26.5% Infineon 34.3% 16.1% Omron 8.4% 7.3% 8.8% NRJC 4.1% 5.2% 3.5% 1.5% NeoMEMS 1.5% 2006 2008 2010 2012 2014 Source: IHS Inc., “MEMS Microphone
Slide 28: 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 29: Infineon supplies embedded Secure Element for all Samsung Gear S2 models
Infineon supplies embedded Secure Element for all Samsung Gear S2 smart watch models Infineon eSE › Infineon embedded Secure Element (eSE) safeguards users’ sensitive data and supports secured contactless payment transactions based on Near Field Communications (NFC) technology › Infineon eSE chips a
Slide 30: Infineon confirms its leading role in Internet of Things (IoT) security
Infineon confirms its leading role in Internet of Things (IoT) security Infineon OPTIGA™ TPM in Google’s OnHub router and smart home hub › Smart home devices will fuel demand for hardware-based security › OPTIGA™ TPM (based on latest TPM 2.0 standard) is first to comply with internationally recogniz
Slide 31: 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 32: 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 › Mobile device and › Mobile payments Syste
Slide 33: Table of Contents
Table of Contents 1 Infineon at a Glance 2 Growth Drivers 3 Results and Outlook 2015-11-26 Copyright © Infineon Technologies AG 2015. All rights reserved. 33
Slide 34: 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] +36% 1,598 1,586 1,598 239 1,483 1,175 1,128 1,359 16% 15% 13% 15% 18% 188 169 198 245 286 Q4 FY14 Q1 FY15 Q2 FY15 Q3 FY15 Q4 FY15 Q4 FY15 Revenue Segment Result Segment Result Marg
Slide 35: 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% +78% 621 614 598 518 518 517 534 464 +24% 300 280 +27% 269 271 241 219 20% 17% 18% 20% 22% 190 182 172 181 13% 14% 11% 11% 15% 20% 15% 8% 12% 15% 142 132 14% 14% 18
Slide 36: Guidance for Q1 FY16 and total FY16
Guidance for Q1 FY16 and total FY16 Outlook Q1 FY16* Outlook FY16* (compared to Q4 FY15) (compared to FY15) Decrease of 6% 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 14% 16% Investments
Slide 37: Part of your life. Part of tomorrow.
Part of your life. Part of tomorrow. infineon
Slide 38: Infineon's Revenue Development 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 5,100 (excl. IRF) 1,200** 1500 296,383 2,906 1,681 2,045 1,821 1,995 2,289 2,366 2,701 2,916 2,128 3,103 3,780 3,774 3,815 4,303 0 1999 2001 2003 2005 2007
Slide 39: Integration of International Rectifier digested; R&D and SG&A stable in target range
Integration of International Rectifier digested; R&D and SG&A stable in target range S and G&A*,** R&D*,*** [EUR m] 218 215 220 210 201 197 200 180 15% 180 160 138 136 140 139 14% 140 120 13% 100 80 12% 60 40 11% 20 0 10% Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 FY14 FY15 FY14 FY15 General & Administration Sel
Slide 40: 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] Q4 Q1 1,129 FY14 FY15 Q2 Q3 Q4 1,012 1,040 125 1000 100 750 800 700 631 755 75 600 707 490 550 50 500 400 200 25 300 0 0 100 -52 Q4 Q1 Q2 Q3 Q4 FY14 FY15 -100 Inventories DOI** Trad
Slide 41: 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 0 0% FY11 FY12 FY13 FY14 FY15* FY16e FY11 FY12 FY13 FY
Slide 42: Dividend increase of €0.02 expected in February 2016
Dividend increase of €0.02 expected in February 2016 after increase of €0.06 in 2015 Total gross capital returns history [EUR m] 1,278 308 › Increase of dividend from 109 €0.18 to €0.20 225 212 202 will be proposed to AGM on 18 26 167 164 February 2016. 130 225 › Payout of 129 129 202 173 ~€225m wil
Slide 43: Acquisition of International Rectifier completed; growing net cash position
Acquisition of International Rectifier completed; growing net cash position Liquidity development [EUR m] 186 190 1793 220 1793 1832 2232 2418 2107 1917 1656 1842 2013 -176 49 Q4 Q1 Q2 Q3 Q4 FY14 FY15 Gross Cash Debt Net Cash Net Debt › In Q4 FY15, gross cash and net cash increased due to – positive
Slide 44: Strong increase in RoCE in Q4 FY15 exceeding target
Strong increase in RoCE in Q4 FY15 exceeding target: 'RoCE above WACC' over the cycle RoCE* history WACC: low teens % 30% FY14: 20% 20% FY13: 14% FY15: 13% 10% 5% 7% 16% 27% 17% 21% 24% 24% 18% 6% 9% 26% 0% Q1 FY13 Q2 Q3 Q4 Q1 FY14 Q2 Q3 Q4 Q1 FY15 Q2 Q3 Q4 Capital Employed* history [EUR m] 6000 521
Slide 45: 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 46: 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 › September 2014: Infineon was listed in the STOXX® Global ESG Leaders Indices, which serves as an › January 2015: Infineon is indicator of the quality of Infineon’s listed in the Sustai
Slide 47: Financial calendar
Financial calendar Date Location Event 01 – 02 Dec 2015 Phoenix, AZ Credit Suisse TMT Conference 02 Feb 2016* Q1 FY16 Results 18 Feb 2016 Munich Annual General Meeting 03 May 2016* Q2 FY16 Results 02 Aug 2016* Q3 FY16 Results 30 Nov 2016* Q4 FY16 and FY 2016 Results * preliminary 2015-11-26 Copyrigh
Slide 48: 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
Infineon Technologies — Q4 FY2015 Earnings Presentation on 6ix