Infineon Technologies Ag · XETR:IFX
Infineon Technologies — Q3 FY2015 Earnings Presentation
35 slides from Infineon Technologies's earnings presentation, Jul 30, 2015
Slide 1: Third Quarter FY 2015 Quarterly Update
Third 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 Q3 FY15 revenue: EUR 1,586m Revenue split by Segment Power represents ~60% of revenue [EUR m] 621 IPC ~17% 517 PMM ATV ~33% 269 ~39% 172 CCS ~11% OOS + C&E ATV IPC PMM CCS ~0.4% Power Non-Power 2015-07-30 Copyright © Infineon Te
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 $16.4bn Infineon Renesas 12.0% 19.1% NXP 30.5% (incl. IRF) Infineon 10
Slide 6: Integration of International Rectifier on track – next steps completed
Integration of International Rectifier on track – next steps completed Major achievements in Q3 FY15 › Organizational integration progressing fast; in many areas completed › Executing the discontinuation of manufacturing operation at Techview in Singapore; completed by end of CY15 › Full commitment:
Slide 7: Table of Contents
Table of Contents 1 Infineon at a Glance 2 Growth Drivers 3 Results and Outlook 2015-07-30 Copyright © Infineon Technologies AG 2015. All rights reserved. 7
Slide 8: Infineon benefits from auto and industrial, the by far fastest growing semiconductor sectors
Infineon benefits from auto and industrial, the by far fastest growing semiconductor sectors Compound annual growth rates 2014 - 2019 Industrial 7.1% $41bn* Automotive 5.7% $29bn* Chip Card ICs** 4.7% $2.6bn* Total Semi Market 3.1% $355bn* Communications 2.7% $122bn* Data Processing 2.1% $114bn* Con
Slide 9: 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*) * Source: own estimate Most balanced portfolio with sensors, micro- Infineon is ideally c
Slide 10: 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 11: Receiving Bosch Global Supplier Award for Infineon's 77 GHz radar chip family
Receiving Bosch „Global Supplier Award“ for Infineon‘s 77 GHz radar chip family Award-winning RASIC chips › On 16 July 2015, Infineon received the 77 GHz radar IC in “Bosch Global Supplier Award” for eWLB package innovation in recognition of its radar product family. › Innovative eWLB package reduce
Slide 12: New 3D Hall sensor family – expanding Infineon's sensor target markets
New 3D Hall sensor family – expanding Infineon‘s sensor target markets Features Applications Package › extremely low power consumption › control elements › highly accurate › gear sticks › industry’s smallest 3D Hall sensor › steering columns › for three-dimensional, linear and › multi-function rotat
Slide 13: Wide adoption of premium features, ADAS and CO2 reduction drive ATV's growth
Wide adoption of premium features, ADAS and CO2 reduction drive ATV‘s growth Drivers for semiconductor content per car Vehicle production CO2 reduction Advanced safety Comfort, Premium Courtesy: BMW Group Courtesy: AUDI › ~ 4% growth per › driven by › current: › premium cars are annum legislation cr
Slide 14: 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 semiconduct
Slide 15: 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 16: Infineon's path to expand its market share for MHA and light industrial applications
Infineon‘s path to expand its market share for MHA and light industrial applications Strategic steps › 1st step: Increase of shareholding in the Korean joint venture LS Power Semitech (LSPS) from 46% to 66%, thereby benefitting from the close cooperation with Samsung and LG who go for 100% VSD motor
Slide 17: Infineon and Google to jointly develop advanced radar chip for gesture recognition
Infineon and Google to jointly develop advanced radar chip for gesture recognition Infineon is a recognized leader in radar-based sensor IC with both components and system-level solutions › Infineon and Google’s Advanced Technology and Google „Project Soli“ Projects (ATAP) group jointly develop rada
Slide 18: 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 19: 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 High-end Mobile Government Payment IoT Security Communications Identification › Greater adoption of › Transition to chip- › Adoption of elec- › Rise of smart NFC technologies based payment tronic govern- homes, con
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: BMW Group Courtesy: Siemens AG › CO2 reduction › Energy efficiency › Energy efficiency › Security › Advanced Driver › Automation › Power density › Mobile payments Assistance › Productivity › Mobile device an
Slide 21: Table of Contents
Table of Contents 1 Infineon at a Glance 2 Growth Drivers 3 Results and Outlook 2015-07-30 Copyright © Infineon Technologies AG 2015. All rights reserved. 21
Slide 22: 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] +43% 1,586 1,586 244 1,483 1,175 1,110 1,128 1,342 15% 16% 15% 13% 15% 170 188 169 198 245 Q3 FY14 Q4 FY14 Q1 FY15 Q2 FY15* Q3 FY15 Q3 FY15 Revenue Segment Result Segment Result Marg
Slide 23: ATV, IPC, PMM boosted by International Rectifier business; CCS growth solely organic
ATV, IPC, PMM boosted by International Rectifier business; CCS growth solely organic ATV IPC PMM CCS [EUR m] [EUR m] [EUR m] [EUR m] +22% +91% 621 598 510 518 518 517 464 +35% 300 280 +40% 269 271 241 219 17% 20% 17% 18% 20% 200 190 14% 13% 14% 11% 11% 182 172 20% 20% 15% 8% 12% 142 132 123 8% 14% 1
Slide 24: Guidance for Q4 FY15 and total FY15
Guidance for Q4 FY15 and total FY15 Outlook Q4 FY15 Outlook FY15 (compared to Q3 FY15) (compared to FY14) Increase by 1% Increase of ~34% Revenue +/- 2%-points (prev.: Increase of 36% +/- 2%-points) Segment At the mid-point of the revenue guidance: 15% Result 16% (prev.: 15% at the mid-point of the
Slide 25: Part of your life. Part of tomorrow.
Part of your life. Part of tomorrow. infineon
Slide 26: Since Q2 FY15 R&D and SG&A are containing acquisition-related expenses
Since Q2 FY15 R&D and SG&A are containing acquisition-related expenses S and G&A** R&D*** [EUR m] 218 220 210 201 200 180 15% 180 160 138 136 141 140 139 14% 140 122 120 13% 100 80 12% 60 40 11% 20 0 10% Q3 Q4 Q1 Q2* Q3 Q3 Q4 Q1 Q2* Q3 FY15 FY15 FY15 FY15 General & Administration Selling R&D % of sa
Slide 27: Working capital leveling off after acquisition of International Rectifier and Qimonda settlement
Working capital leveling off after acquisition of International Rectifier and Qimonda settlement Working capital** Inventories [EUR m] [EUR m] [days] Q3 FY14 Q4 Q1 FY15 Q2* Q3 1040 125 1012 750 1000 100 700 623 800 490 755 75 500 600 680 707 400 50 300 200 25 100 0 0 Q3 FY15 Q4 Q1 FY15 Q2* Q3 -100 -
Slide 28: FY15 investment ratio is decreasing towards 13%
FY15 investment ratio (including International Rectifier) is decreasing towards 13% Investments** D&A [EUR m] 1000 30% 887 890 ~800*** 800 ~750 668 20% 600 15.1% 514 453 466 205 13.7% 428 378 11.9% 364 12.9% 400 215 325 336 10% 203 200 150 115 141 141 0 0% FY09 FY10 FY11 FY12 FY13 FY14 FY15e* FY09 F
Slide 29: Dividend of €0.18 has increased capital returns by €202m in February 2015
Dividend of €0.18 has increased capital returns by €202m in February 2015 Total gross capital returns history [EUR m] 1,053 › In November 2013, a 308 new €300m capital returns program with a 109 maturity until Sep 2015 212 was started. 202 › Per 31 Mar 2015, no put 26 167 164 options for buyback 130
Slide 30: Net cash already returned to positive level in second quarter after acquisition
Net cash already returned to positive level in second quarter after acquisition Liquidity development [EUR m] 186 190 190 1793 2263 2073 2418 2232 2107 1917 1656 1832 1842 -176 49 Q3 Q4 Q1 Q2 Q3 FY14 FY15 Gross Cash Debt Net Cash / Net Debt › In Q3, gross cash and net cash increased due to: – positi
Slide 31: NOPAT increased in Q3 FY15 – target: RoCE above WACC over the cycle
NOPAT increased in Q3 FY15 – target: 'RoCE above WACC' over the cycle RoCE** history WACC: low teens % 30% FY14: 20% 20% FY13: 14% 10% 5% 7% 16% 27% 17% 21% 24% 24% 18% 6% 9% 0% Q1 FY13 Q2 Q3 Q4 Q1 FY14 Q2 Q3 Q4 Q1 FY15 Q2* Q3 Capital Employed** history [EUR m] 6000 5213 5015 4000 2969 2239 2274 221
Slide 32: 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 33: 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 34: Financial calendar
Financial calendar Date Location Event 03 Sep 2015 London Deutsche Bank European TMT Conference 22 - 23 Sep 2015 Munich Baader Investment Conference Berenberg Bank and Goldman Sachs German 23 Sep 2015 Munich Corporate Conference ATV Presentation by Jochen Hanebeck, 28 Sep 2015 London Division Presid
Slide 35: 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 — Q3 FY2015 Earnings Presentation on 6ix