Slide 1: Investor Presentation Fiscal First Quarter 2024
Investor Presentation Fiscal First Quarter 2024 A Leading Provider of Smart, Connected and Secure Embedded Solutions
Slide 2: Safe Harbor
SAFE HARBOR Forward Looking Statement Safe Harbor: During the course of this presentation, we will make projections or other forward-looking statements regarding the future financial performance of the company (including our guidance) or future events, including our strategy, growth drivers, industr
Slide 3: Corporate Overview
Corporate Overview Leading Total Systems Solutions Provider • High-performance standard and specialized • Wireless and Wired Connectivity solutions Mixed-Signal Microcontroller, Digital Signal • FPGA solutions Controller and Microprocessor solutions • Non-volatile EEPROM and Flash Memory • Mixed-Sig
Slide 4: Revenue By End Market
Revenue By End Market FY22 Durable End Markets FY23 14% 12% 11% 11% 40% 41% 17% 17% 18% 19% Industrial Data Center & Computing Automotive Communication Consumer Appliance *Based on Microchip estimates
Slide 5: Net Sales Growth
Net Sales Growth 10,000 9,000 131 consecutive quarters of Non-GAAP profitability! 8,000 7,000 $ Million 6,000 16.1% CAGR 5,000 4,000 3,000 2,000 1,000 0 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY
Slide 6: First Quarter FY2024 Revenue Mix
First Quarter FY2024 Revenue Mix Net Sales by Product Line Net Sales by Geography Net Sales by Channel Other Europe 24% Direct 15% 52% Mixed Americas Analog Signal 28% 28% MCUs Asia Distribution 57% 48% 48% ➢ Sustained growth from organic efforts focused on TSS and Megatrends ➢ Synergistic product p
Slide 7: Record Fiscal 1st Quarter 2024 Results (non-GAAP)
Record Fiscal 1st Quarter 2024 Results (non-GAAP) ➢ Record revenue of $2.29 billion; grew 2.5% QoQ and 16.6% YoY ‒ 11 consecutive quarters of revenue growth ➢ Record gross margin of 68.4%; increased 130 basis points YoY ➢ Record operating margin of 48.1%; increased 250 basis points YoY ➢ Record earn
Slide 8: Fiscal 2nd Quarter 2024 Guidance (non-GAAP)
Fiscal 2nd Quarter 2024 Guidance (non-GAAP)* Q1 FY24 Q2 FY24 Guide Long Term Actual @ mid-point Model $2,288.6 $2,266.0 FY22 – 26 CAGR Revenue ($ Million) 2.5% QoQ -1.0% QoQ of 10% to 15% 16.6% YoY 9.3% YoY Gross Margins 68.4% 68.4% 67.5% to 68.5% Operating Expenses 20.3% 20.3% 22.5% to 23.5% Operat
Slide 9: Navigating a Soft Landing
Navigating a Soft Landing ➢ PSP backlog that is >>50% of our total backlog ➢ Growing base of multi-year supply agreements with several large customers ➢ Actively helping customers with inventory positions to push out or redeploy backlog ➢ Investing in internal inventory to be well positioned for whe
Slide 10: Semi Industry Sales YoY Growth Through Cycles
Semi Industry Sales YoY Growth Through Cycles 35% 30% 25% Semi Industry Sales Y/Y 20% Growth Rates 15% 10% 5% 0% -5% -10% -15% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Semi Sales Y/Y % Chg. Semi Sales Y/Y Growth is sourced from SIA CY2022 est. annual global sal
Slide 11: Strong Cash Generation Through Cycles
Strong Cash Generation Through Cycles 35% 30% 23.4% $3,150 10-Year $2,650 25% ADJ. FCF* Semi Industry Sales Y/Y Growth Rates $2,150 Adj. Microchip Free Cash Flow* 20% CAGR $1,650 15% $1,150 ($ in millions) 10% $650 5% $150 0% -5% -$350 -10% -$850 -15% -$1,350 2007 2008 2009 2010 2011 2012 2013 2014
Slide 12: Resilient Profitability Through Cycles
Resilient Profitability Through Cycles 35% 70% MCHP LT Non-GAAP Gross Margin Target* 30% 68% 67.8% Semi Industry Sales Y/Y Growth Rates 25% 66% Microchip NG Gross Margin % 20% 64% 62.0% 62.8% 15% 60.4% 60.9% 62% 60.1% 58.8% 61.1% 61.9% 10% 60% 57.4% 58.1% 5% 57.9% 58.8% 58% 58.2% 57.2% 57.6% 0% 56%
Slide 13: Improving Efficiency Through Cycles
Improving Efficiency Through Cycles 35% 50% 46.9% 30% MCHP LT Non-GAAP Operating Margin Target* 45% Trough Non-GAAP Operating Margin Semi Industry Sales Y/Y Growth Rates 25% Microchip NG Operating Margin % 40% 20% 36.1% 35.9% 39.6% 38.7% 35% 15% 32.3% 36.2% 34.9% 31.8% 31.0% 37.1% 10% 32.4% 31.6% 30
Slide 14: Microchip Organic Growth Strategy
Microchip Organic Growth Strategy ➢ Focus on Total System Solutions (TSS) ‒ Diversified portfolio of Smart, Connected and Secure Solutions ‒ Software, firmware, reference designs to speed customer’s time to market ➢ Provide solutions in Megatrend growth areas ‒ Drives growth ≥ 2X corporate growth Em
Slide 15: Empowering Innovation In Diverse, Durable Markets
Empowering Innovation In Diverse, Durable Markets Consumer Industrial Space Sustainability Automotive Medical Data Center Defense Communication Infrastructure Aviation 15
Slide 16: Providing Total System Solutions
Providing Total System Solutions Portfolio of Hardware, Software and Services Power Management RFICs MMICs DC-DC Converters Encryption Supervisors & Ref. & High Voltage Precision LDOs, Battery Mgt. Digital Security I/Os Voltage Discretes & Modules Potentiometer Reference Motor Sensors Drivers Amplif
Slide 17: Market Megatrends
Market Megatrends Industrial 5G AI/ML IoT/Edge Computing Computing AI/ML Data Centers Automotive E-Mobility Communications Sustainability Consumer AI/ML ADAS/Autonomous Driving 17
Slide 18: Consistent, Disciplined and Balanced Capital Return Strategy
Consistent, Disciplined and Balanced Capital Return Strategy ‒ Actively reducing debt post 2018 M&A activity Debt Paydown ‒ 20 consecutive quarters of debt paydown Adjusted Free Cash $6.8 Billion ‒ Current leverage ratio of 1.29x Flow (FCF)* ‒ 84 consecutive quarters of Generation Dividends Paid div
Slide 19: Microchip 3.0
Microchip 3.0 Sustained revenue growth Elite long-term non-GAAP 5-year Organic Revenue from organic efforts business model of CAGR of 10% - 15% using focused on TSS and 67.5% - 68.5% Gross Margin FY21 as baseline Megatrends 44% - 46% Operating Margin Adjusted EBITDA Margin Diversified end-market mix
Slide 20: Environmental Stewardship
Environmental Stewardship Waste Water Energy GHG Reduction Management Consumption Emissions and Reuse 20 Click Here for Microchip’s 2022 Sustainability Report
Slide 21: Microchip's Winning Formula
Microchip’s Winning Formula Grow revenue Generate significant ~10% - 15% Extend our strong cash and increase organically while foundation built on capital returned to significantly culture and owners to 100% of expanding gross and sustainability Adj. Free Cash Flow operating margins Delivering Diffe
Slide 22: Thank You
THANK YOU A Leading Provider of Smart, Connected and Secure Embedded Control Solutions