Nxp Semiconductors N.v. · NASDAQ:NXPI
Nxp Semiconductors — Investor Presentation (February 2019)
26 slides from Nxp Semiconductors's investor presentation, February 2019
Slide 1: NXP Investor Presentation Fourth Quarter 2018
NXP Investor Presentation Fourth Quarter 2018 February 2019 SECURE CONNECTIONS FOR A SMARTER WORLD
Slide 2: Forward-Looking Statement
Forward-Looking Statement This presentation includes forward-looking statements which include statements regarding NXP’s business strategy, financial condition, results of operations, and market data, as well as any other statements which are not historical facts. By their nature, forward-looking st
Slide 3: NXP Investment Thesis
NXP Investment Thesis Market Leader in Focused on Strong Growing Markets Profitable Growth Shareholder All Excess Cash Friendly Returned to Shareholders 2
Slide 4: Secure Connections for the Smarter World… has Evolved
Secure Connections for the Smarter World… has Evolved Preprocessing Focus Verticals Cloud IoT Edge Enabling Infrastructure Technologies Home Automotive Gateway Industrial Controller Machine Learning Authentication Auto Smart Industrial & IoT Processing Gateway City Mobile Connectivity Services Data
Slide 5: NXP Addresses 4 Major End Markets
NXP Addresses 4 Major End Markets Automotive Industrial & IoT ADAS + Electrification Fragmented customer base System solutions innovation with OEMs Processing needs are transforming markets Increased content drives growth Scalable solutions as a differentiator Mobile Communication Large mobile and a
Slide 6: HPMS Market Leader with Sharp Focus, Broad Reach
HPMS Market Leader with Sharp Focus, Broad Reach 1,2,3,4 NXP 2018 Revenue by Operating Segment NXP: the HPMS leader • #5 global non-memory semi supplier 4% Corporate & Other • #1 global auto semi supplier 42% • Focused IoT processing: MCU–CrossOver–AP Auto 6% - #2 MCU supplier SIS • #1 secure identi
Slide 7: Focused Leadership – End Markets
Focused Leadership – End Markets 1,2,3 NXP 2018 Revenue by End-market Exposure Broad end market exposure • Long product life cycles • High barriers to entry • Application expertise 48% Automotive Recognized leadership in • Automotive 19% • MCU and application processors Industrial & • Mobile transac
Slide 8: Growth Opportunity Driven by Focus End Markets
Growth Opportunity Driven by Focus End Markets 1 Growth by End Market Percent 2018A – 2021E $10.9B - $11.6B End Market 2018 3-yr. CAGR Revenue 5-7% 3-Yr CAGR Automotive 48% Up 7 to 10% $9.4B Industrial & IoT 19% Up 8 to 11% Mobile 12% Up 4 to 6% Comm. Infra. & Other 19% 0 to up 2% Total Up 5 - 7% 20
Slide 9: Automotive – NXP Leads, Accelerates in New Areas
Automotive – NXP Leads, Accelerates in New Areas 1,2 Revenue 7-10% 3-Yr CAGR Growth drivers $4.5B • New business – above market growth − ADAS / radar, vehicle networks, electrification • Core business – at market growth − Connected infotainment, powertrain, 2018A 2021E secure car access Market 5-7%
Slide 10: Industrial & IoT – Highly Diversified
Industrial & IoT – Highly Diversified 1,2,3,4 Revenue 8-11% 3-Yr CAGR Growth drivers $1.8B • Processing − 32bit microcontrollers & cross-overs − IoT application processors − Analog mixed-signal & connectivity 2018A 2021E Market 3-5% $127B 3-Yr CAGR Value proposition • Broad, scalable solutions • Com
Slide 11: Mobile – Specialty Supplier with High Moats
Mobile – Specialty Supplier with High Moats 1,2,3,4 Revenue 4-6% 3-Yr CAGR $1.2B Growth drivers • Mobile payment adoption • New use cases (transit, access, etc.) • High-speed mixed-signal interface 2018A 2021E Market 4-7% Value proposition 3-Yr CAGR $71B • Technology innovator and leadership • Recog
Slide 12: Comm. Infra. & Other – Cyclical and Project Oriented
Comm. Infra. & Other – Cyclical and Project Oriented 1,2,3 Revenue 0-2% $1.8B 3-Yr CAGR Growth drivers • 5G basestation deployment will result in − Adoption of mMIMO − Continued leadership in LDMOS − Transition to GaN 2018A 2021E • Leadership in transit, access and retail 3-5% − MIFARE and RFID Mark
Slide 13: Diverse Customer Base - Top 20 Customers > 40% of Revenue
(1) Diverse Customer Base - Top 20 Customers > 40% of Revenue 15% >25,000 Total Customers 0% Automotive Mobile Comm. Infra. 12 1. Reflects sales through all channels
Slide 14: Driving Profitable Growth in Excess of Addressable Market
Driving Profitable Growth in Excess of Addressable Market (1,2,3,4) 2 As Reported Revenue Up 16% 3-yr. CAGR ($B) Non-GAAP Gross Profit up 18% 3-yr. CAGR ($B) $6.1 $9.5 $9.3 $9.4 $3.0 $4.8 $4.9 $5.0 2015 2016 2017 2018 2015 2016 2017 2018 2 2 Non-GAAP EBIT Profit up 17% 3-yr. CAGR ($B) Non-GAAP Free
Slide 15: Recent Quarterly Business Trends
Recent Quarterly Business Trends (1,2,3) As Reported Revenue ($M) Non-GAAP Gross Margin 2,211 2,202 2,387 2,456 2,269 2,290 2,445 2,403 51.7% 53.0% 53.7% 54.2% 52.9% 52.8% 53.0% 53.1% Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Non-GAAP Operating M
Slide 16: Revenue by End Market Trend ($M)
(1) Revenue by End Market Trend($M) Automotive (1%) Q-Q Industrial & IoT 1% Y-Y (13%) Q-Q (7%) Y-Y $1,017 $1,073 $1,067 $1,106 $1,131 $1,143 $1,121 $1,112 $374 $410 $468 $466 $426 $454 $498 $435 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Mobile Co
Slide 17: Debt Summary End of 4Q18
Debt Summary End of 4Q18 Cash Sr. Sr. Sr. (1) Sr. Sr. Sr. Sr. Sr. Revolving Debt Instrument Convertible Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Credit Facility Notes Notes Notes Notes Notes Notes Notes Notes Notes Maturity Date Dec-19 Jun-20 Jun-21 Jun-22 Sep-
Slide 18: Working Capital Ratios
(1,2) Working Capital Ratios DSO DPO 41 38 35 33 32 31 32 30 83 93 86 92 83 90 74 80 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 DIO(2) Cash Conversion Cycle 97 103 99 99 106 111 100 102 55 48 48 40 55 53 58 52 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q
Slide 19: Guidance for the First Quarter of 2019
(1) Guidance for the First Quarter of 2019 Guidance Range GAAP Reconciliation non-GAAP Low Mid High Low Mid High Total Revenue $ 2,020 $ 2,090 $ 2,160 $ - $ 2,020 $ 2,090 $ 2,160 Q-Q -16% -13% -10% -16% -13% -10% Y-Y -11% -8% -5% -11% -8% -5% Gross Profit $ 1,010 $ 1,060 $ 1,112 $ (33) $ 1,043 $ 1,0
Slide 20: Financial Model 2018E – 2021E
Financial Model 1 2018E – 2021E Focused Market Growth(1) 3 - 5% NXP Growth(1) 5 - 7% Non-GAAP Gross Margin 53 - 57% Non-GAAP R&D 14 - 16% Non-GAAP SG&A 6 - 8% Non-GAAP Operating Margin 31 - 34% Non-GAAP Operating Income Growth ~8 - 14% 19 1. 3 Year CAGR from 2018 actuals through 2021E internal NXP e
Slide 21: Updated Modeling Items
Updated Modeling Items 1,2 4Q18A 2019E 2020E 2021E Cash Tax on Ongoing $29M 5.0% 7.0% 11.0% Operations Incidental Cash Taxes $32M $298M $51M - Stock Based Compensation $93M $365M $365M $350M Non-Controlling Interest $13M $40M $45M $45M 1. Updated since Analyst Day 2018 (Sept 11, 2018); 20 2. Inciden
Slide 22: Quarterly Financial Reconciliation (GAAP to non-GAAP)
Quarterly Financial Reconciliation (GAAP to non-GAAP) (1) Q4 Q3 Q4 ($ in millions, unless otherwise stated) 2018 2018 2017 Other Information Total Revenue 2,403 2,445 2,456 • PPA effects: ($385M) GAAP Gross Profit 1,243 1,256 1,242 • Restructuring: ($1M) Gross profit adjustments (32) (39) (89) • Sto
Slide 23: Quarterly Cash Flow Overview ($M)
Quarterly Cash Flow Overview ($M) (1) Q4 Q3 Q4 2018 2018 2017 Net cash provided by (used for) operating activities 731 2,615 738 Net cash provided by (used for) investing activities (174) (42) (135) Net cash provided by (used for) financing activities 288 (3,609) (123) Effects of changes in exchange
Slide 24: Quarterly Adjusted EBITDA ($M)
Quarterly Adjusted EBITDA ($M) (1,2) Q4 Q3 Q4 2018 2018 2017 Net income (loss) 289 1,833 768 Reconciling items to EBITDA Financial (income) expense 77 119 79 (Benefit) provision for income taxes (141) 311 (629) Depreciation 124 119 145 Amortization 379 378 397 EBITDA 728 2,760 760 Results of equity-
Slide 25: End-market to Operating Segment Map
1 End-market to Operating Segment Map Auto SCD SI&I SIS 7 – 10% CAGR 8 – 11% CAGR 0 – 2% CAGR 0 – 2% CAGR SCD Automotive • Entire Auto • Infotainment AP Auto 7 – 10% CAGR SII Industrial • Industrial & IoT MCU • High perf. analog • Industrial & IoT AP & IoT • AC-DC power • Low power connectivity SCD
Slide 26: Value Proposition
Value Proposition Driving RMS Multiple High Solutions World-class Leadership Growth Markets Core Competency Expertise & Team Focused on RMS Profitable growth Resolving customer Customer focused > 1.5X pain-points passion to win Maximize Shareholder Value Strong cash flow generation 25
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