Slide 1: NXP Investor Presentation First Quarter 2023
NXP Investor Presentation First Quarter 2023 May 2023 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 document includes forward-looking statements which include statements regarding NXP’s business strategy, financial condition, results of operations, the expected material weakness in our internal control over financial reporting, including the timeli
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) 2022 Revenue Revenue by end-market exposure by business type ~$15B Accelerated $6B Growth Drivers ~$11B 20-25% $9.4B 2021-24 CAGR ~$3B 52% $1.6B Automotive High RMS ~$9B Core Businesses ~$8B ~5% $7.8B 2021-24 CAGR 2018 2021 2024E 12% 21%
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) ’22 Total NXP Product Revenue ’22 Automotive ’22 Industrial & IoT True Leader Leader ’22 Sales ’22 Sales RMS >1.5x RMS 1.0 – 1.5x $6.9B $2.7B ’22 Sales $13.2B ’22 Mobile ’22 Com. Infra. & Others Focused Contender ’22 Sales ’22 Sales RMS <0.5x $1.6B
Slide 12: Diverse End-Customer Base with High Barriers to Entry
Diverse End-Customer Base with High Barriers to Entry (1) Top 20 End-customers are less than 45% of 2022 Revenue >25,000 Total Customers No 10% Customers Automotive Mobile Comm. Infra. & Other PUBLIC 11 1. Reflects 2022 sales through all channels
Slide 13: Driving Profitable Growth in Excess of Addressable Market
Driving Profitable Growth in Excess of Addressable Market (1,2,3) As Reported Revenue Non-GAAP Gross Profit / Non-GAAP Gross Margin Up 14% 3-yr. CAGR ($B) Up 17% 3-yr. CAGR ($B) 53.5% 51.1% 56.1% 57.9% $8.9 $8.6 $11.1 $13.2 $4.7 $4.4 $6.2 $7.6 2019 2020 2021 2022 2019 2020 2021 2022 Non-GAAP Operati
Slide 14: Annual Revenue by End Market
Annual Revenue by End Market ($B) (1) Automotive Industrial & IoT Up 18% 3-yr. CAGR ($B) Up 19% 3-yr. CAGR ($B) $4.2 $3.8 $5.5 $6.9 $1.6 $1.8 $2.4 $2.7 2019 2020 2021 2022 2019 2020 2021 2022 Mobile Communication Infrastructure & Other Up 11% 3-yr. CAGR ($B) Up 2% 3-yr. CAGR ($B) $1.2 $1.2 $1.4 $1.6
Slide 15: Recent Quarterly Business Trends
Recent Quarterly Business Trends (1,2) As Reported Revenue ($M) Non-GAAP Gross Profit / Non-GAAP Gross Margin 57.6% 57.8% 58.0% 58.0% 58.2% 3,136 3,312 3,445 3,312 3,121 1,807 1,915 1,999 1,922 1,816 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Non-GAAP Operating Profit / Non-GAAP Ope
Slide 16: Quarterly Revenue by End Market
Quarterly Revenue by End Market ($M) (1) Automotive 1% Q-Q Industrial & IoT 17% Y-Y (17%) Q-Q (26%) Y-Y $1,557 $1,713 $1,804 $1,805 $1,828 $682 $713 $713 $605 $504 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Mobile Communication Infrastructure & Other 7% Q-Q (36%) Q-Q 7% Y-Y (35%) Y-
Slide 17: Debt Summary at the End of 1Q23
Debt Summary at the End of 1Q23 (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 (1,2,3) DSO DPO 27 27 27 26 31 77 77 69 77 68 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 DIO Cash Conversion Cycle 89 94 99 116 135 39 44 57 65 98 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 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 $45M Net capex 6 to 8% St
Slide 21: Guidance for the Second Quarter of 2023
Guidance for the Second Quarter of 2023 (1,2,3,4,5) GAAP Reconciliation Non-GAAP Low Mid High Low Mid High Total Revenue 3,100 3,200 3,300 3,100 3,200 3,300 Q-Q -1% 3% 6% -1% 3% 6% Y-Y -6% -3% 0% -6% -3% 0% Gross Profit 1,741 1,816 1,891 (47) 1,788 1,863 1,938 Gross Margin 56.2% 56.8% 57.3% 57.7% 58
Slide 22: Annual Financial Reconciliation (GAAP to non-GAAP)
Annual Financial Reconciliation (GAAP to non-GAAP) (1) ($ in millions, unless otherwise stated) 2019 2020 2021 2022 Total Revenue 8,877 8,612 11,063 13,205 GAAP Gross Profit 4,618 4,235 6,067 7,517 Gross profit adjustments (131) (165) (138) (126) Non - GAAP Gross Profit 4,749 4,400 6,205 7,643 GAAP
Slide 23: Annual Cash Flow Overview
Annual Cash Flow Overview ($M) (1) ($ in millions, unless otherwise stated) 2019 2020 2021 2022 Net cash provided by (used for) operating activities 2,373 2,482 3,077 3,895 Net cash provided by (used for) investing activities (2,284) (418) (934) (1,249) Net cash provided by (used for) financing acti
Slide 24: Annual Adjusted EBITDA
Annual Adjusted EBITDA ($M) (1) ($ in millions, unless otherwise stated) 2019 2020 2021 2022 GAAP Net income (loss) 272 80 1,906 2,833 Reconciling items to EBITDA (Non-GAAP) Financial (income) expense 350 417 403 434 (Benefit) provision for income taxes 20 (83) 272 529 Depreciation 518 547 551 605 A
Slide 25: Quarterly Financial Reconciliation (GAAP to non-GAAP)
Quarterly Financial Reconciliation (GAAP to non-GAAP) (1) Q1 Q2 Q3 Q4 Q1 ($ in millions, unless otherwise stated) 2022 2022 2022 2022 2023 Total Revenue 3,136 3,312 3,445 3,312 3,121 GAAP Gross Profit 1,777 1,882 1,967 1,891 1,770 Gross profit adjustments (30) (33) (32) (31) (46) Non - GAAP Gross Pr
Slide 26: Quarterly Cash Flow Overview
Quarterly Cash Flow Overview ($M) (1) Q1 Q2 Q3 Q4 Q1 ($ in millions, unless otherwise stated) 2022 2022 2022 2022 2023 Net cash provided by (used for) operating activities 856 819 1,144 1,076 632 Net cash provided by (used for) investing activities (329) (288) (360) (272) (351) Net cash provided by
Slide 27: Quarterly Adjusted EBITDA
Quarterly Adjusted EBITDA ($M) (1,2) Q1 Q2 Q3 Q4 Q1 ($ in millions, unless otherwise stated) 2022 2022 2022 2022 2023 Net income (loss) 666 683 750 734 623 Reconciling items to adjusted net income Financial (income) expense 105 128 98 103 82 (Benefit) provision for income taxes 114 129 149 137 118 D
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