Slide 1: Investor Presentation Third Quarter Fiscal Year 2023
Investor Presentation Investor Presentation Third Quarter Fiscal Year 2023 Second Quarter Fiscal Year 2023 A Leading Provider of Smart, Connected and Secure Embedded Solutions Ganesh Moorthy/Steve Sanghi/Eric Bjornholt February 2023 Leading Provider of Smart, Connected, and Secure Embedded Control S
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 Microcontroller, Digital Signal Controller and • FPGA solutions Microprocessor solutions • Non-volatile EEPROM and Flash Memory • Mixed-Signal, Analog,
Slide 4: Durable End Markets
Fiscal Year 2022 Revenue By End Market Durable End Markets 14% 40% Industrial 11% Data Center & Computing 17% Automotive 18% Communication Consumer Appliance 4
Slide 5: Consistent Revenue Growth
Consistent Revenue Growth 129 Consecutive Quarters of Non-GAAP Profitability! 9,000 8,000 7,000 6,000 16.3% CAGR $ in millions 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 F
Slide 6: Third Quarter FY2023 Revenue Mix
Third Quarter FY2023 Revenue Mix Net Sales by Product Line Net Sales by Geography Net Sales by Channel Other Europe Direct 16% 20% 52% Americas Analog MCU 26% 28% 56% Asia Distribution 54% 48% Sustained growth from organic efforts focused on TSS and Megatrends Synergistic product portfolio empow
Slide 7: Record Fiscal Quarter 2023 Results (non-GAAP)
Record Fiscal 3 Quarter 2023 Results (non-GAAP) rd Record revenue of $2.169 billion; grew 4.6% QoQ and 23.4% YoY ‒ 9 consecutive quarters of revenue growth Record gross margin of 68.1%; increased 202 basis points YoY Record operating margin of 47.5%; increased 283 basis points YoY Record ear
Slide 8: Fiscal Quarter 2023 Guidance (non-GAAP)
Fiscal 4 Quarter 2023 Guidance (non-GAAP) th * Q3 FY23 Q4 FY23 Guide Long Term Actual @ mid-point Model $2,169.2 $2,223.5 FY22 – 26 CAGR Revenue ($ Million) 4.6% QoQ 2.5% QoQ of 10% to 15% 23.4% YoY 20.6% YoY Gross Margins 68.1% 68.2% 67.5% to 68.5% Operating Expenses 20.6% 20.7% 22.5% to 23.5% Oper
Slide 9: Managing A Soft Landing
Managing A Soft Landing Supply gradually improving; first time in 9 quarters modestly reduced our large unsupported backlog ‒ Targeting lead-times for a majority of our products to be 26 weeks or less by second half of 2023 If or when macro weakness catches up to our business, we believe we can ac
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 Est. Semi Sales Y/Y % Chg. Semi Sales Y/Y Growth is sourced from SIA CY2022 est. annual globa
Slide 11: Strong Cash Generation Through Cycles
Strong Cash Generation Through Cycles 35% $3,500 30% 23.4% $3,000 10-Year 25% ADJ. FCF* $2,500 Semi Industry Sales Y/Y Growth Rates Adj. Microchip Free Cash Flow* 20% CAGR $2,000 15% $1,500 ($ in millions) 10% $1,000 5% $500 0% $0 -5% -$500 -10% -$1,000 -15% -$1,500 2007 2008 2009 2010 2011 2012 201
Slide 12: Resilient Profitability Through Cycles
Resilient Profitability Through Cycles 35% 70% 30% MCHP LT Non-GAAP Gross Margin Target* 68% 67.8% 25% 66% Semi Industry Sales Y/Y Growth Rates 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% 25% Semi Industry Sales Y/Y Growth Rates 38.7% 40% Microchip NG Operating Margin % 37.1% 36.2% 20% 36.1% 35.9% 39.6% 15% 32.3% 35% 34.9% 31.8% 31.0% 10% 32.4% 31.6% 30% 30.2% 30.3% 5% 28.6% 25% 0% 20%
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
Empowering Innovation 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 Potentiom eter Reference Motor Sensors Drivers Am pl
Slide 17: Market Megatrends
Market Megatrends Industrial 5G IoT/Edge Computing Computing Data Centers Automotive E-Mobility Communications Sustainability Consumer ADAS/Autonomous Driving 17
Slide 18: Consistent, Disciplined and Balanced Capital Return Strategy
Consistent, Disciplined and Balanced Capital Return Strategy ‒ Actively reducing debt after Debt Paydown increasing leverage for M&A ‒ 18 consecutive quarters of Adjusted Free Cash $6.2 Billion debt paydown Flow (FCF)* ‒ Current leverage ratio of 1.56x Generation Dividends Paid ‒ 82 consecutive quar
Slide 19: Recent Awards and Recognition
Recent Awards and Recognition 19
Slide 20: 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 44% - 46% Operating Margin Megatrends Adjusted EBITDA Margin Diversified end-market mix
Slide 21: Microchip's Winning Formula
Microchip’s Winning Formula 21
Slide 22: Thank You
THANK YOU A Leading Provider of Smart, Connected and Secure Embedded Control Solutions