Nxp Semiconductors N.v. · NASDAQ:NXPI
Nxp Semiconductors — Q4 2023 Earnings Presentation
32 slides from Nxp Semiconductors's earnings presentation, Feb 6, 2024
Slide 1: NXP Investor Presentation Fourth Quarter 2023
NXP Investor Presentation Fourth Quarter 2023 February 2024 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
Forward Looking Statements This document includes forward-looking statements which include statements regarding NXP’s business strategy, financial condition, results of operations, market data, as well as any other statements which are not historical facts. By their nature, forward-looking statement
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 2
Slide 4: NXP: A Rich History of Innovation
NXP: A Rich History of Innovation High Performance Mixed-Signal Focus Secure Edge Processing $228 $230 Year-end Share Marvell Price Connectivity Asset Acquired Freescale $159 $158 Merger $117 $127 Non-GAAP 36.3% 35.1% Operating $98 $84 Margin % IPO $76 $73 32.9% 26.6% 29.4% 28.7% $46 29.0% Phillips
Slide 5: Macrotrends Driving Waves of Semi Growth
Macrotrends Driving Waves of Semi Growth (1) Rise of Secure Edge Smart connected devices Smartphones Smart factories and homes Data-center servers Smart connected cars Laptop, Game Consoles Desktop, Home Audio Mobiles HiFi… Semiconductor TAM ($B) 2000 2005 2010 2015 2020 2025E 2030E 1. Omdia Applica
Slide 6: 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 7: 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 6 6
Slide 8: 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 9: Accelerating Profitable Growth of 8-12% CAGR
Accelerating Profitable Growth of 8-12% CAGR (as Analyst Day November 2021) (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 sens
Slide 10: Our Secular Growth Drivers Expected to Scale Rapidly
Our Secular Growth Drivers Expected to Scale Rapidly (as Analyst Day November 2021) (1,2,3,4) 2023 Revenue: $13.3B Revenue by end-market exposure by business type ~$15B Accelerated $6B Growth Drivers ~$11B 20-25% $9.4B 2021-24 CAGR 56% ~$3B $1.6B Automotive High RMS ~$9B Core Businesses ~$8B ~5% $7.
Slide 11: Accelerating Secular Profitable Revenue Growth
Accelerating Secular Profitable Revenue Growth (as Analyst Day November 2021) (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
Slide 12: 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 $1.6B
Slide 13: Diverse End-Customer Base with High Barriers to Entry
Diverse End-Customer Base with High Barriers to Entry (1) Top 20 End-customers are less than 45% of 2023 Revenue >25,000 Total Customers No 10% Customers Automotive Industrial & IoT Mobile Comm. Infra. & Other PUBLIC 12 1. Reflects 2023 sales through all channels 12
Slide 14: Driving Profitable Growth in Excess of Addressable Market
Driving Profitable Growth in Excess of Addressable Market (1,2,3) As Reported Revenue Non-GAAP Gross Profit / Non-GAAP Gross Margin Up 16% 3-yr. CAGR ($B) Up 21% 3-yr. CAGR ($B) 51.1% 56.1% 57.9% 58.5% $8.6 $11.1 $13.2 $13.3 $4.4 $6.2 $7.6 $7.8 2020 2021 2022 2023 2020 2021 2022 2023 Non-GAAP Operat
Slide 15: Annual Revenue by End Market ($B)
Annual Revenue by End Market ($B) (1) Automotive Industrial & IoT Up 23% 3-yr. CAGR ($B) Up 11% 3-yr. CAGR ($B) $3.8 $5.5 $6.9 $7.5 $1.8 $2.4 $2.7 $2.4 2020 2021 2022 2023 2020 2021 2022 2023 Mobile Communication Infrastructure & Other Up 6% 3-yr. CAGR ($B) Up 6% 3-yr. CAGR ($B) $1.2 $1.4 $1.6 $1.3
Slide 16: Recent Quarterly Business Trends
Recent Quarterly Business Trends (1,2) As Reported Revenue ($M) Non-GAAP Gross Profit / Non-GAAP Gross Margin 58.0% 58.2% 58.4% 58.5% 58.7% 3,312 3,121 3,299 3,434 3,422 1,922 1,816 1,926 2,010 2,010 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Non-GAAP Operating Profit / Non-GAAP Ope
Slide 17: Quarterly Revenue by End Market ($M)
Quarterly Revenue by End Market ($M) (1) Automotive 0% Q-Q Industrial & IoT 5% Y-Y 9% Q-Q 9% Y-Y $1,805 $1,828 $1,866 $1,891 $1,899 $605 $504 $578 $607 $662 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Mobile Communication Infrastructure & Other (19%) Q-Q 8% Q-Q (8%) Y-Y 0% Y-Y $408 $
Slide 18: Debt Summary at the End of 4Q23
Debt Summary at the End of 4Q23 (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 19: Working Capital Ratios
Working Capital Ratios (1,2,3) DSO DPO 26 31 29 25 24 77 68 63 60 72 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 DIO Cash Conversion Cycle 116 135 137 134 132 65 98 103 99 84 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 DSO = (91.25 x AR) / Revenue DIO = (91.25 x Inven
Slide 20: 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 21: Financial Model
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 $45M Net capex 6 to 8% Stock base
Slide 22: Guidance for the First Quarter of 2024
Guidance for the First Quarter of 2024 (1,2,3,4,5) GAAP Reconciliation Non-GAAP Low Mid High Low Mid High Total Revenue 3,025 3,125 3,225 3,025 3,125 3,225 Q-Q -12% -9% -6% -12% -9% -6% Y-Y -3% 0% 3% -3% 0% 3% Gross Profit 1,698 1,772 1,846 (41) 1,739 1,813 1,887 Gross Margin 56.1% 56.7% 57.2% 57.5%
Slide 23: GAAP Condensed Consolidated Statement of Operations ($M)
GAAP Condensed Consolidated Statement of Operations ($M) (1) Q1 Q2 Q3 Q4 ($ in millions, unless otherwise stated) 2023 2023 2023 2023 2023 Revenue 3,121 3,,299 3,434 3,422 13,276 Cost of Revenue (1,351) (1,418) (1,469) (1,485) (5,723) Gross Profit 1,770 1,881 1,965 1,937 7,553 Research and developme
Slide 24: Annual GAAP to non-GAAP Reconciliation ($M)
Annual GAAP to non-GAAP Reconciliation ($M) (1) ($ in millions, unless otherwise stated) 2023 2023 GAAP Gross Profit 7,553 GAAP Net income (loss) attributable to stockholders 2,797 Gross profit adjustments (209) PPA Effects (356) Non - GAAP Gross Profit 7,762 Restructuring (98) GAAP Gross Margin 56.
Slide 25: Annual Cash Flow Overview ($M)
Annual Cash Flow Overview ($M) (1) ($ in millions, unless otherwise stated) 2020 2021 2022 2023 Net cash provided by (used for) operating activities 2,482 3,077 3,895 3,513 Net cash provided by (used for) investing activities (418) (934) (1,249) (1,508) Net cash provided by (used for) financing acti
Slide 26: Annual Adjusted EBITDA ($M)
Annual Adjusted EBITDA ($M) (1) ($ in millions, unless otherwise stated) 2020 2021 2022 2023 GAAP Net income (loss) 80 1,906 2,833 2,822 Reconciling items to EBITDA (Non-GAAP) Financial (income) expense 417 403 434 309 (Benefit) provision for income taxes (83) 272 529 523 Depreciation 547 551 605 65
Slide 27: Quarterly GAAP to non-GAAP Reconciliation ($M)
Quarterly GAAP to non-GAAP Reconciliation ($M) (1) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 ($ in millions, unless otherwise stated) 2023 2023 2023 2023 2023 2023 2023 2023 GAAP Gross Profit 1,770 1,881 1,965 1,937 GAAP Net income (loss) attributable to stockholders 615 698 787 697 Gross profit adjustments (46) (45)
Slide 28: Quarterly Cash Flow Overview ($M)
Quarterly Cash Flow Overview ($M) (1) Q4 Q1 Q2 Q3 Q4 ($ in millions, unless otherwise stated) 2022 2023 2023 2023 2023 Net cash provided by (used for) operating activities 1,076 632 756 988 1,137 Net cash provided by (used for) investing activities (272) (351) (255) (273) (629) Net cash provided by
Slide 29: Quarterly Adjusted EBITDA ($M)
Quarterly Adjusted EBITDA ($M) (1,2) Q4 Q1 Q2 Q3 Q4 ($ in millions, unless otherwise stated) 2022 2023 2023 2023 2023 Net income (loss) 734 623 704 792 703 Reconciling items to adjusted net income Financial (income) expense 103 82 74 75 78 (Benefit) provision for income taxes 137 118 158 123 124 Dep
Slide 30: Notable Public Press Announcements
Notable Public Press Announcements • NXP and Zendar Inc. Accelerate the Development of High-Resolution Radar • NXP Expands S32 Platform with Motor Control Solution for Software-Defined Vehicle Edge Nodes • NXP Introduces the Next Generation of Automotive Ultra-Wideband ICs Combining Secure Ranging a
Slide 31: 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 30 30
Slide 32: Secure Connections for a Smarter World
SECURE CONNECTIONS FOR A SMARTER WORLD