Infineon Technologies Ag · XETR:IFX
Infineon Technologies — Q2 2017 Earnings Presentation
50 slides from Infineon Technologies's earnings presentation, Jun 6, 2017
Slide 1: Second Quarter FY 2017 Quarterly Update
Second Quarter FY 2017 Quarterly Update update per 6 June 2017 Infineon Technologies AG Investor Relations
Slide 2: Table of Contents
Table of Contents 1 Infineon at a Glance 2 Quarterly Highlights 3 Growth Drivers 4 Selected financial figures Please regard the “Notes” and “Glossary” at the end of the presentation. Disclaimer: This presentation contains forward-looking statements about the business, financial condition and earning
Slide 3: Infineon at a glance
Infineon at a glance Business Segments Power represents ~60% of revenue Industrial Power [EUR m] Automotive Control (IPC) 783 17% (ATV) 520 Power Manage- 293 29% 169 44% ment & Multi- market (PMM) ATV IPC PMM CCS 10% Power Non-Power* Chip Card & revenue in Q2 FY17: €1,767 incl. OOS and C&E of €2m Se
Slide 4: Our strategy is targeted at value creation through sustainable organic growth
Our strategy is targeted at value creation through sustainable organic growth Focus Technology leadership System understanding Auto Power RF and sensors Security System leader #1; system and Broad RF and sensor Leader in in automotive technology leader technology portfolio security solutions Average
Slide 5: Infineon increased relative market share in power and outperformed chip card market
Infineon increased relative market share in power and outperformed chip card market Automotive Power discretes Smart Card ICs semiconductors and modules total market in 2015: $2.72bn total market in 2016: $30.2bn total market in 2015: $14.8bn NXP 14.0% Infineon 18.7% NXP 30.5% Infineon 10.7% ON + FC
Slide 6: Tight customer relationships are based on system know-how and app understanding
Tight customer relationships are based on system know-how and app understanding ATV IPC PMM CCS EMS partners Distribution partners 2017-06-06 Copyright © Infineon Technologies AG 2017. All rights reserved. 6
Slide 7: Infineon's organic revenue development clearly outperformed total semi market
Infineon‘s organic revenue development clearly outperformed total semi market [EUR m] organic CAGR(99-16): ~+9% 7500 CAGR(99-16): +5.1% 6000 4500 6,059 (incl. IRF**) 300,000 5,100 (excl. IRF) 3000 126,895 1,200 200,000 296,383 295,996 1500 2,916 1,681 2,045 1,821 1,995 2,289 2,366 2,701 2,906 2,128
Slide 8: Accelerated investments in FY17 to maximize margin contribution and customer satisfaction
Accelerated investments in FY17 to maximize margin contribution and customer satisfaction Incremental investments in PPE of €100m help accommodate strong order entry in major growth areas, such as xEV, ADAS and power Dresden Kulim Silicon carbide Backend › ramp of 300 mm › accelerated ramp › HybridP
Slide 9: Organic RoCE as the key value metric typically amounts to ~2x WACC
Organic RoCE as the key value metric typically amounts to ~2x WACC 20% 10% 0% FY14 FY15 FY16 Q1 FY17 Q2 Q3 Q4 RoCE (reported) RoCE (excluding PPA and Deferred Tax Effects) 2017-06-06 Copyright © Infineon Technologies AG 2017. All rights reserved. 9
Slide 10: Our promise to investors: Continued value creation through growth
Our promise to investors: Continued value creation through growth Earnings-per-share (EPS) development [EUR cent] +17% 30 +13% 20 EPS basic 20 21 21 18 19 18 16 16 17 EPS adjusted 10 14 0 Q2 FY16 Q3 Q4 Q1 FY17 Q2 Total cash return to shareholders [EUR m] 1,526 308 › Policy of sustainable 248 109 212
Slide 11: Guidance for Q3 FY17 and FY17
Guidance for Q3 FY17 and FY17 Outlook Q3 FY17* Updated Outlook FY17* (compared to Q2 FY17) (compared to FY16) Increase of Increase of 3% Revenue 8% to 11% +/- 2%-points (prev.: „Increase of 6% +/- 2%-points“) Segment At the mid-point of the At the mid-point of the revenue guidance: Result revenue gu
Slide 12: Table of Contents
Table of Contents 1 Infineon at a Glance 2 Quarterly Highlights 3 Growth Drivers 4 Selected financial figures 2017-06-06 Copyright © Infineon Technologies AG 2017. All rights reserved. 12
Slide 13: Q2 FY17 Group and Division Performance
Q2 FY17 Group and Division Performance Revenues: Segment Result: Segment Result Margin: Group €1,767m (10% y-y) €296m (30% y-y) 16.8% ATV* IPC* PMM* CCS* [EUR m] [EUR m] [EUR m] [EUR m] Power management +17% strongly up y-y; RF and sensors in 783 seasonal low. Payment market 705 bottomed out. 671 67
Slide 14: 2017 marks the market entry of Infineon with SiC MOSFETs and full SiC modules
2017 marks the market entry of Infineon with SiC MOSFETs and full SiC modules › Infineon owns industry’s broadest power semiconductor portfolio with regard to products, packages and technology › Infineon offers “best-fit solutions” based on Si-based and SiC-based components › Infineon’s SiC MOSFET i
Slide 15: Infineon SiC MOSFET with revenue potential of triple-digit €m in industrial applications
Infineon SiC MOSFET with revenue potential of triple-digit €m in industrial applications Bare die Discr. MOSFET Full SiC module vol. production: H2 CY17 vol. production: vol. production: volume production: vol. production: H2 CY17 H2 CY17 since 16 May 2017 H2 CY17 Industrial grade Automotive grade P
Slide 16: Hybrid SiC and full SiC power modules will show highest growth
Hybrid SiC and full SiC power modules will show highest growth Total silicon carbide market development 2015 SiC market share total market in 2015: $200m [$ m] CAGR16-25 CAGR16-25 conserv. case base case Wolfspeed 27% 2,937 +32% Infineon 23% Rohm 20% 1138 +60% Mitsubishi 11% +23% 1,457 STMicro 9% +4
Slide 17: Table of Contents
Table of Contents 1 Infineon at a Glance 2 Quarterly Highlights 3 Growth Drivers 4 Selected financial figures 2017-06-06 Copyright © Infineon Technologies AG 2017. All rights reserved. 17
Slide 18: Infineon benefits from industrial and auto, the by far fastest growing segments
Infineon benefits from industrial and auto, the by far fastest growing segments CAGR 2016 – 2021 by Semiconductor Industry Segment Industrial 9.1% $44bn* Automotive 6.8% $32bn* Total Semi Market 5.4% $352bn* Consumer 5.2% $36bn* Data Processing 4.5% $112bn* Communications 4.4% $129bn* Chip Card ICs*
Slide 19: Infineon is system leader in automotive; making cars clean, safe and smart
Infineon is system leader in automotive; making cars clean, safe and smart #2 with market share gains in power and sensors: › #1 in power semiconductors* › #2 in sensors* › #4 in microcontrollers* (#1 in powertrain**) Infineon is ideally Most balanced portfolio with sensors, micro- positioned to con
Slide 20: Reference to web presentations
Reference to web presentations For full automotive story please refer to: 16 Mar 2017: Bernstein xEV and Energy Storage Conference by Hans Adlkofer, VP Automotive System Group www.infineon.com/bernstein 11 Oct 2016: ATV Division Call by Peter Schiefer, Division President Automotive www.infineon.com/
Slide 21: Infineon first partner in Volkswagen's TRANSFORM 2025+ strategy program
Infineon first partner in Volkswagen’s “TRANSFORM 2025+” strategy program “TRANSFORM 2025+” › Volkswagen secures its position in the field of future vehicle innovations such as automated and fully electric driving cars › The company is cooperating directly with semiconductor manufacturers to further
Slide 22: Infineon's position in the automotive semiconductor universe
Infineon's position in the automotive semiconductor universe Automotive semiconductors 2016 total market size: $30.2bn NXP* 14.0% Market share trend Infineon 10.7% +0.3%-pt – Infineon benefits disproportionately Renesas 9.8% from the two mega trends Texas Instr. 7.8% – clean cars STMicro 7.4% – ADAS
Slide 23: Key market trends significantly drive increasing semiconductor content per car
Key market trends significantly drive increasing semiconductor content per car ADAS/AD Clean cars Connectivity/security › ADAS and AD are › To reach CO2 emission › Advanced connectivity critical enabler to goals, the automotive is driven by making reduce the number of industry has to focus the car p
Slide 24: ADAS/AD semi growth driven by radar and camera sensor modules over the next 5 years
ADAS/AD semi growth driven by radar and camera sensor modules over the next 5 years Average semiconductor content per car by level of automation* Level 2 (today) Level 3 (~2025) Level 4/5 (2030+) $55 $550 $110 $30 $400 $50 8% $25 $140 $0 $165 $180 $195 $60 $0 $0 $100 $40 Total BoM Total BoM Total Bo
Slide 25: Infineon's product portfolio fosters revenue growth in ADAS/AD for the next decade
Infineon's product portfolio fosters revenue growth in ADAS/AD for the next decade Today 2020 2025 Driver $ $ $ $ $ Monitoring Front $ $ $ $ $ Rear/surround $ SiGe 77 GHz $ $ $ $ $ $ $ $ SiGe 24 GHz $ $ $ $ $ $ $ $ RF CMOS $ $ $ Sensor fusion $ $ $ $ Others Lidar $ $ $ $ $ Actuators $ $ Sense Comput
Slide 26: All types of xEV will significantly increase power semiconductor content per car
All types of xEV will significantly increase power semiconductor content per car Average xEV semiconductor content by degree of electrification Mild hybrid / 48 V PHEV / HEV EV In contrast to micro hybrid systems, Adder for DC-DC conversion, inverter, these systems support aside from onboard charger
Slide 27: Power semiconductor demand for different levels of electrification
Power semiconductor demand for different levels of electrification incremental power semi 400 V .. 800 V content for drive train EV, Fuel Cell EV - energy recovery ~$300 Plug-in HEV - onboard charger Full HEV - start-stop start-stop only - energy recovery - start-stop - coasting, sailing Hybrid - en
Slide 28: Infineon has all elements and unparalleled package expertise for all xEV applications
Infineon has all elements and unparalleled package expertise for all xEV applications Bare die Discretes Scalable products Plug-n-Play HybridPACK™ solutions Si IGBT Si bare dies HybridPACK™ Double- Easy modules Sided Cooling SiC bare dies SiC MOSFET SiC optimized package solution 2017-06-06 Copyrigh
Slide 29: ADAS/AD, clean cars, and adoption of premium features drive growth
ADAS/AD, clean cars, and adoption of premium features drive growth Drivers for semiconductor content per car Vehicle production Clean cars ADAS/AD Comfort, premium › Driven by legislation › Today: › Premium cars are › crash avoidance early adopters of › Improvements of ICE › ADAS high-end comfort an
Slide 30: Infineon is #1 and technology leader in power semiconductors
Infineon is #1 and technology leader in power semiconductors #1 in the market* for MOSFETs, discrete IGBTs, and total market Broad product and technology portfolio Infineon is ideally positioned to gain Addressing broadest range of applications further market share and earn 300 mm thin-wafer manufac
Slide 31: Ramp of 300 mm thin-wafer manufacturing technology on schedule
Ramp of 300 mm thin-wafer manufacturing technology on schedule Advantages of 300 mm manufacturing of power semiconductors › When fully loaded, frontend manufacturing cost per unit will be 20 – 30% lower than on 200 mm › Capital intensity is 30% lower than for 200 mm Current status of Dresden 300 mm
Slide 32: As system leader in power, Infineon has broadest application and technology reach
As system leader in power, Infineon has broadest application and technology reach Covering the entire power chain Generation Transmission Consumption Main IPC markets Main PMM power markets System competence for highest reliability and highest efficiency Stacks Modules MOSFETs/IGBTs Drivers IPMs Con
Slide 33: Efficiency and digitalization are main market drivers for power applications
Efficiency and digitalization are main market drivers for power applications IPC PMM (industrial power) (power management) Drives Renewables Traction MHA AC-DC DC-DC › Energy › Legislation › Growing › Energy › Energy › Energy efficiency › Growing population in efficiency efficiency efficiency › Auto
Slide 34: IPC is perfectly positioned to outperform traditional markets and leverage emerging ones
IPC is perfectly positioned to outperform tradi- tional markets and leverage emerging ones Traditional markets with <5% p.a. Emerging markets with >5% p.a. › Portfolio for automation application to › Comprehensive offering and expertise compensate low demand in drives enable growth in SiC above aver
Slide 35: Tailored growth strategies maintain leadership position in both major segments of PMM
Tailored growth strategies maintain leadership position in both major segments of PMM PMM Power RF and Sensors Current position Growth based on 3-layer-model › Scale and technology leader in MEMS SiGe and other RF power discretes › Broadest portfolio: 25V – 900V › All applications › #1 holding ~1/3
Slide 36: Infineon is the leader in security solutions for the connected world
Infineon is the leader in security solutions for the connected world #2 in microcontroller-based smart card ICs* #1 in embedded digital security** Infineon is ideally positioned to Complete portfolio of hardware, software, benefit from the services and turn-key solutions growth trends in the securit
Slide 37: CCS is enabling security for the connected world
CCS is enabling security for the connected world Smart card applications Embedded security applications Infineon holds leading positions in security solutions markets #2 market size: $2.72bn #1* market size: $698m microcontroller-based Embedded secure smart card ICs microcontrollers › Mobile device
Slide 38: Infineon's long-term growth is based on sustainable growth drivers
Infineon‘s long-term growth is based on sustainable growth drivers ATV IPC PMM CCS Courtesy: Hyundai › CO2 reduction › Energy efficiency › Energy efficiency › Security as a › Advanced Driver › Automation › Power density function Assistance › Productivity › BLDC motors › Mobile payments Systems incre
Slide 39: Table of Contents
Table of Contents 1 Infineon at a Glance 2 Quarterly Highlights 3 Growth Drivers 4 Selected financial figures 2017-06-06 Copyright © Infineon Technologies AG 2017. All rights reserved. 39
Slide 40: SG&A includes noticeable Wolfspeed acquisition-related costs
SG&A includes noticeable Wolfspeed acquisition-related costs S and G&A* R&D** [EUR m] 220 208 200 196 196 195 197 200 192 200 195 180 15% 180 160 14% 140 120 13% 100 12.1% 12.3% 12.1% 12.1% 12.2% 80 11.7% 11.9% 11.8% 12% 60 40 11% 20 10.7% 10.9% 0 10% Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 FY16 FY17 FY16 FY1
Slide 41: All figures on a healthy level
All figures on a healthy level Working capital* Inventories [EUR m] [EUR m] [days] 1,165 1,198 1,191 1,249 1,228 1200 120 1000 911 865 922 1000 791 100 800 739 800 104 107 80 100 100 99 600 600 60 400 40 400 200 20 200 0 0 0 Q2 FY16 Q3 Q4 Q1 FY17 Q2 Q2 FY16 Q3 Q4 Q1 FY17 Q2 Inventories DOI* Trade re
Slide 42: Investments increase to €1,050m from €950m due to higher full-year growth
Investments increase to €1,050m from €950m due to higher full-year growth above trendline Investments* D&A [EUR m] ~1,050** 1000 890 30% 826 833 ~830 785 760 800 22.8% 668 20% 600 514 15.5% 14.8%** 466 378 428 13.1% 11.7% 400 12.1% 13.5% 12.8% 219 11.9% 12.9% 10% 11.0% 205 9.8% 200 204 200 0 0% FY12
Slide 43: Net cash decreased due to dividend payment
Net cash decreased due to dividend payment Liquidity development [EUR m] 1,769 1,784 471 2,043 299 2,017 1,776 1,803 2,083 2,240 2,209 2,049 166 27 32 Q2 Q3 Q4 Q1 Q2 FY16 FY17 Gross Cash Debt Net Cash › Free Cash Flow from continuing operations was €82m. › Debt decreased by €26m due to repayment of
Slide 44: Infineon has a balanced maturity profile and a solid investment grade rating (BBB) from S&P
Infineon has a balanced maturity profile and a solid investment grade rating (BBB) from S&P Maturity profile [EUR m; US$ m] €500 $350 $350 €300 $235 €171 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 Campeon 8-year 10-year 12-year Eurobond final re- Eurobond USPP USPP USPP Sep 2018 payment
Slide 45: Part of your life. Part of tomorrow.
Part of your life. Part of tomorrow. Infineon
Slide 46: Infineon is a long-standing member of Europe's leading sustainability indices
Infineon is a long-standing member of Europe's leading sustainability indices Infineon’s most recent achievements › Sep 2016: Infineon is listed in the STOXX® Global ESG Leaders Indices, which serves as an indicator of the quality of Infineon’s performance in the governance, social and environmental
Slide 47: Financial calendar
Financial calendar Date Location Event 13 – 14 Jun 2017 Paris Exane European CEO Conference 20 Jun 2017 London JPMorgan Tech CEO Conference 21 – 22 Jun 2017 Berlin Dt. Bank German, Swiss & Austrian Conference 29 Jun 2017 London PMM Presentation by Andreas Urschitz, Division President 01 Aug 2017* Q3
Slide 48: Notes
Notes Investments = 'Purchase of property, plant and equipment' + 'Purchase of intangible assets and other assets' incl. capitalization of R&D expenses Capital Employed = 'Total assets' – 'Cash and cash equivalents' Please note: All positions in ' ' refer to the – 'Financial investments' respective
Slide 49: Glossary
Glossary ACC adaptive cruise control micro- vehicles using start-stop systems and limited hybrid recuperation AD automated driving mild- vehicles using start-stop systems, recuperation, DC- ADAS advanced driver assistance system hybrid DC conversion, e-motor AEB automatic emergency braking OBC onboa
Slide 50: Institutional Investor Relations contacts
Institutional Investor Relations contacts Dr. Jürgen Rebel Corporate Vice President +49 89 234-21626 Investor Relations juergen.rebel@infineon.com Joachim Binder Senior Director +49 89 234-25649 Investor Relations joachim.binder@infineon.com Holger Schmidt Senior Manager +49 89 234-22332 Investor Re
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