CSR — Merger or Acquisition (February 2009)
30 slides from CSR's merger presentation, Feb 11, 2009
Slide 1: Combination with SiRF Technology Holdings, Inc
CSR plc Combination with SiRF Technology Holdings, Inc Strengthens our leadership position in the Connectivity Centre 10 February, 2009
Slide 2: Disclaimer
Disclaimer 2 This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 which represent the current expectations and beliefs of management of CSR plc (“CSR”) concerning the proposed merger of SiRF Technology Holdings, Inc. (“Si
Slide 3: Agenda
Agenda 3 1. Fourth Quarter Results 2. SiRF transaction – compelling strategic rationale Strong financial case Strengthens and diversifies CSR Strengthens our leadership position in the Connectivity Centre
Slide 4: Fourth Quarter 2008 Financial Results
Fourth Quarter 2008 Financial Results
Slide 5: Overview
Overview 5 Significant operational progress Design wins give increasing confidence of growing market share in 2009 Will have launched four products by the end of this month Cost saving programme fully implemented with benefit now expected to be $25 million for 2009 Fourth quarter financial outcome i
Slide 6: Operational progress
Operational progress 6 Anticipate shipping BC7 in third quarter to our lead customer. Sampling with other Tier 1’s MusiCore being evaluated at multiple Tier 1 handset manufacturers Launched: UF6000, the world’s smallest embedded WiFi chip at just 16mm 2 CSR9000, our BT / FM / WiFi combination, to be
Slide 7: Financial Summary Q4 2008 Q3 2008
Financial Summary Q4 2008 Q3 2008 7 Revenue $140.1m $205.5m Gross Margin 43.5% 44.5% Underlying * operating profit $1.7m $32.1m Underlying* diluted earnings per share $0.05 $0.19 Operating result ($15.0m) $30.9m Diluted (loss) earnings per share ($0.05) $0.18 Net cash from operating activities $34.0
Slide 8: SiRF Transaction
SiRF Transaction
Slide 9: Compelling Financial, Commercial and Strategic Rationale
Compelling Financial, Commercial and Strategic Rationale Strong Financial Case Strengthens and diversifies CSR Strengthens our leadership position in the Connectivity Centre 9 Diversifies revenue base, by customer, technology and market from day one Substantial combined cash (pro-forma $378 million
Slide 10: Overview of SiRF
Overview of SiRF Revenue split (Q3 08) Business description Example major customers 10 * Non GAAP Pioneered consumer GPS 2008 revenue of $232.5 million and EBIT of $(37.5)* million Loss making, but currently executing cost reduction programme Strong cash position of $115.8 million as at 31 December
Slide 11: Transaction Overview
Transaction Overview 11 SiRF to merge into CSR SiRF shareholders receiv e approximately 0.741 CSR shares for every 1 SiRF share As at close on 9 February 2 009, represents a value of $136 million Post-transaction, CSR shareholders will own 73% of the enlarged group with SiRF shareholders holding the
Slide 12: Strong Financial Case
Strong Financial Case
Slide 13: Strong Financial Case
Strong Financial Case SiRF 2008A CSR 2008A Pre-announced 2009 cost savings Cost synergies Total (pro- forma) 13 Notes: 1 Includes run rate impact of cost reductions announced in 2008 for SiRF and CSR of $35m and $25m respectively 2 CSR EBIT represents underlying EBIT. CSR underlying results exclude
Slide 14: Pre-existing SiRF Litigation
Pre-existing SiRF Litigation ITC District Court Conclusion 14 SiRF has ongoing IP litigation with Global Locate/Broadcom at U.S. International Trade Commission and U.S. District Court Case seeks damages Set for trial in late 2010 CSR has undertaken a detailed review Litigation risk factored into CSR
Slide 15: Strengthens and diversifies CSR
Strengthens and diversifies CSR
Slide 16: Leader in two attractive growth markets: Bluetooth and GPS
Strengthens and diversifies CSR – leader in two attractive growth markets Bluetooth GPS 16 Source: CSR estimates
Slide 17: Cross-selling Opportunity
Strengthens and diversifies CSR – Cross-selling Opportunity CSR (BT) SiRF (GPS) Customer 1 Customer 2 Customer 3 Customer 4 Customer 6 Customer 7 Customer 5 17 Complementary customer base means that cross-selling opportunities are significant Dual product offering increases combined group’s attracti
Slide 18: Strong Combined GPS IP Position
Strengthens and diversifies CSR – Strong Combined GPS IP Position GPS A-GPS E-GPS 18 Combined patent portfolio in excess of 200 GPS patents Combined IP covers complete range of GPS technologies Strong GPS IP Weak GPS IP
Slide 19: Strengthens our leadership position in the Connectivity Centre
Strengthens our leadership position in the Connectivity Centre
Slide 20: Connectivity Centre - Combo Chip
Strengthens our leadership position in the Connectivity Centre - Combo Chip
Slide 21: Connectivity Market Growth
Strengthens our leadership position in the Connectivity Centre – Connectivity Market Growth 21 5.0 CAGR 18% Source: CSR estimates 3.5 7.0 Combined market for all technologies (BT, FM, GPS, Wi-Fi, UWB, NFC) growth from $3.5bn to $5-7bn CAGR 9%
Slide 22: Summary – Compelling Financial, Commercial and Strategic Rationale
Summary – Compelling Financial, Commercial and Strategic Rationale Strong financial case Strengthens and diversifies CSR Strengthens our leadership position in the Connectivity Centre 22
Slide 23: Appendix
Appendix
Slide 24: Process to Completion
Process to Completion Expected date Event 24 Mid Feb – Mid March April - May May - June June HSR waiting period and clearance Circular sent to CSR shareholders and publication of the Prospectus F-4 registration statement sent to SiRF shareholders CSR and SiRF shareholder meetings to approve the tran
Slide 25: SiRF net income — GAAP to non-GAAP reconciliation
SiRF net income — GAAP to non-GAAP reconciliation Source: SiRF 2008 results
Slide 26: SiRF Income Statement
SiRF Income Statement 2008 2007 2006 26 ($ 000’s) Revenue 232,452 329,380 247,680 Cost of goods sold 147,994 161,766 111,937 Gross profit 84,458 167,614 135,743 Gross margin (%) 36.3 50.9 54.8 Operating expenses 441,797 180,743 131,007 Operating profit (GAAP) (357,339) (13,129) 4,736 Net Interest in
Slide 27: SiRF Balance Sheet
SiRF Balance Sheet 2008 2007 2006 2008 2007 2006 27 ($ 000’s) Assets Cash and cash equivalents 85,840 100,963 133,817 Current financial assets 29,950 38,446 36,391 Inventories 16,372 27,962 16,472 Accounts receivable 16,329 37,060 18,375 Deferred tax assets 6,946 11,743 Other current assets 4,153 5,
Slide 28: SiRF Products
SiRF Products Architecture Product Description 28 SiRFstarII GSC2x Combines radio frequency integrated circuit and a digital signal processing circuit in a single package SiRFstarIII GSC3/LP Combines radio frequency integrated circuit and a digital signal processing circuit in a single 7 mm x 10 mm
Slide 29: SiRF Software
SiRF Software Software Description 29 SiRFLoc Client and server software for wireless devices that provides enhanced location information using the capabilities of the wireless networks, as needed, for multimode GPS SiRFXTrac Software designed to provide high-sensitivity satellite tracking in autono
Slide 30: Disclaimer
Disclaimer 30 This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 which represent the current expectations and beliefs of management of CSR plc (“CSR”) concerning the proposed merger of SiRF Technology Holdings, Inc. (“S