Nordic Semiconductor Asa · OSL:NOD
Nordic Semiconductor Asa — Q4 2020 Earnings Presentation
31 slides from Nordic Semiconductor Asa's earnings presentation, Feb 4, 2021
Slide 1: Quarterly Presentation Q4 2020
Quarterly Presentation Q4 2020 February 4, 2021
Slide 2: Disclaimer
© Nordic Semiconductor Disclaimer The following presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated (“relevant persons”). Any person who is not a relevant person should not act or rely on this presentation or any of its contents
Slide 3: Accelerating growth through 2020
© Nordic Semiconductor Accelerating growth through 2020 Strong demand across all end-user markets Bluetooth revenue USD 97.6m (+49%) Revenue Gross margin Proprietary revenue USD 25.3m (+55%) USDm Cellular IoT revenue USD 2.7m 127.1 52.7% Gross margin of 52.7% Continued high volumes of adva
Slide 4: Order backlog at new and higher level
© Nordic Semiconductor Order backlog at new and higher level Backlog (USDm) Order backlog of USD 492m, +361% y-o-y 492 500 Bluetooth Low Energy and multiprotocol 450 solutions account for 84% 400 Shift in customer mix with several major 350 tier-1s placing high-volume orders 288 300 Technolo
Slide 5: Fortifying the broad market leadership
© Nordic Semiconductor Fortifying the broad market leadership Continued high certification market share Bluetooth Low Energy end-product certifications 1600 End-product 1400 certifications, 45% 43% 43% Nordic Q4 20 1200 Other Qualcomm 1000 39% 39% Infineon 800 Dialog 141 SiLabs 45 % mkt share in 600
Slide 6: Developer kit shipments continue to grow
© Nordic Semiconductor Developer kit shipments continue to grow Kit shipments 100,000 94,911 86,989 Total kit shipments +9% in 2020 90,000 80,000 High installed base of reusable kits 70,000 64,784 Shipped >50K kits in H2 2020 60,000 50,000 46,252 Significant contribution from nRF52840 36,147 develop
Slide 7: New product launches in Q4
© Nordic Semiconductor New product launches in Q4 Shenzhen DO Eve Systems Tsingoal NousLogic tiptap Intelligent Technology nRF52840 nRF52833 nRF9160 nRF9160 nRF52840 Bluetooth LE & UWB Smartwatch Smart home products Healthcare/medical Contactless payment Module supporting both realtime monitoring te
Slide 8: Multiprotocol SoCs enabling smart homes
© Nordic Semiconductor Multiprotocol SoCs enabling smart homes Eve Systems launching the first smart home products to take advantage of Apple HomeKit’s new Thread functionality New ‘Eve Thermo’ is powered by Nordic’s nRF52840 SoC, which supports both Bluetooth 5, Thread and Zigbee 8
Slide 9: Nordic inside COVID-19 home tester
© Nordic Semiconductor Nordic inside COVID-19 home tester Nordic’s nRF52810 Bluetooth LE SoC powers new COVID-19 Home Test kit from Ellume Authorized by the FDA under an emergency use authorization, easy-to-use 15 minutes test for SARS-CoV-2 infection Automatically transmitting results via Sma
Slide 10: nRF5340 in volume production
© Nordic Semiconductor nRF5340 in volume production Taking IoT to the next level The world’s first dual Arm Cortex-M33 wireless SoC High performance - high efficiency – no trade-offs Advanced features and security required for highly complex IoT applications LE Audio Advanced wearables P
Slide 11: Cellular IoT progressing
© Nordic Semiconductor Cellular IoT progressing Regulatory certifications overview for nRF9160: Strong APAC carrier coverage with three new major certifications in Q4: KDDI (Japan) Softbank (Japan) LGU+ (S. Korea) New IoT solution designs and partners help scale our business Introduced u
Slide 12: Nordic expands global cellular IoT coverage
© Nordic Semiconductor Nordic expands global cellular IoT coverage Partnering with Arkessa to provide global LTE-M/NB-IoT service Leader in virtual SIM (eSim/eUICC) Eliminates need for Nordic customers to negotiate IoT data contracts with individual carriers Extensive European and global LTE-M
Slide 13: nRF9160 in Ericsson/Sigma reference design
© Nordic Semiconductor nRF9160 in Ericsson/Sigma reference design Enabling rapid IoT development for industrial customers Ericsson and Sigma chose nRF9160 and nRF52840 for joint ‘ARDESCO’ reference design Integrates accelerometer and temperature, humidity, air quality, air pressure and light sen
Slide 14: nRF9160 in new modules & turn-key products
© Nordic Semiconductor nRF9160 in new modules & turn-key products Enabling rapid IoT development for industrial customers Avnet Asia integrating nRF9160 and nRF52840 for the smallest available module combining LTE-M/NB-IoT, Bluetooth and GPS Braveridge in Japan using nRF9160 for new ‘Sonicboard’
Slide 15: Wi-Fi to complete the connectivity portfolio
© Nordic Semiconductor Wi-Fi to complete the connectivity portfolio Wi-Fi development Securing the ‘missing link’ in the connectivity portfolio team with 80 people + IP tech assets/patents across Wi-Fi 4/5/6 Nordic positioned to create first platform unifying low-power Bluetooth, Wi-Fi and cellu
Slide 16: Financials
Financials Pål Elstad, CFO
Slide 17: Revenue growth of 53% in Q4
© Nordic Semiconductor Revenue growth of 53% in Q4 Quarterly revenue (USDm) Growth in all technologies in Q4… 150 Bluetooth accounting for 77% total revenue, 127 after increasing 49% y-o-y to USD 97.6 million 125 119 Proprietary +55% to USD 25.3 million 100 Cellular IoT USD 2.7 million (USD
Slide 18: Revenue growth in all markets
© Nordic Semiconductor Revenue growth in all markets Consumer Building/ Group Electronics Wearables Retail Healthcare Others USDm USDm USDm USDm USDm USDm 127.1 53.7 18.1 27.0 10.6 13.5 +52.9% +6.5% +59.0% -3.0% +12.3% -6.7% +62.3% +17.8% +113.2% +36.0% +30.3% +26.6% y-o-y q-o-q y-o-y q-o-q y-o-y q-
Slide 19: Gross margin remaining at high level
© Nordic Semiconductor Gross margin remaining at high level Gross margin (%) 56% Gross margin at 52.7% 54.1% Continued favorable product mix, with 54% 52.7% 51.9% 51.9% high share of complex high value SoCs 51.6% 52% 52.4% Decline from reported Q3-margin, as Q3 50% was supported by USD 2 million
Slide 20: Operating model performance Q4 2020
© Nordic Semiconductor Operating model performance Q4 2020 Gross margin 52.7% Q4 2020 Q4 2019 Revenue USD 127.1m USD 83.1m +52.9% Growth in all technologies and markets R&D short- range 13.7% 52.7% 51.6% Gross margin +1.1pp Product mix and unit costs R&D USD 67.0m USD 42.9m cellular IoT 7.9% 13.7% 1
Slide 21: Cash operating expenses
© Nordic Semiconductor Cash operating expenses Cash cost increase of 23%, mainly due to Cash OPEX* (USDm) increased number of employees and bonus accruals Salary: Number of employees increased by 17% 29.9 26.9 to 897** over the past last 12 months 23.4 24.1 21.5 21.8 Other Opex: Varies with pa
Slide 22: Year-on-year EBITDA improvement
© Nordic Semiconductor Year-on-year EBITDA improvement EBITDA (USDm) and margin (%), quarterly EBITDA (USDm) and margin (%), LTM 35 35% 80 35% 29.0 % 70 30 30% 30% 26.8 % 60 25 23.8 % 25% 25% 50 20.0 % 20 20% 20% 21.1 % 40 18.9 % 15 15% 15% 30 10 14.7 % 10% 10% 20 11.4 % 5 5% 10 5% 0 0% 0 0% Q4 2019
Slide 23: Capex development
© Nordic Semiconductor Capex development Capex (USDm) Capex of USD 5.4 million in Q4, mainly 6.0 delivery of new manufacturing testers 5.0 2020 Capex intensity of 4% of revenue, 6.4 % 4.0 down from 7% in 2019 5.7 % 5.4 % Expect 2021 Capex intensity level 3.0 4.2 % similar to 2020 level 2.0 1.9
Slide 24: Continued strong cash position
© Nordic Semiconductor Continued strong cash position Cash position and Cash Flow Q4 2020 (USDm) Operating cash flow of USD 51.0m NWC/Revenue LTM at 19.4%, compared to 24.3% at end of 2019 Continued disciplined cash strategy Tight cash management and optimized cash conversion Strengthened cash b
Slide 25: Summary and Outlook
Summary and Outlook Svenn-Tore Larsen, CEO
Slide 26: Nordic is on a long-lasting growth journey
© Nordic Semiconductor Nordic is on a long-lasting growth journey 450 Innovation unlocking new Widespread IoT adoption → market waves 400 350 Emerging IoT markets → 300 Revenue, USDm 250 200 Wearables → 150 PC peripherals → 100 50 Game controllers → 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 200
Slide 27: A strong and resilient operating model
© Nordic Semiconductor A strong and resilient operating model Early movers Lead on connectivity Investing early in high- Low power, high performance, growth markets feature-rich, reliable and robust Sustainable business Technology innovation in Scalable solutions In own operation and throughout the
Slide 28: Bluetooth acceleration + proprietary revival
© Nordic Semiconductor Bluetooth acceleration + proprietary revival Bluetooth +43% in Bluetooth revenue, USDm Proprietary revenue, USDm 2020 350 350 Well above the 300 300 indicated mid-term 20%-30% growth 250 250 range 200 200 CAGR of 19%-29% over the past 5-6 years* 150 150 Proprietary rev
Slide 29: Demand shift supports long-term growth plan
© Nordic Semiconductor Demand shift supports long-term growth plan Backlog (USDm) 492 Solid market position 500 Market leader in Bluetooth 450 400 Positioned to take lead in cellular IoT 350 Complementing portfolio with Wi-Fi 300 Accelerating demand growth 250 200 through 2020 150 107 Me
Slide 30: Supply temporarily limits the upside in 2021
© Nordic Semiconductor Supply temporarily limits the upside in 2021 Nordic had ordered wafer volumes allowing for significant growth also in 2021 Nordic has now been notified of limitations in wafer supply, with current allocation allowing for minimum 25% increase in production volumes in 2021
Slide 31: Expect strong Q1 in challenging supply environment
© Nordic Semiconductor Expect strong Q1 in challenging supply environment Q1 2021 guidance Risks and uncertainties remain + Faster technology adoption strengthens Revenue Gross margin long-term growth potential USDm – Supply capacity temporarily curtails 130-140 ~50%-51% production +85% - 100% +2%