Infineon Technologies Ag · XETR:IFX
Infineon Technologies — Q4 FY2020 Earnings Presentation
76 slides from Infineon Technologies's earnings presentation, Nov 9, 2020
Slide 1: Fourth Quarter FY 2020 Quarterly Update
Fourth Quarter FY 2020 Quarterly Update Infineon Technologies AG Investor Relations
Slide 2: Infineon at a glance
Infineon at a glance Addressing long-term high-growth trends Illustrative aggregated FY20 revenue by segment › IoT (incl. data center, 5G, sensing, connectivity) 14% › electro-mobility Automotive (ATV) Industrial Power Control (IPC) 43% › assisted driving, autonomous driving 29% Power & Sensor Syste
Slide 3: Illustrative aggregated FY20 revenue by target application
Illustrative aggregated FY20 revenue including contribution from Cypress of ~€1,900m from 1 Oct 2019 through 30 Sep 2020 Illustrative aggregated FY20 revenue of ~€9,600m by target application powertrain ICE; 8% industrial and consumer IoT; 10% xEV (incl. MHEV); 5% payment, identification, ticketing;
Slide 4: Infineon offers a unique portfolio that links the real and the digital world
Infineon offers a unique portfolio that links the real and the digital world Coin cell-powered devices Battery-powered devices Power supplies Information and data about the real world Industrial IoT Connectivity Real-world Software Digital Drives applications Ecosystem world Smart Home Value additio
Slide 5: Infineon is a global top-10 player, #1 in power semiconductors
Infineon is a global top-10 player, #1 in power semiconductors, and ranked #3 in the overall microcontroller market Semiconductor suppliers Power discretes and modules MCU suppliers 2019 total market: $428bn1) 2019 total market: $21.0bn2) 2019 total market: $17.5bn1) Intel 16.5% Infineon 19.0% Renes
Slide 6: Infineon remains top player in security ICs, NOR Flash, and MEMS microphones
Infineon remains top player in its target markets: security ICs, NOR Flash, and MEMS microphones Security ICs (excl. NFC controller; excl. NFC eSE) Wi-Fi standalone ICs Infineon is focusing on wearables and IoT but not 2019 total market: $2.8bn 2019 total market: 978m units addressing routers, PCs,
Slide 7: Tight customer relationships, based on system know-how and application understanding
Tight customer relationships, based on system know-how and application understanding ATV IPC PSS CSS EMS partners Distribution partners 2020-11-09 Copyright © Infineon Technologies AG 2020. All rights reserved. 7
Slide 8: Infineon expands supply base for SiC boules with GT Advanced Technologies
Infineon expands supply base for SiC boules with GT Advanced Technologies Key facts of the deal From powder to application: the main SiC process steps › Based on GTAT’s high-quality boules, Infineon is now enabling an additional source for competitive SiC wafers › Supply agreement for 150 mm SiC bou
Slide 9: Reaping of synergies on track
Reaping of synergies on track Planned ramp-up of cost synergies Planned ramp-up of revenue synergies €180m €1.5bn P2S for G&A long-term revenue synergies €1bn S&M Near-term R&D revenue synergies: improved customer access, COGS cross-selling opportunities end FY20 mid FY21e mid FY22e mid FY23e* FY22e
Slide 10: Examples for revenue synergies across all divisions
Examples for revenue synergies across all divisions Automotive Power Domain Controller Air conditioning › Strongly growing IPC customer for IPMs › Customer: ATV joint account for intelligent and IGBTs multi-channel high-side switches › Revenue synergies: › Revenue synergies: PSoC™4 for inverterized
Slide 11: Further improvement of through-cycle target operating model
Further improvement of through-cycle target operating model Target Operating Model Infineon financial performance to approach targets as Cypress integration progresses Revenue growth 9%+ Segment Result margin 19% Investment-to-sales 13% 2020-11-09 Copyright © Infineon Technologies AG 2020. All right
Slide 12: Outlook for Q1 FY21 and FY21
Outlook for Q1 FY21 and FY21 Outlook Q1 FY21* Outlook FY21* ~ €10.5bn Revenue €2.4bn – €2.7bn plus or minus 5% At the mid-point of the revenue guidance: At the mid-point of the revenue guidance: Segment Result Margin ~16% ~16.5% Investments in FY21 €1.4bn – €1.5bn D&A in FY21 €1.5bn – €1.6bn** Free
Slide 13: ESG: targets and achievements
ESG: targets and achievements
Slide 14: Our products and innovations are key elements to deal with climate change
Our products and innovations together with an efficient production are key elements to deal with climate change We contribute a CO2 reduction of more than 54 million tons* * Updated figurers will be available on 23 Nov 2020 – as part of the new sustainability report Our net ecologic CO2 benefit is e
Slide 15: Infineon will become carbon-neutral by 2030
Infineon will become carbon-neutral by 2030 70% CO2 emissions reduction target in 2025 (Scope 1 and 2 emissions) 1. Avoiding direct emissions and further reducing energy consumption 2. Purchasing green electricity with guarantees of origin for unavoidable emissions 3. Compensate the smallest part by
Slide 16: External recognitions confirm our engagement in contributing to a sustainable society
External recognitions confirm our engagement in contributing to a sustainable society Rating/Score Scale Date MSCI ESG AA CCC to AAA 02/2020 B climate scoring CDP F to A 02/2020 B- water scoring 98th percentile Ecovadis 0 to 100 11/2019 “Gold” award 79 DJ Sustainability™ Dow Jones Sustainability Ind
Slide 17: Automotive
Automotive Cinfineon
Slide 18: Mid-term market outlook for ATV division's target applications
Mid-term market outlook for ATV division’s target applications Application (% of FY20 segment rev) Market Outlook for CY21 › Y-Y recovery with unit growth at mid-teens % › Continued uncertainties related to market development mainly due to COVID-19 pandemic › Incentives and CO2 regulations should ke
Slide 19: Infineon's top market position is built on system competence
Infineon’s top market position is built on system competence based on an industry-leading product portfolio Automotive semiconductors (2019 total market: $37.2bn) › New #1 in the total market post acquisition of Cypress Infineon 13.4% › Solid #1 in power despite xEV subsidies cut in China in H2 CY19
Slide 20: Electro-mobility
fineon In Electro-mobility
Slide 21: Trends toward electrification of cars remain unchanged
Trends toward electrification of cars remain unchanged; driven by more stringent legal guidelines Passenger car CO2 emission development and regional regulations CO2 emission by degree of electrification CO2 emission: Tank-to-wheel 200 CO2 emission values (g/km; normalized to NEDC CO2 emission (g/km
Slide 22: The incremental content of power semiconductors in xEV is a significant opportunity
The incremental content of power semiconductors in xEV is a significant opportunity for Infineon 2020 average xEV semiconductor content by degree of electrification 48 V / Mild Hybrids Full & Plug-in Hybrids and Battery Electric Vehicles $32 $834 $330 $90 $0 $572 $61 $7 $17 $14 $23 $396 $396 $38 Non
Slide 23: Automated Driving
Automated Driving Infineon
Slide 24: Radar/Lidar modules and sensor fusion will grab the lion's share of semiconductor BoM
Radar/Lidar modules and sensor fusion will grab the lion’s share of semiconductor BoM in ADAS/AD-equipped cars Incremental average semiconductor content per car by level of automation at the given years Level 2 Level 2+ Level 4/L5 L2 vehicles in 2020: ~5m L2+ in 2025: ~2.5m L4/L5 vehicles in 2030: ~
Slide 25: The Infineon AURIX µC family has become the first-choice automotive architecture
The Infineon AURIX™ µC family has become the first-choice auto- motive architecture for high-growth and safety-critical applications Infineon AURIX™ revenue development over time FY10 FY20e FY25e CAGR(FY10-FY25)= 5.7% CAGR(FY20-FY25)= 34% [indexed: FY10 = 100] TAM: TAM: €1.6bn €4.8bn CAGR(FY20-FY25)
Slide 26: Strong microcontroller footprint in next-generation high-volume platforms
Strong microcontroller footprint in next-generation high-volume platforms OEM platform #1: › 14 MCUs (+ NOR Flash + Wi-Fi) OEM platform #2: › 20 MCUs › start of production: end of CY20 › start of production: CY22 Engine control Braking AD fusion Instrument Engine Braking AD fusion Cluster TFT module
Slide 27: Infineon's Power Strategy
Infineon's Power Strategy Cinfineon
Slide 28: Infineon's portfolio covers the entire range of power and frequency
Infineon's portfolio covers the entire range of power and frequency What is a power switch? How are power switches categorized? 10 MW When turned on power current flows = 1 MW When turned off IGBT current is blocked SiC Module Module 100 kW What counts? › Losses in on-state (R(DS)on) 10 kW › Hea
Slide 29: Infineon's discrete power portfolio is separated by voltage classes
Infineon's discrete power portfolio* is basically separated by voltage classes Silicon-based power switches Compound semiconductors 6,500 V IPC territory 4,500 V CoolSiC™ MOSFET IGBT 3,300 V roadmap modules 1,700 V discrete IGBTs 1,200 V SiC MOSFET today IGBTs (discrete, modules) (CoolSiC™) high-vol
Slide 30: SiC is switching gears: industrial biggest share, automotive half of incremental revenue
SiC is switching gears: industrial still holds the biggest share, but about half of the incremental revenue contributed by automotive Industrial and automotive applications driving the growth [EUR m] CAGR(FY17-FY21): ~50% > 70% 150 100 ~150 different CoolSiC™ products as of today 50 ~60 different cu
Slide 31: Strong CoolSiC portfolio expansion by packages and voltages
Strong CoolSiC™ portfolio expansion: by packages and by voltages Broadest and best-in-class SiC portfolio Industrial Automotive grade CoolSiC™ CoolSiC™ CoolSiC™ Hybrid CoolSiC™ MOSFET CoolSiC™ MOSFET Diode Diode Discrete Discrete Module Discrete IPM Module Discrete Discrete Module voltages 600 V Exp
Slide 32: Second generation CoolSiC Trench MOSFET will increase the addressable market
Second generation (2nd Gen.) CoolSiC™ Trench MOSFET will increase the addressable market 1st Gen. CoolSiC™ Trench MOSFET 2nd Gen. CoolSiC™ Trench MOSFET is the leading technology today is in advanced development phase 1st Gen. with lowest losses 2nd Gen. will expand the lead 1,2 Turn-on losses, Eon
Slide 33: Siltectra: Status of implementation of Cold Split technology
Siltectra: Status of implementation of Cold Split technology Process tools Clean room Process flow › Design and production of semi- › Clean room ready for manufacturing › Integration of individual process steps automated process tool park by end of calendar year 2020 into complete work flow complete
Slide 34: Industrial Power Control
Infineon Industrial Power Control
Slide 35: Mid-term market outlook for IPC division's target applications
Mid-term market outlook for IPC division’s target applications Application (% of FY20 segment rev) Market Outlook for CY21 ~30% › Industrial drives expected to recover in low single digits › Total installations forecasted close to pre-COVID levels with upside potential in China and ~14% Europe ~10%
Slide 36: Clear leader in discrete IGBTs and IGBT modules; fostering position in IPMs
Clear leader in discrete IGBTs and IGBT modules; fostering position in IPMs Discrete IGBTs IPMs IGBT modules1) 2019 total market: $1.44bn 2019 total market: $1.59bn 2019 total market: $3.31bn Infineon 32.5% Mitsubishi 32.7% Infineon 35.6% Fuji Electric 11.7% ON Semi 17.9% Mitsubishi 11.9% ON Semi 7.
Slide 37: Growth in home appliances supported by ongoing inverterization
Growth in home appliances supported by ongoing inverterization and sustained growth of overall number of RACs [units m] Total home appliances (HA) shipments vs inverterized shipments › Inverterization of home appliances driven by energy +3.7% efficiency regulations 800 +15.3% 600 › Room air-conditio
Slide 38: What comes next? Mid- to long-term structural growth opportunities
What comes next? Mid- to long-term structural growth opportunities Core Adjacent New area Courtesy: Courtesy: Alstom Shakti pumps new material solar pumps fuel cell Courtesy: Siemens AG Courtesy: McKinsey EV charging energy storage eMarine Courtesy: Lilium GmbH collaborative robots eDelivery vehicle
Slide 39: Power & Sensor Systems
Power & Sensor Systems Infineon
Slide 40: Mid-term market outlook for PSS division's target applications
Mid-term market outlook for PSS division’s target applications Application (% of FY20 segment rev*) Market Outlook for CY21 Computing ~20% › Acceleration towards cloud computing to continue Communication › In general, long-term drivers due to 5G still intact. However, trade tensions generate some ~9
Slide 41: PSS's growth is built on many applications in power and non-power
PSS's growth is built on many applications from different sectors in power and non-power Computing Communications Smartphones Consumer Industrial › data center › base stations › smartphones › eBikes, eScooter › power supplies › enterprise server › backhaul cellular › mobile devices › multicopter › E
Slide 42: PSS – Power
Be = = HNN i PSS — Power om
Slide 43: Infineon is the clear leader in MOSFETs; growth potential in power ICs
Infineon is the clear leader in MOSFETs; growth potential in power ICs Discrete Power MOSFETs Power ICs 2019 total market: $8.10bn 2019 total market: $24.4bn Infineon 24.6% Texas Instruments 16.0% ON Semi 12.8% Infineon 7.7% STMicro 9.5% Analog Devices 7.2% Toshiba 7.3% Qualcomm 6.3% Renesas* 5.6% S
Slide 44: Transition from 3G/4G to 5G drives demand in power semis
Transition from 3G/4G to 5G drives demand in power semis for antennas and power supplies 5G base station › driver #1: massive growth of data and computing power Massive MIMO DC-DC (MOSFET, ICs) › driver #2: higher number of base stations due to dense network › driver #3: ~4x higher power semi Base s
Slide 45: What comes next? Mid- to long-term structural growth opportunities
What comes next? Mid- to long-term structural growth opportunities Core Adjacent New area 5G infrastructure on-board charger collaborative robots hyperscale AI data center power tools smart speaker new material home appliances class D audio 2020-11-09 Copyright © Infineon Technologies AG 2020. All r
Slide 46: PSS – RF and Sensing
PSS — RF and Sensing infineon
Slide 47: Main applications addressed by PSS sensors portfolio
Main applications addressed by PSS sensors portfolio MEMS microphone 3D radar (24/60 GHz) 3D ToF image sensor Environmental Ultra-low World’s Best audio Best price / power smallest form performance performance consumption factor 14.0 x 13.6 x 7.5 mm³ Low power Presence VR/AR, consumption detection b
Slide 48: Sensor markets targeted by PSS
Sensor markets targeted by PSS MEMS microphone market Radar IC market (24 GHz and 60 GHz only) [US$ m] [EUR m] 1.969 1.792 307 1.501 1.318 227 1.120 130 151 114 2019 2020 2021 2022 2023 FY 2019 2020 2021 2022 2023 (+0.1-pt) Source: Infineon estimates Source: Infineon estimates 3D ToF image sensor ma
Slide 49: Different market dynamics of selected PSS sensors
Different market dynamics of selected PSS sensors MEMS microphone Radar ICs (24 GHz and 60 GHz only) › Market growth in MEMS microphones is mainly driven › In order to allow secure social distancing in public by hearables. New headset features like active noise buildings Infineon has developed a sma
Slide 50: Sweeping success of our XENSIV MEMS microphones catapulted Infineon to new #1
Sweeping success of our XENSIV™ MEMS microphones driven by unparalleled audio characteristics catapulted Infineon to new #1 Infineon’s market share development in MEMS microphones (by units) 43.5% 2019 MEMS die market share 34.7% 36.5% total market: 5.4bn units 26.5% Infineon 43.5% Knowles 39.8% 8.8
Slide 51: New 3D ToF image sensor with improved long range to be launched in Q3 FY21
New 3D ToF image sensor with improved long range to be launched in Q3 FY21 › Enables functionalities like real-time augmented reality, long range scanning, small object reconstruction, fast low-power autofocus and Characteristics: picture segmentation. › Long range up to 10 meters › High resolution
Slide 52: Connected Secure Systems
Cinfineon Connected Secure Systems
Slide 53: Connected Secure Systems – comprehensive systems for a secure, connected world
Connected Secure Systems – comprehensive systems for a secure, connected world Positioned to benefit from major growth trends Top player in key markets › Security, connectivity and compute are the essential ingredients # 1 in security ICs1,2 # 5 in Wi-Fi standalone ICs3 for IoT # 1 in payment1 # 3 i
Slide 54: CSS owns the key ingredients to address the high-growth IoT market
CSS owns the key ingredients to address the high-growth IoT market: security solutions, wireless connectivity and processing Payment Identification Industrial IoT Consumer IoT Connected Cars Smart Watch Applications Security solutions SECORA™ family, OPTIGA™ family, CL / DIF and embedded security co
Slide 55: Infineon offers the entire system for IoT
Infineon offers the entire system for IoT − unlocking new markets and applications lifestyle service wearables robot personal cloud shaver, medical epilator, device toothbrush sensors power smart speaker microph. software and ecosystem motor air con pressure connectivity light smart watch radar coil
Slide 56: Mid-term market outlook for CSS division's target applications
Mid-term market outlook for CSS division’s target applications Application (% of FY20 segment rev) Market Outlook for CY21 Payment Payment, › Momentum in contactless payments expected to continue ID, Ticketing Identification ~30% › Prolonged restrictions on international travel expected to further a
Slide 57: Sapphire crystal with payment chip turns every watch into a contactless payment device
Sapphire crystal with payment chip from Infineon turns every watch into a contactless payment device – potential for new opportunities › Swiss-based company Winwatch and Infineon developed a contactless payment function for traditional wristwatches Chip module with antenna and security feature Termi
Slide 58: Selected financial figures
Selected financial figures Cinfineon
Slide 59: Revenue and segment result development
Revenue and segment result development [EUR m] 2,490 › Strong fourth quarter › Brightened picture in several key target markets 2,174 2,062 1,986 1,916 › Ongoing demand recovery and improving supply dynamics 37.0% 35.5% 34.5% 31.8% › Accelerating adoption rates for structural drivers 27.0% like elec
Slide 60: Q4 FY20 division performance
Q4 FY20 division performance ATV IPC PSS CSS [EUR m] [EUR m] [EUR m] [EUR m] 1,052 893 846 829 815 759 639 681 593 617 23.9 24.6 27.5 362 334 358 366 349 22.4 21.0 162 158 162 307 326 13.6 13.9 14.2 12.1 12.0 8.7 8.1 6.0 18.6 17.3 17.2 19.8 -2.9 5.9 16.3 59 62 62 63 69 153 146 138 143 209 22 22 23 3
Slide 61: RoCE and adjusted RoCE
RoCE and adjusted RoCE 25% 15% 5% -5% FY17 FY18 FY19 FY20 Q4 FY19 Q1 FY20 Q2 Q3 Q4 Adjusted RoCE (excl. effects from International Rectifier and Cypress acquisition, Deferred Tax Effects, RF Power sale) RoCE 2020-11-09 Copyright © Infineon Technologies AG 2020. All rights reserved. 61
Slide 62: Earnings-per-share and total cash return
Earnings-per-share and total cash return Development of earnings-per-share (EPS) from continuing operations [EUR cent] 19 16 17 20 13 13 13 13 8 EPS basic Q4 FY19 Q1 FY20 Q2 Q3 Q4 EPS adjusted -11 Total cash return to shareholders [EUR m] 336 › Dividend proposal for FY20: €0.22 per 308 283 305 286 2
Slide 63: Opex development
Opex development Selling, General & Administration Research & Development [EUR m] [EUR m] General & Administration R&D Selling % of sales 316 308 321 308 % of sales 239 230 243 241 222 214 63 5877 14.5% 204 15710.6% 1 59 1 10.6% 10.8% 1 51 10.8% 56 14.8% 239 57 53 242FY19 Q3 Q1 Q4 FY20 Q2Q3 239 159
Slide 64: Trade working capital components
Trade working capital components Working capital* Inventories [EUR m] [EUR m] [days] 2,215 2,052 1,762 1,701 1,767 1,736 1,511 1,583 1,505 1,007 115 132 120 126 109 Q4 Q1 FY20 Q2 Q3 Q4 Q4 Q1 FY20 Q2 Q3 Q4 Inventories DIO* Trade receivables Trade payables [EUR m] [days] [EUR m] [days] 1,057 1,047 1,1
Slide 65: D&A impacted by Cypress consolidation and PPA
D&A impacted by Cypress consolidation and PPA Investments* Depreciation & Amortization [EUR m] [EUR m] 1.5bn - 1.6bn 1,451 1.4bn - 1.5bn 1,254 1,260 ~500 315 1,099 1,022 945 826 812 861 87 833 103 140 129 16.5% 18.1% 14.5% ~14.1% 12.9% 14.0% ~14.8% 12.8% 12.8% 11.3% 11.8% 11.5% 693 683 758 858 945 F
Slide 66: Liquidity development
Liquidity development [EUR m] Gross Cash Gross Debt Net Cash/Debt 1,531 1,537 1,556 4,859 4,588 3,779 3,450 3,328 3,227 3,051 2,223 Q4 Q1 Q2 Q3 Q4 -7,033 -3,806 -7,746 FY19 FY20 -4,296 › Q3 FY20: - Closing of the acquisition of Cypress; entire acquisition financing facility drawn - Raising €1.0bn vi
Slide 67: Maturity profile
Maturity profile [EUR m; US$ m; nominal values] Eurobond (Mar 2022) Term loans (Sep 2022, Sep 2023, Jun 2024) Corporate bonds under the EMTN program (Jun 2023, Jun 2026, Jun 2029, Jun 2032) US PP Notes (Apr 2024, Apr 2026, Apr 2028) €750 Hybrid bonds* (Jan 2025, Jan 2028) $555 $1,110 $1,110 €750 €60
Slide 68: Part of your life. Part of tomorrow.
Cinfineon Part of your life. Part of tomorrow.
Slide 69: Glossary (1 of 2)
Glossary (1 of 2) ABB accelerated book building ECC error correction code AC alternating current ECU electronic control unit AC-DC alternating current - direct current EPS electric power steering AD automated driving eSIM embedded subscriber identity module ADAS advanced driver assistance system EV
Slide 70: Glossary (2 of 2)
Glossary (2 of 2) IRF International Rectifier Pol point-of-load IVN in-vehicle networking PSoC programmable system-on-chip LCD liquid crystal display PV photovoltaic LDO low dropout voltage regulator RF radio frequency LED light-emitting diode rhs right-hand scale LSEV low-speed electric vehicle Si
Slide 71: Disclaimer
Disclaimer Disclaimer This presentation contains forward-looking statements about the business, financial condition and earnings performance of the Infineon Group. These statements are based on assumptions and projections resting upon currently available information and present estimates. They are s
Slide 72: Financial calendar
Financial calendar Date Location Event 10 Nov 2020 London virtual UBS European Conference 17 Nov 2020 Hong Kong virtual JPM Global TMT Conference 17 Nov 2020 Bus Tour virtual Cowen Virtual Silicon Valley Bus Tour 18 - 19 Nov 2020 Barcelona virtual Morgan Stanley TMT Conference 23 Nov 2020 Fr
Slide 73: ESG footnotes
ESG footnotes 1) This figure considers manufacturing, transportation, function cars, flights, materials, chemicals, water/waste water, direct emissions, energy consumption, waste, etc. and is based on internally collected data and externally available conversion factors. All data relate to the 2019
Slide 74: 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' – 'Financial investments' – 'Assets classified as held for sale – ('Total Current li
Slide 75: For further reading
For further reading IPC Business Update ATV Call Dr. Peter Wawer, Dr. Peter Friedrichs Peter Schiefer 7 May 2020 5 October 2020 https://www.infineon.com/pcim_presentation https://www.infineon.com/2020atvcall Sustainability Report 2020 IFX Day 2018 23 November 2020 Capital Markets Day London, 12 June
Slide 76: Institutional Investor Relations contacts
Institutional Investor Relations contacts Alexander Foltin Executive Vice President Finance, Treasury & Investor Relations +49 89 234-23766 alexander.foltin@infineon.com Joachim Binder Isabell Diel Distinguished Engineer Investor Relations Manager Investor Relations +49 89 234-25649 +49 89 234-38297
Infineon Technologies — Q4 FY2020 Earnings Presentation on 6ix