Slide 1: Soitec Annual Results Fiscal year 2017/2018
Soitec Annual Results Fiscal year 2017/2018 Paris, France
Slide 2: Disclaimer
Disclaimer This document was prepared by Soitec (the “Company”) on June 13, 2018 in connection with the announcement of the full-year FY’18 results. This document is provided for information purposes only. It is public information only. The Company’s business operations and financial position is des
Slide 3: Agenda
Agenda Greetings 1 Paul Boudre, CEO 2 Rémy Pierre, CFO 3 Paul Boudre, CEO Q&A session 14/06/2018 3 Annual Results FY 2017-18 Paris
Slide 4: Agenda
Agenda Greetings 1 Paul Boudre, CEO 2 Rémy Pierre, CFO 3 Paul Boudre, CEO Q&A session 14/06/2018 4 Annual Results FY 2017-18 Paris
Slide 5: Executive summary
Executive summary 1 Outstanding financial performance for fiscal year 2017/2018 2 Business trends are robust across our key end markets 3 Strong focus on ramp-up execution 14/06/2018 5 Annual Results FY 2017-18 Paris
Slide 6: Further substantial improvement in operating profitability in FY'18
Further substantial improvement in operating profitability in FY’18 Sales growth Significant increase in EBITDA (Electronics) €m, % at constant FX €m, as a % of sales 29.2% +4% +31% 311 15.6% 16.7% 233 246 91 36 41 FY'16 FY'17 FY'18 FY'16 FY'17 FY'18 restated restated Net result Net cash position €m
Slide 7: Powerful innovation trends across technology markets
Powerful innovation trends across technology markets Mobility enhanced with new device features and 5G Autonomous and e-vehicles to set new standards Artificial intelligence already in our everyday life Augmented & Virtual reality, more than a gadget 14/06/2018 7 Annual Results FY 2017-18 Paris
Slide 8: 4 strategic end markets
4 strategic end markets Cloud infrastructure Smartphones Internet of Things Automotive 14/06/2018 8 Annual Results FY 2017-18 Paris
Slide 9: Soitec in the value chain
Soitec in the value chain Engineered substrates G S Si D Buried Oxide Base material SOI transistor Smart Cut TM technology IC Silicon die with millions of Starting transistors wafers SOI processed PCB wafer with multiple raw dice per wafer SOI substrates (Silicon on Insulator) 14/06/2018 9 Annual Re
Slide 10: Smartphones
Smartphones 3G/4G fuelling current growth 3D image sensors initial adoption for facial FD-SOI value proposition recognized 5G around the corner recognition – use cases for AR/VR for several critical applications Image signal processors 4G 5G Facial recognition Artificial intelligence RF-SOI for Ante
Slide 11: Automotive
Automotive Power-SOI to benefit from structural semi FD-SOI to ramp for ADAS FD-SOI chips ramping up content increase Development in radars for infotainment application processors Multimedia application processors Power-SOI for Super computing chips gate drivers Power-SOI for ASICs for radars Class
Slide 12: Automotive – View from a leading car maker
Automotive – View from a leading car maker FD-SOI value proposition (AUDI) › Key benefits › Ultra low voltage operation Down to 0.4 V by corner trimming / bias trimming > 70% power reduction possible › Performance gain By corner trimming / bias trimming « more bang for the buck » › Dynamic switching
Slide 13: Internet of Things
Internet of Things FD-SOI offers the best value proposition for FD-SOI for consumer applications FD-SOI for industrial applications edge-computing and ultra-low power applications FD-SOI will now address Speed performance those areas GPS for smartwatches Smart cities Cloud Ear buds Edge Very edge Sm
Slide 14: Infrastructure for cloud, mobile and satellite
Infrastructure for cloud, mobile and satellite FD-SOI Photonics-SOI For crypto-currency mining For datacenters optical transceivers FD-SOI For broadband communications in Low Earth Orbit (LEO) satellites FD-SOI For base stations 14/06/2018 14 Annual Results FY 2017-18 Paris
Slide 15: Substrate materials at the base of electronics innovation
Substrate materials at the base of electronics innovation Services Final Product Software Hardware Semiconductor device Substrates 14/06/2018 15 Annual Results FY 2017-18 Paris
Slide 16: Towards more partnerships in our innovation model
Towards more partnerships in our innovation model Today – A global R&D network Tomorrow – More partnerships with OEMs Soitec leading industry-wide consortium (+25 companies) to accelerate FD-SOI adoption in critical automotive applications 14/06/2018 16 Annual Results FY 2017-18 Paris
Slide 17: Soitec footprint to expand in every end market
Soitec footprint to expand in every end market Smartphones Automotive >100 mm² >200 mm² ~100 80mm² ~2020mm² 2017 2022 2017 2022 Cloud infrastructure Internet of Things >400 mm² ~50 mm² ~8080mm² <10 mm² 2017 2022 2017 2022 14/06/2018 17 Annual Results FY 2017-18 Paris Source: Soitec estimates, 2017
Slide 18: Strong business trends support our FY22 TAM outlook
Strong business trends support our FY22 TAM outlook Bottom-up demand scenarios for Soitec addressable markets ~5.0M >1 M wafers* in 2017 wafers* ~3.5M wafers* Digital ~2.2M wafers* Digital Digital Comm. Comm. Comm. & Power & Power & Power Low Mid High 14/06/2018 18 Annual Results FY 2017-18 Paris *
Slide 19: Strong focus on ramp-up execution
Strong focus on ramp-up execution People Manufacturing Supply chain Securing access to silicon wafers Top silicon bulk wafer Base silicon bulk wafer Refreshing wafers: -Increases margin Silicon bulk wafer Multi-product -Reduces bulk supply exposure for with epitaxy layer manufacturing expansion in F
Slide 20: Agenda
Agenda Greetings 1 Paul Boudre, CEO 2 Rémy Pierre, CFO 3 Paul Boudre, CEO Q&A session 14/06/2018 20 Annual Results FY 2017-18 Paris
Slide 21: FY'18: revenue breakdown
FY’18: revenue breakdown In €m Change vs FY’17 Sales breakdown FY’17 Q1’18 Q2’18 Q3’18 Q4’18 FY’18 % at % constant FX 200mm wafer sales 182.5 46.5 47.4 49.4 49.1 192.4 +5% +9% 4% 200mm 300mm wafer sales 56.7 21.1 23.7 24.9 36.5 106.3 +88% +95% 62% 300mm Royalties and IP 6.6 1.9 2.2 1.7 6.1 11.9 +82%
Slide 22: Continuous improvement in gross margin
Continuous improvement in gross margin Sales 180 36.1% in €m 34.0% 32.4% Gross margin 27.8% 28.6% 160 as % of sales 24.9% > Steady revenue growth over the last quarters 22.3% > 200mm: industrial productivity further improved 140 in Bernin I 4.5% 61 1.6% > 300mm: utilization of Bernin II capacity 120
Slide 23: Group consolidated P&L (1/2)
Group consolidated P&L (1/2) In €m FY’18 FY’17 Change Sales 310.6 245.7 +26% 1 Gross profit 106.9 77.4 +38% Net R&D expenses sharply down as a result of: As a % of sales 34.4% 31.5% › Capitalization of some development project costs Gross R&D expenses (43.9) (45.2) -3% › Higher prototype sales Proto
Slide 24: Group consolidated P&L (2/2)
Group consolidated P&L (2/2) 1 > Including impairment reversal related to Bernin II for In €m FY’18 FY’17 €3.8m 2 Current operating income 67.4 27.7 > €(0.4)m interest and charges related to OCEANE 2018 vs €(6.6)m in FY’17 Other operating income and expenses 1 4.1 (8.2) > A €4.6m non recurring finan
Slide 25: Cash generation from operating activities
Cash generation from operating activities FY’18 FY’17 Continuing Discounted Continuing Discounted In €m Total Total operations operations operations operations Net profit 92.1 (5.6) 86.5 7.2 1.1 8.4 Depreciation and amortization 18.6 - 18.6 20.8 - 20.8 Other items 1 (20.1) 2.9 (17.2) 12.9 (10.0) 2.9
Slide 26: Significant increase in EBITDA of the continuing operations (Electronics)
Significant increase in EBITDA of the continuing operations (Electronics) 29.2% 16.7% 15.6% FY’18 EBITDA includes: 91 % of sales > €2.9m resulting from one-off royalties and IP revenue > €7.5m one-off R&D subsidy 36 41 €m FY'16 FY'17 FY'18 restated 14/06/2018 26 Annual Results FY 2017-18 Paris
Slide 27: FY'18 strong cash generation
FY’18 strong cash generation Net change in cash = + € 10.7m in €m +40.0 +18.4 Continuing activities Discontinued (19.9) 8.2 activities (20.6) 8.2 (1.1) 2.1 (2.5) (3.6) 120.0 Group 109.3 Cash and cash Net cash Net cash used New credit Loan Financial Cash used by Net impact of Cash and cash equivalent
Slide 28: Further strengthening of the balance sheet during FY'18
Further strengthening of the balance sheet during FY’18 Shareholders’ equity Gross debt €m €m 1 1 & 2 278 > Early conversion of 99% of the 219 2018 OCEANE in August 2017: equity reinforced by +€40.9m 149 121 and debt reduced by nearly the 1 78 same amount -8 31 March 16 31 March 17 31 March 18 31 Ma
Slide 29: Simplified consolidated balance sheet
Simplified consolidated balance sheet 31 March 31 March 31 March 31 March In €m 2018 2017 In €m 2018 2017 Total equity 278.6 149.1 Intangible assets 8.2 4.0 Long-term financial debt 59.6 104.7 Tangible assets and other non current 207.3 157.0 Provisions and other non-current liabilities 11.4 15.2 as
Slide 30: Investment projects related to industrial sites
Investment projects related to industrial sites FY’19 capex planned at approx. €120m includes: Bernin I: increase capacity by adding 50 K wafers Bernin II: extend the existing building with a view to increase capacity by +150 K wafers in the future Singapore: complete the pilot line and also add ref
Slide 31: Agenda
Agenda Greetings 1 Paul Boudre, CEO 2 Rémy Pierre, CFO 3 Paul Boudre, CEO Q&A session 14/06/2018 31 Annual Results FY 2017-18 Paris
Slide 32: Guidance for FY'19
Guidance for FY’19 Revenue growth EBITDA margin Capex Above 35% growth at constant Around 27% Approx. €120m exchange rate 14/06/2018 32 Annual Results FY 2017-18 Paris
Slide 33: Q&A
Q&A
Slide 34: Appendix
Appendix
Slide 35: FY'18 net financial result
FY’18 net financial result In €m FY’18 FY’17 Interest expense on OCEANE 2018 (0.4) (4.7) One-off charge related to the repurchase of OCEANE 2018 - (2.2) Interest expense on loans and credit lines (0.4) (0.8) Interest expense on leasing (0.5) (1.1) Change in valuation of financial assets (non recurri
Slide 36: Net profit from discontinued operations
Net profit from discontinued operations Directly reported at the bottom of consolidated P&L In €m FY’18 FY’17 Sales 1.2 0.8 Expenses (1.8) (0.6) Current operating income/(loss) (0.6) 0.2 Other operating income and expenses (1.8) (5.0) Operating income/(loss) (2.4) (4.8) Net financial income/(expense
Slide 37: Thank you
Thank you Follow us on: Soitec @Soitec_FR / @Soitec_EN Soitec For more information, visit us at: www.soitec.com 14/06/2018 37 Annual Results FY 2017-18 Paris