Slide 1: STMicroelectronics Q4 & FY 2023 Financial Results
STMicroelectronics Q4 & FY 2023 Financial Results January 25, 2024
Slide 2: Forward looking information
Forward looking information Some of the statements contained in this release that are not historical facts are statements of future expectations and other forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 or Section 21E of the Securities Exchange Act of 1934
Slide 3: Highlights
Highlights • Net revenues of $4.28B decreased 3.2% Y/Y and 3.4% Q/Q. Gross margin was 45.5%. Q4 • Revenues and gross margin were slightly below the mid-point of the guidance, with higher revenues in Personal Electronics offset by a 2023 softer growth rate in Automotive. • Operating margin was 23.9%
Slide 4: Automotive
Automotive Car electrification Car digitalization 4
Slide 5: Industrial
Industrial Power & Energy Embedded processing Industrial sensors 5
Slide 6: Personal electronics, Communications equipment & computer peripherals
Personal electronics Communications equipment & computer peripherals 6
Slide 7: Manufacturing initiatives
Manufacturing initiatives 300 mm capacity expansion Silicon carbide capacity expansion Crolles Agrate Catania Singapore Bouskoura Shenzhen 7 Global Foundries, Crolles San’an, Chongqing
Slide 8: Sustainability
Sustainability Commitments • Carbon neutral* by 2027 Fifteen-year Power Purchase Agreement • Sourcing 100% renewable energy by 2027 with ERG for the supply of renewable energy to ST operations in Italy *on scope 1 & 2 and partially scope 3 8
Slide 9: Q4 2023 Revenues
Q4 2023 Revenues % by product group % by shipment location % by region of origin Americas Americas Asia 15% Pacific Others 29% 0.1% 38% Microcontrollers & Automotive & 28% 57% Digital ICs Group Discrete Group (MDG) (ADG) 33% EMEA Asia 29% Pacific EMEA 48% % by customer type 23% 30% Distribution 45%
Slide 10: Q4 2023 Financial highlights
Q4 2023 Financial highlights Revenues = $4.28B Operating Margin = 23.9% 4.5 30% 4.4 28% 4.3 26% -3.2% 4.2 Y/Y 24% 4.1 22% 4.0 20% Q422 Q323 Q423 Q422 Q323 Q423 Gross Margin = 45.5% Net Income = $1.08B 50% 1.3 48% 1.1 46% 44% 0.9 42% 40% 0.7 Q422 Q323 Q423 Q422 Q323 Q423 10
Slide 11: FY 2023 Revenues by end market
FY 2023 Revenues by end market Communications equipment & computer peripherals -4.2%Y/Y 10% Personal electronics -25.1%Y/Y 19% 41% Automotive +33.5%Y/Y 30% Industrial +11.4%Y/Y 11
Slide 12: FY 2023 Revenues
FY 2023 Revenues % by product group % by shipment location % by region of origin Americas Americas Asia 16% Pacific Others 37% 30% 0.1% Microcontrollers & Automotive & 28% 56% Digital ICs Group Discrete Group (MDG) (ADG) 33% EMEA Asia Pacific 32% 45% EMEA % by customer type 23% Distribution 34% 42%
Slide 13: FY 2023 Financial highlights
FY 2023 Financial highlights Revenues = $17.29B Operating Margin = 26.7% 18.0 28% 16.0 +7.2% Y/Y 26% 14.0 24% 12.0 10.0 22% FY22 FY23 FY22 FY23 Gross Margin = 47.9% Net Income = $4.21B 48% 4.3 4.1 47% 3.9 46% 3.7 45% 3.5 FY22 FY23 FY22 FY23 13
Slide 14: Revenues
Revenues Q423 Revenues = $4.28B FY23 Revenues = $17.29B 5.0 18.0 4.0 16.0 3.0 14.0 Q422 Q123 Q223 Q323 Q423 FY22 FY23 Q423 revenues down 3.2% Y/Y FY23 revenues up 7.2% Y/Y • ADG revenues increased 21.5%, while AMS and MDG decreased • The Y/Y growth is driven by strong demand in Automotive and, to a
Slide 15: Gross margin
Gross margin Q423 Gross Margin = 45.5% FY23 Gross Margin = 47.9% 50% 50% 49% 48% 48% 47% 46% 46% 45% 44% 44% Q422 Q123 Q223 Q323 Q423 FY22 FY23 Q423 Gross Margin FY23 Gross Margin • Down 200 bps Y/Y, due to higher input manufacturing costs, • Up 60 bps Y/Y principally driven by the positive impact o
Slide 16: Net operating expenses
Net operating expenses* FY23 Quarterly Net Operating Expenses Average = $919M 1100 30% 4.2 30% 900 3.3 25% 25% 700 2.4 500 20% 20% 1.5 300 15% 15% 100 0.6 -100 10% -0.3 10% Q422 Q123 Q223 ** Q323 Q423 FY22 FY23 SG&A R&D OIE, net Net OPEX % SG&A R&D OIE, net Net OPEX % Q423 Net Operating Expenses at
Slide 17: Q4 2023 Product group results
Q4 2023 Product group results Automotive & Discrete Analog, MEMS & Sensors Microcontrollers & Digital ICs (ADG) (AMS) (MDG) Revenues = $2,060M Revenues = $993M Revenues = $1,225M Operating Margin = 31.9% Operating Margin = 14.8% Operating Margin = 28.0% 2,100 40% 2,100 40% 2,100 40% 1,800 1,800 1,80
Slide 18: FY 2023 Product group results
FY 2023 Product group results Automotive & Discrete Analog, MEMS & Sensors Microcontrollers & Digital ICs (ADG) (AMS) (MDG) Revenues = $7.85B Revenues = $3.99B Revenues = $5.43B Operating Margin = 31.8% Operating Margin = 17.3% Operating Margin = 33.8% 8.0 40% 8.0 40% 8.0 40% 6.0 6.0 6.0 30% 30% 30%
Slide 19: FY 2023 Financial flexibility
FY 2023 Financial flexibility Net Cash From Operating Net Capex* = $4.11B Free Cash Flow** = $1.77B Activities = $5.99B 6.0 4.5 Capex / sales (%) 25% 2.0 4.5 1.5 3.0 20% 5-year 3.0 average 1.0 1.5 15% 1.5 0.5 0.0 0.0 10% 0.0 FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23
Slide 20: Solid capital structure
Solid capital structure $6.08B ST is in a very solid position from a capital, liquidity $5.05B $4.52B and balance sheet perspective. $2.93B $2.72B $2.59B $3.16B $2.46B After December 2023 upgrade, ST credit rating is now $1.80B BBB+ with Stable Outlook from S&P and Baa1 with Positive Outlook from Mo
Slide 21: Q1 2024 Outlook
Q1 2024 Outlook Net Revenues Q124 outlook, at the mid-point, is for net revenues of $3.6B, decreasing Y/Y by 15.2% and decreasing Q/Q by 15.9%, plus or minus 350 bps. Gross Margin Gross margin is expected to be about 42.3%, +/- 200 bps. This outlook is based on an assumed effective currency exchange
Slide 22: FY 2024 plan: net CAPEX about $2.5B
FY 2024 We plan to invest about $2.5B in net CAPEX. We will drive the Company based on a plan for FY24 revenues in the range of $15.9B to $16.9B. Within this plan, we expect a gross margin in the low to mid-40’s. H124 will be impacted by a significant inventory correction in Industrial. In H224, we
Slide 23: FY 2024 Revenue dynamics
FY 2024 Revenue dynamics* We expect mid-single digit Y/Y growth. Excluding the impact of capacity reservation fees Automotive and of a specific customer 2023 inventory replenishment effect, this would correspond to low-double digit Y/Y growth. Expect to return to high-single digit Y/Y growth in H224
Slide 24: Takeaways
Takeaways Following several years of revenue growth and increased profitability, we see 2024 as a transition year. We are adapting our plans according to market dynamics while continuing to execute on our established strategy and operating model. We will continue to strongly focus on Automotive and
Slide 25: ST re-organization in two Product Groups, split in four Reportable Segments
ST re-organization in two Product Groups, split in four Reportable Segments ST will be re-organized in two Product Groups split in four Reportable Segments, and the existing sales and marketing organization will be complemented by a new application marketing organization by end market implemented ac
Slide 26: Appendix
Appendix
Slide 27: ST revenue growth and improved performance
ST revenue growth and improved performance US$M FY17 FY18 FY19 FY20 FY21 FY 22 FY23 ST Revenue 8,347 9,664 9,556 10,219 12,761 16,128 17,286 ST Revenues Y/Y 19.7% 15.8% -1.1% 6.9% 24.9% 26.4% 7.2% Gross Margin 39.2% 40.0% 38.7% 37.1% 41.7% 47.3% 47.9% Operating Margin 12.0% 14.5% 12.6% 12.9% 19.0% 2
Slide 28: Historical financial performance
Historical financial performance US$M, except EPS Q122 Q222 Q322 Q422 FY22 Q123 Q223 Q323 Q423 FY23 Net Revenues 3,546 3,837 4,321 4,424 16,128 4,247 4,326 4,431 4,282 17,286 Gross Margin 46.7% 47.4% 47.6% 47.5% 47.3% 49.7% 49.0% 47.6% 45.5% 47.9% Operating Income 877 1,004 1,272 1,287 4,439 1,201 1
Slide 29: Appendix
• Net financial position and Adjusted Net Financial Position (non-U.S. GAAP measure): represents the difference between our total liquidity Appendix and our total financial debt. Our total liquidity includes cash and cash equivalents, restricted cash, if any, short-term deposits, and marketable secu
Slide 30: FY 2023 Revenues by new Product Groups and Reportable Segments
FY 2023 Revenues* by new Product Groups and Reportable Segments 30 US$M Q123 Q223 Q323 Q423 FY23 Analog products, MEMS and Sensors (AM&S) 1,400 1,293 1,367 1,418 5,478 Power and discrete products (P&D) 909 989 989 965 3,852 Analog, Power & Discrete, MEMS and Sensors 2,309 2,282 2,356 2,383 9,330 (AP
Slide 31: © STMicroelectronics - All rights reserved. ST logo is a trademark or a registered
© STMicroelectronics - All rights reserved. ST logo is a trademark or a registered trademark of STMicroelectronics International NV or its affiliates in the EU and/or other countries. For additional information about ST trademarks, please refer to www.st.com/trademarks. All other product or service