Nordic Semiconductor Asa · OSL:NOD

Nordic Semiconductor Asa — Q1 2022 Earnings Presentation

26 slides from Nordic Semiconductor Asa's earnings presentation, Apr 28, 2022

1. Slide 1: Quarterly Presentation Q1 2022

   Quarterly Presentation Q1 2022 April 28, 2022

2. 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

3. Slide 3: Highlights

   © Nordic Semiconductor Highlights  Revenue of USD 183 million (+28%) Revenue, gross profit and EBITDA (USDm)  Severely impacted by wafer supply 183 Revenue +28%  Gross margin 60%  EBITDA of USD 55 million (+120%), 143  Expect solid Q2 despite continued 109 Gross profit +52% supply challenges 72

4. Slide 4: Seeking to align backlog to capacity

   © Nordic Semiconductor Seeking to align backlog to capacity Backlog (USDm) 1,800 1687 1,600 1537  Reduction in order backlog does 1,400 1316 not reflect demand 1258 1,200  Order backlog >> delivery capabilities 1,000 given the current supply chain constraints 803 800  Actively working with end-cu

5. Slide 5: Order Backlog under constrained supply

   © Nordic Semiconductor Order Backlog under constrained supply  In a normal situation with unconstrained Order backlog/quarterly revenue supplies, order backlog was a leading 12 indicator for revenue in the following 10 two quarters 8  A combination of high demand and constrained supply has inflate

6. Slide 6: Low inventories throughout the value chain

   © Nordic Semiconductor Low inventories throughout the value chain  No signs of inventory build-up Nordic inventory/Revenue quarterly 0.9  Low inventories of 0.8 Nordic products at 0.7  Nordic 0.6 0.5  Distributors 0.4  End-customers 0.3 0.2 0.1 0.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2020 2020 2020 2020

7. Slide 7: Revenue by end-user market

   © Nordic Semiconductor Revenue by end-user market Driven by product allocations  Consumer accounts for Short-range revenue by end-user markets, last 12 months (USDm) two-thirds of revenue 700 Other  Highest growth for 600 Healthcare Industrial last 3 years 500 Industrial  High upside in 400 Consu

8. Slide 8: Steady and high certification market share

   © Nordic Semiconductor Steady and high certification market share Significantly increasing value per design Bluetooth Low Energy end-product certifications, last 12 months 1500 End-product certifications, 1200 Nordic Q1 2022 Other Qualcomm 46% 42% 43% Infineon 900 41% 39% 42% Dialog 117 33% TI 39 %

9. Slide 9: New product launches in Q1

   © Nordic Semiconductor New product launches in Q1 Level Home eBuyNow Bmmpr Tributech Solutions Lobaro Smart Locks “Moto Watch 100” “Bmmpr x Assets” OEM module Wireless M-Bus Gateway nRF52840 nRF5340 nRF9160/nRF52833 nRF9160 nRF9160 An Apple HomeKit®- and Smartwatch with wide Anti-theft, anti-damage,

10. Slide 10: cIoT set to benefit from new partners

    © Nordic Semiconductor cIoT set to benefit from new partners Accelerating our customers’ time to market cIoT revenue last 12 months (USDm) 22 17 7 1 Q1 2020 Q1 2021 Q1 2022 10

11. Slide 11: Making cellular IoT easy

    © Nordic Semiconductor Making cellular IoT easy Simplifying IoT Standard Essential Patent licensing (SEP)  Nokia and Nordic with pioneering new approach to licensing use of cellular IoT SEPs +  Adds transparency and predictability early in the design process  Licenses will be available to Nordic’

12. Slide 12: Successful MWC 2022

    © Nordic Semiconductor Successful MWC 2022 Innovative demonstrations in Barcelona  Nordic LE Audio applications based on the nRF5340 advanced wireless SoC and a Cirrus Logic® TWS ADC/DAC  Nordic’s LE Audio technology was chosen by Sennheiser for audio broadcasting  Thingy:91s tracked around the w

13. Slide 13: Financials

    Financials Pål Elstad, CFO

14. Slide 14: Revenue growth of 28% y-o-y

    © Nordic Semiconductor Revenue growth of 28% y-o-y Quarterly revenue (USDm) 200 183 171 175  Y-o-y growth across all technologies, 148 148 150 143 although capped by wafer supply 125  Bluetooth +26 % to USD 150 million 100  Proprietary +20 % to USD 25 million 75  Cellular IoT +438 % to USD 7 mil

15. Slide 15: Revenue per market

    © Nordic Semiconductor Revenue per market Group Consumer Industrial Healthcare Others USDm USDm USDm USDm USDm 183.1 122.2 39.8 14.2 5.9 +28% +7% +28% +6% +18% +3% +54% +39% +52% +10% y-o-y q-o-q y-o-y q-o-q y-o-y q-o-q y-o-y q-o-q y-o-y q-o-q  New market classifications now includes cellular IoT R

16. Slide 16: Breakdown by end-user markets

    © Nordic Semiconductor Breakdown by end-user markets Aligned with customers end-products and our sales structure Markets Verticals Consumer  Mobile/PC HID  VR/AR  Toys  Wearables  Consumer Asset Tracking  CE Remotes  Smart Home  Consumer Health  Wireless Charging  Gaming  Audio  Other He

17. Slide 17: Continued strong gross margin

    © Nordic Semiconductor Continued strong gross margin 70% 65%  Full-quarter effect of price increases 60% 58.9% 59.7%  Significant effect of changes in product and customer mix 55% 53.1%  High margins reflects product 50.9% 50.2% 50% allocations under constrained supply 45% 40% Q1 2021 Q2 2021 Q3

18. Slide 18: Operating model performance Q1 2022

    © Nordic Semiconductor Operating model performance Q1 2022 Gross margin 59.7% Q1 2022 Q1 2021 Δ R&D short-range Revenue USD 183.1m USD 143.2m +27.8% Volume, price and product mix 11.8% R&D cellular IoT 59.7% 50.2% Price adjustments and signifcant 6.4% Gross margin +9.5pp R&D Wi-Fi 2.1% USD 109.3m US

19. Slide 19: Investing in growth

    © Nordic Semiconductor Investing in growth Cash cost increase mainly due to increased Cash OPEX* (USDm) number of employees Salary:  Number of employees increased by 22 % to 1,257 over the past last 12 months 41 40  Reversal of tax accruals related to equity 36 33 37 compensation and reversal of b

20. Slide 20: Capex development

    © Nordic Semiconductor Capex development Capex (USDm) 10 9 8 7 6.5 % 6  Low capex of USD 4 million in Q1 5 3.8 % 4  Overall capex intensity expected at ~4% 2.7 % 3 3.5 % 2.3 % of revenue in 2022, on par with 2021 2 1 0 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Capex Capex/Revenue 20

21. Slide 21: Continued strong cash position

    © Nordic Semiconductor Continued strong cash position Cash position and Cash Flow Q1 2022 (USDm)  Operating cash flow of USD 32.0m in Q1  Increasing net working capital mainly due to accounts receivables  NWC/Revenue LTM up to 19.9% from 17.8% at YE 2021 – still at low level  Continued disciplin

22. Slide 22: Summary and Outlook

    Summary and Outlook Svenn-Tore Larsen, CEO

23. Slide 23: Expect solid Q2 despite supply challenges

    © Nordic Semiconductor Expect solid Q2 despite supply challenges Q2 2022 guidance  Revenue guidance reflects current wafer allocations for Q2 2022 Revenue Gross margin  Higher wafer supply expected in the USDm 190-210 >54% second half of the year  cIoT affected by component shortage +29% to +42%

24. Slide 24: Expanding capacity through multi-sourcing

    © Nordic Semiconductor Expanding capacity through multi-sourcing Delivering features that IoT requires in the future  Developing new technology platform across short-range, Wi-Fi and cellular IoT  R&D innovation with high customer involvement  Multi-year project with large R&D teams on multiple s

25. Slide 25: The outlook stands firm

    © Nordic Semiconductor The outlook stands firm Revenue (USDm)  USD 1bn revenue target in 2023 >25%  Aiming to more than double CAGR revenue in 2023-2026 ~28%  Continued strong growth in CAGR short-range 1bn  Accelerating in cIoT 611  Early traction in Wi-Fi  Gradually increasing revenue contri

26. Slide 26: aaa

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