Intel Corporation · NASDAQ:INTC
Intel — Investor Presentation (February 2017)
33 slides from Intel's investor presentation, Feb 9, 2017
Slide 1: Investor Meeting February 2017
Investor MeetingFEBRUARY 2017
Slide 2: Bob Swan, Chief Financial Officer
Bob Swan Chief financial officer
Slide 3: Disclosures
DISCLOSURES This presentation contains non-GAAP financial measures relating to our performance. You can find the reconciliation of these measures to the most directly comparable GAAP financial measure in the Appendix at the end of this presentation. The non-GAAP financial measures disclosed by Intel
Slide 4: A Brief Recap
A BRIEF RECAP Industry leader Expanding TAM… investing in the future Industry trends playing to our strengths Great portfolio of businesses and assets
Slide 5: Industry Leader
INDUSTRY LEADER IDM Advantage Moore’s Law Leadership World Class Products
Slide 6: We Have a Great Set of Businesses with Leading Positions
WE HAVE A GREAT SET OF BUSINESSES WITH LEADING POSITIONS CCG DCG TG PSG NSG
Slide 7: A Significant Transformation
A SIGNIFICANT TRANSFORMATION… Moving from PC Centric to powering the cloud and billions of smart, connected devices CCG Revenue Growth Business Revenue CAGR 13% CAGR 2014 2016 20142016 CCG: Excellent performance in a declining market Growth Business: Strong growth… continue to invest Growth business
Slide 8: Shifting Our Resources
SHIFTING OUR RESOURCES Reduction… Reallocation… Reinvesting… Repositioning $ 22B Spending 2016 to 2017F $ 18 2016Intel SecurityCCG Reduction, Growth BusinessesMoore’s2017F RestructuringLaw Forecast Restructuring in process… while investing in growth segment and Moore’sLaw 2017 forecasts are Intel es
Slide 9: Industry Trends Playing to Our Strengths
BY 2020 AVG. 1.5 GB OF TRAFFIC / DAY INTERNET USER AUTONOMOUS 4 TB OF DATA / DAY VEHICLES INDUSTRY TRENDS PLAYING TO CONNECTED 5 TB OF DATA / DAY AIRPLANE OUR STRENGTHS SMART 1 PB OF DATA / DAY FACTORY CLOUD 750 PB OF VIDEO / DA VIDEO PROVIDERS Source: Amalgamation of analyst data and Intel analysis
Slide 10: Leverage Our Strengths to Expand Our TAM
LEVERAGE OUR STRENGTHS TO EXPAND OUR TAM 2021F Si TAM ($B) ~$30B ~$65B~$55B~$40B~$30B Networking $ TechnologyADASTotal Tam PhotonicstechnologyIndustrial Video Revenue Segmentation Intel Ompath3D NANDmodemRetail~$220B PC CPU Data centerNon-volatileMobileIoT Memory Source: 2016 Intel Revenue is based
Slide 11: We Understand Key Questions Exist
WE UNDERSTAND KEY QUESTIONS EXIST… “Intel is spreading itself too thin… Intel likes to spend.” “Intel’s acquisition of Altera… - Romit Shah We don’t think the deal should change anyone’s mind on Intel...” - Joe Moore “‘Tick tock tock’ has and more worrisome implications…” – Tim Arcuri Other brands a
Slide 12: Deliver the Present, Create the Future
DELIVER THE PRESENT… CREATE THE FUTURE
Slide 13: Deliver on the Present: 2017 Guide (Non-GAAP)
DELIVER ON THE PRESENT… 2017 GUIDE (NON-GAAP) REVENUE GROSS MARGIN EPS LOW SINGLE ~63% ~$2.80 DIGIT GROWTH (excluding Security Business) 2017 forecasted figures are on a non-GAAP basis. Refer to the Appendix for a reconciliation of these non-GAAP measures. 2017 forecasts are Intel estimates, based u
Slide 14: The Transformation Continues
THE TRANSFORMATION CONTINUES… Moving from PC Centric to powering the cloud and billions of smart, connected devices CCG REVENUE GROWTH BUSINESS REVENUE MI SINGLE DIGITS DOUBLE DIGITS 2016 2017F 2016 2017F CCG: Cautious outlook on PC TAM… Growt Business Well positioned… continue to invest 2017 foreca
Slide 15: Deliver on the Present: DCG
DELIVER ON THE PRESENT… DCG Revenue $17.2B git growth 2016 2017F Expanding TAM… investing in the future Growth Drivers… Adjacencies, Cloud Skylak ramp Margin Drivers… operating income grows slower than revenue, transition to 14nm, allocations 2017 forecasts are Intel estimates, based upon current ex
Slide 16: Deliver on the Present: CCG
DELIVER ON THE PRESENT… CCG Revenue $32.9B Mi single digits 2016 2017F PC TAM declining… disciplined investments Growth Drivers… segmentation and sel up Margin Drivers… Grow operating income faster than revenue, improved 14nm costs 2017 forecasts are Intel estimates, based upon current expectations
Slide 17: Deliver on the Present: NSG, IOTG, PSG
DELIVER ON THE PRESENT… NSG Revenue IOTG Revenue PSGRevenue oY > 1YoY $2.6B $2.6BMi $1.8Bdigit 2016 2017F 20162017F20162017F Delivering Inte Optan ™ SSDs Design Wins with major players: in 2017 BMW, Levi’s & GE Digital Continued revenue growth in traditional embedded markets Margin Drivers… phased M
Slide 18: Creating the Future: Big Bets
CREATING THE FUTURE… BIG BETS + 00B TAM ~$10B TAM5+50Bs (in 2021F) (2025F L3+ Automated Semi)(Connected Devices) NVM 2021F NVM fastest growing segment Semi content Per car Diversification of devices onto the Positive Operating Margin late 2018 Today ~$100 to $200wireless network Disciplined, staged
Slide 19: Capital Allocation
_ CAPITAL ALLOCATION ip
Slide 20: Our Capital Allocation Priorities
OUR CAPITAL ALLOCATION PRIORITIES… INVEST IN BUSINESS • R&D ~22% of revenue… ’17 flat to ’16 • Capex at 20% of revenue… Memory Driven • Strategic M&A Shareholder Returns Paid ver last 10 years ~40% dividends, ~60% buyback Dividends grow with non-GAAP earnings Share buyback to offset dilution … While
Slide 21: 2017 Capital
2017 CAPITAL CAPITAL TRENDS: 2013 – 2017F $12B 500M (includes ~$2.5B for Memory) 100% $ Memory Other Logi Cape as a % of Revenue* Capacity $0 2013 2014201520162017F0% 2017 forecasts are Intel estimates, based upon current expectations and available information and are subject to change without notic
Slide 22: R&D Spending: Leverage Our Strength to Expand Our TAM
R&D SPENDING… LEVERAGE OUR STRENGTH TO EXPAND OUR TAM 2021F Si TAM ($B) R&D INVESTMENT Shift ~5% ~25%~40%~55%~80% (2015-2017F) Source: 2015-2017F Intel R&D Investment Shift is based on Intel financials and forecast. 2021F Si TAM is based on amalgamation of analyst data and Intel analysis, based upon
Slide 23: Strategic M&A: Strengthening Our Integration
STRATEGIC M&A… STRENGTHENING OUR INTEGRATION Forecasts are Intel estimates, based upon current expectations and available information and are subject to change without notice.
Slide 24: Accelerate Our Capabilities: Strategic M&A
ACCELERATE OUR CAPABILITIES STRATEGIC M&A
Slide 25: Accelerating Our Capability: ICAP Portfolio
ACCELERATING OUR CAPABILITY… ICAP PORTFOLIO Strategically aligned Supports and accelerates disruptive future technologies Enables early technology pathfinding and market sensing Intel Capital Portfolio* Software New Tech Comms Sales & Mktg Data Center Client Other MoorE’ LAW *Fair market value for p
Slide 26: Shareholder Returns: Dividend Increase Planned Starting in Q2 '17
SHAREHOLDER RETURNS… DIVIDEND INCREASE PLANNED STARTING IN Q2 ‘17 Dividend/Share 2017 $1.04 $0.05* 2005 2006 2007200820092010201120122013201420152016 *Pending final approval by Intel’s Board of Directors.
Slide 27: Over the Next Years
OVER THE NEXT 3 YEARS… Revenue Growth Operating efficiency earnings CCG declines Gross Margins decline Net cash low single digits modestly… remain in top growt and/or half of historical range opportunistic buybacks Growth’ businesses doubl digit growth Direct spending as % ICAP portfolio returns o r
Slide 28: In Closing
IN CLOSING Transformation continues… from PC centric to powering the cloud and billions of smart, connected devices A data oriented company… expanding our TAM We are making big bets… but will improve our efficiency Capital returns remain a high priority
Slide 29: (ue usToRNEETNG
(ue usToRNEETNG
Slide 30: Investor Meeting February 2017
Investor MeetingFEBRUARY 2017
Slide 31: Appendix
APPENDIX
Slide 32: Appendix: 2016 Non-GAAP Reconciliation
APPENDIX: 2016 NON-GAAP RECONCILIATION Twelve Months Ended Twelve Months Ended ($ in Millions, except per share amounts) Dec 31, 2016 Dec 31, 2016 GAAP NET REVENUE $59,387 GAAP NET INCOME$10,316 Deferred revenue write-down 99 Deferred revenue write-down, net of cost of sales64 NON-GAAP NET REVENUE $
Slide 33: Appendix: 2017 Non-GAAP Reconciliation
APPENDIX: 2017 NON-GAAP RECONCILIATION 2017 Outlook GAAP GROSS MARGIN PERCENTAGE 62% Adjustment for amortization of acquisition-related intangibles 1% NON-GAAP GROSS MARGIN PERCENTAGE 63% GAAP EARNINGS PER SHARE $2.53 Adjustment for restructuring and other charges $0.08 Adjustment for amortization o