Q4 and Full Year 2012 Results

Q4 and Full Year 2012 Results
20 February 2013
Forward looking statement
This presentation contains “forward-looking statements” that reflect management’s
current views with respect to future events. The words “anticipate,” “believe,” “estimate,
“expect,” “intend,” “may,” “plan,” “project” and “should” and similar expressions identify
forward-looking statements. Such statements are subject to risks and uncertainties,
including, but not limited to: an economic downturn in the semiconductor and
telecommunications markets; changes in currency exchange rates and interest rates,
the timing of customer orders and manufacturing lead times, insufficient, excess or
obsolete inventory, the impact of competing products and their pricing, political risks in
the countries in which we operate or sale and supply constraints. If any of these or
other risks and uncertainties occur (some of which are described under the heading
“Risks and their management” in Dialog Semiconductor’s most recent Annual Report)
or if the assumptions underlying any of these statements prove incorrect, then actual
results may be materially different from those expressed or implied by such statements.
We do not intend or assume any obligation to update any forward-looking statement,
which speaks only as of the date on which it is made, however, any subsequent
statement will supercede any previous statement.
2
Dialog Semiconductor Q4 and FY 2012 results, 20 February 2013
Agenda
Q4 and Full Year 2012 Executive Overview
Outlook
Strategic Review
Q4 and Full Year 2012 Financial Overview
Appendix
Dialog at a glance
Q4 2012 - A solid end of year
4
$268m
Revenue
38.5%
Gross margin
21.3%
OPEX %
(Q4 2011 Actual: $172m)
(Q4 2011 Actual: 36.5%)
(Q4 2011 Actual: 24.0%)
+56%
+200bps
-270bps
16.6%
EBIT margin
0.43p
Diluted EPS
$53.5m
Operating cash flow
(Q4 2011 Actual: 12.5%)
(Q4 2011 Actual: 0.29p)
(Q4 2011 Actual: $27.3m)
+410bps
+48%
+96%
Dialog Semiconductor Q4 and FY 2012 results, 20 February 2013
Our main achievements in 2012
Further diversification of products and customers
■
Diversification acceleration
•
New products launched
• New application partners added
• Continued ramp of new platform design wins of power management and audio at
Samsung
■
Increased content of our products and achieved an overall company ASP
close to $2, an increase of 27% over 2011 (2011:$1.54)
■
Continuous innovation remained at the core of our business
•
R&D investment
• Licensing breakthrough technology
■
New segments for Dialog short range wireless
•
Entered wireless audio segment with leading headset and microphone customers
• Entered home automation market with SmartPulseTM
5
Dialog Semiconductor Q4 and FY 2012 results, 20 February 2013
The three year view
Delivering revenue and profit growth
900
800
700
Total revenue, ASP and
number of products sold
($ million and $)
ASP
2.2
774
61% Revenue CAGR 2010-2012
2.10
2.1
1.96
2.0
527
■
Continued to introduce new successful
products and to work with Tier 1 customers
■
R&D investment is keeping us ahead of
our competition
■
Solid OPEX management – 500bps
reduction from 2010
■
EBIT has doubled from 2010 level
■
Full year fully diluted EPS CAGR 20102012 of 19%
1.8
500
1.7
1.69
297
1.6
1.54
300
200
Revenue growth in the last three years
was well above industry average
1.9
600
400
■
1.38
100
1.38
87
57
1.5
100
0
1.4
1.3
1.2
FY 2010
FY 2011
FY 2012
Total revenue(LHS)
Number of products sold(LHS)
Total ASP(RHS)
ASP exc. Connectivity(RHS)
EBIT and Diluted EPS
($ million and $)
120
0.93
42% EBIT CAGR 2010-2012
0.86
1
0.9
90
0.8
60
0.66
91.0
61.6
30
0.6
45.3
0
0.5
FY 2010
6
0.7
FY 2011
FY 2012
Dialog Semiconductor Q4 and FY 2012 results, 20 February 2013
Agenda
Outlook
Strategic Review
Q4 and Full Year 2012 Financial Overview
Appendix
Q1 2013 Outlook
■ In Q1 2013, Dialog expects to deliver year on year growth with revenue for
the quarter to be in the range of $177 to $187 million
■ Q1 2013 revenue guidance reflects a seasonally low quarter partially
driven by a stronger than anticipated end of year late surge in demand for
smartphone and tablet products
■ Gross margin in Q1 2013 will be marginally lower than in Q4 2012,
reflecting the seasonally weaker first quarter. However, gross margin is
expected to improve incrementally through 2013 and grow year on year
■ Given the visibility we have, we remain confident about the company’s
revenue growth for the full year, anticipating a much stronger second half
driven by ramp of high volume new products
8
Dialog Semiconductor Q4 and FY 2012 results, 20 February 2013
Agenda
Strategic Review
Q4 and Full Year 2012 Financial Overview
Appendix
Well positioned to benefit from key market trends
■
Consumer markets are driving semiconductor
technology
•
Need fast time-to-market and products that can be
rapidly configured
• Low energy consumption continues to be critical for
success
■
Mid to low range smartphones driving substantial
growth in China and emerging markets
■
Other platforms gaining momentum in the market –
Android, Microsoft
■
Rapid adoption of the tablet across all markets
■
New market opportunity in the Ultrabook segment
10
Dialog Semiconductor Q4 and FY 2012 results, 20 February 2013
2012 to 2013
≈ +4%
Gartner 4Q12 semiconductor
forecast for 2013
Positioned for strong growth
Focus in high growth mobile applications
Million Units
1,500
917
717
1,000
1,089
1,255
500
-
2012
2013
2014
2015
216
263
21% CAGR 2012-2015
Impact of multi-core and LTE platforms
Emergence of the low end smartphone
Source: IDC 2012
300
Million Units
170
200
30% CAGR 2012-2015
121
Rapid adoption of the tablet
100
0
2012
2013
2014
2015
Source: Gartner Q3 2012 Semiconductor forecast
150
120
Million Units
100
50
The Ultrabook opportunity
40% of notebook market by 2015
70
15
30
0
2012
2013
2014
2015
Source: DRAMexchange,Sep 2011
40
30
Million Units
DECT ULE in home automation
17
20
10
31
5
10
0
2012
2013
2014
Source: GBI Research 2012
11
2015
Consumer behaviour and demographics
pushing the use of short range low
power wireless (home automation,
medical, fitness, PAN)
Dialog Semiconductor Q4 and FY 2012 results, 20 February 2013
Strategic Direction 4 Pillars
Extending our portfolio of products for portable
platforms
2
3
Broader and deeper at our customer base
■
Developing companion PMICs with leading and emerging
application processor vendors to address broader
customer base through their sales eco system
■
Diversifying across more platforms for custom PMIC at
larger accounts
Continuous innovation
■
4
12
Adding ultra-low power audio, new power management
functionality, short range wireless connectivity
Profitability
■
Innovation on low power differentiating power-saving
technologies, fuel gaging, fast charging together with
advanced packaging development
Selected acquisitions and strategic co-operations for
access to innovative differentiating technologies
Dialog Semiconductor Q4 and FY 2012 results, 20 February 2013
More products in
higher growth
segments
low
1
high
Diversifying growth drivers and pursuing further innovation
low
high
Growth
Continuous innovation
Maintaining our leading position in the market
Technological innovation
Business benefits
■
Expanded product functionality and
programmability
■ Allowing faster go-to-market and poweroptimised products
First member of our digital power
management family incorporating ARM
M0 core sampled
■
Leading with TSMC the transition of
PMIC technology from 0.25µ to 0.13µ
BCD
Potential for capacity increase in
preparation for increased future demand
■ Cost efficiency: path to 300mm production
and higher yields
■ Performance improvements: increased
PMIC integration and programmability
■
13
Delivering products that bring further
space and cost reduction for our clients
New multi-phase buck architecture
introduced - key PMIC building block supporting the latest quad and octal
ARM and Intel Atom multicore
processors
Dialog Semiconductor Q4 and FY 2012 results, 20 February 2013
Agenda
Q4 and Full Year 2012 Financial Overview
Appendix
Revenue growth trajectory continues
6th consecutive year of YoY quarterly growth
■ $268 million revenue in Q4 2012
•
•
900
800
700
600
500
400
300
200
100
0
56% growth over Q3 2011
49% sequential quarter growth
■ $774 million full year revenue
•
47% growth over 2011
Full year revenue
($ million)
57% Revenue CAGR 2007-2012
162
87
2007
320
774
Quarterly revenue
($ million)
2008
296
218
2009
2010
268
240
2012
2007
2008
200
180
166
172
160
141
160
120
14
32 36
34
45
44
59
35
25
14
78 88
80
69
61
52
Q2
Dialog Semiconductor Q4 and FY 2012 results, 20 February 2013
Q3
2011
2012
0
Q1
2009
2010
116
98
80
15
2011
50% Q4 Revenue CAGR 2007-2012
280
40
527
Q4
Committed to further year on year gross margin improvement
4th consecutive quarterly increase
■ Q4 2012 IFRS Gross margin of 38.5%
•
Increase of 50bps over prior quarter
■ FY 2012 IFRS Gross margin of 37.8% (FY 2011: 39.5%)
■ Gross margin is expected to improve incrementally through 2013 and grow year on year
■ Q1 2013 gross margin will be marginally lower than Q4 2012, reflecting the seasonally
weaker first quarter
45
40
IFRS Gross Margin %
40.8
%
38.0
35
36.5
36.9
37.5
Q4 2011
Q1 2012
Q2 2012
38.5
30
Q3 2011
16
Dialog Semiconductor Q4 and FY 2012 results, 20 February 2013
Q3 2012
Q4 2012
Further OPEX leverage in 2012
Investing in R&D for future growth
Full year
%
($ million and as a % of revenue)
■
OPEX in line with our business model
and our objectives for 2012
• Full Year 2012 R&D at 16.5%, 60bps below
2011
• Best in class SG&A at 9.3%, 140bps below
2011
210
20
19.0
17.1
180
16.5
72
150
11.7
120
10.7
57
90
10
9.3
35
60
15
128
5
90
30
57
0
0
FY 2010
■
Q4 2012 OPEX % below Q4 2011 level
FY 2011
FY 2012
R&D
SG&A
R&D % of revenue(RHS)
SG&A % of revenue(RHS)
Q3 YTD and Q4
($ million and as a % of revenue)
180
20
18.4
18.3
■
R&D leverage achieved for the full year
and Q4 2012
150
SG&A level amongst best in class *
13.1
50
11.4
90
■
9.9
41
10
9.5
8.2
60
93
16
25
65
30
0
Q3 YTD 2011
(*) Peers: Cirrus Logic, Silicon Lab, ams, CSR, Wolfson, TI, STMicro, Maxim, Linear Tech, Broadcom,
Semtech, Skyworks.
17
15
14.5
120
Dialog Semiconductor Q4 and FY 2012 results, 20 February 2013
Q3 YTD 2012
Q4 2011
22
5
35
0
Q4 2012
R&D
SG&A
R&D % of revenue(RHS)
SG&A % of revenue(RHS)
Operating Profit (EBIT)
107% Q4 2012 EBIT growth over Q4 2011
Quarterly IFRS EBIT
■ Q4 IFRS EBIT of $44.5 million or 16.6% of
revenue
•
•
•
Record quarter for Dialog, up 107% on Q4 2011
690 bps increase from Q3 2012
410 bps increase from Q4 2011
50 ($ million)
40
+107%
+154%
30
44.5
20
10
44.5
21.5
13.4
■ Q4 Underlying EBIT(*) of $47.2 million or
17.6% of revenue
•
81% increase over Q4 2011 (Q4 2011:$26.1
million or 15.2% of revenue)
■ Full year IFRS EBIT of $91.0 million or 11.8%
of revenue
•
•
18
Record year for Dialog
48% increase over FY 2011
Dialog Semiconductor Q4 and FY 2012 results, 20 February 2013
17.5
0
Q4'11
Q4'12
Q2'12
Q3'12
Full year EBIT and EBIT %
100 ($ million)
90
80
70
11.7%
60
50
40
61.6
30
20
10
0
FY 2011
11.8%
+48%
91.0
FY 2012
Q4'12
Net Income
48% Q4 2012 IFRS fully diluted EPS growth over Q4 2011
■ Q4 2012 IFRS Net Income of $30.2 million
•
•
53% increase compared to Q4 2011
Net
income
Financial expenses
mainly
related to the Convertible Bond of $1.3 million
48% Diluted
growth
in Q4over 2011
■ FY 2012 IFRS Net Income
of $62.5 EPS
million,
9% increase
•
100
90
80
70
60
50
40
30
20
10
0
Higher effective tax rate in 2012 at 27.4% compared to 6.6% in 2011
+8%
IFRS Earnings Per Share (Diluted)
($ cents)
Q4 IFRS
$ cents
Diluted EPS
2011
%Var.
43
29
+48%
Estimated 2012
tax rate impact
+48%
86
6 cents
43
23
29
Rebased
Q4'11 *
Q4'11
93
67
Diluted EPS
cents rebased
Full Year IFRS
$ cents
Diluted EPS
cents
Q4'12 **
Rebased
FY'11 *
FY'11
(*) Rebased 2011 comparatives considering estimated impact of applying 2012 tax rate to 2011 EPS
(**) Including 4 cents of dilutive effect from convertible bond
19
2012
Dialog Semiconductor Q4 and FY 2012 results, 20 February 2013
FY'12
(6)
43
23
+87%
2012
2011
%Var.
93
86
+8%
Estimated 2012
tax rate impact
Diluted EPS
cents rebased
(19)
93
67
+39%
Cash Position
Strong balance sheet and free cash flow generation
350
300
■ $312.4 million cash & cash
equivalents balance at the end of
December 2012
Cash and cash equivalents balance
($ million)
250
Convertible
Bond
200
304
150
312
279
100
50
94
114
Q3 2011
Q4 2011
136
0
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Cash Flow Bridge from Q3’12
($ million)
$350
■ $53.5 million cash inflow from
operations in Q4 2012
■ $29 million free cash flow
generated in Q4 2012
- 0.9
+53.9
-1.6
+0.4
-10.6
-10.0
+2.1
$300
312.4
279.1
$250
20
Dialog Semiconductor Q4 and FY 2012 results, 20 February 2013
Inventory Analysis
DIO down on Q3 2011
■ 5% inventory value increase in line with our expectations
■ DIO down on Q3 2012 by 19 days
■ Q1 2013 inventory value is expected to come down in line with seasonality
Inventory ($ million) and Days Inventory Outstanding (# days)
$180
$160
100
78
79
83
72
$140
55
145
62
$120
104
34%
81
152
DIO (1)
100
50
52%
Finished goods
$100
$80
$60
59
62
71
81
Work in process
43%
0
51%
36%
$40
$20
DIO
34%
-50
21%
15%
14%
Q2'12
Q3'12
Q4'12
$0
Q1'11
21
Q2'11
Q3'11
Raw Materials
63
Q4'11
Q1'12
Dialog Semiconductor Q4 and FY 2012 results, 20 February 2013
(1)
Calculated using average
inventory
balance over the period
-100
Highly integrated customised ICs for portable applications
Strong technology focus
In high growth markets
Integrated mixed signal and analogue
power saving IC’s
Addressing high growth portable
applications
Applications processor
agnostic
Highest level of complexity and
integration in power management ICs
for portable applications
Across the ecosystem
Customised for our clients
in collaboration with
our ecosystem
Intensive R&D collaboration with
Apps Partners, foundry and packaging
companies
For Tier 1 clients
Customised solutions underpin
consumer experience and product
differentiation
Fast design process aligned to
client’s business cycles
22
Dialog Semiconductor Q4 and FY 2012 results, 20 February 2013
The power to be...
Notes to the financials
Underlying definition
1. (*) Underlying results in Q4 2012 are based on IFRS, adjusted to exclude share-based
compensation charges and related charges for National Insurance of $1.6 million, excluding
$0.9 million of amortisation of intangibles associated with the acquisition of SiTel
Semiconductor B.V. (now Dialog B.V.) and excluding $1.5 million noncash-effective interest
and financial expense in connection with the convertible bond and discounted purchase
prices.
2. The term “underlying” is not defined in IFRS and therefore may not be comparable with
similarly titled measure reported by other companies. Underlying measures are not intended
as a substitute for, or a superior measure to, IFRS measures.
(**) EBITDA is defined as operating profit excluding depreciation for property, plant and
equipment and amortisation for intangible assets (Q4 2012: $8.8 million)
3. Free Cash Flow is defined as net income plus amortisation and depreciation, plus/minus
change in working capital ,minus capital expenditure and plus/minus interest expense/income.
24
Dialog Semiconductor Q4 and FY 2012 results, 20 February 2013
Balance sheet as of 31 December
25
Dialog Semiconductor Q4 and FY 2012 results, 20 February 2013
Cash flow statement as of 31 December
26
Dialog Semiconductor Q4 and FY 2012 results, 20 February 2013
Full Year income statement
27
Dialog Semiconductor Q4 and FY 2012 results, 20 February 2013
Q4 income statement
28
Dialog Semiconductor Q4 and FY 2012 results, 20 February 2013
Investor Information
Calendar, events and Analyst Coverage
Analyst coverage
Financial Calendar
Baader Bank
Bankhaus Lampe
Barclays Capital
Berenberg Bank
CBSR AG
Cheuvreux
Commerzbank
Credit Suisse
Deutsche Bank
DZ Bank
Exane BNP
H&A
HSBC
Jefferies
JP Morgan
Main First Bank
Morgan Stanley
Natixis
AGM
2 May 2013
Q1 2013 Results
8 May 2013
29
Guenther Hollfelder
Karsten Iltgen
Andrew Gardiner
Ali Farid Khwaja
Veysel Taze
Bernd Laux
Thomas Becker
Justis McEvilly
Uwe Schupp
Harald Schnitzer
Jerome Ramel
Tim Wunderlich
Christian Rath
Lee Simpson
Chetan Udeshi
Jürgen Wagner
Francois Meunier
Maxime Mallet
Key Events
Contacts
Financial PR/IR Advisers:
FTI Consulting – London
Matt Dixon
T: +44 (0)20 7831 3113
[email protected]
Helen McInnes
FTI Consulting – Frankfurt
Head of Global Corporate Communications Thomas M. Krammer
M:+44 (0)7554 419 180
T: +49 (0)69 9203 7183
[email protected]
[email protected]
Jose Cano
Head of Investor Relations
T: +44 (0)1793 756 961
[email protected]
Dialog Semiconductor Q4 and FY 2012 results, 20 February 2013
The power to be...