Q4 and Full Year 2012 Results
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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...