Dialog Semiconductor Q4 and FY 2011 Financial Results 22 February 2012

Transcription

1 Dialog Semiconductor Q4 and FY 2011 Financial Results 22 February 2012

2 Forward Looking Statements 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

3 Agenda Dialog Executive Overview Q4 and FY 2011 Financials Strategic Direction Outlook and Summary 3

4 Executive Overview Our Impressive Growth Continues Fabless provider of mixed signal Integrated Circuits (ICs). Listed on Frankfurt Stock Exchange (FWB:DLG) High Integrated Power Management Low Energy Short Range Wireless Successful today with leading OEMs in high volume, high growth portable devices Smartphones & Tablet PCs Portable Media devices including digital cordless Record Q revenue of $172 million Record FY 2011 revenue of $527 million 78% over FY 2010 (excl SiTel ~41%) Acceleration in EPS: with $1.11 underlying (*) diluted EPS for FY 2011 (35% increase over FY 2010) Addition in Q4 of Samsung as latest Smartphone customer with first platform design win 4 Dialog Revenue ($ million) (*) Definition of underlying provided on slide 9

5 2011 Summary What Have we Achieved Breaking the $500 million barrier in Revenue Our first significant acquisition on Feb 10 of SiTel Semiconductor Expansion of technology to now include short range wireless Acquisition quickly accretive after 1 complete quarter Successful integration before year end achieved One Company 2 new product lines (VOIP, SmartPulse ) launched post acquisition Continued global expansion, particularly in Asia Approximately 650 employees at year end Continued diversification of customer base Gigaset, Panasonic, Microsoft, Plantronics, Samsung added Continued innovation and expansion of PMIC ASSPs 3 rd Generation of system PMIC, supporting multicore ARM Cortex processor configurations Freescale added as latest member of Application Processor Partner Initiative Stacked audio and PMIC in single chip now in production 5

6 Outpacing the Industry in 2011 Winning in Integrated Power Management + 78% Higher volume and higher value PMICs 2011 Dialog Growth 2010 < 1% 2011 Semiconductor Industry % 2011 < 10 mm2 Typical PMIC 2007 > 40 mm2 Typical PMIC 2012 Mixed Signal Peers(**) (**) Peers: Analog Devices, Austriamicrosystems, Cirrus Logic, CSR, IDT, Intersil, Linear Technology, Maxim, MaxLinear, Melexis, Micrel, Microsemi, Monolithic, O2Micro, Pericom, Power Integrations, Semtech, Silicon Laboratories, Standard Microsystems, Supertex, Texas Instruments, Volterra and Wolfson. Source: Barclays Capital February

7 Q Key Financial Metrics Q Revenue $172.1 million Revenue record quarter as combined business % over Q % over prior quarter % over Q (excl SiTel) Q Gross Margin Gross Margin of 36.5% of Revenue Q % Q % Underlying (*) Gross Margin of 37.1% Cash & Cash Equivalents Q Earnings per Share ($) $113.6 million at 31 December 2011 $30.2m of cash from operations in Q4 $21.1m of free cash-flow ( ) during Q4 Underlying(*) EPS (diluted) 35 cents compared to 26 cents in Q IFRS basic and diluted EPS of 30 and 28 cents compared to 21 and 20 cents in Q ( ) Net Income + Depreciation & Amortization - Change in Net Working Capital - Capital Expenditure 7

8 Financial Year 2011 Key Financial Metrics FY 2011 Revenue Revenues of $527.3 million +77.8% over % over 2010 (excluding SiTel) FY 2011 Gross Margin Gross Margin of 39.5% of revenue 2010: 46.3% Underlying (*) Gross Margin of 40.1% of revenue 2010: 46.4% Cash & Cash Equivalents FY 2011 Earnings per Share ($) $113.6 million at 31 December 2011 $72.4m of cash from operations in 2011 $37.8m of free cash-flow ( ) during 2011 Debt free Underlying(*) EPS (diluted) of $1.11 compared to 82 cents in 2010 IFRS basic and diluted EPS of 89 and 84 cents compared to 70 and 66 cents in

9 Q4 and FY 2011 Financials Note: (*) Underlying results are based on IFRS, adjusted to exclude share-based compensation charges (Q4 2011: $1.6 million; 2011: $6.2 million), excluding one-time costs associated with the acquisition of SiTel Semiconductor ( SiTel ) (Q4 2011: $0.1 million; 2011: $3.3 million), excluding amortisation of intangibles associated with the acquisition of SiTel (Q4 2011: $2.3 million; 2011: $6.4 million) and excluding amortisation expenses in relation to previously capitalised R&D expenses for close to end of life products from SiTel (Q4 2011: $0.6 million; 2011: 2.2 million). The term underlying is not defined in IFRS and therefore may not be comparable with similarly titled measures 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 (Q4 2011: $ 2.7 million; 2011: $8.8 million), and amortisation for intangible assets (Q4 2011: $ 7.4 million; 2011: $16.0 million). 9

10 Revenue Growth Continues 5 th Year of YoY quarterly growth 4Q'09 1Q'10 2Q'10 3Q'10 4Q'10 1Q'11 2Q'11 3Q'11 4Q'11 $172.1 million revenue in Q % Growth over Q (63% excl SiTel) 22% QoQ Revenue growth 17 th successive quarter of profitability $527.3 million revenue in % growth over 2010 (41% excl SiTel) $180 $160 $140 $120 $100 $80 $60 $40 $20 $ YoY Revenue ($ million) $200 $180 $160 $140 $120 $100 $80 $60 $40 $20 $ Q1 Q2 Q3 Q Former SiTel Dialog 10

11 Excellence in Execution with 61% increase in Units shipped Increasing volume of devices shipped through market share gain Increase (including SiTel) of volume shipped from 212 million in 2010 to 342 million in 2011 (61%) ASP of core PMIC business of $1.70 in 2011 (20% increase over 2010) Increasing value to Customer Increasing integrated power management functionality in PMIC s Transition to BCD supports higher voltage PMICs 11

12 Gross Margin FY 2011 Gross Margin of 39.5% Decrease of 6.8% points from 46.3% achieved in FY 2010 Q Gross Margin of 36.5% Decrease of 4.4% points from 40.9% achieved in Q Annual Gross Margin % % Underlying(*): 40.1%

13 Q Gross Margin The Components and Normalisation Actual versus Normalised Gross Margin Normalised Gross Margin Will go away post Q To stay until Feb-2014 One offs Thailand/scrap etc 13

14 Gross Margin Explaining the trend now and going forward in 2012 Gross Margin continued to be negatively affected in Q by Constrained supply chain / increased material cost Q4 product mix New products still to reach optimised yield Acquisition related amortisation (a 0.37% pts effect on total Dialog gross margin %) Looking ahead Acquisition related amortisation finished in Q Maintain focus on higher margin ASSPs Expected further improvement in yield on new custom products With actions already underway, visibility on modest improvement in supply chain from Q

15 Increased Operating Profit (EBIT) in Q4 and FY 2011 Q Q4 Underlying Operating Profit or EBIT(*) of $26.1 million (15.2% of revenue) compares with $22.8 million (16.2% of revenue) in Q compares with $17.3 million (19.7% of revenue) in Q Q IFRS EBIT of $21.5 million (12.5% of revenue) Q4 Underlying EBITDA(***) of $33.3 million (19.4% of revenue) FY 2011 FY 2011 Underlying Operating Profit or EBIT(*) of $79.8 million (15.1% of revenue) compares with $63.8 million (21.5% of Revenue) in FY 2010 FY 2011 IFRS Operating profit or EBIT of $61.6 million (11.7% of revenue) FY 2011 Underlying EBITDA(***) of $96.0 million (18.2% of revenue) 15

16 Tax The tax charge in Q continued to benefit from the utilisation of broughtforward tax losses In total a net tax charge of $2.4 million was recorded in Q Overall effective tax rate for Q was 11.1%, compared to 8.9% in Q Overall effective tax rate for FY 2011 was 9.1%, compared to 4.0% in FY 2010 Available accumulated trading losses carried forward in Dialog GmbH that can be offset against future profits are expected to be fully utilised by Q Full year 2012 effective tax rate could approach 27.0% unless optimised further 16

17 Increased Profitability in Q Earnings per Share Cents Underlying(*) Q Net Income of $23.6 million an increase of $6.3 million over Q IFRS Net Income in Q4 of $19.1 million an increase of $6.1 million over Q Q Earnings per Share (Diluted) Cents Cents 26 Cents Q Q Cents Diluted EPS Underlying (*) Diluted EPS 17

18 Increasing Annual and Quarterly EPS (IFRS Basic) Q4-Year over Year EPS (Basic) Development ( ) Annual EPS (Basic) Development $ cents First DTA recognition effect $ cents

19 Cash Position Generating cash from operations $113.6 million cash & cash equivalents balance at Q4 quarter end (**) (**) after repayment in Sept 11 of $10.0 million of short term debt from a $35.0 million revolving credit facility $72.4 million of cash generated from operations during FY 2011 Increase of $19.2 million from prior quarter $30.5 million of cash generated from operations in Q $18.8 million of free cash-flow generated in Q Cash & Cash Equivalents ($m) $180 $160 $140 $120 $100 $80 $60 $40 $20 $0 19 SiTel Acquisition Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11

20 2011: Increasing Success Customer and ASSP Diversification Strategy Succeeding Our increasing customer base begin Q4 2010: 63 global accounts begin Q4 2011: 128 global accounts Driven 50% organically primarily through our processor partner program and 50% from the former SiTel business New ASSPs launched in 2010 created $24 million of revenue in 2011, with > $60 million contribution expected in

21 Agenda Strategic Direction Outlook and Summary 21 Confidential

22 Winning: The Dialog Equation Low power portable device technologies + + Continuous innovation In high growth markets with trend setting customers = Maintaining our high growth of recent years 1 Power Management 2 Ultra Low Power Audio = Low Power Mobile Displays PMIC Integration 4 Short Range Wireless Advanced Packaging 22

23 Huge Opportunity for our Technology Converting discrete power management to PMICs ALL ANALOG ICs (Discrete & Integrated) R&D 20% Power Management R&D 20% Power Management Portable Devices R&D 20% Integrated Power Management -Portable Portable Devices SG&A 10% $42.5bn SG&A 10% $31.8bn SG&A 10% $14.5bn $6.6bn Data Source: Venture Q September 2011, IHS isuppli Research, Dialog. Dialog value proposition > 30% power saving 2. > 30% cost saving 3. Typically 40% board saving 4. Ability to integrate digital control 5. Accelerate time to market for our customers

24 Strategic Direction Track record our strategy is working Profitability high low 1 2 Extending our Portfolio of Products for Portable Platforms Adding ultra-low power audio, unique display products and new power management functionality New short range wireless products from SiTel acquisition Selected technology / IP acquisitions to extend product portfolio 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 More products in higher growth segments 3 Continuous Innovation Innovation on low power differentiating power-saving technologies including Green VOIP, Audio, short range wireless together with advanced packaging development low Growth high 24

25 Outlook and Summary 25

26 Outlook for Q and Financial Year 2012 For Q1 2012, we expect a strong start to the year with revenue for the quarter to be in the range of $160 to $166 million, delivering significant year on year growth and less of a seasonal decline over Q4 than normal. We expect to maintain our strong revenue momentum throughout financial year Although gross margins remain under pressure, we believe that gross margin in Q will stabilise at a similar level to that seen in Q and then we expect gradual improvement in the gross margin going forward in

27 Summary The Investment Opportunity 1 Dialog is in the right spot at the right time, power saving high integrated mixed Signal for personal portable connected devices addressing high growth markets. 2 We continue to grow our engagement with the leaders and trend setting customers. 3 Dialog demonstrating continued execution and growing revenue faster than costs increasing EPS and cash generation. 27

28 - Powering Ahead - 28