Third Quarter FY 2013 Quarterly Update. Infineon Technologies AG Investor Relations

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1 Third Quarter FY 213 Quarterly Update Infineon Technologies AG Investor Relations

2 Table of Contents Infineon at a Glance Market Update Results and Outlook Disclaimer: This presentation contains forward-looking statements about the business, financial condition and earnings performance of the Infineon Group. These statements are based on assumptions and projections resting upon currently available information and present estimates. They are subject to a multitude of uncertainties and risks. Actual business development may therefore differ materially from what has been expected. Beyond disclosure requirements stipulated by law, Infineon does not undertake any obligation to update forward-looking statements.

3 Revenue Split by Division Q3 FY 213 revenue: EUR 1,22m ATV 459m CCS 119m PMM 266m IPC 173m OOS+C&E * 5m * Other Operating Segments; Corporate and Eliminations. Page 3

4 Revenue above EUR 1bn; Segment Result Margin Back above 1% [EUR m] Q3 FY12 Q2 FY13 Q3 FY13 Revenue ,22 Segment Result SR Margin 12.7% 7.4% 11.4% [EUR m] Net Income * Investment Q2 FY13 Revenue 117 Q3 FY13 Segment Result FCF from cont. operations Gross Cash 2,15 2,16 2,137 Net Cash 1,97 1,75 1,832 * Net Income includes income/loss from discont. operations, net of income taxes in Q3 FY12 EUR -8m, in Q2 FY13 EUR -3m and in Q3 FY13-5m. Page 4

5 Tight Customer Relationships are Based on System Know-how and App Understanding ATV IPC PMM CCS Distributors Page 5

6 Infineon Holds Top Positions in All Target Markets Automotive Power Chip Card #2 #1 #1 Renesas 14% Infineon 12% Infineon 25% Infineon 9% Mitsubishi 8% NXP 24% STMicro 8% Toshiba 7% Samsung 21% Freescale 7% STMicro 6% STMicro 18% NXP 6% Int. Rectifier 5% SHHIC 1% Calendar year 212. Source: Strategy Analytics, April 213. Calendar year 211. Source: IMS Research (an IHS company), July 212. Calendar year 211. Source: IMS Research (an IHS company), August 212. Page 6

7 Table of Contents Infineon at a Glance Market Update Results and Outlook

8 Despite Europe, Global Car Production Up in 213; Long-Term Prospects Still Healthy ,4 6,6 9,1 7,9 1,8 11,5 Global car production (cars 6t) [units m] CAGR (12-16) = 4.2% +2.% ,7 6, 6,1 8,2 9,4 8,8 13,5 12,8 12,8 17,1 17,6 18,6 2,4 22, ,6 7,9 8,2 7,3 7,7 7,7 7,5 8,1 15,5 16,1 16,9 14,7 24,8 26,6 28,1 29,2 11,9 13,1 15,4 16,2 16,5 17,2 17,8 17,8 17,9 19, 2,2 19,3 18,8 19,5 2,3 21,1 21,9 22, Europe North America China APAC ex China Japan RoW. Source: IHS, July Page 8

9 Semiconductor Value-Per-Car Continues to Increase Semiconductor value per car by region Semiconductor value per car [USD] Brazil CAGR +3.3% [USD] World CAGR +2.5% China S. Korea N. America Europe Japan CAGR +5.2% CAGR +2.5% CAGR +2.2% CAGR +3.% CAGR +2.2% Semiconductor market by segment [USD bn] Powertrain Safety* Body** Infotainment CAGR +7.2% CAGR +8.2% CAGR +5.9% CAGR +7.% Source: Strategy Analytics (SA): Automotive Semiconductor Demand Forecast , July 213; including semiconductor sensors. * Safety = Safety + Chassis according to SA definition. ** Body = Body + Security according to SA definition. Page 9

10 Growth in Motor Controls Driven by Energy Saving, Government Initiatives and Legislation Industrial motor controls Market description [USD bn] 4 CAGR (12-16) = 8.2% Others Food & beverage, medical & scientific, semiconductor machinery, printing sector. Comparatively low IGBT content. 3 2 Servo Drives High precision motors for general motion control and CNC products. 6/12 V IGBT devices. 1 Medium Voltage Drives Heavy industries (oil & gas, metals, power generation). High-power drives (up to 1 MW). 1.7/3.3/6.5 kv IGBT modules AC Drives Med. Voltage Drives Servo Drives others AC Drives Fans, pumps, material handling, packaging. Mainly 6/12 V IGBT devices used. Source: IHS (IMS Research): The World Market for Industrial Automation Equipment July 213 Update, July 213. Page 1

11 Even With EMEA Shrinking in 213 Worldwide Demand is Growing PV inverter installations by type PV inverter installations by region [GW] 6 CAGR (12-16) = 15.% [GW] 6 CAGR (12-16) = 15.% CAGR (12-16) = 16.3% Utility-Scale Medium Commerce Residential Large Commerce Small Commerce EMEA Americas China Japan RoW Source: IHS (IMS Research): PV Inverter World Market Report 213 Report, July 213. Page 11

12 Growth in Servers Compensates Slowdown in PCs and Notebooks PCs Notebooks PCs and Notebooks Servers [units m] 2 CAGR (12-16) = -2.7% [units k] 12 CAGR (12-16) = 4.6% CAGR (12-16) = -7.7% Source: Gartner: Desktop-Based PCs, Notebooks, Ultramobiles and Tablets, Worldwide: , 2Q13 Update, July 213. Source: Gartner: Forecast: Servers, All Countries, , 2Q13 Update, July 213. Page 12

13 Our Business With RF Components, Si-Mics and Power Semis Fueled by Mobile Devices Smartphones Tablets * [units m] 14 CAGR (12-16) = 16.4% [units m] 5 CAGR (12-16) = 36.2% Source: Strategy Analytics: Global Smartphone Sales Forecast for 88 Countries: 27 to 217, July 213. The chart was created by Infineon based on Gartner research. Source: Gartner: Forecast: Desk-based PCs, Notebooks, Ultramobiles, and Tablets, Worldwide, , 2Q13 Update, July 213. * Including Utility Tablets, Basic Tablets and Premium Tablets. Page 13

14 Double-digit Growth in Payment and Government ID; SIM Cards Flat Smart card ICs Government ID & healthcare [USD bn] [USD m] 4 CAGR (12-16) = 1.1% 1 CAGR (12-16) = 14.5% SIM Cards e-gov. & Healthcare Others Payment & Banking Condit. Access, Pay TV Source: IMS Research (an IHS company): Smart Card and IC Database World 1Q13 Update, June 213. Microcontroller only e-national ID e-healthcare Card e-passport e-other Source: IMS Research (an IHS company): Electronic Government & Healthcare ID Cards Market World 212, December 212. Microcontroller and memory. Page 14

15 Table of Contents Infineon at a Glance Market Update Results and Outlook

16 Return to Year-on-Year-Growth and > 1% Segment Result Margin Revenue and Segment Result [EUR m] +3% FY 212 revenue split by product category % 12% 5% 7% 11% Q3 FY12 Q Q1 FY13 Q2 117 Q3 Power econtrol others Revenue Segment Result Segment Result Margin Page 16

17 Record Sales in ATV; IPC Returned to More Normal Levels; Nice Margin Recovery in PMM Courtesy: Daimler AG ATV IPC PMM CCS [EUR m] +7% [EUR m] [EUR m] [EUR m] % +14% 13% 11% 5% 9% 11% % 14% -4% -2% 8% % 14% 15% 1% 12% 17% % 14% 9% 7% 8% Q3 FY12 Q4 Q1 FY13 Q2 Q3 Q3 FY12 Q4 Q1 FY13 Q2 Q3 Q3 FY12 Q4 Q1 FY13 Q2 Q3 Q3 FY12 Q4 Q1 FY13 Q2 Q3 Revenue Segment Result Segment Result Margin Page 17

18 Automotive Semiconductor Market 212: Infineon #1 in Fastest-Growing Region APAC World ($23.88bn) 1. Renesas 14.2% 2. Infineon 9.1% 3. STMicro 7.9% 4. Freescale 7.% 5. NXP 6.3% 6. Bosch 5.7% 7. TI 5.7% Europe ($8.4bn) 1. Infineon 13.% 2. Bosch 11.3% 3. STMicro 1.% 4. TI 8.4% 5. Renesas 7.8% 6. NXP 7.6% 7. Freescale 7.4% APAC & others* ($5.7bn) 1. Infineon 9.4% 2. STMicro 9.4% 3. Renesas 9.% 4. NXP 8.4% 5. Freescale 7.4% 6. TI 3.1% 7. Toshiba 3.% North America ($4.49bn) Japan ($5.65bn) China ($2.82bn) Korea ($1.81bn) 1.Freescale 12.5% 1.Renesas 33.3% 1.NXP 1.5% 1.Infineon 13.7% 2.Infineon 8.4% 2.Toshiba 13.% 2.STMicro 1.% 2.STMicro 6.8% 3.Renesas 8.2% 3.Fujitsu 4.5% 3.Renesas 9.5% 3.Freescale 6.7% 4.STMicro 8.1% 4.Sanken 3.9% 4.Freescale 9.2% 4.NXP 5.6% 5.TI 7.4% 5.Infineon 3.7% 5.Infineon 7.% 5.Bosch 3.9% Source: Strategy Analytics, April 213. * According to Strategy Analytics this ranking also includes Russia, India, South America and further countries. Page 18

19 Innovation Excellence and CSR is an Integral Part of Infineon s Corporate Strategy Sustainability Award by RobecoSAM Innovation Award by Continental Supplier Sustainability Award by Bombardier Transportation 2 June 213: Infineon received the Sustainability Award for its progress in sustainability management. Infineon is among the 15% most sustainable companies worldwide. 26 June 213: The jury was particularly impressed by the 3D image sensor which allows a complete new human machine interface by the usage of touchless gesture recognition. 8 July 213: The jury recognized Infineon s high level of product responsibility as well as the positive environmental effects its assortment has meant for sustainable mobility. Page 19

20 DrBlade: Design-Wins for DC/DC Voltage Regulation at Major Server Customers DrBlade: the revolutionary chip-embedding technology Design-wins for DrBlade, in combination with our digital power management ICs. Based on Infineon s outstanding manufacturing technology: thin wafer, galvanic electroplating, laser-drilling, die-attach by diffusion-soldering. Top view Bottom view computer tomography Infineon Technologies AG Driver IC computer tomography Infineon Technologies AG Infineon Technologies AG Target applications: DC/DC voltage regulation for computing and telecom. Contains driver IC and OptiMOS MOSFET half-bridge. Small package size, low profile (.6 mm), high power density, RoHS 1) 216 compliant. 1) RoHS = Restriction of Hazardous Substances. Page 2

21 Guidance for Q4 FY13 and FY 213 Outlook Q4 FY13 Outlook FY 213 (compared to FY 212) Revenue About EUR 1,5m. Decline of about 1.5%. Segment Result Margin About 13%. Just under 1%. Investments in FY 213 Just under EUR 4m. D&A in FY 213 About EUR 47m. Page 21

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23 Opex-to-Sales-Ratio S and G&A R&D [EUR m] % 1 14% 8 13% % 2 11% Q3 FY12 Q4 Q1 FY13 Q2 Q3 Q3 FY12 Q4 Q1 FY13 General & Administration Selling R&D % of sales Q2 Q3 1% Page 23

24 DOI, DSO And DPO In Line With Our Targets Working capital * Inventories [EUR m] Q3 FY12 Q4 Q1 FY13 Q2 Q [EUR m] Q3 FY12 Q4 Q1 FY13 Q2 Q3 Inventories DOI* [days] Trade accounts receivable Trade payables [EUR m] Q3 FY12 Q4 Q1 FY13 Q2 Q3 Trade accounts receivable DSO* * For definition please see page 3. [days] [EUR m] Q3 FY12 Q4 Q1 FY13 Q2 Q3 Trade payables DPO* [days] Page 24

25 Investments in FY 213 to be Reduced Significantly Investments * D&A [EUR m] ~ 47 just under FY 29 FY 21 FY 211 FY 212 FY 213 FY 29 FY 21 FY 211 FY 212 FY 213 Q1 Q2 Q3 Full Year Guidance * For definition please see page 3. Page 25

26 Gross Cash and Net Cash Increased Due to Positive Free Cash Flow Liquidity Development [EUR m] Gross Cash Debt Equity-linked Net Cash * Q3 FY12 Q4 Q1 FY13 Q2 Q3 FY12 * Consists of convertible bond (nominal value EUR 113m; book value EUR 15m). Increase in gross cash due to positive Free Cash Flow of EUR 135m reduced by negative Cash flow from discontinued operations of EUR 6m and pay back of EUR 6m debt. Net cash effect correspondingly higher. Convertible bond due in May 214. Page 26

27 Total Gross Capital Returns of EUR 687m Between FY 211 and Q3 FY13 [EUR m] Total gross capital returns history Q1 FY Q2 Q3 Q4 Q1 FY12 38 Q2 Q3 Q4 Q1 FY Q2 Q3 FY11 FY12 FY13 CB 214 share buyback (via put options) dividends Page 27

28 Target: RoCE Above WACC Over the Cycle RoCE* history 1% 8% 6% 4% 2% % -2% -9% Q1 FY1 FY1: 3% 27% 31% 64% 46% Q2 Q3 Q4 Q1 FY11 FY11: 62% 59% 53% 82% Q2 Q3 Q4 Q1 FY12 FY12: 22% 27% 25% 2% 27% 5% Q2 Q3 Q4 Q1 FY13 WACC: low teens % 7% 16% Q2 Q3 Capital Employed* history 2,5 2, 1,5 1, 5 [EUR m] 1,496 1,456 1,499 1,273 1,397 1,196 1,347 1,239 1,629 Q1 FY1 * For definition please see page 3. Q2 Q3 Q4 Q1 FY11 Q2 Q3 Q4 Q1 FY12 1,76 1,889 2,35 Q2 Q3 Q4 Q1 FY13 2,239 2,274 2,216 Q2 Q3 Page 28

29 Infineon is a Long-Standing Member of Europe s Leading Sustainability Indices Dow Jones Sustainability Index FTSE4Good Index Infineon is member of the Dow Jones Sustainability Index since 21. Infineon is currently Europe s one and only semiconductor company member in the Dow Jones Sustainability Indexes. Infineon is semiconductor s sector leader worldwide in two environmental criteria: Product stewardship, Operational eco-efficiency. February 213: According to RobecoSAM, Infineon is among the top 15% most sustainable companies worldwide and therefore listed in the Sustainable Yearbook for the third consecutive year. Infineon was added to the FTSE4Good Index Series on 24 September 21. It was confirmed by the FTSE4Good Policy Committee in its March 213 review that Infineon continues to be a member of the FTSE4Good Index. Page 29

30 Notes Investments = 'Purchase of property, plant and equipment + 'Purchase of intangible assets and other assets' incl. capitalization of R&D expenses Capital Employed = 'Total assets 'Cash and cash equivalents 'Financial investments 'Assets classified as held for sale ('Total Current liabilities 'Short-term debt and current maturities of long-term debt 'Liabilities classified as held for sale ) Please note: All positions in refer to the respective accounting position and therefore should be applied with the positive or negative sign used in the relevant accounting table. RoCE = NOPAT / Capital Employed = ('Income from continuing operations 'financial income 'financial expense ) / Capital Employed Working Capital = ('Total current assets 'Cash and cash equivalents Financial investment 'Assets classified as held for sale') ('Total current liabilities 'Short term debt and current maturities of long-term debt 'Liabilities classified as held for sale') DOI (inventory days; quarter-to-date) = ('Net Inventories' / 'Cost of goods sold') * 9 DSO (days sales outstanding; quarter-to-date) = ('Trade accounts receivable (net)' / 'revenue') * 9 DPO (days payables outstanding; quarter-to-date) = ('Trade payables' / ['Cost of goods sold' + 'Purchase of property, plant and equipment']) * 9 Page 3

31 Financial Calendar Date Location Event 28 Aug 213 Frankfurt Commerzbank Sector Conference Week 3 4 Sep 213 London Deutsche Bank European TMT Conference 18 Sep Sep 213 Munich Conference Call by Jochen Hanebeck Division President, Automotive Berenberg Bank and Goldman Sachs German Corporate Conference 25 Sep 213 Munich Baader Investment Conference 12 Nov 213* Q4 FY13 and FY 213 Results Nov 213 London Company Roadshow including presentation by Andreas Urschitz Division President, Power Management & Multimarket 2 21 Nov 213 Barcelona Morgan Stanley TMT Conference 3 4 Dec 213 Scottsdale, AZ Credit Suisse Technology Conference * provisional Page 31

32 Institutional Investor Relations Contact Ulrich Pelzer Corporate Vice President Finance, Treasury & Investor Relations Joachim Binder Senior Director Investor Relations Holger Schmidt Manager Investor Relations Bernard Wang Manager Investor Relations 31 July 212 Copyright Infineon Technologies 212. All rights reserved. Page 32 Page 32