Q Results. 7 May 2014

Transcription

1 Q1 214 Results 7 May 214

2 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 Q1 214 results, 7 May 214

3 Agenda Q1 214 Executive Overview Outlook Business Review Q1 214 Financial Overview Appendix

4 Dialog at a glance Q Strong revenue and earnings growth $221m IFRS Revenue (Q1 213 Actual: $18m) +23% 43.3% Underlying gross margin (Q1 213 Actual: 38.2%) +51bps 28.7% Underlying OPEX % (Q1 213 Actual: 27.7%) +1bps $.34 Underlying Diluted EPS (Q1 213 Actual: $.21) +41bps +62% +531% 14.6% Underlying EBIT margin (Q1 213 Actual: 1.5%) $128.9m Operating cash flow (Q1 213 Actual: $2.4m) Underlying definition on slide 22 4 Dialog Semiconductor Q1 214 results, 7 May 214

5 Agenda Outlook Business Review Q1 214 Financial Overview Appendix

6 Q2 214 Outlook Given our current visibility, we continue to anticipate that 214 will be another year of good growth. As in previous years, revenue performance will be strongly weighted towards the second half of the year driven by a solid ramp of high volume new products Gross margin for the full year 214 is expected to improve year on year In Q2 214, we expect revenue for the quarter to reflect the lower seasonal pattern and to be in the range of $195 to $21 million Gross margin in Q2 214 is expected to improve year on year and to be broadly in line with Q Dialog Semiconductor Q1 214 results, 7 May 214

7 Agenda Business Review Q1 214 Financial Overview Appendix

8 Early success in Bluetooth Smart Remain ahead of our competitors with best product in the market <½ <½ <½ Power consumption Package size Number of external components for complete core solution Increasing customer engagement across multiple verticals Wireless charging Wearables Health and Fitness HIDs Proximity tags and beacons Smarthome Smart remotes First solar power Bluetooth Smart beacon 8 Dialog Semiconductor Q1 214 results, 7 May 214

9 Leading in Power Conversion markets Established leadership with new AC/DC products launched in the emerging fast charging smartphone market addressing multiple protocols Qualcomm Quick Charge 2. MediaTek Pump Express TM Increased our market share within the high growth Solid State Lighting LED market New high volume customers Expansion of our product portfolio Dimmable solutions which allow better lighting quality Dimmable solutions for high power SSL LED light bulbs Cost sensitive solutions 9 Dialog Semiconductor Q1 214 results, 7 May 214

10 low Profitability high Strategic direction 4 pillars Diversifying growth drivers and pursuing further innovation 1 Extending our portfolio of products for portable platforms 2 Adding ultra-low power audio, new power management functionality, short range wireless connectivity and A/DC power conversion 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 More products in higher growth segments Diversifying across more platforms for custom PMIC at larger accounts 3 Continuous innovation Innovation on low power differentiating power-saving technologies, fuel gaging, fast charging together with advanced packaging development low Growth high 4 Strategic focus on fast growing China smartphone and tablet market Leveraging current technologies and establishing innovative partnerships within Greater China 1 Dialog Semiconductor Q1 214 results, 7 May 214

11 Agenda Q1 214 Financial Overview Appendix

12 Q1 214 Strong revenue growth 23% YoY revenue growth in Q1 214 IFRS revenue Q1 214 $221 million 3% over high end of guidance range 23% increase over Q1 213 Full year IFRS revenue ($ million) 1 41% Revenue CAGR Quarterly IFRS revenue ($ million) % Q1 Revenue CAGR Q1 Q2 Q3 Q Dialog Semiconductor Q1 214 results, 7 May 214

13 Delivering year on year gross margin improvement Q1 214 Underlying gross margin of 43.3% 51bps improvement over Q1 213 % 45 4 Underlying gross margin Q1 214 IFRS gross margin of 42.1% 4bps improvement over Q Q2 214 gross margin will improve on a year-on-year basis and be broadly in line with Q % 45 4 Q1 212 Q2 212 Q3 212 Q4 212 Q1 213 Q2 213 Q3 213 Q4 213 Q1 214 IFRS gross margin 42.1 Gross margin is expected to improve year on year in FY Q1 212 Q1 213 Q Dialog Semiconductor Q1 214 results, 7 May 214

14 Investing in R&D for future growth Underlying OPEX% on a Trailing Twelve Month basis at 25.7%, 6bps below Q1 213 Investing in future growth Maintaining SG&A efficiency Underlying Trailing Twelve Month OPEX % of revenue Q1 213 Q1 214 OPEX % of revenue R&D % of revenue SG&A % of revenue % Q1 IFRS actual trend impacted by the consolidation of Power Conversion into the Group Q1 IFRS Actual ($ million and as a % of revenue) % Q1 212 Q1 213 Q1 214 R&D SG&A R&D % of revenue(rhs) SG&A % of revenue(rhs) 14 Dialog Semiconductor Q1 214 results, 7 May 214

15 Operating Profit (EBIT) Underlying EBIT up 7% on Q1 213 Q1 Underlying EBIT(*) of $32.2 million or 14.6% of revenue Up 7% on Q bps increase from Q1 213 Impact of year-on-year gross margin improvement Underlying EBIT and EBIT % ($ million) 1.5% % 14.6% Q1 213 Q1 214 Q1 IFRS EBIT of $23. million or 1.4% of revenue Up 39% on Q1 213 including $5 million of incremental IFRS adjustments 12bps increase from Q1 213 Impact of year-on-year gross margin improvement IFRS EBIT and EBIT % ($ million) 9.2% % 1.4% Q1 213 Q Dialog Semiconductor Q1 214 results, 7 May 214

16 Net Income Q1 214 Underlying net income up 69% on Q Net income 2 48% Diluted EPS growth in Q4 Q1 214 Underlying Net Income of $23.7 million, 1.7% of revenue 29bps over Q1 213 Effective tax rate at 28.5% (Q1 213: 3.%) Net Income ($ m) IFRS +43% Underlying +69% Q1'13 Q1'14 Q1'13 Q1'14 Underlying EPS ($) Basic Diluted Q1 214 Underlying Basic and Diluted EPS up 67% and 62% respectively +67% +62% Q1'13 Q1'14 Q1'13 Q1'14 16 Dialog Semiconductor Q1 214 results, 7 May 214

17 Cash from operations Record free cash flow generation - $111 million $286 million cash & cash equivalents balance at 28 March 214 After $15 million early debt repayment $1.3 million net cash position Cash and cash equivalents balance ($ million) iwatt acquisition Q3 212 Q4 212 Q1 213 Q2 213 Q3 213 Q4 213 Q1 214 $128.9 million operating cash inflow in Q1 214 (Q1 213: $2.4 million) $111 million free cash flow in Q1 214 (Q1 213: $1.9 million) $35 $3 $25 $2 Cash Flow Bridge from Q4 13 ($ million) (8.6) (1.) (9.) (15.) $ $1 17 Dialog Semiconductor Q1 214 results, 7 May 214

18 Inventory value reduction 1 days increase in DIO over Q4 213 Inventory value at the end of Q1 214 was: Down 25% on Q4 213 Down 39% on Q1 213 In Q2 214 we expect inventory value and DIO to increase from Q1 214 Inventory ($ million) and Days Inventory Outstanding (# days) $2 $18 $16 $14 $12 $1 $8 $6 $4 $2 $ % 52% % 43% 41% 52% 65% 51% 34% 18% 28% 35% 63% 36% 23% 3% 31% 28% 21% 15% 14% 13% 12% 9% Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 DIO (1) 1 Average DIO of 85 days Finished goods Work in process Raw Materials DIO (1) Calculated using average inventory balance over the period 18 Dialog Semiconductor Q1 214 results, 7 May 214

19 The power to be...

20 Agenda Appendix

21 Underlying adjustments Q1 214 US$ Option expenses Accrual National Insurance PPA BV Convertible Bond Acquisition License and integration agreement costs PPA iwatt TOTAL Revenue Cost of sales (38) (5) (1) - - (2,269) (2,682) Selling and marketing expenses (663) (78) (4) - - (1,91) (3,42) General and administrative expenses (925) (447) - - (281) - (1,653) Research and development expenses (1,475) (116) (266) (1,857) Other operating income Operating profit (3,371) (646) (766) - - (281) (4,17) (9,234) Interest expense (1,99) (255) (2,245) Result before income taxes (3,371) (646) (766) (1,99) (255) (281) (4,17) (11,479) Income tax expense ,459 1,96 Net profit (3,371) (463) (574) (1,99) (183) (281) (2,711) (9,573) 21 Dialog Semiconductor Q1 214 results, 7 May 214

22 Notes to the financials Underlying definition (*) Underlying results (net of tax) in Q1-214 are based on IFRS, adjusted to exclude share-based compensation charges and related charges for National Insurance of US$3.8 million, excluding US$.6 million of amortisation of intangibles associated with the acquisition of SiTel (now Dialog B.V.), excluding US$2. million non-cash effective interest expense in connection with the convertible bond, excluding US$.2 million non-cash effective interest expense related to a licensing agreement, excluding US$.3 million acquisition and integration expenses in connection with the purchase of iwatt and excluding US$2.7 million of amortisation and depreciation expenses associated with the acquisition of iwatt. (*) Underlying results (net of tax) in Q1-213 are based on IFRS, adjusted to exclude share-based compensation charges and related charges for National Insurance of $1.1 million, excluding $.9 million of amortisation of intangibles associated with the acquisition of Dialog B.V., excluding $1.9 million noncash-effective interest and financial expense in connection with the convertible bond and discounted purchase prices and excluding US$.2 million non-cash effective interest expenses related to a licensing agreement entered into in Q 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. Underlying results (net of tax) have been fully reconciled to IFRS results (net of tax) above. All other underlying measures disclosed within this report are a component of this measure and adjustments between IFRS and underlying measures for each of these measures are a component of those disclosed above. (**) EBITDA in Q1 214 is defined as operating profit excluding depreciation for property, plant and equipment, (Q1 214:US$5.4 million, Q1 213:US$3.9 million), amortisation of intangible assets (Q1 214:US$7.9 million, Q1 213:US$5.1 million) and losses on disposals and impairment of fixed assets (Q1 214:US$.1 million, Q1 213:US$.3 million). (***) Free Cash Flow in Q1 214 is defined as net income of US$14.1 million plus amortisation and depreciation of US$13.2 million, plus net interest expense of US$3.6 million, plus change in working capital of US$88.9 million and minus capital expenditure of US$9. million. 22 Dialog Semiconductor Q1 214 results, 7 May 214

23 Statement of financial position as of 28 March 214 Assets At 28 March 214 US$ At 31 December 213 US$ Change US$ % Cash and cash equivalents 286, ,25 1, All other current assets 143, ,419 (118,31) (45.3) Total current assets 429, ,444 (17,867) (4.) Property, plant and equipment, net 57,364 58,465 (1,11) (1.9) Goodwill 244, , Intangible assets 144, ,591 (4,2) (2.8) Investments 1,541 1, All other non-current assets 1,613 1, Deferred tax assets 26,813 24,935 1, Total non-current assets 476,6 48,8 (3,48) (.7) Total assets 96, ,452 (21,275) (2.3) Liabilities and Shareholders' equity Current liabilities 129, ,24 (33,282) (2.4) Non-current liabilities 297,777 37,778 (1,1) (3.2) Net Shareholders equity 478, ,65 22,8 4.8 Total liabilities and Shareholders' equity 96, ,452 (21,275) (2.3) 23 Dialog Semiconductor Q1 214 results, 7 May 214

24 Cash flow statement as of 28 March Three months ended 28 March 214 Three months ended 29 March 213 US$ US$ Cash flows from operating activities: Net profit 14,11 9,896 Adjustments to reconcile net profit to net cash used for operating activities: Interest income, net 3,583 2,658 Income tax expense 5,624 4,241 Impairment of inventories 5,144 3,846 Depreciation of property, plant and equipment 5,393 3,92 Amortisation of intangible assets 7,873 5,148 Losses on disposals of fixed assets and impairment of fixed and financial assets Expense related to share-based payments 3,371 1,814 Changes in working capital: Trade accounts receivable, other receivables and factoring 84,234 6,936 Inventories 24,83 2,96 Prepaid expenses 34 (285) Trade accounts payable (37,93) (71,18) Provisions (1,638) (284) Other assets and liabilities 14,14 (3,528) Cash generated from operations 128,99 2,416 Interest paid (1,17) (124) Interest received 8 72 Income taxes paid (8,611) (1,961) Cash flow from operating activities 119,289 18,43 Cash flows from investing activities: Purchase of property, plant and equipment (4,55) (7,865) Purchase of intangible assets (3,11) (2,77) Payments for capitalised development costs (1,495) (777) Purchase of other investments (1,5) Deposits received back (made) (5) Cash flow used for investing activities (9,11) (12,224) Cash flows from financing activities: Redemption of loan (15,) Sale of employee stock purchase plan shares 5, Cash flow from financing activities (9,942) 251 Cash flow from (used for) operating, investing and financing activities 1,336 6,43 Net foreign exchange difference 98 (218) Net increase in cash and cash equivalents 1,434 6,212 Cash and cash equivalents at beginning of period 186,25 312,435 Cash Dialog and cash Semiconductor equivalents Q1 at end 214 of period results, 7 May , ,647

25 Q1 214 Income statement Revenues Mobile Systems Automotive / Industrial Connectivity Power Conversion Three months ended 28 March 214 Three months ended 29 March 213 Change US$ % of revenues US$ % of revenues % 174,6 1,39 17,952 18, , , , (12.9) 8.4 Corporate Sector.. - Revenues 22, , Cost of sales (127,88) (57.9) (111,357) (61.9) 14.8 Gross profit 92, , (14,16) Selling and marketing expenses (6.3) (8,534) (4.8) 64.2 (11,528) General and administrative expenses (5.2) (7,245) (4.) 59.1 (45,749) Research and development expenses (2.7) (36,258) (2.1) ,31 Other operating income.6. - Operating profit 22, , Interest income and other financial income (75.4) Interest expense and other financial expense (3,625) (1.6) (2,829) (1.6) 28.1 Foreign currency exchange gains and losses, net Result before income taxes 19, , Income tax expense (5,624) (2.5) (4,241) (2.4) 32.6 Net profit 14, , Dialog Semiconductor Q1 214 results, 7 May 214

26 Investor Information Calendar, events and analyst coverage Analyst coverage Financial Calendar Key Events Bank of America Merrill Lynch Adithya Metuku Baader Bank Bankhaus Lampe Barclays Capital Berenberg Bank Guenther Hollfelder Dr. Karsten Iltgen Andrew Gardiner Ali Farid Khwaja Q2 214 Results Q3 214 Results 3 July 29 October 214 TMT Conference 7 May 214, Miami CA Cheuvreux Bernd Laux Close Brothers Seydler Veysel Taze Commerzbank Credit Suisse Thomas Becker Achal Sultania 214 Global TMT Conference 3,4 June 214, San Francisco Deutsche Bank Uwe Schupp DZ Bank Exane BNP Paribas Hauck & Aufhauser HSBC Trinkaus & Burkhardt AG Jefferies International JP Morgan Cazenove Harald Schnitzer Jérôme Ramel Tim Wunderlich Christian Rath Lee Simpson Chetan Udeshi, CFA Contacts Jose Cano Head of Investor Relations T: +44 () jose.cano@diasemi.com Financial PR/IR Advisers: FTI Consulting London Matt Dixon T: +44 () matt.dixon@fticonsulting.com Main First Bank AG Morgan Stanley Natixis RBC Juergen Wagner Francois A Meunier Stephane Houri Doug Freedman FTI Consulting Frankfurt Thomas M. Krammer T: +49 () thomas.krammer@fticonsulting.com 26 Dialog Semiconductor Q1 214 results, 7 May 214

27 The power to be...