Investor Presentation • Feb 5, 2019
Investor Presentation
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February 5th, 2019, Oslo, Norway
The following presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated ("relevant persons"). Any person who is not a relevant person should not act or rely on this presentation or any of its contents.
This presentation does not constitute an offering of securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire securities in Nordic Semiconductor ASA (The Company). The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law, and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about, and observe, such restrictions.
This presentation includes and is based, inter alia, on forward-looking information and contains statements regarding the future in connection with The Company's growth initiatives, profit figures, outlook, strategies and objectives. All forward-looking information and statements in this presentation are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for The Company. These expectations, estimates and projections are generally identifiable by statements containing words such as "expects", "believes", "estimates" or similar expressions.
Important factors may lead to actual profits, results and developments deviating substantially from what has been expressed or implied in such statements. Although The Company believes that its expectations and the presentation are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the presentation.
The Company is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the presentation, and neither The Company nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use.
This presentation was prepared for the interim results presentation for the fourth quarter, held on February 5, 2019. Information contained herein will not be updated. The following slides should also be read and considered in connection with the information given orally during the presentation.
| Svenn-Tore Larsen | Pål Elstad | Svenn-Tore Larsen |
|---|---|---|
| CEO. | CEO. | CEO. |
Total revenue of MUSD
$\bigcap$ $\bigcup$
Y-o-Y decrease of -5.0%
Gross Margin 51.0%
Gross margin expansion $+3.4$ p.p y-o-y
Financials Pål Elstad, CFO
| Gross Margin 51.0 % |
Q4 2018 | Q4 2017 | ||
|---|---|---|---|---|
| R&D short- range 21.5 % |
Revenue change $y$ -o-y |
-5.0% | +22.3% (MUSD 61.1) (MUSD 64.4) |
Disappointing revenue in challenging market |
| Gross margin | 51.0% | 47.6% | (+3.4pp) Continued positive contribution from cost improvements and favorable customer and product mix |
|
| R&D cellular IoT 8.2 % |
R&D short-range | 21.5% | 16.4% | (+5.1pp) Expansion in short-range IoT |
| R&D cellular IoT | 8.2% | 9.3% | (-1.1pp) Started capitalization ahead of first production release |
|
| SG&A 18.0 % |
SG&A | 18.0% | 15.6% | (+2.4pp) Increase spending during ramp of cellular IoT |
| EBITDA 3.4% |
EBITDA margin | 3.4% | 6.2% | (-2.8pp) EBITDA margins impacted by weak revenue |
| Gross Margin 49.8% |
2018 | 2017 | ||
|---|---|---|---|---|
| R&D short- range 17 % R&D |
Revenue growth $V$ -O- $V$ |
+15% | +19% (-4pp) Bluetooth growth in line with (MUSD 271) (MUSD 236) medium-term target, strong proprietary |
|
| Gross margin | 49.8% | 47.2% | (+2.6pp) Continued positive contribution from cost improvements and favorable customer and product mix |
|
| cellular IoT 6 % |
R&D short-range | 17% | 15% | (+2pp) Expansion in short-range IoT |
| SG&A 15 % |
R&D cellular IoT | 6% | 8% | (-2pp) Started capitalization ahead of first production release |
| SG&A | 15% | 14% | (+1pp) Cost control whilst scaling organization |
|
| EBITDA 11% |
EBITDA margin | 11% | 10% | (+1pp) Revenue growth drives improved reported EBITDA margin |
| Consumer Electronics |
Wearables | Building /Retail |
Healthcare | Others | |
|---|---|---|---|---|---|
| MUSD 24.9 |
MUSD 94 |
MUSD 1()() |
MUSD 5.5 |
MUSD 79 |
|
| -28.6% -4.6% у-о-у $Q - O - O$ |
-3.1% $y$ -o-y q-o-q $y - 0$ -y-o-y q-o-q $y = 0$ |
+10.3% -22.5% +39.3% y-o-y q-o-q |
$-21.4\%$ $y$ -0- $y$ $Q-O-Q$ |
*Excluding ASIC's, consulting and other revenue
55.0 % 50.0% 45.0 % 40.0% 35.0 % 30.0 % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018
*) Operating expenses, excl. capitalized R&D, depreciation and amort, and option expenses
| Q4 2018 | Q4 2017 | Change | 2018 | 2017 | Change | |
|---|---|---|---|---|---|---|
| Revenue | 60.9 | 64.4 | $-5.3%$ | 270.9 | 236.0 | 14.8% |
| Opex | 24.1 | 20.6 | 16.7% | 87.2 | 68.2 | 28.0% |
| Opex / revenue | 39.6% | 32.1% | $+7.5$ p.p. | 32.2% | 28.9% | 3.3 p.p. |
| EBITDA | 7.0 | 10.0 | $-29.5%$ | 47.7 | 43.4 | 9.9% |
| EBITDA Margin | 11.5% | 15.5% | $-4.0$ p.p. | 17.6% | 18.4% | $-0.8$ p.p. |
* Figures excluding cellular IoT
Tight cash management and optimized cash $\overline{\phantom{a}}$ generating ability
Bluetooth Low Energy end-product certifications*
*Source: DNB Markets
Leading indicator of our position Attractive and competitive solutions
Nordic Semiconductor supports the new 'Direction Finding' feature in our latest nRF52811 device and all subsequent devices
The Bluetooth Special Interest Group (SIG) has added a new direction finding feature that holds the potential to significantly enhance the performance of Bluetooth location services solutions. The new feature allows devices to determine the direction of a Bluetooth signal, thereby enabling the development of Bluetooth proximity solutions that can understand device direction as well as Bluetooth positioning systems that can achieve down to centimeter-level location accuracy.
David Stein, Vice President Global Supplier Management
says David Stein, Vice Presiden Global Supplier Management at DigiKey
nRF9160-DK and nRF9160-SICA were ranked #2 and #4 in product views among 97 000 new parts that Digi-Key has stocked in the last 6 months
▪▪▪
«Nordic's dual mode LTE technology fits perfectly with the new networks, making it easier for more people to take use of loT on 4G,» says Ove Fredheim, head of Telenor Business.
Nordic's nRF9160 Development Kit to be sold in Telenor's web shop.
| Revenue | MUSD $50 - 55$ |
Continued uncertainty related to trade tensions results in temporarily reduced growth rates in Q1 2019 |
|---|---|---|
| Gross margin |
50% | Continued focus on cost improvements and customer and product mix |
| Other | Capex MUSD 7-8 |
Increased capex related to investments in lab equipment to secure future growth in cellular IoT and Tier 1 customers' requirements |
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