Second Quarter FY 2012 Quarterly Update
Infineon Technologies AG Investor Relations
Infineon at a Glance
Growth Outlook and Margin Resilience
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.
Revenue Split by Division
Q2 FY 2012 revenue: EUR 986m
+4% Revenue Growth; Stable Segment Result Margin
|
|
[EUR m] |
Q2 FY11 |
Q1 FY12 |
Q2 FY12 |
|
|
Revenue |
994 |
946 |
986 |
|
|
Segment Result |
202 |
141 |
144 |
|
|
SR Margin |
20.3% |
14.9% |
14.6% |
986
946
141
Q1 FY12 |
[EUR m] |
Net Income* |
572 |
96 |
111 |
|
|
Investment |
164 |
294 |
192 |
|
144
Q2 FY12 |
FCF from
cont.
operations |
13 |
-234 |
-10 |
|
|
Gross Cash |
2,691 |
2,337 |
2,190 |
Revenue
Segment Result |
|
Net Cash |
2,335 |
2,068 |
1,927 |
• Net Income includes "income from discontinued operations, net of income taxes" in Q2 FY11 EUR 399m, in Q1 FY12 EUR -8m and in Q2 FY12 EUR 2m.
Tight Customer Relationships are Based on System Knowhow and App Understanding
Distributors
Infineon Holds Top Positions in All Target Markets
Calendar Year 2011. Source: Strategy Analytics, April 2012.
Source: IMS Research, August 2011.
Source: IMS Research, August 2011.
Infineon at a Glance
Growth Outlook and Margin Resilience
Results and Outlook
New Era: Multiple Factors Driving Demand for Power Semiconductors
'90 – '10
- Electrification of powertrain fuels demand for high-power semis in cars and doubles silicon content.
- Shift towards renewable energies requires orders of magnitude more high-power semis per MW of power generated.
Stronger demand for goods containing power semis due to faster increase in standard of living in BRIC countries.
Healthy Growth in Global Car Production Expected
Source: IHS, April 2012.
Rising Semiconductor Value Per Car Drives Market
Source: Strategy Analytics, Oct. 2011; including semiconductor sensors.
Source: Strategy Analytics, January 2012.
Every Electricity Conversion Step Requires Infineon Components
About 10% Growth p.a. for Cycle Average Expected for Infineon
Infineon: ~10% growth p.a. cycle average
Target to Sustain 15% Cycle-Average Segment Result Margin
SR target margins Total profitability target
Infineon: ~15% operating margin cycle-average
Infineon at a Glance
Growth Outlook and Margin Resilience
Results and Outlook
Q2 FY12: Maintained Solid Segment Result Margin
All-Time-High in Revenues in ATV; Strong Recovery in CCS
Automotive: Infineon Biggest Market Share Gainer Amongst All Players in 2011
Source: Strategy Analytics, April 2012 * According to Strategy Analytics this ranking also includes Russia, South America, Australia and further countries.
Mild-Hybrid Vehicles: New Level of Efficiency Reached by 40µm / 400V IGBT Module
Infineon Security Chips for Europe"s Biggest Contactless Banking Card Project "girogo"
girogo key facts
- 17 April 2012: the German Banking Industry Committee (Deutsche Kreditwirtschaft) launched a new banking card with "girogo" functionality.
- This banking card allows contactless payment without PIN or signing. In addition, it also supports the well-established contact-based payment methods.
- Infineon is the world's first chip manufacturer to meet both the high German Banking Industry Committee security guidelines and the contactless performance requirements of the new banking cards in Germany.
- The German Banking Industry Committee decided for Infineon's 78 family of security microcontrollers using the "Integrity Guard" digital security technology.
- Within the next three to four years, 45m girogo banking cards will be issued.
Guidance for Q3 and FY 2012
* This outlook is based on an assumed US-dollar-to-Euro exchange rate for the remainder of the year in line with the average of the first half of the year.
Superior Growth and Profitability Allow Sustained Investments Over the Cycle
Superior growth and profitability
- Focus on secular growth drivers, e.g. renewables, e-mobility, energy efficiency.
- Leading market share and competitive strengths.
- Financial targets (on average over the cycle): 10% growth p. a. and
-
- 15% Segment Result margin.
Sustained investments for future success
- Counter-cyclical investments, selling and R&D to enable further share gains.
- Investments secure capacity for future growth and competitive advantage.
- 300mm power discretes; 200mm, quality, innovation, automation etc.
Strong returns
- Value creation: RoCE well in excess of our capital cost with 27% in Q1 FY12 and 25% in Q2 FY12.
- Capital returns through dividend payments, share buyback, and CB 2014 buyback.
- Aggregate capital returns since Q1 FY11 amount to more than EUR 500m.
4 Reasons for Sustainable Profitability ─ #1 High Barriers to Entry
Long product life cycles
- For many markets we address, deliveries of semis need to be ensured for very long periods of time:
- for car industry: 7 to 24 years;
- for train industry: about 15 years.
System knowhow and understanding
- Both deep and wide knowhow and understanding of our customers' applications needed for making best in class solutions:
- e.g. HEV/EV needs both automotive and industrial expertise.
Strong quality and reliability req's
- Products need to reliably perform well in the field over longer periods of time:
- airbag reliability required as long as the car is in use;
- wind turbines should function 30 years.
Semiconductors – Core Enablers of Innovation and Higher Functionality #2
Energy Efficiency Mobility Security
Power supplies
More advanced power semiconductors allow smaller, denser, lighter and more efficient power supplies.
VSD
More precise and efficient RPM-control versus mechanical transmission.
Recuperation
Implemented in trains for years; brought to cars by the advent of HEV/EVs.
Power steering
EPS is replacing hydraulicmechanical power steering allowing more flexibility in car design and less power consumption.
Identification Chip-based passports and national ID cards allow much higher level of security compared with paper-only ID cards.
Brand protection Chip-based authentication of accessories, e.g. batteries, cartridges.
Semis Represent a Negligible Part of the Value of the End Product #3
Infineon's Core Competencies ─ Power Semiconductors and eControl #4
Design and manufacturing of Core competence power power semis tightly coupled
Design
- Thin-wafer technology
- Super-junction MOSFETs
- Silicon-Carbide (SiC)
- IGBT module packaging
Core competence eControl
- Automotive real-time 32-bit microcontroller (TriCore™) and multi-core design (AURIX™).
- Industry microcontroller with premium peripheral functions (XMC4000 family).
- Low-power security controller.
IMM Split Into Two New Divisions as of 1 January 2012
Pro-Forma Historical Figures for IPC and PMM
OpEx In-line With Target Operating Model
Working Capital
0 20 40 60 80 0 200 400 Q2 FY11 Q3 Q4 Q1 FY12 Q2 [EUR m] [days] Comparable historical figures not available.
Trade and other receivables Trade and other payables
Inventories DOI*
* For definition please see page 36 in appendix.
Investments Remain High to Exploit Growth Potential
* For definition please see page 36 in appendix.
- Gross cash decreased due to dividend payments of EUR 130m, negative Free Cash Flow and debt reduction of EUR 7m. Net cash impact therefore lower.
- No buyback of convertible bond or shares during the quarter. But put options over 9m shares lapsed with EUR 2.7m premium received.
Value Creation of Infineon by Sustainably High RoCE Above WACC
Average Price Per Underlying Share Below Volume Weighted Average Share Price
Total Gross Capital Returns
Notes
Investments =
'Purchase of property, plant and equipment"
- 'Purchase of intangible assets and other assets' incl. capitalization of R&D expenses
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') * 90
DSO (days sales outstanding; quarter-to-date) = ('Trade accounts receivables (net)' / 'revenue') * 90
DPO (days payables outstanding; quarter-to-date) = ('Trade payables' / ['Cost of goods sold' + 'Purchase of property, plant and equipment']) * 90
Infineon Has a Long Track Record in Responsibility and Sustainability
UN Global Compact Initiative
As one of the first semiconductor companies worldwide, Infineon joined the Global Compact Initiative of the United Nations in 2004.
Dow Jones Sustainability Index
Infineon is currently Europe"s one and only semiconductor company member in the Dow Jones Sustainability Indexes.
Certifications
Based on our efforts for resources management, safety and health standards, Infineon received the EN ISO 14001 and OHSAS 18001 multi-site certification.
| Date |
Location |
Event |
| 5 Jun 2012 |
Zurich |
DZ Bank Sustainability Technologies Conference |
| 31 Jul 2012* |
|
Q3 FY12 Results |
| 29-30 Aug 2012 |
Frankfurt |
Commerzbank
Sector Conference Week |
| 13 Sep 2012 |
London |
JPMorgan Pan Euro Tech Conference |
| 26 Sep 2012 |
Munich |
Baader Investment Conference |
| 14 Nov 2012* |
|
Q4 FY12 Results |
| 15-16 Nov 2012 |
Barcelona |
Morgan Stanley TMT Conference |
| 27-28 Nov 2012 |
Scottsdale |
Credit Suisse Technology Conference |
* preliminary date
Institutional Investor Relations Contact
Ulrich Pelzer
Corporate Vice President Finance, Treasury & Investor Relations +49 89 234-26153 [email protected]
Joachim Binder
Senior Director Investor Relations
+49 89 234-25649 [email protected]