Baader Investment Conference Munich, 26 September 2012
Peter Bauer CEO
Infineon at a Glance
Results and Outlook
Growth 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.
We Focus on Three Areas with Highly Attractive Future Perspectives
Automotive (ATV)
Industrial Power Control (IPC)
Power Management & Multimarket (PMM)
Chip Card & Security (CCS)
25 Sep 2012 Copyright © Infineon Technologies 2012. All rights reserved. Page 3
Revenue Split by Division
Q3 FY 2012 revenue: EUR 990m
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.
Every Electricity Conversion Step Requires Infineon Components
25 Sep 2012 Copyright © Infineon Technologies 2012. All rights reserved. Page 6
Tight Customer Relationships are Based on System Knowhow and Appl. Understanding
Distributors
Infineon Holds Top Positions in All Target Markets
Calendar Year 2011. Source: Strategy Analytics, April 2012.
Source: IMS Research (an IHS company), July 2012.
Calendar Year 2011.
25 Sep 2012 Copyright © Infineon Technologies 2012. All rights reserved. Page 8
Calendar Year 2011.
August 2012.
Source: IMS Research (an IHS company),
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.
Infineon's Market Share for Power Discretes and Modules
Highlights
- Innovative and optimized chip process technologies.
- Tailored assembly and module technology.
- Leading-edge manufacturing, e.g. 300mm power.
* Source: IMS Research (an IHS company) "Power Semiconductor Discretes & Modules – Edition 2012", August 2012.
Copyright © Infineon Technologies 2012. All rights reserved. Page 10
Market Share Gain Track Record Discrete Power MOSFETS
Highlights
- Market share gains over the last several years expected to continue via increased bundling of power discretes with power ICs.
- Strong product portfolio and technology leadership is creating success in high margin markets, enabling reduction in gap to #1.
* Source: IMS Research (an IHS company) "World Market for Power Semicond. Discretes & Modules – Edition 2012", August 2012. ** Source: IMS Research (an IHS company) "World Market for Power Semiconductor Discretes & Modules – Edition 2008/2010".
Infineon at a Glance
Results and Outlook
Growth Outlook
Decreasing Segment Result Margin due to High Investment
|
|
[EUR m] |
Q3 FY11 |
Q2 FY12 |
Q3 FY12 |
|
|
Revenue |
1,043 |
986 |
990 |
|
|
Segment Result |
212 |
144 |
126 |
|
|
SR Margin |
20.3% |
14.6% |
12.7% |
| 986 |
[EUR m]
990 |
Net Income* |
190 |
111 |
82 |
| 144 |
|
Investment |
319 |
192 |
158 |
|
126 |
FCF from
cont.
operations |
-8 |
-10 |
-22 |
| Q2 FY12 |
Q3 FY12 |
Gross Cash |
2,585 |
2,190 |
2,150 |
Revenue
Segment Result |
|
Net Cash |
2,246 |
1,927 |
1,907 |
• Net Income includes "income from discontinued operations, net of income taxes" in Q3 FY11 EUR 15m, in Q2 FY12 EUR 2m and in Q3 FY12 EUR -8m.
After Record Revenues in 2011, Sales in 2012 Are Almost Flat
All-Time-High in Revenues in ATV; Slight Recovery in PMM
25 Sep 2012 Copyright © Infineon Technologies 2012. All rights reserved. Page 15
Guidance for Q4 and FY 2012
* This outlook is based on an assumed Euro/US Dollar exchange rate of 1.25 for Q4 FY12.
Guidance for Q1 FY13
Outlook as per yesterday's ad-hoc release.
Outlook Q1 FY13 (compared to Q4 FY12)
| Revenue |
Revenue
to decline
up to 10 percent. |
| Segment |
Approximately |
| Result |
5 - |
| Margin |
7 percent. |
Management Board will define and implement measures to improve profitability beyond Q1 FY13.
Infineon at a Glance
Results and Outlook
Growth Outlook
Despite Near-Term Outlook Cuts, Long-Term Prospect Still Healthy
Source: IHS, September 2012.
25 Sep 2012 Copyright © Infineon Technologies 2012. All rights reserved. Page 19
Rising Semiconductor Value Per Car Drives Market
Source: Strategy Analytics, July 2012; including semiconductor sensors.
Source: Strategy Analytics, July 2012.
25 Sep 2012 Copyright © Infineon Technologies 2012. All rights reserved. Page 20
About 10% Growth p.a. for Cycle Average Expected for Infineon
Infineon: ~10% growth p.a. cycle average
Infineon is Europe's Most Sustainable Semiconductor Company
Dow Jones Sustainability Index (DJSI)
FTSE4Good Index
- Sept. 2012: Inclusion in the DJSI for the 3rd time in a row.
- Infineon is currently Europe's one and only semiconductor company member in the DJSI.
- September 2012: Infineon has met stringent environmental, social and governance criteria, and has been included in the FTSE4Good index again.
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, 25% in Q2 FY12, and 20% in Q3 FY12.
- Capital returns through dividend payments, share buyback, and CB 2014 buyback.
- Aggregate capital returns since Q1 FY11 amount to more than EUR 500m.
London Hybrid Buses Powered by Infineon's EconoDUAL™3 and PrimePACK™ IGBT Module
London hybrid-electrical buses
- Transport is responsible for ~20% of London's CO2 emission.
- London has been building up a fleet of environmentally-friendly hybrid-electrical buses.
- Olympic athletes and visitors are shuttled around the city.
- Fuel saving of 30%; reduction in NOx of 20%.
Powered by EconoDUAL™3
Infineon's CoolSiC™ And SiC JFET Driver Lift Inverter Efficiency to > 99%
Infineon entering the Japanese photovoltaic market with SiC products
- Japan formally implemented new feedin-tariffs for the PV industry in July 2012 as part of the new clean energy policy.
- Infineon's Japanese customer built a prototype of a 10kW inverter using SiC products in Easy modules.
- CoolSiC™ (SiC JFET transistors) successfully entered the market of efficiency-critical applications such as solar inverters.
- In contrast to Si-based MOSFETs, SiC JFETs require dedicated control circuitry, drivers and design know-how allowing Infineon to increase value and Si-content in customer applications.
Social Networks and Cloud Computing Driving Demand for Highest Efficient Power Supplies
Infineon Supplies Security Chips to Malaysia and South Africa
- MyKad is one of first multiapplication national electronic ID card projects implemented worldwide.
-
Multi-application cards allow implementation of numerous additional functions such as eGovernment, eDriving license, eHealth, eSignature, ePurse and transport.
-
Largest chip-based Government smart card project in South Africa. Start of issuance in April 2012.
- Government smart card for 10m South African recipients of social grants.
- Enables South African citizens to securely receive their social grants on the chip cards.
Target to Sustain 15% Cycle-Average Segment Result Margin
SR target margins Total profitability target
Infineon: ~15% operating margin cycle-average
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
25 Sep 2012 Copyright © Infineon Technologies 2012. All rights reserved. Page 32
Infineon's Core Competencies ─ Power Semiconductors and eControl #4
Design and manufacturing of Core competence power power semis tightly coupled
Manufacturing
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.
OpEx In-line With Target Operating Model
Working Capital
Trade and other receivables Trade and other payables
* For definition please see page 41 in appendix.
** Comparable historical figures not available.
Investments Remain High to Exploit Growth Potential
* For definition please see page 41 in appendix.
- Gross cash decreased due to negative Free Cash Flow and debt reduction of EUR 20m. Net cash impact correspondingly lower.
- Bought back another EUR 5m nominal of convertible bond for EUR 12m.
- No buyback of shares during the quarter. But put options for 9.6m shares lapsed with EUR 3.6m premium received.
Value Creation of Infineon by Sustainably High RoCE Above WACC
Capital Employed* history
* For definition please see page 41 in appendix.
25 Sep 2012 Copyright © Infineon Technologies 2012. All rights reserved. Page 38
Average Price Per Underlying Share Below Volume Weighted Average Share Price
Total Gross Capital Returns
25 Sep 2012 Copyright © Infineon Technologies 2012. All rights reserved. Page 40
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']
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') * 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.
Financial Calendar
| Date |
Location |
Event |
| 14 Nov 2012* |
|
Q4 FY12 Results |
| 15-16 Nov 2012 |
Barcelona |
Morgan Stanley TMT Conference |
20 –
21 Nov 2012 |
London |
Company Roadshow
including presentation by Dr. Helmut Gassel
Division President, Industrial
Power Control (IPC) |
| 27-28 Nov 2012 |
Scottsdale, AZ |
Credit Suisse Technology Conference |
* provisional
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] |
|
Holger Schmidt
Manager
Investor Relations |
+49 89 234-22332
[email protected] |
| 31 July 2012 |
Bernard Wang
Manager
Investor Relations
Copyright © Infineon Technologies 2012. All rights reserved. |
+49 89 234-22669
[email protected]
Page 44 |