Investor Presentation • Jan 31, 2018
Investor Presentation
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Infineon Technologies AG Investor Relations
| 1 | Infineon at a glance |
|---|---|
| 2 | Quarterly highlights |
| 3 | Growth drivers |
| Automotive | |
| Power Management | |
| Security | |
| 4 | Selected financial figures |
Please regard the "Notes" and "Glossary" at the end of the presentation.
2018-02-01 Copyright © Infineon Technologies AG 2018. All rights reserved. 3
| Focus | Technology leadership | System understanding | ||||
|---|---|---|---|---|---|---|
| › Focus on fastest growing segments of semi market ›Tackle global megatrends |
Leverage core competencies › in different end markets to maximize ROI |
›Create value for customers through system under standing |
||||
| Auto | Power | RF & Sensors | Security | |||
| System leader in automotive |
#1; system and technology leader |
Broad RF and sensor technology portfolio |
#1 in Security Solutions |
|||
| Average-cycle financial targets | ||||||
| ~13% ~17% ~8% p.a. Investment-to-sales Segment Result margin Revenue growth (thereof capex*: ~11%) |
||||||
| Continued value creation for shareholders |
||||||
| › Organic RoCE ≙ continuous EPS increase › |
~2x WACC; paying out at least a constant dividend even in periods of slower growth | |||||
| * Infineon reports under IFRS and has |
therefore | to capitalize | development costs which |
represents | currently ~2% of sales. |
Infineon increased relative market share in power and outperformed the chip card market
2018-02-01 Copyright © Infineon Technologies AG 2018. All rights reserved. 6
* Based on Infineon's portfolio (excl. Other Operating Segments and Corporate & Eliminations) per end of FY17.
** Source: WSTS (World Semiconductor Trade Statistics) in EUR, October 2017
| Outlook Q2 FY18* | Outlook FY18* (compared to FY17) |
|
|---|---|---|
| Revenue | Increase of 4% +/- 2%-points |
Increase of 5% +/- 2%-points (prev.: "Increase of 9% +/- 2%-points"**) |
| Segment Result Margin |
At the mid-point of the revenue guidance: ~16% |
At the mid-point of the revenue guidance: ~16.5% (previously: 17% **) |
| Investments in FY18 |
€1.1bn to €1.2bn | |
| D&A in FY18 |
€880m*** About |
* Based on an assumed average exchange rate of \$1.25 for €1.00. ** Previously based on \$1.15 for €1.00.
*** Including D&A on tangible and intangible assets from purchase price allocation of International Rectifier.
| 1 | Infineon at a glance |
|---|---|
| 2 | Quarterly highlights |
| 3 | Growth drivers |
| Automotive | |
| Power Management | |
| Security | |
| 4 | Selected financial figures |
Infineon supplies key components for Audi A8. Examples:
2x HybridPACK™ Drive for 6-phase front motor
2x HybridPACK™ Drive for 6-phase rear motor
› Very high semiconductor content per car: > \$900
› Total SiC-based power semiconductor content per charging point: more than \$3,500
More than 60m pieces shipped since market launch in 2015; shipment of another 60m pieces expected in FY18
| 1 | Infineon at a glance |
|---|---|
| 2 | Quarterly highlights |
| 3 | Growth drivers |
| Automotive | |
| Power Management | |
| Security | |
| 4 | Selected financial figures |
10 Oct 2017: ATV Division Call by Peter Schiefer, Division President Automotive www.infineon.com/atv-call
Infineon benefits from industrial and auto, the by far fastest growing segments
| 1 | Infineon at a glance |
|---|---|
| 2 | Quarterly highlights |
| 3 | Growth drivers |
| Automotive | |
| Power Management | |
| Security | |
| 4 | Selected financial figures |
Most balanced portfolio with sensors, microcontrollers and power for system approach
Leader in electric drivetrain and CO2 reduction - making cars clean
Leader in ADAS - making autonomous driving safe and reliable
Leading product portfolio of sensors and security ICs for individual convenience and connectivity - making cars smart
Focus on sustainable high-bill-of-material areas: powertrain, safety/ADAS/autonomous cars, body
* Source: Strategy Analytics, April 2017; ** Infineon estimate.
Infineon is well positioned to benefit from ADAS/AD, xEV, and connected cars and to gain further market share in the automotive market
* Divestiture of NXP's Standard Product business ("Nexperia") closed on 16 Feb 2017; hence included in the 2016 ranking. Source: Strategy Analytics, "Automotive Semiconductor Vendor Market Shares", April 2017
Megatrends shaping the automotive market; significantly increasing semi content per car
Enabling safety towards Vision Zero Enabling CO2 reduction
Enabling security in connected cars
L2 vehicles in 2020:~8m L3 vehicles in 2025: ~3m L4/L5 vehicles in 2030: ~4m
Source: Strategy Analytics; Infineon.
Bill of material contains all type of semiconductors (e.g. radar modules include µC).
| Level of automation | |||
|---|---|---|---|
| Level 2 | Level 3 | Level 4/5 | |
| Automatic emergency brake/ forward collision warning | |||
| Application* | Parking assist | Valet parking | |
| Lane keep assist | Highway assist | Highway and urban chauffeur | |
| Radar # of modules** |
≥ 3 | ≥ 6 | ≥ 10 |
| Camera # of modules** |
≥ 1 | ≥ 4 | ≥ 8 |
| Lidar # of modules** |
0 | 1 |
≥ 1 |
| Others | Ultrasonic | Ultrasonic Interior camera |
Ultrasonic Interior camera V2X |
* Source: VDA (German Association of the Automotive Industry); Society of Automotive Engineers ** Market assumption
Source: The International Council for Clean Transportation, 2017
Source: Strategy Analytics, "Automotive Semiconductor Content", May 2017; Infineon * "power" includes linear and ASIC; "others" include opto, small signal discrete, memory With the transition from ICE to xEV the power semi content in powertrain increases by ~15x
Source: Strategy Analytics, "Automotive Semiconductor Content", May 2017; Infineon
2018-02-01 Copyright © Infineon Technologies AG 2018. All rights reserved. 31
| 1 | Infineon at a glance |
|---|---|
| 2 | Quarterly highlights |
| 3 | Growth drivers |
| Automotive | |
| Power Management | |
| Security | |
| 4 | Selected financial figures |
#1 in the market* for MOSFETs, discrete IGBTs, IGBT-based modules and total market
Broad product and technology portfolio
Addressing broadest range of applications
300 mm thin-wafer manufacturing for power semiconductors
System leader with digitalization of the control loop and functional integration * Source: IHS Markit, Technology Group, "Power Semiconductor Annual Market Share Report", August 2017 Key areas of innovation
Leader in next-generation power semiconductor materials SiC and GaN
Infineon is well positioned to gain further market share and earn clearly above market-average margins in power semiconductors
+
2018-02-01 Copyright © Infineon Technologies AG 2018. All rights reserved. 37
Essential parts of any electronic system (e.g. in an SMPS); can be realized with separate components or as an integrated power stage as system-on-chip
* Infineon estimates
› Integration of additional sensing functions
› 60 GHz radar sensors e.g. for gesture sensing (example: Google Soli)
› Combination of microphone and radar with audio processor from XMOS enables far-field voice capture by audio beamforming combined with radar target presence detection
* Source: IHS Markit, Technology Group, "MEMS microphone database", October 2017
› Core technologies enable broad portfolio of products for even more applications.
2018-02-01 Copyright © Infineon Technologies AG 2018. All rights reserved. 41
| 1 | Infineon at a glance |
|---|---|
| 2 | Quarterly highlights |
| 3 | Growth drivers |
| Automotive | |
| Power Management | |
| Security | |
| 4 | Selected financial figures |
Infineon is the leader in security solutions for the connected world
Complete portfolio of hardware, software, services and turnkey solutions
controller market Leading in growth segments payment, government ID, connected car security, IoT, and Information and Communications Technology security
Infineon is well positioned to benefit from the growth trends in the security
* Source: IHS Markit, Technology Group, "Smart Card Semiconductors Report", July 2017
› Infineon AURIX™ microcontroller with HSM for onboard communication › Security microcontrollers (e.g. eSIMs, TPMs) enable various functions like eCall, software over-the-air, vehicle-to-infrastructure, and on-board multimedia
› Security microcontroller for Infineon MIPAQ™ Pro IPM enabling authentication › Security chips are integrated in solutions for Industry 4.0 applications, e.g. robots
› OPTIGA™ TPM and OPTIGA™ Trust for devices like smart home routers and gateways (e.g. Google OnHub), smart meters, smart lighting etc.
| 1 | Infineon at a glance |
|---|---|
| 2 | Quarterly highlights |
| 3 | Growth drivers |
| Automotive | |
| Power Management | |
| Security | |
| 4 | Selected financial figures |
* Target range for SG&A: "Low teens percentage of sales".
** Target range for R&D: "Low to mid teens percentage of sales". In FY17, R&D expenses amounted to €776m, incl. reduction of €68m of grants received. Not included are €129m of capitalized development costs.
Q1 FY17 Q2 Q3 Q4 Q1 FY18 Trade receivables DSO*
* For definition please see page "Notes".
Investments between €1.1bn and €1.2bn due to strong underlying growth in demand
* For definition please see page "Notes".
Note: Additional debt with maturities between 2018 and 2023 totaling €61m of which €32m repayments related to Campeon.
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.
The IHS Markit reports, data and information referenced herein (the "IHS Markit Materials") are the copyrighted property of IHS Markit Ltd. and its subsidiaries ("IHS Markit") and represent data, research, opinions or viewpoints published by IHS Markit, and are not representations of fact. The IHS Markit Materials speak as of the original publication date thereof and not as of the date of this document. The information and opinions expressed in the IHS Markit Materials are subject to change without notice and neither IHS Markit nor, as a consequence, Infineon have a duty or responsibility to update the IHS Markit Materials or this presentation. Moreover, while the IHS Markit Materials reproduced herein are from sources considered reliable, the accuracy and completeness thereof are not warranted, nor are the opinions and analyses which are based upon it. IHS Markit and the trademarks used in the data, if any, are trademarks of IHS Markit. Other trademarks appearing in the IHS Markit Materials are the property of IHS Markit or their respective owners.
› Sep 2016: Infineon is listed in the STOXX® Global ESG Leaders Indices, which serves as an indicator of the quality of Infineon's performance in the governance, social and environmental areas (ESG)
› For 2017, Infineon has earned a spot among the three best companies in the "Information Technology" sector in the Germany, Austria and Switzerland region.
› Mar 2017: Infineon has been reconfirmed as a constituent of the Ethibel Sustainability Index (ESI) Excellence Europe
| Date | Location | Event |
|---|---|---|
| 22 Feb 2018 |
Munich | Annual General Meeting |
| 26 – 28 Feb 2018 |
Barcelona | Mobile World Congress |
| 03 May 2018* | Q2 FY18 Results | |
| 12 June 2018 | London | Capital Markets Day "IFX Day 2018" |
| 01 Aug 2018* | Q3 FY18 Results | |
| 30 Aug 2018 | Frankfurt | Commerzbank Sector Conference |
| 24 Sep 2018 | Unterschleißheim nearby Munich |
Berenberg and Goldman Sachs 7th German Corporate Conference |
| 25 Sep 2018 | Munich | Baader Investment Conference |
| 12 Nov 2018* | Q4 FY18 and FY 2018 Results |
* preliminary
Notes
Investments =
'Total assets'
'Purchase of property, plant and equipment'
('Income from continuing operations'
/ Capital Employed
DOI (days of inventory; quarter-to-date) =
('Net Inventories' / 'Cost of goods sold') * 90
DSO (days sales outstanding; quarter-to-date) = ('Trade receivables' / 'revenue') * 90
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.
DPO (days payables outstanding; quarter-to-date) =
('Trade payables' / ['Cost of goods sold' + 'Purchase of property, plant and equipment']) * 90
| AD | automated driving | |
|---|---|---|
| ADAS | advanced driver assistance system |
|
| AEB | automatic emergency braking |
|
| AR | augmented reality | |
| BoM | bill of material | |
| DPM | digital power management | |
| eCall | emergency call | |
| EPS | electric power steering | |
| eSIM | embedded subscriber identity module | |
| EV | electric vehicle | |
| HEV | mild and full hybrid electric vehicle | |
| HSM | hardware security module |
|
| ICE | internal combustion engine |
| MHA | major home appliances |
|---|---|
| micro hybrid |
vehicles using start-stop systems and limited recuperation |
| mild hybrid |
vehicles using start-stop systems, recuperation, DC DC conversion, e-motor |
| OBC | onboard charger |
| PHEV | plug-in hybrid electric vehicle |
| SiC | silicon carbide |
| SiGe | silicon germanium |
| SOTA | software over-the-air |
| TPM | trusted platform module |
| UPS | uninterruptible power supply |
| V2X | vehicle-to-everything communication |
| VR | virtual reality |
| VSD | variable speed drive |
| xEV | all degrees of vehicle electrification (EV, HEV, PHEV) |
Corporate Vice President +49 89 234-21626
Investor Relations [email protected]
Senior Director +49 89 234-25649 Investor Relations [email protected]
Senior Manager +49 89 234-22332 Investor Relations [email protected]
Manager +49 89 234-83346 Investor Relations [email protected]
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