Investor Presentation • Nov 12, 2019
Investor Presentation
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Infineon Technologies AG Investor Relations
| 1 | Infineon at a glance |
|---|---|
| 2 | Planned acquisition of Cypress |
| 3 | Quarterly highlights |
| 4 | Automotive |
| 5 | Industrial Power Control |
| 6 | Power Management & Multimarket |
| 7 | Digital Security Solutions |
| 8 | Selected financial figures |
| Focus | Technology leadership | System understanding | |||
|---|---|---|---|---|---|
| › Focus on fastest growing segments of semi market › Tackle global megatrends |
› in different end markets to maximize ROI |
Leverage core competencies | › standing |
Create value for customers through system under |
|
| Auto | Power | RF & Sensors | Security | ||
| System leader in automotive |
#1; system and technology leader |
Broad RF and sensor technology portfolio |
#2 in Security Solutions |
| Target operating model: average-cycle targets | ||
|---|---|---|
| Revenue growth | Segment Result margin | Investment-to-sales |
| 9% | 17%+ | 15% |
| Continued value creation for shareholders | ||
| › | › | › |
| Organic RoCE ≙ | Paying out at least a constant dividend | continuous EPS |
| ~2x WACC | even in periods of slower growth | increase |
total market in 2018: \$37.7bn
Source: Strategy Analytics, "2018 Automotive Semiconductor Vendor Share", April 2019
total market in 2018: \$21.0bn
Source: Based on or includes content supplied by Informa Tech (former IHS Markit Technology), "Power Semiconductor Market Share Database – 2018", September 2019
total market in 2018: \$3.2bn
Source: ABI Research, "Smart card & secure ICs", September 2019
| Outlook Q1 FY20* (compared to Q4 FY19) |
Outlook FY20* | |
|---|---|---|
| Revenue | Decline of 7% +/- 2%-points |
increase of 5% +/- 2%-points |
| Segment Result Margin |
At the mid-point of the revenue guidance: ~13% |
At the mid-point of the revenue guidance: ~16% |
| Investments in FY20 | ~€1.3bn** | |
| D&A in FY20 | ~€1bn*** |
| 1 | Infineon at a glance |
|---|---|
| 2 | Planned acquisition of Cypress |
| 3 | Quarterly highlights |
| 4 | Automotive |
| 5 | Industrial Power Control |
| 6 | Power Management & Multimarket |
| 7 | Digital Security Solutions |
| 8 | Selected financial figures |
| Current (as announced at CMD 2018) |
Integrated company* |
|
|---|---|---|
| Revenue growth |
9% | 9%+ |
| Segment result margin |
17%+ | 19% |
| Investment-to-sales | 15% | 13% |
* Infineon financial performance to approach new targets as integration progresses
| STEP 1 | Underwriting of full acquisition amount by 3 banks | |
|---|---|---|
| STEP 2 | Confirmation of investment grade rating by Standard & Poor's | |
| STEP 3 | Equity de-risking: Raise of €1.5bn via ABB | |
| STEP 4 | Successful syndication of acquisition facility to 20 national and international banks |
|
| STEP 5 | Successful launch of €1.2bn dual-tranche hybrid bond |
|
| NEXT | › Refinancing of remaining bridge and term loan through capital markets › Deleveraging: return to target level ≤ 2x gross debt / EBITDA in 2023 |
| 1 | Infineon at a glance |
|---|---|
| 2 | Planned acquisition of Cypress |
| 3 | Quarterly highlights |
| 4 | Automotive |
| 5 | Industrial Power Control |
| 6 | Power Management & Multimarket |
| 7 | Digital Security Solutions |
| 8 | Selected financial figures |
Infineon and Nichia to build high-definition micro-LED matrix solution for adaptive driving beams
Nichia and Infineon develop a high-definition (HD) light engine
› HD light to the entire field of view
› new driver IC control and diagnose all 16K µLEDs individually
project markings on the road
Nichia µ-PLS*
* micro pixelated light source
OEM's from major regions awarding this platform
› industrial (PMM): diodes, MOSFETs
* as per end of FY19; ** only customers with > €10k revenue considered
› ~ triple-digit €m revenue expected for FY20
Complete radar system with antennas on a very small area and very low power consumption
Source: Strategy Analytics, "Automotive Semiconductor Vendor Market Shares", April 2019
* Japan has already met its 2020 statutory target as of 2013 Source: ICCT (www.theicct.org), August 2019
Source: Infineon; IHS Markit, Automotive Group, "Alternative propulsion forecast", September 2019; Strategy Analytics, "Automotive Semiconductor Content", August 2019. * Non PT (non powertrain): average semiconductor content in Body, Chassis, Safety & Infotainment application segments.
** "power" includes linear and ASIC; "others" include opto, small signal discrete, memory
A failure-tolerant system with high availability relies on dependable key functionalities
| NCAP 5 Star, AD L2 | AD L2+/L3 | AD L4/L5 | |
|---|---|---|---|
| Automatic emergency brake/ forward collision warning | |||
| Application* | Parking assist | Valet parking | |
| Lane keep assist | Highway assist | Highway and urban chauffeur | |
| Radar # of modules** |
Corner MRR/LRR ≥ 3 |
MRR/LRR ≥ 6 |
Imaging ≥ 10 |
| New: Corner; starting 2020 | Corner | Surround | |
| 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
2019-11-12 Copyright © Infineon Technologies AG 2019. All rights reserved. 30
* excluding drivers and control ICs
› System understanding and strong R&D force allow us to enter emerging power applications
* Littelfuse acquired IXYS Corporation in January 2018. Both companies are reported separately in 2017 and combined as Littelfuse in 2018.
** Microchip Technology acquired Microsemi Corporation in May 2018. Both companies are reported separately in 2017 and combined as Microchip in 2018.
*** Including standard (non-integrated) IGBT modules and power integrated modules (PIMs) / converter inverter brake (CIB) modules.
Source: Based on or includes content supplied by Informa Tech (former IHS Markit Technology), "Power Semiconductor Market Share Database 2018", September 2019.
*Low-power drives include compact drives, standard drives, premium drives and brushed DC drives.
* Infineon is serving the top-10 but not necessarily as a sole supplier.
1) based on or includes content supplied by Informa Tech (former IHS Markit Technology), "PV Installations Tracker – Q1 2019"; March 2019; including off-grid 2) by shipped capacity in MW: based on or includes content supplied by Informa Tech (former IHS Markit Technology), "PV Inverter Market Tracker – Q3 2019", October 2019
* Infineon is serving the top-10 but not necessarily as a sole supplier.
1) Wood Mackenzie Power & Renewables, "Market Outlook Update", March 2019
2) by shipped capacity in MW: Wood Mackenzie, Power & Renewables, "Historic wind turbine OEM market share", March 2019
collaborative robots eAviation
eDelivery vehicles
fuel cell
eMarine
2019-11-12 Copyright © Infineon Technologies AG 2019. All rights reserved. 42
total market in 2018: \$7.58bn
total market in 2018: \$25.62bn
Source: Based on or includes content supplied by Informa Tech (former IHS Markit Technology), "Power Semiconductor Market Share Database 2018", September 2019. Discrete Power MOSFET market incl. automotive MOSFETs. Power IC market incl. automotive power ICs.
In total battery-powered applications are a significant growth driver for PMM's power business
hyperscale AI data center
on-board charger
power tools
new material home appliances class D audio
Core Adjacent New area
collaborative robots
smart speaker
2019-11-12 Copyright © Infineon Technologies AG 2019. All rights reserved. 49
Augmented Reality Voice-controlled devices Gesture control
Commercial and consumer multicopters
Industrial robotics
| Key Use Cases – | Examples | |||
|---|---|---|---|---|
| Voice authentication | Advanced fitness tracking |
Smog alarm | Gesture sensing | 3D AR gaming |
| Face recognition & biometric identification | ||||
| Human Machine Interface |
Source: Infineon
| 1 | Infineon at a glance |
|---|---|
| 2 | Planned acquisition of Cypress |
| 3 | Quarterly highlights |
| 4 | Automotive |
| 5 | Industrial Power Control |
| 6 | Power Management & Multimarket |
| 7 | Digital Security Solutions |
| 8 | Selected financial figures |
* In FY19, reported R&D expenses amounted to €945m, net of €111m of grants received and net of €125m of capitalized development costs.
Working capital* Inventories [EUR m]
Trade receivables Trade payables
[EUR m]
* For definition please see page "Notes".
[EUR m] [days]
* For definition please see page "Notes".
Note: Additional debt with maturities between 2019 and 2023 totaling €32m of which €12m repayments relate to Campeon.
On 1 Oct 2019, Infineon issued a perpetual hybrid bond with two tranches: €600m with first call date in 2025 and €600m with first call date in 2028; both are accounted as equity under IFRS. * On 3 Jun 2019, S&P placed Infineon on CreditWatch with negative outlook in relation to the Cypress acquisition.
| AC | alternating current |
eCall | emergency call |
|---|---|---|---|
| AC-DC | alternating current - direct current |
ECU | electronic control unit |
| AD | automated driving |
EPS | electric power steering |
| ADAS | advanced driver assistance system |
eSIM | embedded subscriber identity module |
| AEB | automatic emergency braking |
eSIM | embedded SIM |
| AFS | advanced frontlight system |
EV | electric vehicle |
| AI | artificial intelligence |
FPGA | field programmable gate array |
| AR | augmented reality |
GPU | graphics processing unit |
| BEV | battery electric vehicle |
HEV | mild and full hybrid electric vehicle |
| BGA | ball grid array |
HMI | human machine interaction |
| BoM | bill of material |
HSM | hardware security module |
| CPU | central processing unit |
HST | high-speed train |
| DC | direct current |
HW | hardware |
| DC-DC | direct current - direct current |
ICE | internal combustion engine |
| DPM | digital power management | IVN | in-vehicle networking |
| IPM | intelligent power module | |
|---|---|---|
| iPol | image processing line |
|
| IRF | International Rectifier | |
| LSEV | low-speed electric vehicle | |
| LSPS | LS Power Semitech Co. Ltd. |
|
| µC | microcontroller | |
| MEMS | micro electro-mechanical systems |
|
| MHA | major home appliances |
|
| MIMO | multiple input, multiple output | |
| micro hybrid |
vehicles using start-stop systems and limited recuperation | |
| mild hybrid |
vehicles using start-stop systems, recuperation, DC-DC conversion, e-motor |
|
| MOSFET | metal-oxide silicon field-effect transistor |
|
| OBC | on-board charger | |
| OEM | original equipment manufacturer |
|
| PHEV | plug-in hybrid electric vehicle |
|
| Pol | point-of-load |
| PV | photovoltaic |
|---|---|
| RF | radio frequency |
| rhs | right-hand scale |
| Si | silicon |
| SiC | silicon carbide |
| SiGe | silicon germanium |
| SMPS | switch-mode power supply |
| SOTA | software over-the-air |
| SW | software |
| ToF | time-of-flight |
| 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) |
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 Informa Tech reports, data and information referenced herein (the "Informa Tech Materials – mostly former IHS Markit Technology Materials") are the copyrighted property of Informa Tech Research Ltd. and its subsidiaries ("Informa Tech") and represent data, research, opinions or viewpoints published by Informa Tech, and are not representations of fact. The Informa Tech 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 Informa Tech Materials are subject to change without notice and neither Informa Tech nor, as a consequence, Infineon have any duty or responsibility to update the Informa Tech Materials or this publication as a result. Informa Tech Materials are delivered on an "as-is" and "as-available" basis. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in the Informa Tech Materials. To the maximum extent permitted by law, Informa Tech and its affiliates, IHS Markit and its Affiliates and their respective, officers, directors, employees and agents, disclaim any liability (including, without limitation, any liability arising from fault or negligence) as to the accuracy or completeness or use of the Informa Tech Materials. Informa Tech and/or IHS Markit will not, under any circumstance whatsoever, be liable for any trading, investment, commercial or other decisions based on or made in reliance of the Informa Tech Materials. The "IHS Markit" brand and logo have been licensed for use by Informa Tech. The "IHS Markit" brand and logo and any thirdparty trademarks used in the IHS Markit Technology Materials are the sole property of IHS Markit Group or their respective third-party owners.
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 any duty or responsibility to update the IHS Markit Materials or this publication. 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.
| Date | Location | Event |
|---|---|---|
| 13 – 14 Nov 2019 |
Barcelona | Morgan Stanley TMT Conference |
| 20 Nov 2019 | Frankfurt | DZ Bank Equity Conference |
| 25 Nov 2019 | Munich | UBS German Senior Investor Day |
| 5 Feb 2020* | Q1 FY20 Results | |
| 20 Feb 2020 | Munich | Annual General Meeting |
| 24 – 26 Feb 2020 |
Barcelona | Investor Meetings at Mobile World Congress |
| 5 May 2020* | Q2 FY20 Results | |
| 6 May 2020 | Nuremberg | Industrial Power Control Business Update at PCIM |
| 9 – 10 Jun 2020 |
Paris | 22nd Exane European CEO Conference |
| 4 Aug 2020* | Q3 FY20 Results | |
| 9 Nov 2020* | Q4 FY20 and FY 2020 Results |
DIO (days inventory outstanding; quarter-to-date) = ('Net Inventories' / 'Cost of goods sold') * 90
DPO (days payables outstanding; quarter-to-date) = ('Trade payables' / ['Cost of goods sold' + 'Purchase of property, plant and equipment']) * 90
DSO (days sales outstanding; quarter-to-date) = ('Trade receivables' / 'revenue') * 90
Please note: 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.
Corporate Vice President Finance, Treasury & Investor Relations
+49 89 234-23766 [email protected]
Senior Director Investor Relations +49 89 234-25649 [email protected]
Manager Investor Relations
+49 89 234-38297 [email protected]
Senior Manager Investor Relations
+49 89 234-38348 [email protected]
Senior Manager Investor Relations
+49 89 234-22332 [email protected]
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