Investor Presentation • Sep 28, 2020
Investor Presentation
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Infineon Technologies AG Investor Relations
| 1 | First quarter Cypress being part of Infineon |
|---|---|
| 2 | ESG: targets and achievements |
| 3 | Automotive |
| 4 | Industrial Power Control |
| 5 | Power & Sensor Systems |
| 6 | Connected Secure Systems |
| 7 | Selected financial figures |
* pro forma figure
1) Based on or includes research from Omdia, "Annual 2001-2019 Semiconductor Market Share Competitive Landscaping Tool – Q4 2019 v2", March 2020.
2) Based on or includes research from Omdia, "Power Semiconductor Market Share Database – 2020", September 2020.
Results are not an endorsement of Infineon Technologies AG. Any reliance on these results is at the third party's own risk.
Expected integration and restructuring costs equivalent to ~1x cost synergies one-off over time.
* Expected cost synergies of €180m p.a. gradually ramping up over approximately three years after closing (16 April 2020). Ramp progression adjusted for later closing and COVID-19 implications.
| Target Operating Model Infineon financial performance to approach targets as integration progresses |
|
|---|---|
| Revenue growth |
9%+ (up from "9%") |
| Segment Result margin |
19% (up from "17%") |
| Investment-to-sales | 13% (down from "15%") |
Equity part of refinancing completed; successful bond issue to repay acquisition-related bridge facility
| 2019 | › Arranging and syndication of acquisition facility |
|
|---|---|---|
| › Initial equity de-risking in two steps: › €1.5bn via ABB › €1.2bn via dual-tranche hybrid bond |
|
|
| 2020 | › Drawdown of acquisition facility and usage of raised funds |
|
| › Investment grade rating of BBB- by Standard & Poor's |
| |
| › Completion of equity part via €1.0bn ABB |
| |
| › €2.9bn bond issued, with maturities up to 12 years; bridge facility completely repaid |
| |
| NEXT | › Refinancing of remaining term loans (~€3.0bn) with maturities from Sep 2022 to Jun 2024 through debt capital markets › Return to target level ≤ 2x gross debt / EBITDA over mid-term |
Note: Graph excludes pre-existing Cypress convertibles of ~\$385m repayment value, maturing latest 2022, and additional debt with maturities between 2020 and 2023 totaling €15m of which €4m 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.
| Outlook Q4 FY20* |
Outlook FY20* | |
|---|---|---|
| Revenue | between €2.3bn and €2.6bn |
~€8.5bn |
| Segment Result margin |
At the mid-point of the revenue guidance: ~14% |
~13% |
| Investments in FY20 |
~€1.2bn | |
| D&A in FY20 |
~€1.3bn** |
* Based on an assumed average exchange rate of \$1.15 for €1.00 (previously \$1.10 for €1.00).
** Including the effects of the preliminary purchase price allocation for Cypress
For footnotes please see page "ESG footnotes" in the appendix.
Abatement of Perfluorinated Compounds (PFCs)1) is one of the most important measures avoiding direct emissions.
Historically, Infineon's normalized emission rate has been below WSC 2020 target of 2.2 tons of CO2 equivalent per m² wafer area.
1) Namely perfluorinated and polyfluorinated carbon compounds, sulfur hexafluoride (SF6 ) and nitrogen trifluoride (NF3 )
| Rating/Score | Scale | Date | |
|---|---|---|---|
| MSCI ESG | AA | CCC to AAA | 02/2020 |
| CDP | B climate scoring B- water scoring |
F to A | 02/2020 |
| Ecovadis | 98th percentile "Gold" award |
0 to 100 | 11/2019 |
| Dow Jones Sustainability Index | 79 DJ Sustainability™ World Index listing |
0 to 100 | 09/2019 |
| Ethibel Sustainability Index Excelence Europe" |
Index member | - | 06/2020 |
| ISS ESG Corporate Rating | C+ Prime Status |
D- to A+ |
06/2020 |
| FTSE4Good Index | Index member | - | 07/2020 |
| Euronext Vigeo Eurozone 120 Index Euronext Vigeo Europe 120 Index |
Indices member | - | 06/2020 |
| Sustainalytics | 77 "Outperformer" level |
0 to 100 | 06/2020 |
Source: Strategy Analytics, "Automotive Semiconductor Vendor Market Shares v2", May 2020. The acquisition of Cypress by Infineon closed on 16 April 2020. The market shares for 2019 shown here are the combined market shares of Infineon and Cypress based on their individual figures.
| Body | Cluster/ Chassis Infotainment |
Powertrain | ADAS/AD | ||
|---|---|---|---|---|---|
| Sensors (magnetic, pressure, radar, current, 3D ToF, TrueTouch®, CapSense®) | |||||
| MCU (Embedded Power ICs, PSoC™, Traveo™) |
MCU (AURIX™) | ||||
| Memory (NOR Flash, SRAM, nvSRAM, F-RAM) |
|||||
| Power (MOSFETs, IGBTs, modules, driver ICs, power ICs, LDOs, PMICs, USB Type-C PD) | |||||
| Connectivity (USB) Application examples |
Connectivity (Wi-Fi, BT, BLE) |
||||
| › HVAC › door control › pumps › seat adjustment |
› instrument cluster › in-cabin entertainment › touch control › in-cabin charging |
› braking › steering › stability program › suspension |
› engine management › transmission › main inverter › auxiliaries |
› speed control › emergency braking › blind spot detection › sensor fusion |
* 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
› SOTA update
› programmable logic controller
› edge computing
› 4G/5G base station: radio access network and baseband
2020-09-28 Copyright © Infineon Technologies AG 2020. All rights reserved. 31
* excluding drivers and control ICs
› System understanding and strong R&D force allow us to enter emerging power applications
1 st Gen. CoolSiC™ Trench MOSFET is the leading technology today
2 nd Gen. CoolSiC™ Trench MOSFET is in advanced development phase
Source: Infineon, datasheets on supplier web pages, September 2019.
2 nd Gen. CoolSiC™ Trench MOSFET will significantly enlarge the market size for SiC MOSFETs
| Process tools | Clean room | Process flow | |
|---|---|---|---|
| › Design and production of semi-automated process tool park completed in Dresden |
› Clean room ready for manufacturing by end of calendar year 2020 |
› Integration of individual process steps into complete work flow |
|
| 1/3 of the industrialization journey accomplished |
|||
| Wafer splitting by 2022 | Boule splitting by 2023 | ||
| › Wafer for splitting are already available › Increases # of wafers up to a factor of 2 |
› › |
Boules start to become available Increases # of wafers by a factor of 2.0 in a first step, with potential for a factor of 2.6 |
Combining boule splitting and wafer splitting will make the most efficient process
| Application | Market Outlook for H2 CY20 | Market Outlook for CY21 |
|---|---|---|
| › Industrial drives expected to contract due to push-outs in manufacturing equipment investments |
› Industrial drives highly correlated to GDP › recovery earliest in H2 CY21 |
|
| › Recovery supported by China subsidy awards in late June |
› Total installations forecasted close to pre-crisis levels with upside potential in China and Europe |
|
| › Growth may be not as strong as expected due to installation delays but higher than in CY19 |
› Self-sustainable growth due to long-term drivers and increasing competitiveness |
|
| › Run-rate of appliance shipments back to seasonal pattern; growth driven by China energy efficiency program for air conditioners; partly offset by home appliance retailer inventory levels |
› Growth driven by catch-up effects of delayed purchases as well as energy efficiency incentive programs |
|
| › Weaker passenger volume leads to short-term pushouts in China |
› Long-term drivers ensure steady stability, although growth depends on stimuli programs in China and Europe |
* Including standard (non-integrated) IGBT modules and power integrated modules (PIMs) / converter inverter brake (CIB) modules. Source: Based on or includes research from Omdia, "Power Semiconductor Market Share Database - 2020", September 2020.
* Low-power drives include compact drives, standard drives, premium drives and brushed DC drives.
[units m]
Source: Based on or includes research from Omdia, "Major Home Appliance Market Report 2019", August 2019
What makes system solution attractive to customers?
› Ease of design combined portfolio covers all relevant system components
Infineon heritage Cypress heritage
collaborative robots eAviation
eDelivery vehicles
fuel cell
eMarine
2020-09-28 Copyright © Infineon Technologies AG 2020. All rights reserved. 46
1.8% 3.0% 4.1% 4.5% 5.0% 5.6% 7.3% 9.5% 12.8% 24.6% MagnaChip China Resources Nexperia Alpha and Omega Vishay Renesas Toshiba STMicro ON Semi Infineon Discrete Power MOSFETs 2019 total market: \$8.10bn
* Renesas acquired Integrated Device Technology in March 2019. Both companies were reported combined as Renesas in 2019. Source: Based on or includes research from Omdia, "Power Semiconductor Market Share Database - 2020", September 2020. Discrete Power MOSFET market incl. automotive MOSFETs. Power IC market incl. automotive power ICs.
Infineon and Spark Connected are joining forces to become the leader in notebook wireless charging solutions
› used for smartphones, hearables, and other devices
› high efficiency of up to 95%
› turnkey reference design › incl. SW, HW, and design-in support enabling fast time-to-market
Transmitter; in the charging pad (demonstration device) Receiver; in the notebook (demonstration device)
In total battery-powered applications are a significant growth driver for PSS' 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
2020-09-28 Copyright © Infineon Technologies AG 2020. All rights reserved. 55
Source: Infineon estimates
Source: Yole, "Gas and Particle Sensors Report 2018", December 2018
Radar ICs (24 GHz and 60 GHz only)
| › Innovative products with best signal-to-noise ratio are very much valued by leading consumer electronic manufacturers. Outstanding audio experiences for active noise cancellation, transparent hearing and recording use cases. › New applications like true wireless stereo earbuds offer good growth opportunities. |
› Excellent market position with 24 GHz in automotive for blind spot detection. › New growth areas for 24 GHz and 60 GHz in consumer, IoT and industrial applications: advanced presence detection, people tracking and vital sensing. › Emerging market for in-cabin sensing. (+0.1-pt) |
|---|---|
| 3D ToF image sensor |
Environmental sensors |
| › With its XENSIV™ REAL3™ 3D ToF image sensors, Infineon serves the mobile device market since 2016. AR use cases expected to drive strong market growth from 2021 onwards. › Markets like robotics, in-cabin sensing and payment terminals offer additional potential. |
› Market entry in CO sensor market with first 2 revenues expected in FY21. › XENSIV™ PAS CO sensor meets the two 2 key criteria small footprint and high performance in an affordable way. Hence the sensor is suitable to monitor air quality in a broad selection of everyday devices. |
Source: Based on or includes research from Omdia, "MEMS Microphone Database 2019", January 2020
2020-09-28 Copyright © Infineon Technologies AG 2020. All rights reserved. 60
| Application | Market Outlook for H2 CY20 | Market Outlook for CY21 |
|---|---|---|
| Payment | › Concerns related to COVID-19 lead to accelerated adoption of contactless payments worldwide |
› Momentum in contactless payments expected to continue |
| Identity | › International travel restrictions due to COVID-19 affecting the issuance of passports and border control documents |
› Prolonged restrictions on international travel expected to further negatively affect the issuance of passports |
| Smart home, home appliances |
› Demand disrupted by COVID-19 mainly due to supply chain disruptions, lower consumer spending power, as well as the restrictions on installation services |
› Return to growth, however, lower level than previously expected. › New features and technologies enter production and spread across models |
| Gaming | › Positive trend in gaming driven by COVID-19 lockdowns as need for indoor family entertainment increases |
› Launch of new console models into the market expected to be offset by overall market saturation; Peak of demand driven by COVID-19 vanishes |
| Wearables | › Despite headwinds from COVID-19, global demand of smart watches still continues to grow driven by consumers' monitoring of health and fitness |
› New product launches expected to further boost demand |
| Microcontroller | › 15+ years of investment in PSoC portfolio with > 2bn MCUs shipped › major advantages of programmability and low power consumption › integrated security as a key feature, especially for IoT |
|---|---|
| Connectivity | › excellent market reputation; 1bn+ wireless nodes shipped › proven interoperability between Wi-Fi and BT/BLE as well as monolithic integration into MCUs › a leader in combos and software stack key for IoT applications |
| Security | › leading security market player; unrivaled in security and contactless competence › full solution offered with software – making security easy-to-implement, especially for IoT devices |
| Software | › industry-leading software and toolbox: WICED, MODUS Toolbox › software as a key differentiator and a major enabler for fast and easy implementation of MCU, connectivity and security solutions in IoT devices |
| Ecosystem | › established developer community for hardware and software › fast, proven technical support infrastructure |
Example: smart watch
| 1 | First quarter Cypress being part of Infineon |
|---|---|
| 2 | ESG: targets and achievements |
| 3 | Automotive |
| 4 | Industrial Power Control |
| 5 | Power & Sensor Systems |
| 6 | Connected Secure Systems |
| 7 | Selected financial figures |
[EUR m]
* Consolidation of Cypress revenue as of 16 April 2020.
Adjusted RoCE (excl. effects from International Rectifier and Cypress acquisition, Deferred Tax Effects, RF Power sale) RoCE
* In FY19, reported R&D expenses amounted to €945m, net of €111m of grants received and net of €125m of capitalized development costs.
[EUR m] [EUR m] 1,475 1,511 1,583 1,762 1,505 Q3 FY19 Q4 Q1 FY20 Q2 Q3
Trade receivables Trade payables
[EUR m] [days]
* For definition please see page "Notes".
** Along with the integration of Cypress refund liabilities to customers are presented under "other current liabilities" instead of "trade receivables". Prior quarters' figures were adjusted accordingly for better comparability.
Cycle management slows down investments; D&A impacted by Cypress consolidation and PPA
* For definition please see page "Notes".
| ABB | accelerated book building |
|---|---|
| AC | alternating current |
| AC-DC | alternating current - direct current |
| AD | automated driving |
| ADAS | advanced driver assistance system |
| AEB | automatic emergency braking |
| AFS | advanced frontlight system |
| AI | artificial intelligence |
| AR | augmented reality |
| ASP | average selling price |
| BEV | battery electric vehicle |
| BGA | ball grid array |
| BLE | Bluetooth Low Energy |
| BoM | bill of material |
| BT | Bluetooth |
| CPU | central processing unit |
| CRC | cyclical redundancy check |
| DC | direct current |
| DC-DC | direct current - direct current |
| DIY | do it yourself |
| DPM | digital power management |
| eCall | emergency call |
| ECC | error correction code |
| ECU | electronic control unit |
|---|---|
| EPS | electric power steering |
| eSIM | embedded subscriber identity module |
| EV | electric vehicle |
| FHEV | full hybrid electric vehicle |
| FPGA | field programmable gate array |
| G2M | go-to-market |
| GaN | gallium nitride |
| GPS | global positioning system |
| GPU | graphics processing unit |
| HEV | mild and full hybrid electric vehicle |
| HMI | human machine interaction |
| HSM | hardware security module |
| HST | high-speed train |
| HVAC | heating, ventilation, air conditioning |
| HW | hardware |
| IC | integrated circuit |
| ICE | internal combustion engine |
| IGBT | insulated gate biploar transistor |
| IoT | Internet of Things |
| IPM | intelligent power module |
| IVN | in-vehicle networking |
| iPol | image processing line |
| IRF | International Rectifier | ||
|---|---|---|---|
| IVN | in-vehicle networking |
||
| LCD | liquid crystal display | ||
| LDO | low dropout voltage regulator | ||
| LED | light-emitting diode | ||
| LSEV | low-speed electric vehicle | ||
| LSPS | LS Power Semitech Co. Ltd. |
||
| µC | microcontroller | ||
| Mb | megabit | ||
| MCU | microcontroller unit |
||
| MEMS | micro electro-mechanical systems |
||
| MHA | major home appliances |
||
| MHEV | mild hybrid electric vehicle | ||
| 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 |
||
| MPU | microprocessor unit |
||
| OBC | on-board charger | ||
| OEM | original equipment manufacturer |
||
| P2S | Infineon's strategic product-to-system approach |
||
| PAS | photoacoustic spectroscopy |
||
| PFC | power factor correction |
||
| PHEV | plug-in hybrid electric vehicle |
||
| PMIC | power management IC |
| Pol | point-of-load | ||
|---|---|---|---|
| PSoC | programmable system-on-chip |
||
| PV | photovoltaic | ||
| RF | radio frequency |
||
| rhs | right-hand scale | ||
| Si | silicon | ||
| SiC | silicon carbide |
||
| SiGe | silicon germanium |
||
| SMPS | switch-mode power supply | ||
| SNR | signal-to-noise ratio |
||
| SoC | system-on-chip | ||
| SOTA | software over-the-air |
||
| SPI | serial peripheral interface |
||
| SRAM | static random access memory |
||
| SW | software | ||
| TAM | total addressable memory |
||
| TCO | total cost of ownership |
||
| ToF | time-of-flight | ||
| TPM | trusted platform module |
||
| UPS | uninterruptible power supply |
||
| USB | universal serial bus |
||
| V2X | vehicle-to-everything communication |
||
| VR | virtual reality |
||
| VSD | variable speed drive |
||
| Wi-Fi | wireless fidelity | ||
| 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 Omdia reports, data and information referenced herein (the "Omdia Materials – mostly former IHS Markit Technology Materials") are the copyrighted property of Informa Tech Research Ltd. and its subsidiaries or affiliates (together "Informa Tech") and represent data, research, opinions or viewpoints published by Informa Tech, and are not representations of fact. The Omdia 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 Omdia Materials are subject to change without notice and neither Informa Tech nor, as a consequence, Infineon have any duty or responsibility to update the Omdia Materials or this publication as a result. Omdia 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 Omdia 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 Omdia 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 Omdia Materials. The "IHS Markit" brand and logo have been licensed for use by Informa Tech. The "IHS Markit" brand and logo and any third-party 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.
Deutscher Zukunftspreis 2015, laureate Infineon, photographer Ansgar Pudenz, Hamburg (Germany).
| Date | Location | Event |
|---|---|---|
| 19 Aug 2020 | Baden-Baden virtual |
Lampe Bank German Conference |
| 1 – 2 Sep 2020 |
Chicago virtual |
Jefferies Annual Semiconductor, IT Hardware & Communications Infrastructure Summit |
| 2 Sep 2020 | Japan virtual |
UBS Japan in Focus Conference |
| 3 Sep 2020 | London virtual |
dbAccess European TMT Conference |
| 8 – 9 Sep 2020 |
New York virtual |
Citi 2020 Global Technology Virtual Conference |
| 14 Sep 2020 | San Francisco virtual |
DB Global Technology Conference |
| 21 Sep 2020 | Unterschleißheim (nearby Munich) virtual |
Berenberg Goldman Sachs German Corporate Conference |
| 22 Sep 2020 | Munich hybrid |
Baader Investment Conference |
| 5 – 6 Oct 2020 |
London virtual |
ATV Roadshow and Call |
| 9 Nov 2020* | Q4 FY20 and FY 2020 Results | |
| 18 Nov 2020 | Barcelona virtual |
Morgan Stanley TMT Conference |
| 23 Nov 2020 | Frankfurt | DZ Bank 11th Equity Conference |
DIO (days inventory outstanding; quarter-to-date) = ('Net Inventories' / 'Cost of goods sold') x 90
DPO (days payables outstanding; quarter-to-date) = ('Trade payables' / ['Cost of goods sold' + 'Purchase of property, plant and equipment']) x 90
DSO (days sales outstanding; quarter-to-date) = ('Trade receivables' / 'revenue')* x 90
*without debtors with credit balances
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.
IPC Business Update Dr. Peter Wawer, Dr. Peter Friedrichs 7 May 2020
https://www.infineon.com/pcim_presentation
ATV Call Peter Schiefer 8 October 2019
https://www.infineon.com/atv_call
https://www.infineon.com/sustainability_2019
IFX Day 2018 Capital Markets Day London, 12 June 2018
https://www.infineon.com/ifxday_2018
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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