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Investor Presentation JP Morgan Technology, Media & Telecom
Conference
Steve Sanghi, Chairman and CEO
©May 2016
2 ©May 2016
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FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
MCU Analog Memory Licensing MMO
Annual Net Sales Growth
$ M
illi
on
• 102 consecutive quarters of profitability!
4 ©May 2016
Analog Yearly Revenue (k$)
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5 ©May 2016
Highly Profitable Financial Model *
* Represents the midpoint of the non-GAAP financial guidance for the June 2016
quarter
Microchip Atmel Microchip + Atmel
Long Term
Model
Revenue ($M) $585.5 $235.0 $820.5
Gross Margin (%) 58.4% 46.5% 55.0% 59%
Operating Expense (%) 26.45% 37.0% 29.5% 26%
Operating Income ($M) $187.1 $22.5 $209.6
Operating Income (%) 31.95% 9.5% 25.5% 33%
6 ©May 2016
Synergy and Accretion Expectations
Transaction is expected to be immediately accretive to our non
GAAP earnings per share
Short term: Targeting 18% growth in non-GAAP EPS from FY16 to
FY17 with accretion from Micrel and Atmel.
Atmel adds ~25 cents in FY 2017
Long term: 3rd year after close (FY2019), we expect:
$170M in synergy from cost savings and revenue growth
Atmel to contribute ~90 cents/share of non GAAP EPS (this assumes
shares issued in the Atmel transaction are purchased back prior to
FY19)
Targeting consolidated Microchip non GAAP EPS of $4.25/share
Represents non GAAP EPS growth of over 17% per year for
Microchip over the next 3 years.
Full synergy of over $200M in the 4th year (FY 2020)
Extends Microchip’s record of organic as well as acquisition driven
revenue and non GAAP EPS growth
8 ©May 2016
SUPX - SUPX PIC
Customer Counts
-
500
1,000
1,500
2,000
2,500
3,000
3,500
Q315 Q415 Q116 Q216 Q316
Supertex
Supertex Pic
Record number of customers!!!
Supertex Sampling 8X at MCHP
More than 1000 New Attach Customers added!!!!
9 ©May 2016
MICREL LPS Group
Customer Sample Shipments
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Feb CY15 Mar CY15 APR CY15 MAY CY15 June CY15 July CY15 Aug CY15 Sept CY15 OCT CY15 NOV CY15 DEC CY15 JAN CY16 FEB CY16 MAR CY16
TOTAL
Switch to MCHP Business systems “Go Live”
May 8 Deal Announced
August 3 Close
Micrel Sampling 2X and Growing
10 ©May 2016
Fiscal 4th Quarter 2016 Micrel
Qtr ending Qtr ending Qtr ending 9/30/15 12/31/15 3/31/16
Gross Margin % 45.4% 49.5% 53.2%
Operating Exp 41.8% 31.9% 30.4%
Operating Prof. 3.6% 17.6% 22.8%
11 ©May 2016
Core Diversity in Competitive Platforms
Supplier 8 Bit 16 Bit 32 Bit
NXP/Freescale • 68HC05
• 68HC08
• 68HC11/12
• RS08xxx
• LPC900
• 68HC16
• 56800/568000
• MPCXXX
• MCFXXX
• MSC8XX
• LPC, Kinetis
Renesas • H8 • H16
• M16
• 78K
• R8C
• M32
• V850
• RX
• SH7
• S3
TI • MSP430 • C2000/C28000
• MSP432
• LM3, LM4, Tiva
MCHP • PIC16
• PIC18
• AVR8
• 8051
• dsPIC
• PIC24
• AVR32
• PIC32
• SAM
12 ©May 2016
MCHP Financial Information Consolidated
Q1FY17 Long-Term
Actual Guidance Model With
Mar. 31, 2016 Jun. 30, 2016 Atmel
Net Sales
($MM Non-GAAP) $568.4 $799.1 – 841.9
Gross Margin* 58.4% 54.8% - 55.2% ~ 59%
Operating Expenses*
(% of Sales) 27.0% 29.1% - 29.8% ~ 26%
Operating Profit 31.4% 25.0% - 26.1% ~ 33%
EPS (Non-GAAP**) $0.70 $0.70 – 0.79
EPS (GAAP) $0.31
* Excludes share-based compensation, acquisition related charges, non-recurring items and adoption of ASC Subtopic 470-20.
** A reconciliation of our GAAP to non-GAAAP results is available at www.microchip.com.
Actual Guidance
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