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Dialog Semiconductor Q1 2016 Results
4 May 2016
Dialog Semiconductor Q1 2016 results – 4 May 2016
Forward looking statement
2
This presentation contains “forward-looking statements” that reflect management’s current
views with respect to future events. The words “anticipate,” “believe,” “estimate, “expect,”
“intend,” “may,” “plan,” “project” and “should” and similar expressions identify forward-looking
statements. Such statements are subject to risks and uncertainties, including, but not limited to:
an economic downturn in the semiconductor and telecommunications markets; changes in
currency exchange rates and interest rates, the timing of customer orders and manufacturing
lead times, insufficient, excess or obsolete inventory, the impact of competing products and
their pricing, political risks in the countries in which we operate or sale and supply constraints.
If any of these or other risks and uncertainties occur (some of which are described under the
heading “Risks and their management” in Dialog Semiconductor’s most recent Annual Report)
or if the assumptions underlying any of these statements prove incorrect, then actual results
may be materially different from those expressed or implied by such statements. We do not
intend or assume any obligation to update any forward-looking statement, which speaks only
as of the date on which it is made, however, any subsequent statement will supercede any
previous statement.
Dialog Semiconductor Q1 2016 results – 4 May 2016
Q1 2016 – Financial Overview
Outlook
Business Review Agenda Text Here
Q&A
Insert Agenda Text
Insert Agenda Text Here
3
Agenda
Dialog Semiconductor Q1 2016 results – 4 May 2016
Dialog at a glance – Q1 2016
$241m
IFRS
Revenue (Q1 2015
Actual: $311m)
12.4%
Underlying EBIT
margin (Q1 2015
Actual: 22.8%)
$0.28
Underlying Diluted
EPS (Q1 2015
Actual: $0.71)
45.5%
Underlying
gross margin (Q1 2015
Actual: 46.6%)
33.1%
Underlying
OPEX % (Q1 2015
Actual: 23.8%)
$135.1m Cash from
operations (Q1 2015
Actual: $132.4m)
-110bps +930bps
nm -61% +2%
-22%
4
Underlying reconciliation table on slide 19
Dialog Semiconductor Q1 2016 results – 4 May 2016
311
241
0
50
100
150
200
250
300
350
Q1 2015 Q1 2016
Q1 2016 – In line with guidance Revenue at high-end of March guidance range
5
46.6 45.9 45.5
30
35
40
45
50
Q1 2015 Q4 2015 Q1 2016
% Underlying gross margin
IFRS revenue
($ million)
-22%
• Q1 2016 revenue at the high-end of
March guidance range
– Solid growth in:
• Power Conversion supported by rapid
charge roll out
• Bluetooth Smart
– Lower volumes in Mobile Systems
– Legacy DECT decline
• Q1 2016 gross margin in line with
guidance
• Gross margin reduction caused by
lower volumes
Dialog Semiconductor Q1 2016 results – 4 May 2016
24.4 24.9
16.7 16.8
7.7 8.1
0
5
10
15
20
25
30
35
40
0
30
Q1 2015 Q1 2016
OPEX % of revenue R&D % of revenue
SG&A % of revenue
71.0
29.9
0
10
20
30
40
50
60
70
80
Q1 2015 Q1 2016
• Underlying OPEX on a Trailing Twelve
Month basis 50bps above Q1 2015
– Supporting the medium-term organic
growth opportunity
– Increasing ASIC opportunities for
our core technologies with Tier 1
customers
• Underlying EBIT at the bottom of the
trough
– Lower volumes impact on gross
margin
– Rigorous control of operating
expenses
Focused R&D effort
6
(*) Other operating income and expenses included in SG&A
Investing in future revenue streams
Underlying EBIT and EBIT %
($ million)
-58%
12.4%
22.8%
Trailing Twelve Month Underlying OPEX
% of revenue *
Dialog Semiconductor Q1 2016 results – 4 May 2016
0.71
0.28
Q1 2015 Q1 2016
Q1 2016 earnings
7
• Q1 2016 underlying tax rate of 22%
(2015: 25%)
• $137 million Atmel termination fee not
taxable in the UK
• $110 million free cash flow generated in
Q1 2016
• Temporary working capital increase in
Q1 2016
Underlying diluted EPS ($)
-61%
Solid balance sheet
478 567
662
0
100
200
300
400
500
600
700
Q3 2015 Q4 2015 Q1 2016
Cash and cash equivalents balance
($ million)
Dialog Semiconductor Q1 2016 results – 4 May 2016
Q1 2016 – Financial Overview
Outlook
Business Review Agenda Text Here
Q&A
Insert Agenda Text
Insert Agenda Text Here
8
Agenda
Dialog Semiconductor Q1 2016 results – 4 May 2016
Q2 2016 outlook
9
• Based on our current visibility, we anticipate revenue for Q2 2016 to improve
sequentially from Q1 2016 and to be in the range of $240 to $260 million. On the basis
of this revenue guidance, gross margin in Q2 2016 will be flat to marginally above Q1
2016.
• In line with historic seasonality, we expect revenue performance for the full year to be
strongly weighted towards the second half of the year. However, as a result of the
continuing softness in smartphone market demand, we now anticipate revenue for the
full year 2016 to decline high single digit percentage year-on-year. We expect growth
momentum in our Connectivity and Power Conversion products to remain strong
through 2016.
• In line with the revenue performance, we expect underlying gross margin percentage
for the full year to be slightly below the level achieved in 2015. The effect of the lower
anticipated revenue in FY 2016 will be partially offset by rigorous control of operating
expenses in the
Dialog Semiconductor Q1 2016 results – 4 May 2016
Q1 2016 – Financial Overview
Outlook
Business Review
Q&A
Insert Agenda Text
Insert Agenda Text Here
10
Agenda
Dialog Semiconductor Q1 2016 results – 4 May 2016
A leader in Power Management Laying the foundations for future revenue growth
11
• H2 ramp of our highly integrated Power
Management IC (PMIC) with Tier 1
customers
• New design wins increasing content in
2017
• Diversification of PMIC business:
– Increasing number of opportunities with
Tier 1 customers
– New segments:
• PMIC for computing systems
• Highly integrated PMIC for TVs and Set-top
boxes.
– Sub-PMIC design wins in China
Dialog Semiconductor Q1 2016 results – 4 May 2016
High growth Bluetooth® Smart segment Strong momentum in 2016
12
Volume today • Health & Fitness / Wearables • Proximity (tags and beacons) • HIDs Emerging • Smart Homes • Medical • Wireless charging (A4WP) • Automotive • Gaming accessories
$0
$200
$400
$600
$800
$1,000
$1,200
2014 2015 2016 2017 2018 2019
61% CAGR 2015-2018
Bluetooth® Smart - Market size M$
Dialog Semiconductor Q1 2016 results – 4 May 2016
Leader in rapid charge technologies Many protocols from platform vendors and mobile OEMs
13
Samsung
Huawei
LeTV
OEM #4
The Leader in Rapid Charging
• Widest Customer Base • Most Technologies
Supported
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Dialog Semiconductor Q1 2016 results – 4 May 2016 14
Q&A
Dialog Semiconductor Q1 2016 results – 4 May 2016
Appendix
15
Agenda
Dialog Semiconductor Q1 2016 results – 4 May 2016
20% Q1 Revenue CAGR 2011-2016
14 14 25 35 32 34 44 52 36 45
59 78
61 69 80 88 98 116
141 172 166 160
180
268
180 151
219
352
221 219
281
435
311 316 330
397
241
0
40
80
120
160
200
240
280
320
360
400
440
480
Q1 Q2 Q3 Q4
2007
2008
2009
2010
2011
Quarterly IFRS revenue
($ million)
2012
2013
2014
2015
Q1 2016 revenue
16
87 162 218 296
527
774 901
1,156 1,355
0
200
400
600
800
1000
1200
1400
1600
2007 2008 2009 2010 2011 2012 2013 2014 2015
Full year IFRS revenue
($ million) 36% Revenue CAGR
2010-2015
+17% • Q1 2016 IFRS revenue $241 million
– Power Conversion up 28% on Q1 2016
– Mobile Systems down 26% on Q1 2016
– Connectivity down 25% on Q1 2016
Strong growth in Power Conversion
2016
Dialog Semiconductor Q1 2016 results – 4 May 2016
119
153 148
120
105
139
62
86 88
38
56 64 71 56
103
-100
-50
0
50
100
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16
Finished goods
Work in process
Raw Materials
DIO
Effective inventory management
17
• At the end of Q1 2016 inventory value up 13% and DIO up 47 days over Q4 2015
• In Q2 2016 we expect inventory value and inventory days to decrease from Q1 2016
Inventory ($ million) and Days Inventory Outstanding (# days)
DIO (1)
28%
9% 11%
63%
59%
38%
46%
30%
18%
37%
45%
25%
38%
37% 99
26%
29%
45%
Average DIO of 69 days
88
67%
16%
29%
9%
41%
50%
4%
(1) Calculated using average
inventory balance over the period 18%
32%
50%
135
Dialog Semiconductor Q1 2016 results – 4 May 2016
Strong cash flow generation
18
286 272 257 324
421 448 478 567
662
0
100
200
300
400
500
600
700
Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016
• $662 million cash & cash equivalents
balance at 1 April 2016
• $137 million Atmel termination fee
• $110 million Q1 2016 free cash flow (Q1
2015: $98 million)
Cash and cash equivalents balance
($ million)
Cash Flow Bridge from Q4’15
($ million)
566.8
165.9
(35.2)
(26.4) (1.6) (13.9) 6.6
662.2
$300
$350
$400
$450
$500
$550
$600
$650
$700
$750
$800
Dialog Semiconductor Q1 2016 results – 4 May 2016
Q1 2016 – Underlying adjustments
19
Dialog Semiconductor Q1 2016 results – 4 May 2016
Q1 2016 – Income statement
20
Dialog Semiconductor Q1 2016 results – 4 May 2016
Q1 2016 – Balance sheet
21
Dialog Semiconductor Q1 2016 results – 4 May 2016
Q1 2016 – Cash flow statement
22
Dialog Semiconductor Q1 2016 results – 4 May 2016
Investor information
23
Analyst coverage
Financial Calendar
Q2 2016 Results 28 July
Q3 2016 Results 3 November
Key Events
Jose Cano
Head of Investor Relations
T: +44 (0)1793 756 961
Contacts
Bank of America Merrill Lynch Adithya Metuku
Baader Bank Guenther Hollfelder
Bankhaus Lampe Dr. Karsten Iltgen
Barclays Capital Andrew Gardiner
Berenberg Bank Tammy Qiu
Bryan, Garnier & Co Dorian Terral
CA Cheuvreux Bernd Laux
Close Brothers Seydler Veysel Taze
Commerzbank Thomas Becker
Credit Suisse Achal Sultania
Deutsche Bank Rob Sanders
DZ Bank Harald Schnitzer
Exane BNP Paribas David O’Connor
Hauck & Aufhauser Tim Wunderlich
HSBC Trinkaus & Burkhardt AG Christian Rath
Jefferies International Robert Lamb
JP Morgan Cazenove Chetan Udeshi
Main First Bank AG Juergen Wagner
Morgan Stanley Francois A Meunier
Natixis Stephane Houri
RBC Mitch Steves
Stifel Lee Simpson
Financial PR/IR Advisers:
FTI Consulting – London
Matt Dixon
T: +44 (0)20 7831 3113
FTI Consulting – Frankfurt
Anja Meusel
T: +49 (0)69 9203 7120
20 June 2016, London
JPMorgan CEO Conference
10-12 May 2016, Miami
Jefferies TMT Conference
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…personal
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…connected
© 2016 Dialog Semiconductor 24
Powering the Smart Connected Future
www.dialog-semiconductor.com