[PPT] - Q1 2013 Results 8 May 2013 Forward looking statement This PowerPoint Presentation

SLIDE 1

Q1 2013 Results

8 May 2013

SLIDE 2

2

Forward looking statement

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

bsolete 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

ther risks and uncertainties occur (some of which are described under the heading

“Risks and their management” in Dialog Semiconductor’s most recent Annual Report)

r 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 2013 results, 8 May 2013

SLIDE 3

Agenda

Q1 2013 Executive Overview Outlook Strategic Review Q1 2013 Financial Overview Appendix

SLIDE 4

4

Dialog at a glance Q1 2013 – Delivering revenue growth and gross margin improvement

$180m Revenue

(Q1 2012 Actual: $166m)

9.2% EBIT margin

(Q1 2012 Actual: 9.5%)

$0.15 Diluted EPS

(Q1 2012 Actual: $0.17)

38.1% Gross margin

(Q1 2012 Actual: 36.9%)

28.8% OPEX %

(Q1 2012 Actual: 27.6%)

$20.4m Operating cash flow

(Q1 2012 Actual: $35.8m)

+120bps +120bps

30bps
12%
43%

+8%

Dialog Semiconductor Q1 2013 results, 8 May 2013

SLIDE 5

Agenda

Outlook Strategic Review Q1 2013 Financial Overview Appendix

SLIDE 6

6

Q2 2013 Outlook

■ Given the visibility we have, we remain confident about the company’s revenue growth for the full year, anticipating a much stronger second half driven by ramp of high volume new products ■ In Q2 2013 Dialog expects revenue for the quarter to be in the range of $140 to $155 million ■ On the basis of the revenue outlook for Q2 2013 we expect gross margin to be flat to marginally below Q1 2013 ■ Gross margin is expected to improve incrementally through the second half and grow year on year

Dialog Semiconductor Q1 2013 results, 8 May 2013

SLIDE 7

Agenda

Strategic Review Q1 2013 Financial Overview Appendix

SLIDE 8

8

Investing for the long term of the business

Diversifying through innovation

■ New products to be launched in the second half of the year with our largest clients ■ Exciting new products launched in Q1 2013

SmartwaveTM our first multi-touch IC (MTIC)
Intel Bay Trail collaboration

■ Progress with Asia based smartphone chipset vendors targeting high growth

segment of the market

■ Keeping momentum in R&D investments relating to 2014-2016 programmes

Increased focus on product areas that support our diversification effort
New products in the pipeline

■ Business fundamentals underpin a positive ASP trend

Dialog Semiconductor Q1 2013 results, 8 May 2013

SLIDE 9

9

Entering key markets with exciting new products

Focus on high growth mobile applications

21% CAGR 2012-2015

Emergence of the low end smartphone Impact of multi-core and LTE platforms Consumer behaviour and demographics pushing the use of short range low power wireless (home automation, medical, fitness, PAN)

30% CAGR 2012-2015

Rapid adoption of the tablet The Ultrabook opportunity 40% of notebook market by 2015 3rd platform win with Samsung Reference design with Asia based smartphone chipset vendor H2 new products ramp Collaboration with Intel on Bay Trail platform Launch of SmartwaveTM our first multi-touch IC Everspring - home automation DECT ULE based solution

Dialog Semiconductor Q1 2013 results, 8 May 2013

SLIDE 10

10

Strategic Direction 4 Pillars

Diversifying growth drivers and pursuing further innovation

high low low high

Profitability Growth More products in higher growth segments

Extending our portfolio of products for portable

platforms

■ Adding ultra-low power audio, new power management functionality, short range wireless connectivity

Broader and deeper at our customer base

■ Developing companion PMICs with leading and emerging application processor vendors to address broader customer base through their sales eco system ■ Diversifying across more platforms for custom PMIC at larger accounts

Continuous innovation

■ Innovation on low power differentiating power-saving technologies, fuel gaging, fast charging together with advanced packaging development

1 3 4 2 Selected acquisitions and strategic co-operations for access to innovative differentiating technologies

Dialog Semiconductor Q1 2013 results, 8 May 2013

SLIDE 11

Agenda

Q1 2013 Financial Overview Appendix

SLIDE 12

12

Q1 revenue growth in line with our February guidance

8% year on year growth

2007 2008 2009 2010 2011

Quarterly revenue ($ million)

14 14 25 35 32 34 44 52 36 45 59 78 61 69 80 88 98 116 141 172 166 160 180

268

40 80 120 160 200 240 280 320 Q1 Q2 Q3 Q4

2012

■ $180 million revenue in Q1 2013

8% growth over Q1 2012
36% sequential decline in line with guidance

87 162 218 296 527 774

100 200 300 400 500 600 700 800 900

2007 2008 2009 2010 2011 2012 Full year revenue ($ million)

57% Revenue CAGR 2007-2012 54% Q1 Revenue CAGR 2007-2013

180

2013

Dialog Semiconductor Q1 2013 results, 8 May 2013

SLIDE 13

40.8 36.5 36.9 37.5 38.0 38.5 38.1

30 35 40 45

Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013

%

IFRS Gross Margin %

13

Committed to year on year gross margin improvement

Q1 2013 gross margin in line with February guidance

■ Q1 2013 IFRS Gross margin of 38.1% 120bps above Q1 2012

Decrease of 40bps over prior quarter
Gross margin reflects the seasonally weaker first quarter and higher allocation per unit of the

fixed element of cost of goods sold (COGS)

■ Gross margin is expected to improve through H2 2013 and grow year on year ■ In Q2 2013 we expect gross margin to be flat to marginally below Q1 2013

Dialog Semiconductor Q1 2013 results, 8 May 2013

SLIDE 14

14

Further OPEX leverage in 2013

Investing in R&D for future growth

19 29 36 14 17 16 19.4 17.2 20.1 13.8 10.4 8.7

5 10 15 20 25 30 60 Q1 2011 Q1 2012 Q1 2013 R&D SG&A R&D % of revenue(RHS) SG&A % of revenue(RHS)

■ Q1 OPEX in line with our business

model and our objectives

■ Q1 2013 R&D at 20.1%, 290bps above

Q1 2012

■ Best in class SG&A at 8.7%, 170bps

below Q1 2012

■ Trailing twelve months OPEX as a

percentage of revenue year on year reduction of 60bps

(*) Peers: Cirrus Logic, Silicon Lab, ams, CSR, Wolfson, TI, STMicro, Maxim, Linear Tech, Broadcom, Semtech, Skyworks.

%

Q1 Actual

($ million and as a % of revenue)

Trailing twelve months

($ million and as a % of revenue)

30.7 26.8 26.2 18.7 16.7 17.2 12.0 10.1 9.0

5 10 15 20 25 30 35 40 30 From Q1 2011 From Q1 2012 From Q1 2013 OPEX % of revenue R&D % of revenue SG&A % of revenue

Dialog Semiconductor Q1 2013 results, 8 May 2013

SLIDE 15

15

■ Q1 Underlying EBIT(*) of $18.9 million or 10.5% of revenue

12% decrease over Q1 2012 (Q1 2012: $21.5

million or 13.0% of revenue)

Sustained R&D programmes relating to 2014

and 2015 projects

Operating Profit (EBIT)

■ Q1 IFRS EBIT of $16.6 million or 9.2% of revenue

5.4% increase over Q1 2012
EBIT % 30bps below Q1 2012

5% Q1 2013 EBIT growth over Q1 2012

15.7 16.6

5

5 15 25 Q1 2012 Q1 2013

Q1 IFRS EBIT and EBIT %

($ million)

+5.4%

9.5% 9.2%

17.5 16.6

10.0 20.0 30.0

Q3 2012 Q1 2013

IFRS EBIT and EBIT %

($ million)

■ Q1 2013 EBIT level is at similar level to Q3 2012

Incremental long term R&D investment

9.7% 9.2%

Revenue $180 Revenue $180

Dialog Semiconductor Q1 2013 results, 8 May 2013

SLIDE 16

16

Net income

48% Diluted EPS growth in Q4

■ Q1 2013 IFRS Net Income of $9.9 million, 15% below Q1 2012

Financial expenses related to the interest expense in connection with the

measurement of the financial liability from the convertible bond

Effective tax rate peaked at 30% as indicated in February (Q1 2012: 27%)

18 15 17 15

Q1'12 Q1'13 Q1'12 Q1'13

IFRS Earnings Per Share ($ cents)

Net Income

Basic Diluted

Dialog Semiconductor Q1 2013 results, 8 May 2013

SLIDE 17

114 136 304 279 312 319 50 100 150 200 250 300 350

Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013

Cash Position

Strong balance sheet and cash flow generation

17

Convertible Bond

■ $319 million cash & cash equivalents balance at 29 March 2013 ■ $20.4 million cash inflow from

perations in Q1 2013

■ $1.9 million free cash flow generated in Q1 2013

Cash and cash equivalents balance ($ million)

318.6 312.4 +25.9

7.5
2.0
12.2

$250 $300 $350

Cash Flow Bridge from Q4’12 ($ million)

+2.0

Dialog Semiconductor Q1 2013 results, 8 May 2013

SLIDE 18

59 62 71 63 81 104 145 152

30% 18% 52%

78 79 72 55 62 83 100 81 120

100
50

50 100

$0 $20 $40 $60 $80 $100 $120 $140 $160 $180 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13

Finished goods Work in process Raw Materials DIO 51%

145

18

Inventory Analysis

Managing inventory transition through the product cycle trough

Inventory ($ million) and Days Inventory Outstanding (# days)

■ Inventory value in Q1 2013 includes the increase in raw materials ahead of new product launches – approximately $22 million or 18 days ■ Inventory value will continue to drop in Q2 2013

36% 21% 15% 43% 34%

(1) Calculated using average

inventory balance over the period

DIO (1)

14% 34% 52%

Dialog Semiconductor Q1 2013 results, 8 May 2013

SLIDE 19

The power to be...

SLIDE 20

20

Highly integrated customised ICs for portable applications

Strong technology focus

Integrated mixed signal and analogue power saving IC’s Applications processor agnostic

Across the ecosystem

Intensive R&D collaboration with Apps Partners, foundry and packaging companies

For Tier 1 clients

Customised solutions underpin consumer experience and product differentiation Fast design process aligned to client’s business cycles

In high growth markets

Addressing high growth portable applications

Highest level of complexity and integration in power management ICs for portable applications Customised for our clients in collaboration with

ur ecosystem

Dialog Semiconductor Q1 2013 results, 8 May 2013

SLIDE 21

21

Notes to the financials

Underlying definition

(*) Underlying results in Q1 2013 are based on IFRS unaudited consolidated interim income statement, adjusted to exclude share-based compensation charges and related charges for National Insurance of US$1.3 million, excluding US$1.1 million of amortisation of intangibles associated with the acquisition of SiTel (now Dialog BV), excluding US$1.9 million non-cash effective interest expense in connection with the convertible bond and excluding US$0.3 million non-cash effective interest expense related to a licensing agreement entered into Q3 2012 and also excluding the related tax effects. The term “underlying” is not defined in IFRS and therefore may not be comparable with similarly titled measure reported by other companies. Underlying measures are not intended as a substitute for, or a superior measure to, IFRS measures (**) EBITDA is defined as operating profit excluding depreciation for property, plant and equipment (Q1 2013: US$3.9 million, Q1 2012: US$2.7 million), amortisation for intangible assets (Q1 2013: US$5.1 million, Q1 2012: US$4.7 million) and losses on disposals and impairment of fixed assets (Q1 2013: US$0.3 million, Q1 2012: US$0.2 million) (***) Free Cash Flow is defined as net income of US$ 9.9 million plus amortisation and depreciation of $US9.1 million, minus change in working capital of US$7.5 million, minus capital expenditure of US$12.2 million and plus net interest expense of $US2.6 million.

Dialog Semiconductor Q1 2013 results, 8 May 2013

SLIDE 22

22

Balance sheet as of 29 March 2013

Dialog Semiconductor Q1 2013 results, 8 May 2013

SLIDE 23

23

Cash flow statement as of 29 March 2013

Dialog Semiconductor Q1 2013 results, 8 May 2013

SLIDE 24

24

Q1 2013 income statement

Dialog Semiconductor Q1 2013 results, 8 May 2013

SLIDE 25

25

Investor Information

Calendar, events and analyst coverage

Analyst coverage Financial Calendar

Q2 2013 Results 23 July 2013

Key Events

Helen McInnes Head of Global Corporate Communications M:+44 (0)7554 419 180 helen.mcinnes@diasemi.com Jose Cano Head of Investor Relations T: +44 (0)1793 756 961 jose.cano@diasemi.com Financial PR/IR Advisers: FTI Consulting – London Matt Dixon T: +44 (0)20 7831 3113 matt.dixon@fticonsulting.com FTI Consulting – Frankfurt Thomas M. Krammer T: +49 (0)69 9203 7183 thomas.krammer@fticonsulting.com

Contacts

Baader Bank Guenther Hollfelder Bankhaus Lampe Karsten Iltgen Barclays Capital Andrew Gardiner Berenberg Bank Ali Farid Khwaja CBSR AG Veysel Taze Cheuvreux Bernd Laux Commerzbank Thomas Becker Credit Suisse Justis McEvilly Deutsche Bank Uwe Schupp DZ Bank Harald Schnitzer Exane BNP Jerome Ramel H&A Tim Wunderlich HSBC Christian Rath Jefferies Lee Simpson JP Morgan Chetan Udeshi Main First Bank Jürgen Wagner Morgan Stanley Francois Meunier Natixis Maxime Mallet

Global TMT Conference 9 May, New York

Dialog Semiconductor Q1 2013 results, 8 May 2013

6th Sustainable Technology Conference 4 June, Zurich

SLIDE 26