Third quarter report 2012
Third quarter report 2012 Fabrizio Rossini Head of investor relations
Safe harbor This presentation contains forward-looking statements that involve inherent risks and uncertainties. We have identified certain important factors that may cause actual results to differ materially from those contained in such forward-looking statements. For a detailed description of risk factors see STMicroelectronics’ (NYSE:STM) and Ericsson's (NASDAQ:ERIC) filings with the US Securities and Exchange Commission, particularly each company's latest published Annual Report on Form 20-F. 3 Third Quarter 2012 Report
Third quarter report 2012 Didier Lamouche President and CEO
Transforming our company Culture • From technology focus to customer focus • Sustainable profitability Company Organization • From brilliant ideas to • Execution products delivered on • Simplicity time Customers • Speed • Engage with market • Focus shapers Products • Diversification • Clear market strategy • Focused portfolio approach • Differentiation Solid execution in the last quarters in line with the transformation roadmap 5 Third Quarter 2012 Report
Culture Company Customers Products Q3 Revenues MUnits MUSD ∙ $359 million revenues 8 700 ∙ NovaThor ModAp platforms 7.4 7 600 continue to grow as largest 6 500 revenue segment with 7.4 5 million units shipped 5.3 400 ∙ Feature phones and legacy 4 300 about 40% of revenues 3 ∙ Revenues stabilized 200 2 100 1 1.3 0 0 Q4 Outlook Q210Q310Q410Q111Q211Q311Q411Q112Q212Q312 ModAp platforms MUnits Revenue MUSD ∙ Net sales to be approx. flat Continuing to execute well sequentially on NovaThor platform ramp 6 6 Third Quarter 2012 Report Third Quarter 2012 Report
Culture Company Customers Products Continuing momentum Shanda Bambook S1 Yulong Coolpad CP7728 mMax Tablet+Phone Motorola Sony XT760 Xperia P Tier 1 Asian Customer Samsung Sony Galaxy Beam Xperia U Tier 1 Asian Customer Sony Samsung Xperia go Galaxy S HTC Sensation Advance Tier 1 Asian Z710t Samsung Customer Ontim Galaxy Ace2 WP8500 Tablet Lenovo Sony Via LePhone Xperia Sola U8500 S899t Q2 Q1 Q3 2011 2012 7 Third Quarter 2012 Report
Culture Company Customers Products Samsung GALAXY S III mini Launched October 11 th 8 Third Quarter 2012 Report
Culture Company Customers Products Organization Members of the Executive Committee Didier LAMOUCHE President and CEO Mats NORIN Carlo FERRO EVP, Chief Chief Operating Technology Officer Officer Marc CETTO Ronen BEN-HAMOU Smart Platform R&D Solutions Newly appointed Senior Vice President Peter Oaklander Sales & Marketing Sales & Marketing Transforming our Sales focus in line with market developments 9 Third Quarter 2012 Report
Culture Company Customers Products Financial Overview ∙ $ million 2012 2012 2012 Delta Net sales $359 million Q3 Q2 Q1 Q3 vs 4% sequential growth Q2 Net sales 359 344 290 15 • Execution of cost transformation Adjusted (148) (235) (297) 87 initiatives ahead of plan: $38 million Operating savings vs. Q4 2011 income/(loss)* Net operating (146) (249) (159) 103 • Operating loss halved from cashflow Q1 2012 level to $148 million *:.Adjusted Operating Income/(Loss) is a non-GAAP measure. Please refer to the press release for details. • $87 million sequential reduction Adjusted operating income/(loss) * • -$146 million net operating cashflow $ million • $103 million sequential improvement Solid execution delivering progress on all our key financial metrics 10 10 Third Quarter 2012 Report Third Quarter 2012 Report
Culture Company Customers Products Conclusions ∙ In the last 9 months ∙ Repositioned company strategy and showing solid progress on execution ∙ Put in place the full organization to aggressively execute the strategy ∙ Ramped and delivered NovaThor platforms in volume ∙ Catching up on execution of our advanced LTE platforms ∙ Delivering FD-SOI silicon supporting our differentiated new platform roadmap ∙ Executing with sense of urgency on cost realignment in a predictable manner ∙ Delivering on key elements of strategy, such as application processor partnership ∙ Moving forward on site consolidation strategy ∙ However, we still have significant work ahead ∙ Recovering from large losses towards profitability and financial sustainability ∙ Execution of current and future platforms remains our priority focus ∙ Market remains competitive and we are dependent on our customers’ success 11 Third Quarter 2012 Report
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