PowerPoint Template Feb 2015

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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.


Q1 2016 – Financial Overview

Outlook

Business Review Agenda Text Here

Q&A

Insert Agenda Text

Insert Agenda Text Here

3

Agenda


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


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


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 *


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)



Outlook

Business Review Agenda Text Here

Q&A

Insert Agenda Text


8

Agenda


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



Outlook

Business Review

Q&A

Insert Agenda Text


10

Agenda


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


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$


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


Appendix

15

Agenda


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


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


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


Q1 2016 – Underlying adjustments

19


Q1 2016 – Income statement

20


Q1 2016 – Balance sheet

21


Q1 2016 – Cash flow statement

22


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

[email protected]

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

[email protected]

FTI Consulting – Frankfurt

Anja Meusel

T: +49 (0)69 9203 7120

[email protected]

20 June 2016, London

JPMorgan CEO Conference

10-12 May 2016, Miami

Jefferies TMT Conference

mailto:[email protected]

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© 2016 Dialog Semiconductor 24

Powering the Smart Connected Future

www.dialog-semiconductor.com

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