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

Q1 2013 Results 8 May 2013

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 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. 2 Dialog Semiconductor Q1 2013 results, 8 May 2013

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

Dialog at a glance Q1 2013 – Delivering revenue growth and gross margin improvement $180m 38.1% 28.8% Revenue Gross margin OPEX % (Q1 2012 Actual: $166m) (Q1 2012 Actual: 36.9%) (Q1 2012 Actual: 27.6% ) +8% +120bps +120bps 9.2% $0.15 $20.4m EBIT margin Diluted EPS Operating cash flow (Q1 2012 Actual: 9.5%) (Q1 2012 Actual: $0.17 ) (Q1 2012 Actual: $35.8m) -30bps -12% -43% 4 Dialog Semiconductor Q1 2013 results, 8 May 2013

Agenda Outlook Strategic Review Q1 2013 Financial Overview Appendix

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 6 Dialog Semiconductor Q1 2013 results, 8 May 2013

Agenda Strategic Review Q1 2013 Financial Overview Appendix

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 • Smartwave TM 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 8 Dialog Semiconductor Q1 2013 results, 8 May 2013

Entering key markets with exciting new products Focus on high growth mobile applications 3rd platform win with 21% CAGR 2012-2015 Samsung Emergence of the low end smartphone Reference design with Asia Impact of multi-core and LTE platforms based smartphone chipset vendor H2 new products ramp Collaboration with Intel on 30% CAGR 2012-2015 Rapid adoption of the tablet Bay Trail platform Launch of Smartwave TM our The Ultrabook opportunity first multi-touch IC 40% of notebook market by 2015 Consumer behaviour and demographics Everspring - home pushing the use of short range low power automation DECT ULE based wireless (home automation, medical, fitness, solution PAN) 9 Dialog Semiconductor Q1 2013 results, 8 May 2013

Strategic Direction 4 Pillars Diversifying growth drivers and pursuing further innovation high Extending our portfolio of products for portable 1 platforms ■ Adding ultra-low power audio, new power management functionality, short range wireless connectivity Profitability More products in Broader and deeper at our customer base 2 higher growth ■ Developing companion PMICs with leading and emerging segments application processor vendors to address broader customer base through their sales eco system ■ Diversifying across more platforms for custom PMIC at larger accounts low Continuous innovation 3 ■ Innovation on low power differentiating power-saving low high Growth technologies, fuel gaging, fast charging together with advanced packaging development 4 Selected acquisitions and strategic co-operations for access to innovative differentiating technologies 10 Dialog Semiconductor Q1 2013 results, 8 May 2013

Agenda Q1 2013 Financial Overview Appendix

Q1 revenue growth in line with our February guidance 8% year on year growth ■ $180 million revenue in Q1 2013 Full year revenue 900 774 • 800 ($ million) 8% growth over Q1 2012 700 • 36% sequential decline in line with guidance 527 600 57% Revenue CAGR 2007-2012 500 400 296 218 300 162 200 87 100 0 2007 2008 2009 2010 2011 2012 Quarterly revenue ($ million) 54% Q1 Revenue CAGR 2007-2013 320 268 2007 280 240 2008 180 200 180 172 2009 166 160 160 141 2010 116 120 98 88 2011 80 78 69 80 61 59 52 45 44 2012 36 34 35 32 25 40 14 14 2013 0 Q1 Q2 Q3 Q4 12 Dialog Semiconductor Q1 2013 results, 8 May 2013

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 45 IFRS Gross Margin % 40 40.8 38.5 % 38.1 38.0 37.5 36.9 36.5 35 30 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 13 Dialog Semiconductor Q1 2013 results, 8 May 2013

Further OPEX leverage in 2013 Investing in R&D for future growth Q1 Actual % ($ million and as a % of revenue) ■ Q1 OPEX in line with our business 60 25 model and our objectives 20.1 19.4 20 17.2 16 13.8 15 17 30 ■ Q1 2013 R&D at 20.1%, 290bps above 10.4 14 10 8.7 Q1 2012 36 29 5 19 0 0 ■ Best in class SG&A at 8.7%, 170bps Q1 2011 Q1 2012 Q1 2013 R&D SG&A below Q1 2012 R&D % of revenue(RHS) SG&A % of revenue(RHS) Trailing twelve months ($ million and as a % of revenue) 30 40 30.7 35 ■ Trailing twelve months OPEX as a 26.8 26.2 30 percentage of revenue year on year 25 reduction of 60bps 18.7 20 16.7 17.2 15 12.0 10.1 10 9.0 5 0 0 From Q1 2011 From Q1 2012 From Q1 2013 OPEX % of revenue R&D % of revenue SG&A % of revenue (*) Peers: Cirrus Logic, Silicon Lab, ams, CSR, Wolfson, TI, STMicro, Maxim, Linear Tech, Broadcom, Semtech, Skyworks. 14 Dialog Semiconductor Q1 2013 results, 8 May 2013

Operating Profit (EBIT) 5% Q1 2013 EBIT growth over Q1 2012 Q1 IFRS EBIT and EBIT % 25 ■ Q1 IFRS EBIT of $16.6 million or 9.2% of ($ million) 9.5% revenue 9.2% +5.4% • 5.4% increase over Q1 2012 15 • EBIT % 30bps below Q1 2012 16.6 15.7 5 Q1 2012 Q1 2013 -5 ■ Q1 2013 EBIT level is at similar level to Q3 2012 30.0 • Incremental long term R&D investment IFRS EBIT and EBIT % ($ million) Revenue $180 Revenue $180 20.0 ■ Q1 Underlying EBIT(*) of $18.9 million or 9.7% 9.2% 10.5% of revenue • 12% decrease over Q1 2012 (Q1 2012: $21.5 17.5 million or 13.0% of revenue) 16.6 • Sustained R&D programmes relating to 2014 10.0 and 2015 projects Q3 2012 Q1 2013 15 Dialog Semiconductor Q1 2013 results, 8 May 2013

Net Income ■ Q1 2013 IFRS Net Income of $9.9 million, 15% below Q1 2012 • Financial expenses related to the interest expense in connection with the Net income measurement of the financial liability from the convertible bond • Effective tax rate peaked at 30% as indicated in February (Q1 2012: 27%) 48% Diluted EPS growth in Q4 IFRS Earnings Per Share ($ cents) Basic Diluted 0 0 0 0 0 0 18 17 0 15 15 0 0 0 0 Q1'12 Q1'13 Q1'12 Q1'13 16 Dialog Semiconductor Q1 2013 results, 8 May 2013

Cash Position Strong balance sheet and cash flow generation 350 Cash and cash equivalents balance ($ million) 300 ■ $319 million cash & cash Convertible 250 Bond equivalents balance at 29 March 200 2013 319 312 150 304 279 100 136 114 50 0 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Cash Flow Bridge from Q4’12 ($ million) $350 ■ $20.4 million cash inflow from - 7.5 -2.0 operations in Q1 2013 +25.9 -12.2 +2.0 $300 ■ $1.9 million free cash flow generated in Q1 2013 318.6 312.4 $250 17 Dialog Semiconductor Q1 2013 results, 8 May 2013