Q4 and Full Year 2014 Results 19 February 2015 Forward looking - PowerPoint PPT Presentation

Q4 and Full Year 2014 Results 19 February 2015

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 Q4 and Full Year 2014 results, 19 February 2015

Agenda Q4 2014 Executive Overview Outlook Business Review Q4 and full year 2014 Financial Overview Appendix

Dialog at a glance Q4 2014 – Strong revenue growth and cash flow generation $435m 46.6% 19.5% IFRS Underlying Underlying Revenue gross margin OPEX % (Q4 2013 Actual: $351m) (Q4 2013 Actual: 43.0%) (Q4 2013 Actual: 21.3% ) +24% +360bps (180)bps $1.17 27.1% $119.3m Underlying Diluted Underlying EBIT Cash flow from operating activities EPS margin (Q4 2013 Actual: $46.2m) (Q4 2013 Actual: $0.70 ) (Q4 2013 Actual: 21.7%) +540bps +67% +158% Underlying definition on slide 22 4 Dialog Semiconductor Q4 and Full Year 2014 results, 19 February 2015

Agenda Outlook Business Review Q4 and full year 2014 Financial Overview Appendix

Q1 2015 Outlook ■ Given our current visibility, we expect 2015 to be another year of good growth. As in previous years, revenue performance will be strongly weighted towards the second half of the year ■ Q1 2015 revenue will reflect the expected seasonal pattern and deliver year on year growth. We expect revenue for Q1 2015 to be in the range of $265m to $300 million ■ In line with the seasonal lower revenue, gross margin in Q1 2015 will decline sequentially but improve on a year-on-year basis. ■ Gross margin for 2015 is expected to remain broadly at a similar level to the full year 2014 6 Dialog Semiconductor Q4 and Full Year 2014 results, 19 February 2015

Agenda Business Review Q4 and full year 2014 Financial Overview Appendix

Delivering revenue and earnings growth Revenue and ASP ($ million and $) ASP ■ Revenue growth well above industry 2.90 20% ASP CAGR 1500 3.0 average 2011-2014 2.8 2.48 2.6 30% CAGR 2011-2014 2.66 2.4 1000 2.10 2.2 2.30 2.0 +28% 1.69 1,156 1.8 1.96 500 901 1.6 ■ R&D investment supports future and new 1.4 1.54 774 revenue streams 1.2 527 0 1.0 FY 2011 FY 2012 FY 2013 FY 2014 Total revenue (LHS) Total ASP exc. Power Conversion (RHS) ASP exc. Connectivity and Power Conversion(RHS) ■ SG&A costs at best in class levels Underlying EBIT and Diluted EPS ($ million and $) 2.27 270 2.5 42% EBIT CAGR 240 +58% 2011-2014 210 2.0 ■ Underlying EBIT doubled from 2012 180 1.44 150 1.5 1.19 120 1.11 230 90 +65% 140 1.0 60 108 80 30 0 0.5 FY 2011 FY 2012 FY 2013 FY 2014 8 Dialog Semiconductor Q4 and Full Year 2014 results, 19 February 2015

Broadening our customer base Number of trading customers ■ Focus on fast growing China +16% consumer electronics – early success in Mobile Systems and Connectivity 357 308 ■ Maintained our technology advantage in Bluetooth Smart and started high 127 volume shipments in Q4 2014 2012 2013 2014 ■ Strengthened our leadership position in the LED SSL dimmable segment and fast charging AC/DC converters 2.0™ Pump Express™ 2.0™ 9 Dialog Semiconductor Q4 and Full Year 2014 results, 19 February 2015

Well positioned for future growth ■ Exposed to high growth markets with differentiated power management and low power connectivity solutions ■ Broadening our customer base in new addressable markets ■ Establishing strategic collaborations to focus on fast growing China consumer electronics market ■ Strong cash generative business capable of funding new strategic initiatives 10 Dialog Semiconductor Q4 and Full Year 2014 results, 19 February 2015

Agenda Q4 and Full Year 2014 Financial Overview Appendix

Dialog at a glance Full year 2014 – Solid growth and earnings acceleration $1,156m 45.3% 25.4% IFRS Underlying Underlying Revenue gross margin OPEX % (FY 2013 (FY 2013 (FY 2013 Actual: $901m) Actual: 40.5%) Actual: 25.1% ) +28% +480bps +30bps 19.9% $2.27 $270.5m Underlying EBIT Underlying Diluted Cash flow from operating activities margin EPS (FY 2013 (FY 2013 (FY 2013 Actual: $110.7m) Actual: 15.4%) Actual: $1.44 ) +450bps +58% +144% Underlying definition on slide 23 12 Dialog Semiconductor Q4 and Full Year 2014 results, 19 February 2015

8 th consecutive year of growth ■ Q4 2014 IFRS revenue $435 million Full year IFRS revenue +28% ($ million) 1400 1,156 40% Revenue CAGR 2009-2014 1200 • 24% YoY revenue growth 901 1000 • 55% sequential increase over Q3 2014 774 800 527 600 296 400 218 162 ■ 87 H2 2014 IFRS revenue $716 million up 26% on H2 2013 200 • 63% sequential increase over H1 2014 0 2007 2008 2009 2010 2011 2012 2013 2014 Quarterly IFRS revenue ($ million) 41% Q4 Revenue CAGR 2009-2014 480 2007 435 440 400 2008 352 360 2009 320 281 268 280 2010 221 219 219 240 180 180 200 2011 172 166 160 151 160 141 116 98 2012 120 88 80 78 69 61 59 52 80 45 44 36 34 35 32 2013 25 14 14 40 0 2014 Q1 Q2 Q3 Q4 13 Dialog Semiconductor Q4 and Full Year 2014 results, 19 February 2015

Delivering year on year gross margin improvement % 50 Underlying gross margin ■ Q4 2014 Underlying gross margin of 46.6% 46.6 45 45.4 44.5 43.3 • 43.0 360 bps improvement over Q4 2013 40 40.1 38.6 38.2 38.0 35 30 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 % ■ Full Year 2014 IFRS and Underlying 50 IFRS gross margin Underlying gross margin gross margin up on FY 2013 45 45.3 • 550bps IFRS improvement 44.5 • 480bps Underlying improvement 40 40.5 39.0 38.0 37.8 35 30 FY 2012 FY 2013 FY 2014 FY 2012 FY 2013 FY 2014 14 Dialog Semiconductor Q4 and Full Year 2014 results, 19 February 2015

Investing in R&D for future growth % Full year underlying OPEX 30 % of revenue * 40 35 ■ Full year underlying OPEX% at 25.4% 25.4 30 25.1 25 17.5 20 17.2 • R&D 30 bps above FY2013 15 • Industry leading SG&A flat on FY 2013 7.9 7.9 10 5 0 0 FY 2013 FY 2014 OPEX % of revenue R&D % of revenue SG&A % of revenue Full year IFRS Actual ■ Full year 2014 IFRS OPEX% ($ million and as a % of revenue) * % 360 25 330 • Investing in future growth: 70 bps increase 300 20 18.5 17.8 270 16.5 on R&D% on FY 2013 240 15 210 214 • SG&A in line with FY2013 at 9.9% 161 180 128 150 9.9 10 9.8 9.3 120 90 5 60 115 88 72 30 0 0 FY 2012 FY 2013 FY 2014 (*) Other operating expenses included in SG&A SG&A R&D R&D % of revenue(RHS) SG&A % of revenue(RHS) 15 Dialog Semiconductor Q4 and Full Year 2014 results, 19 February 2015

Operating Profit (EBIT) Underlying Q4 2014 EBIT up 54% year on year Underlying EBIT and EBIT % ■ Q4 Underlying EBIT(*) of $117.9 million or 250.0 19.9% ($ million) 240.0 +65% 230.0 220.0 27.1% of revenue 210.0 200.0 190.0 180.0 +54% 170.0 160.0 • 540bps increase from Q4 2013 15.4% 150.0 140.0 27.1% • 130.0 180bps year-on-year decrease on OPEX% 120.0 230.3 110.0 100.0 21.7% 90.0 80.0 70.0 139.6 60.0 117.9 50.0 40.0 76.4 30.0 20.0 ■ Full year Underlying EBIT(*) up 65% on 10.0 0.0 previous year to $230 million Q4 2013 Q4 2014 FY 2013 FY 2014 • 450bps increase on EBIT % IFRS EBIT and EBIT % 200 16.1% • 190 OPEX% broadly in line with 2013 +81% ($ million) 180 170 160 150 140 +49% 130 120 24.2% 11.4% 110 ■ 100 Full year IFRS EBIT up 81% to 185.9 million 185.9 90 20.1% 80 or 16.1% of revenue 70 60 105.1 50 102.7 40 70.6 30 • 470bps increase on EBIT% 20 10 • 80bps year-on-year increase on OPEX% 0 Q4 2013 Q4 2014 FY 2013 FY 2014 16 Dialog Semiconductor Q4 and Full Year 2014 results, 19 February 2015