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Analysts Conference February 2020 Innovation Matters
Analysts ConferenceFebruary 2020
Innovation Matters
Elmos at a glance
2
47%
40%
4%
EU
Rest of World
Asia/Pacific
US10%
Automotive focus: Sales by industry
35
~5
1,300
85%
15%
Automotive
Non‐automotive
~2/3
~1/3
Inhouse
Foundry
Global reach: Sales by region
Fablitestrategy:
Wafer production
6
16 sites globally – German roots withDortmund headquarters
product segments: Ranging, Optical, Sensor ICs, Motor Control, Lighting, Safety/Power/Custom ICs
employees, thereof 350 people in product development
years experience in analog mixed signal IC solutions
Elmos ICs on averagein every new car
Design‐Center in Düsseldorf opened
Significant strengthening ofdesign/application resources
Recent milestones (1/2)
3
1 billion USPA ICs sold
Sustained high demand and great future potential
Fablite strategy extended
Front‐End: Fablite establishedBack‐End: 2nd wave of outsourcing started
Conversion into SE announced
AGM will decide in May 2020
Recent milestones (2/2)
4
SMI sold for 95m USD
Transaction for 3.4x externalrevenue / closed Sept 30, 2019
Elmos and Audi strengthen partnership
Audi is key customer for new LED rear light control IC
New CEO appointed
Dr. Schneider (CFO) is designated CEO beginning 2021. Current CEO, Dr. Mindl, will be consultant in the future
Cooperation with Fraunhofer IMS will end June 30, 2020
Deliveries to customers secured by Dortmund fab and foundry partners
5
0% 10% 20% 30% 40%
LED Lighting
BLDC motors(HVAC, pumps,engine cooling)
Advanced Display /HMI
Distance Warning(Emergency Braking
+ Parking)
EV(Battery + Plug‐In)
The car is the next smart device ̶̶Elmos is present in the highest growing sub‐segments
Source: Strategy Analytics / for BLDC motors: LMCA CAGR 2019‐2024
Selected projectsin development
#1for Ultrasonic ICs
#1for Gesture Control
#1for HVAC flaps
#1for Ambient Lighting(and soon rear light)
Semi growth rate for selected applications (CAGR 2016‐21) Elmos ICs for growing segments
Elmos shareholder structure set for long‐term perspective
6
Weyer Beteiligungsgesellschaft mbH and related parties ZOE‐VVG GmbH and related parties Jumakos Beteiligungsgesellschaft mbH Treasury Stock Free float, thereof: 5.05% WA Holdings Inc. as of Jan 09, 2020 5.01% Teslin Capital Management BV as of May 05, 2017 4.06% JPMorgan Asset Mgt. (UK) Ltd. as of Nov 04, 2019
Shareholder structure
Jan
Share chart Xetra (Jan. 02, 2019 – Jan. 31, 2020)
14
18
22
26
30
34
20.0%
5.0%5.1%
14.1%
14.8%
4.1%
2.3%
Free float48.8%
Satisfying performance
Elmos share +47% in 2019
Two more shareholders >3%
High interest inElmos shares
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
Elmos increases sales and gross margin
7
196.6
294.8
42.3%
2015
21.7
273.4
20.4
2016
253.9
43.9%
250.4
230.1
2017
23.7
23.0
2018
277.6
46.4%21.4
2019
45.2%
206.9
41.7%
219.6 228.6
+6.2%
Sales developed positively in a challenging market environment due to existing products and new ramp ups
Organic growth of 7.7% to 273.4 million Euro
Design Wins 2019 continue on a high level
Book‐to‐bill ratio was below one at the end of the period (please note that Q4 2019 sales was an all‐time high)
Yearly sales (million Euro) & gross margin (%) Quarterly sales (million Euro) & gross margin (%)
62.2
45.5%
Q1 2019
6.9
46.2%
67.7
Q2 2019
45.6%
7.3
48.3%
67.8
7.2
Q3 2019
75.7
Q4 2019
69.175.0 75.0 75.7
+7.7%
Gross margin MicromechanicsSemiconductor
Semimarket2
New car registrations1
Elmos outperformed selected peers in 2019
8
YoY Sales development Elmos vs. Peers Market environment 2019: YoY development
−5.1%
8.8%
Q2 2019Q1 2019
8.6%
Q3 2019 Q4 2019
−7.0%
8.1%
−7.6%
8.4%*
−6.2%
ElmosPeers
Average of 6 peers (On Semi, Infineon, NXP, X‐Fab, STMicro, Melexis)*Semiconductor Business only (due to the sale of SMI)
JapanWorld‐wide
Europe IndiaChina USA World‐wide
‐5%
1%
‐10%
‐1%‐2%
‐13%‐12%
Sources: 1VDA, 2Gartner
Good earnings development –EBIT margin at mid‐term target level
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Six years double‐digit EBIT margin in a row EBIT margin achieved mid‐term target level in 2017, 2018 and 2019 Reported EBIT is 97.3m Euro
The sale of SMI resulted in other operating income of 63.1m Euro The termination of the Fraunhofer cooperation resulted in other operating expenses of 11.1m Euro
EPS increased to 4.36 Euro in 2019 (2018: 1.79 Euro) reflecting above mentioned effects
2017
45.3
10.1%11.2%
2015 2018
24.5
2016
15.3%18.4%
15.4%
23.1
2019
38.4
51.0
Yearly EBIT* (m Euro) & EBIT margin* (%) Quarterly operational EBIT (m Euro) & EBIT margin (%)
Q4 2019
14.8%
Q2 2019Q1 2019
17.4%14.7%
Q3 2019
14.6%
10.2
13.011.0 11.0
Reported EBIT 97.3m Euro
*2019: Operational EBIT/EBIT margin without consideration of the result from the sale of the subsidiary SMI and without deduction of the restructuring expenses for the termination of the cooperation with the Fraunhofer Institute IMS
SMI related cash inflow leads to substantial net cash position
10
Operating Cash Flow (million Euro)
10.1%
23.0
10.5%14.3%
2016
14.8%
2014 20172015
14.9% 14.9%
2018 2019
29.923.2
37.241.4 43.6
20192014 2015 20172016 2018
10.6
29.7
9.1
‐5.2 ‐3.3
76.9
Capex (million Euro & % of sales)
Adjusted Free Cash Flow (million Euro)
Supportedby tax effects
2019
40.0
20172014 2015 2016 2018
50.3
33.537.9
48.4 45.6
2015 20192014
55.4
2016
53.7
2017 2018
47.033.2
16.9
74.3Burdened
by tax effects
1
Supported bySMI sale1
Net cash (million Euro)
‐ Adjusted free cash flow: Cash flow from operating activities less capital expenditures for/plus disposal of intangible assets and property, plant and equipment (including payments from disposals of consolidated companies)‐ Capital expenditures: Capital expenditures for intangible assets and property, plant and equipment less capitalized development expenses1 Disregarding one‐off effect from sale and lease back structure of ca. 14 million Euro
Supported bySMI sale
Reliable guidance – despite weak economy guidance given in February 2019 fulfilled
As of February 14, 2019
Sales growth in 2019 (vs. 2018) 6%‐10% (yoy) 4%‐8% (yoy) 6.2%
EBIT margin (operational) 13%‐17% 13%‐17% 15.4% Capital expenditures (in % of sales)1 <15% of sales <15% of sales 14.8%
Adjusted free cash flow2 Positive Significantly positive 76.9m Euro
Ø Exchange rate 1.15 USD/EUR 1.15 USD/EUR 1.12 USD/EUR
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Guidance Actuals 2019as of Feb 13, 2019 as of Sept 30, 2019
(adjusted for SMI sale only)
Elmos has closed the sale of SMI to Measurement Specialties Inc., a subsidiary of TE Connectivity Ltd., as of September 30, 2019. SMI is therefore only included in the sales and earnings of Elmos for the first nine months in 2019. The transaction has resulted in other operating income of 63.1m Euro in 2019.
The termination of the cooperation with the Fraunhofer Institute IMS causes provisions for restructuring expenses of about 11.1m Euro, recognized in the 2019 financial year.
→The operational EBIT margin disregards these two effects.
1Capital expenditures for intangible assets and property, plant, and equipment less capitalized development costs2Cash flow from operating activities less capital expenditures for/plus disposal of intangible assets and property, plant and equipment (including payments from the disposal of consolidated companies)
Market environment 2020: uncertain economic conditions
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Daily Newspaper Headlines Market Outlook1
2020e figures as of Dec 2019 Europe (‐2%) China (‐2%) US (‐3%)
85 80 79
2018 2019 2020e
‐5% ‐1%
1VDA
New car registrations in million units
Guidance 2020
As of February 14, 2019
Sales growth in 2020 (vs. 2019 sales of continued operations of 273.4m Euro) Low single‐digit percentage
EBIT margin (operational) 11%‐16%
Capital expenditures (in % of sales)1 <15% of sales
Adjusted free cash flow2 Positive
Assumed Ø Exchange rate 1.10 USD/EUR
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As of February 18, 2020
1Capital expenditures for intangible assets and property, plant, and equipment less capitalized development costs2Cash flow from operating activities less capital expenditures for/plus disposal of intangible assets and property, plant and equipment (including payments from the disposal of consolidated companies)
The guidance is based on the current subdued economic situation, particularly in the automotive sector, and is subject to the as yet unforeseeable impact of the coronavirus on the economy.
The Next Smart Device: The Car
Analysts ConferenceFebruary 2020
1515
Research Coverage and Elmos Financial Calendar
Event Date
Preliminary results 2019* February 18, 2020
Analysts Conference (Conference Call/Webcast) February 18, 2020
Final results 2019* March 19, 2020
Quarterly results Q1/2020* May 6, 2020
AGM in Dortmund, Germany May 13, 2020
Quarterly results Q2/2020* August 5, 2020
Quarterly results Q3/2020* November 4, 2020
*The German Securities Trading Act (Wertpapierhandelsgesetz) and the Market Abuse Regulation (EU) oblige issuers to immediately announce any information that may have a substantial price impact, irrespective of the communicated schedules. Therefore it is possible that we will announce key figures of quarterly and annual results ahead of the dates listed above. As we can never rule out changes of dates, we recommend checking dates and news ahead of schedule on the Company’s website (www.elmos.com).
Institution Analyst Recommendation
Deutsche Bank Johannes Schaller Hold
DZ Bank Harald Schnitzer Hold
Hauck & Aufhäuser Christian Sandherr Hold
Oddo BHF Stéphane Houri Buy
Warburg Research Malte Schaumann Hold
Event Date
Institution Analyst Recommendation
Elmos Semiconductor AG
Heinrich‐Hertz‐Str. 1 | 44227 Dortmund | Germany Telephone: + 49 231 75 49 287 | Telefax: + 49 231 75 49 [email protected] | www.elmos.com
DISCLAIMERThis presentation contains forward‐looking statements based on beliefs of Elmos‘ management.Such statements reflect the company‘s current views with respect to future events and aresubject to risks and uncertainties. Many factors could cause the actual results to be materiallydifferent, including, among others, changes in general economic and business conditions,changes in currency exchange rates and interest rates, introduction of competing products, lackof acceptance of new products or services and changes in business strategy. Actual results mayvary materially from those projected here. Elmos does not intend or assume any obligation toupdate these forward‐looking statements.
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