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Investor presentation – Year-end results 2014 Analyst and Press Conference – Novotel Zurich City-West – February 26, 2015
Investor presentation – Year-end results 2014
Analyst and Press Conference – Novotel Zurich City-West – February 26, 2015
The following documentation contains forward-looking statements that are subject to certain risks and uncertainties. Actual results may differ materially from those anticipated in this presentation.
2
Company overview
Markets and customers
Products and applications
Financial details
Outlook and summary
Backup information
Agenda
3
Micronas at a glance
4
About 900 employees worldwide
Leading supplier of Hall sensors for the automotive industry
Core business Automotive Focus on sensors and sensor-based solutions
Full in-house production with own waferfab and backend operations including testing and packaging
zero ppm quality to ensure customer satisfaction
Commitment to environmental protection
Most Preferred Partner for Sensing and Control
Sales offices across Europe
Micronas Ltd. Glenrothes, Scotland
Test center, Production
Micronas New Technologies GmbH, Munich, Germany
Research & Development Sales
5
Group structure and locations
Micronas GmbH Freiburg, Germany
Research & Development Marketing & Sales Production
Micronas Japan K.K. Tokyo, Japan, Sales office
Micronas Semiconductor Holding AG, Zurich, Switzerland
Headquarters
Sales office Shanghai, China
Sales office Detroit, USA
Sales office Seoul, Korea
Micronas in 2014 – financial overview
Micronas met its sales and profit forecasts for the 2014 financial year – 4 percent sales growth over last year
8 percent adjusted sales growth (without dashboard controllers)
Automotive Hall sensor sales up by 6 percent Industrial Hall sensor sales increased by 28 percent Embedded motor controller sales more than doubled
Earnings were influenced by temporary start-up costs for
new products and by currency-exchange factors
Japanese sales invoiced in euros at 35 percent; increase to approx. 75 percent for the next 12 months
Proposal to distribute CHF 0.05 per registered share
Share-buy-back program of a maximum of CHF 20 million
6
Micronas in 2014 – operational overview
Strengthening of our product portfolio for the automotive and industrial market by new products all manufactured on the 8-inch line:
Linear Hall sensor with integrated capacitors Second generation 3D HAL technology Market’s first ISO 26262 compliant, low-power Hall switch Second generation of embedded motor controllers
Combined heat and power plant to marry care for the
environment with profitability
Capacity utilization at the Freiburg manufacturing plant stood at around 85 percent
For Micronas the switch from 6- to 8-inch production and the launch of new and innovative products are valuable steps towards long-term productivity gains and sustained margin improvements
7
Agenda
8
Company overview
Markets and customers
Products and applications
Financial details
Outlook and summary
Backup information
Micronas has a long history in Automotive with a very large customer base
Micronas maintains full control of production from wafer fab, assembly and final testing providing highest flexibility to meet automotive quality and to offer unique customization capability
Micronas offers the world´s largest Hall sensor portfolio covering most automotive applications
Micronas also provides innovative fully integrated servo-drive solutions for motor control applications
Markets Automotive
Automotive
9
Powertrain
Chassis and safety
Body and comfort
Intelligent sensor and actuator solutions for smart automation networks to enable increased comfort and lifestyle
Highly reliable and robust sensors to meet the demands for long lifetime within harsh environments
Wide range of cost-effective sensor solutions for eco-friendly home appliances with small form factor
Markets Industrial
Industrial
10
Building, home and office Automation
Home appliance and white goods
Factory and process automation
Garden and power tools
Agricultural and heavy machinery Mobility and robotics
Markets and technology drivers
Comfort and lifestyle
High levels of functionality, low power and small form factor enable new applications and comfort features
Economy
Reduced overall system cost enabled by highly integrated sensors and embedded controllers, e.g. increasing magnet costs can be compensated by higher sensitivity
11
Increased safety demand drive growth for novel, intelligent and redundant products and system solutions
Increased demand for high energy efficiency and CO2 reduction needs optimized sensors and actuator solutions, e.g. for engines, BLDC motors and HVAC systems
Environmental protection
Safety
100%
120%
140%
160%
180%
200%
2014 2015 2016 2017 2018 2019 2020
BLDC motors Automotive (Mil. USD)
Hall sensors Automotive (Mil. USD)
Elektronc systems Automotive (Mil. USD)
Vehicle production (Mil. units)
Market development
12 Source: Strategy Analytics / IHS / WSTS / Micronas, January 2015
Mar
ket f
igur
es n
orm
aliz
ed to
201
4
CAGR 2015 – 2020 = 4%
CAGR 2015 – 2020 = 6%
CAGR 2015 – 2020 = 7%
CAGR 2015 – 2020 = 10%
Hall sensors and BLDC motors will continue to outgrow vehicle production and electronic systems in cars
13 13
Customer and distributor base
14 14
Automotive manufacturers – OEMs
Agenda
15
Company overview
Markets and customers
Products and applications
Financial details
Outlook and summary
Backup information
Micronas product portfolio
Embedded motor controllers Hall-effect sensors
Gas sensors
Up to 100 electric motors per vehicle Market growth dominated by BLDC and
stepper motors All-in-one solution
provides higher system efficiency to reduce motor size and weight
Major automotive trends for CO2 reduction and car electrification are asking for tighter controls, thus increasing the demand for magnetic sensors
More than 85% of magnetic sensors in cars are based on the Hall effect
Micronas offers the broadest portfolio of Hall sensors for automotive applications covered by switches, linear, direct angle and current sensors
Multi-parameter gas, temperature and relative humidity sensor
Single-chip sensor results in small and low power solution
Applications include fire detection, HVAC and leakage
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Safety
New product development and documentation are meeting the requirements of ISO26262, the de-facto standard for automotive functional safety
Micronas has developed a concept for its devices to become insensitive against disturbing magnetic stray fields caused by the increased car electrification (HEV/EV)
Capacitors are integrated into the sensor package in order to fulfill stringent EMC/ESD requirements and to reduce overall system costs
Two silicon dies are integrated into a single package to respond efficiently to redundancy requirements for most critical applications (pedal, throttle, steering)
Redundancy
Robustness Integration
Hall-effect sensors – trends
17
Easy to implement contact-less switch Replacement of microswitches
Hall-effect sensors – products
Switches
18
power tools
Precise angle detection with a single sensor
Replacement of inductive or optical angle encoders
Angular steering angle
Highly accurate position detection
Replacement of conventional potentiometers
Linear bending lights
pressure
Small form factor contact-less current transducer
Replacement of shunt-based solutions
Current battery management
current monitor joystick
buckle switch throttle flap
Micronas offers the broadest portfolio of Hall sensors for automotive and industrial
Cost effectiveness
Reducing Cost of Ownership and software development time is a major concerns for our customers. Our products are flexible and configurable to drive different type of motors.
Micronas products are enabling different driving schemes and optimization functions enabling smaller motors to reach higher torque requirements.
Micronas is focusing on enabling complex drive to ever smaller motors with small footprint, reducing the number of necessary external components to a minimum.
BLDC motors enables weight, space and noise reduction in interior applications. Micronas products ensure a smooth transition from BDC and Stepper motors towards BLDC motors.
Weight and noise reduction
Efficiency Miniaturization
Embedded motor controllers – trends
19
HVC 2480B All-in-one
Embedded motor controllers – products
Micronas solutions are single-chip, high voltage controllers with flexible peripherals and direct motor driving capabilities.
20
Higher efficiency
32-bit ARM CortexTM-M3 core enables high end motor control strategies to further reduce noise and increase efficiency
Smaller footprint
Integration of digital logic as well as analog, HV and NVM capabilities in a dedicated CMOS process in co-operation with X-FAB
next
Application fields Automotive
Active pedal Powertrain valves Battery management Gear position Water/oil pumps Shift lever position Turbo charger Liquid level Thermo management/
valves
Steering torque Steering angle Steering motor position Chassis position sensor Braking pedal
Window lift/sun roof LED fans Door lock Buckle switch Adaptive headlights HVAC Blower and flap control Seat position/climate Grill shutter Climate flaps
Hall-effect sensors (switches, linear, direct angle, current) and embedded motor controllers
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Chassis and safety Body and comfort Powertrain
Application fields Industrial
HVAC Rolling shutter/
blinders Door/window locks Water metering
Hall-effect sensors (switches, linear, direct angle, current) and embedded motor controllers
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Joystick/pedal Throttle/valve Cylinder position Proximity switch
Building, home and office automation
Factory and process automation
Door lock Flow measurement Motor commutation Push button
Home appliance and white goods
Factory and process automation
E-bike Wheel chair Utility tractor Robot
Mobility and robotics
Mower Chain saw Trimmer Blower
Pedal sensor Throttle sensor Transmission
shifter Joystick
Garden and power tools
Agricultural and heavy machinery
Agenda
23
Company overview
Markets and customers
Products and applications
Financial details
Outlook and summary
Backup information
-202468
1012
2013 2014
Industrial
Sales
EBIT
0
50
100
150
2013 2014
Automotive
Sales
EBIT
24
Micronas Group – segment information
Mil. CHF
Automotive accounts for 93 and Industrial for 7 percent of total turnover
Mil./CHF 31.12.2014 31.12.2013
AutomotiveNet sales 147.8 143.6Gross margin 46.2 45.8in % of sales 31.3% 31.9%Operating profit (EBIT) 6.7 9.1in % of sales 4.5% 6.4%
Mil./CHF 31.12.2014 31.12.2013
IndustrialNet sales 10.7 8.3Gross margin 4.1 3.2in % of sales 38.8% 38.0%Operating loss (EBIT) -0.3 -1.1in % of sales -2.8% -12.7%
Mil. CHF
0
50
100
150
200
2013 2014
Sales by product lines
Hall sensors Controllers
5%
95%
Sales part by product lines
Controllers Hall-effect sensors
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Segment Automotive – product lines
Sales of Hall sensor products were 6 percent higher than in the prior year
Overall controller sales were slightly lower due to the discontinuation of the old dashboard controllers
Sales of the new embedded motor controllers more than doubled
Mil. CHF
Mil./CHF 31.12.2014 31.12.2013 Change in %
Hall-effect sensors 140.9 133.2 6%Controllers 6.9 10.4 -34%Total sales 147.8 143.6 3%
62%
12%
6% 4% 16%
Sales in Europe
Germany Hungary Czech Republic France Others
86%
10% 4%
Sales in Asia
Japan China Others
58%
33% 9% 0%
Sales total
Asia Europe America Others
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Micronas Group – regional information
Mil./CHF 31.12.2014 31.12.2013 Change in %
Europe 51.6 50.5 2%Asia 92.9 89.7 4%America 13.8 11.5 20%Others 0.2 0.2 0%
Total sales 158.5 151.9 4%
In Europe, thanks to a targeted strategic expansion of marketing and sales operations, sales growth excluding the old dashboard controllers came to more than 15 percent
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
Q1-14 Q2-14 Q3-14 Q4-14
Book-to-bill
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Micronas Group – order book
Orders on hand of CHF 49 million – book-to-bill ratio of 1.01
ratio
Mil./CHF 31.12.2014 31.12.2013
Orders on hand, beginning of year 48.1 43.4Net sales 158.5 151.9Order intake 160.3 155.9Translation adjustments -0.9 0.7Orders on hand, end of year 49.0 48.1
Book-to-bill 1.01 1.03
Micronas Group – income statement
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Mil./CHF in % of Mil./CHF in % ofnet sales net sales
Net sales 158.5 151.9Gross margin 50.4 31.8% 49.0 32.2%
Research and development expenses -27.9 17.6% -27.8 18.3%Marketing and sales expenses -10.5 6.6% -9.9 6.5%Administrative and general expenses -6.0 3.8% -5.6 3.7%Other operating income/expenses 0.4 0.3% 2.3 1.5%Operating profit (EBIT) 6.4 4.0% 8.1 5.3%
Financial income/expenses/FX net. -3.0 -1.3Pretax profit 3.4 2.2% 6.8 4.5%
Income taxes 0.0 -0.2Profit for the period 3.4 2.2% 6.6 4.4%
EBITDA 18.1 11.4% 19.4 12.8%
Earnings per share in CHF 0.12 0.23
31.12.2014 31.12.2013
Micronas Group – balance sheet
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Healthy net cash and equity position
Mil./CHF 31.12.2014 31.12.2013
Total non-current assets 95.9 86.2Cash, cash equivalents and short-term financial investments 152.1 173.7Other current assets 49.7 43.2Total assets 297.7 303.1
Total shareholders' equity 109.8 129.8in % of total assets 36.9% 42.8%Total long-term liabilities 167.7 150.2Total current liabilities 20.2 23.1Total liabilities 187.9 173.3Total shareholders' equity and liabilities 297.7 303.1Cash, cash equivalents and short-term financial cash deposits 151.4 170.4
Micronas Group – trade working capital
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Trade net working capital represents 25 percent of net sales
Mil./CHF 31.12.2014 31.12.2013Inventories 33.5 26.9Accounts receivable 14.6 12.7Accounts payable 9.2 11.4
Trade net working capital 38.9 28.2
Micronas Group – cash flow statement
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Investments in manufacturing for the 8-inch ramp-up and in a combined heat and power unit – net cash of CHF 151 million
Mil./CHF 31.12.2014 31.12.2013
Cash, cash equivalents and short-term financial cash deposits at the beginning of the year 170.4 169.9
Cash flow from operating activities 3.2 10.6
Cash flow from investing activities -19.1 -10.2
Cash flow from financing activities -1.4 -1.3
Exchange effect on cash -1.7 1.4Change in cash, cash equivalents and short-term financial cash deposits -19.0 0.5Cash, cash equivalents and short-term financial cash deposits at the end of the year 151.4 170.4
Agenda
32
Company overview
Markets and customers
Products and applications
Financial details
Outlook and summary
Backup information
Grow faster than the Automotive market Grow sales in Europe and America above average Ensure leading position for Hall-sensors in the
automotive market
Capture new markets with our sensor based solutions like our embedded motor controllers
Keep high investments in innovation while increasing profitability
Year-on-year sales growth of > 8 % Gross margin of > 40 % R&D expenditures of 16 – 18 %
EBIT margin of 15 %
Long-term targets
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The ongoing electrification of motor vehicles will continue to drive demand for the highly efficient control and highly integrated sensor systems that are used in a growing number of applications
Following the removal of the minimum Swiss franc/euro exchange rate, based on a EUR/CHF rate of 1.05: Sales of around CHF 71 million for the first half 2015 are
expected
In euros, this would represent a growth of 2 percent
Owing to the conversion of cash held in foreign currencies, a loss is expected at net profit level
The EBIT margin, still influenced by start-up costs for new products, should improve slightly and is expected to be in the mid single-digit percentage range
Outlook for first half-year 2015
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Summary
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Our customers trust us. More than 3 billion sensors sold from the world market leader of linear Hall-effect sensors.
Quality without compromises. Our products are known for superior quality, functional safety and excellent reliability.
All under one roof. More flexibility and fast time-to-market.
Excellence by experience. Innovative solutions and excellent support, based on deep market and broad system know-how.
Agenda
36
Company overview
Markets and customers
Products and applications
Financial details
Outlook and summary
Backup information
Total shares outstanding as at December 31, 2014: 29 752 930
Shareholder structure
Shareholders by country Shareholders by category
27.8%
18.8%
0.4%
7.2%
2.9%
0.1%
42.8%
Switzerland
Great Britain
Germany
Rest of Europe
USA
Rest of world
Shares notregistered
21.4%
2.2%
17.0%
0.1% 0.5%
1.2%
14.8%
42.8%
Persons
Companies
Funds
Foundations
Pension funds
Insurance comp.
Banks
Shares notregistered
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Number of shares
Nortrust Nominees Ltd.1 London, Great Britain 2 745 123 9.23
RBC Dexia Investor Services Trust1 London, Great Britain 2 351 874 7.90
Sparinvest Holdings SE2 Luxembourg 1 583 383 5.33
Brandes Investment Partners, L.P.2 San Diego, USA 1 509 430 5.08
Black Creek Investment Management Inc.2 Toronto, Canada 1 495 070 5.04
Highclere International Investors LLP2 London, Great Britain 915 388 3.08
Wellington Management Company, LLP2 Boston, USA 901 175 3.03
As at December 31, 2014, the Company is aware of the following shareholders holding 3 percent or more of the capital and/or voting rights of the Company:
Shareholder Registered office Percentage
1Nortrust Nominees Ltd. and RBC Dexia Investor Services Trust are acting in their capacity as nominees for other investors. The above figures (number of shares and percentages) conform to the figures as at December 31, 2014.
2The above figures (number of shares and percentages) conform to the figures contained in the respective notifications to the Company and the Disclosure Office of the SIX Swiss Exchange; they may not be accurate as at December 31, 2014.
Major shareholders
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February 26, 2015 Closing date of share register
March 27, 2015 Ordinary Shareholders’ Meeting
10 a.m., Technopark, Zurich
April 23, 2015 Quarterly key figures Q1-2015
July 23, 2015 Half-year results 2015
October 22, 2015 Quarterly key figures Q3-2015
IR calendar
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IR contact Susy Krucker, Head of Investor Relations, [email protected] for further information, please check: www.micronas.com / Investor
