ams Q3 2014 results Kirk Laney, CEO Michael Wachsler-Markowitsch, CFO Moritz Gmeiner, Head of IR October 2014 © ams AG 2014 What we do for our customers ams provides innovative analog solutions to the most challenging applications in sensors, sensor interfaces, power management, and wireless. Confidential © ams AG 2014 Page 2 ams overview At a glance • Focus on high performance analog semiconductors • Sensor solutions, sensor interfaces, power management, wireless • Ultra-low power, highest accuracy, sensitivity and integration • Analog IDM: world class design + in-house manufacturing • Best-in-class solutions for leading OEMs worldwide By the numbers • 400+ analog engineers • Over 30 years of design experience • Revenues Q3 2014 EUR133m/$176m (Q3 2013: EUR98m/$130m) FY2013 EUR378m/$502m (2012: EUR388m/$498m) • 1,500+ employees worldwide • 7,800+ customers Confidential © ams AG 2014 Page 3 Our focus High performance sensors and analog ICs Target markets Core expertise Consumer and Communications Industrial, Medical, Automotive 59% of revenues (H1 2014) 41% of revenues (H1 2014) Sensor solutions, sensor interfaces Power management Wireless Confidential © ams AG 2014 Page 4 OUR MARKETS CONSUMER AND COMMUNICATIONS INDUSTRIAL, MEDICAL, AUTOMOTIVE Consumer and Communications Sensor solutions and sensor interfaces, power management, wireless Sensors Power management Wireless Specialty solutions • Light sensors, gesture sensors • MEMS microphone ICs • Hall/inductive/ capacitive sensors • Power management ICs • Lighting management ICs • NFC antenna booster, front ends • RFID readers (UHF/HF/NFC) • LF/HF/UHF transceivers/smart tags • Active noise cancellation (ANC) • Wireless sensors (lightning sensor) • Specialty sensor interfaces Confidential © ams AG 2014 Page 6 Light sensors Worldwide leader in intelligent integrated light sensors Sensor solutions • RGB color - for full analysis of light spectrum and temperature; enhance display picture quality • Ambient light (ALS) - measure monochromatic ambient light to control display brightness • Proximity (Prox) - detect proximity of user’s ear to control display/touchscreen on-state • Gesture - sense hand movement in proximity of device surface to create touchless interface Gesture 4-in-1 module continuing to gain traction Consumer electronics • Smartphones, tablet PCs, mobile devices, HDTV, PCs, notebooks Sensor-driven lighting – “cognitive lighting” • Major light sensor-based opportunity in the coming years • Dynamically managed industrial, home, and professional lighting • Combining LED controller and sensor technologies Confidential © ams AG 2014 Page 7 Success: Gesture recognition sensor Simplifying the human-machine interface (HMI) with high performance touchless technology Highly integrated gesture sensor innovation • ams’ leading photodiode technology adapted Volume shipto provided highly reliable, precise touchless ments into user interface for consumer, communications, global device medical, automotive, and industrial markets platforms • Sophisticated gesture engine accommodates complex IR-based gesture sensing • TMG3993 IR gesture, color ambient light sensing (ALS) and proximity detection 4-in-1 module with mobile coupon redemption • Industry standard module package size with <10mm2 footprint Benefits • Highly integrated solution for maximum system value • Configurable gesture commands provide application flexibility • Reduces system BOM cost and board space requirements • MobeamTM bar code functionality simplifies coupon usage • Enables next generation user interface applications Confidential © ams AG 2014 Page 8 Wireless solutions – NFC, RFID Mobile transactions: NFC solutions • Antenna boost technology with automatic tuning offers unique advantages • Antenna booster front-end enables reliable and convenient NFC • Solutions for smartphone-embedded NFC, complete NFC on SIM/microSD card, and reader functions • World-leading expertise in NFC technology High run rates of NFC booster for major socket Authentication: RFID solutions • Integrated one-chip UHF reader solutions offer low solution cost for cost-effective RFID deployment • Other RFID products: HF readers, smart tags, LF/HF/UHF transceivers • Applications: consumables, goods tracking and authentication, retail shrinkage prevention Confidential © ams AG 2014 Page 9 Success: NFC antenna booster Reliable near field communication (NFC) for convenient mobile transactions Wireless innovation • Advanced active tag analog front end (AFE) • Active antenna boost overcomes reception problems in smartphones or for small form factor antennas • Designed for ultra small form factor applications Growth driver given strong NFC payment momentum Benefits • World’s first High Frequency (HF) active booster amplifies the antenna by >80x for NFC in small areas • Overcomes field-dampening metal environments to ensure 100% read rate • Extends range up to 10cm (free air) for NFC on SIM cards • Key enabler of reliable NFC in mobile devices and wearables • Drives NFC mobile payment adoption Confidential © ams AG 2014 Page 10 MEMS microphone ICs MEMS microphone interfaces for smartphones, handsets, tablet PCs, notebooks, and other mobile devices • • • • • Over 1.6 billion MEMS microphone ICs shipped in 2013 Market leader with over 60% market share Extensive product portfolio based on more than 10 years of expertise Dynamic market driven by device adoption/penetration, audio quality and cost optimizations Leader in low noise focusing on higher value market segments High volume product line for broad range of devices Confidential © ams AG 2014 Page 11 Power management solutions for mobile devices PMIC solutions enable optimum battery life and system performance Power management innovation • High performance PMIC design delivers superior value for clamshell and other mobile devices utilizing multicore processor designs • Supports leading mobile graphics processor’s current and upcoming platforms • Patent pending unique technology to manage high speed, high current power stages PMIC ramp-up for first clamshell devices ongoing Benefits • Industry’s smallest total size multiphase DC/DC design, resulting in a PCB area savings of 50% • Enables highest frame rates at maximum screen resolutions for mobile devices while maximizing battery life • Industry’s first programmable and scalable converter solution supporting up to 20 amps load in 10 microseconds Confidential © ams AG 2014 Page 12 Industrial Sensor solutions and sensor interfaces Industrial automation and control • Motion control • Industrial sensors • Drives and electrical motors 2D and 3D position encoders • Magnetic rotary and linear encoders • Integrated high performance Hall sensors • Broad portfolio for widest range of applications Building automation and security • HVAC • Safety • Bus systems Seismic sensor interfaces • Highest sensitivity sensor solutions Confidential © ams AG 2014 Page 13 Medical Sensor solutions and sensor interfaces, power management, wireless Medical imaging: Leader in lowest noise sensor solutions • Computed tomography – supplier to #1 • Digital X-ray – supplier to #1 • Mammography – supplier to #1 • Ultrasound – supplier to market leaders Personal health devices • Diabetes management • Heart rate monitors Robotic surgical solutions • Encoder-driven accuracy Confidential © ams AG 2014 Page 14 Automotive Sensor and sensor interfaces, bus systems, power management, wireless Position sensing • Pedal & throttle position • Transmission (clutch, gear shift) • Steering wheel angle and torque • Brushless motor control applications Battery power management • Battery management for conventional, hybrid, and electric vehicles • Highly-efficient power management Safety systems • Collision avoidance LIDAR systems (object detection) • ESP (Electronic Stability Program) • FlexRay® high bandwidth data network Confidential © ams AG 2014 Page 15 Success: Laser-based LIDAR collision avoidance Enables automatic braking for accident avoidance and pedestrian protection Automotive innovation • Obstacle distance detection by laser pulse time-of-flight measurement • Laser beam scans area in front of vehicle, beam reflection is measured with highest speed and accuracy • Chip set comprising three channel high bandwidth amplifier and high speed pipelined ADC • In volume production for multiple platforms Benefits • Very cost-effective active safety feature • Allows for fully automatic braking in dense city traffic • Simple assembly close to rear view mirror • Seamless integration with vehicle stability system via standard CAN bus • Cost-effective for fast adoption in volume platforms Confidential © ams AG 2014 Page 16 Scalable and profitable manufacturing model In-house capacity + manufacturing partnerships: proven excellence for profitable growth Wafer manufacturing • 200mm in-house fab (2014E 155k wafers p.a.) • CMOS nodes: 0.18µm – 0.35µm – 0.8µm • Specialty analog processes • Best-in-class efficiency • Multi-source security: TSMC, UMC, IBM Decision to accelerate further fab capacity expansion step Assembly and test • In-house test in Austria and the Philippines • In-house TSV 3D packaging line in Austria • Multi-source assembly locations • End-to-end fully integrated supply chain Confidential © ams AG 2014 Page 17 Global value chain Headquarters Design centers Test center Sales offices • • • 9 design centers Austria, Switzerland, Italy (2), Spain, Slovenia, USA (2), India High volume test center Philippines Continuing growth in distribution design-ins and revenues Over 30 distributors worldwide including Future Electronics, Digi-Key, Mouser Confidential © ams AG 2014 Page 18 Quality and responsibility commitment Quality commitment • Certified under - ISO/TS16949 (automotive) - ISO/TS13485 (medical) - ISO 14001 (environment) • Zero defect commitment with industry-leading field failure rates • Global quality systems with local resources/labs in key markets • Top rankings by customers Corporate responsibility • Member of the UN Global Compact • CDP (Carbon Disclosure Project) participant • Conflict metals/hazardous-use materials program implemented • 70% reduction of CO2 footprint since 2003; mid-term goal to be a carbon-neutral company Confidential © ams AG 2014 Page 19 ams - shaping the world with sensor solutions Company highlights Confidential © ams AG 2014 Page 20 Key figures EURm (IAS) Total revenues 9M 2014 9M 2013 Q3 2014 Q3 2013 325.4 + 19% 274.3 132.8 + 35% 98.2 Gross margin (excl. acquisition-related costs) (incl. acquisition-related costs) 57% 55% 54% 52% 57% 55% 55% 53% Result from operations (EBIT) (excl. acquisition-related costs) (incl. acquisition-related costs) 81.6 74.0 47.2 39.6 37.4 34.5 22.5 20.0 68.8 + 83% 37.5 31.9 + 71% 18.6 1.23 / 1.18 1.01 / 0.97 0.69 / 0.662) 0.56 / 0.542) 0.57 / 0.54 0.47 / 0.45 0.34 / 0.332) 0.28 / 0.272) Net result EPS (basic/diluted)1) CHF EUR 1) Earnings per share in CHF were converted using the average currency exchange rate for the respective periods 2) Earnings per share have been adjusted to reflect the share split of 1:5 Confidential © ams AG 2014 Page 21 Financial results EURm Total revenues Total revenues by market H1 2014 400 + 19% 300 Industrial, Medical, Automotive 325.4 274.3 200 41% + 35% Consumer & Communications 59% 132.8 100 98.2 0 9M 2013 9M 2014 Q3 2013 Q3 2014 Total revenues by region 2013 / H1 2014 100% 150 80% 59% 48% Asia/Pacific 60% 5% 40% 6% 20% 35% 0% Total backlog 2013 Americas 120 90 119.8 107.1 Consignment stock agreements approx. EUR10-12m 60 47% H1 2014 Europe (EMEA) 30 0 Jun 30 2014 Sept 30 2014 Confidential © ams AG 2014 Page 22 Financial results EURm, % of revenues Gross profit, gross margin R&D 75 250 18.7% 56.5%1) 200 54.3%1) 142.5 55.4%1) 100 50 0 50 177.6 150 52.2 9M 2013 9M 2014 34.4 17.1% 56.6%1) 14.8% 25 73.0 Q3 2013 Q3 2014 SG&A 17.9 16.8 0 9M 2013 9M 2014 Q3 2013 Q3 2014 EBIT 75 19.4% 125 16.9% 100 50 53.1 55.0 17.0% 25.1%1) 17.2%1) 75 15.7% 25 81.61) 28.1%1) 23.0%1) 50 47.21) 16.7 0 51.2 16.6% 9M 2013 9M 2014 1) 20.8 Q3 2013 Q3 2014 excl. acquisition-related costs 37.41) 25 22.51) 0 9M 2013 9M 2014 1) Q3 2013 Q3 2014 excl. acquisition-related costs Confidential © ams AG 2014 Page 23 Financial results EURm, % of revenues Net result, EPS (basic/diluted) Operating cash flow 100 100 80 CHF 1.23/1.18 EUR 1.01/0.97 60 68.8 CHF 0.69/0.661) EUR 0.56/0.541) 40 85.6 75 70.9 CHF 0.57/0.54 EUR 0.47/0.45 50 0.34/0.331) CHF EUR 0.28/0.271) 37.5 20 31.9 25 34.0 37.1 18.6 0 9M 2013 9M 2014 Q3 2013 Q3 2014 Net cash, cash + short term investments Net cash 120 Cash + short term invest. 0 9M 2013 9M 2014 Q3 2013 Q3 2014 Capital expenditures 60 57.5 103.9 90 92.1 40 40.3 60 20 30 0 18.7 17.5 35.1 0 Q3 2013 Q3 2014 1) Q3 2013 Q3 2014 adjusted to reflect the share split of 1:5 7.5 9M 2013 9M 2014 Q3 2013 Q3 2014 Confidential © ams AG 2014 Page 24 Thank you Please visit our website www.ams.com Confidential © ams AG 2014 Profit and loss statement EURm (IAS) 9M 2014 9M 2013 Q3 2014 Q3 2013 325.4 295.3 30.1 274.3 247.9 26.4 132.8 123.0 9.8 98.2 89.7 8.5 Gross profit • Gross margin (incl. acquisition-related costs) 177.6 54.6% 142.5 51.9% 73.0 55.0% 52.2 53.2% Research and development Selling, general and administrative Other operating income/expenses - 53.9 - 55.0 5.3 - 51.2 - 53.1 1.5 - 19.6 - 20.8 1.9 - 16.8 - 16.7 1.3 74.0 39.6 34.5 20.0 Operating margin 22.7% 14.4% 26.0% 20.4% Net financing costs - 0.3 - 0.6 0.4 - 0.5 Result before tax Income tax result 73.6 - 4.9 39.1 - 1.6 35.0 - 3.1 19.6 - 1.0 Net result 68.8 37.5 31.9 18.6 1.23 / 1.18 1.01 / 0.97 0.69 / 0.662) 0.56 / 0.542) 0.57 / 0.54 0.47 / 0.45 0.34 / 0.332) 0.28 / 0.272) Total revenues • Products • Foundry Result from operations (EBIT) (incl. acquisition-related costs) • EPS (basic/diluted) CHF1) EUR 1) Earnings per share in CHF were converted using the average currency exchange rate for the respective periods 2) Earnings per share have been adjusted to reflect the share split of 1:5 Confidential © ams AG 2014 Page 26 Balance sheet EURm Sep 30, 2014 Dec 31, 2013 Liabilities and equity Sep 30, 2014 Cash and short term invest. Trade receivables Inventories Other current assets 103.9 85.0 55.0 14.2 104.3 63.7 40.5 10.5 Interest-bearing debt Trade liabilities Provisions Other liabilities 8.5 41.1 31.2 29.6 0.8 28.3 23.2 24.1 Total current assets 258.1 219.1 Total current liabilities 110.3 76.3 Fixed assets Intangible assets Investments Deferred tax asset Other non-current assets 191.9 271.1 6.4 33.6 8.0 145.4 243.0 5.1 33.3 7.1 Interest-bearing debt Employee benefits Provisions Deferred tax liabilities Other liabilities 60.3 20.1 25.4 14.6 13.5 59.3 23.6 22.9 13.6 12.6 Total non-current assets 511.0 433.9 Total non-current liabilities Shareholders’ equity 138.8 132.0 519.9 444.7 Total liabil. and equity 769.1 653.0 Assets (IAS) Total assets 769.1 653.0 Dec 31, 2013 Confidential © ams AG 2014 Page 27 Cash flow statement EURm (IAS) 9M 2014 9M 2013 Q3 2014 Q3 2013 Income before tax Depreciation 73.6 26.7 39.1 26.7 35.0 9.5 19.6 8.7 Cash flow from operations 85.6 70.9 37.1 34.0 Capital expenditures - 57.5 - 40.3 - 17.5 - 7.5 Cash flow from investing activities - 76.7 - 40.4 - 21.7 - 7.0 Proceeds from borrowings Repayment of borrowings Dividends paid Changes resulting from capital increase 9.1 - 0.4 - 14.1 5.2 11.9 - 18.2 - 19.4 9.0 8.2 0 0 2.5 11.5 - 15.6 0 1.1 Cash flow from financing activities - 14.3 - 27.3 11.9 - 11.1 Change in cash and cash equivalents - 5.4 3.2 27.4 15.9 Cash and cash equivalents at end of period 77.9 71.1 77.9 71.1 Confidential © ams AG 2014 Page 28