ST-Ericsson Q1 2010 Earnings presentation

FIRST QUARTER REPORT 2010
FIRST QUARTER REPORT 2010
Claudia Levo
Senior Vice President, Communications
SAFE HARBOR
This presentation contains forward-looking statements that
involve inherent risks and uncertainties. We have identified
certain important factors that may cause actual results to differ
materially from those contained in such forward-looking
statements.
For a detailed description of risk factors see STMicroelectronics’
(NYSE:STM) and Ericsson's (NASDAQ:ERIC) filings with the
US Securities and Exchange Commission, particularly each
company's latest published Annual Report on Form 20-F.
FIRST QUARTER REPORT 2010
Gilles Delfassy, President and CEO
NET SALES
∙ Net sales $606 million
∙ Ongoing portfolio transition
∙ Some seasonal effect
∙ Lower number of days in the fiscal period
$ million
800
700
600
500
400
YoY pro-forma: +8%
QoQ: -18%
300
200
100
0
1
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TRANSFORMING THE COMPANY
• Entry & feature phones
∙ Smartphones
∙ Connected devices
∙ High-value entry
• Modem only
∙ Application engine
∙ Modem
∙ Connectivity
• Three big customers
∙ Diversified customer
portfolio
∙ Open/complete platforms
• Custom solutions
∙ Global
• Europe and Asia
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ST-ERICSSON HIGHLIGHTS IN Q1
∙ Launched entry smartphone platform, U6715 - shipping to Acer
∙ Shipped 10 million TD chipsets to our customers
∙ Enhancements to our advanced smartphone platform, U8500
∙ Reached dual-core at 1.2GHz
∙ Best-in-class HSPA+ solution – multiple wins
∙ New multimode modem architecture for numerous access technologies
∙ Collaboration with China Mobile on TD-LTE
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FIRST QUARTER SUMMARY
∙ Adjusted operating loss $114 million reflecting
∙ Lower sales
∙ Unfavorable product mix
∙ Lower contribution from European funding programs
∙ Inventory reduced by $14 million to $230 million
∙ Net cash $120 million
∙ Restructuring plans on track
∙ Around 50% of total savings of $230 million plan realized
∙ $115 million plan to contribute savings from H2 2010
∙ R&D efficiency program initiated and integration of IT systems completed
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OUTLOOK
∙ Sequential net sales approximately
flat with respect to the first quarter
2010*
∙ Improvements of operating result not
anticipated to occur until the second
half of 2010*
* This slide contains forward looking statements
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WHAT OUR CUSTOMERS WANT
Smartphones
Connected devices
• High-performance application engines
• High-speed modems
• Integrated or standalone solutions
• Optimized thin modems
• Multi-mode capable
• Integrated or external
Entry and low cost
• Features at lowest cost and power
• Single-chip integration
• Market ready solutions
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IN SUMMARY - 2010 PRIORITIES
• Competitive cost structure
• New portfolio
• Prepare the company for future, profitable growth
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Q&A