ams Full year and fourth quarter results 2013 Kirk Laney, CEO Michael Wachsler-Markowitsch, CFO Moritz Gmeiner, Head of IR February 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. © 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 By the numbers • 350+ analog engineers • Over 30 years of design experience • Revenues FY2013 EUR378m/$502m (2012: EUR388m/$502m) Q4 2013 EUR103m/$141m (Q4 2012: EUR98m/$126m) • More than 1,400 employees worldwide • Over 7,800 customers worldwide © ams AG 2014 Page 3 Our focus High performance sensors and analog ICs Target markets Core expertise Consumer & Communications Industrial, Medical, Automotive 59% of revenues (FY 2013) 41% of revenues (FY 2013) Sensor solutions, sensor interfaces Power management Wireless © ams AG 2014 Page 4 OUR MARKETS CONSUMER & COMMUNICATIONS INDUSTRIAL, MEDICAL, AUTOMOTIVE © ams AG 2014 Page 5 2013 highlights Consumer & Communications Consumer & Communications records decrease in revenues • Delayed customer projects and base effects as key factors for weak performance • Position with leading smartphone, tablet PC and mobile device OEMs unchanged; new design-wins Innovative gesture sensor as next generation solution, trend to RGB color sensing • Compact module offers gesture, RGB color, proximity, and coupon redemption; first volume orders • Global leader in advanced light sensors; trend to RGB color sensors for hi-res display management Wireless NFC and RFID revenues fall short of expectations • NFC mobile payment hardware solutions do not provide expected momentum in 2013 • Very strong position with antenna booster; convinced to drive substantial growth in NFC MEMS microphone ICs and other lines perform well • Shipment growth as leader in a dynamic market focusing on penetration and cost optimization • Power management solutions develop positively but at a slower pace than envisaged © ams AG 2014 Page 6 Consumer & Communications Sensor solutions and sensor interfaces, power management, wireless Sensors Power management Wireless Specialty solutions • Light sensors, gesture sensor • MEMS microphone ICs • Hall/inductive/ capacitive sensors • Power management ICs • Lighting management ICs • NFC front ends, active booster • RFID readers (UHF/HF/NFC) • LF/HF/UHF transceivers/ smart tags • Active noise cancellation (ANC) • Wireless sensors (lightning sensor) • Specialty sensor interfaces © ams AG 2014 Page 7 Light sensors Worldwide leader in intelligent integrated light sensors Sensor solutions • Ambient light (ALS) - measure ambient light to control display brightness gesture • RGB color - for full analysis of light spectrum and temperature; enhance display picture quality • 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 Technology leader in gesture, RGB color, 3D packaging, SDL Consumer electronics • Smartphones, tablet PCs • HDTV, PCs, notebooks Sensor-driven lighting • Major light sensor applications for the future • Smart, dynamically managed home, industrial, and outdoor lighting © ams AG 2014 Page 8 Innovation: Gesture recognition sensor Simplifying the human-machine interface (HMI) with high performance touchless technology Highly integrated gesture sensor innovation • ams’ leading photodiode technology adapted to provided highly relable and precise touchless user interface for consumer, communications, medical, automotive, white goods and industrial markets. • Sophisticated gesture engine accommodates complex IR-based gesture sensing • TMG3993 IR gesture, color ambient light sensing (ALS) and proximity detection module with IR LED and MobeamTM bar code emulation • 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 mobile commerce • Enables next generation user interface applications © ams AG 2014 Page 9 Innovation: Mobile coupon redemption ams and MobeamTM technology partnership for barcode emulation for mobile coupons Digital light sensor innovation • Integrated 1D barcode transmit technology using ams industryleading light sensors and MobeamTM’s light-based beaming technology • Solution utilizes the same proximity IR LED used for managing smartphone touchscreen displays Benefits • Enables smartphones to transmit UPC barcodes that can be read by the tens of millions of point-of-sales (POS) laser scanners • Provides smartphone OEMs with a turn-key mobile couponing solution and enables differentiation without need for additional components • Smartphones offer easy mobile commerce transactions using barcodes including coupon redemption, gift cards, tickets, etc. © ams AG 2014 Page 10 Wireless solutions Mobile transactions: NFC solutions • Solutions for smartphone NFC and complete Enabling reliable NFC on SIM/microSD card with peer-to-peer smartphone and reader/tag functions NFC payments • Active booster technology analog front-ends with auto antenna tuning • World-leading expertise in NFC technology • Strong design pipeline for large scale implementations Authentication: RFID solutions • Integrated one-chip UHF reader solutions offer low solution cost for cost-effective RFID deployment • Other RFID: HF readers, smart tags, LF/HF/UHF transceivers • Applications: consumables, goods tracking and authentication, retail shrinkage prevention © ams AG 2014 Page 11 Innovation: RFID active booster technology Reliable near field communication (NFC) to assure worry-free mobile transactions Wireless innovation • Advanced active tag analog front end (AFE) • Active Boost overcomes reception problems in smartphones or for small form factor antennas • Designed for ultra small form factor tag applications 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 and microSD cards • Clears path for mass market adoption of smartphone NFC payment, already in mass production for SIM/microSD applications © ams AG 2014 Page 12 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 Industry 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 MEMS mics now standard feature for mobile devices © ams AG 2014 Page 13 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 the next generation of 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 Benefits • 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 • Industry’s smallest total size multiphase DC/DC design, resulting in a PCB area savings of 50% © ams AG 2014 Page 14 2013 highlights Industrial, Medical, Automotive Good performance of industrial end markets • Brightening macroeconomic outlook through 2013 drives positive demand momentum • Market position as technology specialist for industrial sensors and position measurement expanded Medical business continues positive development • Medical imaging remains key driver with industry-leading sensor capabilities • Evolution of Asian markets, future sensor opportunities for personal devices and wearables Strong growth in automotive business • Good end market demand and vehicle platform launches drive strong shipment growth • Major design-wins, particularly in Japan and Asia, leading to significant R&D additions © ams AG 2014 Page 15 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 © ams AG 2014 Page 16 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 © ams AG 2014 Page 17 Automotive Sensors 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 (pedestrian detection) • ESP (Electronic Stability Program) • FlexRay® high bandwidth data network © ams AG 2014 Page 18 Innovation: 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, second generation nearing release 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 Confidential © ams AG 2014 Page 19 Scalable manufacturing model In-house capacity + manufacturing partnerships: a successful model for profitable growth Wafer manufacturing • 200mm in-house fab (120k wafers p.a.) • CMOS nodes: 0.18µm – 0.35µm – 0.8µm • Specialty analog processes • Best-in-class efficiency • Multi-source security: TSMC, UMC, IBM EUR10-15m additional invest to optimize wafer fab and test capacity Project to identify additional wafer fab assets outside Europe Assembly and test • In-house test in Austria and the Philippines • In-house TSV 3D packaging line in Austria completed, currently in optimization and qualification, mass production H2 2014 • Multi-source assembly locations • End-to-end fully integrated supply chain © ams AG 2014 Page 20 Global value chain • • • 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 © ams AG 2014 Page 21 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 © ams AG 2014 Page 22 Financial results Michael Wachsler-Markowitsch, CFO © ams AG 2014 Key figures EURm (IAS) 2013 2012 Q4 2013 Q4 2012 Total revenues 377.8 - 3% 387.6 103.5 + 6% 97.5 55% 52% 55% 52% 56% 54% 56% 53% Result from operations (EBIT) 63.9 - 25% 84.8 24.2 + 24% 19.6 Net result 60.8 - 26% 81.9 23.3 + 26% 18.5 5.56 / 5.34 4.52 / 4.35 7.67 / 7.30 6.37 / 6.06 2.12 / 2.03 1.73 / 1.65 1.69 / 1.60 1.40 / 1.32 Gross margin (before amortization charge) (incl. amortization charge) EPS (basic/diluted) CHF EUR © ams AG 2014 Page 24 FINANCIAL RESULTS P&L BALANCE SHEET CASH FLOW © ams AG 2014 Page 25 Total revenues EURm - 2.5% 400 387.6 120 + 6.2% 377.8 300 90 200 60 100 30 0 0 2012 • • 2013 97.5 Q4 2012 103.5 Q4 2013 Slight decrease in full year revenues, positive Q4 performance On constant currency basis, revenues 2013 unchanged year-on-year, Q4 2013 +10% year-on-year © ams AG 2014 Page 26 Revenue distribution % of revenues Total revenues by market 2013 Total revenues by region 2012/2013 100% 75% 63% 59% Asia/Pacific Industrial, Medical, Automotive (+ 5) Consumer & Communications (- 5) 41% 50% 5% 59% 6% Americas 25% 32% 35% 2012 2013 Europe (EMEA) 0% • • Slight expansion of EMEA business in 2013 Stronger Industrial, Medical, Automotive share of revenues for 2013 © ams AG 2014 Page 27 Total backlog EURm 100 Consignment stock agreements approx. EUR10-12m - 15.8% 90.9 75 76.6 50 25 0 Dec 31 2012 • • Dec 31 2013 Lower year-end backlog reflects shortened lead times for upcoming product ramp-ups Total backlog + designated consignment stock agreements = total customer-committed pipeline © ams AG 2014 Page 28 Gross profit / gross profit margin EURm, % of revenues, gross profit margin excluding amortization charges 250 54.7% 54.6% 80 55.7% 55.7% 200 202.9 - 2.4% 198.0 60 150 52.1 + 6.6% 55.5 40 100 20 50 0 0 2012 2013 Q4 2012 Q4 2013 Gross profit margin • • Gross margin performance driven by product mix, full utilization and production efficiencies Gross margin including amortization charges for 2013: 52.4%, Q4 2013: 53.7% © ams AG 2014 Page 29 R&D expenses EURm, % of revenues 80 18.1% 25 68.5 20 15.2% 60 59.0 16.7% 15.7% + 16.0% 15 40 15.4 + 12.5% 17.3 10 20 5 0 0 2012 • • 2013 Q4 2012 Q4 2013 2013 R&D investments to support major automotive design-wins and dedicated key account teams R&D expenses staying within business model target range © ams AG 2014 Page 30 SG&A expenses EURm, % of revenues 80 16.8% 60 65.0 + 6.1% 18.3% 25 69.0 20 19.4% 15.4% 19.0 15 - 16.1% 40 15.9 10 20 5 0 0 2012 • • 2013 Q4 2012 Q4 2013 SG&A expenses reflect build-out of dedicated Asian and U.S. customer support network Q4 2013 shows cost management and one-time benefit from release of profit-sharing provisions © ams AG 2014 Page 31 Result from operations (EBIT) EURm, % of revenues 100 21.9% 80 23.4% 30 16.9% 20.1% 84.8 24.2 20 60 - 24.7% 19.6 63.9 + 23.6% 40 10 20 0 0 2012 • • 2013 Q4 2012 Q4 2013 Higher impact on EBIT profitability due to operating expense growth Q4 2013 reflects revenue growth and gross margin strength © ams AG 2014 Page 32 Net financial result EURm 6 6 3 3 0 0 + 156.6% -1.4 + 66.4% -0.2 -0.5 -3 -3 -6 -6 2012 • • 2013 0.1 Q4 2012 Q4 2013 Significant improvement in 2013 due to cash generation and net cash build Effects from exchange rate fluctuations reflected in financial result © ams AG 2014 Page 33 Tax expense EURm, tax rate: % of result before tax (PBT) 5 5 4 3 4.1% 1.8% 1 3 2.6 2 1.5 4.7% 2 4.2% 1 0.9 1.0 Q4 2012 Q4 2013 0 0 2012 • • 4 2013 Low tax expense due to application of historic tax losses and international tax structures 2014 tax rate expected to remain around mid single-digit levels © ams AG 2014 Page 34 Net income / earnings per share EURm, earnings per share (EPS) in CHF and EUR (basic/ diluted) 100 CHF 7.67/ 7.30 EUR 6.37/ 6.06 CHF 5.56 / 5.34 EUR 4.52/ 4.35 30 CHF 1.69 / 1.60 EUR 1.40 / 1.32 CHF 2.12 / 2.03 EUR 1.73 / 1.65 25 80 81.9 20 23.3 60 - 25.8% 60.8 15 18.5 + 26.4% 40 10 20 5 0 0 2012 • • 2013 Q4 2012 Q4 2013 Net income decrease reflects lower operating profitability 2013 share count increased due to employee option exercises, Q4 2013 share count 14,559,683 © ams AG 2014 Page 35 FINANCIAL RESULTS P&L BALANCE SHEET CASH FLOW © ams AG 2014 Page 36 Working capital EURm Working capital at year-end 100 + 5.5% 80 60 72.0 75.9 40 2013 2012 Trade receivables + Inventories - Trade liabilities 63.7 40.5 28.3 42.2 56.2 26.4 Working capital in % of revenues 75.9 20% 72.0 19% 20 0 Dec 31 2012 • • Dec 31 2013 Working capital reflects high Q4 revenues Strong decrease in inventories due to supply chain optimizations © ams AG 2014 Page 37 Net cash, cash and short term investments EURm, % of total liabilities Net cash, equity ratio Cash and short-term investments 68% 60 120 65% + 20.1% 104.3 90 40 86.8 44.2 60 + 635.9% 20 30 0 6.0 2012 0 2013 Dec 31 2012 Dec 31 2013 Equity ratio • • Strong increase in net cash position by year-end Further increase in cash despite investments demonstrates cash flow strength © ams AG 2014 Page 38 FINANCIAL RESULTS P&L BALANCE SHEET CASH FLOW © ams AG 2014 Page 39 Cash flow from operations EURm 140 120 50 124.8 40 39.3 100 - 19.7% 80 100.2 30 - 25.3% 60 29.3 20 40 10 20 0 0 2012 • • 2013 Q4 2012 Q4 2013 Good cash generation despite slight decrease in revenues Q4 operating cash flow reflects year-end working capital increase © ams AG 2014 Page 40 Capital expenditures EURm 50 25 47.1 40 30 20 31.9 + 47.5% 15 20 10 10 5 0 11.0 - 38.4% 6.8 0 2012 2013 Q4 2012 Q4 2013 Acquisition of intangibles, property, plant and equipment • • 2013 capital expenditures include significant additional investment for 3D packaging line 2014E: additional investments of EUR 10-15m for fab optimization and test capacity expansion © ams AG 2014 Page 41 Dividend policy and proposal Dividend policy • Distribution of 25% of net earnings Dividend proposal for 2013 • EUR 1.04 per share outstanding • AGM May 22, 2014, payment date June 2, 2014 © ams AG 2014 Page 42 Company highlights and outlook Kirk Laney, CEO © ams AG 2014 Company highlights Analog makes sense © ams AG 2014 Page 44 Outlook and key topics for 2014 Strong project and revenue pipeline with major OEMs Significant new product ramps in 2014 with bias towards second half Q1 2014 impacted by seasonality and effects from customer ramp-up shifts, expected revenues EUR 80-85m, operating margin expected up year-on-year Aligning ams with becoming a sensor solutions provider • Targeted investments and project to identify additional wafer fab assets outside Europe • Actively evaluating further additions to our sensor technologies portfolio © ams AG 2014 Page 45 Thank you Please visit our website www.ams.com © ams AG 2014 Profit and loss statement EURm (IAS) 2013 2012 Q4 2013 Q4 2012 Total revenues • Products • Foundry 377.8 343.0 34.8 387.6 359.7 27.9 103.5 95.1 8.4 97.5 88.9 8.6 Gross profit • Gross margin incl. amortization charge 198.0 52.4% 202.9 52.3% 55.5 53.7% 52.1 53.4% Research and development Selling, general and administrative Other operating income/expenses - 68.5 - 69.0 3.3 - 59.0 - 65.0 5.9 - 17.3 - 15.9 1.9 - 15.4 - 19.0 1.8 Result from operations (EBIT) • Operating margin 63.9 16.9% 84.8 21.9% 24.2 23.4% 19.6 20.1% Net financing costs - 0.5 - 1.4 0.1 - 0.2 Result before tax Income tax result 63.4 - 2.6 83.4 - 1.5 24.3 - 1.0 19.4 - 0.9 Net result 60.8 81.9 23.3 18.5 5.56 / 5.34 4.52 / 4.35 7.67 / 7.30 6.37 / 6.06 2.12 / 2.03 1.73 / 1.65 1.69 / 1.60 1.40 / 1.32 EPS (basic/diluted) CHF EUR © ams AG 2014 Page 47 Balance sheet EURm Dec 31, 2013 Dec 31, 2012 Liabilities and equity Dec 31, 2013 Cash and short term invest. Trade receivables Inventories Other current assets 104.3 63.7 40.5 10.5 86.8 42.2 56.2 11.2 Interest-bearing debt Trade liabilities Provisions Other liabilities 0.8 28.3 23.2 24.1 9.4 26.4 24.3 20.8 Total current assets 219.1 196.4 Total current liabilities 76.3 80.9 Fixed assets Intangible assets Investments Deferred tax asset Other non-current assets 145.4 243.0 5.1 33.3 7.1 131.3 260.0 6.4 32.9 7.0 Interest-bearing debt Employee benefits Provisions Deferred tax liabilities Other liabilities 59.3 23.6 22.9 13.6 12.6 71.4 19.2 22.8 17.2 13.1 Total non-current assets 433.9 437.5 Total non-current liabilities Shareholders’ equity 132.0 143.6 444.7 409.5 Total liabil. and equity 653.0 634.0 Assets (IAS) Total assets 653.0 634.0 Dec 31, 2012 © ams AG 2014 Page 48 Cash flow statement EURm (IAS) 2013 2012 Q4 2013 Q4 2012 Income before tax Depreciation 63.4 35.2 83.4 33.3 24.3 8.4 19.4 8.4 Cash flow from operations 100.2 124.8 29.3 39.3 Capital expenditures - 47.1 - 31.9 - 6.8 - 11.0 Cash flow from investing activities - 46.8 - 65.7 - 6.4 - 41.3 Proceeds from borrowings Repayment of borrowings Dividends paid Changes resulting from capital increase 14.0 - 33.6 - 19.4 11.2 34.0 - 68.7 - 8.1 18.6 2.1 - 15.4 0 2.3 26.2 - 10.6 0 4.0 Cash flow from financing activities - 37.9 - 42.9 - 10.6 13.7 Change in cash and cash equivalents 15.4 16.2 12.3 11.7 Cash and cash equivalents at end of period 83.4 67.9 83.4 67.9 © ams AG 2014 Page 49