ams Q1 2014 results Kirk Laney, CEO Michael Wachsler-Markowitsch, CFO Moritz Gmeiner, Head of IR April 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 Q1 2014 EUR86m/$118m (Q1 2013: EUR85m/$112m) FY2013 EUR378m/$502m (2012: EUR388m/$498m) • 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 and 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 AND COMMUNICATIONS INDUSTRIAL, MEDICAL, AUTOMOTIVE © ams AG 2014 Page 5 Consumer and 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, antenna 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 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 sensor module shipping in high volume Consumer electronics • Smartphones, tablet PCs, upcoming mobile devices • 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 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 Supplying leading to provided highly reliable, precise touchless high-end smartuser interface for consumer, communications, phone platform medical, automotive, and industrial markets • 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 mobile commerce • Enables next generation user interface applications © ams AG 2014 Page 8 Wireless solutions Mobile transactions: NFC solutions • Solutions for smartphone embedded NFC and complete NFC on SIM/microSD card • Antenna booster technology analog front-ends with auto antenna tuning • World-leading expertise in NFC technology • OEM relationships build market acceptance Enabling a seamless experience in smartphone NFC 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 9 Success: NFC antenna booster Reliable near field communication (NFC) to assure worry-free mobile transactions Wireless innovation • Advanced active tag analog front end (AFE) Gearing up for • Active antenna boost overcomes reception large scale OEM problems in smartphones or for small form adoption in 2014 factor antennas • Designed for ultra small form factor 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 cards • Accelerating NFC smartphone adoption via large scale OEM engagement © 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 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 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 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 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 © 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 © ams AG 2014 Page 14 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 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, additional car platforms launching 2014, 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 © 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 150k wafers p.a.) • CMOS nodes: 0.18µm – 0.35µm – 0.8µm • Specialty analog processes • Best-in-class efficiency • Multi-source security: TSMC, UMC, IBM 2014 invest to increase wafer fab and test capacity on track Project to identify 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 17 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 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 © ams AG 2014 Page 19 ams company highlights Shaping the world with sensor solutions © ams AG 2014 Page 20 Key figures EURm (IAS) 2013 2012 Q1 2014 Q1 2013 Total revenues 377.8 - 3% 387.6 86.3 + 2% 84.9 55% 52% 55% 52% 56% 54% 54% 51% Result from operations (EBIT) 63.9 - 25% 84.8 15.4 + 47% 10.5 Net result 60.8 - 26% 81.9 14.7 + 48% 9.9 5.56 / 5.34 4.52 / 4.35 7.67 / 7.30 6.37 / 6.06 1.32 / 1.26 1.08 / 1.04 0.91 / 0.87 0.74 / 0.70 Gross margin (before amortization charge) (incl. amortization charge) EPS (basic/diluted) CHF EUR © ams AG 2014 Page 21 Financial results EURm Total revenues 450 300 Total revenues by market 2013 - 3% 387.6 Industrial, Medical, Automotive 377.8 41% 59% 150 + 2% 84.9 0 2012 2013 86.3 Q1 2013 Q1 2014 Total revenues by region 2012 / 2013 100% Total backlog 120 80% 63% 59% Asia/Pacific 90 60% 60 40% 20% 0% Consumer & Communications 5% 6% Americas 32% 35% Europe (EMEA) 2012 2013 85.5 76.6 Consignment stock agreements approx. EUR10-12m 30 0 Dec 31 2013 Mar 31 2014 © ams AG 2014 Page 22 Financial results EURm, % of revenues Gross profit, gross margin 250 R&D 80 54.6%1) 54.7%1) 200 202.9 68.5 60 198.0 59.0 150 100 18.1% 15.2% 53.7%1) 56.3%1) 40 19.4% 19.1% 16.5 16.5 20 50 43.4 0 2012 2013 46.5 Q1 2013 Q1 2014 0 2012 2013 Q1 2013 Q1 2014 EBIT SG&A 80 16.8% 60 65.0 18.3% 100 69.0 80 21.9% 84.8 60 40 20.8% 18.5% 16.9% 63.9 40 17.9% 12.4% 20 17.6 0 2012 1) 2013 20 16.0 Q1 2013 Q1 2014 before amortization charge 0 2012 2013 15.4 10.5 Q1 2013 Q1 2014 © ams AG 2014 Page 23 Financial results EURm, % of revenues Net results, EPS (basic/diluted) 100 80 Operating cash flow 150 CHF7.67/7.30 EUR6.37/6.06 81.9 CHF5.56/5.34 EUR4.52/4.35 100 60 124.8 100.2 60.8 CHF1.32/1.26 EUR1.08/1.04 40 20 0 9.9 2012 2013 14.7 Q1 2013 Q1 2014 Net cash, cash + short term investments 120 50 CHF0.91/0.87 EUR0.74/0.70 Net cash Cash + short term invest. 0 2013 13.7 14.3 Q1 2013 Q1 2014 Capital expenditures 60 104.3 90 94.1 47.1 40 60 30 2012 31.9 20 44.2 23.0 34.0 13.5 0 0 Q4 2013 Q1 2014 Q4 2013 Q1 2014 2012 2013 Q1 2013 Q1 2014 © ams AG 2014 Page 24 Thank you Please visit our website www.ams.com © ams AG 2014 Profit and loss statement EURm (IAS) 2013 2012 Q1 2014 Q1 2013 Total revenues • Products • Foundry 377.8 343.0 34.8 387.6 359.7 27.9 86.3 76.8 9.5 84.9 76.8 8.1 Gross profit • Gross margin incl. amortization charge 198.0 52.4% 202.9 52.3% 46.5 53.9% 43.4 51.2% Research and development Selling, general and administrative Other operating income/expenses - 68.5 - 69.0 3.3 - 59.0 - 65.0 5.9 - 16.5 - 16.0 1.3 - 16.5 - 17.6 1.2 Result from operations (EBIT) • Operating margin 63.9 16.9% 84.8 21.9% 15.4 17.9% 10.5 12,4% 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 15.4 - 0.7 10.3 - 0.4 Net result 60.8 81.9 14.7 9.9 5.56 / 5.34 4.52 / 4.35 7.67 / 7.30 6.37 / 6.06 1.32 / 1.26 1.08 / 1.04 0.91 / 0.87 0.74 / 0.70 EPS (basic/diluted) CHF EUR © ams AG 2014 Page 26 Balance sheet EURm Mar 31, 2014 Dec 31, 2013 Liabilities and equity Mar 31, 2014 94.1 63.1 45.2 13.3 104.3 63.7 40.5 10.5 Interest-bearing debt Trade liabilities Provisions Other liabilities 2.0 28.4 22.3 25.1 0.8 28.3 23.2 24.1 Total current assets 215.6 219.1 Total current liabilities 77.8 76.3 Fixed assets Intangible assets Investments Deferred tax asset Other non-current assets 166.3 240.3 4.9 33.3 6.8 145.4 243.0 5.1 33.3 7.1 Interest-bearing debt Employee benefits Provisions Deferred tax liabilities Other liabilities 58.1 24.1 23.1 12.9 12.3 59.3 23.6 22.9 13.6 12.6 Total non-current assets 451.5 433.9 Total non-current liabilities Shareholders’ equity 130.4 132.0 458.8 444.7 Total liabil. and equity 667.1 653.0 Assets (IAS) Cash and short term invest. Trade receivables Inventories Other current assets Total assets 667.1 653.0 Dec 31, 2013 © ams AG 2014 Page 27 Cash flow statement EURm (IAS) 2013 2012 Q1 2014 Q1 2013 Income before tax Depreciation 63.4 35.2 83.4 33.3 15.4 8.5 10.3 9.0 Cash flow from operations 100.2 124.8 14.3 13.7 Capital expenditures - 47.1 - 31.9 - 23.0 - 13.5 Cash flow from investing activities - 46.8 - 65.7 - 22.8 - 14.5 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 0 0 0 1.4 0.3 - 1.9 0 7.8 Cash flow from financing activities - 37.9 - 42.9 - 1.9 6.8 Change in cash and cash equivalents 15.4 16.2 - 10.5 6.1 Cash and cash equivalents at end of period 83.4 67.9 72.8 74.0 © ams AG 2014 Page 28 Annual General Meeting Key proposals 2014 Share split 1:5 to increase liquidity and ease of trading • Technical step due to Austrian law requiring calculated nominal share value to be at least EUR 1.00: Reallocation of equity funds to increase calculated nominal share value before split • Split 1:5 into 72.9m shares with calculated nominal value of EUR 1.00 Long term employee incentive plan (LTIP) 2014 • No vesting over first three years of plan, no time-based vesting, first vesting H2 2017 • Vesting contingent on two hurdle criteria: 3-year EPS growth + 3-year total shareholder return vs. industry benchmark • LTIP 2014 can be covered via treasury shares or new shares (conditional capital) • ONLY IF hurdle criteria are fully met AND no options are covered via treasury shares, customary share count increase of up to 2% p.a. averaged over 5-year life of plan • Elimination of existing large conditional capital and creation of new conditional capital solely in the amount of LTIP – same relative size as 2009 conditional capital © ams AG 2014 Page 29