ams Full year and fourth quarter results 2014 Kirk Laney, CEO Michael Wachsler-Markowitsch, CFO Moritz Gmeiner, Head of IR February 2015 © ams AG 2015 We are shaping the world with sensor solutions We provide high performance analog solutions to the most challenging applications in sensors, sensor interfaces, power management, and wireless. © ams AG 2015 Page 2 ams at a glance Our business • Focus on high performance analog semiconductors • Sensor solutions, sensor interfaces, power management, wireless • Ultra-low power, highest accuracy, sensitivity and integration • World class analog design + in-house manufacturing • Best-in-class solutions for leading OEMs By the numbers • 440+ analog engineers • Over 30 years of design experience • Record revenues FY 2014 EUR464m/$614m (2013: EUR378m/$502m) Q4 2014 EUR139m/$174m (Q4 2013: EUR103m/$141m) • 1,600+ employees worldwide • 8,000+ customers © ams AG 2015 Page 3 Our focus High performance sensors and analog ICs Target markets Core expertise Consumer & Communications Industrial, Medical, Automotive 64% of revenues (FY 2014) 36% of revenues (FY 2014) Sensor solutions, sensor interfaces Power management Wireless © ams AG 2015 Page 4 OUR MARKETS CONSUMER AND COMMUNICATIONS INDUSTRIAL, MEDICAL, AUTOMOTIVE 2014 highlights Consumer & Communications Excellent performance and most significant growth driver for ams • New product launches create powerful momentum for largest ams business • Very strong position with major smartphone, tablet PC and mobile device OEMs going forward NFC booster: customer success drives extremely high volumes, boosting growth in H2 2014 • Significant socket with impressive shipments in 2014 and very high run rates into 2015 • Leading technology to optimize NFC mobile transactions, ongoing OEM push in NFC Gesture sensor solution: a high volume success in multiple platforms • Strong run rates for multi-functional modules shipping into Asian customers • Global leader in advanced light sensors, RGB color sensors expanding further Other consumer & communications product lines perform well • Continued leadership in MEMS microphone interface ICs focused on cost optimization • New PMIC solutions generate revenues, focus on larger mobile devices and wearables © ams AG 2015 Page 6 Consumer & Communications Sensor solutions and sensor interfaces, power management, wireless Sensors Power management Wireless Specialty solutions • • • • • Specialty PMICs • Power management ICs • Lighting management ICs • NFC antenna booster • NFC solutions • RFID readers (UHF/HF) • LF/HF/UHF transceivers/smart tags • Active noise cancellation (ANC) • Other wireless sensors (lightning sensor) • Specialty sensor interfaces Light sensors Gesture sensors Biosensors MEMS microphone ICs • Hall/inductive/ capacitive sensors © ams AG 2015 Page 7 Light sensors Worldwide leader in intelligent integrated light sensors Sensor solutions • Gesture - sense hand movement in proximity of device surface to create touchless interface • 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 4-in-1 module adoption ongoing, 70m units shipped Broad coverage of consumer electronics markets • Smartphones, tablet PCs, mobile devices, HDTV, PCs, notebooks New application: Cognitive lighting • Major light sensor-based opportunity becomes reality • Dynamic management improves industrial, home and office lighting • Combining LED control and sensor technologies © ams AG 2015 Page 8 Emerging: Cognitive lighting Smart lighting management integrates sensing and control to unlock energy savings Sensor innovation • AS721x Autonomous Daylighting Manager industry’s first integrated IoT-connected chip-scale smart lighting manager • Combines photopic sensors including nano-optic filters with LED control and wireless connectivity • Senses ambient daylight to deliver constant lux levels as amount of outside light varies • Brings cost-effective sensing, control and connectivity to luminaires and light engines First product sampling, available Q3 2015 Benefits • Highly integrated system-level sensing and control offers major reduction in system cost and time-to-market • Network-enabled architecture for IoT connectivity via BLE, ZigBee, WiFi, Ethernet/PoE or other networks • Smart lighting sensor solutions create natural, convergent IoT sensor hubs within smart buildings © ams AG 2015 Page 9 Wireless solutions – NFC, RFID NFC solutions for mobile transactions • Antenna boost technology with automatic tuning offers unique performance • Antenna booster enables fully reliable mobile device NFC transactions • Solutions for smartphone NFC, boosted secure elements, NFC on SIM/microSD card and reader implementations • World-leading expertise in NFC design • Full roadmap to exploit technology leadership Very high NFC booster shipments into major socket RFID solutions for authentication • Integrated one-chip UHF readers and other RFID solutions offer low solution cost to help RFID deployment • Applications: consumables, materials tracking and authentication, supply chain and retail security © ams AG 2015 Page 10 Success: NFC antenna booster Technology leader enabling reliable NFC for mobile transactions Wireless innovation • Advanced analog active tag NFC booster • Active antenna boost overcomes reception problems in smartphones or for small form factor antennas • Designed for ultra small form factor applications including wearables Key growth driver given strong NFC momentum, 139m units shipped Benefits • High Frequency (HF) active antenna booster amplifies the antenna by >80x for NFC in small areas • Shrinks antenna size to barely visible miniature footprint • Ensures 100% read rate overcoming field-dampening metal environments • Enables NFC on SIM cards and boosted secure elements • Unrivalled and industry-recognized solution for reliable NFC in smartphones, mobile devices and wearables © ams AG 2015 Page 11 Audio: MEMS microphone ICs, ANC MEMS microphone interface ICs • • • • Market leader in very dynamic market Product portfolio serving wide spectrum of end customer requirements Leading position in low noise solutions Strong customer partnership focusing on higher value market segments High volume MEMS mic interface line for broad range of devices ANC (active noise cancellation) • • • Technology leader offering pure analog noise reduction without need for DSP Significant audio quality improvement at very low power and minimized footprint Emerging high volume opportunities in smartphones and mobile devices © ams AG 2015 Page 12 Power management solutions for mobile devices Specialty PMIC solutions for optimum system performance Specialty PMIC solutions • High performance PMIC design for Building optimum system performance specialty PMIC • Added value for clamshell and other mobile revenue stream devices utilizing multicore processors • Support leading mobile graphics processor vendor’s current and upcoming platforms • Tight analog integration means significantly reduced footprint • Programmable solutions maximize battery life and enable superior graphics or camera performance © ams AG 2015 Page 13 2014 highlights Industrial, Medical, Automotive Robust performance of industrial markets • Positive demand environment across end markets drives growth in 2014 • Further improvement of market position at large OEMs as recognized technology specialist Acquisition of two smaller sensor specialists enhances sensor portfolio • Applied Sensor: specialty gas sensors, shipping into automotive applications • acam mess-electronic: high resolution time-based sensors, shipping into industrial applications Medical business develops positively • Medical imaging and industry-leading sensor capabilities as core elements of Medical success • High value design-wins in Asia and further broadening of customer base Strong growth in automotive business • Healthy end market demand and vehicle platform launches as key drivers in 2014 • Stuffed pipeline of design-wins including Japan and Asia creates multi-year growth path © ams AG 2015 Page 14 Industrial Sensor solutions and sensor interfaces Industrial automation and control • Motion control • Industrial sensors including time-based 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 • Sensor networking and bus systems Seismic sensor interfaces • Very high sensitivity sensor solutions © ams AG 2015 Page 15 Medical Sensor solutions and sensor interfaces, power management, wireless Medical imaging: Leader in lowest noise sensor solutions • Computed tomography • Digital X-ray • Mammography • Ultrasound Personal health devices • Diabetes management • Heart rate monitors Robotic surgical solutions • Encoder-driven accuracy © ams AG 2015 Page 16 Automotive Sensor solutions and sensor interfaces, bus systems, power management Position sensing • Pedal & throttle position • Transmission (clutch, gear shift) • Steering wheel angle and torque • Brushless motor control applications LIDAR collision avoidance continues model penetration 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 Gas sensing • Air quality sensing © ams AG 2015 Page 17 Scalable manufacturing for profitable growth In-house capacity + manufacturing partnerships Wafer manufacturing • 200mm in-house fab (2015E 180k wafers p.a.) • CMOS nodes: 0.18µm – 0.35µm – 0.8µm • Specialty analog processes • Best-in-class efficiency • Multi-source security: TSMC, UMC, IBM Fab capacity expansion: step 1 ramped, step 2 nearing completion Assembly and test • In-house test in Austria and the Philippines • Multi-source assembly locations • End-to-end fully integrated supply chain • Further expansion of test capacity in 2015 © ams AG 2015 Page 18 Global value chain Headquarters Design centers Test center Sales offices • • • • Additional design resources from Applied Sensor and acam acquisitions 12 design centers Austria, Switzerland, Italy (2), Spain, Slovenia, USA (2), India, Germany (2 new), Japan (new) High volume test center Philippines Continuing growth in distribution design-ins and revenues © ams AG 2015 Page 19 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; ongoing reduction measures © ams AG 2015 Page 20 Financial results Michael Wachsler-Markowitsch, CFO © ams AG 2015 Key figures EURm (IAS) Total revenues 2014 2013 Q4 2014 Q4 2013 464.4 + 22.9% 377.8 139.0 + 34.3% 103.5 Gross margin (excl. acquisition-related costs) (incl. acquisition-related costs) 56% 55% 55% 52% 56% 54% 56% 54% Result from operations (EBIT) (excl. acquisition-related costs) (incl. acquisition-related costs) 116.1 105.4 73.9 63.9 34.5 31.4 26.7 24.2 97.5 + 60.4% 60.8 28.8 + 23.4% 23.3 1.74 / 1.67 1.43 / 1.37 1.11 / 1.072) 0.90 / 0.872) 0.51 / 0.48 0.42 / 0.40 0.42 / 0.412) 0.35 / 0.332) 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 © ams AG 2015 Page 22 FINANCIAL RESULTS P&L BALANCE SHEET CASH FLOW © ams AG 2015 Page 23 Total revenues EURm 500 150 464.4 400 377.8 + 22.9% 300 90 200 60 100 30 0 103.5 + 34.3% 0 2013 • • 139.0 120 2014 Q4 2013 Q4 2014 Strong revenue growth for full year and particularly Q4 2014 On constant currency basis, revenues 2014 +22% year-on-year, Q4 2014 +26% year-on-year © ams AG 2015 Page 24 Revenue distribution % of revenues Total revenues by market 2014 Total revenues by region 2013/2014 100% 75% 50% 59% 57% 6% 4% 35% 39% 2013 2014 25% Asia/Pacific Industry, Medical, Automotive (- 4) 36% Americas 64% Consumer & Communications (+ 5) Europe (EMEA) 0% • • Slight expansion of EMEA business in 2014 but mostly due to billing locations Stronger Consumer & Communications share of revenues for 2014 © ams AG 2015 Page 25 Total backlog EURm Consignment stock agreements approx. EUR10-12m 140 131.3 120 100 80 60 76.6 + 71.4% 40 20 0 Dec 31 2013 • • Dec 31 2014 Very strong increase in backlog demonstrates strength of consumer business into 2015 Total backlog + designated consignment stock agreements = total customer-committed pipeline © ams AG 2015 Page 26 Gross profit / gross profit margin EURm, % of revenues, gross profit including acquisition-related costs 300 56.4% 54.7% 80 56.0% 55.7% 75.6 250 253.2 200 198.0 60 55.5 + 27.9% 150 + 36.2% 40 100 20 50 0 0 2013 2014 Q4 2013 Q4 2014 Gross profit margin excluding acquisition-related costs • • Gross margin performance driven by product mix, full utilization and production efficiencies Gross margin including acquisition-related costs 2014: 54.5%, Q4 2014: 54.4% © ams AG 2015 Page 27 R&D expenses EURm, % of revenues 100 25 18.1% 16.7% 16.6% 23.1 20 80 77.0 60 68.5 + 12.4% 15 40 10 20 5 0 17.3 + 33.6% 0 2013 • • 16.6% 2014 Q4 2013 Q4 2014 2014 R&D investments support full multi-year pipeline of customer projects and design-wins R&D investments to continue within business model target range © ams AG 2015 Page 28 SG&A expenses EURm, % of revenues 100 18.3% 25 16.5% 80 60 21.8 20 69.0 + 11.4% 76.9 15 40 10 20 5 0 15.9 + 37.1% 0 2013 • • 15.7% 15.4% 2014 Q4 2013 Q4 2014 SG&A expenses show select sales and support additions, profit-sharing and commissions Q4 2014 shows profit sharing-driven base effect due to release of accruals compared to Q4 2013 © ams AG 2015 Page 29 Result from operations (EBIT) EURm, % of revenues 22.7% 120 100 16.9% 105.4 35 30 20 63.9 31.4 24.2 + 29.8% + 64.9% 15 40 10 20 5 0 0 2013 • • 22.6% 25 80 60 23.4% 2014 Q4 2013 Q4 2014 Strong EBIT growth driven by H2 2014, Q4 2014 includes R&D expansion and one-time effects EBIT margin excl. acquisition-related costs 2014 25.0%, Q4 2014 24.8% © ams AG 2015 Page 30 Net financial result EURm 3 3 2 2 1 1 0.1 0 0 -1 -0.5 -1 - 140.0% -2 -1.2 -0.9 -2 -3 -3 2013 • • - 1000.0% 2014 Q4 2013 Q4 2014 2014 financial result mainly impacted by revaluation of equity earn-out for IDS acquisition Effects from exchange rate fluctuations reflected in financial result © ams AG 2015 Page 31 Tax expense EURm, tax rate: % of result before tax (PBT) 8 7 4.1% 6.3% 6.6 6 5 5 4 3 4.2% 5.6% 4 2 3 2 1.7 2.6 1 1.0 1 0 0 2013 2014 Q4 2013 Q4 2014 Tax rate • • Low tax expense 2014 due to application of historic tax losses and international tax structures 2015 P&L tax rate and cash tax rate expected to reach mid to high single-digit © ams AG 2015 Page 32 Net income / earnings per share EURm, earnings per share (EPS) in CHF and EUR (basic/diluted) 100 CHF 1.11 / 1.07 EUR 0.90 / 0.87 CHF 1.74 / 1.67 EUR 1.43 / 1.37 30 CHF 0.42 / 0.41 EUR 0.35 / 0.33 CHF 0.51 / 0.48 EUR 0.42 / 0.40 97.5 28.8 25 80 20 23.3 + 23.4% + 60.4% 60 60.8 15 40 10 20 5 0 0 2013 • • 2014 Q4 2013 Q4 2014 Net income increase reflects strong increase in operating profitability 2013 figures adjusted for 1:5 share split in 2014 © ams AG 2015 Page 33 FINANCIAL RESULTS P&L BALANCE SHEET CASH FLOW © ams AG 2015 Page 34 Working capital EURm Working capital at year-end 100 87.9 80 75.9 +15.8% 60 2014 2013 Trade receivables + Inventories - Trade liabilities 79.0 59.9 51.0 63.7 40.5 28.3 Working capital in % of revenues 87.9 19% 75.9 20% 40 20 0 Dec 31 2013 • • Dec 31 2014 Successful working capital management relative to revenue growth Increase in inventories due to expansion of production capacity (higher WIP) © ams AG 2015 Page 35 Net cash, cash and short term investments EURm, % of total liabilities Net cash, equity ratio 60 Cash and short-term investments 240 68% 58% 229.6 210 180 40 44.2 + 1.8% 45.0 150 120 90 20 104.3 + 120.1% 60 30 0 0 2013 2014 Dec 31 2013 Dec 31 2014 Equity ratio • • Encouraging net cash development despite investments into capacity Opportunistic addition of debt resulting in higher cash balance © ams AG 2015 Page 36 FINANCIAL RESULTS P&L BALANCE SHEET CASH FLOW © ams AG 2015 Page 37 Cash flow from operations EURm, % of revenues 140 28.0% 26.5% 130.2 120 100 100.2 32.1% 50 28.3% 44.6 40 + 29.9% 80 30 60 20 29.3 + 52.2% 40 10 20 0 0 2013 2014 Q4 2013 Q4 2014 Cash flow as % of revenues • • Very strong cash generation driven by business growth High level of cash flow to revenues underlines attractive business model © ams AG 2015 Page 38 Capital expenditures EURm, % of revenues - Acquisition of intangibles, property, plant and equipment 80 12.5% 15.1% 25 70.1 20 70 60 9.1% 50 40 47.1 15 + 48.8% 6.6% 12.6 10 30 20 5 6.8 + 85.3% 10 0 0 2013 2014 Q4 2013 Q4 2014 Capital expenditures as % of revenues • • 2014 capital expenditures include significant expansion of in-house production capacity 2015: completion of wafer fab build-out and expansion of test capacity © ams AG 2015 Page 39 Dividend policy and proposal Dividend policy • Distribution of 25% of net earnings Dividend proposal for 2014 • EUR 0.33 per share outstanding Dividend timetable • AGM June 9, 2015 • Payment date June 18, 2015 © ams AG 2015 Page 40 Company highlights and outlook Kirk Laney, CEO © ams AG 2015 Company highlights Analog makes sense © ams AG 2015 Page 42 Outlook 2015 and first quarter 2015 Another growth year expected for 2015 Very strong project and revenue pipeline with major OEMs across markets • Large scale projects for various leading consumer OEMs extending into 2016 • High value automotive and industrial pipeline offers multi-year revenue outlook Continued R&D investments and expansion of design resources, 3 new design centers 2014/15 (2x Germany, 1x Japan) New product ramps including cognitive lighting and consumer health biosensor expected in 2015 Q1 2015 expected to show sequential growth vs. Q4 2014 contrary to typical seasonality, expected revenues EUR 145-150m, operating margin expected slightly up from Q4 2014 © ams AG 2015 Page 43 Thank you Please visit our website www.ams.com © ams AG 2015 Profit and loss statement EURm (IAS) 2014 2013 Q4 2014 Q4 2013 Total revenues • Products • Foundry 464.4 425.0 39.4 377.8 343.0 34.8 139.0 129.7 9.3 103.5 95.1 8.4 Gross profit • Gross margin (incl. acquisition-related costs) 253.2 54.5% 198.0 52.4% 75.6 54.4% 55.5 53.7% Research and development Selling, general and administrative Other operating income/expenses - 77.0 - 76.9 6.0 - 68.5 - 69.0 3.3 - 23.1 - 21.8 0.7 - 17.3 - 15.9 1.9 Result from operations (EBIT) 105.4 63.9 31.4 24.2 ( ( ( ( Operating margin 22.7% 16.9% 22.6% 23.4% Net financing costs - 1.2 - 0.5 - 0.9 0.1 104.1 - 6.6 63.4 - 2.6 30.5 - 1.7 24.3 - 1.0 97.5 60.8 28.8 23.3 1.74 / 1.67 1.43 / 1.37 1.11 / 1.072) 0.90 / 0.872) 0.51 / 0.48 0.42 / 0.40 0.42 / 0.412) 0.35 / 0.332) (incl. acquisition-related costs) • Result before tax Income tax result Net result 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 © ams AG 2015 Page 45 Balance sheet EURm Dec 31, 2014 Dec 31, 2013 Liabilities and equity Dec 31, 2014 Cash and short term invest. Trade receivables Inventories Other current assets 229.6 79.0 59.9 18.3 104.3 63.7 40.5 10.5 Interest-bearing debt Trade liabilities Provisions Other liabilities 38.5 51.0 37.6 42.1 0.8 28.3 23.2 24.1 Total current assets 386.7 219.1 Total current liabilities 169.2 76.3 Fixed assets Intangible assets Investments Deferred tax asset Other non-current assets 204.1 315.7 6.5 34.1 7.7 145.4 243.0 5.1 33.3 7.1 Interest-bearing debt Employee benefits Provisions Deferred tax liabilities Other liabilities 146.1 27.0 27.1 20.8 8.9 59.3 23.6 22.9 13.6 12.6 Total non-current assets 568.2 433.9 Total non-current liabilities Shareholders’ equity 230.0 132.0 555.8 444.7 Total liabil. and equity 955.0 653.0 Assets (IAS) Total assets 955.0 653.0 Dec 31, 2013 © ams AG 2015 Page 46 Cash flow statement EURm (IAS) 2014 2013 Q4 2014 Q4 2013 Income before tax Depreciation 104.1 37.3 63.4 35.2 30.5 10.6 24.3 8.4 Cash flow from operations 130.2 100.2 44.6 29.3 Capital expenditures - 70.1 - 47.1 - 12.6 - 6.8 - 108.9 - 46.8 - 32.2 - 6.4 125.3 - 0.8 -14.1 14.0 - 33.6 - 19.4 116.2 - 0.4 0 2.1 - 15.4 0 99.1 - 37.9 113.4 - 10.6 Change in cash and cash equivalents 120.3 15.4 125.8 12.3 Cash and cash equivalents at end of period 203.7 83.4 203.7 83.4 Cash flow from investing activities Proceeds from borrowings Repayment of borrowings Dividends paid Changes resulting from capital increase Cash flow from financing activities © ams AG 2015 Page 47