ams Full year + fourth quarter results 2015 Kirk Laney, CEO Michael Wachsler-Markowitsch, CFO Moritz Gmeiner, Head of IR February 2016 © ams AG 2016 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 2016 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 • Best-in-class solutions for leading OEMs By the numbers • 500 analog engineers • More than 30 years of design experience • 17 design centers, 2 manufacturing sites • 2,000+ employees worldwide • 8,000+ customers © ams AG 2016 Page 3 Our focus High performance sensors and analog ICs Target markets Core expertise Consumer & Communications Automotive, Industrial, Medical 65% of revenues (FY 2015) 35% of revenues (FY 2015) Sensor solutions and sensor interfaces Power management Wireless © ams AG 2016 Page 4 2015 highlights Light sensors again largest revenue contributor and key driver of 2015 growth • Market leader in consumer, leading position in upcoming advanced light sensing technologies Acquisition of image sensor specialist CMOSIS adds significant IP and growth potential • Excellent sensor portfolio expansion: high-value industrial/medical business and strong innovation Acquisition of CMOS environmental sensors opens major growth opportunities across markets • Key portfolio expansion to drive integrated sensing for new growth applications in AIM and consumer New U.S. wafer fab to support growth plans and drive cost and margin benefits from 2018 • Highly attractive rental model with State of NY for state-of-the-art capacity without capex burden Good growth in Automotive, Industrial, Medical as sensors continue to proliferate • Leading sensor solutions provider focused on Industry 4.0 and Internet of Awareness Fully aligned for 2019 organic revenue goal of EUR 1bn • Strong development and project pipeline in consumer and AIM © ams AG 2016 Page 5 Light sensors Worldwide leader in intelligent integrated light sensors Sensor solutions • Gesture - hand movement sensing near device surface creates touchless interface • RGB color ALS - full light spectrum/light temperature analysis improves display quality • Classic ALS - legacy monochromatic ambient light sensing for simple display management • Proximity (Prox) - skin proximity detection to control display/touchscreen on-state Gesture module in multiple platforms, first TSV shipments Broad coverage of consumer electronics markets • Smartphones, tablet PCs, mobile devices, HDTV, PCs/notebooks New opportunities: Industrial lighting, new consumer applications • Combination of LED driver and light sensing for building lighting • New light sensor-based technologies to improve consumer devices • True Color Sensing for advanced analysis of light environment © ams AG 2016 Page 6 Acquisition of CMOSIS Expansion of optical sensor portfolio with high-end CMOS image sensors Leader in high-end CMOS imaging • High-performance area and line scan Multiple growth CMOS sensors opportunities in • Leading position in global shutter technology industrial and medical for excellent high-speed performance image sensing • Low noise, global and rolling shutter, high dynamic range, and high frame rate solutions • Advanced applications in machine vision, medical, broadcast, traffic, scientific and photographic imaging • Locations in Belgium, Germany, Portugal, U.S. NanEye <1mm2 camera modules for endoscopy-type medical applications • Significantly higher picture quality and robustness for better diagnostics Financial and transaction details • Equity value of approx. EUR 220m, all-cash transaction • Sound revenue base of close to EUR 60m in 2015 with strong margins • Consolidated from December 2015 onwards © ams AG 2016 Page 7 Emerging: Biosensors for personal devices Highly integrated health and fitness solutions based on advanced optical sensing Sensor innovation • High quality heart rate measurement using AS7000 first gen photoplethysmography (PPG) biosensor shipping, • Low-power high performance integrated hardsecond gen launch and software solution including optical filters expected H1 2016 • Improved accuracy across situations supports heart rate variability (HRV) applications • Moving to red/IR illumination for higher value biosensing • Upcoming products expected to include reflective SpO2 and blood pressure Benefits • High integration including high performance optical sensor module to drive next generation of health and fitness solutions • Ideal for fitness bands worn constantly, at rest and when exercising • Technology platform enabling future spectral sensing health applications © ams AG 2016 Page 8 Wireless solutions – NFC, RFID NFC solutions for mobile transactions (Boosted NFC) NFC boost license • High performance ALM antenna boost agreement with technology major NCC vendor • Highest NFC reliability for wearables, smartphones, and mobile devices • Applications in device NFC, small form factors and readers • License agreement with major NFC controller chip (NCC) vendor to pursue high volume opportunities in coming years RFID solutions for authentication • Integrated one-chip UHF readers and RFID solutions for lower cost RFID deployment • Materials tracking and authentication, supply chain security © ams AG 2016 Page 9 Audio: MEMS microphone ICs, ANC MEMS microphone interface ICs • • • • Market leader in dynamic market Around 1.6bn units shipped in 2015 Leading position in low noise solutions Strong customer partnership focused on high value market segments Lenovo using ANC in smartphonebundled earphones ANC (active noise cancellation) • • • • High performance technology offering pure analog noise reduction, no DSP required Significant audio quality improvement Very low power consumption, minimized footprint, comprehensive roadmap for enhanced feature set High volume opportunity in bundled earphones and similar devices © ams AG 2016 Page 10 Industrial Sensor solutions and sensor interfaces Industrial automation, control, and sensing • Motion control • Industrial sensors including time-based sensors • Drives and electrical motors • Seismic sensor interfaces 2D and 3D position encoders • Magnetic rotary and linear encoders • Broad portfolio of integrated high performance Hall sensors Building automation and security • HVAC + Safety • Sensor networking and bus systems Environmental sensing • Relative humidity, pressure and temperature CMOS sensors © ams AG 2016 Page 11 Emerging: Cognitive industrial lighting Smart lighting management integrates sensing and control to unlock energy savings Sensor innovation • Industry’s first integrated IoT-connected chip-scale smart lighting managers • Photopic sensors with nano-optic filters, high efficiency LED drivers and wireless connectivity • Ambient daylight sensing delivers constant lux levels as amount of outside light varies • Cost-effective sensing, control and connectivity for luminaires and light engines First products launched; building mid-term volume opportunity Benefits • Significant energy savings potential from truly smart LED lighting • Integrated system-level sensing and control for major reduction in system cost • Protocol-agnostic networked architecture for easy IoT connectivity • Smart lighting sensor solutions bring convergent IoT sensor hubs to smart buildings © ams AG 2016 Page 12 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 • Heart rate monitors • Diabetes management Robotic surgical solutions • Encoder-driven accuracy © ams AG 2016 Page 13 Automotive Sensor solutions and sensor interfaces, bus systems, power management Position sensing • Pedal and throttle position • Transmission (clutch, gear shift) • Steering wheel angle and torque • Brushless motor control applications LIDAR object detection supports upcoming applications Safety systems and ADAS • Collision avoidance LIDAR systems (ADAS for object detection) • ESP (Electronic Stability Program), data bus networks Battery power management • Battery management for conventional, hybrid, and electric vehicles • High efficiency power management Environmental sensing • Air quality sensing • Relative humidity and temperature sensing © ams AG 2016 Page 14 Scalable manufacturing model In-house capacity + manufacturing partnerships Wafer manufacturing • 200mm internal fab, Austria (180-190k 200mm-wafer equiv. p.a.) • CMOS + specialty analog down to 180nm • External wafer sources: TSMC, UMC, GF U.S. wafer fab project on track, expected ramp early 2018 New wafer fab project in upstate New York, USA • Renting new custom-built wafer fab from State of New York • First buildout: 150k+ 200mm-wafer equiv. p.a., 130nm capable • Start of construction H1 2016E, production ramp early 2018E • No depreciation on fab • Significantly lower per-wafer cost to drive margin benefits Test and assembly • In-house test in Austria and the Philippines • End-to-end fully integrated supply chain © ams AG 2016 Page 15 Global value chain Headquarters Design centers Test center Sales offices • • • 17 design centers Austria, Switzerland, Italy (2), Spain, Slovenia, Germany (3), Belgium, Netherlands, Portugal, Finland, USA (2), India, Japan 2015: 4 design centers added from acquisitions (CMOS environmental sensors + CMOSIS) - Netherlands, Belgium, Germany, Portugal High volume test center Philippines © ams AG 2016 Page 16 Financial results © ams AG 2016 Key figures EURm (IAS) Total revenues 2015 2014 Q4 2015 Q4 2014 623.1 + 34.2% 464.4 147.2 + 5.9% 139.0 Gross margin (excl. acquisition-related amortization) (incl. acquisition-related amortization) 56% 54% 56% 55% 57% 55% 56% 54% Result from operations (EBIT) (excl. acquisition-related amortization) (incl. acquisition-related amortization) 162.2 147.3 116.1 105.4 33.7 29.3 34.5 31.4 148.7 + 52.4% 97.5 30.6 + 6.5% 28.8 2.30 / 2.21 2.16 / 2.08 1.74 / 1.67 1.43 / 1.37 0.48 / 0.46 0.44 / 0.43 0.51 / 0.48 0.42 / 0.40 Net result EPS (basic/diluted) CHF EUR © ams AG 2016 Page 18 FINANCIAL RESULTS P&L BALANCE SHEET CASH FLOW © ams AG 2016 Page 19 Total revenues EURm 750 160 600 450 623.1 464.4 120 139.0 147.2 + 5.9% + 34.2% 80 300 40 150 0 0 2014 • • 2015 Q4 2014 Q4 2015 Strong full year revenue growth, Q4 2015 excluding CMOSIS above high end of expectations On constant currency basis, revenues 2015 up 19% year-on-year, Q4 2015 down 3% year-on-year © ams AG 2016 Page 20 Revenue distribution % of revenues Total revenues by market 2015 Total revenues by region 2014/2015 100% 75% 50% 57% 65% Asia/Pacific Industry, Medical, Automotive (- 1 pp) 35% 4% 65% 4% Americas 25% 39% 32% Consumer & Communications (+ 1 pp) Europe (EMEA) 0% 2014 • • 2015 Further expansion of Asia/Pacific business in 2015 partly due to billing locations Consumer & Communications share of revenues almost unchanged from 2014 © ams AG 2016 Page 21 Total backlog EURm Consignment stock agreements approx. EUR15-17m 140 120 131.3 - 9.0% 100 119.4 80 60 40 20 0 Dec 31 2014 • • Dec 31 2015 Backlog comparison reflects current softer consumer demand environment Total backlog + designated consignment stock agreements = total customer-committed revenue pipeline © ams AG 2016 Page 22 Gross profit / gross profit margin EURm, % of revenues, gross profit including acquisition-related amortization 400 56.4% 300 56.1% 100 339.2 75 56.6% 56.0% 75.6 253.2 + 34.0% 200 50 100 25 80.4 + 6.4% 0 0 2014 2015 Q4 2014 Q4 2015 Gross profit margin excluding acquisition-related amortization • • Gross profit margin performance due to product mix, full utilization, scale effects, production efficiency Gross profit margin including acquisition-related amortization 2015: 54.4%, Q4 2015: 54.6% © ams AG 2016 Page 23 R&D expenses EURm, % of revenues 120 17.3% 16.6% 40 21.5% 16.6% 107.8 30 90 77.0 + 39.9% 60 20 30 10 0 23.1 + 37.1% 0 2014 • • 31.6 2015 Q4 2014 Q4 2015 R&D investments continuing on high level to support multi-year pipeline Q4 2015 includes base effect from acquisitions © ams AG 2016 Page 24 SG&A expenses EURm, % of revenues 120 16.5% 40 15.0% 15.7% 90 93.5 76.9 + 21.6% 60 20 30 21.8 - 1.8% 21.4 10 0 0 2014 • • 14.6% 30 2015 Q4 2014 Q4 2015 SG&A expenses include selective sales/marketing investments, profit-sharing, commissions Successful SG&A expense management through 2015 © ams AG 2016 Page 25 Result from operations (EBIT) EURm, % of revenues, EBIT excluding acquisition-related amortization 200 26.0% 25.0% 160 45 24.8% 30 34.5 162.2 120 116.1 22.9% - 2.2% 33.7 + 39.7% 80 15 40 0 0 2014 2015 Q4 2014 Q4 2015 EBIT margin excluding acquisition-related amortization • • Strong EBIT growth driven by high revenue growth in H1 2015 and good performance in H2 2015 EBIT margin (EBIT) incl. acquisition-related amortization 2015 23.6% (147.3), Q4 2015 19.9% (29.3) © ams AG 2016 Page 26 Net financial result EURm 4 12 11.7 3 9 3.0 + 1034.1% 2 6 + 433.7% 3 1 0 0 -0.9 -1.2 -1 -3 2014 • • 2015 Q4 2014 Q4 2015 2015 financial result swing mainly driven by exchange rate volatility and revaluation effects Q4 2015 includes additional financing for CMOSIS acquisition © ams AG 2016 Page 27 Tax expense EURm, tax rate: % of result before tax (PBT) 15 5 6.3% 6.5% 12 4 10.3 9 6 3 5.2% 2 6.6 3 1 0 0 2014 5.6% 2015 1.7 1.7 Q4 2014 Q4 2015 Tax rate • • Low tax expense 2015 due to historic tax losses and international tax structures Cash tax rate expected to increase gradually © ams AG 2016 Page 28 Net income / earnings per share EURm, earnings per share (EPS) in CHF and EUR (basic/diluted) 160 CHF 1.74 / 1.67 EUR 1.43 / 1.37 CHF 2.30 / 2.21 EUR 2.16 / 2.08 40 CHF 0.51 / 0.48 EUR 0.42 / 0.40 CHF 0.48 / 0.46 EUR 0.44 / 0.43 148.7 30 120 28.8 + 52.4% 80 97.5 20 40 10 0 0 2014 • • 30.6 + 6.5% 2015 Q4 2014 Q4 2015 2015 net income growth reflects strong increase in operating profitability EPS base (basic/diluted) 2015 68,873,498/71,604,447 shares, Q4 2015 69,026,942/71,598,007 shares © ams AG 2016 Page 29 FINANCIAL RESULTS P&L BALANCE SHEET CASH FLOW © ams AG 2016 Page 30 Working capital EURm Working capital at year-end 120 2014 88.7 79.8 58.6 79.0 59.9 51.0 109.9 18% 87.9 19% 109.9 100 80 2015 87.9 Trade receivables + Inventories - Trade liabilities +25.0% 60 40 Working capital in % of revenues 20 0 Dec 31 2014 • • Dec 31 2015 Very successful working capital management against strong revenue growth Increase in inventories due to expansion of production capacity (higher WIP) © ams AG 2016 Page 31 Net cash, cash and short term investments EURm, % of total liabilities Net cash, equity ratio 100 58% Cash and short-term investments 240 56% 50 229.6 180 45.0 0 - 37.3% 120 143.9 -50 - 391.8% -100 60 -131.3 -150 0 Dec 31 2014 Dec 31 2015 Dec 31 2014 Dec 31 2015 Equity ratio • • Net debt position created in Q4 2015 due to CMOSIS acquisition Decrease in cash and cash equivalents towards year-end due to CMOSIS acquisition © ams AG 2016 Page 32 FINANCIAL RESULTS P&L BALANCE SHEET CASH FLOW © ams AG 2016 Page 33 Cash flow from operations EURm, % of revenues 180 27.1% 24.5% 150 120 152.9 126.0 60 29.9% 50 40 + 21.0% 31.5% 44.0 43.8 + 0.1% 90 30 60 20 30 10 0 0 2014 2015 Q4 2014 Q4 2015 Cash flow as % of revenues • • Very strong cash generation driven by business growth Continued high level of cash flow to revenues © ams AG 2016 Page 34 Capital expenditures EURm, % of revenues - Acquisition of intangibles, property, plant and equipment 100 15.1% 12.9% 80 80.1 60 70.1 11.1% 20 9.0% 15 + 14.2% 16.3 12.6 + 29.7% 10 40 5 20 0 0 2014 2015 Q4 2014 Q4 2015 Capital expenditures as % of revenues • • 2015 capital expenditures driven by completion of in-house wafer capacity and test expansion Q4 2015 capital expenditures include specialty equipment for next generation light sensors © ams AG 2016 Page 35 Dividend policy and proposal Dividend policy • Distribution of 25% of net earnings Dividend proposal for 2015 • EUR 0.51 per share outstanding (2014: EUR 0.33) Dividend timetable • AGM 2 June 2016 • Payment date 10 June 2016 © ams AG 2016 Page 36 Company highlights and outlook © ams AG 2016 Outlook Mid-term goal 2016 outlook Q1 2016 outlook EUR 1 billion in organic revenues in 2019 • • • Another growth year expected for ams Continued R&D investments Technology roadmaps, project pipeline and customer engagements build growth expectations for coming years to 2019 • Expected revenue of EUR 131-138 million given softer end market demand, particularly in smartphone market Expected gross margin on comparable level to Q4 2015 Expected operating (EBIT) margin of 18-20% given revenue outlook and continued R&D investments (excluding acquisition-based amortization) • • © ams AG 2016 Page 38 Company highlights Analog makes sense © ams AG 2016 Page 39 ams Shaping the world with sensor solutions © ams AG 2016 Profit and loss statement EURm (IAS) 2015 2014 Q4 2015 Q4 2014 Total revenues • Products • Foundry 623.1 579.0 44.1 464.4 425.0 39.4 147.2 136.2 11.0 139.0 129.7 9.3 Gross profit • Gross margin incl. amortization charge 339.2 54.4% 253.2 54.5% 80.4 54.6% 75.6 54.4% Research and development Selling, general and administrative Other operating income/expenses - 107.8 - 93.5 9.3 - 77.0 - 76.9 6.0 - 31.6 - 21.4 1.9 - 23.1 - 21.8 0.7 Result from operations (EBIT) • EBIT margin incl. amortization charge 147.3 23.6% 105.4 22.7% 29.3 19.9% 31.4 22.6% 11.7 - 1.2 3.0 -0.9 Result before tax Income tax result 158.9 - 10.3 104.1 - 6.6 32.3 - 1.7 30.5 - 1.7 Net result 148.7 97.5 30.6 28.8 2.30 / 2.21 2.16 / 2.08 1.74 / 1.67 1.43 / 1.37 0.48 / 0.46 0.44 / 0.43 0.51 / 0.48 0.42 / 0.40 Net financing costs EPS (basic/diluted) CHF1) EUR 1) Earnings per share in CHF were converted using the average currency exchange rate for the respective periods © ams AG 2016 Page 41 Balance sheet EURm Dec 31, 2015 Dec 31, 2014 Liabilities and equity Dec 31, 2015 Cash and short term invest. Trade receivables Inventories Other current assets 143.9 88.7 79.8 28.7 229.6 79.0 59.9 18.3 Interest-bearing debt Trade liabilities Tax liabilities Provisions Other liabilities 75.0 58.6 46.3 34.7 31.0 38.5 51.0 34.4 30.3 42.1 Total current assets 341.0 386.7 Total current liabilities 245.6 196.3 Fixed assets Intangible assets Investments Deferred tax asset Other non-current assets 256.6 582.0 1.9 34.8 7.0 204.1 315.7 6.5 34.1 7.7 Interest-bearing debt Employee benefits Provisions Deferred tax liabilities Other liabilities 200.2 32.4 0.0 57.9 6.0 146.1 27.0 0.0 20.8 8.9 Total non-current assets 882.3 568.2 Total non-current liabilities Shareholders’ equity 296.6 202.9 681.2 555.8 1,223.4 955.0 Assets (IAS) Total assets 1,223.4 955.0 Total liabil. and equity Dec 31, 2014 © ams AG 2016 Page 42 Cash flow statement EURm (IAS) 2015 2014 Q4 2015 Q4 2014 Income before tax Depreciation 158.9 47.9 104.1 37.3 32.3 12.9 30.5 10.6 Cash flow from operations 152.9 126.0 44.0 43.8 Capital expenditures - 80.1 - 70.1 - 16.3 - 12.6 Cash flow from investing activities - 287.2 - 108.9 - 211.9 - 32.2 Proceeds from borrowings Repayment of borrowings Dividends paid 220.3 - 149.6 - 22.8 125.3 - 0.8 - 14.1 155.2 - 44.9 0 116.2 -0.4 0 24.4 99.1 103.0 113.4 -109.9 116.1 - 64.9 125.0 103.6 203.7 103.6 203.7 Cash flow from financing activities Change in cash and cash equivalents Cash and cash equivalents at end of period © ams AG 2016 Page 43