Credit Suisse 2013 Annual Technology Conference

Transcription

1 December 2013 Credit Suisse 2013 Annual Technology Conference Steve Sanghi, President and Chief Executive Officer Eric Bjornholt, Vice President and Chief Financial Officer

2 December 2013 May Today s Agenda Microchip s business characteristics 1. Consistent growth 2. Perennial market share gains bit MCU positioned for growth 4. High margin business model 5. Shareholder friendly with consistently increasing dividends and free cash flow Current business conditions Opportunity for significant accretion as margins expand towards updated business model

3 December 2013 May Microchip Characteristics 1. Consistent growth 2. Perennial market share gains bit MCU positioned for growth 4. High margin business model 5. Shareholder friendly with consistently increasing dividends and free cash flow

4 $ Million FY 93 FY 94 FY 95 FY 96 FY 97 FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 RR December 2013 May Annual Net Sales Growth 92 consecutive quarters of profitability 4

5 $ Million MCU Sales Growth FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 RR December 2013 May

6 December 2013 May FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 6 Analog Yearly Revenue (k$) $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 FQ2 FQ2

7 December 2013 May Microchip Characteristics 1. Consistent growth 2. Perennial market share gains bit MCU positioned for growth 4. High margin business model 5. Shareholder friendly with consistently increasing dividends and free cash flow

8 December CY94 CY96 CY98 CY00 CY02 CY04 CY06 CY08 CY10 Q112 Q312 Q113 8 Total MCU (8/16/32) Market Share % %

9 December 2013 PIC32 State of the Union

10 December Growing Product Portfolio Tipping Point CY08 CY09 CY10 CY11 CY12 CY13 CY14

11 PIC32 family Highest 32-bit MCU Performance Renesas RX62N MIPS32 M4K ST STM32 Cortex -M4 [The PIC32MZ] is also faster than any ARM-based MCU chip running at the same frequency.. You see, there s more than one embedded-risc architecture out there. It s also got better code density...take that, Cambridge University! EE Journal, Editor Jim Turley Freescale Kinetis Cortex -M TI Stellaris Cortex -M3 NXP LPC17xx Cortex -M3 The PIC32MZ crunches 1.92 at a whopping 330 DMIPS at 200MHz, easily beating any popular competitor in its price class December Microcontroller.com, Editor Bill Giovino CoreMark is an independent/public benchmark for core performance CoreMark is a trademark of The Embedded Microprocessor Benchmark Consortium (EMBC ) PIC32 estimate configured for zero wait state Flash performance MIPS32 ISA 11

12 17% better code density 140% 120% 100% PIC32 Code Density Best in Class Lower is better 80% 60% 40% 20% 0% PIC32 Compiler C32 v2.01 (MIPS32) 1.65 DMIPS/MHz IAR CORTEX-M3 (Thumb-2) 1.25 DMIPS/MHz IAR CORTEX-M4 (Thumb-2) 1.25 DMIPS/MHz > 30% higher performance & 17% better code density! December

13 December Framework that Simplifies Software Development Comprehensive Development Environment Direct Resale by Microchip First Line of Support Comprehensive Web Portal Saves development time: ~20%-40% I think the story with MPLAB Harmony is, What do you do after you integrate everything into the MCU? You integrate the ecosystem. UBM Tech - Electronics, VP and Brand Director Patrick Mannion

14 32-bit Revenue FQ2 YTD YTD FQ3 YTD FQ3 FQ2 FQ2 YTD FQ2 YTD FQ3 YTD FQ3 FY09 FY10 FY11 FY12 FY13 FY14 December

15 December PIC32 Gaining Market Recognition PIC32 is #1 in EE Times Ranking Microchip PIC 32-bit (MIPS) STMicro STM32 (ARM) TI Stellaris (ARM) Atmel (AVR32) NXP LPC (ARM) Atmel AT91xx (ARM) FreescaleKinetis (Cortex-M4) TI OMAP Arduino Freescale 68K, ColdFire Freescale i.mx (ARM) Cypress PSOC 5 (ARM) TI C2000 MCUs TI Sitara (ARM) Altera Nios II (soft core) RenesasSuperH, H8SX, M32C, M32R Xilinx MicroBlaze (soft-core) Altera SoC-FPGA (ARM) Intel Atom, Pentium, Celeron, Core 2, Core ix TI Hercules (ARM) Actel/Microsemi ProASIC 3 (ARM) Freescale PowerPC 55xx Energy Micro EFM32 Freescale PowerPC 5xx, 6xx 23% 21% 20% 16% 16% 12% 12% 11% 10% 10% 10% 8% 8% 8% 7% 7% 7% 6% 6% 5% 5% 34% 31% 28% Production Customer Ramp Growing

16 PIC32 Has a Broad Range of Marquee Customer Adoption December 2013 December

17 PIC32 MCU Platform is Designed into a Broad Range of Applications Consumer Industrial Security Automotive Docking Station Audio Head Phones Engine Control Security System Panel GPS Tracking White Goods Graphics GPS Control Lighting Control HVAC Air Handler Photo ID Management Dashboard Robotic Vacuum Cleaner Remote Control Power Meter Bar code Scanner Diagnostics Server Diagnostic Monitoring Auto Diagnostics MCU32 December Microchip Confidential 4 17

18 December The State of the Union of the PIC32 Product Line has never been stronger!!!

19 December 2013 May Microchip Characteristics 1. Consistent growth 2. Perennial market share gains bit MCU positioned for growth 4. High margin business model 5. Shareholder friendly with consistently increasing dividends and free cash flow

20 Q1FY02 Q2FY02 Q3FY02 Q4FY02 Q1FY03 Q2FY03 Q3FY03 Q4FY03 Q1FY04 Q2FY04 Q3FY04 Q4FY04 Q1FY05 Q2FY05 Q3FY05 Q4FY05 Q1FY06 Q2FY06 Q3FY06 Q4FY06 Q1FY07 Q2FY07 Q3FY07 Q4FY07 Q1FY08 Q2FY08 Q3FY08 Q4FY08 Q1FY09 Q2FY09 Q3FY09 Q4FY09 Q1FY10 Q2FY10 Q3FY10 Q4FY10 Q1FY11 Q2FY11 Q3FY11 Q4FY11 Q1FY12 Q2FY12 Q3FY12 Q4FY12 Q1FY12 Q2FY13 Q3FY13 Q4FY13 Q1FY14 Q2FY14 Gross Margin % (Non-GAAP*) Higher Utilization Richer Product Mix Record 61.5% Long-term GM goal 55 SST Acquisition (%) Fab 4 Production start Worldwide Financial Crisis Business Downturn *Excludes share-based compensation and acquisition-related expenses. A reconciliation of our GAAP to non-gaaap results is available at December 2013 May

21 December Microchip Characteristics 1. Consistent growth 2. Perennial market share gains bit MCU positioned for growth 4. High margin business model 5. Shareholder friendly with consistently increasing dividends and free cash flow

22 Q1FY07 Q2FY07 Q3FY07 Q4FY07 Q1FY08 Q2FY08 Q3FY08 Q4FY08 Q1FY09 Q2FY09 Q3FY09 Q4FY09 Q1FY10 Q2FY10 Q3FY10 Q4FY10 Q1FY11 Q2FY11 Q3FY11 **Q4FY Q1FY12 Q2FY12 Q3FY12 Q4FY12 Q1FY13 Q2FY13 Q3FY13 Q4FY13 Q1FY14 Q2FY14 Q3FY14 ~ $2.2B Dividends Paid $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 $0.40 $0.35 $0.30 $0.25 $0.20 $0.15 $0.10 $0.05 $0.00 December Total Dividend Dividend per Share **Q4FY11 dividend accelerated into Q3FY11 22

23 December Topics to Cover The Characteristics of Microchip s Business 1. Consistent growth 2. Perennial market share gains bit MCU positioned for growth 4. High margin business model 5. Shareholder friendly with consistently increasing dividends and free cash flow Current business conditions Opportunity for significant accretion as margins expand towards updated business model

24 December Current Business Conditions Just yesterday, we narrowed the guidance for net sales and EPS, but kept the mid point of the guidance the same. December quarter sales are expected to be seasonally normal Bookings activity is steady with backlog filling in for the March quarter Microchip expects growth in net sales in the March 2014 quarter

25 December Topics to Cover The Characteristics of Microchip s Business 1. Consistent growth 2. Perennial market share gains bit MCU positioned for growth 4. High margin business model 5. Shareholder friendly with consistently increasing dividends and free cash flow Current business conditions Opportunity for significant accretion as margins expand towards updated business model

26 December 2013 May MCHP Financial Information Consolidated Actual Guidance Q3FY14 Actual Guidance Long-Term Sept. 30, 2013 Dec. 31, 2013 Model Net Sales ($MM Non-GAAP) $492.7 $ Gross Margin* 59.0% 58.8% % ~ 61.5% ±.5% Operating Expenses* (% of Sales) 27.2% 27.0% % ~ 26.5% ±.5% Operating Profit 31.8% 31.3% % ~ 35.0% ± 1.0% EPS (Non-GAAP**) $0.63 $ EPS (GAAP) $0.46 $ * Excludes share-based compensation, acquisition related charges, non-recurring items and adoption of ASC Subtopic A reconciliation of our GAAP to non-gaaap results is available at

27 December 2013 May Summary Microchip is a consistent revenue grower Microchip is a perennial market share gainer Microchip 32-bit MCU strategy is showing impressive results Microchip has consistently maintained a high margin business model Microchip is shareholder friendly with consistently increasing dividends and free cash flow The December quarter is expected to be seasonally normal Investors have an opportunity for significant EPS accretion as margins expand towards the updated long term business model

28 December 2013 Thank You!