Nanya Technology. Q Investor Conference. Dr. Pei-Ing Lee, President & Spokesman. Presentation to Investors and Analysts, 17 Jul.

Transcription

1 Nanya Technology Q Investor Conference Presentation to Investors and Analysts, 17 Jul Dr. Pei-Ing Lee, President & Spokesman NTC Proprietary Level: Property

2 Safe Harbor The information herein and the presentation made during the conference contain forward-looking statements and are provided for information purposes only. Neither Nanya Technology Corp. nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements or undertakes duty to update the statements. You are urged to review the information provided herein carefully, and please don t distribute, reproduce or disclose the information in whole or in part without prior written permission of NANYA Technology Corp. 2

3 Agenda 01. Key Takeaways 02. Q2 18 Revenue & Results 03. CAPEX & Bit Shipment 04. Market Outlook 05. Business Outlook 3

4 01 Q2 18 KEY TAKEAWAYS 4

5 Key Takeaways Q2 18 Revenue of NT$ 24,592 million(m), (+30.8% QoQ) ASP increased mid-single%, Bit shipment increased low 20% Q2 18 Gross Margin 55.0%; Operating Margin 46.8% Foreign exchange gain of NT$ 1,768M Recognized NT$ 2,526M undistributed earnings tax expense Q2 18 Net Income of NT$ 11,304M, Net Margin 46.0%, EPS NT$ 3.68, BVPS NT$ (Cash dividend of NT$ 3.5/share, deducted) 1H 18 1H 18 Revenue of NT$ 43,390M (+74.6% vs. 1H 17) Net Income of NT$ 18,531M, EPS NT$

6 02 Q2 18 REVENUE & RESULTS 6

7 Revenue, Net Income (Million NT$) Quarterly Financial Highlights 30,000 15,000 48% 49% 47% 44% 42% 42% 42% 40% 40% 37% 36% 34% 34% 33% 31% 31% 30% 28% 28% 25% 21% 18% 18% 17% 44% 44% 40% 39% 32% 33% 32% 55.0% 52% 50% 24, % 44% 18,797 30% 7,227 11,304 60% Gross Margin, Operating Margin (%) 0 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Revenue (Million NT$) Net Income (Million NT$) Gross Margin(%) Operating Margin(%) 0% 7

8 Quarterly Revenue Results QoQ Q2 18 vs. Q1 18 YoY Q2 18 vs. Q2 17 Revenue +30.8% +94.8% Shipment Increased low 20% range Increased low 60% range ASP Increased mid-single digit% Increased low 20% range Exchange Rate +1.4% -1.7% Q2 18 Revenue increased by 30.8% QoQ Q2 18 Bit shipment increased low 20% range QoQ Q2 18 ASP increased mid-single digit % QoQ Q2 18 FX positive impacted 1.4% on Revenue QoQ 8

9 Q2 18 Financial Results Summary Amount in Million NT$, except for EPS & BVPS Q2'18 Q1'18 Q2'17 QoQ Unaudited Audited Audited Net Sales 24, % 18, % 30.8% 12, % 94.8% Gross Profit (Loss) Gross Margin(%) 13, % 9, % 39.0% 5, % 144.2% Operating Income (Loss) Operating Margin(%) YoY 11, % 8, % 38.4% 4, % 176.2% EBITDA* EBITDA Margin (%) 14, % 11, % 29.0% 6, % 137.7% Non-operating Income (Expense) 1, % -1, % 3, % Income Tax Benefit (Expense) -2, % % -1, % Net Income (Loss) Net Margin (%) 11, % 7, % 56.4% 6, % 74.2% Earnings Per Share (NT$) 3.68** Book Value Per Share (NT$) 47.36*** Shares Outstanding(million shares) 3,101 3,060 2,748 Note: * EBITDA = Operating income + Depreciation & Amortization Expenses ** EPS is based on weighted average outstanding shares of 3,075M *** BVPS is calculated based on 3,101M outstanding shares after deduction of NT$ 3.5 cash dividend payable 9

10 Q2 18 vs. Q1 18 Results Comparison Q2'18 Q1'18 QoQ Amount in Million NT$ Unaudited Audited (PPT* Delta) Net Sales 24,592 18, % Gross Profit (Loss) Gross Margin(%) Operating Income (Loss) Operating Margin(%) 13, % 9, % +3.2% 11, % 8, % +2.5% Remarks ASP increased mid-single digit % QoQ Bit shipment Bit shipment increased low 20% range QoQ FX positive 1.4% on Revenue Q2 18 Gross profit increased NT$ 3,796M, mainly due to ASP& Shipment increase and cost improvement Q2 18 R&D expense increased NT$ 482M, SG&A increased 123M Q2 18 OP Income increased NT$ 3,191M, mainly due to ASP& Shipment increase Net Income (Loss) Net Margin (%) 11, % 7, % +7.6% FX** Positive NT$ 2,946M (Q2 18: NT$ +1,768M, Q1 18: NT$ - 1,178M) Recognized NT$ 2,526M tax expense due to undistributed earnings *PPT: Percentage Points, ** FX: Foreign Currency Exchange 10

11 Operating Expenses (Million NT$) SG&A Expenses * Unaudited number (Million NT$) R&D Expenses * Unaudited number 577 Q4 1, * Q3 Q2 Q1 1, , * Note: SG&A expenses increased by NT$ 123M in Q2 18 mainly from employee compensation and variable selling expense Note: R&D expenses increased by NT$ 482M in Q2 18 mainly from 20nm product development and 10nm class technology development and employee compensation 11

12 Cash Flows Q2'18 Q1'18 1H'18 Cash Flow Unit: Million NT$ Unaudited & Consolidated Audited & Consolidated Beginning Balance 50,197 33,769 Cash from Operating Activities 11,692 7,943 Capital expenditures -2,780-1,941 Investments and others 2,347* 10,425** 33,769 19,635 Cash from Operating Activities Capital Expenditures -4,720 12,772 Investments and others 61,456 Ending Balance 61,456 50,197 Free Cash Flow (1) 8,912 6,003 (1) Free Cash Flow = Cash from operating activities Capital expenditures * ESOP execution NT$1.4 billion, FX positive impact NT$ 698 million ** Net proceeds received NT$10.6 billion in Q1 18 (Micron shares disposal in Q4 17) /1/1 Beginning Balance 1H 18 Free Cash Flow NT$14,915 Million 2018/6/30 Ending Balance 12

13 1H 18 Financial Results Summary Amount: Million NT$ 1H 18 1H 17 Unaudited & Consolidated Audited & Consolidated Net Sales 43, % 24, % 74.6% Cost of Goods Sold 20, % 14, % Gross Margin 23, % 10, % 122.9% SG&A Expenses 1, % 1, % R&D Expenses 2, % 1, % Operating Income 19, % 8, % 147.3% Non-operating Income (Exp.) % 3, % Income before Tax 20, % 11, % 83.6% Income Tax Benefit (Expense) -2, % -1, % Net Income 18, % 9, % Net Income attributable to noncontrolling interests % % Net Income attributable to NTC 18, % 9, % 89.8% EPS(NT$) YoY 13

14 03 CAPEX & BIT SHIPMENT 14

15 CAPEX & Bit Shipment BIT SHIPMENT (YOY) NT$ Billion ~48% 16% 20% (E) CAPEX Q2 Q1-8.6% Flat (E) Bit Shipment (YoY) Capital Expenditure (CAPEX) Bit Shipment Q2 18 CAPEX NT$ 2.78Billion (B) Estimated 2018 CAPEX of NT$ 23.9B 20nm equipment payment deferred 10nm Class technology development New CAPEX NT$ 15.94B estimated to be expended in 2018 out of total NT$19.71B Mid-single digits% increase expected in Q3 18 Target 2018 to reach 48% bit shipment growth, 2019 bit growth target to reach mid teens % 15

16 04 MARKET OUTLOOK 16

17 DRAM Market outlook Q3 18 Supply Q3 18 moderate supply growth expected Demand 2H 18 the demand in each segments remains favorable Mobile Market: the new flagship smartphones with emerging applications, high resolution, 3D sensing, artificial intelligence (AI), and augmented reality will continue to stimulate Mobile DRAM demand. High-end gaming phones start to equip 8GB Mobile DRAM Server Market: Hyper scale data centers continue to out grow market average demand. Telecom operators prepare for 5G services. Estimated 258GB DRAM as average content per server Consumer Market:Major drivers of consumer applications: TV, set-top box, SSD, Networking products (PON), smart speakers. IPTV's 4K penetration rate exceeds 50%, SSD built-in DRAM demand continues to grow, PON DRAM content forecasts to grow by about 40% yoy Global Watch Tariffs war, IP infringement and Antitrust accusation, have not impacted memory business in the near term. However, caution needed for potential out-of-control situation 17

18 05 BUSINESS OUTLOOK 18

19 Nanya Business Outlook 2H 18 DRAM Demand-Supply remain stable Cash dividend NT$ billion (NT$ 3.5 per share), payment on Jul. 20, 2018 CAPEX budget NT$19.71 billion mainly for mid-teens % bit growth in 2019 Nanya Technology Operation Focuses: Plan to deliver LPDDR4/4X products in Q4 18 Monthly output to increase to 73,000 WPM in year 2019, from current 65,000 WPM, with the output of 20nm increasing to 47,000 WPM from current 35,000 WPM 10nm class technology development underway 19

20 Thanks & Questions 20

21 Q2 18 Consolidated Income Statement Q2'18 Q1'18 Q2'17 QoQ Amount: Million NT$ Unaudited Audited Audited Net Sales 24, % 18, % 30.8% 12, % 94.8% Cost of Goods Sold 11, % 9, % 7, % Gross Margin 13, % 9, % 39.0% 5, % 144.2% SG&A Expenses % % % R&D Expenses 1, % % % Operating Income 11, % 8, % 38.4% 4, % 176.2% Non-operating Income (Exp.) 1, % -1, % 3, % Income before Tax 13, % 7, % 86.7% 8, % 68.6% Income Tax Benefit (Expense) -2, % % -1, % Net income attributable to noncontrolling interests Net Income 11, % 7, % 6, % 0 0.0% % 7 0.1% Net Income attributable to NTC 11, % 7, % 56.4% 6, % 74.2% EPS(NT$) Book Value Per Share YoY 21