STMicroelectronics. Corporate Overview June 2012

Transcription

1 STMicroelectronics Corporate Overview June 2012

2 About ST 2 A global semiconductor leader The largest European semiconductor company 2011 revenues of $9.73B (1) Approx. 50,000 employees worldwide (1) 12,000 people working in R&D 12 manufacturing sites Listed on New York Stock Exchange, Euronext Paris and Borsa Italiana, Milano (1) Including ST-Ericsson, a 50:50 joint venture with Ericsson

3 Focused Product Segments 3 50/50 JV with Ericsson Wireless Digital Automotive Analog & Microcontrollers Power Discrete Digital Convergence Group (DCG) Imaging, BiCMOS ASIC & Silicon Photonics Group (IBP) Automotive Products Group (APG) Analog, MEMS & Sensors (AMS) Micro, Memory & Security (MMS) Industrial & Power Discrete (IPD) 3

4 FY11 Revenues by Product Segments 4 Digital #1 in Set-top Box outside US #2 in Set-top Box Worldwide Wireless ST-Ericsson 19% 16% 13% 17% 35% Automotive (APG) #1 in China #1 ASIC #1 Smart Power #3 Worldwide Analog, MEMS & Microcontrollers (AMM) #1 in MEMS Sensors and Microactuators Power Discrete (PDP) #1 in Thyristor #1 HV>400V PowerMOS *See appendix Source: IHS isuppli 2011 rankings ST s exposure to the Wireless segment* at the earnings level is 9%

5 Global Presence 5 14% 24% 62% 29% 38% 33% Americas EMEA Asia % by location of order shipment % by customer origin 2011 revenue by geography

6 ST Total Revenues 6 FY11 total revenues = $9.73B Wholly-Owned Businesses +1% year-over-year Wireless down 30% US$M FY05 FY06 FY07 FY08 FY09 FY10 FY11 ST ex Flash Wholly-Owned Wireless 6

7 Billings Bottomed in Q112 7 ST Q112 Revenues = $2.02B Sequentially, Separate Revenue Dynamics Again Wholly-Owned Businesses down 3% Wireless down 29% Q212 Revenue Guidance: +7.5%; +/- 3 percentage points US$M Wholly-Owned Wireless Guidance

8 Wholly-Owned Business Performance 8 ST s Wholly-Owned Businesses outgrew its SAM by +220bps during expanding its market share to 5.8% from 5.7% 1.5% % Growth (%) 1.0% 0.5% 0.0% -0.5% -1.0% -1.5% SAM excl. WLS ST-WO Revenues (USD bn) % 4.0% Revenues Market Share Market Share SAM = Serviceable Available Market SAM Wholly-Owned Businesses = SAM excluding Wireless SAM ST Wholly-Owned Businesses are comprised of Automotive, Digital, Analog, MEMS & Microcontrollers and Power Discrete Source: WSTS, STMicroelectronics

9 Wholly-Owned Business vs. Wireless 9 Wholly-Owned* Wireless ** In US$M FY10 FY11 Q112 FY10 FY11 Q112 Revenues 8,127 8,183 1,727 2,219 1, Operating Income (Loss) before impairment, restructuring & one-time items 1, (483) (812) (293) Operating Margin 13.1% 11.4% 0.8% na na na Minority Interests na na na *** 168 * ST Wholly-Owned Businesses are comprised of Automotive, Digital, Analog, MEMS & Microcontrollers, Power Discrete and Others ** 100% of ST-Ericsson s results (out of which 50% from the competence of ST) as consolidated by ST plus other margins of ST related to ST- Ericsson s business *** Q411 Wireless Minority Interests exclude the impact of $92M related to ST-Ericsson valuation allowance

10 ST Gross Margin & Opex Evolution 10 40% 35% Gross Margin Evolution 30% 25% 20% Q111 Q211 Q311 Q411 Q112 Q212 Gross Margin - Reported Unused Capacity Recovering from low volumes recorded from mid-2011 and one-time arbitration award Progressive disappearance of unused capacity charges and improvement in manufacturing efficiencies Arbitration Award Guidance 1, Operating Expenses Evolution US$M Opex expected to be: Stable in $ in Q212 Down in $ in H212 Key program: ST-Ericsson restructuring 0 Q111 Q211 Q311 Q411 Q112 Q212 R&D SG&A

11 Net Financial Position* 11 US$M 1,400 1, Reported Attributable to ST $1.27B Expect net financial position attributable to ST to be stable to slightly up at the end of December /31/08 12/31/09 12/31/10 12/31/11 3/31/ /31/12e -600 Maintained strong net cash position throughout FY11 and Q112 despite weak market conditions from mid-2011 as well as a specific situation at a major customer While funding $1.38B of capex and absorbing our portion of ST-Ericsson investment redeemed $764M in debt and paid $415M in dividends *See appendix **Includes ST-Ericsson short-term debt to Ericsson of $489M as of Mar. 31, 2012, $400M as Dec. 31, 2011, and $75M as of Dec. 31, 2010.

12 Dividend Evolution 12 STM dividend yield of ~8% among the highest in the semiconductor industry* ST cumulative dividends paid to shareholders from 2005 to present is > $1.5B Quarterly dividend offers a steady income to shareholders and also potential stock price revaluation *Source: Bloomberg (June 5, 2012) **2011 annualized dividend to be paid in equal installments in June, August and December 2012 and February

13 Wireless Revenues: $1.55B; -30% Y/Y 50% Minority Interest 16% ST-Ericsson to lower breakeven point Revised, more flexible business model ST expects a significant reduction in losses at ST-Ericsson in 2012 ST-Ericsson Operating Profitability Improvement % 0 0% % -1, Mid term -70% Operating Profit Operating Profit Margin

14 Digital Revenues: $1.84B; -15% Y/Y Operating Margin Mid-Term Drivers Realize synergies related to unified processing platform Capitalize on recovery in STB market Ramp new products TV, monitors, Smart Connectivity products Communication infrastructure ASICs Market/product diversification in Imaging 19% New applications proximity sensing, user detection, etc. New markets auto, gaming, medical, security, sports Operating Margin Expansion: Mid-term Target: Mid-Single Digit % 10% 5% 0% -5% Q111 FY11 Q112-10% -15%

15 Power Discrete Products (PDP) Revenues: $1.24B; -6% Y/Y 13% Operating Margin Mid-Term Drivers Capitalize on market megatrends Energy saving, automations green & renewable energy Improve product mix IGBT & Power Modules drive motor control applications Breakthrough low voltage Power MOSFET technology (OFT) Manufacturing flexibility Efficient front/back-end capabilities Singapore conversion to 200mm Operating Margin Expansion: Mid-term Target: Mid-Teens % 20% 15% 10% 5% 0% -5% Q111 FY11 Q112

16 Automotive Product Group (APG) Revenues: $1.68B; +18% Y/Y 17% Operating Margin Mid-Term Drivers Capitalize on solid growth in Auto market Increasing pervasion of electronics in the car Volume opportunities in emerging markets New and innovative products 32-bit Power MCU in eflash, RF for Active Safety Leader in BCD technologies; introducing new generation Complete system offer in emerging markets Operating Margin Expansion: Mid-Term Target: Mid-Teens % 15% 10% 5% 0% Q111 FY11 Q112 16

17 Analog, MEMS & MCUs (AMM)* Revenues: $3.38B; +7% Y/Y 35% Operating Margin Mid-Term Drivers Rapid growth in Motion MEMS / expanding product portfolio Microphone, pressure sensor, compass, etc. Enlargement of 32-bit MCU portfolio (GP & Secure) Ramping new BCD technologies for motor control New products for SmartGrid and OLED display drivers New wave of advanced analog products Expansion of customer base and targeted applications Operating Margin Expansion: Mid-Term Target: Low-Twenties % *New AMM perimeter starting January 1, % 20% 15% 10% 5% 0% Q111 FY11 Q112

18 ST Financial Model 18 ST remains committed to delivering on a fully consolidated basis: 9% to 12% operating margin 12% to 18% return on net assets (RONA) target 16% to 22% RONA attributable to ST

19 40% Application Drivers towards % 30% SSD Tablets 25% 20% Building & Home Automation Smartphones (4G CAGR > 100%) CAGR 15% 10% 5% 0% Fiber Broadband Ebooks Printer Energy Generation & Distribution Appliances WLAN Acess/Routers Medical Fab Automation HDD STB Game Consoles Infotainment Automotive Body TV Computer Systems -5% -10% Flat Panel Monitor -15% Mobile Phone 1G/2G -20% 100 1,000 10, ,000 Market Size in 2015 ($M) Automotive Electronics Categories Consumer Electronics Categories Data Processing Categories Industrial Electronics Categories Wired Communications Categories Wireless Communications Categories Source : IHS isuppli (SAM, excl. DRAM, Flash, MPUs, Opto)

20 Key Requirements 20 Performance Interface Power Smart World Security Multimedia Convergence + Sense & Power

21 Leading Sense & Power 21 Analog MCUs MEMS/Sensors Key Enablers Leading position in key products Rich portfolio of technologies Broad system know-how Power Management Supporting our target markets Automotive Communications Computer & Peripherals Consumer Industrial & Other

22 Growth Drivers for Sense & Power 22 Healthcare Aging/growing population & Security Increasing threats Wellness Energy Automotive Finite natural resources Growth Rising global car production and silicon content drive market New opportunities (HEV/EV)

23 New Sense & Power Products in Analog & MEMS Motion MEMS Combo Altimeter Microphone Touch screen controllers Operational amplifiers Smart Sensors (RF, MCU, Sensor) Automotive Power Amplifier ABS, Air Bag, Powertrain, Smart Power Power TM MCU Memory, Microcontrollers & Security MCU Cortex - M0/M4 families 32-bit F0 series 32-bit F3/F4 Series Secure MCU (ST31 on ARM SC000 core) NFC for mobile handsets Android, Windows 8 and other EEprom dual interface Industrial & Power Discrete IGBT for motor control, solar and UPS Amoled power management Power MOSFET MDmesh V Smart Grid: Power Line Modem Photovoltaic ICs

24 Driving Multimedia Convergence 24 Digital TV & Monitor Digital Set-Top Box Network Infrastructure (ASIC) Automotive Infotainment Imaging Key Enablers Low-power and high performance CMOS process roadmap Leading position in all converging markets Broad system know-how Smartphones & Tablets

25 Growth Drivers for Multimedia Convergence 25 Explosion of digital content Secure, ubiquitous, personalized services Emerging markets Growth

26 New Multimedia Convergence Products in Digital Convergence Platform Digital TV: Newman Set-top Box: Orly DisplayPort Premium monitors: Athena DisplayPort based Smart Connectivity: Pegasus Networking ASICs Imaging Imaging diversification Consumer, computer, automotive, medical Expanding customer base

27 Manufacturing and Technology R&D: 2012 Capital Spending 27 Front-end manufacturing / R&D 20 nm FDSOI capability Crolles 300 mm 40 nm mix capacity increase Imaging sensor BSI capability Manufacturing and Engineering System Back-end manufacturing Capacity increase and mix evolution at Asian plants MEMS capacity increase Manufacturing & Engineering System Copper wire conversion Others Testing, IT, quality & safety Plan: $0.7B to $0.8B Investments focused on: Strategic growth businesses and key product ramps Proprietary manufacturing

28 Key Programs to Increase Value 28 Increase Shareholder Value Boost Innovation Expand Customer Base Cost Reduction ST- Ericsson Turnaround

29 Appendix Trends

30 Financial Performance 30 In US$M, except EPS FY10 Q111 Q211 Q311 Q411 FY11 Q112 Net Revenues 10,346 2,535 2,567 2,442 2,191 9,735 2,017 Gross Margin 38.8% 39.1% 38.1% 35.8% 33.4% 36.7% 29.6% Operating Income (Loss) before impairment, restructuring & one-time items* Operating Margin before impairment, restructuring & onetime items attributable to ST* % Net Income Reported (11) 650 (176) % % (13) 4.3% (123) (0.2%) % (280) (6.5%) EPS Diluted Adjusted EPS Diluted* (0.01) (0.01) (0.20) (0.14) Free Cash Flow* Net Financial Position, adjusted for 50% investment in ST-Ericsson* 961 1, ,255 (250) 1,293 (136) 1, ,167 (288) 1, ,267 Effective Exchange Rate /$

31 Glossary 31 Free cash flow is defined as net cash from operating activities minus net cash from (used in) investing activities, excluding payment for purchases of and proceeds from the sale of marketable securities (both current and non-current), short-term deposits and restricted cash. We believe free cash flow provides useful information for investors and management because it measures our capacity to generate cash from our operating and investing activities to sustain our operating activities. Free cash flow is not a U.S. GAAP measure and does not represent total cash flow since it does not include the cash flows generated by or used in financing activities. In addition, our definition of free cash flow may differ from definitions used by other companies. Net financial position: resources (debt), represents the balance between our total financial resources and our total financial debt. Our total financialresources include cash and cash equivalents, net of bank overdrafts, if any, current and non-current marketable securities excluding Micron shares received in connection with the sales of Numonyx, short-term deposits and non-current restricted cash, and our total financial debt includes short term borrowings, current portion of long-term debt and long-term debt, all as reported in our consolidated balance sheet. We believe our net financial position provides useful information for investors because it gives evidence of our global position either in terms of net indebtedness or net cash position by measuring our capital resources based on cash, cash equivalents and marketable securities and the total level of our financial indebtedness. Net financial position is not a U.S. GAAP measure. Return on Net Assets (RONA)is the ratio of operating income before impairment and restructuring charges divided by average net assets used during the period. ST defines average net assets as average total assets net of total liabilities as reported in our consolidated balance sheet excluding all itemsrelated to our financial position such as cash and cash equivalents, marketable securities, short term deposits, restricted cash, bank overdrafts, current portion of long term debt and long term debt. Operating income before impairment, restructuring and one time item excludes impairment, restructuring charges and other related closure costsand NXP Arbitration award. Operating income before impairment, restructuring and one-time item attributable to ST is calculated as operating income before impairment, restructuring and one time item excluding 50% of ST-Ericsson operating loss before impairment and restructuring as consolidated by ST. Operating margin before impairment, restructuring and one time item attributable to ST is calculated as operating income before impairment, restructuring and one time item attributable to ST divided by reported revenues excluding 50% of ST-Ericsson revenues as consolidated by ST. Return on Net Assets (RONA) attributable to ST is calculated as annualized operating income before impairment, restructuring and one time item attributable to ST divided by reported net assets excluding 50% of ST-Ericsson net assets as consolidated by ST. Adjusted net earnings and earnings per share (EPS) are used by our management to help enhance an understanding of ongoing operations and to communicate the impact of the excluded items. Adjusted earnings excludes impairment, restructuring charges and other related closure costs attributable to ST,the impact of equity investment divestiture and subsequent sale of Micron shares, other-than-temporary impairment (OTTI) charges and realized gain on financial assets, NXP Arbitration award net of the relevant tax impact. Consolidation of ST-Ericsson: ST-Ericsson, a joint venture owned 50% by ST, began operations on February 3, 2009 and is consolidated into ST s operating results as of that date. ST- Ericsson is led by a development and marketing company consolidated by ST. A separate platform design company providing platformdesigns mostly to the development and marketing company is accounted for by ST using the equity method. Wireless Segment: As of February 3, 2009, Wireless includes the portion of sales and operating results of the 50/50 ST-Ericsson joint venture asconsolidated in the Company s revenues and operating results, as well as other items affecting operating results related to the wireless business. Sales recorded by ST-Ericsson and consolidated by ST are included in Telecom and Distribution 31