Microchip Technology Incorporated · NASDAQ:MCHP
Microchip Technology — Credit Suisse 26th Annual Technology Conference (November 2022)
16 slides from Microchip Technology's conference presentation, Nov 29, 2022
Slide 1: Credit Suisse 26th Annual Technology Conference
Credit Suisse 26th Annual Technology Conference A Leading Provider of Smart, Connected and Secure Embedded Solutions Ganesh Moorthy President & CEO November 29, 2022
Slide 2: Safe Harbor
SAFE HARBOR Forward Looking Statement Safe Harbor: During the course of this presentation, we will make projections or other forward-looking statements regarding the future financial performance of the company (including our guidance) or future events, including our strategy, growth drivers, industr
Slide 3: Corporate Overview
Corporate Overview Leading Total Systems Solutions Provider: • High-performance standard and specialized • Wireless and Wired Connectivity solutions Microcontroller, Digital Signal Controller and • FPGA solutions Microprocessor solutions $6.8 • Non-volatile EEPROM and Flash Memory • Mixed-Signal, An
Slide 4: Empowering Innovation
Empowering Innovation Consumer Industrial Space Sustainability Automotive Medical Data Center Defense Communication Infrastructure Aviation 4
Slide 5: Record Fiscal 2nd Quarter 2023 Results (non-GAAP)
Record Fiscal 2nd Quarter 2023 Results (non-GAAP) Record revenue of $2.073 billion; grew 5.6% QoQ and 25.7% YoY ‒ 8 consecutive quarters of record revenue Record gross margin of 67.7%; increased 244 basis points YoY Record operating margin of 46.9%; increased 438 basis points YoY Record earn
Slide 6: Fiscal Year 2022 Revenue By End Market
Fiscal Year 2022 Revenue By End Market Durable End Markets 14% Industrial 11% 40% Data Center & Computing Automotive Communication Consumer Appliance 17% 18% 6
Slide 7: Fiscal 3rd Quarter 2023 Guidance (non-GAAP)
Fiscal 3rd Quarter 2023 Guidance (non-GAAP)* Q2 FY23 Q3 FY23 Guide Long Term Actual @ mid-point Model $2,073.2 $2,156.0 FY22 – 26 CAGR Revenue ($ Million) 5.6% QoQ 4.0% QoQ of 10% to 15% 25.7% YoY 22.7% YoY Gross Margins 67.7% 67.9% 67.5% to 68.5% Operating Expenses 20.9% 20.8% 22.5% to 23.5% Operat
Slide 8: Managing A Soft Landing
Managing A Soft Landing We recognize that macro conditions are weakening, although we do not see any weakness in our business ‒ We expect to be supply constrained well into 2023 If or when macro weakness catches up to our business, we believe we can achieve a soft landing because: ‒ Strong PSP (≥
Slide 9: Consistent Revenue Growth
Consistent Revenue Growth 9,000 8,000 128 consecutive quarters of Non-GAAP profitability! 7,000 6,000 $ Million 16.2% CAGR 5,000 4,000 3,000 2,000 1,000 0 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21
Slide 10: Semi Industry Sales YoY Growth Through Cycles
Semi Industry Sales YoY Growth Through Cycles 35% 30% 25% Semi Industry Sales Y/Y Growth Rates 20% 15% 10% 5% 0% -5% -10% -15% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Semi Sales Y/Y % Chg. Semi Sales Y/Y Growth is sourced BOA Global Research, IMF, and SIA 10
Slide 11: Resilient Profitability Through Cycles
Resilient Profitability Through Cycles 35% 70% 30% MCHP LT Non-GAAP Gross Margin Target* 68% 25% 65.7% 66% Microchip NG Gross Margin % 20% 64% Semi Industry Sales Y/Y Growth Rates 62.0% 62.8% 15% 60.4% 60.9% 62% 60.1% 58.8% 61.1% 61.9% 10% 60% 57.4% 58.1% 5% 57.9% 58.8% 58% 58.2% 57.2% 57.6% 0% 56%
Slide 12: Improving Efficiency Through Cycles
Improving Efficiency Through Cycles 35% 50% 30% MCHP LT Non-GAAP Operating Margin Target* 45% 25% 43.5% 38.7% 40% Microchip NG Operating Margin % 37.1% 36.2% 20% 36.1% 35.9% 39.6% Semi Industry Sales Y/Y Growth Rates 15% 32.3% 35% 34.9% 31.8% 31.0% 10% 32.4% 31.6% 30% 30.2% 30.3% 28.6% 5% 25% 0% 20%
Slide 13: Strong Cash Generation Through Cycles
Strong Cash Generation Through Cycles 35% 21.6% $2,800 30% $2,300 10-Year 25% FCF CAGR Semi Industry Sales Y/Y Growth Rates $1,800 Microchip Free Cash Flow* 20% 15% $1,300 ($ in millions) 10% $800 5% $300 0% $0 -$200 -5% -10% -$700 -15% -$1,200 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Slide 14: Microchip 3.0 – One Year Later
Microchip 3.0 – One Year Later Elite long-term non-GAAP Sustained growth from 5-year Organic Revenue business model of organic efforts focused on CAGR of 10% - 15% using 67.5% - 68.5% Gross Margin TSS and Megatrends FY21 as baseline 44% - 46% Operating Margin Adjusted EBITDA Margin Diversified end-m
Slide 15: Microchip's Winning Formula
Microchip’s Winning Formula Grow revenue Generate significant ~10% - 15% Extend our strong cash and increase organically while foundation built on capital returned to significantly culture and owners to 100% of expanding gross and sustainability Free Cash Flow operating margins Our best is still ahe
Slide 16: Thank You
THANK YOU A Leading Provider of Smart, Connected and Secure Embedded Control Solutions
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