Nordic Semiconductor Asa · OSL:NOD
Nordic Semiconductor Asa — Q4 2016 Earnings Presentation
26 slides from Nordic Semiconductor Asa's earnings presentation, Feb 10, 2017
Slide 1: Investor Presentation Q4 2016
Investor Presentation Q4 2016 February 10° 2017, Oslo, Norway
Slide 2: Today's presentation
Today's presentation Business update Financials Business outlook Ladi ao GU.i @ iB, 7 1 | ais mr Svenn-Tore Larsen Pal Elstad Thomas Embla Bonnerud CEO CFO Director of Strategy and IR N
Slide 3: Business update
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Slide 4: Financial summary - Q4 2016
Financial summary - Q4 2016 Revenue MUSD 52.6 +135% y-o-y +1% g-0-q Revenue Bluetooth MUSD 50.6 +7% y-o-y -2% g-0-4 » Revenue : Proprietary MUSD 19.5 —+26% = -1% y-o-y q-0-g Gross margin 46.2% -4pp +0pp y-O-y qg-O-q Adjusted EBIT* MUSD 1.5 -60% y-o-y -62% q-o-q * Q4 2015 EBIT is adjusted for MUSD 7
Slide 5: Growing and diversifying customer base
Growing and diversifying customer base Continued strong growth in number of Continued diversification of ; ke 9 _ oS active customers*: 45% year-on-year Bluetooth revenue uillll € ¢ | 7 W Q4 2015 Q4 2016 a4 Ql a2 3 G4) Al Gk OO fo) Top 10 9 2014 2015 2015 2015 2015 2016 2016 2016 2016 A7% 40% custom
Slide 6: New products powered by Nordic
New products powered by Nordic Xiaomi VR Headset Bong 3 HR Kwikset door lock Parking Lock Withings Steel HR Gaming Activity tracker Smart lock Smart City Smart Watch NRF5S2 NRF5S2 NRFS2 nNRFS1 NRF5S2
Slide 7: Market leadership in Bluetooth
© 280 SECON Market leadership in Bluetooth Bluetooth low energy end-product certifications* End-product : e : certifications: os ° ° ee : ° 35% : ~ e e e e - e 30% : 7 1O7 | Ll Luk ann art Cauk SERRE .. yoy — g-o-q | *Source: DNB Markets 7
Slide 8: Technology leadership in Bluetooth
Technology leadership in Bluetooth Extending our nRF52 Series line-up Nordic first to market with Bluetooth 5 - with a new higher end SoC Strong statement on technology leadership = Higher value solutions for more = Biggest update to Bluetooth low energy demanding applications 4x range, 2x data thro
Slide 9: GSA award for 'Most Respected Public Semiconductor Company'
GSA award for ‘Most Respected Public Semiconductor Company’ with $100 - $500 million in annual sales M A strong recognition from our industry peers and partners on our products, vision and future opportunities ea Global Semiconductor Alliance (GSA) is a 400+ member strong, non-profit, international
Slide 10: Continued momentum with developers
© 280 SECON Continued momentum with developers 2016 was another record year for Off to a good start with our new higher- development kits sales end Bluetooth 5 SoC - > 1500 nRF52840 Development kits sold 2013 2014 2015 2016 in December 2016 Total kit sales 2013 - 2016
Slide 11: Pal Elstad, CFO
eae te Pal Elstad, CFO
Slide 12: Revenue by technology
Revenue by technology 40.000 60 000 50 000 Revenue Revenue 30.000 e @ eee e ° . Bluetooth Proprietary e e 40.000 20000 e 30 000 MUSD MUSD 20 000 $0.6 19. 5 ° ° +7% -2% +26% -1% a a2 G3 a4 at a2 as a at G2 Gs 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 y-o-y g-0-q y-o-y g-o-q m Propri
Slide 13: Revenue by market
Revenue by market Consumer Wearables : Building/Retail |» Healthcare Others Electronics MUSD MUSD : MUSD MUSD MUSD 25.4 10.2 8.4 2.8 3.4 +17% +0% -27% -8% — +141% +11% +7% -21% . +33% = -2% yoy — q-o-q yoy goq i: yoy qo-g yoy qoq yoy — q-o-q
Slide 14: Gross Margin
Gross Margin 60% Ramp of new products impacts Gross Margins = GM of 46.2% in Q4 2016 (50.1% in Q4 2015) = Gross Margins in the lower end as a result of lower yields during the volume ramp of the nRF52 55% . AVA v\X Gradual improvement of Gross Margins in 2017 a "Issue with nRF52 solved during Q3/Q4,
Slide 15: Cash Operating Expenses
Cash Operating Exoenses”? M7%* Continued growth in OPEX 38.7%** = Cash operating expenses increased 10,4%, of which 3.7% relates to cellular = The increase is driven by headcount growth of 17.2% from 454 in Q4 2015 to 532 in Q4 2016 = Compared to Q3 2016 cash OPEX increased 11.4% Investing for futur
Slide 16: Operating Profits (EBIT)
Operating Profits (EBIT) Adjusted EBIT *) 20.5%) Investments impacts EBIT Margins 16.8% "= EBIT margin of 2.9%. Adjusted for Cellular Investment EBIT margin of 11.8%. * Continuous R&D investments for future growth reduces EBIT Q4 2015 Q4 2015 Q4 2016 Q4 2016 ex.Cellular ex.Cellular *) Adjusted for Q
Slide 17: Cash flow
Cash flow Q4 2016 = Q32016 EBITDA Taxes Inventory AR AP Opening *)— Paid sing Balance Balance * Net cash out flow in Q@4 MUSD -8.3 (adjusted for financing MUSD -18.3 = Mainly driven by increase in raw material inventory. NWC increased by MUSD 12.0, or from 33% of LTM to 39% * EBITDA Adjusted for Cap
Slide 18: Thomas Embla Bonnerud, Director of Strategy and IR
Thomas Embla Bonnerud, Director of Strategy and IR
Slide 19: Short term outlook - guidance for H1 2017
© 280 SECON Short term outlook - guidance for H1 2017 Revenue MUSD Based on our current visibility, we anticipate revenue for 1H : 100 - 107 2017 to be in the range of MUSD 100 to 107. We except Bluetooth to be the growth driver for 2017. The 1H » Bluetooth : th 30-40% 2017 guidance range is based o
Slide 20: Continuous investments for future growth
Continuous investments for future growth Planned headcount | Stepping up our R&D efforts in 4 key areas: end of 2017 61 O : Power Management Audio +14% FF} y-o-y : Smart Home Security 20
Slide 21: Exciting emerging and future verticals
Exciting emerging and future verticals AirFuel™ magnetic resonance wireless charging = Attractive next generation wireless charging technology for mobile devices = Binary - smart phone adoption is key trigger = Potential upside for overall market growth Audio streaming over Bluetooth® low energy = T
Slide 22: Continued strong design win momentum
Continued strong design win momentum Embedded flash (kB) Ind Soc | Ce en ndustries strongest SoC line-up 028 High-end || * Baseline to high-end SoCs nNRF52840 * Range of price-feature-performance points NRF52832 i = Covering a broad range of application 512 || Mainstream Cutting edge connectivity DR
Slide 23: Successful major chipset tape-out in Q4 2016
Successful major chipset tape-out On-track to sample selected lead in Q4 2016 customers in 2H 2017 Our first fully integrated chipset Engineering samples, software, kits and suitable for sampling to customers development tools Expect at least another tape-out Increasingly confident in our timing and
Slide 24: Positive end to a overall disappointing year
Positive end to a overall disappointing year Q4. 2016- = Back to growth year-on-year * Underlying Bluetooth growth of 48% = Record Q4, even adjusted for MUSD 4 transferred from Q3 ~ Momentum. moving into 2017 Strong backlog of MUSD 28 (+25% y-o-y) Record pipeline of certified end-products with Nordi
Slide 25: Disclaimer
Disclaimer The following presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated (“relevant persons”). Any person who is not a relevant person should not act or rely on this presentation or any of its contents. This presentation doe
Slide 26: February 10° 2017, Oslo, Norway
Investor Presentation Q4 2016 February 10° 2017, Oslo, Norway