UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
April 28, 2016
NXP Semiconductors N.V.
(Exact name of registrant as specified in charter)
The Netherlands
(Jurisdiction of incorporation or organization)
60 High Tech Campus, 5656 AG, Eindhoven, The Netherlands
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1).
Yes ¨ No x
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7).
Yes ¨ No x
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ¨ No x
Name and address of person authorized to receive notices
and communications from the Securities and Exchange Commission
Dr. Jean A.W. Schreurs
60 High Tech Campus
5656 AG Eindhoven – The Netherlands
This report contains NXP Semiconductors Analyst Day Presentation, April 2016.
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| 1 | NXP Semiconductors Analyst Day Presentation, April 2016 | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized at Eindhoven, on the 28th day of April 2016.
| NXP Semiconductors N.V. | ||||
| /s/ D. Durn |
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| D. Durn, CFO |
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Exhibit 1
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NXP SEMICONDUCTORS
ANALYST DAY
NEW YORK | APRIL 2016
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LEGAL NOTICE
This document has been prepared by NXP Semiconductors N.V. (“NXP”) solely for informational purposes. The presentation includes the following slides, the oral presentation of the slides by NXP or any person on its behalf, any question-and-answer session that follows the oral presentation, hard copies of this document and any materials distributed at, or in connection with the presentation (collectively, the “Presentation”). By attending the meeting at which the Presentation is made, or by reading the Presentation, you will be deemed to have (i) agreed to all of the following restrictions and made the following undertakings and (ii)acknowledged that you understand the legal and regulatory sanctions attached to the misuse, disclosure or improper circulation of the Presentation.
Information relating to markets, market size, market share, market position, growth rates and other industry data contained in the Presentation relating to our industry and business is partly based on our estimates and is provided solely for illustrative purposes. We have also compiled, extracted and reproduced market or other industry data from external sources, including third parties or industry or general publications. Any such information contained in the Presentation has not been independently verified and no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions expressed herein. None of NXP, the companies in the NXP group or any of their respective directors, officers, employees, agents or any other person shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of the Presentation or its contents or otherwise arising in connection with the Presentation. The information and opinions contained in this Presentation do not purport to be comprehensive, are provided as at the date of the document and are subject to change without notice. While we believe our internal estimates to be reasonable, they have not been verified by any independent sources, and we cannot assure you as to their accuracy or that other persons would agree with our calculations and estimates. The industry and market data included in the Presentation may be subject to significant uncertainty due to differing definitions of the relevant markets described, as well as the other uncertainties. NXP is not under any obligation to update or keep current the information contained in the Presentation.
Non-GAAP Financial Measures
In addition to providing financial information on a basis consistent with U.S. generally accepted accounting principles (“GAAP”), the Presentation also contains the following selected financial measures on a non-GAAP basis: (i) Gross profit, (ii) Gross margin, (iii) Research and development, (iv) Selling, general and administrative, (v) Other income, (vi) Operating income (loss), (vii) Operating margin, (viii) Financial Income (expense), (ix) Cash tax expense, (x) Results relating to equity-accounted investees, (xi) Net income (loss), (xii) Net income (loss) attributable to stockholders, (xiii) Weighted average shares –diluted, (xiv) Diluted net income (loss) attributable to stockholders per share, (xv) EBITDA, adjusted EBITDA and trailing 12 month adjusted EBITDA, and (xvi) non-GAAP free cash flow. The non-GAAP information excludes the amortization of acquisition related intangible assets, the purchase accounting effect on inventory and property, plant and equipment, merger related costs (including integration costs), certain items related to divestitures, share-based compensation expense, restructuring and asset impairment charges, process and product transfer costs, non-cash interest expense on convertible notes, extinguishment of debt, changes in the fair value of the warrant liability prior to January 1, 2016, foreign exchange gains and losses and the non-cash impact on income tax expense.
Management does not believe that these items are reflective of the Company’s underlying performance. The presentation of these and other similar items in NXP’s non-GAAP financial results should not be interpreted as implying that these items are non-recurring, infrequent or unusual. NXP believes this non-GAAP financial information provides additional insight into the combined business of NXP since its merger with Freescale as well as the Company’s on-going performance and has therefore chosen to provide this information to investors for a more consistent basis of comparison and to help them evaluate the results of the Company’s on-going operations and enable more meaningful period to period comparisons. These non-GAAP measures are provided in addition to, and not as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Reconciliations of these non-GAAP measures to the most comparable measures calculated in accordance with GAAP are provided in the financial statements portion of the quarterly earnings releases in a schedule entitled “Financial Reconciliation of GAAP to non-GAAP Results (unaudited).”
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LEGAL NOTICE (CONT.)
Forward-Looking Statement
This presentation includes forward-looking statements which include statements regarding our business strategy, financial condition, results of operations, and market data, as well as any other statements which are not historical facts. By their nature, forward-looking statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. These factors, risks and uncertainties include the following: market demand and semiconductor industry conditions, our ability to successfully introduce new technologies and products, the demand for the goods into which our products are incorporated, our ability to generate sufficient cash, raise sufficient capital or refinance our debt at or before maturity to meet both our debt service and research and development and capital investment requirements, our ability to accurately estimate demand and match our production capacity accordingly or obtain supplies from third-party producers, our access to production from third-party outsourcing partners, and any events that might affect their business or our relationship with them, our ability to secure adequate and timely supply of equipment and materials from suppliers, our ability to avoid operational problems and product defects and, if such issues were to arise, to rectify them quickly, our ability to form strategic partnerships and joint ventures and successfully cooperate with our alliance partners, our ability to win competitive bid selection processes to develop products for use in our customers’ equipment and products, our ability to successfully establish a brand identity, our ability to successfully hire and retain key management and senior product architects; and, our ability to maintain good relationships with our suppliers. In addition, this document contains information concerning the semiconductor industry and our business segments generally, which is forward-looking in nature and is based on a variety of assumptions regarding the ways in which the semiconductor industry, our market segments and product areas will develop. We have based these assumptions on information currently available to us, if any one or more of these assumptions turn out to be incorrect, actual market results may differ from those predicted. While we do not know what impact any such differences may have on our business, if there are such differences, our future results of operations and financial condition, and the market price of the notes, could be materially adversely affected. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak to results only as of the date the statements were made; and, except for any ongoing obligation to disclose material information as required by the United States federal securities laws, we do not have any intention or obligation to publicly update or revise any forward-looking statements after we distribute this document, whether to reflect any future events or circumstances or otherwise. For a discussion of potential risks and uncertainties, please refer to the risk factors listed in our SEC filings. Copies of our filings are available from our Investor Relations department or from the SEC website, www.sec.gov.
No Offer or Solicitation
The Presentation does not constitute or form part of, and should not be construed as, an offer to sell or issue, or the solicitation of an offer to purchase, subscribe to or acquire, securities of NXP, or an inducement to enter into investment activity in the United States or in any other jurisdiction in which such offer, solicitation, inducement or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of such jurisdiction. No part of this Presentation, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever.
The Presentation is not for publication, release or distribution in any jurisdiction where such publication, release or distribution would constitute a violation of the relevant laws of such jurisdiction, nor should it be taken or transmitted into such jurisdiction.
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AGENDA
8:00 – 8:30AM RICK CLEMMER
2016 Analyst Day Introduction
8:30 – 9:00AM DAN DURN
Financial Overview
9:00 – 9:15AM
Finance Q&A
9:15 – 10:45AM RUDY STROH
Security – Connectivity
10:45 – 11:00AM
Security – Connectivity Q&A
11:00 – 11:30AM
Break
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AGENDA
11:30AM – 1:00PM KURT SIEVERS
Automotive
1:00 – 1:15PM
Automotive Q&A
1:15 – 1:30PM RICK CLEMMER
Summary and Q&A
1:30 – 2:30PM
Lunch with Management
2:30 – 3:30PM
NXP Product Demonstrations and Management Discussions
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COVISION IPAD
ENGAGEMENT
PLEASE LOGIN TO THE iPAD
USING YOUR EMAIL ADDRESS
USER NAME [YOUR EMAIL ADDRESS]
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NXP Semiconductors 2016 ANALYST DAY
RICK CLEMMER
President & Chief Executive Officer
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Secure Connections for the Smarter World
Everything
Smart
40B+ devices with intelligence shipped in 2020
Processing
Automotive
Everything
Connected
1B+ additional consumers online, 30B+ connected devices
Connectivity
Everything
Secure
Potential economy savings up to half trillion dollars
Security
Automotive Industrial Connected Devices IoT
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NXP Value Proposition
Multiple High Growth Markets + RMS >1.5x
PROFITABLE GROWTH
World-Class Expertise and Team
CUSTOMER-FOCUSED PASSION TO WIN
Operational Excellence + Benchmark Cost Structure
STRONG CASH GENERATION
MAXIMIZE SHAREHOLDER VALUE
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The New NXP – Strategically and Financially Compelling
Solutions leadership
Broad and diverse customer base
Compelling cross-sell opportunity
Complementary market reach
Growth in excess of market
Accelerates “Secure Connections for a Smarter World” strategy
Leader in automotive semiconductor
Leader in broad-based MCU
Far superior earnings growth
RMS focused growth
Margin expansion driven by
- Portfolio optimization
- Cost synergy realization
Shareholder value creation
Focus on optimal capital structure
Achieve 2x leverage
Return excess free cash flow to shareholders
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HPMS Market Leader with Sharper Focus, Broader Reach
NXP Non-GAAP 2015 Adjusted Revenue by Operating Segment
Auto
32% Corp & Other 2%
STDP
13%
SCD
23% SIS
10%
SI&I
20%
NXP: the HPMS leader
Deliver growth >1.5x market
#5 global non-memory semi supplier
#1 global auto semi supplier
#1 non-auto MCU
#1 secure identification
Focused on 2x the serviceable market
Complimentary portfolios and customers
Opportunities to cross sell
Ability to deliver complete solutions
Deliver >1.5x market growth
Note: Combined Non-GAAP Adjusted Revenue is the combined consolidated revenue of NXP and Freescale. The information excludes the divestment of previously announced businesses and the creation of joint-ventures. Please refer to the NXP Historic Financial Model file found on the Financial Information page of the Investor Relations section of our website at www.nxp.com/investor for additional information relative to our Non-GAAP Financial Measures.
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RMS Philosophy – Focus on Product and Application Leadership
NXP Non-GAAP 2015 Adjusted Revenue by RMS Concentration
Focused Contender
<0.5x
True Leader
RMS > 1.5x
Competitive
0.5—1.0x
Leader
1.0—1.5x
Market Focus – achieve RMS > 1.5x
Focus on large, faster growing markets
Engage market leaders early
Deliver product and application leadership
Focused execution
Benefits of RMS leadership
First mover advantage
Out-grow, out-invest competition
Drive disproportionate profit
Thought leadership for OEMs
Sustainable barriers to entry
Note: Combined Non-GAAP Adjusted Revenue is the combined consolidated revenue of NXP and Freescale. The information excludes the divestment of previously announced businesses and the creation of joint-ventures. Please refer to the NXP Historic Financial Model file found on the Financial Information page of the Investor Relations section of our website at www.nxp.com/investor for additional information relative to our Non-GAAP Financial Measures.
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Focused Leadership – End Markets
NXP Non-GAAP 2015 Adjusted Product Revenue by End-market Exposure
Automotive 41%
Industrial
& Other
2% Computing 24% Consumer 7% Comm. Mobile Infra. 15% 11%
Broad end market exposure
Long life cycles
High barriers to entry
Application expertise
Product leadership positions
#1 Automotive
#1 Non-auto MCU
#1 Secure identification
#1 Mobile transactions
Note: Combined Non-GAAP Adjusted Revenue is the combined consolidated revenue of NXP and Freescale. The information excludes the divestment of previously announced businesses and the creation of joint-ventures. Please refer to the NXP Historic Financial Model file found on the Financial Information page of the Investor Relations section of our website at www.nxp.com/investor for additional information relative to our Non-GAAP Financial Measures.
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Focus to Drive Growth
NXP Non-GAAP Adjusted
2015 Revenue(2) First Call Est.(1)
STDP SIS
SI&I SCD Auto
2015 2016E
Strategic Focus
Auto • Extend current leadership
• Investment focus to ADAS and security
• Mobile Transactions: true leadership, transit
SCD • MCU: 32bit ARM leadership, drive applications
• i.MX: solutions focus with security
• Leverage high speed interface leadership, USB Type C
SI&I • RF Power: leverage leadership, GaN, mMIMO
• Digital Networking: WIP – focus investment
• Extend security leadership
SIS • Balanced participation in profitable end-markets
• Leverage IP across entire portfolio
(1) First Call estimate as of April 19, 2016.
(2) Combined Non-GAAP Adjusted Revenue is the combined consolidated revenue of NXP and Freescale. The information excludes the divestment of previously announced businesses and the creation of joint-ventures. Please refer to the NXP Historic Financial Model file found on the Financial Information page of the Investor Relations section of our website at www.nxp.com/investor for additional information relative to our Non-GAAP Financial Measures.
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Ability to Deliver Connected System Solutions
Tamper Resistant
HW / SW
Crypto
Mixed-signal Processing Multi-standard Expertise MCU / MPU Connectivity Wired or RF
Integrated Solutions
Sensors
Axis of system level integration
Future connected device requirements
Ultra-low power processing
End-to-end security
Ultra-low power connectivity
Secure firmware, middleware, protocols
Environmental sensing
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The New NXP – Accelerating Secure Connections Vision
NXP – Product & Application Leadership
Secure Secure Secure Automotive Identification Connected Interface & Solutions Devices Infrastructure
(1) (1) (1) Revenue(1)
Revenue Revenue Revenue
~$1.0B ~$2.2B ~$2.0B ~$3.2B
Standard Products Revenue(1) ~$1.3B
Leverage product leadership
Leader in automotive
Leverage security and MCU leadership
Pivot to application leadership / influence
Evolution of secure ADAS solutions
System requirements of IoT / Smarter World
Focused product and application leadership
Drives growth >1.5x market
Significant earnings power and cash flow
(1) Combined Non-GAAP Adjusted Revenue is the combined consolidated revenue of NXP and Freescale. The information excludes the divestment of previously announced businesses and the creation of joint-ventures. Please refer to the NXP Historic Financial Model file found on the Financial Information page of the Investor Relations section of our website at www.nxp.com/investor for additional information relative to our Non-GAAP Financial Measures.
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Communication Infrastructure – Solid Leadership
RF Power
Market position
#1 Provider of PA solutions to BTS industry
RF technology and innovation leader
Market strategy
Invest to lead transition to GaN as market develops
Capture thought leadership in mMIMO
Drive system integration from baseband to antenna, spanning frequency & power
Positioned for leadership in new white goods markets
Digital Networking
Market position
#1 in communications segment in 2015
Market strategy
Transition to faster growth segments – IoT, V2I
Maintain leadership in packet acceleration and security
Recent market success
Broad ARM/64 LS – portfolio well received
Gaining share with ARM/64 in enterprise
Control plane processor white box switching
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Focus on Product and Application Leadership
APPLICATIONS FOCUS
Auto Auto Mobile TX
Core ADAS & Interfaces Core ID Industrial Infrastructure IoT
Hardware Security
Software Security
DERSHIP Processing
LEA RF Connectivity
Wired Connectivity
Analog
Power Mgt.
RF
TECHNOLOGY Power
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Focus on Product and Application Leadership
APPLICATIONS FOCUS
Auto Auto Mobile TX
Core ADAS & Interfaces Core ID Industrial Infrastructure IoT
Hardware Security
Software Security
DERSHIP Processing
LEA RF Connectivity
Wired Connectivity
Analog
Power Mgt.
RF
TECHNOLOGY Power
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NXP Value Proposition
True Leadership Driving RMS
FOCUSED ON RMS > 1.5x
Multiple High Growth Markets
PROFITABLE GROWTH
World-Class Expertise and Team
CUSTOMER-FOCUSED PASSION TO WIN
Operational Excellence + Benchmark Cost Structure
STRONG CASH GENERATION
MAXIMIZE SHAREHOLDER VALUE
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SECURE CONNECTIONS FOR A SMARTER WORLD
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Financial Overview
DAN DURN
Executive Vice President and Chief Financial Officer
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NXP – Focused Industry Powerhouse
Leadership in high growth markets
- Portfolio drives above market growth opportunity
Target model drives superior growth
- ~15%+ Non-GAAP EPS growth
Strong cash flow
- Margin expansion + operating discipline = $4B+ Non-GAAP Adjusted EBITDA(1)
- Low capital intensity
Total return strategy
- Disciplined capital allocation
- Excess cash returned to shareholders
Note: (1) Assumes 2019E, midpoint of growth range, midpoint of EBIT range
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Focused Industry
Powerhouse
Portfolio Drives
Above Market
Growth Opportunity
Target Model Drives 15%+ Non-GAAP EPS Growth
Margin Expansion +
Operating Discipline
= $4B+ Non-GAAP
Adjusted EBITDA
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NXP – Top 5 Semiconductor Company
(1)
2015 REVENUES , $B
55 14 12 10 8 6 4 2
0
INTC QCOM AVGO TXN NXP(2) IFX STM RENS ON ADI MCHP MXIM LLTC FCS ATML SLAB ISIL CAVM
(1) Source: public filings (2) For NXP, reference is made to the Combined Non-GAAP Adjusted Revenue which is the combined consolidated revenue of NXP and Freescale. The information excludes the divestment of previously announced businesses and the creation of joint-ventures. Please refer to the NXP Historic Financial Model file found on the Financial Information page of the Investor Relations section of our website at www.nxp.com/investor for additional information relative to our Non-GAAP Financial Measures.
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Focused Leadership – End Markets
NXP Non-GAAP 2015 Adjusted Product Revenue by End-market Exposure
Automotive 41%
Industrial
& Other
2% Computing 24% Consumer 7% Comm. Mobile Infra. 15% 11%
Broad end market exposure
Long life cycles
High barriers to entry
Application expertise
Product leadership positions
#1 Automotive
#1 Non-auto MCU
#1 Secure identification
#1 Mobile transactions
Note: Combined Non-GAAP Adjusted Revenue is the combined consolidated revenue of NXP and Freescale. The information excludes the divestment of previously announced businesses and the creation of joint-ventures. Please refer to the NXP Historic Financial Model file found on the Financial Information page of the Investor Relations section of our website at www.nxp.com/investor for additional information relative to our Non-GAAP Financial Measures.
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Top 20 Customers ~40% of 2016E Revenue (1)
12.0%
>25,000 Total Customers
6.0%
0.0%
Automotive Mobile Comm. Infra. Industrial & Other
Note: (1) Through all channels,
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Merger Momentum
Driving synergy capture
$200M in 2016; $500M in 2017
Management team integrated and executing
Product roadmaps aligned
High customer engagement
Portfolio attracting new customers
Early cross sell and solutions success
Industry powerhouse with diversification, scale and above market earnings growth potential
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Focused Industry
Powerhouse
Portfolio Drives
Above Market
Growth Opportunity
Target Model Drives 15%+ Non-GAAP EPS Growth
Margin Expansion +
Operating Discipline
= $4B+ Non-GAAP
Adjusted EBITDA
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Driving Above Market Growth Opportunity
Expected Growth 2016E – 2019E
5-7%
3-4%
Semi Industry NXP
Outgrow the broader market by >1.5x
Leverage portfolio scale and reach
Aligned with key market drivers
- Auto: ADAS, security and infotainment
- Everything smart, secure and connected
High growth – high profit segments
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Focused Industry
Powerhouse
Portfolio Drives
Above Market
Growth Opportunity
Target Model Drives 15%+ Non-GAAP EPS Growth
Margin Expansion +
Operating Discipline
= $4B+ Non-GAAP
Adjusted EBITDA
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Generating Significant Shareholder Value
Non-GAAP Adjusted Revenue ($B)
7% CAGR
NXP
“classic”
12% CAGR
2012 2013 2014 2015
Non-GAAP Adjusted EBIT ($B) 21%
CAGR
2012 2013 2014 2015
Stock Price Performance
NXP 608%
S&P 500 165%
2012 2015
Note: Combined Non-GAAP Adjusted Revenue is the combined consolidated revenue of NXP and Freescale. The information excludes the divestment of previously announced businesses and the creation of joint-ventures. Please refer to the NXP Historic Financial Model file found on the Financial Information page of the Investor Relations section of our website at www.nxp.com/investor for additional information relative to our Non-GAAP Financial Measures.
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Starting From a Position of Strength
(1)
Annualized 1Q15 ($M)
Non-GAAP Revenue $9,960
Non-GAAP Gross Profit $4,764
Non-GAAP Gross Margin 47.8%
Non-GAAP EBIT $2,252
Non-GAAP EBIT Margin 22.6%
Complementary product portfolio
Enabling increased share of wallet
Growth above market
Improve gross profit
$100 million of cost synergies in COGS
FSL “classic” operational improvement
EBIT expansion
$500 million of total cost synergies
NXP “classic” OpEx discipline
Note:1Q2015 annualized results for NXP and Freescale, less divesture of NXP RF Power and NXP Bipolar
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Compelling Financial Model
2016E – 2019E
Focused Market Growth(1) 3 — 4%
NXP Growth(1) 5 — 7%
Non-GAAP Gross Margin 51 — 55%
R&D 13 — 15%
SG&A 6 — 8%
Non-GAAP EBIT Margin 30 — 33%
Non-GAAP EPS Growth(1) ~15%+
Non-GAAP Adjusted EBITDA 2019E $4B+
(1) 3 Year CAGR 2016E-2019E
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NXP Non-GAAP Financial Model
HPMS STDP NXP
Non-GAAP 54 — 58% 30 — 34% 51 — 55%
GM%
Non-GAAP 14 — 16% 3 — 4% 13 — 15%
R&D%
Non-GAAP
SG&A% 6 — 8% 6 — 8% 6 — 8%
Non-GAAP 32 — 35% 20 — 24% 30 — 33%
EBIT%
Assumptions
NXP growth >1.5x industry
Significant margin improvement
- R&D investment driving future growth
Additional metrics
- Tax
2016E: ~$20M / Qtr 2017E: ~$35-$40M / Qtr 2018E/19E: ~10% / ~12%
- SBC / year
2016E/19E: ~$350M / ~$275M
- Capex: ~5% of revenue
- Leverage: <=2x by 2Q17
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Operating Segment Growth Rates
SIS
SI&I
SCD
Auto
STDP
2012 2016E 2019E
2016E—2019E CAGR
HPMS Up mid to high single digit
Auto Up mid to high single digit
SIS Up low to mid single digit
SCD Up low double digit to mid teens
SI&I Up mid to high single digit
STDP Growth in line with discrete market
Total 5— 7%
Note: Combined Non-GAAP Adjusted Revenue is the combined consolidated revenue of NXP and Freescale. The information excludes the divestment of previously announced businesses and the creation of joint-ventures. Please refer to the NXP Historic Financial Model file found on the Financial Information page of the Investor Relations section of our website at www.nxp.com/investor for additional information relative to our Non-GAAP Financial Measures.
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Focused Industry
Powerhouse
Portfolio Drives
Above Market
Growth Opportunity
Target Model Drives 15%+ Non-GAAP EPS Growth
Margin Expansion +
Operating Discipline
= $4B+ Non-GAAP
Adjusted EBITDA
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Strong Free Cash Flow and Capital Returns
Non-GAAP FCF Generation $4.3B
$3.3B
2012 2015
Cumulative Non-GAAP FCF (1)
NXP “classic” cumulative (1)
Share Repurchases
$2.4B
2012 2015
NXP “classic” cumulative share repurchase
1) Combined Non GAAP Free Cash Flows is the combination of Non GAAP Free Cash Flows of NXP and Freescale. Non GAAP Free Cash Flows of NXP represent Net cash provided by (used for) operating activities less net capital expenditures on property, plant and equipment. Non GAAP Free Cash Flows of Freescale represent Net cash provided by (used for) operating activities, less capital expenditures on property, plant and equipment, less excess tax benefits from share-based compensation. Please refer to the NXP Historic Financial Model file found on the Financial Information page of the Investor Relations section of our website at www.nxp.com/investor for additional information relative to our Non-GAAP Financial Measures.
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2019E – Illustrative Sensitivities to Revenue Growth
Non-GAAP Earnings / Share
~$10.50
~$9.50 ~$10.00
~$9.00
~$8.50
~$9.50
~$9.00
~$8.50
~$8.00
~$7.50
2% 4% 6% 8% 10%
2016E – 2019E Revenue CAGR
Cash Generation / Share
~$13.75
~$13.00
~$12.25
~$11.50
~$10.75 ~ $12.00
~ $11.50
~ $11.00
~ $10.50
~$10.75
2% 4% 6% 8% 10%
2016E – 2019E Revenue CAGR
Note: Combined Non-GAAP Adjusted Revenue is the combined consolidated revenue of NXP and Freescale. The information excludes the divestment of previously announced businesses and the creation of joint-ventures. Please refer to the NXP Historic Financial Model file found on the Financial Information page of the Investor Relations section of our website at www.nxp.com/investor for additional information relative to our Non-GAAP Financial Measures.
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Total Return Strategy
~15%+ CAGR
$12
$6
$-
2016E 2017E 2018E 2019E
Non-GAAP Cash Generation Per Share(1)
Creating long term shareholder value
Cash generation yield: ~30 – 33%
Disciplined capital allocation
Debt reduction – target 2x leverage
Continue aggressive share repurchase
Implement dividend exiting 2017
Note: (1) Non-GAAP Adj. EBITDA less net Capex / diluted per share
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Focus on Driving Execution
Deliver on synergy targets
Execute on margin expansion
Drive R&D – fuel growth
Shaping a high performing culture
Revenue CAGR 5-7% Non-GAAP Adj. EBITDA $4B+ Non-GAAP EPS CAGR ~15%+
Industry powerhouse with diversification, scale and above market earnings growth potential
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Focused Industry
Powerhouse
Portfolio Drives
Above Market
Growth Opportunity
Target Model Drives 15% + Non-GAAP EPS Growth
Margin Expansion +
Operating Discipline
= $4B+ Non-GAAP
Adjusted EBITDA
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SECURE CONNECTIONS FOR A SMARTER WORLD
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Secure Connections for a Smarter World
RUDY STROH
Executive Vice President and General Manager
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AGENDA
01 INTRODUCTION
02 SECURITY AND CONNECTIVITY LEADERSHIP
03 EMBEDDED PROCESSING LEADERSHIP
04 SUMMARY & OUTLOOK
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Accelerating Secular Trends Drive Growth Opportunities
Everything
Smart
40B+ devices with intelligence shipped in 2020
Processing
Everything
Connected
1B+ additional consumers online, 30B+ connected devices
Connectivity
Everything
Secure
Potential economy savings up to half trillion dollars
Security
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Outgrowing the Market through Technology & Application Leadership
Deep Application & System Knowledge
Ecosystem Relationships Trusted Advisor Thought Leadership
Payments Mobile Smart Smart Transactions Home Industry
Secure Wearables Smart Smart Identification Cities Objects
Product & Technology Leadership
Processing Connectivity Security
|
|
Unique Capability to Serve Diverse Customer Base
Position of Strength Unique Customer Enablement
+
25k+ end customers
#2
High performance mixed signal semiconductor supplier to distribution
Runtime Software
Software Support Development Tools
Hardware Application Development Specific Tools
|
|
Immediate Cross-Sell Opportunities Based on Combined Portfolio
Example
Point-Of-Sales (POS)
USB Type-C i.MX
Main Controller Unit Contact Reader
NFC Reader Power Management
+
One-Stop-Shop Easy to Design NXP
Applications
Deep System Knowledge
|
|
SAM Outgrows the Semiconductor Industry
2016E – 2019E SAM, 3-Year CAGR
0% 2% 4% 6% 8%
SIS 1-4%
SCD 4-7%
SII 4-7%
SAM
Secure Connected Devices
(SCD)
~50% Secure ~40% Interfaces
& Infrastructure
(SI&I)
~10%
Secure Identification Solutions
(SIS)
2016E SAM ~$30B
|
|
Technology & Application Markets Mapped to Operating Segments
Secure Identification
Solutions (SIS)
Payment Cards Secure Identification Smart Cities Smart Objects
Certified Secure MCU Secure Keys Crypto accelerators Secure OS & Applets Contactless Multi-Application Trust Provisioning Biometric Authentication LH, HF, UHF, NTAG
Tamper detection MIFARE DESFire
Secure Connected Devices (SCD)
Mobile Transaction Smart Home Wearables Industrial
BLE NFMI eSE
NFC ZigBee / Thread MCU
Application Processor eUICC Secure Keys
Secure OS Loader Service Service Management
Secure Interfaces & Infrastructure (SI&I)
Wired Connectivity Wireless Infrastructure Digital Networking
Authentication High-Speed Switches AC-DC
I2C OVP / Load switch USB PD PHY
Re-timer Direct Charging LNAs
WLAN FEIC Power Amplifier Digital Networking
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|
AGENDA
01 INTRODUCTION
02 SECURITY AND CONNECTIVITY LEADERSHIP
03 EMBEDDED PROCESSING LEADERSHIP
04 SUMMARY & OUTLOOK
|
|
Leading in Payment Cards and Secure Identity
Technology Leadership
True Leader
RMS > 1.5
Contactless performance
Advanced security
Richest portfolio
Market ($B)
2016E – 2019E CAGR
3%
$1.4B
$1.3B $1.3B (10%)
$0.8B
5%
5%
2012 2015 2016E 2019E
SecID Payment Payment Dual Interface Contact
Key Drivers
Payment
EMV migration
Transition to dual interface
Secure identity
Digitization of documents
Adoption of national eID
Government spending
|
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Continued EMV Migration and Dual Interface Transition
2.8B
1.3B
1.3B
0.5B 0.8B
0.6B
2015 2015
2015 2015 2015 2015 EUROPE
USA CHINA
0.9B 2.4B
1.2B
0.3B
Cards installed base (Bpcs) 0.1B
2015 2015
Smart card Mag-strip 2015 2015
LATAM
0.3B
MEA
Annual shipment (Bpcs)
2015 2015
Contact Dual interface APAC
|
|
World Leader in Smart Cities & Smart Objects
Technology Leadership
True Leader
RMS > 1.5
#1 in smart cities application
#1 tagging applications
Complete LF to UHF portfolio
Market ($B)
2016E—2019E CAGR
0.5 7%
0.4
0.4
0.3 16% 2% 2%
5%
2012 2015 2016E 2019E
Transport Access Management Loyalty Tagging
Key Drivers
Multi-applications migration require shift to MCU-based solutions in smart mobility
UHF retail and NFC brand engagement driving growth in tagging market
|
|
Leader and Trusted Partner in Secure Identification Solutions
Technology Leadership
SmartMX
#1 in secure identification
#1 in payment card
#1 in transit application
#1 tagging applications
Contactless performance
Advanced security
Richest portfolio
Ecosystem Relationships
Relationships with all players
Financial institutions
National printing houses
Transport operators
System integrators
Certification bodies
Retailers
Card & label manufacturers
Inlay manufacturers
Trusted Advisor
Trusted solution partner
Governments
Top tier banks
Public transport authorities
Municipalities
Standard bodies
Driving convergence
Enable emerging applications
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Physical & Functional Security Leadership
Security
Physic Tamper Resistant Circuits
Hardened Software Immune
SmartM
Silicon to Fault Injection
Functional Security
Trust Crypto
MCUs, i.MX & LayerScape Cloud Apps Processors Services
Differentiation
Leader in tamper proof, physically secure MCU & tags
Cards and devices resistant against physical attacks
Enabling secure edge to cloud communication
Industry certified hardware & software security
Cryptographic blocks
Trusted execution environment
|
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Innovation in Secure Microcontroller for Smart Card and Mobile Transactions
Technology
Faster Higher Security
Payment transaction time New secure core Contactless performance Secure FLASH loader NFC & UHF interfaces Advanced crypto accelerator MIFARE for mobile Physically uncloneable function FeliCa Next-gen tamper resistance
SmartMX
Dual interface High-performance Multi-application
Simplified Lifecycle Management Smaller Footprint
FLASH 40nm non-volatile memory Unified tool chain Over-the-air update (mobile)
Application
Payment Transportation
Mobile Transaction Access
Ecosystem
Banks Certification
Transport Authorities Government
|
|
Proximity Technology – World Leader in NFC
Market ($B)
2016E-2019E CAGR
10%
2.3
1.6 1.8 17%
0.9
5%
2012 2015 2016E 2019E
Contactless Cards NFC
Application
Identification Payment Transit
Access Mobile Wearables
Providing best end-user experience
Highest Tx power and lowest Rx sensitivity enable
- Highest degree of flexibility for antenna form factors
- Best operating distance
Seamless interoperability in the field
Fastest secure contactless transaction time
NXP NFC software the reference in all major OS
|
|
Mobile Transactions: Continued Growth From Increasing Attach Rate
Technology Leadership
True Leader
RMS > 1.5
#1 in NFC/eSE solutions
#1 in contactless readers
Seamless interoperability
eSE/NFC Market Penetration
60%
1.6 1.8
1.5
0.7
15%
2012 2015 2016E 2019E
Smartphones volume (Bpcs)
NFC/eSE attach-rate (%)
Key Drivers
Continued eSE/NFC penetration
Adoption on lower-end smartphones
Use-case expansion into transit
|
|
China Leads in Mobile Transit
WW Mobile Ticketing Market
1-3B Mobile Tickets by 2019
Easy & seamless
Care-free commute
Improved user experience
China Readiness
CONSUMER CONTACTLESS HABIT is already there
ECOSYSTEM READY
Top 10 City Adoption
Trusted Partner & Advisor
Beijing
Nanjing Chengdu Wuhan Shanghai Suzhou Hangzhou Chongqing
Shenzhen Guangzhou
|
|
Trusted Partner for Mobile Transactions
Technology Leadership
Recognized leader
#1 in NFC/eSE solutions
#1 in contactless readers
Seamless interoperability
Ecosystem Relationships
Relationships with all players
Easy access for service providers
Support for infrastructure operators
Trusted Advisor
Easy to design in NXP
Educated all mobile OEMs
Reference design platform
Supporting China mobile transit
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Wired Data & Power Delivery – Complete Technology Portfolio
Market ($B)
2016E -2019E CAGR
5.0 6%
4.0 4.1
3%
3.4
11%
2012 2015 2016E 2019E
Power Interfaces
Application
Mobile Charging Computing Industrials Servers
Full portfolio offering
Industry leader in high-speed (e.g. switches, re-timer)
Efficient power delivery (e.g. AC-DC, controllers)
Wired authentication
|
|
Mobile Fast Charging and Seamless Connectivity Enabled by USB Type-C
Market ($B)
2016E -2019E CAGR
1.6 87%
210%
75%
80%
0.3 90%
0.04 -
2012 2015 2016E 2019E
AC Adapters Smartphone Computing Peripherals
Application
100W Reversible 10Gbs
AC-DC Wall-to-Device Fast Power Authentication Charging Customization
End-to-end solution
Complete portfolio from wall-to-device
- Industry leader in high-speed (switches, re-timer…)
- High voltage process technology
- Highest power density (AC-DC, controllers, USB PD…)
- Secure authentication enables safe charging
Proven expertise in custom mobile solutions
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|
AGENDA
01 INTRODUCTION
02 SECURITY AND CONNECTIVITYLEADERSHIP
03 EMBEDDED PROCESSING LEADERSHIP
04 SUMMARY & OUTLOOK
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|
Embedded Processing Leadership
GEOFF LEES
Senior Vice President and General Manager
|
|
Everything Smart – Industry Leading Embedded Portfolio
Technology
Performance i.MX Apps Processors Relative KINETIS MCUs LPC MCUs
Relative Power
Deep System & Application Knowledge
Portfolio
Leading non-automotive MCU supplier
Broadest range of embedded processing from lowest power 32-bit MCUs to high performance multi-core 32/64-bit APs
Differentiated software ecosystem
Customers and markets
Highly diversified customer base
Global multi-market focus
Strong presence in emerging applications
|
|
Leadership in Microcontrollers and Application Processors
#1 in non-Automotive Microcontrollers
$10.9B $10B
2012 2015
Competitive Leader
NXP RMS
RMS > 0.5 RMS > 1
#2 in Industrial & Auto Application Processors
$4.4B
$3.8B
2012 2015
Focus Contender Competitive
NXP RMS
RMS < 0.5 RMS > 0.5
|
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MCU Market Growth Driven by 32-bit and Specific Applications
Market ($B)
2016E-2019E CAGR
12.9 3%
11.8
10.9
9.6 8% —
2012 2015 2016E 2019E
8/16-bit 32-bit
Application
2016E 2016E-2019E Segment Market CAGR
Automation $2.0B 9% Power & Energy $0.8B 12% Healthcare $0.8B 8% Building Control $0.7B 9% POS $0.1B 16% Appliances $0.5B 5% Wearables $0.1B 7%
SUM $4.9B 9%
Others $6.9B (2%)
|
|
Application Processor Business in High-Growth Non-Mobile Segments
Market ($B)
2016E-2019E
Focus on growth segments CAGR
13%
7.0
9%
4.9
4.3
8%
2.5
26%
2012 2015 2016E 2019E
Consumer Industrial Auto Infotainment
Application
2016E 2016E-2019E
Segment Market CAGR
Smart Watch $0.7B 31%
OTT / HDMI Decoder $0.4B 14%
Building Control $0.2B 11%
Automation $0.9B 10%
Medical $0.4B 9%
Automotive Infotainment $1.8B 9%
POS $0.5B 4%
SUM $ 4.9B 15%
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Solution Platform for the Growing Media IoT
Addressable Market ($B)
Entry into Growth Market
2016E-2019E CAGR
2.3 9%
1.8
8%
14%
7%
2016E 2019E
Audio OTT Camera & Surveillance
Applications
Media Streaming Voice Control Video OTT
Video Surveillance Game Streaming Video Conference
NXP Unique Capabilities
Media Processing Security Go-To-Market
4K Video & 3D Audio
Authentication Distribution Processing
Transcoding Secure OS Easy to Design
Voice Recognition & HDCP Digital Rights
Partners & Ecosystem Natural Language Management
|
|
End-to-End Secure Hardware + Software Ecosystem
Hardware
Broad range of hardware security configurations
MCU MCU / AP MCU / AP / SE
OS OS TEE OS SE OS
HWA
Isolation
Cryptographic blocks Trust Crypto Secure storage
Authentication
Trusted execution environment
Tamper
Tamper resistance
Software Ecosystem
Close partnerships with industry leaders
Consumer, industrial and IoT ecosystem
…
Secure connectivity
…
Secure operating systems
…
Secure update & lifecycle management layer
Source: TSR, Connectivity Report, Q1 2016, ABI, 802.15.4 Wireless Sensor Network Market Data, Q3 2015
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|
Delivering Full Secure Smart Connected Portfolio to the IOT
Technology Focus
Physical and Functional Security
Trust Crypto
Tamper
MCUs, i.MX & Layerscape Cloud Apps Processors Services
Embedded Processing Leadership Low Power Wireless Connectivity Security Enabled Software Ecosystem
IOT Application Focus
Industrial
Smart
Wearables Home
Hearables
|
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Solution Platform for Smart Home
Addressable Market ($B)
Entry into High Growth Market
2016E-2019E CAGR
0.5 33%
25%
0.2
37%
2016E 2019E
Node Gateway
Unique ability to provide interoperability, seamless security and fit-for-purpose processing
Ecosystem Partnership
Smart Secure Connected Portfolio
Interoperability Seamless Security Fit for Purpose Processing
ZigBee / Thread Lifecycle Management i.MX Bluetooth Smart Secure OS Kinetis NFC Secure MCU LPC
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|
Solution Platform for Wearables
Addressable Market ($B)
Entry into High Growth Market
2016E-2019E CAGR
1.8 32%
14%
0.8
37%
2016E 2019E
Smart Watch Trackers
Technology
Unique ability to deliver integrated solutions with best-in-class power, performance and security
Software
Smart Wallet RTOS Porting (via BLE) Power Optimization
Mobile App Activity • Multi component integration
Middleware Tracking
System level optimization Hardware Hassle free payment solution
Secure High-Performance • Ecosystem compliance & integration
Low Power Connectivity
Processing
BLE MCU
NFC Secure Element
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|
Unique Capability to Serve Diverse Customer Base
MCU/AP Customer Base
25k+ end-customer
100%
~60% Distribution
~40% Direct
Share of Revenue
Unique Customer Enablement
Runtime Software
Software Support Development Tools
Hardware Application Development Specific Tools
|
|
Easy to Design with NXP
|
|
Easy to Design with NXP
Software and support
SDK with Thread stack
Thread extensions and accelerations
Reference projects i.MX 6D based gateway
Freedom boards for prototyping
Test tool application for checking connectivity between MCU & WiFi
Custom SPI bootloader
Technical consulting & partnership
+ NXP Wireless MCU
TM
Febreze Home™ with Febreze Connect TM Scent + motion sensing night light
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|
AGENDA
01 INTRODUCTION
02 SECURITY AND CONNECTIVITY LEADERSHIP
03 EMBEDDED PROCESSING LEADERSHIP
04 SUMMARY & OUTLOOK
|
|
Outgrowing the Market through Technology & Application Leadership
Deep Application & System Knowledge
Ecosystem Relationships Trusted Advisor Thought Leadership
Payments Mobile Smart Smart Transactions Home Industry
Secure Wearables Smart Smart Identification Cities Objects
Product & Technology Leadership
Processing Connectivity Security
|
|
Winning in Selected Growth Markets
Secure Connected Secure Interfaces & Secure Identification
Devices (SCD) Infrastructure (SI&I) Solutions (SIS)
Penetration of NFC/eSE USB Type-C Contactless migration Drivers Consumer & industrial AP Fast charging eID cards Growth 32-bit MCU applications RF content increase Smart transit and tagging
Leader in NFC/eSE solutions Full portfolio and customization Contactless performance
Complete MCU & AP portfolio capability for wall-to-device Advanced security solutions
Power efficient processing and High performance, proprietary Richest portfolio
Differentiator connectivity • Trusted solution advisor RF technologies: SiGe, GaN
NXP • Customer enablement
|
|
Sustainable Profitable Growth via Leadership in Growth Markets
2016E – 2019E 3-Year CAGR 0% 5% 10% 15%
Revenue Low to mid single digit
SIS
SAM 1-4%
Revenue Low double digit to mid teens
SCD
SAM 4-7%
Revenue Mid to high single digit
SII
SAM 4-7%
SAM
Secure Connected Devices
(SCD)
~50% Secure ~40% Interfaces
& Infrastructure
(SI&I)
~10%
Secure Identification Solutions
(SIS)
2016E SAM ~$30B
|
|
SECURE CONNECTIONS FOR A SMARTER WORLD
|
|
Safe and Secure Mobility
KURT SIEVERS
Executive Vice President and General Manager, Automotive
|
|
NXP Leads Automotive Innovation – #1 Global Auto Semi
Car Infotainment ADAS & Safety
Secure Car Access
Standard Products
Body, Comfort & Networking
BMW 7-series Awarded 2016 World Luxury Car
BMW 7: NXP exceeding $300 per vehicle NY International Auto Show
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|
AGENDA
01 MARKET & STRATEGY
02 CORE BUSINESS GROWTH
03 ADAS & SECURITY
04 SUMMARY
|
|
Safe & Secure Mobility – 90% Innovation Through Electronics
Seamlessly Connected ADAS Towards Energy Mobility Experience Self-Driving Efficiency
One hour per 1.3M global road fatalities US mandates 163 grams / mile day in the vehicle every year and 54.5 MPG by 2025
Enjoying Life Saving Lives Reducing CO2
|
|
Auto Semi Market Has Outgrown Vehicle Production
GDP and Vehicle Production Auto Semi and Vehicle 2007–2015 Highly Correlated Production Highly Correlated Growth Rates
(Normalized, % Growth) (Normalized, % Growth) (%)
R2= 91% R2= 98% 5%
3%
1x 1x
2007 2009 2011 2013 2015 2007 2009 2011 2013 2015 Global Vehicle Global Auto
Production Semi TAM
Global Real GDP Growth Global Auto Semi TAM Growth Global Vehicle Production Growth Global Vehicle Production Growth
|
|
This Trend Will Continue: Auto Semi TAM Growth 4-6%
Global Vehicle Production
(MU)
99 3% 91
89 90 94 1% 81
2012 2015 2016E 2019E
Semi Content / Vehicle
($)
$382 4% $344 $366 2% $342 $332 $297
2012 2015 2016E 2019E
CAGR 2016E—2019E Max% Min%
Auto Semi TAM
($B)
$38 6%
$31
$34 4% $31 $29
$24
2012 2015 2016E 2019E
|
|
Auto Semi Market – Focus SAM Growing Ahead of TAM
Global Auto Semi TAM 2016E – 2019E
(2015 $29B) (3-Year CAGR)
Power
10% NXP Auto Focus SAM 5-7%
MCU/MPU 24% Other 18%
Global Auto Semi TAM 4-6%
Sensors Analog 15% 32%
Vehicle Production 1-3%
|
|
Very Sticky Business as Features Proliferate from Luxury to Volume
Passive
Year of First High End ADAS –Keyless Introduction Infotainment Front Radar Entry / Go
LUXURY
2006 2006 2002
VOLUME
2012 2014 2018E
SMALL
2016E 2018E 2022E
Long Product Life-Cycles
(Secure Car Access, Revenue Over Time)
OEM 4 OEM 3 OEM 2
OEM 1
E E E E E
2012 2014 2016 2018 2020 2022 2024
|
|
Strategy – Technology Leadership Across Application Domains
Infotainment Car Access Body & IVN Safety Powertrain ADAS
RF / DSP
DERSHIP MCU / MPU
LEA Analog
Sensors
TECHNOLOGY Security
|
|
Strategy – Leverage Technology Leadership Towards RMS Leadership
APPLICATIONS FOCUS
Infotainment Car Access Body & IVN Safety Powertrain ADAS
2015 RMS
RF / DSP
DERSHIP MCU / MPU LEA
Analog
TECHNOLOGY Sensors
Security
|
|
System Solution Leadership at Work
CAN / Ethernet
Power Processor Management
Transceiver
Field Tested by
Industry 1st postage stamp sized radar solution
|
|
Strategic Position
Technology Leadership
Power 10%
MCU/MPU 24% Other 18%
Sensors Analog 15% 32%
#1 Auto Analog / RF / DSP
#1 Auto Microcontrollers (ex. Japan)
#1 Merchant Auto MEMS Sensors
Application Focus
#1 Car Infotainment
#1 Secure Car Access
#1 Body & In-Vehicle Networking
#1 Safety
#1 Powertrain
Innovation Leader ADAS Innovation Leader Security
#1 Auto Semi
14%
IFX 10% Others 51% REN
10% STM
TXN 8% 7%
#1 2015 Global Auto Semi
#1 China, North America, Europe
|
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AGENDA
01 MARKET & STRATEGY
02 CORE BUSINESS GROWTH
Car Infotainment Secure Car Access
Body & In-vehicle Networking Safety
03 ADAS & SECURITY
04 SUMMARY
|
|
Leadership in Core Application Segments
Body & In-Vehicle
Car Infotainment Secure Car Access Safety Powertrain Network
SAM Market Size, 2015 $2.9B $0.5B $2.3B $2.8B $0.7B
Market Growth Rate,
6% 7% 4% 4% 3%
2016E – 2019E
NXP Rank, 2015 #1 #1 #1 #1 #1 Relative Market Share,
>1.5x >1.5x >1.5x >1.5x 1x – 1.5x
2015
OEMs
Tier 1 Customers
|
|
AGENDA
01 MARKET & STRATEGY
02 CORE BUSINESS GROWTH
Car Infotainment Secure Car Access
Body & In-vehicle Networking Safety
03 ADAS & SECURITY
04 SUMMARY
|
|
Accelerating Consumer Expectations Drive Infotainment Growth
Bring Media Internet Your Own Tape / CD HDD / USB Portable
Source Radio
Application
Processor Audio SW Multimedia Connectivity
Part
Broadcast Analog Digital Hybrid of Car
Radio
Audio
Class AB Class D # of Speakers
Amplifier
|
|
Underpinned Share Gains in Radio/Audio…
Strong SAM Growth
SAM
Class-D Digital Radio
Analog Radio
2016 E 2017E 2018 E 2019E
Outgrowing the Market
NXP vs. Market
1.6X
1.3X
1.2X
True Leadership
MS by Segment
#1 #1
#1
#1
#1 #1
2016E 2019E 2016E 2019E 2016E 2019E
Class-D Terrestrial Analog Amplifier Digital Radio Radio
in 2016
NXP designed into 14 of top 15 OEM customers in 2016
|
|
…Enabled by Industry Leading 1-Chip RFCMOS Solutions
From: Multi-Chip Discrete
2x Analog Radio Tuner ICs
1x Analog Radio DSP
1x Digital Radio Tuner IC
1x Digital Radio DSP
1x Memory IC
To: 1-Chip RFCMOS
Integrating 6 ICs into 1 SoC
Minimum externals
Single PCB, no daughter board
No shielded tuner modules
Integration: ease of use for customers & SAM expansion
|
|
NXP Offers Most Complete Infotainment System
$18-45 per vehicle
Power
Multimedia
$15-35 per vehicle Processing
Power + Multimedia Processing + Hybrid SDR
& Advanced Hybrid SDR Audio
$5-8 per vehicle & Advanced
Audio
Radio & Audio Amplifier Amplifier Amplifier
2006 2012 2018E
World leader in car infotainment
Most complete infotainment system solution
Innovation leadership
Best performance broadcast reception & audio
Fully digital amplifier for lowest power dissipation
Multimedia processors with power management
|
|
Unique Cross Sell Opportunity with Enhanced Performance
Car Radio & Audio Application Processor Ethernet
4 Network Solutions
1 Software
2 Audio
3 Power
Power Management Audio Amplifier
Leading system performance
1 Tight system coupling
2 Powerful audio system play
3 Tailored PMIC system
4 Complete IVN solutions
|
|
AGENDA
01 MARKET & STRATEGY
02 CORE BUSINESS GROWTH
Car Infotainment Secure Car Access
Body & In-vehicle Networking Safety
03 ADAS & SECURITY
04 SUMMARY
|
|
Security and Convenience Drive Car Access Growth
Complementary • Smartphone access
Devices and • Cloud-based virtual key management Services • Car sharing and fleet management
Passive keyless entry / go
Personalization
Smart Key
Display key and diagnostics
Remote control of car functions
Remote keyless entry
Classic Key
Immobilization
|
|
SAM Expansion and True Leadership
$4 per vehicle $11-15 per vehicle $15-20 per vehicle
Motion Sensor Ultra Wide Band NFC NFC
Transmitter Transceiver Transceiver Immobilizer 3D Immobilizer 3D Immobilizer
Ultra Wide Band 3 x NFC 3 x NFC
Receiver Transceiver Transceiver Immo Reader Immo Driver/Reader Immo Driver/Reader
Classic Smart High End Key Key Smart Key
Designed into 19 of top 20 OEMs
Best convenience and security
Smallest form factor
Near-field communication
1st with ultra-wide-band
1st with motion sensors
|
|
NXP Powers High End Smart Key
Passive
Microcontroller Keyless Entry / Go
Long Range
Application Processor 2-Way Communication
BMW 7-Series display key: up to $15 of NXP content per vehicle
|
|
Underpinned Share Gains in Secure Car Access
Driving System Value Up
(Penetration Rate)
100%
Value: $4 / Vehicle
Value: $11—$15 / Vehicle
2014 2018 E 2022 E
Classic Key Smart Key
Complementary Devices and Services
Winning 19 of Top 20 OEMs
(% of OEMs won)
100%
2012 2015 2019 E
NXP Other
|
|
Safe and
Secure Mobility
BOB CONRAD
Senior Vice President and General Manager
|
|
AGENDA
01 MARKET & STRATEGY
02 CORE BUSINESS GROWTH
Car Infotainment Secure Car Access
Body & In-vehicle Networking Safety
03 ADAS & SECURITY
04 SUMMARY
|
|
Comfort Features Drive Body and Networking Market
Comfort Features
Fully Automated HVAC (Penetration rate, %)
55% 51% 49%
42%
2012 2015 2016E 2019E
Physical Constraints
Average Passenger Vehicle Weight (kg)
1672
1656
1640
1601
2012 2015 2016E 2019E
Everything Networked
Number of Nodes Per Vehicle (Units)
40 33 30 23
2012 2015 2016E 2019E
|
|
Networking: More Nodes, More Value
Everything Networked
E T H E R N E T
100 Mbit/s
20 kbit/s
10-20 20-50 50-100 Nodes / Vehicle
Feature Up
Secure
Smart
Robust
|
|
For Every Node NXP Offers Full Scalability for Easiest Design
Single-Chip Integration
Power CAN
Supply MCU
16/32 bit
LIN Drivers
Sensor Interface
Space Constrained Applications
Full range of solutions with
100% tool / SW compatibility
Discrete Components
Ethernet Sensors
MCU
CAN Drivers 32 bit
Power LIN
Supply
High Performance Applications
“Fully integrated solutions like S12 MagniV help Brose to deliver superior functionality in a yet cost efficient design.”
Mr. Attila Dalkilic, VP Purchasing Electronics/Drives
|
|
New NXP Offers Most Complete Node Solutions
$4-8 per node
Actuators
Sensors
Switch Monitoring $2-4 per node
Sensors
MCU $1-2 per node
MCU Sensors
Power MCU Power Transceivers Transceivers Transceivers
LIN Node CAN Node Ethernet Node
More nodes per vehicle
Higher $ value per node
Scalable solutions for every node
From discrete to integrated
From low to high bandwidth
From 8 bit to 32 bit MCU
Common tool and software platform
|
|
AGENDA
01 MARKET & STRATEGY
02 CORE BUSINESS GROWTH
Car Infotainment Secure Car Access
Body & In-vehicle Networking Safety
03 ADAS & SECURITY
04 SUMMARY
|
|
Safety Advancements Reducing Road Fatalities
5 US Fatality Rate per 100-Million Vehicle Miles Traveled
0
1971 1981 1991 2001 2011 2015 2021E
Predictive (ADAS)
Active (Anti-Lock Braking & Stability) Self
Driving
Preventive (Tire Pressure Monitoring System) Car
Reactive (Airbag)
Safety crucial for self-driving car
Safety, quality & reliability at the heart of automotive engineering
Trusted technology and functional safety track-record essential
Safety system adoption accelerated by mandates & NCAP ratings
ADAS needed to reverse recent increase in fatality rate (texting)
|
|
Leading Position With Top Tier-1 Safety Customers
$15-17 per vehicle $12-14 per vehicle
Speed Sensors
Pressure Sensors
Motion Sensors
Motion Sensors
MCU
$5-6 per vehicle
MCU Pressure Sensors
Motion Sensors HV Analog HV Analog MCU
RF Transceivers Network Network
Tire Pressure Airbag Anti-Lock Braking Monitoring & Stability
Key supplier across market leaders
Trusted partner with broadest portfolio of safety solutions
Industry first with ISO26262 certification for functional safety
Foundational position and competence for next wave of safety: ADAS
|
|
AGENDA
01 MARKET & STRATEGY
02 CORE BUSINESS GROWTH
03 ADAS & SECURITY
General Radar Secure V2X Security
04 SUMMARY
|
|
Safe & Secure Mobility – 90% Innovation Through Electronics
ADAS Towards Self-Driving
1.3M global road fatalities every year
Saving Lives
|
|
The Race to Self-Driving: Evolution or Revolution?
LEVEL 1 Driver Assistance
Driver
Vehicle or
Adaptive cruise control (ACC)
Automatic braking
Lane keeping
LEVEL 2 Partial Automation
Driver
Vehicle
Partial automated parking
Traffic jam assistance
Emergency brake with steer
LEVEL 3
Conditional Automation
Driver
Vehicle
Semi autonomous:
-Highway chauffeur
-Self parking
LEVEL 4 High Automation
Driver
Vehicle
Fully autonomous
ADAS
Self-Driving
Responsibility for safe operation Control of complete vehicle Control of steering Control of vehicle speed
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Higher Levels of Automation Need Many Complementary Sensors
Secure V2X
L1 L2 L3 L4 NO SOME YES YES
Ultrasonic
Lidar
L1 L2 L3 L4 Commercial viability to be determined 4-8 8-12 Radar
Units per car
Radar
L1 L2 L3 L4 0-3 0-5 3-6 6-20
Units per car
Camera
L1 L2 L3 L4 0-1 3-5 3-6 3-6
Units per car
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ADAS – Real-Time Network of Sensors, Processors and Actuators
SENSE THINK ACT
Non-Line Vehicle State Line of Sight of Sight
Speed Motion Ultrasonic Lidar Camera Radar V2X
Instrument cluster
Vehicle Control
Ethernet / CAN
Engine Transmission Brake Steering Airbag Suspension
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ADAS – Real-Time Network of Sensors, Processors and Actuators
SENSE THINK ACT
Non-Line Vehicle State Line of Sight of Sight
Speed Motion Ultrasonic Lidar Camera Radar V2X
Ethernet / CAN
NXP Portfolio
Instrument cluster
Vehicle Control
Engine Transmission Brake Steering Airbag Suspension
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Automatic Emergency Braking Accelerating ADAS Market
SENSE
V2X
Radar
Camera
Motion
Speed
THINK ACT
NHTSA, March 17, 2016
The U.S. DOT … automatic emergency braking a standard feature on virtually all new cars no later than NHTSA’s 2022 reporting year…
Vehicle Control
Ethernet / CAN
Engine Transmission Brake
NXP Portfolio Enabling AEB
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Semiconductor Content Scales with Automation Level
~$500 per vehicle
Secure V2X
~$400 per vehicle
Secure V2X Radar Radar Vision
~$100 per vehicle Vision
Radar
Sensor Fusion Vision Sensor Fusion Sensor Fusion
Level 2 Level 3 Level 4
Safety requirements accelerate L3 adoption ahead of self-driving cars
Majority of safety benefits achieved by L2-3 automation
L3 captures 80% of growth opportunity
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ADAS: $3.5B Focus TAM by 2025E @ 15% CAGR
NXP Focus TAM
($B)
3.5
2.0
0.8
2015 2020E 2025E
Segment CAGR NXP Focus
2015-25E Sensors / RF Processors
V2X ~100%
Radar ~20%
Vision ~10%
IR ~10%
Lidar ~10%
Ultrasonic ~7.5%
Sensor Fusion ~20% n/a
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ADAS Processor Leadership
Networking Infotainment Radar Processors Processors Processors
Adjacent Opportunities Common S/W Architecture
Core Processing and Acceleration Platforms
Safety & Security IP
Automotive Quality & Reliability
Vision Lidar Fusion
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AGENDA
01 MARKET & STRATEGY
02 CORE BUSINESS GROWTH
03 ADAS & SECURITY
General Radar Secure V2X Security
04 SUMMARY
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Radar: Explosive Growth Opportunity
Radar SAM
1.0 ($B)
0.5
2016E 2019E
CAGR: 27%
More cars with radar
“Toyota plans to make automatic emergency braking a standard feature by the end of 2017”
Automotive News, March 2016
More radar sensors per vehicle
Partial Highly Automated Automation Driving
Additional use-cases emerging
Parking Gesture Control
(Ultrasonic Replacement) (Infotainment HMI)
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Leading Radar Innovation
LEVEL 1-2
FRONT
$15-35 per vehicle 1-3 radars per vehicle
Scalable Transceiver Platform
Processor
LEVEL 3
CORNER + FRONT
$35-60 per vehicle 3-6 radars per vehicle
One-Chip
Transceiver
Processor
LEVEL 4
360° COCOON
$120-220 per vehicle up to 20 radars per vehicle
One-Chip
Transceiver
RFCMOS One-Chip
Processor
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Design Win Pipeline Filled For Radar Leadership by 2019E
SAM Growth 27%
SAM, $B 0.8
Radar 0.4 Transceivers
Radar Processors
2016 E 2017E 2018 E 2019E
Outgrowing the Market
NXP vs. Market
2.3X
1.2X
True Leadership Position
Market Share
#1
#1 #1
#1 #2
+ =
#3
2016E 2019E 2016E 2019E 2016E 2019E
Transceivers Processors TOTAL
9 out of top 10 ADAS Tier-1s are expected to use NXP-based solution by 2019E
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Safe and Secure Mobility
KURT SIEVERS
Executive Vice President and General Manager, Automotive
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AGENDA
01 MARKET & STRATEGY
02 CORE BUSINESS GROWTH
03 ADAS & SECURITY
General Radar Secure V2X Security
04 SUMMARY
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Secure V2X – ADAS Full Potential
Vehicle Approaching
“Do Not Pass!”
Roadwork Beyond Line-of-Sight
Platooning
30 Feet Gap @ 50mph
Emergency Vehicle Warning
Connecting cars
Beyond-line-of-sight
From sensing to communicating
Direct communication, no network
Fully secure
Societal benefits (US DOT)
Save >1,000 lives / year
Reduce 2.3M non-fatal injuries
Save society $871 billion annually
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New NXP Offers Most Complete Secure V2X System Solution
up to $30 per vehicle
Software
Processor i.MX
+
Security
Software Defined Radio 802.11p Modem
Ethernet
Strong value proposition
Innovation leader in secure V2X
Highest performance
- 1.5 Miles distance
- 0.5 msec latency
- Field-tested by Audi
Powerful system play
Integral software + hardware solution
Scalability
Secure element
NXP V2X Smart Antenna Module
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In Pole Position to Lead in Secure V2X
Government
Mandate expected 2016E
Corridor test drive (AT, DE, NL)
ERPII launch 2019E / 2020E
Plan to mandate for 2020E
Customers, Partners & Field Trials
SoP MY2017 (Delphi)
EcoTwin truck platooning
Smart City Challenge USA Harman platform design win
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AGENDA
01 MARKET & STRATEGY
02 CORE BUSINESS GROWTH
03 ADAS & SECURITY
General Radar Secure V2X Security
04 SUMMARY
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Security Foundational for the Connected Car
Protect privacy
Prevent unauthorized access
Increase safety
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New NXP Offers Most Scalable Auto Cybersecurity Solution
Secure
4
Processing
Secure
3
Network
Secure
2
Gateway
1 Secure Interfaces
NXP #1 Automotive Hardware Security
4-Layer security solution
Secure wireless interfaces – HW crypto
Secure gateway – separation of concerns
Secure in-vehicle network communication
Secure application processing
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AGENDA
01 MARKET & STRATEGY
02 CORE BUSINESS GROWTH
03 ADAS & SECURITY
04 SUMMARY
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Track Record of 1.5x TAM Growth from 2012-2015
NXP Auto Growth vs Auto TAM
(Normalized, % Growth)
CAGR ’12-’15
7.1%
4.6%
1x
2012 2013 2014 2015
NXP Auto Auto TAM
NXP Auto has outgrown TAM by 1.5x
RMS leadership
SAM expansion through innovation
Trusted partner of global auto industry
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Auto Growth Strategy
ADAS and Security
Technology Leadership Application Leadership
#1 #1 #1 #1
Infotainment Car Access Body & IVN Safety
Trusted partner of the global auto industry
90% of auto innovation through electronics
Sticky market, high barriers to entry
New business
Innovation leader in ADAS & security
Core business
Profitable & sustained growth secured
Foundation
Trusted partner (#1) in attractive market
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Auto Growth Summary
2016E – 2019E 3-Year CAGR
Mid to high single digit
Global Auto Semi TAM 4-6%
Car Production 1-3%
NXP outgrows TAM by >1.5x
Trusted partner
High RMS franchises
Innovation leadership
ADAS expected to approach ~10% of total 2019E expected revenues
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SECURE CONNECTIONS FOR A SMARTER WORLD
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NXP Semiconductors Summary
RICK CLEMMER
President & Chief Executive Officer
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Key Messages Today
Growth drivers
Auto: analog, ADAS, infotainment
SIS: transit & access, eGovernment, banking
SCD: MPU, mobile transactions, MCU
SI&I: high speed I/F, RF Power, smart antennas
Strong financial returns
Revenue growth: 5-7%
Non-GAAP EPS CAGR: ~15%+
2019E Non-GAAP Adjusted EBITDA: $4B+
Returning excess cash to shareholders
Note: Combined Non-GAAP Adjusted Revenue is the combined consolidated revenue of NXP and Freescale. The information excludes the divestment of previously announced businesses and the creation of joint-ventures. Please refer to the NXP Historic Financial Model file found on the Financial Information page of the Investor Relations section of our website at www.nxp.com/investor for additional information relative to our Non-GAAP Financial Measures.
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NXP Value Proposition
True Leadership Driving RMS
FOCUSED ON RMS > 1.5x
Multiple High Growth Markets
PROFITABLE GROWTH
World-Class Expertise & Team
CUSTOMER-FOCUSED PASSION TO WIN
Operational Excellence + Benchmark Cost Structure
STRONG CASH GENERATION
MAXIMIZE SHAREHOLDER VALUE
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SECURE CONNECTIONS FOR A SMARTER WORLD