DGAP-News: Dialog Semiconductor Plc. / Key word(s): Quarter Results
DIALOG SEMICONDUCTOR REPORTS FIRST QUARTER RESULTS ENDED 3 APRIL 2015
Company delivers first quarter year on year revenue growth of 41% and
record cash generation
07.05.2015 / 07:30
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London, UK, 7 May 2015 - Dialog Semiconductor plc (FWB: DLG), a provider of
highly integrated power management, AC/DC, solid state lighting and
Bluetooth(R) Smart wireless technology, today reports results for its first
quarter ending 3 April 2015.
Q1 2015 financial highlights
- Revenue up 41% over Q1 2014 to $311 million
- IFRS gross margin at 46.0%
- Underlying (*) EBITDA (**) up 94% to 80.2 million or 25.8% of revenue
- IFRS operating profit (EBIT) up 142% over Q1 2014 to $55.6 million or
17.9% of revenue
- Underlying (*) basic and diluted EPS up 131% and 109% respectively over
Q1 2014. IFRS basic and diluted EPS up 24% and 20% respectively over Q1
20141
- Record $132 million of cash generated from operations
(1) 2014 IFRS Net Income has been adjusted. Please refer to Note 2 of the
Q1 2015 Interim Report
Q1 2015 operational highlights
- Design win momentum continues for Power Management smartphone and
tablet designs
- Bluetooth(R) Smart product portfolio expansion with launch of four new
products, including industry's first Wearable on Chip(TM)
- IoT success continues as our low power Bluetooth Smart technology is
broadly adopted
- Mediatek's latest MT6795 Octa-core Application processor powered by
Dialog's sub PMIC
- Sub PMIC adopted in HTC's latest two smartphones
- LED Solid State Lighting portfolio and market expansion with new
products launched
- Sensor Joint Venture announced with DYNA Image
Commenting on the results Dialog Chief Executive, Dr Jalal Bagherli, said:
"This has been an outstanding first quarter for Dialog and I am extremely
pleased that our strong, consistent growth trajectory continues. Our cash
generation stands at a record level, underscoring the profitability and
operational leverage of our business model.
"Our growth drivers remain aligned to our strategic focus. Momentum in
Power Management and Bluetooth(R) Smart continues to gather pace with new
customers and the industry's first Wearable on ChipTM. The joint venture
with DYNA Image brings complementary sensor technology to our product
portfolio.
"This is a strong note on which to start the year and we look forward to
the months ahead with confidence in the continued development of our
business."
Outlook
Given our current visibility, we expect 2015 to be another year of good
growth. As in previous years, revenue performance will be weighted towards
the second half of the year.
We expect revenue for Q2 2015 to be in the range of $290 to $310 million.
Gross margin in Q2 2015 will remain broadly in line with Q1 2015 and
improve on a year-on-year basis. Gross margin for the full year 2015 is now
expected to be slightly above the full year 2014.
Financial overview
<pre>
IFRS First Quarter
US$ million 2015 2014 Var.
Revenue 311.2 220.9 +41%
Gross Margin 46.0% 42.1% +390bps
R&D % 17.3% 20.7% (340)bps
SG&A %1 10.8% 11.0% (20)bps
EBIT 55.6 23.0 142%
EBIT % 17.9% 10.4% +750bps
Net income2 38.8 31.0 +25%
Basic EPS $2 0.57 0.46 +24%
Diluted EPS $2 0.53 0.44 +20%
Operating cash flow 132.4 128.9 3%
Underlying First Quarter
US$ million 2015 2014 Var.
Gross Margin 46.6% 43.3% +330pbs
EBITDA 80.2 41.3 +94%
EBITDA % 25.8% 18.7% +710bps
EBIT 71.0 32.2 +120%
EBIT % 22.8% 14.6% +820bps
Net income 55.5 23.7 +134%
Basic EPS $ 0.81 0.35 +131%
Diluted EPS $ 0.71 0.34 +109%
(1) Including other operating expenses/income
(2) 2014 IFRS amounts have been adjusted. Please refer to Note 2 of the Q1
2015 Interim Report
Revenue in Q1 2015 was up 41% to $311 million. The strong revenue
performance was the result of:
- 53% year-on-year revenue growth in Connectivity driven by strong
momentum in Bluetooth(R) Smart and wireless audio (DECT based
solutions)
- Mobile Systems - up 46% over Q1 2014
Q1 2015 IFRS gross margin was 46.0%, significantly above Q1 2014 and 30bps
below Q4 2014. The year-on-year increase was the result of:
- The lower allocation per unit of the fixed component of Cost of Goods
Sold;
- Positive product mix contribution from the latest generation of
products in Mobile Systems and Connectivity ;and
- The continuing realisation of the benefits of manufacturing cost
optimisation.
In Q1 2015 underlying (*) net OPEX as a percentage of revenue was at 23.8%,
490bps below Q1 2014. The value of underlying net OPEX in Q1 2015 increased
17% over Q1 2014.
Investments in R&D increased through the first quarter. On an underlying
(*) basis, R&D investment was up 14% over Q1 2014, which is in line with
our strategy of continuing innovation and diversification of our product
portfolio. As a percentage of revenue, underlying R&D in Q1 2015 decreased
to 16.0% (Q1 2014: 19.9%). This reduction was the result of the strong top
line growth during the period.
Underlying (*) SG&A in Q1 2015 stood at 8.0% of revenue, 140bps below Q1
2014 primarily as a result of the strong growth of the business. In Q1
2015, the company booked a provision of $3.4 million for the settlement of
a claim brought in April 2014 by the former iWatt Inc. shareholders.
Subsequent to quarter end, a settlement was reached for that amount without
admission of faults, wrong doing or liabilities by Dialog. The Company
expects to pay the settlement in May 2015.
In Q1 2015 we achieved IFRS and underlying (*) EBIT of $55.6 million and
$71.0 million respectively, 142% and 120% over Q1 2014. Underlying EBIT
margin in the quarter was 22.8% (Q1 2014: 14.6%). The Q1 2015 underlying
EBIT increase of 120% was primarily driven by good performance in the
Mobile Systems segment and the turnaround in the Connectivity segment. On
an underlying basis, the Connectivity segment contributed $1.7 million EBIT
profit in Q1 2015 (Q1 2014 EBIT loss: $1.2 million).
In total, a net tax charge of $15.5 million was recorded in Q1 2015. This
represents an effective tax rate of 28.5% (adjusted Q1 2014: 32.8%
excluding one-off non-cash deferred tax credit). The effective tax rate for
the year ending 31 December 2014 was 29.0% (excluding one-off non-cash
deferred tax credit). The decrease in our group effective tax rate is
driven by the on-going exercise to align our Intellectual Property with the
commercial structure of the group. This has allowed Dialog to fully
recognise previously unrecognised UK trading loss carry forwards and to
benefit from the favourable UK tax regime for technology companies. We
believe this gradual decrease is sustainable and will now accelerate from
2016, thus continuing to drive further reductions in our effective tax rate
in the years to come.
In Q1 2015, underlying (*) net income and underlying EPS more than doubled
from Q1 2014 levels. Underlying diluted EPS in Q1 2015 was 109% higher than
in the same quarter of 2014.
At the end of Q1 2015, our total inventory level was $105 million (or ~56
days), an increase of $6 million over the prior quarter and 19% over Q1
2014.This represents an 18 day increase in our days of inventory over the
prior quarter. We are managing our inventory levels tightly at an
appropriate level to service our current customer backlog. During Q2 2015
we expect inventory value and inventory days to increase from Q1 2015 in
anticipation of a number of high volume product launches during the second
half of the year.
At the end of Q1 2015, we had cash and cash equivalents balance of $421
million. In the first quarter alone we generated a record $132 million of
operating cash and $98 million of free cash flow (***).
Subsequent to the end of the quarter, on 28 April, Dialog Semiconductor
announced the total conversion of the $201 million Convertible Bond due
2017. As such, no bonds will be redeemed by Dialog pursuant to the optional
redemption notice dated 16 March 2015 (in which Dialog announced its
intention to redeem any outstanding Bonds on 5 May 2015) and all Bonds have
been cancelled. Dialog has issued 6,797,025 new ordinary shares and the
total number of ordinary shares issued by Dialog is now 77,865,955.
(*) Underlying results (net of tax) in Q1-2015 are based on IFRS, adjusted
to exclude share-based compensation charges and related charges for
National Insurance of US$7.3 million, excluding US$0.2 million of
amortisation of intangibles associated with the acquisition of SiTel (now
Dialog B.V.), excluding US$2.1 million non-cash effective interest expense
in connection with the convertible bond, excluding US$0.2 million non-cash
effective interest expense related to a licensing agreement, excluding
US$3.7 million acquisition and integration expenses in connection with the
purchase of iWatt (of which US$3.4 million correspond to a litigation
provision)and excluding US$3.2 million of amortisation and depreciation
expenses associated with the acquisition of iWatt.
(*) Underlying results (net of tax) in Q1-2014 are based on IFRS, adjusted
to exclude share-based compensation charges and related charges for
National Insurance of US$3.8 million, excluding US$0.6 million of
amortisation of intangibles associated with the acquisition of SiTel (now
Dialog B.V.), excluding US$2.0 million non-cash effective interest expense
in connection with the convertible bond, excluding US$ 0.2 million non-cash
effective interest expense related to a licensing agreement, excluding
US$0.3 million acquisition and integration expenses in connection with the
purchase of iWatt, excluding US$3.6 million of amortisation and
depreciation expenses associated with the acquisition of iWatt and US$17.8
million one-off non-cash deferred tax credit resulting from an intra-group
re-organisation of certain intellectual property.
The term "underlying" is not defined in IFRS and therefore may not be
comparable with similarly titled measures reported by other companies.
Underlying measures are not intended as a substitute for, or a superior
measure to, IFRS measures. Underlying results (net of tax) have been fully
reconciled to IFRS results (net of tax) above. All other underlying
measures disclosed within this report are a component of this measure and
adjustments between IFRS and underlying measures for each of these measures
are a component of those disclosed above.
(**) EBITDA in Q1 2015 is defined as operating profit excluding
depreciation for property, plant and equipment, (Q1 2015:US$5.3 million, Q1
2014:US$5.4 million), amortisation of intangible assets (Q1 2015:US$7.5
million, Q1 2014:US$7.9 million) and losses on disposals and impairment of
fixed assets (Q1 2015:US$0.1 million, Q1 2014:US$0.1 million).
(***) Free Cash Flow in Q1 2015 is defined as net income of US$38.8 million
(Q1 2014: 31.0 million), plus amortisation and depreciation (Q1
2015:US$12.8 million, Q1 2014:US$13.2 million), plus net interest expense
(Q1 2015:US$2.9 million, Q1 2014:US$3.6 million), plus change in working
capital (Q1 2015:US$57.8 million, Q1 2014:US$88.9 million) and minus
capital expenditure (Q1 2015:US$14.3 million, Q1 2014:US$9.0 million).
Operational overview
Dialog is playing its part a global enabler of the Internet of Things
(IoT). In Q1 2015, we built on the success of our first DA14580
SmartBond(TM) Bluetooth Smart System-on-Chip by announcing four new devices
in the product family. In 2014, the revolutionary DA14580 offered less
than half the power consumption and size of competing solutions and was
adopted rapidly across multiple IoT segments by leading consumer companies.
Volume shipments started in Q4 2014 and continued to ramp in Q1.
The new 2015 SmartBond(TM) SoCs are optimised for emerging high volume
consumer markets including wireless charging, wearables, smart home and
human interface devices. They integrate application specific functionality,
and feature even lower system power consumption. Equally important, the
high level of functional integration reduces our customers' bill of
materials. For smart remote control units, which will replace traditional
infrared controls, our latest SmartBond(TM) device includes ultra-low power
audio codecs for voice control, a technology that remote control
manufacturers are adopting in growing numbers. For wearables, one of the
highest volume opportunities in the IoT, we launched the DA14680 Wearable
on Chip(TM) SmartBond(TM) SoC. This leverages Dialog's power management
expertise to provide all the power management needed for wearable computing
products, including those powered using energy harvesting techniques.
Dialog is now well placed to capture design wins in all of the major high
volume consumer electronics segments of the IoT with innovative Bluetooth
Smart solutions.
Our proven success with leading smartphone customers for custom power
management IC's (PMICs) continued through Q1 2015 with new design wins.
Additionally, during the quarter we continued to ramp several new high
volume custom PMIC products for hugely popular smartphone models and
recently launched wearable products.
Our sub-PMIC - DA9210 - multi-phase DC-DC converter powers the latest
MT6795 MediaTek Octa-core Application Processor and is a key component of
MediaTek's reference platform. This is in addition to the MT6595 platform
where the DA9210 is already successfully used in many China tier 1
smartphone designs. Post the quarter close, we announced HTC's latest
smartphones, the HTC One M9+ and HTC One E9+ have adopted this sub-PMIC
technology.
In Q1, we launched two new products from the Power Conversion Business
segment. We entered the MR16 - low voltage (12 volt) downlight LED form
factor - market segment with an excellent dimming and universal transformer
compatibility solution. Additionally, we launched a new dimming platform,
delivering the ultimate in dimming performance while eliminating more than
20 external components from the bill of materials. These two devices allow
Dialog to continue its market leadership in the dimming segment of the fast
growing LED domestic retrofit market.
The shift to higher power and faster charging continues as the China
smartphone market transitions through 2015, with our rapid charging
technology broadly adopted by the top China smartphone manufacturers.
This week we announced a joint venture (JV) with the Lite-On Group in
Taiwan for a strategic investment in Dyna Image a wholly owned subsidiary
of Lite-On. Upon closing Dialog will be the largest shareholder with a 40%
stake. Additionally, ShunSin Technology (Zhongshan) LTD, part of ShunSin
Technology Holdings LTD, a subsidiary company of Foxconn will also hold an
equity stake. The focus of the JV will be to accelerate adoption of Dyna
Image's sensors technology into the smartphone and IoT markets,
leveraging Dialog's broader power saving and Bluetooth(R) Smart expertise
and ShunSin's packaging technology for smart system sensing solutions.
* * * * *
Dialog Semiconductor invites you today at 09.00 am (London) / 10.00 am
(Frankfurt) to take part in a live conference call and to listen to
management's discussion of the Company's Q1 2015 performance, as well as
guidance for Q2 2015. Participants will need to register using the link
below labelled 'Online Registration'. A full list of dial in numbers will
also be available.
Online Registration:
http://wcc.webeventservices.com/r.htm?e=968560&s=1&k=784D6482B43E6687A9258
28A6EDD63BD
Conference Number: +44 (0) 2071 928000
Conference ID: 9040952
In synchronicity with the call, the analyst presentation will be webcasted
on our website at: http://www.dialog-semiconductor.com/investor-relations.
A replay will be posted at the same address four hours after the conclusion
of the presentation and will be available for 30 days.
For further information please contact:
Dialog Semiconductor
Jose Cano
Head of Investor Relations
T: +44 (0)1793 756 961
jose.cano@diasemi.com
FTI Consulting London
Matt Dixon
T: +44 (0)20 7269 7214
matt.dixon@fticonsulting.com
FTI Consulting Frankfurt
Anja Meusel
T: +49 (0) 69 9203 7120
Anja.Meusel@fticonsulting.com
Note to editors
Dialog Semiconductor provides highly integrated standard (ASSP) and custom
(ASIC) mixed-signal integrated circuits (ICs), optimised for smartphone,
tablet, IoT, LED Solid State Lighting (SSL) and Smart Home applications.
Dialog brings decades of experience to the rapid development of ICs while
providing flexible and dynamic support, world-class innovation and the
assurance of dealing with an established business partner. With world-class
manufacturing partners, Dialog operates a fabless business model and is a
socially responsible employer pursuing many programs to benefit the
employees, community, other stakeholders and the environment we operate in.
Dialog's power saving technologies including DC-DC configurable system
power management deliver high efficiency and enhance the consumer's user
experience by extending battery lifetime and enabling faster charging of
their portable devices. Its technology portfolio also includes audio,
Bluetooth(R) Smart, Rapid Charge(TM) AC/DC power conversion and
multi-touch.
Dialog Semiconductor plc is headquartered in London with a global sales,
R&D and marketing organisation. In 2014, it had $1.16 billion in revenue
and was one of the fastest growing European public semiconductor companies.
It currently has approximately 1,400 employees worldwide. The company is
listed on the Frankfurt (FWB: DLG) stock exchange (Regulated Market, Prime
Standard, ISIN GB0059822006) and is a member of the German TecDax index.
Forward Looking Statements
This press release contains "forward-looking statements" that reflect
management's current views with respect to future events. The words
"anticipate," "believe," "estimate", "expect," "intend," "may," "plan,"
"project" and "should" and similar expressions identify forward-looking
statements. Such statements are subject to risks and uncertainties,
including, but not limited to: an economic downturn in the semiconductor
and telecommunications markets; changes in currency exchange rates and
interest rates, the timing of customer orders and manufacturing lead times,
insufficient, excess or obsolete inventory, the impact of competing
products and their pricing, political risks in the countries in which we
operate or sale and supply constraints. If any of these or other risks and
uncertainties occur (some of which are described under the heading "Risks
and their management" in Dialog Semiconductor's most recent Annual Report)
or if the assumptions underlying any of these statements prove incorrect,
then actual results may be materially different from those expressed or
implied by such statements. We do not intend or assume any obligation to
update any forward-looking statement which speaks only as of the date on
which it is made, however, any subsequent statement will supersede any
previous statement.
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Language: English
Company: Dialog Semiconductor Plc.
Tower Bridge House, St. Katharine's Way
E1W 1AA London
United Kingdom
Phone: +49 7021 805-412
Fax: +49 7021 805-200
E-mail: jose.cano@diasemi.com
Internet: www.dialog-semiconductor.com
ISIN: GB0059822006, XS0757015606
WKN: 927200
Indices: TecDAX
Listed: Regulated Market in Frankfurt (Prime Standard); Regulated
Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich,
Stuttgart; Luxemburg
End of News DGAP News-Service
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353977 07.05.2015
DGAP-News: DIALOG SEMICONDUCTOR REPORTS FIRST QUARTER RESULTS ENDED 3 APRIL 2015 Company delivers first quarter year on year revenue growth of 41% and record cash generation
| Source: EQS Group AG