DIALOG SEMICONDUCTOR Plc.
DIALOG SEMICONDUCTOR REPORTS RESULTS FOR THE FOURTH QUARTER AND YEAR ENDED 31 DECEMBER 2016. Dialog reports fourth quarter revenue up 5% on Q3 2016 and strong cash flow generation.
DGAP-News: Dialog Semiconductor Plc. / Key word(s): Preliminary Results
– Q4 revenue of US$365 million slightly above the mid-point of November guidance. Full year revenue of US$1,198 million. – Q4 gross margin at 45.6% and underlying1 gross margin at 46.1%. Full year gross margin at 45.7% and underlying gross margin at 46.3%, in line with the November guidance. – Q4 operating profit of US$74.2 million and underlying1 operating profit of US$84.5 million. Full year operating profit of US$309.8 million and underlying operating profit of US$221.0 million. – All operational business segments profitable on an underlying1 basis for Q4 2016 and the full year. – Q4 diluted EPS of US$0.66 and underlying1 diluted EPS of US$0.78. Full year diluted EPS of US$3.25 and underlying diluted EPS of US$2.09 . – Q4 cash flow from operating activities of US$88.9 million (Q4 2015: US$109.7 million). US$59.8 million of free cash flow1 generated in Q4 2016, down 6% over Q4 2015. US$697 million of cash and cash equivalents, US$130 million above 31 December 2015.
– Design win momentum for custom Power Management ICs (PMICs) at leading smartphone OEM. – Expanded our portfolio of Application Specific Standard Products (ASSP) with next generation Chargers and PMICs. – On target with the development of an integrated PMIC targeting new LTE platform for future Asia smartphone business expansion. – Rapid Charge(TM) success for Asia smartphone power adapters, supporting a record year revenue for the Power Conversion business. – Gallium Nitride (GaN) product development on track, demonstrating leading power density and efficiency. – Built a solid presence in the Bluetooth(R) low energy market, delivering over 70% year-on-year revenue growth, with our SmartBond(TM) SoCs. – Entered the wireless charging market, with a strategic partnership and US$10 million investment in Energous, a NASDAQ-listed wireless charging technology company. 1) Underlying measures and free cash flow quoted in this Press Release are non-IFRS measures (see page 5). Commenting on the results, Dialog Chief Executive, Dr Jalal Bagherli, said: Outlook Based on our current visibility and typical seasonal trends, we anticipate revenue for Q1 2017 to be in the range of US$255-US$285 million. Good business momentum and a pipeline of key product launches, gives us confidence in expecting 2017 to be a year of good revenue growth. As in previous years, revenue performance will be strongly weighted towards the second half of the year. In line with the revenue performance, we expect gross margin percentage for Q1 2017 and the full year 2017 to be broadly in line with Q4 2016.
2) R&D, SG&A and other operating income as a percentage of revenue.
Q4 2016 gross margin was 45.6%, in line with Q4 2015. Q4 2016 underlying1 gross margin was 46.1%, 20bps above Q4 2015. The resilience of gross margin in Q4 2016 and for the full year 2016 is the result of the flexibility of our fabless business model combined with rigorous management of costs and the lower value of inventory write-offs. OPEX, comprising SG&A and R&D expenses, in Q4 2016 was US$92.2 million, or 25.2% of revenue. Underlying1 OPEX, comprising underlying SG&A and R&D expenses, in Q4 2016 was US$83.5 million, or 22.9% of revenue. R&D expense in Q4 2016 was up 11% from Q4 2015. As a percentage of revenue, R&D in Q4 2016 was up 270bps year-on-year to 16.3%. On an underlying1 basis, R&D expense was up 11% from Q4 2015. As a percentage of revenue, underlying1 R&D in Q4 2016 was up 260bps year-on-year to 15.3%. This increase was predominantly the result of the on-going investment in large application-specific customer opportunities as well as in programmes supporting new growth areas and the diversification of the business. SG&A expense in Q4 2016 was down 30% from Q4 2015. This decrease was predominantly the result of the US$14.7 million of Atmel related costs accounted for in Q4 2015. As a percentage of revenue, SG&A in Q4 2016 was 270bps below Q4 2015. Underlying1 SG&A in Q4 2016 was up 2% over Q4 2015. As a percentage of revenue, underlying SG&A was 80bps above Q4 2015 to 7.6%. This increase was the result of the slightly higher SG&A costs and the lower revenue. Operating profit in Q4 2016 was US$74.2 million, down 9% year-on-year as a result of the lower revenue and higher operating expenses. Operating profit improved 21% sequentially, mainly as a result of the higher revenue and lower R&D costs in Q4 2016. Operating profit margin in the quarter was 20.4%, broadly in line with Q4 2015. Underlying1 operating profit was US$84.5 million, down 20% year-on-year, also as a result of the lower revenue and higher operating expenses. Underlying1 operating profit increased 15% sequentially, for the same reasons as operating profit. Underlying1 operating margin in the quarter was 23.2%, 330bps below Q4 2015, mostly due to the year-on-year increase in OPEX. The effective tax rate in 2016 was 15.4% (2015: 30.4%). The low effective tax rate for 2016 reflects the tax treatment of the Atmel termination fee of US$137.3 million.The underlying1 effective tax rate in 2016 was 24.0%, in line with Q3 YTD 2016 (24.0%) and down 100bps year-on-year (2015: 25.0%). In Q4 2016, net income was down 1% year-on-year but up 13% over the previous quarter (Q3 2016: US$46.3 million). Underlying1 net income was down 21% year-on-year but up 12% over the previous quarter (Q3 2016: US$55.5 million). The year-on-year Q4 net income decline was the result of the lower operating profit partially offset by a net gain of US$1.9 million resulting from the fair valuation of the Energous warrants.The Q4 year-on-year decrease in underlying1 net income was driven by the movement in underlying1 operating profit. Underlying1 diluted EPS in Q4 2016 was down 20% year-on-year and up 10% over the previous quarter (Q3 2016: 71 cents). At the end of Q4 2016, our total inventory level was US$105 million, 27% below the previous quarter (or ~48 days), representing a 21-day decrease in our days of inventory from the previous quarter. During Q1 2017, we expect inventory value to remain at a similar level to Q4 2016 and days of inventory to increase from Q4 2016. On 30 December 2016, the first interim settlement of the second tranche of the buyback programme took place. The Company purchased 473,592 ordinary shares at an average price of EUR36.8557. Subsequent to year end, on 17 February 2017, the final settlement of the second tranche of the buyback programme took place. During the second tranche, the Company purchased 1,451,048 ordinary shares at an average price of EUR38.7651. The total number of shares purchased by the Company under the buy back programme until the 17 February 2017 was 2,783,206 at an average price of EUR33.6842 and at an aggregate total cost of EUR93,750,060, corresponding to 3.6% of the Company’s ordinary share capital. At the end of Q4 2016, we had a cash and cash equivalents balance of US$697 million. Cash flow from operating activities in Q4 2016 was US$88.9 million, 19% below Q4 2015 (Q4 2015: US$109.7 million) as a result of the US$27.2 million income tax paid during the quarter (Q4 2015: US$8.9 million).
Combining technical excellence with short design cycles, we continue to deliver value to our customers with highly integrated and differentiated products. This value underpins the potential for content increase in 2017 and over the medium term. In 2016, the Average Selling Price (ASP) of our main products remained broadly in line with 2015 at US$3.15 (2015:US$3.13). In Q4 2016, we also added new custom PMIC design wins for next generation models at our largest customer. In line with our strategic goals, during 2016 the Mobile Systems Business Group made good progress in expanding its product portfolio of Application Specific Standard Products (ASSP) with next generation Chargers ICs and PMICs, targeting smartphones and computing platforms. We expect this to allow us to increase our content share in smartphones and tablets for products entering production in 2017. Additionally, Dialog brought its power management expertise into adjacent markets such as DSLR cameras, auto-infotainment, TVs, set-top boxes, and WiFi routers. The Power Conversion Business Group delivered a record 38% year-on-year revenue performance in 2016. RapidCharge(TM) solutions for power adapters continued to be adopted as a differentiated technology by OEMs in Asia. Through a combination of technology, speed of execution and wide support of rapid charge protocols, Dialog has successfully built approximately 70% market share of the rapid charge adapter market for smartphones and tablets. Through a focused R&D approach, the company continued to innovate in charging technologies. In 2016 Dialog entered the Gallium Nitride (GaN) market with the launch of its first GaN monolithic integrated device, enabling our customers to market more efficient and smaller travel adapters. This was the result of a close cooperation with our foundry partner Taiwan Semiconductor Manufacturing Corporation (TSMC). GaN offers the potential to replace incumbent MOSFET technology in many applications with a new power technology, and offers significant TAM expansion for Dialog. During 2016, our Connectivity Business Group shipped over 50 million Bluetooth(R) low energy SoC units into the Internet of Things (IoT) market. This is a strong indication of the value we bring to customers and the continuing adoption of the technology across a wide range of applications. Our strategy remains focused on targeted verticals, namely wearables, proximity tags, advanced remote controls, gaming accessories, and augmented reality and virtual reality accessories. In support of this: – We expanded the SmartBond(TM) product portfolio with the extended launch of the DA14681 offering high integration and flexibility that provides connectivity for re-chargeable devices, including wearables, smart home and other emerging IoT devices. The DA14681 shipped in high volume for fitness tracker wearable products, such as Xiaomi’s Mi Band 2. – Additionally, in 2016 Dialog launched an OpenThread Sandbox development platform and a second Apple HomeKit development kit, targeting an increasing customer base developing innovative applications for the future smarthome. In Q4 2016, the Company made a US$10 million investment in Energous Corporation, a Nasdaq-listed wireless charging technology company. As part of the agreement, Dialog became the exclusive component supplier of the WattUp ICs while Energous is able to leverage Dialog’s distribution channels and customer relations to accelerate market adoption. 3) Excluding Dyna-Image employees
Non-IFRS measures Underlying measures of profitability and free cash flow quoted in this Press Release are non-IFRS measures. Our use of underlying measures and reconciliations of the underlying measures to the nearest equivalent IFRS measures for Q4 2016 and FY 2016 are presented in Section 4 of the FY 2016 Results Announcement. For ease of reference, we present below reconciliations for the non-IFRS measures quoted in this Press Release: Income statement items
EBITDA
***** Dialog Semiconductor invites you today at 09.30 am (London) / 10.30 am (Frankfurt) to take part in a live conference call and to listen to management’s discussion of the Company’s Q4 and full year 2016 performance, as well as guidance for Q1 2017. Participants will need to register using the link below labelled ‘Online Registration’. A full list of dial in numbers will also be available. To register for the webcast and receive dial in numbers, the conference PIN and a unique User ID please click on the link below: In parallel to the call, the analyst presentation will be available at: http://webcast.openbriefing.com/semiconductor_q4_results_230217/ Full release including the Company’s condensed consolidated income statement, consolidated balance sheet, consolidated statements of cash flows and selected notes for the year ended 31 December 2016 is available under the investor relations section of the Company’s website at: Dialog, the Dialog logo, SmartBond(TM), Rapid Charge(TM), are registered trademarks of Dialog Semiconductor Plc or its subsidiaries. All other product or service names are the property of their respective owners. (c) Copyright 2017 Dialog Semiconductor. All rights reserved. For further information please contact: Note to editors 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) Low Energy, 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 2016, it had US$1.2 billion in revenue and approximately 1,770 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.
23.02.2017 Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG. |
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 |
WKN: | 927200 |
Indices: | TecDAX |
Listed: | Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange |
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