CSR Investor Presentation

Transcription

1 CSR Investor Presentation June 2010 Will Gardiner, Chief Financial Officer

2 This presentation contains certain statements (including, statements concerning plans and objectives of management for future operations or performance, or assumptions related thereto) that are forward looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 in relation to the future financial and operating performance and outlook of CSR. These forward-looking statements can be identified by words such as believes, estimates, anticipates, expects, intends, will, plans, should, may and other similar expressions, including statements relating to: expected developments in our product portfolio, expected revenues, expected future design wins and increase in market share, the expected incorporation of our products in those of our customers, the expectation of volume shipments of our products, and the current expectations and beliefs of management of CSR. These forward-looking statements are based upon numerous assumptions regarding CSR s business strategies and the environment in which CSR will operate and therefore involve a number of known and unknown risks, contingencies, uncertainties and other factors, many of which are beyond the control of CSR. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by the forward-looking statements. These factors include, but are not limited to: a continuing or worsening economic downturn, which could reduce demand for consumer products; risks associated with securing sufficient capacity from third-parties that manufacture, assemble and test CSR s products and other risks relating to CSR s fabless business model; continuing or worsening declines in average selling prices of CSR s products; risks associated with existing or future litigation; costs associated with the development of new products in response to market demand; errors or failures in the hardware or software components of CSR s products; risks associated with acquiring and protecting intellectual property; risks relating to forecasting consumer demand for and market acceptance of CSR s products and the products that use CSR s products; the cyclicality of the semiconductor industry; the potential for disruption in the supply of wafers or assembly or testing services due to changes in business conditions, natural disasters, terrorist activities, public health concerns or other factors; CSR s ability to manage past and future acquisitions; CSR s ability to attract and retain key personnel, including engineers and technical personnel; and the difficulty in predicting future results. Each forward looking statement speaks only as of the date hereof. CSR does not undertake to release publicly any updates or revisions to any forward looking statements contained herein, otherwise than required by law. 2

3 CSR Overview Founded in 1999; Headquarters in Cambridge, England IPO on London Stock Exchange in 2004 (LSE: CSR) ~1,400 employees worldwide More than 100 customers and over 50 products actively shipping Fabless business model 3

4 Why Invest in CSR World-class products Significantly increased TAM by adding FM, GPS and WiFi products Entered 2010 with refreshed product lines in all technologies Significant growth prospects Target markets expected to grow 15-30% CAGR Expect to gain market share across all technology segments Connectivity is proliferating to new markets Automotive (BT, WiFi, GPS) PCs (WiFi and BT becoming more important with BT 3.0) Digital Still Cameras (GPS for geo-tagging) TVs/remotes (BT) Many more. Financial Strength >$400M in cash; no debt Capitalizing on trends Moving to a Platform Solution approach Economic strength in the BRIC economies plays to our strong position. 4

5 Diversified Across Technologies, Customers, End Markets Top 5 customers = 52% of rev #1 customer = 26% of rev Top 5 customers = 47% of rev 3 different #1 customers in the past year Headset / Consumer 46% Auto / PND 5% Handset 49% Headset / Consumer 25% Auto / PND 25% Handset 50%

6 Company Overview

7 New, World-Class Solutions Now Shipping 7 th generation BT Designed in as main BT+FM device in top handset makers Best in class FM radio performance with excellent Bluetooth / FM coexistence Expected to be largest volume shipping connectivity combo in the market by end th gen BT + 2 nd gen WiFi World s smallest IEEE802.11n device BT+Wi-Fi co-existence is a key selection criteria - BT 3.0 High Speed Strong BT supplier needed when selecting handset Wi-Fi FM radio actually works! CSR Synergy integrating both Bluetooth and Wi-Fi software provides an optimum system platform SiRFstar IV 4 th gen GPS for location aware CE devices SiRFatlasV 5 th gen GPS for entry-level location and navigation devices Platform approach enables shortest time to market Fast boot up; Fast Time to First Fix Dead Reckoning

8 The Connectivity Centre Evolves

9 The Connectivity Centre Evolves

10 The Connectivity Centre Evolves

11 The Connectivity Centre Evolves

12 The Connectivity Centre Evolves

13 $bn Connectivity Center Growth Combined market for all technologies (BT, FM, GPS, Wi-Fi, Audio, NFC) CAGR 15-30% Source: CSR estimates 13

14 Leveraging Technologies Across Multiple Markets HBU - Handsets 50% of revenue APBU Auto & PND 25% of revenue In-Dash or After-Market PND ACBU Audio & Consumer 25% of revenue Headsets Gaming PC PMP Health Watches

15 Business Unit Overview

16 Mid-30% BT market share; expected to increase in 2010 Smartphones expected to grow 25% CAGR in the next 3 years Supplying all of the seven largest handset OEMs Gaining Tier 1 GPS traction Strong position in emerging markets Leading next-generation products in Bluetooth, Bluetooth+FM, GPS and Wi-Fi 16

17 Divisional Revenues Q Q Revenue $85.7m $71.3m Percentage of total 49% 62% Q pro forma aggregated Outlook Strong growth in smart phone demand drives connectivity and location in handsets. BRIC countries provide a significant future growth opportunity for all of our technologies. Commercial Highlights Strong year-on-year growth of 20 percent First Tier 1 design-win for CSR9000 (BT+WiFi module) New Tier 1 design-win for SiRFstarIV w/existing customer GPS now shipping to four of the top seven smart phone manufacturers BC7820 ramp continues to drive BT market share 17.

18 Attach Rate (%) Handset Growth Drivers Mobile not fixed, internet user experience Smartphones to be true Mobile Computers Wi-Fi provides speed and low cost data LBS provides the essential location dimension Feature phones add Wi-Fi and LBS to high Bluetooth attach rates NFC added to feature set CSR s Synergy gives user and customer benefits to pull complete connectivity 80% 70% 60% 50% 40% 30% 20% 10% 0% Improved user experience drives attach rates more aggressively Bluetooth FM GPS WiFi NFC 18

19 APBU Overview Leading Supplier of GPS/BT to the Auto Market Auto GPS and BT market share in 2009 >50% Expect to increase market share in both auto and PND in 2010 Ranked a top 5 supplier of infotainment to the auto industry by isuppli Strong position in emerging markets where PND growth rates are the highest Strict auto qualification requirements allows for higher ASPs and longer product cycles 19

20 Divisional Revenues Q Q Revenue $44.4m $23.6m Percentage of total 26% 21% Q pro forma aggregated Outlook Automotive and PND markets buoyant. Strong demand and significant growth predicted in BRIC countries. Commercial Highlights Strong year-on-year growth of 88 percent. Penetration rates rising strongly in cars. GPS mandated in Brazil for all new cars. Additional UF6000 Wi-Fi chip design-win at a Tier1 automotive supplier. CSR ranked as a top five supplier for infotainment to the automotive industry.. 20

21 $Bn Auto and PND Growth Drivers Regulatory mandates Hands Free legislation ecall / location tracking Road tolling Cars are becoming connectivity centers Telematics, navigation, real-time traffic Hands Free driving WiFi access point Streaming content to multiple headsets Dealer incentives are driving attach rates Strong growth in developing countries where mapping is new Free maps will drive attractive price points APBU Market TAM by Market Segment PND Auto 21

22 ACBU Overview A Leading Position in a Growth Market #1 in wireless audio with >70% market share Stereo BT gaining momentum; we have >90% market share Two independent surveys ranked CSR-based headsets as the best performance and call clarity of all those tested GPS penetration is increasing Partnerships enable us to target PC market Present in many CE products where there is an increasing trend for wireless connectivity and location Digital Still Cameras Health & Well-being 22

23 Divisional Revenues Q Q Revenue $42.9m $19.9m Percentage of total 25% 17% Q pro forma aggregated Outlook Significant pick-up in headset demand in 2010 expected to continue. Bluetooth 4.0 (BTLE) attracting large amounts of interest. Geo-tagging in Digital Still Cameras a growing opportunity. Commercial Highlights Strong year-on-year growth of 116 percent. Stereo Bluetooth momentum continues with many design-wins. Headsets incorporating CSR technology consistently top ranked. SiRFstarIII designed into two Panasonic digital still cameras. Garmin launches sports watch using SiRFstarIV. 23

24 $Bn Audio and Consumer Growth Drivers TAM revenue CAGR is 21% Hands Free legislation and interest in stereo headsets will fuel wireless audio growth Portable gaming continues to be strong BT 3.0 and location awareness will drive connectivity attach rates in PCs An increasing number of CE devices will incorporate GPS Digital Still Cameras Health and well-being devices BTLE will enable many new CE devices ACBU market by segment Headset Consumer PC 24

25 Financial Overview

26 Strong revenue performance De-stocking from 2009 downturn is behind us Seeing strength across all technologies and market sectors New products are gaining traction Strong gross margin Rebound in higher margin, non-handset businesses Acquisition of higher margin GPS business Focus on platform approach should help future GMs Strong balance sheet >$400M in cash No debt Taking a cautious approach to 2H 2010 as visibility is limited 26

27 $ Millions Historic Quarterly Revenue 250 $210M - $225M Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Est. Q Revenue up 115% YoY reported Revenue up 51% YoY like-for-like Gross margin up 5% pts YoY to 46.5% More favorable product mix Q Guidance As of May 5, 2010 Revenue up 21% 30% sequentially to $210M to $225M 27

28 $ Millions Historic Quarterly Underlying Operating Profit Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 (10) (20) 28

29 $ Millions Streamlined Operating Model; Preparing for Growth SG&A R&D Operating expenses reduced by approximately 30% from Q2 08 to Q2 10 Cost reduction efforts from both CSR and SiRF Synergies from acquisition All numbers are pro-forma aggregated 0 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Increasing operating expenses slightly to take advantage of growth opportunities across all technologies, sectors and geographies New operating expense target is $290 - $300m/year 29

30 Target Operating Model Q Target Model Gross Margin 46.5% 45% R&D % 25% 20% SG&A % 15% 10% Operating Margin 3% 15% 30

31 Connectivity markets poised for strong growth De-risked the business by diversifying across technologies, customers and market segments Entered 2010 with new, world-class product solutions in all technologies Expect to gain market share in BT, BT+FM, GPS and WiFi in 2010 Good presence in BRIC countries, which are seeing solid growth Strong financial controls and balance sheet 31