Half Year Results FY th December,

Transcription

1 Half Year Results FY15 16 th December,

2 Agenda Welcome and Introduction Geoff Shingles, Chairman Financial Results Richard Smith, CFO Business & Technology Update Hossein Yassaie, CEO Q&As Imagination Technologies FY15 Half Year Results 16dec2014 2

3 Highlights Group H1 Results in-line; strong licensing and robust royalty revenues Complete & complementary IP range now established Platform IP capability unique and attracting more engagements Technology PowerVR strong technology from high-end (XT) to low-end (XE) MIPS processors 64-bit launched and record quarterly royalties Ensigma communications continue to gain traction & wider deployment Pure Business rationalised to focus on areas of strategic & financial significance Supporting strategic engagements and ecosystems Migrating from heavy investment period to exploitation across all product lines Imagination Technologies FY15 Half Year Results 16dec2014 3

4 Financial Overview Richard Smith CFO

5 Financial highlights - 1 Technology revenues growing Licensing: up 11% to 16.0m (H1 FY14: 14.4m) Royalties: robust at 56.3m (H1 FY14: 56.2m) Licensing: significantly increased activity across all IP families 49 licenses (up from 43 last year) signed across more than 20 partners 22 PowerVR multimedia (including Series7) 21 MIPS processors (including 2 Warrior) 5 Ensigma communications 1 FlowCloud Platform IP capability gaining traction and helping to fuel momentum SoC design-wins Significant increase in new committed SoCs with over 35 new SoC design-wins Imagination Technologies FY15 Half Year Results 16dec2014 5

6 Financial highlights - 2 Shipments: 648m units (H1 FY14: 640m) 248m non-mips (H1 FY14: 280m) and 400m MIPS (H1 FY14: 360m) Stronger average royalty rate on non-mips and MIPS unit shipments due to mix PowerVR Series6/6XT graphics shipping in volume across 6 partners in all key sectors, including mobile, TV & automotive Strong video processing IP unit shipments Record quarterly shipments of MIPS CPU in quarter ending September 14 Operating expenses Underlying operating expenses tightly controlled increased in line with expectations and consistent with reduced expected level of 10% increase for the full year (down from typical 20%) Imagination Technologies FY15 Half Year Results 16dec2014 6

7 Group adjusted profit & loss H1 FY15 H1 FY14 Change m m % Revenue Licensing % Royalties % Pure (34)% Other % Total revenue (3)% Gross profit % Gross profit margin 90% 87% 3% Underlying operating expenses (68.9) (61.8) 12% Adjusted operating profit (60)% Adjusted operating profit margin 6% 15% (58)% Net financing expense (1.7) 0.8 (312)% Adjusted profit before tax (75)% Licensing revenue up 11% Royalty revenue robust Group shipments at 648m units Profit marginally ahead of expectation for H1 FY15 Imagination Technologies FY15 Half Year Results 16dec2014 7

8 Technology Revenue * Adjusted operating profit ** Adjusted operating margin H1 FY15 H1 FY14 Change m m % Licensing % Royalties % Other % Total revenue % Profit * (50)% Margin ** 11% 22% (50)% Number of licenses Signed 49 licenses in H1 across our IP families (H1 FY14: 43 licenses) Over 35 new SoC design-wins H1 FY13 H1 FY14 H1 FY15 Imagination Technologies FY15 Half Year Results 16dec2014 8

9 Pure H1 FY15 H1 FY14 Change m m % Revenue (34)% Profit /(loss)* (2.8) (3.1) 10% * Adjusted operating profit/(loss) Focus on markets with better returns Benefiting from organisational changes made at end of FY14 Imagination Technologies FY15 Half Year Results 16dec2014 9

10 Reconciliation of Adjusted to Reported profit H1 FY15 H1 FY14 m m Adjusted profit before tax Share based incentive costs (6.3) (6.2) Amortisation of intangibles from acquisitions (4.6) (4.1) Other acquisition related costs (0.6) (0.6) Loss on investments (3.3) (0.7) Release of contract obligation Contingent acquisition consideration release Reported (loss)/profit before tax (10.7) 2.2 Tax credit / (charge) 0.4 (3.3) Reported profit/(loss) after tax (10.3) (1.1) All non-cash adjustments Amortisation mainly relates to MIPS acquisition Loss on investments due to revaluation of investments Imagination Technologies FY15 Half Year Results 16dec

11 Group cash flow H1 FY15 H1 FY14 m m Adjusted profit before tax Depreciation Other 0.9 (1.0) Operating cashflows before working capital Working capital (18.9) (7.4) Cash generated by operations (10.7) 7.6 Interest (0.2) (0.3) Tax (1.2) (56.8) Net cashflows from operating activities (12.1) (49.5) Cash flows from Investing activities (9.6) (13.5) Cash flows from Financing activities 6.6 (1.3) Net (decrease)/increase in cash (15.1) (64.3) Effect of exchange rate fluctuation 1.1 (0.7) Opening cash position Closing cash position Working capital movements due to timing of royalty receipts Capital expenditure primarily related to the redevelopment of property Short term utilisation of RCF over period end to cover timing of royalty receipts Over 50m of property assets (offices and data centre) Imagination Technologies FY15 Half Year Results 16dec

12 Outlook Licensing Licensing revenue for the full year targeted to grow by around 10% As usual dependent on timing of partners activities Royalties Royalty revenues expected to be on track Volumes in lower-end will recover but exact timing is uncertain Non-MIPS royalty rate continues to hold strong offsetting volume impact Expect MIPS volume to be marginally ahead of last year Pure Expect continued improvement in financial performance from refocus and organisational changes Operating expenses Underlying operating expense growth is significantly lower than FY14 Full year growth consistent with previous guidance at 10% Imagination Technologies FY15 Half Year Results 16dec

13 Business and Technology Update Sir Hossein Yassaie CEO

14 Our IP portfolio powers everything, everywhere Markets: Mobile phones Mobile computing Consumer multimedia Automotive Networking Enterprise Wearables IoT Imagination Technologies FY15 Half Year Results 16dec

15 Change is in the air Existing markets growing & changing Mobile phones and computing Home consumer => connected consumer Enterprise and networking => ubiquitous connectivity, heterogeneous compute Automotive => connected, ADAS New markets emerging with no established players Wearables IoT: Health, Energy, Agriculture; Transport; Retail; Security; Toys Automation & Robotics Real-time and big data analytics SoCs remain the key enablers; system knowhow the differentiator Products + cloud services are disruptive combinations Imagination Technologies FY15 Half Year Results 16dec

16 Important facts Markets More than 7bn units shipped across every target market - 1.3bn of 12bn TAM in FY TAM heading towards 25bn+ by FY2019 Products Comprehensive, leading IP portfolio -PowerVR graphics, video, vision -MIPS CPUs and MCUs -Ensigma Wi-Fi, BT, TV, radio Newer technologies transitioning to revenue generation Resources >1,700 people world-wide Leadership Tier1 partners Strong and growing ecosystems Revenues m FY10 FY11 FY12 FY13 FY14 Imagination Technologies FY15 Half Year Results 16dec

17 Imagination s IP portfolio Everything needed to create connected SoC solutions for all markets FlowCloud Connectivity Ensigma Communications Processors MIPS General Processors SoC fabric PowerVR Graphics & GPU Compute Processors PowerVR Video Processors PowerVR Vision Processors Unified Memory Each IP core is a class leader Lowest power; smallest silicon area Open and customer-centric business model Imagination Technologies FY15 Half Year Results 16dec

18 We re now in a different place Key Licensees Strategic Partners Imagination Technologies FY15 Half Year Results 16dec

19 We re now in a different place Key Licensees More customers than ever before Deep relationships with key influencers globally Stronger relationships with industry executives More than 300 top executives at our annual Executive Receptions Growing attendance at our Technology Summits Around 1,500 people attending events in US, China and across Asia Strategic Partners Imagination Technologies FY15 Half Year Results 16dec

20 IP market characteristics When needed by most, the move from stand-alone devices to SoC IP is inevitable Stand-alone Chips % Drivers: - Needed by everyone - Silicon integration - Difficult black boxes - Ecosystem benefits - Shared cost of R&D CPU IP GPU/ VPU IP On-Chip IP % ~80%; 20bn+ ~70%; 3bn+ 100s of millions of units per annum RPU IP Broadening adoption & market maturity Today 2019 ~20%; 3bn+ Billions of units per annum Imagination Technologies FY15 Half Year Results 16dec

21 IP platforms enable differentiated solutions Mobile Wearables Connected Car Connected Home Internet of Things Enterprise Infrastructure Domain Solutions Customer technologies & know-how Ecosystems software, tools, apps, middleware, hardware Scalable IP PowerVR Multimedia Customizable IP platforms Imagination Technologies FY15 Half Year Results 16dec

22 Scalable IP & customizable IP platforms Accelerating Time to Market (TTM) & building differentiation Scalable IP Hardware, software, tools PowerVR graphics Customizable IP Platform Pre-validated multi-ip configs, drivers, OS port, development boards Partners Differentiated ASSP 3 rd party applications Optimized End Products PowerVR video PowerVR vision MIPS processors Ensigma communications Ensigma Comms MIPS Other IP Scalable Fabric PowerVR Graphics PowerVR Video PowerVR Vision Partner IP Partner-specific applications CPU Video GPU Comms Partner IP Imagination Technologies FY15 Half Year Results 16dec

23 IP platforms from low to high end Enabling customers to create differentiated SoCs with low risk Compute AP Comms Performance AP CPU cluster Comms Video Connected AV Comms CPU cluster Audio Video GPU Compute cluster Applications IoT Comms CPU Partner & other IP Connected Audio Comms CPU Audio Partner & other IP CPU Audio Partner & other IP Video GPU Partner & other IP Partner & other IP Already working with customers for several of these platforms Imagination IP Platforms Imagination Technologies FY15 Half Year Results 16dec

24 The business case 2014 SAMs Graphics & Video IP: 1.2bn+ units 64/32-bit Processor IP: ~10bn units Communications IP: 100m+ units Market: Maturing Mature but transforming Starting to emerge Status: #1 GPU IP; #1 VPU IP #2 CPU IP #1 RPU IP Imagination Technologies FY15 Half Year Results 16dec

25 The business case Our 3 main silicon IP families form the pillars of our business 2019 SAMs 64/32-bit Processor IP: ~20bn units IoT Camera IP: ~2bn units Graphics & Video IP: 3bn+ units Communications IP: 3bn+ units Market: Maturing Mature Growing Status: #1 GPU IP; #1 VPU IP #2 CPU IP #1 RPU IP Imagination Technologies FY15 Half Year Results 16dec

26 The business case Customizable IP platforms Multimedia Multimed ia Multimedia Smart cameras 20%- 30% SAM 5bn 3bn 1bn 40%- 60% SAM 20bn 10bn 8%=> 25% SAM 3bn 20%- 30% Market: Maturing Mature Emerging Status: #1 GPU IP; #1 VPU IP #2 CPU IP #1 RPU IP Imagination Technologies FY15 Half Year Results 16dec

27 Recent announcements PowerVR Series7 Keeping up the competitive momentum from low end to high end MIPS I bit CPU Completes the Warrior family MIPS tools Ensuring a rich developer environment for all MIPS users Embedded Computer Design names MIPS M-class Top Embedded Innovation Ensigma Whisper ultra-low power IoT connectivity Creator CI20 platform The start of new developer communities complementing prpl Developments systems and building blocks Imagination Technologies FY15 Half Year Results 16dec

28 PowerVR Series7XT/XE GPUs Even more efficiency & scalability; first simultaneous launch of XE and XT Massive scalability 7XE for low-end to mid-range, 7XT for mid-range to high-end From 50+ GFLOPS to near 1.5 TFLOPS From sub-clusters to 16-clusters from 16 to 512 ALU cores Advanced features Full Android Extension Pack (AEP) features Android 5.0 Lollipop ready Hardware tessellation for maximum performance DirectX 11 and OpenCL FP64 feature packs Full support for hardware virtualization Key for heterogeneous, multi-domain security A wavefront of next-generation leading GPUs Imagination Technologies FY15 Half Year Results 16dec

29 PowerVR Graphics performance evolution Ever more graphics performance at an ever faster pace Relative Graphics Performance 850x 800x 750x 700x 650x 600x 550x 500x 450x 400x 350x 300x 250x 200x 150x 100x 50x x Power, Performance and Area (PPA) Efficiency-focussed architecture PowerVR Series4 PowerVR Series5 PowerVR Series5XT PowerVR Series6 PowerVR Series6XT PowerVR Series Performance Scalability Imagination Technologies FY15 Half Year Results 16dec

30 Highly efficient, scalable MIPS Warrior I6400 Setting a new standard in mainstream 64-bit processing Highly efficient, scalable 64-bit performance Hardware virtualization Simultaneous multithreading Nextgeneration security Advanced power management 128-bit SIMD Imagination Technologies FY15 Half Year Results 16dec

31 I6400: Broad feature set for a wide range of applications Automotive/ Embedded DTV/STB Mobile Enterprise SMT, Virtualization, SIMD, Heterogeneous MC, ECC SMT, Virtualization, SIMD, MC 64-bit, SMT, Virtualization, SIMD, Heterogeneous MC 64-bit, SMT, MC, Multi-Cluster, Virtualization, ECC Broadest set of applications ever addressed by a single MIPS core family Imagination Technologies FY15 Half Year Results 16dec

32 Creator development board family Driving broader MIPS and PowerVR communities Ideal for developers, students, Makers, and hobbyists wanting to gain access to our technologies Rich features set: Supports Linux and Android Dual-core MIPS CPU PowerVR GPU On-board Wi-Fi Full support for FlowCloud connectivity Comprehensive tool support Online community Range of partner boards also broadening Imagination Creator CI20 Digilent ChipKit WiFire Imagination Technologies FY15 Half Year Results 16dec

33 At the heart of networking New MIPS-based SoCs launched throughout 2014 Cavium Broadcom Lantiq Ikanos Tremendous interest in our security story Response from all major operators (e.g. via Home Gateway Initiative, HGi) extremely positive to our proposals All agree change is essential, and we have a real solution that scales from low-end IoT to high-end datacentres Warrior family builds on MIPS success in networking Imagination Technologies FY15 Half Year Results 16dec

34 Leverage & profitability Single IP product profitability profile m Research Phase Development Market Entry Maturity Long investment cycle Slow initial revenue ramp (licensing only) Accelerated late royalty + licensing ramp Imagination Technologies FY15 Half Year Results 16dec

35 Leverage & profitability Single IP product profitability profile m Research Phase Development Market Entry Maturity Long investment cycle Slow initial revenue ramp (licensing only) Accelerated later royalty + licensing ramp Imagination s operating margin expansion Planned strategic investment in complementary technologies =>impacted short-term margin All planned product lines are now in place => we re at the end of major new investments All business units either already in or entering revenue generation Margin expansion => longer term goal 30%-40% Time FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 Imagination Technologies FY15 Half Year Results 16dec

36 Summary Technology Complete & complementary IP range now established Platform IP capability unique and attracting more engagements Pure Business rationalised to focus on areas of strategic & financial significance Group Business transitioning from investment to exploitation in newer product lines Leverage within the business model will enable expansion of operating margins with a long-term steady state of 30%-40% Product range complete with all lines contributing => driving financial performance Imagination Technologies FY15 Half Year Results 16dec

37 Q&A