AGM th September, Imagination Technologies AGM September 2013 p1

Transcription

1 AGM th September, Imagination Technologies AGM September 2013 p1

2 Agenda Welcome and Introduction Geoff Shingles, Chairman Business & Technology Update Hossein Yassaie, CEO Financial Results Richard Smith, CFO Q&As The Board AGM Formal Proceedings Geoff Shingles Refreshments & Product Demonstrations Imagination Technologies AGM September 2013 p2

3 Highlights Group Good progress strategically and organisationally Technology Continued strong unit shipments and growth in royalties Licensing softened 2H last year due to industry transitions & regional issues Steady so far this year, other engagements in progress MIPS fully integrated and progressing PowerVR Series6 now shipping in all key markets; next generation Series6XT IP delivery imminent Pure UK and some export markets have been tough last year Encouraging signs with new products An important driving force for our technologies Geared up for next phase of growth Imagination Technologies AGM September 2013 p3

4 Business Update & the Future Imagination Technologies AGM September 2013 p4

5 What we do An unrivalled silicon & software IP portfolio for SoCs Multimedia Processors PowerVR GPU: Graphics, Compute MIPS CPU: Performance & Embedded PowerVR RTU: Ray Tracing PowerVR VPU: Video & Vision OS: Tools: Android, Linux, RTOS, GNU, LLVM, Debug, Probes Cloud Multimedia Communications Ensigma RPU: connectivity & receivers Flow: Cloud Server & Client technologies General Processing Ensigma: networking & security FlowLive: B2C website HelloSoft: V.VoIP & VoLTE Floworks: Ecosystem, IoT, M2M Complementary businesses supporting new technologies Caustic Professional Imagination Technologies AGM September 2013 p5

6 Everything focused on the SoC An unrivalled portfolio of IP to enable our partners to create class-leading solutions Flow Cloud technologies Ensigma RPU Radio comms processor MIPS CPU General processor PowerVR GPU Graphics processor PowerVR VPU Video & Vision processor Unified Memory Imagination s IP is open; the selection of each major IP block for SoCs is a key and complex strategic decision of our customers Imagination Technologies AGM September 2013 p6

7 Imagination is global Growing R&D, support and sales world-wide UK: global HQ 4 R&D centres USA: a major focus >250 people 6 US offices R&D, support, sales India: key R&D centre 3 India offices Asia: sales & support Across every major country Our operations reflect both our customers needs and global engineering centres of excellence Imagination Technologies AGM September 2013 p7

8 Broadening our TAM Each step of our IP technology expansion takes us into new & larger target markets IP Technologies Target Markets MIPS Processors All classes of SoC & embedded devices Ensigma Communications PowerVR Graphics Video & Vision All consumer, mobile & embedded SoCs; Internet of Things Multimedia for mobile consumer automotive Imagination Technologies AGM September 2013 p8

9 Diversifying licensees Globally, across all markets, from high end to low end SUNPLUS Imagination Technologies AGM September 2013 p9

10 Strategic partnerships are key Close relationships with key industry partners ensures our technology leadership Imagination Technologies AGM September 2013 p10

11 In more products than ever before More than 5 billion products 3 million per day Note: now includes MIPS Imagination Technologies AGM September 2013 p11

12 Strategic progress in FY2013/14 We continue to focus on building sustainable and long-term value in our business Faster than expected growth in unit shipments Strengthening penetration in all key target markets Both geographically and by segment Key strategic acquisition of MIPS Accelerating our growth in the large and growing processor IP market PowerVR leading graphics & video markets New PowerVR technologies Vision and Ray Tracing Notable licensing revenues for Ensigma communications Flow technology generating strong initial response Imagination Technologies AGM September 2013 p12

13 Q1 FY2013/14 Update Momentum continues; several strategically important developments Key announcements and events: PowerVR Series6 now announced by leading vendors including MediaTek MIPS Series5 Warrior CPU core family announced Expanding relationships with key partners including MediaTek & Broadcom Ensigma licensees growing latest Toshiba New technologies announced Caskeid B2C FlowAudio service based on Flow cloud technologies Jongo gaining traction - to ship into major US retailers BestBuy, Walmart Key industry news: Renesas Mobile acquired by Broadcom Wearables emerging great opportunity for MIPS, PowerVR and Ensigma Imagination Technologies AGM September 2013 p13

14 SoC Volume (m Units) No. of SoCs Partner chip design & shipment Shipping Total mar-06 mar-07 apr-08 apr-09 apr-10 apr-11 apr-12 apr mar-06 mar-07 apr-08 apr-09 apr-10 apr-11 apr-12 apr Imagination Technologies AGM September 2013 p Excluding MIPS

15 Design wins by market at end of FY12/ Mobile Phones 48 Handheld Multimedia Total: Home Consumer Mobile Computing Automotive Emerging Markets Excluding MIPS We continue to strengthen the diversity of SoCs across all our market segments Imagination Technologies AGM September 2013 p15

16 Volume munits Scaling the business to the next level Imagination IP pre MIPS acquisition MIPS CPU IP FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2016 Future Note: target set prior to acquisition of MIPS Our goal has been to achieve around 1 billion units/annum shipments Imagination Technologies AGM September 2013 p16

17 Electronics industry trends Everything is becoming smart Everything is programmable, upgradable and connected Relies on multimedia (entertaining, easy to use) and connectivity (content, social) Internet of Things everything connected Will lead to 10bn+ market bigger than mobile Wearable electronics will make everyone more connected that ever before LTE further liberating smartphones Will radically change how voice and data are transmitted 1080P => 4K and beyond displays 4K is happening now a major driver & change Combination of video & non-video data, e.g. social networking Tablets as second complementary displays also as smart remotes Apps will not rely on CPU ISA for performance Performance apps not tied into CPU ISA going away thanks to LLVM, binary translation and HTML5 and Apps stores Android already available on devices that use MIPS, ARM, Intel CPUs Imagination Technologies AGM September 2013 p17

18 Imagination is driving emerging markets Our IP is already in major emerging applications markets We have the fundamental IP to build any kind of device Imagination Technologies AGM September 2013 p18

19 The leading multimedia solution GPU Graphics Series5 SGX the world s most widely deployed mobile GPU Series6 Rogue recognised as the benchmark for embedded GPUs Leading performance and power metrics Over 20 design wins First product shipments started; significant volume during this FY from multiple partners New Series6XT family coming later this year Demand for high performance graphics within tight power envelope Latest UI trends, increasing resolution and advanced gaming all driving graphics demand Low end is moving higher Industry s leading GPU technology and roadmap Imagination Technologies AGM September 2013 p19

20 The leading multimedia solution GPU Compute Taking offload to the next stage No compromise in mix between graphics and compute Superior power and area to get the job done Latest Samsung Galaxy S4 first mainstream smartphone to support OpenCL Rogue will take GPU Compute to a new level Video By far the most successful video decode and encode IP family in the industry New Series5 video cores lead industry with 4K, 10bit colour, next generation HEVC/H.265 Vision Important complementary technology with significant potential Demonstrating leadership in multimedia IP Imagination Technologies AGM September 2013 p20

21 GPU power efficiency and thermal impact High power consumption = heat = risk of thermal panic = reduced performance Thermal shutdown of GPU = Performance Hit Competitor A Competitor B PowerVR Data courtesy of Anandtech.com Imagination Technologies AGM September 2013 p21

22 Video power consumption Transcode example Transcode Power consumption Competitor A Competitor B PowerVR video requires lower power & gives higher performance finishes first PowerVR VXD & VXE (Intel Clovertrail ) Data courtesy of Anandtech.com Imagination Technologies AGM September 2013 p22

23 Innovation in GPUs: Ray Tracing The behaviour of light is not inherently supported in conventional graphics Current graphics use pre-baked lighting to emulate reflections, shadows etc Never looks realistic Not dynamic, so limits freedom of content creation Hardware Ray Tracing Unit (RTU) models light inherently, so every scene delivers rich image realism Content creation is much simpler PowerVR Ray Tracing is uniquely efficient and will be disruptive Imagination Technologies AGM September 2013 p23

24 Creating a new force in CPUs Most efficient true RISC architecture Performance, power consumption, architectural elegance Strong installed base and substantial ecosystem Provide certainty on the future Build on existing diverse and strong customer relationships Develop other key market segments & ecosystem Market leading and comprehensive product roadmap Build on the Aptiv product range Compelling next generation MIPS Series5 Warrior family of CPU IP cores Coverage across all key segments Exploit increasingly open OS and app portability Set-Top Box Giving the electronics industry a real choice for CPU IP Networking Tablets Wearable computing Enterprise Infrastructure Imagination Technologies AGM September 2013 p24

25 CPUs: everywhere and growing Every product has many CPUs and MCUs Smart Phone: 5-10 CPUs Smart Car: CPUs Smart House: 100s of CPUs CPUs are everywhere it s an enormous and growing IP market Imagination Technologies AGM September 2013 p25

26 The ultimate comms processor Driving the connected revolution Programmable connectivity plus TV/radio Efficient, always-on, ultra low power Completely different to CPU or GPU Programmable + configurable engines Complex dataflow at various speeds Multi-standard - integrated or stand alone Today: stand alone connectivity chips Tomorrow: integrated baseband on SoC with serial link to RF or highly integrated low cost SoCs with RF on chip targeting IoT Ensigma RPU is a real enabler for all forms of integrated communications Imagination Technologies AGM September 2013 p26

27 Making the Internet of Things reality Enabling domain experts to focus on what they know best Simple, well-defined APIs Basic services shrink-wrapped System architecture to allow devices to communicate to one another and share services & content Flow-enabled platform Flow directory servers & baseline services Subscriptions & transaction-based revenues User app built using Flow Flow Partner service providers The Flow technology platform enables the connectivity for everything Imagination Technologies AGM September 2013 p27

28 Imagination market forecast June 2013 Market Segment TAM* 2017 M Units SAM** 2017 M Units Potential Share of SAM Mobile Phone 2,113 1,870 35%-60% Phones Description Handheld Multimedia %-50% Home Consumer %-50% Mobile Computing %-50% In-car Electronics %-30% Networking 1, %-50% Media players, cameras, games consoles TV/STB, radio/audio, DVD/BluRay; photo frames, media servers Tablets, mobile PCs Navigation, PND, dashboards, communications Access points & CPE; service providers; enterprise; storage Total 5,933 4,271 * TAM = Total Available Market in the segment (e.g. total number of handsets per year) ** SAM = Serviceable (by Imagination) Available Market in the segment (i.e. the number of non-captive chips that could use Imagination s IP) Including MIPS Imagination Technologies AGM September 2013 p28

29 Imagination Technologies AGM September 2013 p29

30 Three phase strategy Helping drive Imagination s objectives in strategic markets Phase 1: Drive and penetrate digital radio Adoption across all categories Global opportunities Phase 2: Drive and enable wireless home revolution Deliver market changing audio devices & apps Wireless home content delivery everywhere Subscription-based services Phase 3: Lead the way in IoT home automation & elife Deliver solutions for connected home, security, energy, assisted living Leveraging connected processors and Flow and ecosystem partners A key element of our Internet of Things strategy Imagination Technologies AGM September 2013 p30

31 Product & platform development Wireless streaming and internet connected Jongo range features Caskeid multiroom audio, incorporating unique patented ultra-low latency synchronisation method Cloud-based services ipad, iphone and Android apps; advanced user experience Connected Set-Top Box Avalon Freeview+ HD In-car radio and audio Strong engagements with leading car manufacturers Broadcast radio Strengthening core and premium product ranges Strategic engagements Onkyo, VW group, Universal Music Group, Alpine, Pioneer Imagination Technologies AGM September 2013 p31

32 Jongo multiroom wireless speakers Unique patented low latency audio distribution over Wi-Fi Jongo allows you to add as many speakers in as many rooms as you like With Bluetooth you can stream music to one speaker at a time With Wi-Fi go multiroom and seamlessly play your music through multiple speakers in multiple rooms Caskeid licensable IP has been announced strong interest already Imagination Technologies AGM September 2013 p32

33 Financial Overview Imagination Technologies AGM September 2013 p33

34 Technology business update FY2012/13-1 Technology revenues up 28% Licensing: 29.1m including 2.6m MIPS (2012: 34.4m) Royalties: up 49% to 95.1m including 5.6m MIPS (2012: 63.8m) Shipments: 700m units (2012: 325m) Comprises 535m from Imagination + 165m from MIPS Substantial volume growth across many partners and market segments Very strong penetration in emerging markets Non-MIPS volume driven by mobile/tablets and accelerating in TV & STBs Partner SoCs: 158 (2012: 136) In Volume Production: 84 (2012: 60) Note: MIPS figures only for last 12 weeks of period Imagination Technologies AGM September 2013 p34

35 Technology business update FY2012/13-2 Licensing behind plan 2 nd half short term issue Many new and extended agreements with Allwinner, Greenplug, Intel, LG, MediaTek, Realtek, Renesas, Samsung, ST, ST-Ericsson, TI, Toumaz Several new partners including Entropic, Ineda, Metaio, Socle 20 important agreements involving around 35 IP core licenses PowerVR Series6: first products now shipping LG shipping in TVs; Renesas announced products Many more to launch over remaining CY 2013 MIPS Excellent feedback and co-operation with MIPS partners Growing enthusiasm for new MIPS roadmap Note: Summary excludes MIPS except as stated Imagination Technologies AGM September 2013 p35

36 Group revenue m Group revenue Technology 47 Pure Momentum continues 28% increase in technology revenue 49% growth in royalty revenue /10 10/11 11/12 12/13 Imagination Technologies AGM September 2013 p36

37 Group adjusted profit & loss 12/13 Underlying m 12/13 MIPS m 12/13 Total m 11/12 m Change % Revenue % Gross profit % Gross profit margin 86% 96% 86% 84% Operating expenses (91.5) (6.8) (98.3) (69.8) 39% Foreign exchange Adjusted operating profit (9)% Adjusted operating profit margin 22% 13% 22% 29% Interest and financing income Adjusted profit before tax (7)% - Positive contribution from MIPS - Operating expenses in line with guidance Imagination Technologies AGM September 2013 p37

38 Group profit reconciliation 12/13 m 11/12 m Adjusted profit before tax Share based remuneration expenses (11.3) (10.3) Acquisition related charges: Amortisation of intangible assets (4.2) (2.7) Acquisition costs (2.7) - Adjustment to deferred consideration Gain on investments Impairment of investments (5.7) (0.1) Reported pre-tax profit Taxation (5.9) (8.0) Reported profit after tax Earnings per share 2.4p 8.0p - Amortisation of intangibles increased due to MIPS acquisition - Acquisition costs of 2.7m Imagination Technologies AGM September 2013 p38

39 Technology 12/13 Underlying m 12/13 MIPS m 12/13 Total m 11/12 m Change % Revenue Royalties % Licensing (15)% Other Total revenue % Profit * % Margin * 33% 13% 32% 40% * Adjusted operating profit - Royalties - 535m units shipped in the year. Royalty rate maintained in H2 - MIPS contributed 8m of revenue and 1m of profit from 7 February to 30 April Imagination Technologies AGM September 2013 p39

40 Revenue m Pure 12/13 m 11/12 m Change % Revenue (12)% International UK Profit * (6.4) (2.9) * Adjusted operating profit /09 09/10 10/11 11/12 12/13 - UK and some export markets tough - Loss increased due to difficult environment and investment in new strategic products Imagination Technologies AGM September 2013 p40

41 MIPS acquisition Balance Sheet m Fixed assets 2.0 Trade and other receivables 15.9 Cash Corporation Tax 56.3 Transaction costs 18.0 Other costs Trade and other payables (18.1) Tax liability (56.3) Paid 14 June 2013 Other transaction costs (18.0) Paid February 2013 Net assets acquired m of cash acquired as part of transaction m to settle tax liabilities and 18.0m to settle other transaction expenses - Other balance sheet items broadly net off Imagination Technologies AGM September 2013 p41

42 MIPS acquisition fair value accounting Consideration represented as: m Net assets 7.8 Intangible assets 50.1 Annual amortisation of 4.8m Goodwill 23.2 Deferred tax liability (17.2) 63.9 = $100m consideration - $100m consideration has been allocated based on fair value - Intangible assets represents the value assigned to technology, trademarks and customer relationships Imagination Technologies AGM September 2013 p42

43 Group cash flow 12/13 m 11/12 m Operating cash flows Working capital movements (15.8) (10.5) Net operating cash flows Investments (7.4) (2.8) Capital expenditure (24.0) (9.6) Acquisitions MIPS (2.2) 0.0 Acquisitions Others (1.9) 0.0 Net financing 25.4 (0.1) Taxes paid (1.2) (1.2) Issue of shares, interest etc Exchange fluctuations Net increase Opening cash position Closing cash position Working capital movements in line with royalty growth 35m of 65m property redevelopment now complete MIPS small cash impact in period ( 56.3m tax outflow in June 2013) Net financing term loan of 30.9m and repayment of 5.5m of mortgage Imagination Technologies AGM September 2013 p43

44 Final Remarks Imagination Technologies AGM September 2013 p44

45 Final Remarks Goals and opportunities We continue to focus on building sustainable and long-term value in our business, despite the transient events and short term variations that are inevitable in the dynamic markets in which we operate Our important strategic engagements continue with further partnerships developing and new opportunities arising which will continue to drive our market penetration and growth Our strong technology base, partner engagements, design wins achieved, and growing opportunities, give me confidence that we will continue our planned progress Technology and organisation foundations set for next stage of growth Imagination Technologies AGM September 2013 p45

46 Q & A Imagination Technologies AGM September 2013 p46

47 AGM Formal Proceedings Imagination Technologies AGM September 2013 p47

48 Lunch and Demonstrations Imagination Technologies AGM September 2013 p48