CSR plc. Consumer Electronics Show January 8-9, 2009

Transcription

1 CSR plc Consumer Electronics Show January 8-9, 2009

2 Forward Looking Statements During the course of our presentation, we will make forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Exchange Act of 1934, including statements regarding CSR s financial position, financial targets, business strategy, products, plans and objectives. Such statements involve risks and uncertainties that could cause CSR s actual results to be materially different from any results implied by such forward-looking statements. Important factors that could cause CSR s actual results to differ materially from such forward-looking statements include those discussed in the Annual Report & Financial Statements 2006 set out in the section Business Risks in the Business Review, including consumer and market acceptance of CSR s products and the products that use CSR s products; declines in average selling prices of CSR s products; CSR s expectation that it will not sustain its recent rate of revenue growth, CSR s dependence on a few key customers and distributors, the timing of significant orders; potential cancellations and deferrals of significant orders, CSR s failure to anticipate changing customer product requirements; CSR s failure to successfully develop new products in a timely manner, the lengthy design cycle for CSR s products, CSR s ability to secure sufficient capacity from thirdparties that manufacture, assemble and test its products, the potential for any disruption in the supply of wafers or assembly or testing services due to changes in business conditions, natural disasters, terrorist activities or other factors, the yields that CSR s subcontractors achieve with respect to CSR s products, possible errors or failures in the hardware or software components of CSR s products, CSR s ability to successfully manage its recent expansion and growth, CSR s ability to protect its intellectual property, the impact and outcome of any future litigation involving intellectual property or other matters, CSR s ability to attract and retain key personnel including engineers and technical personnel, competitive developments in CSR s markets, difficulty in predicting future results, the cyclicality of the semiconductor industry and overall economic conditions. These forward-looking statements speak only as at the date of this presentation and CSR undertakes no obligation to update the forward-looking statements contained in this presentation or any other forward-looking statements it may make. 2

3 Agenda Overview of CSR Financial overview Market opportunity Executing the strategy with superior products Summary 3

4 C S R p l c Overview CSR PLC All rights reserved.

5 Overview of CSR today Listed on London Stock Exchange in March 2004 Headquarters Cambridge, UK, c.1,000 employees World class talent New management team Leader in wireless connectivity Outstanding blue chip customer list Leading Bluetooth technology and market share Profitable, fabless operating model Significantly over a billion units shipped to date 5

6 Worldwide Class Operations CSR US Detroit CSR UK Cambridge CSR Sweden Stockholm CSR China Shanghai CSR Korea Seoul CSR Japan Tokyo CSR US Dallas CSR France Sophia-Antipolis CSR Taiwan Taipei, Taoyuan CSR India Bangalore CSR Denmark Aalborg CSR China Shenzhen 6

7 C S R p l c Financial Snapshot CSR PLC All rights reserved.

8 Income Statement Summary $millions Q Q Change Q Change Revenue (34.6) GM (%) (0.5) 48.2 (3.7) R&D (37.9) (39.4) (1.5) (36.5) 1.4 SG&A (21.5) (22.5) (1.0) (21.8) (0.3) Op Profit (25.2) as % Revenue Tax (7.5) (5.7) (1.8) (17.0) 9.5 Effective tax rate (%) (23.4) (23.7) (28.7) Net Income (17.8) as % Revenue Underlying Diluted EPS ($) (0.12) All figures are underlying 8

9 Cash Flow and Balance Sheet $millions Q Q Change Cash & equivalents Operating cash flow Capital Expenditure (5.7) Working Capital Inventory (11.6) Trade Receivables (14.6) Trade Payables (61.2) (78.9) (17.7) 9

10 Revenue (Millions) Historic Quarterly Revenue $250 $200 $150 $100 $50 $0 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q

11 EBIT ($Millions) Historic Quarterly EBIT $60.00 $50.00 $40.00 $30.00 $20.00 $10.00 $0.00 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q

12 Streamlining Expenses in Light of the Economic Environment We are accelerating the conclusions of our operational assessment and reassessing the level of expenditure and investment required for us to champion the Connectivity Centre. Implementation of cost saving initiatives to reduce SG&A and R&D. People costs will be reduced. Non-people costs are being streamlined, such as travel, expenses and consultants. Targeting a reduction of $20m in our cost base for 2009 in comparison to Won t affect our ongoing business plan as we are cutting back on discretionary spending items not core projects. One-off charge in the fourth quarter relating to these initiatives of up to $10m. Committed to take the necessary cost saving actions to remain cashflow positive should demand be weaker than expect in

13 C S R p l c Market Opportunity CSR PLC All rights reserved.

14 Focus on the connectivity centre RF low energy 14

15 Wireless connectivity market growth Strong growth is anticipated in wireless technologies even using reduced forecasts $Billion UWB 5.00 CAGR 12% NFC GPS WiFi FM BT 15 Source: Estimates based on - ABI 2007, IMS 2008, In-Stat 2007, isuppli 2007, CSR

16 This is driven by the smart phone low energy 16 16

17 Smart phone & feature phone volume growth is set for long term growth Source: Estimates based on - ABI 2007, IMS 2008, CSR MU 1,400 1,200 Smartphone Feature phone Basic phone Ultra Low Cost 1, m

18 C S R p l c Compelling Product Portfolio CSR PLC All rights reserved.

19 The connectivity centre exists today with BC7 The world s first integrated chip solution combining: Audio GPS Radio BT & BT-LE FM RX FM TX Bluetooth v2.1 & ULP Radio GPS FM Transmitter FM Receiver Digital Section; DSP ROM and RAM Stereo Audio Output Digital circuitry, embedded DSP, RAM & ROM Indicative diagram of an existing CSR chip 19

20 BlueCore7 ( BC7830 ) Offers Ultra Low Cost GPS World s first Ultra Low Cost GPS combination device for handsets c.11 2 mm silicon size, the smallest and lowest cost in the industry The nearest competition is 50% bigger and on a more expensive process geometry Low incremental cost of adding GPS to a handset Possible to GPS-enable mass-market feature phones running a wide variety of Location Based Services ( LBS ) LBS will form an important future revenue stream for operators 20

21 Leading Edge Packaging for our Connectivity Centre BC7 designed on modules and chipon-board in WLCSP form Smallest, cheapest packaging option for handset chips Leading edge packaging. WLCSP enables the lowest cost and smallest devices For lower complexity, less expensive PCBs 0.5mm ball pitch is a requirement CSR only, provides 0.5mm WLCSP for BT only, BT+FM and Wi-Fi products Competitors have finer ball pitches ranging from 0.4mm down to 0.25mm forcing handset manufacturers to use more expensive PCB technologies 21

22 Audio differentiation is here today: MusiCore Music is important to end users and therefore our customers However they don t want to increase cost or time to market MusiCore provides industry defining audio functionality Bluetooth hour music play back Dual mic noise cancellation Reduction in overall bill of materials No extra chip required No increase in PCB size (3.8x4.8mm CSP) 22

23 MusiCore is financially compelling for our customers Current Market Solution CSR s MusiCore Solution Bluetooth 4x4mm ~$1.50 Single chip 4x5mm <$2.5 Audio Codec 4x4mm ~$0.70 Multimedia processor 8x8mm ~$3.00 PCB Side 1 Requires three chips Total cost = c.$5.20 PCB Side 2 PCB area c.100mm 2 No voice processing Complex long development time One chip that is five times smaller Less than ½ the cost, c.$ hr music play back (70hrs with BT headphones) High Quality Voice processing Based on proven tech More than 50m CSR DSPs already shipped Standard Software Faster time to market

24 Up to 10x Better Battery Life Music Play Time (Hours) Typical Handset (Wired Headphones) Best Current Handset MusiCore (streaming to BT Headphones) MusiCore (Wired Headphones) MusiCore uses 3.7V for compete decode and playback operation

25 UniFi3 ( UF6000 ) The World s Smallest and Ultra Low Cost Wi-Fi Smallest of any n device Just 16 2 mm, same size as many currently shipping Bluetooth devices We are creating a BT/Wi-Fi module smaller than the competition and more flexible given rapidly changing Wi-Fi standards CSR s Wi-Fi and BT+FM+GPS device has a total silicon size of just 27 2 mm Competing combination devices are nearly 40% bigger and do not include GPS Smallest and cheapest packaging option. 0.5mm ball pitch means that UF6000 can easily be adopted for chipon-board designs CSR is lowering the cost of adopting Wi-Fi, particularly important as mass market feature phones start to adopt Wi-Fi 25

26 Industry Leaders Choose CSR For Their Products Handsets Headsets PC & Automotive 26

27 C S R p l c Executing On The Strategy CSR PLC All rights reserved.

28 Q3 Update on Key Milestones Four Proof Points: Proof Point 1 Establish BlueCore7 2 Establish MusiCore 3 Establish Wi-Fi 4 Establish Partnerships Update Development on track, increasingly confident as more milestones are passed. Increased interest from top tier customers. On track to generate first revenues in Design activity continuing, shipping in six handsets. 65nm and UniFi-3 taped out. ew partnership with to create Pure peech. Progressing other partnership opportunities. 28

29 C S R p l c Summary and Outlook CSR PLC All rights reserved.

30 Operational Summary Cost control a very high priority in current environment Operational focus positions the Company well for growth Product pipeline developing well, considerable interest shown 30

31 Outlook Visibility remains extremely poor First half of 2009 expected to be weak Expect the downturn to extend well into 2009 Discretionary nature implies weakness for Headsets in

32 Outlook continued Competitors recognising strength of Connectivity Centre strategy Core programs not impacted by cost reduction measures Expect to recover market share in second half of

33 CSR plc Consumer Electronics Show January 8-9, 2009