investor ppt q4'13 final -...
TRANSCRIPT
Presentation
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Safe Harbor StatementStatements contained in this presentation that are not historical facts are forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include statements concerning the outlook for its dual-core and quad-core solutions in domestic and overseas markets, customer acceptance of the Actions Semiconductor's new products and corresponding increases in market share, Actions Semiconductor's belief that it is positioned to capture some upside from these trends, and Actions Semiconductor's future expectations with respect to revenue, gross margin, operating expenses and share-based compensation expense. Actions Semiconductor uses words like "believe," "anticipate," "intend," "estimate," "expect," "project" and similar expressions to identify forward-looking statements, although not all forward-looking statements contain these words. These forward-looking statements are estimates reflecting current assumptions, expectations and projections about future events and involve significant risks, both known and unknown, uncertainties and other factors that may cause Actions Semiconductor's actual performance, financial condition or results of operations to be materially different from those suggested by the forward-looking statements including, among others, customers' cancellation or modification of their orders; our failure to accurately forecast demand for our products; the loss of, or a significant reduction in orders from, any of our significant customers; fluctuations in our operating results; our inability to develop and sell new products; defects in or failures of our products; the expense and uncertainty involved in our customer design-win efforts; the financial viability of the distributors of our products; consumer demand; worldwide economic and political conditions; fluctuations in our costs to manufacture our products; our reliance on third parties to manufacture, test, assemble and ship our products; our ability to retain and attract key personnel; our ability to compete with our competitors; and our ability to protect our intellectual property rights and not infringe the intellectual property rights of others. Other factors that may cause our actual results to differ from those set forth in the forward-looking statements contained in this press release and that may affect our prospects in general are described in our filings with the Securities and Exchange Commission, including our most recently filed Forms F-1, 20-F and 6-Ks. Other unknown or unpredictable factors also could have material adverse effects on Actions Semiconductor's future results, performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this press release may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated, or if no date is stated, as of the date of this press release. Except as required by law, Actions Semiconductor undertakes no obligation and does not intend to update or revise any forward-looking statement to reflect subsequent events or changed assumptions or circumstances.
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Company Overview
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Actions Semiconductor
HQ: Zhuhai CHN
Founded Zhuhai, China 2001 | IPO: NASDAQ 2005
SoC design for portable multimedia devices
HQ: Zhuhai | Offices: Shanghai, Shenzhen, Hong Kong, Taipei.
Employees: 600+
Main Products:
- Tablet SoC
- Portable video SoC
- Portable audio SoC
A China Semiconductor Industry Association Top 10 IC Design Enterprise for six consecutive years
Leading products received China Innovative Product and Technology Awards for five consecutive years
Attach great importance to protecting IP, holds 258 patents
Symbol: ACTS Exchange: NASDAQ (IPO 2005) Market Cap (12/31/2013): $205 million ADS outstanding1: 69 million Revenue 2: $69.4 million Total cash3: $224.6 million Cash per ADS1,3: $3.27
Equity Snapshot
1 As of December 31, 2013; each ADS represents 6 common shares2 The year ended December 31, 20133 As of December 31, 2013; Includes cash & cash equivalents, time deposits and marketable/trading securities
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Investment Highlights
传统便携式多媒体芯片的市场领导者
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Significant market growth potential for whitebox tablet chipsets ~90M shipped globally in 2013; forecast to grow >20% per year to 2016
ACTS R&D drives volumes, market leadership potential Launched China’s 1st quad-core chipset in 2012; dual-core, low-end quad-core and high-
end quad-core owl series chipsets in 2013 ACTS tablet chipset shipments: 100K in Dec 2012 vs. >1M in Dec 2013 (~10% market
share1), expect to continuously increase market share Ongoing R&D for high performance chipset supporting H.265 4K2K video, utilizing 64bit
CPU and operating system in 2014
A market leader in portable multimedia SoC >50% market shares, non-Apple portable audio and video products Focus: fast growing wireless boombox market. 2014 global shipments forecast:
>10M/month ACTS bluetooth boombox reached volume shipments in the fourth quarter of 2013,
forecast rapid 2014 market share increase
Solid Financial Position $224.6M net cash, will support sustainable development Target revenue growth of at least 20%-25% for 2014 Share repurchase program to enhance long-term shareholder value1Market share based on company estimates of overall whitebox market shipments
Investment Highlights
传统便携式多媒体芯片的市场领导者
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20 years of low power SoC development experience Leading mixed signal design capabilities and comprehensive analog circuit
intellectual property asset Leader in low power design methodology with 20 years of experience Competitive PMU technology and high integration SoC design 12 years of multimedia R&D, from super-low power full spec audio codec to the most
advanced H.265 4K2K video codec
Solid foundation to serve Tier 1 international brands Disciplined operations as a US publicly listed company
Prudent financial, quality control and process management systems. In-house IC testing capabilities, including CP and FT
Dedicated marketing and technical support team to serve overseas OEM and ODM
Qualified supplier to many Tier 1 international brands
David Lee, Chairman and COO 15+ years of corporate finance and investment management experience ACTS’ CFO from 2005‐2007 Former CEO of ABN AMRO Asset Management (China) BSc degree in Biometrics from National Taiwan University MBA from Duke University
Nigel Liu, Chief Financial Officer 14+ years of accounting/finance experienceFormer Senior Manager at PricewaterhouseCoopersCPA, Qualified Internal Auditor & Certified Internal Auditor (Taiwan)BA in accounting from Fu Jin Catholic University in Taiwan MBA from National Taiwan University
Experienced Management Team
Dr. Zhenyu Zhou, Chief Executive Officer 17+ years of senior management experience Expertise in establishing R&D teams, setting strategy and product road maps, and
driving revenue growth through design win activity Founder of Mavrix (acquired by ACTS in 2010) Master’s and PhD from the University of Southern California
Shawn Li, Chief Technology OfficerServed as Chief Technology Officer since ACTS’ establishment in 2001Former director of research and development at Zhuhai Arestek Electronic Co., Ltd. MSc degree in electrical engineering from Beijing Institute of Technology
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Strong Financials and Investments
$224.6 million in net cash; 55% of which is invested in time deposits in banks and 45% of which is invested in funds
Low risk asset allocation: 90%+ in RMB cash and equivalents
In‐house VC, coupled with external Private Equity partners, to identify synergetic targets based in China and Taiwan
Continued investment in advanced technology and R&D teams Reorganize R&D to focus on advanced tablet solutions and wireless
connectivity enabled multimedia products Better utilize talent and intellectual property Improve efficiency
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Healthy Financial Position
M&A Activities
Research & Development
Solid Balance Sheet
(US$ Million) 12/31/12 12/31/13
Total assets 322.2 335.9
Shareholders’ equity 278.8 282.6
Net cash1 223.3 224.6
Net assets per ADS2 $4.71 $4.89Net cash per ADS2 $3.26 $3.27
1 Includes cash & cash equivalents, time deposits and marketable/trading securities2 Based on 68.69 mil wtd avg ADS outstanding as of 12/31/13, and 68.37 mil wtd avg ADS outstanding as of 12/31/2012
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Income Statement
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1 Q1’14 guidance reflects the return to a more traditional sales pattern vs Q1’ 13 when the Company had a steep ramp in shipments of its new tablet SoC solutions.
2 Q4’13 gross margin was impacted by aggressive pricing strategy to build share in tablet market and a year end inventory write-off.
(US$ Million) 1Q'14e 1Q’13 2Q’13 3Q’13 4Q’13
Revenue1 $12~$13 $16.4 $18.5 $16.9 $17.6
Gross profit $5.9 $6.0 $5.6 $3.9
Gross margin2 ~30% 36.2% 32.2% 33.2% 22.2%
Net Income (loss) $0.4 $0.7 ‐$0.15 ‐$0.83Earnings (loss) per ADS $0.01 $0.01 ‐$0.002 ‐$0.012
Share Repurchase Program
As of December 31, 2013, $50.4 million invested to repurchase 22.1 million ADSs
Open to privately negotiated transactions to accelerate pace of buyback program
Board of Directors approved a total of $30 million ADSs buyback
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Significant Progress
Top Priority for the Company
Product Introduction
Application Portfolio of Actions’SoCs
Portable Audio & Video Multimedia Devices
Cloud Connected Devices
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Android Tablet
OTT Box
WiFi Speaker
Bluetooth Speakers
MP3
Boom Box
PMPiPUSH
(Miracast dongle)E Book
Gaming
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Vital Role in Consumer Electronics Ecosystem
Actions
Consumer Electronics Ecosystem
End users
SoC Platforms
Revenues
Advanced devices & services
Revenues
• Multimedia and Mobile Internet SoC solutions for portable consumer electronics• Production ready, turnkey solutions and support• Creating better time to market, better quality and better BOM Cost
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Strong Position in Key Markets
(M pcs)− Provider of the first quad-core
tablet SoC and tablet chipsets with the most competitive price-to-performance ratio in the white-box tablet market
− Leading position(>50%) in portable audio and video multimedia segments
Strength
− Great opportunity and continued growth in sub $100 Tablets
− Growth from Bluetooth boom box and other wireless connectivity enabled multimedia products
− Rapid growth in overseas markets
Potential
Potential Market Shipments for Actions by Segment
Source: Company estimates
MP3 Player42
Automotive/Boombox
85PMP
related35
Android Tablet110
FY 2014e
• White-box tablet market & non-apple portable multimedia market
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Expanding Total Available Market
($M USD)TAM for Actions’ Products by Segment
Source: Company estimates
0
100
200
300
400
500
600
700
FY 2011 FY 2012 FY 2013e FY 2014e
MP3 Player Automotive/BoomboxPMP related Android Tablet
$305
$550$600 $620
• White-box tablet market and non-apple portable multimedia market
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Fast Growing Tablet Market
Source: IHS iSuppli January 2014
141
488
0
100
200
300
400
500
600
2012 2013 2014e 2015e 2016e 2017e
Worldwide Tablet Sales(millions of units)
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Fast Growing Tablet Market
Source: Digitimes December 2013
234
289
0
50
100
150
200
250
300
350
2011 2012 2013 2014e
WhiteboxTop Tier Int'lApple
Worldwide Tablet Sales(millions of units)
• Approx. 20% annual growth
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• High performance, quad‐core SoC• High performance, 64bit CPU and operating system
High end
• Primarily dual‐core solutions for 2013
• Increasing adoption of quad‐core SoC for 2014
Mid end
• Predominately Single‐core for 2013
• Rapid migration to dual‐core SoC for 2014
Low end
Shipments
White-box Tablet Market Segmentation• Complete product family of OWL series chipsets
Actions' Competitive Advantages
Value Proposition
• Production-ready turnkey solutions and support accelerate introduction of new products to the mass market
• Highly competitive total BOM costs with compelling price-to-performance ratio
Technology
• Internally developed IP portfolio• Advanced process technology roadmap (28 nm)• Leading IC design in low power, high performance, highly
integrated solutions
Proven Partner
• Market leader in portable multimedia products• System-level knowledge of customers’ manufacturing process• Quickly adapt to various customer requirements and evolving
industry standards
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20142012
1.3GHz Quad core CPU
High performance Multi‐core GPU
Low power consumption
Highly integration for best performance/cost ratio
ATM7029
2013
ATM7039
1.6GHz Quad Core CPU
The Imagination PowerVR SGX544 GPU
OPEN GL ES 3.0/RederScript Supporting
HEVC Supporting
ATM705x
2GHz Quad core CPU
Most Advanced GPU
Open GL ES 3.0/Render Script/HEVC Supporting
Lower Power Consumption
Tablet SoC Product Roadmap (OWL Family)
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Entry
Mainstream
Performance
1.3GHz Dual core CPU
The Imagination PowerVR SGX540 GPU
Low power consumption
Highly integration for best performance/cost ratio
ATM7021
2012 2014
Complete Value Line Functional Portable Audio and Video SOC platform
-MP3 and Boombox for various display support
- PMP for QVGA, SD and HD resolution
- Portable Gaming
2013
Portable Multimedia SoC Platform Roadmap• Market leader in portable multimedia SoC, dozens of hot selling SoC
Audio and Video SOC platform w/ Wireless Connectivity (Smart Accessory)
-MP3 and Boombox with Bluetooth connectivity
-Wifi based internet audio and video system
- Bluetooth soundbar
- SmartTV Box and dongle
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Smart Accessory
Featured Product
Important Upstream and Downstream Partners
IC Companies - Central Position in Value Chain
Manufacturers
Foundry UMC TSMC SMIC
Assembly & Test
SPIL Fujitsu Tianshuihuatian
Customers
OEMs /Brands Global &
Regional OEMs
300+ China, Global & Regional brands and traders
IDHs / VARs/ Manufacturers
Dozens of China-based designers
10+ China focused resellers
>500s Actions-focused application developers
100s of China-based manufacturers
IP Providers
ARM IMG
MIPS Real
DTS HDMI
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Strong Relationships with Top TMT Companies
•Respected IP rights•The most licensing
Others
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Thank You
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