|Real-time Estimate - 04/21 06:58:25 am|
PRESS RELEASE: Q4 2020 revenue at USUSD439 -2-
|03/03/2021 | 01:33am|
In Q4 2020, we completed the fourth and final settlement of the second tranche of the 2019 Buyback Programme, purchasing 696,849 ordinary shares for EUR29.7 million. Under this tranche, the Company purchased a cumulative total of 2,036,705 ordinary shares for EUR70.0 million at an average price per share of EUR34.37, corresponding to 2.7% of the Company's ordinary share capital as at 27 March 2019.
At the end of Q4 2020, we held cash and cash equivalents of USUSD524 million (Q4 2019: USUSD1,025 million). Cash flow from operating activities in Q4 2020 was USUSD130.8 million which was above Q4 2019 (Q4 2019: USUSD57.4 million). The year-on- year movement was mainly due to working capital. In Q4 2020, the Group generated free cash flow of USUSD115.3 million, which was above Q4 2019 (Q4 2019: USUSD44.4 million) due to the higher cash flow from operating activities. At the end of the quarter, the remaining principal amount of the USUSD300 million prepayment outstanding from our largest customer was USUSD75.0 million.
Q4 2020 Segmental overview Dialog is a fabless semiconductor company primarily focused on the development of highly integrated mixed-signal products for consumer electronics and other high-growth markets. Our highly skilled engineers, partnership approach, operational flexibility, and the quality of our products are sources of competitive advantage. Our primary end markets are consumer markets such as IoT, Computing, and Mobile. The increasing adoption of standard technologies, such
as Bluetooth(R) low energy or LED lighting, and the expansion of high-performance processors into infotainment systems, have contributed to the expansion of our presence in the automotive segment. The acquisitions of Creative Chips and Adesto have enabled our expansion in the growing Industrial IoT market. Our ambition is to build a vibrant mixed-signal business, with a balanced end market exposure, on innovative low power products which enable our customers to get to market fast.
Underlying results by segment
Revenue Operating profit/(loss) Operating margin
Restated* Restated* Restated* USUSD millions unless stated otherwise Q4 Q4 2019 Change Q4 Q4 2019 Q4 Q4 2019 2020 2020 2020 Custom Mixed Signal 258.8 253.4 +2% 84.2 82.4 32.5% 32.5% Advanced Mixed Signal 81.8 68.4 +19% 11.0 2.7 13.4% 4.0% Connectivity & Audio 60.9 50.2 +21% 9.7 4.3 15.9% 8.7% Industrial IoT 28.3 2.3 nm - (0.7) 0.2% (29.2)% Total Segments 429.8 374.3 +15% 104.9 88.8 24.4% 23.7% Corporate and other unallocated items 8.9 6.3 +42% 5.6 2.5 62.7% 39.1% Total Group 438.7 380.6 +15% 110.5 91.3 25.2% 24.0% * Restated to reflect the segment reorganisation (see page 5).
Custom Mixed Signal (CMS) In Q4 2020, underlying revenue was USUSD259 million, 2% above Q4 2019 due to growth in new mixed-signal products partially offset by the expected decline in legacy licensed main PMICs. Revenue in CMS from our largest
customer's products not covered by the licensing agreement was up 35% year-on-year to USUSD153.2 million (Q4 2019: USUSD113.3 million). Underlying operating profit for CMS increased 2% year-on-year to USUSD84.2 million, mainly due to the higher revenue.
During the quarter, we were awarded new custom designs and continued to receive requests for quotations from a range of tier one customers, for new custom designs for 2022 and beyond in diverse areas of power, battery management, display, and audio technologies.
There is a growing market opportunity for next generation battery management solutions, capable of supporting higher wattage chargers, safe and short charging times, as well as secondary charging from phones to other devices. Dialog is well positioned to capitalise on this opportunity, with a range of products built on our strong expertise in the design of mixed-signal and power-efficient ICs, meeting the requirements of a wide range of customers in mobile and consumer IoT end markets. We are currently engaged with the top mobile OEMs, with standard battery management products
shipping from Q3 2020 and we expect revenue from high-volume contracts to begin with new smartphones in the second half of 2021.
In parallel, we continue to leverage our power management technology into new markets and geographies through the expansion of our platform reference designs. The collaborations with Renesas, Xilinx, and Telechips strengthen Dialog's presence in the automotive segment, in particular, Intelligent In-Vehicle Infotainment and ADAS. We have over 100 automotive customer engagements, most of which are expected to go into production over the next three years.
Advanced Mixed Signal (AMS) During Q4 2020, underlying revenue increased by 19% from Q4 2019 due to strong revenue growth in CMICs and in-device charging products, as demand and design-in momentum improved. Underlying operating profit was USUSD11.0 million, four times higher than in Q4 2019, mainly driven by the higher revenue and product mix, together with cost savings.
Dialog has successfully maintained a commanding market share in the rapid charge market through a combination of differentiated technology, speed of execution and wide support of rapid charge products, leading the industry in high power density AC/DC chargers. In Q4 2020 we shipped high-power delivery products.
Our broad product portfolio, which includes LED backlighting and LED driver ICs, and proprietary digital control technology for power conversion, enables high quality solutions at a low cost. We are engaged with tier one customers in the high-end TV market and we are seeing a gradual expansion of our customer base in mobile and automotive display markets with medium term opportunities.
Dialog's configurable technology, including the highly successful GreenPAK(TM) product family, has become established as the leading choice in the market. Low power consumption and in-system programming enables customers to rapidly
customise and integrate multiple analog, logic, and discrete components into a single chip. Earlier in the year we launched a high-voltage GreenPAK(TM) product, ideal for consumer and industrial motor applications, as well as a new update for the GreenPAK(TM) Designer software package containing simulation capabilities which will further reduce development time and simplify the design process across the entire GreenPAK(TM) portfolio. In Q4 2020 we launched a new member of the GreenPAK(TM) family, the SLG47004, the first fully programmable advanced analog system IC with configurable op amp functionality. The expansion of the GreenPAK(TM) product range within the last 12 months will further accelerate its adoption across a wider range of applications, such as automotive as well as smartphone cameras. Our growing range of configurable products gives our customers the flexibility to keep pace with rapidly changing market needs. The CMIC, along with other members of the GreenPAK(TM) family, replaces dozens of components in a wide range of applications to optimize flexibility, footprint, and a reduction of the bill of materials.
Connectivity and Audio (C&A) During Q4 2020, underlying revenue grew by 21% from Q4 2019 mainly due to higher revenue from audio products and BLE. Underlying operating profit in the quarter was 123% above Q4 2019 at USUSD9.7 million (Q4 2019: USUSD4.3 million) and operating margin was 15.9%. We continue to invest in the development of new BLE and audio products to take advantage of market opportunities and position the segment for higher revenue growth and profitability over the coming years.
Revenue from our SmartBond(TM) BLE System-on-Chip ("SoC") was 5% above Q4 2019, as a result of increased demand from customers in Asia. Following the launch of SmartBond TINY(TM) and the SmartBond TINY(TM) module, we launched our first combo Wi-Fi and BLE module, the DA16200 SoC. This offering was purpose built for battery-powered IoT applications, including connected door locks, thermostats, security cameras and other devices that require an "always on" Wi-Fi connection. Its VirtualZero(TM) technology enables the industry's lowest level of power consumption for Wi-Fi connectivity, so that even continuously connected devices can achieve up to five years of battery life in many use cases. Highly integrated, the SmartBond(TM) SoC family delivers the smallest, most power efficient BLE solutions available - and enables the lowest system costs.
In Q4 2020, the combined revenue from new audio products and Codecs almost tripled year-on-year. The C&A Segment is targeting the rapidly-growing consumer wireless headset market with our SmartBeat(TM) wireless audio IC. This technology enables a new immersive headset experience and supports both wired USB 3.0 Type-C(TM) and
Bluetooth(R) based consumer headsets. Our product portfolio targeting the headset market also includes a family of highly- integrated audio codec chips that deliver best-in-class active noise cancellation, providing optimal audio performance in any environment.
Industrial IoT In Q4 2020, we reorganised the Group's structure bringing together the businesses from Adesto and Creative Chips into a new segment named Industrial IoT. Underlying revenue was USUSD28.3 million and the segment broke even in Q4 2020.
During the quarter we continued to make good progress on the integration of Adesto and we expect it to be completed by the end of 2021.
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