Dialog Semiconductor – Update on Organisational Structure and Segment Information

LONDON, UK / ACCESSWIRE / July 22, 2019 / Dialog Semiconductor Plc (XETRA: DLG), a provider of highly integrated power management, Configurable Mixed-signal IC, AC/DC, solid state lighting and Bluetooth(R) low energy wireless technology, today updates on its organisational structure and segment information in support of its long-term growth strategy.

The Group’s organisational structure has been updated to support our growth strategy and the transformation of our business over the coming years. These changes align with our focused R&D approach and pursuit of business opportunities in high-growth segments of our target end-markets – IoT, Mobile, Automotive and Computing & Storage. Our entrepreneurial culture and deep expertise in power efficient mixed-signal ICs, expanding customer base, and disciplined capital allocation will help us drive the next phase of growth and create value for shareholders.

Organisational changes

We have reduced the number of reporting segments from four to three: Custom Mixed Signal (CMS), Advanced Mixed Signal (AMS) and Connectivity & Audio (C&A); previously Mobile Systems, Advanced Mixed Signal, Connectivity and Automotive & Industrial. The following table summarises the segment changes:

Previous Reporting Segments Changes (+/-) New Reporting Segments
Mobile Systems + Custom Automotive Motor Control ICs
– ASSP PMICs/Charging
– Audio
Custom Mixed Signal (CMS)
Advanced Mixed Signal + ASSP PMICs/Charging
+ Industrial Lighting
Advanced Mixed Signal (AMS)
Connectivity + Audio Connectivity and Audio (C&A)
Automotive and Industrial – Custom Automotive Motor Control ICs
– Industrial Lighting
—-

In support of our growth strategy and the transformation of our business over the coming years, Dialog has made the following changes to its Management Team:

– Vivek Bhan, previously SVP, Engineering has been appointed Senior Vice President (SVP) and General Manager, Custom Mixed Signal business group taking over from Udo Kratz who retired at the end of April 2019;

– Tom Sandoval, previously SVP, Worldwide Sales has been appointed SVP Automotive and will coordinate the Group’s effort into the automotive end-market; and

– John Teegen, previously VP, Configurable Mixed Signal business unit, has been appointed SVP, Worldwide Sales.

Additionally, Alex McCann joined the Group in May 2019 as SVP, Global Operations, bringing over twenty years of semiconductor global operations experience to his new role. Most recently, Alex was VP, LTC Operations and Integration Chair at Analog Devices Inc (which acquired Linear Technology Corporation (LTC) where Alex was Chief Operating Officer). Alex took over from Mohamed Djadoudi who retired at the end of June 2019. Davin Lee and Sean McGrath remain in their current roles as SVP and General Manager, Advanced Mixed Signal and SVP and General Manager, Connectivity & Audio, respectively.

Change in basis of segment information

At the same time as we made the organisational changes, the Management Team changed its focus from IFRS measures to underlying measures as the principal basis for allocating resources to and assessing the financial performance of the Group’s businesses. Underlying revenue is therefore the measure of segment revenue and underlying operating profit/loss the measure of segment profit/loss that is now presented in the Group’s segment disclosures.

Underlying revenue and underlying operating profit/loss are non-IFRS measures. Our use of non-IFRS measures is explained on pages 156 to 161 of our 2018 Annual Report and Accounts. We do not regard non-IFRS measures as a substitute for, or superior to, the equivalent IFRS measures. Non-IFRS measures presented by Dialog may not be directly comparable with similarly titled measures used by other companies.

Restated segment information

Segment information restated to reflect these organisational and measurement changes for 2017 and 2018, for Q1/Q2/Q3/Q4 2018 and for Q1 2019, is shown in Table 1 and Table 2 on page 2 of this Press Release and is available on our website in pdf and excel format:

https://www.dialog-semiconductor.com/organisational-update

The Group’s results for 2017 and 2018, for Q1/Q2/Q3/Q4 2018 and for Q1 2019 remain unchanged.

Dialog will publish its results for Q2 and H1 2019 on July 30, 2019, including segment information presented in accordance with its new reporting structure and on an underlying basis. Analyst and investor call details are available on our website:

https://www.dialog-semiconductor.com/sites/default/files/dialog_semiconductor_-_q2_2019_call_invite_-_eng_.pdf

Table 1: Underlying revenue by segment (unaudited)

Underlying revenue1 Underlying revenue1
Three months ended
30 March
2018
US$000
Three months ended
29 June
2018
US$000
Three months ended
28 September 2018
US$000
Three months ended
31 December 2018
US$000
Three months ended
29 March
2019
US$000
Year
ended
31 December
2017
US$000
Year
ended
31 December
2018
US$000
Custom Mixed Signal 245,402 194,538 274,534 327,845 211,605 1,059,603 1,042,319
Advanced Mixed Signal 53,926 63,651 66,265 60,694 50,898 137,834 244,536
Connectivity & Audio 32,819 37,467 42,734 40,984 32,376 147,603 154,004
Total segments 332,147 295,656 383,533 429,523 294,879 1,345,040 1,440,859
Corporate and other unallocated items 8 8 41 1,222 7 7,801 1,279
Total Group 332,155 295,664 383,574 430,745 294,886 1,352,841 1,442,138

1 Revenue is from sales to external customers (there were no inter-segment sales)

Table 2: Underlying operating profit by segment (unaudited)

Underlying operating profit/(loss) Underlying operating profit/(loss)
Three months ended
30 March
2018
US$000
Three months ended
29 June
2018
US$000
Three months ended
28 September
2018
US$000
Three months ended
31 December
2018
US$000
Three months ended
29 March
2019
US$000
Year
ended
31 December
2017
US$000
Year
ended
31 December
2018
US$000
Custom Mixed Signal 60,515 37,558 72,027 97,489 44,945 296,236 267,589
Advanced Mixed Signal 3,028 8,175 9,040 6,511 1,008 (1,326) 26,754
Connectivity & Audio (618) 4,081 5,590 4,584 5,019 9,740 13,637
Total segments 62,925 49,814 86,657 108,584 50,972 304,650 307,980
Corporate and other unallocated items (10,475) (7,740) (2,977) (5,160) (3,821) (45,192) (26,352)
Total Group 52,450 42,074 83,680 103,424 47,151 259,458 281,628

Table 3: Reconciliation of underlying measures to equivalent IFRS measures (unaudited)

Underlying performance measures exclude specific items of income or expense that are recognised in profit or loss reported in accordance with IFRS that we consider hinder comparison of the financial performance of our businesses from one period to another, with each other or with other similar businesses.

During the periods for which restated segment information is provided, there were no differences between underlying revenue and revenue reported in accordance with IFRS. We present reconciliations of underlying operating profit to operating profit reported in accordance with IFRS for each of those periods in the table below.

Three months ended
30 March
2018
US$000
Three months ended
29 June
2018
US$000
Three months ended
28 September
2018
US$000
Three months ended
31 December 2018
US$000
Three months ended
29 March
2019
US$000
Year
ended
31 December
2017
US$000
Year
ended
31 December
2018
US$000
Underlying operating profit 52,450 42,074 83,680 103,424 47,151 259,458 281,628
Share-based compensation and related payroll taxes (10,348) (8,746) (10,205) (12,354) (11,886) (35,498) (41,653)
Accounting for business combinations:

Acquisition-related costs
(4,539)

Amortisation of acquired intangible assets
(5,657) (5,657) (5,658) (5,657) (5,657) (16,461) (22,629)

Consumption of the fair value uplift of acquired inventory
(2,388) (406) (335) (2,305) (3,129)

Consideration accounted for as compensation expense
(454) (350) (342) (335) (319) (1,409) (1,481)

Forfeiture of deferred consideration
127 36 14 27 83 204

Remeasurement of contingent consideration
(158) 523 1,154 (641) 878
Integration costs (689) (474) (940) (662) (2,305) (2,765)
Corporate transaction costs (773) (3,880) (6,693) (4,031) (11,346)
Strategic investments:

Impairment of non-current assets held by Dyna Image
(4,327)

Loss on deconsolidation of Dyna Image
(5,597)
Operating profit reported under IFRS 32,883 26,227 63,488 77,109 25,341 187,017 199,707

*******

For further information please contact:

Dialog Semiconductor
Jose Cano
Head of Investor Relations
T: +44 (0)1793 756 961
jose.cano@diasemi.com

FTI Consulting London
Matt Dixon
T: +44 (0)2037 271 137
matt.dixon@fticonsulting.com

FTI Consulting Frankfurt
Anja Meusel
T: +49 (0)69 9203 7120
anja.meusel@fticonsulting.com

About Dialog Semiconductor

Dialog Semiconductor is a leading provider of integrated circuits (ICs) that power mobile devices and the Internet of Things. Dialog solutions are integral to some of today’s leading mobile devices and the enabling element for increasing performance and productivity on the go. From making smartphones more power efficient and shortening charging times, enabling home appliances to be controlled from anywhere, to connecting the next generation of wearable devices, Dialog’s decades of experience and world-class innovation help manufacturers get to what’s next.

Dialog operates a fabless business model and is a socially responsible employer pursuing many programs to benefit the employees, community, other stakeholders and the environment in which we operate. Dialog Semiconductor Plc is headquartered in London with a global sales, R&D and marketing organization. In 2018, it had approximately $1.44 billion in revenue. It currently has approximately 2,000 employees worldwide. The company is listed on the Frankfurt (FWB: DLG) stock exchange (Regulated Market, Prime Standard, ISIN GB0059822006) and is a member of the German TecDAX and MDAX indices. For more information, visit www.dialog-semiconductor.com.

Forward Looking Statements

This press release contains “forward-looking statements” that reflect management’s current views with respect to future events. The words “anticipate,” “believe,” “estimate”, “expect,” “intend,” “may,” “plan,” “project” and “should” and similar expressions identify forward-looking statements. Such statements are subject to risks and uncertainties, including, but not limited to: an economic downturn in the semiconductor and telecommunications markets; changes in currency exchange rates and interest rates, the timing of customer orders and manufacturing lead times, insufficient, excess or obsolete inventory, the impact of competing products and their pricing, political risks in the countries in which we operate or sale and supply constraints. If any of these or other risks and uncertainties occur (some of which are described under the heading “Managing risk and uncertainty” in Dialog Semiconductor’s most recent Annual Report) or if the assumptions underlying any of these statements prove incorrect, then actual results may be materially different from those expressed or implied by such statements. We do not intend or assume any obligation to update any forward-looking statement which speaks only as of the date on which it is made, however, any subsequent statement will supersede any previous statement.

Contact:
Jose Cano
Director, Investor Relations
jose.cano@diasemi.com
+44(0)1793756961

SOURCE: Dialog Semiconductor Plc

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