Melexis NV
XBRU:MELE
| US |
|
Fubotv Inc
NYSE:FUBO
|
Media
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
C
|
C3.ai Inc
NYSE:AI
|
Technology
|
| US |
|
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
| CN |
|
NIO Inc
NYSE:NIO
|
Automobiles
|
| US |
|
Fluor Corp
NYSE:FLR
|
Construction
|
| US |
|
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
| US |
|
TopBuild Corp
NYSE:BLD
|
Consumer products
|
| US |
|
Abbott Laboratories
NYSE:ABT
|
Health Care
|
| US |
|
Chevron Corp
NYSE:CVX
|
Energy
|
| US |
|
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
| US |
|
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
| US |
|
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
| US |
|
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
| US |
|
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
54.5
92.75
|
| Price Target |
|
We'll email you a reminder when the closing price reaches EUR.
Choose the stock you wish to monitor with a price alert.
|
|
Fubotv Inc
NYSE:FUBO
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
C
|
C3.ai Inc
NYSE:AI
|
US |
|
|
Uber Technologies Inc
NYSE:UBER
|
US |
|
|
NIO Inc
NYSE:NIO
|
CN |
|
|
Fluor Corp
NYSE:FLR
|
US |
|
|
Jacobs Engineering Group Inc
NYSE:J
|
US |
|
|
TopBuild Corp
NYSE:BLD
|
US |
|
|
Abbott Laboratories
NYSE:ABT
|
US |
|
|
Chevron Corp
NYSE:CVX
|
US |
|
|
Occidental Petroleum Corp
NYSE:OXY
|
US |
|
|
Matrix Service Co
NASDAQ:MTRX
|
US |
|
|
Automatic Data Processing Inc
NASDAQ:ADP
|
US |
|
|
Qualcomm Inc
NASDAQ:QCOM
|
US |
|
|
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
Melexis NV
You don't have any saved screeners yet
Dear audience, our CFO, Karen Van Griensven; and myself, Françoise Chombar, are pleased to welcome you to the Melexis earnings call for the first -- last quarter and thus, full year 2017. We will be taking your questions after a brief introduction from our side.Let me first give you some highlights from the business side, the market side. 10 chips -- 10 Melexis chips in every new car. 2017 is now earmarked with this distinguished milestone. We are pleased to present you with a nice set of 2017 results, in line with our earlier guidance and despite more currency headwinds at year-end than we had anticipated. Once again, Melexis posts double the market growth, thanks to a broadly-based product mix. Geographically, our Asia Pacific share in sales grows above average versus 2016, while Europe keeps a steady pace. North and Latin America is a bit down, in line with the lower growth in the U.S. than rest of the world overall. There are 3 trends in automotive that Melexis products are an ideal match to: electrification, assisted drive and user experience. As a consequence of these trends, customer demands are increasing and also, new applications find their way to volume production. The trend towards electrification pushes up the need for all kinds of motor drivers, and obviously, also sensors, be they magnetic pressure or temperature. The move towards assisted drive requires our customers to enhance the functional safety of their systems, and for already many years, Melexis products delivered the required Automotive Safety Integrity Levels, also known as ASIL. Other Melexis product line that support the assisted drive trend and thus provide higher safety for driver and passenger, include: rain light sensors; TPMS, Tire Pressure Monitoring System; sensor interfaces in ABS and ESP systems; and also time-of-flight cameras for driver monitoring. Last, but not least, we lately see an increased interest for making the user experience more satisfying. As an example, Melexis' ambient light solutions are a perfect fit for our customers to differentiate their interiors. And as the vehicle operating in electric mode becomes more silent, likewise, our smart drivers ensure that mechatronic systems, such as HVAC smart, operate more silently than ever before. As you can tell, Melexis sustains a constant flow of innovations that help our customers to raise the bar on their applications. We are also pleased with our performance in adjacent markets. Main growth drivers were: smart appliances and smart HVACs; or contactless thermometer applications with our temperature sensors; or industrial applications, such as current sensors for solar inverters/converters, position sensors for joysticks of all kinds; or fan drivers for CPU cooling.Our guidance for 2018 calls for a sales growth of 12% to 15%, with margins similar to 2017. All that taking into account a euro-dollar exchange rate of $1.23. At constant currency versus '17, sales growth guidance would have been between 16% and 19%, thus, well above last year's percentage. To conclude, allow me a reflection. Melexis multiyear stretch of double-digit growth is remarkable in our industry. This being said, we take nothing for granted. We are where we are today because we didn't follow a traditional path. We followed our own based on values on thinking big and sometimes a bit crazy and by putting people at the same level of importance as results. Melexis stands for engineering the best imaginable future in what we do and how we do it. Let me now hand the stage to our CFO, Karen Van Griensven.
Thank you, Françoise. Good afternoon, ladies and gentlemen. I will take you first to the fourth quarter results for 2017. So the sales in the fourth quarter were at EUR 132.7 million, an increase of 11% compared to the same quarter of the previous year and an increase of 4% compared to the previous quarter. The euro-U.S. dollar exchange rates evolution had a negative impact of 4% compared to the same quarter of last year and a negative impact of 1% compared to the previous quarter. The gross margin was EUR 61.1 million, an increase of 11% compared to the same quarter of last year and an increase of 6% compared to the previous quarter. So gross margin remains relatively stable at levels around 46%. R&D expenses were 13.5% of sales, G&A was at 4.8% and sales of selling was at 2.4% of sales. So no surprises there. But we did record an exceptional result of EUR 2.2 million that relates to the disposal of a minority shareholding in Q4. The operating result was EUR 36 million, an increase of 22% compared to the same quarter of last year and an increase of 12% compared to the previous quarter. Excluding the exceptional result, our operating margin was at 25.4%, so slightly higher than in the previous quarter. Our tax rate in Q4 amounts to 26%, so higher than usual. This is due to a few ad hoc events, the biggest one being the new -- the latest new Belgian tax legislation that was approved in December. This new legislation consists, amongst others, of a gradual reduction in effective tax rate in the coming years, which will obviously benefit Melexis in the long term. However, in Q4, this had a negative tax effect on our deferred tax asset calculation, and that's the main reason of the lower tax rate in Q4.All in all, net income came out at EUR 26.6 million or EUR 0.66 per share, an increase of 6% compared to EUR 25.1 million or EUR 0.62 per share in the fourth quarter of 2016 and a decrease of 5% compared to the previous quarter, mainly due to the higher tax rate.For the full year 2017, sales were at EUR 511.7 million, an increase of 12% compared to the previous year. The exchange rate impact was actually neutral compared to 2016. Gross margin was at EUR 235.4 million, an increase of 13% compared to 2016. For the full year, the gross margin came out at 46% in 2017 compared to 45.7%, so slightly better compared to 2016.R&D expenses were 13.6% of sales. G&A was at 4.7% of sales. And selling was at 2.3% of sales. The operating results amounted to EUR 132.6 million, an increase of 16% compared to last year. So the operating margin came out at 25.9%, including the exceptional operating result, and 25.5% excluding this result, where we had 25% in 2016.In our 2016 (sic) [ 2017 ] financial results, they were higher than in 2016. On the other hand, our fixed -- our tax rate was higher than 2016. The 2 compensate each other more or less, so that we came out at EUR 111 million net profit in 2017, an increase of 15% compared to 2016. This amounts to EUR 2.75 per share compared to EUR 2.38 per share in 2016.There is also announcement regarding the dividend. So the Board of Directors approved last week to propose to the annual shareholders' meeting to pay out over the result of 2017 a total dividend of EUR 2.10 per share. This amount contains an interim dividend of EUR 1.3 per share, which was already paid in October, and the final dividend of EUR 0.80 per share, which will be payable after approval of the annual shareholders' meeting.Looking ahead at 2018. So for the Q1 2018, we expect sales to be around EUR 140 million. For the full year, we expect growth to be between 12% and 15%, a gross profit margin around 45% and an operating margin around 25%, all taking into account a lower average U.S. dollar in 2018 of EUR 1.22 -- EUR 1.23 per U.S. dollar. I would like to close here my section, and I would like to open the question-and-answer session. So, please go ahead.
[Operator Instructions] Your first question comes from the line of Francois Bouvignies of UBS.
I have a couple as usual. The first one is on your guidance that you provided for the full year. Obviously, very strong trend to continue. I just have a question on the -- how do you deal with the potential double ordering in the industry? I mean, when you look at your guidance, do you have a buffer for order -- double ordering? Do you have like maybe some -- I mean, how do you factor this risk in your guidance? That's the first one. The second one is on your inventories, which continues to increase, and obviously, you have a strong outlook going forward. Ver interesting [indiscernible] because it seems particularly high. Is there any specific reason or anything that we should be aware of around this? And the last one, maybe it's -- how about your investments EUR 75 million over 5 years and EUR 60 million in France as well? How do you -- how should we think about the phasing of this investments and the split versus OpEx and CapEx maybe? It would be very helpful to have some color at it.
Yes, thank you for your questions. Let me answer the first question on our guidance and how do we factor in -- or how do we deal with double ordering. Well, I think we're pretty much intimate enough with our customers to understand what is behind for them. So we try to really understand the value chain further downstream. I cannot exclude that we have some double orderings somewhere because, of course, you have also smaller customers, you have distribution customers. But I think that is a -- not such a big percentage as such. So we've been, let's say, delivering to these customers for a long time already. We know them very well. We don't have a lot of very, very new customers. And whenever we have a new customer, we ask very, very intricate questions to understand how their business model looks like, what OEMs are they servicing and making sure that -- yes, that we understand what is the business behind it. On the inventory, in fact, we might be -- you say that it's particularly high. I think it is as high as it should be in order to get ready for our growth. Now on the third question, could you repeat your third question, please?
Yes, it's on your investments that you are making at EUR 75 million and EUR 60 million to increase your capacity. I was just wondering how you -- should we think about the phasing of these investments in the next 5 years? So how much should we include in '18? And maybe in a split versus OpEx and CapEx, how should we think about that?
Karen, could you take that question?
Yes. So for 2018, we can be clear. So we expect investments of CapEx in the order -- but that is all over Melexis, so in the range of EUR 75 million, of which around EUR 20 million will be in buildings and the rest in equipment. So EUR 20 million, EUR 25 million even in buildings. This is mainly Sofia, but also Ypres and a little bit but limited in Corbeil. The figures...
Sorry, but the total OpEx will be around EUR 75 million?
EUR 65 million in 2018, Melexis overall.
Okay. And then on '19, I mean, should we see a big drop or still at this kind of level?
It will be rather at similar levels. We expect it rather to be at similar level.
Okay. And your OpEx? On your OpEx?
So you mean our operation, how that will evolve, our operational expenses?
Yes, operating expenses. So I guess, you need to -- this EUR 75 million, so it's only -- and EUR 60 million is only CapEx? Or does it include...
Only CapEx.
And on the OpEx, I guess, you will need to fill your fab with engineers and et cetera. So should we see a particular impact on your R&D line or anything like that?
We will see increase everywhere, but more or less in line with sales growth as we believe we -- I mean, the guidance is for 25% EBIT. So that means expenses will grow more or less. It can be a bit more, a bit less in line with sales.
Okay. That's very helpful. And the last one maybe from me is the -- if you look at 2017, you have many moving parts, can you maybe give us some color around your exposure to magnetic sensors or position sensors, current sensors as percentage of revenues? Because I mean, it's very difficult to have a clear view around all the moving parts. So it would be great to have this data if you can provide by any chance.
Yes, We usually don't... Okay, go ahead, Karen. Sorry.
No, we usually don't -- we don't give details on -- at that level. So -- but we can say that all product lines are growing after we expect again to have substantial growth in all product lines. Obviously, position sensors in absolute terms is much more important than many of the other product lines. But they will all grow at probably double-digit growth. So the proportional -- the distribution we have today will be more or less similar also next year. No big changes to be expected there.
[Operator Instructions] Your next question comes from the line of Guy Sips of KBC Securities.
First question is on your FX sensitivity, can you give us some color what the $0.05 move of the dollar would give on your results? And the second question is on the tax rate guidance. Could you give some color what we could pencil in for 2018 until 2020 for the tax rates?
So for the tax rate, we can expect -- for 2018, we expect similar tax level as this year -- I mean, as previous year, 2017. In the long term, the positive evolution of the fiscal environment in Belgium should have a positive effect for Melexis as well. But it's very difficult today to -- yes, to express a fixed number.
And you mean similar -- does that include the one -- the negative one-off in Q4? Or should we expect...
Looking at the tax rate we see over the full year, including also the effect we saw in 2000 -- so looking at the full year tax rate, which was around 18%. So we can expect something similar, maybe a bit lower, a bit higher, but around similar levels.
And your next question comes from the line of Paul Moran of Northern Trust.
Could you just remind me of what the variance -- various large currency buckets are in terms of your revenue exposure? I know in the past you've said that U.S. dollar revenue is about 60% of sales. Could you give me an update on broadly where we are for '17, '18?
We can expect -- I mean, the effects, like we said in the past, was for every $0.05, more or less EUR 3 million impact on operating level. We can keep that level also for 2018.
Then my question is, in terms of -- has there been any change? Are you still roughly 60% of sales U.S. dollar?
There might be a slight decrease in dollars rather than an increase. But overall impact today, we don't expect a very big change compared to 2017.
Okay. And just to ask a bit more on FX levels. What -- you mentioned that there was basically no FX headwind effect in revenues for 2017. What were your effective rates? Because I don't see that. I see a bit of a change.
What do you mean? You -- I'm not sure I understand it.
I'm trying to understand. So looking at the average 2017 on 2016, euro/dollar there was 230 basis point difference between the 2 years. And then the results there says that there was no impact. I don't know if that's just a rounding issue, so I'm just trying to understand what the impact there is.
Yes, it could be that, in the past year, we used -- so it's a technical issue between -- we used the dollar rate of the month before, so not the daily rate. So that might impact somehow -- that might explain some of the difference between what you see and what we see in our figures.
Okay. So...
But as of -- this is the way we did it in the past. So we used the dollar rate of the month before for the next month, the average of the previous month for the next month. As of 2018, we have changed this, and we use now the daily rate. So every day, it's updated.
Okay. Understood. So can I ask -- just to come back to my initial question, has there been much of a change? And it's just a small reduction in U.S. dollar only that's really been the only change you would point to versus 2016 when that was published?
What do you -- I'm still not sure I understand. But you were talking versus 2016?
Yes.
So we have 0 effect on our -- I mean, in the sales figures, there is no effect. The dollar rate on -- I mean, the 12% is not -- I mean, there is no impact of any dollar in there.
Yes, and I'm trying to understand why that is. That's the bit that I'm a bit confused because when I look at the averages, there is an effect. So I'm just wondering if you're -- if the reason is you're being very conservative in terms of the growth guidance and the FX headwind effect on that. It's basically what I'm getting at.
No, I can only know -- I wouldn't know -- I mean, I can only tell you that there is no effect in our accounting.
Okay. And so that would be, if 60% of revenue is U.S. dollars, is the majority of the others of that -- is it in euros? Or is it a whole...
It's all euro and dollar. No.
It's all euro. Okay.
No, no. It's only dollar and euro. The average dollar by which the sales are accounted for in 2016 is exactly the same as the one in 2017.
Yes, I guess, that's where we'd agree to disagree in...
Yes, I understand. Yes. But I think it's because we have accounted in a different -- we have not used the overall average dollar rate that was -- the overall average dollar rate, that's already a difference we took. We have a month -- we are always a month behind.
Yes, okay. That might be the difference. I haven't looked at that.
I can still explained for some of the difference, but yes, it should explain the -- normally, the full difference.
Yes. I guess, it also implies that the -- yes, that there's a bigger headwind than what you're taking about that you've taken into account. So actually, you're being conservative on the growth on a constant currency basis. But that's just -- that was my interpretation there.
But this is -- I'm talking '16 versus '17. In 2018, there is a clear effect of the U.S. dollar. As for also what we -- but 2016 versus 2017, we do not see -- in the second half, we saw quite -- obviously, we have -- were disadvantaged by the dollar. But in the first half, we saw the opposite effect. So over the full year, it averaged out.
[Operator Instructions] Your next question comes from the line of Marcel Achterberg of Degroof Petercam.
I have 2. First one, the additional capacity that you announced this morning. How much would that actually add to your existing capacity over the next 5 years in percentage volume terms? And second question is, the gross margin guidance remains unchanged to 45%, but it has been above that for a number of years actually. So isn't that a bit conservative to keep guiding for that level and then beating it pretty much every year?
Maybe I can answer the second question first. So we look at what we know today and make the best possible estimation or assessment. So that's things might go better, and that in most cases, it was better. As you say, I'm not sure. Maybe it has been sometimes also below that figure, or below expectations. But we try to always do the best we can, so -- in the assessment. So it might be, but I don't have a crystal ball, and we can only base ourselves on what we know today and make the best assessment possible. We try to be as realistic as possible, let's say it like that. And on the capacity, it's very difficult to give you a percentage there. We -- the major investment that we announced also this morning was mainly an investment in buildings. And of course, the buildings we do not fill it up completely to start with. We have to have a building where we have to put our equipments in. But we installed then the capacity as is needed. And equipments can be installed, of course, a bit faster than you can build a building. So it's very difficult to really answer your percentage. It's just also like with the -- like what I answered on the inventory, we are setting ourselves up for growth.
Yes. What I'm trying to find confirmation that the capacity addition over the next 5 years, the equipment moving on a gradual basis, that should allow you to keep growing by double-digit percentage over that time if demand allows that.
Well, we don't give guidance over longer period of time than '18. But of course, we do make our assessment also for which capacity do we have to set ourselves up for in order to manage the potential growth that is coming to us. So as our long-term targets are always between -- or have always been between 10% and 15%, that's also, of course, the rate at which we estimate our capacity need.
There are no further questions at this time. Please continue.
Okay, ladies and gentlemen, we would like to thank you for your kind attention and for all your questions. Our next earnings conference call will be on April 20, the same day as our shareholders' meeting. Goodbye for now.
Excuse me, madam. We do have 2 people come in to ask a question. Will you take these?
Okay.
The first one came -- comes from the line of Charles Lepetitpas of Natixis.
Something on the lidar, we've seen yesterday, I think, a competitor announcing first-design wins for lidar at an equipment supplier. Can you provide us with an update from your side on where you sit at the moment on that particular project?
Well, lidar is a big word for a pretty big hype that is there in the industry. We usually do not give out any information on where we are with development until the time is there. We are working on lidar based on the IP that we have, of course, acquired over time with building 2D and 3D cameras. We do not inform on design wins. We only inform once it's on the market. That's the line of information that we are taking.
Your next question comes from the line of Christoph Greulich of Berenberg.
Yes. First of all, I was wondering like the guidance you're giving for the organic growth in 2018 is bigger than the one in 2017. So I was just wondering, what is the main driver behind that. And yes, what is driving that 2018, actually, will be an even better year than the already strong year 2017? And the second question was regarding the operating leverage, as you're strong -- growing very strongly on the top line, I was just wondering why we don't see operating leverage there, which would lead to margin expansion as a result.
Okay. So Karen, if you can take the second question, I will take the first one now. So for 2018, in fact, all the products that I have mentioned in my introduction will somehow contribute to that growth. We have some ramp-ups, new ramp-ups coming on board for products that we have already introduced, that I mentioned also in my introduction. So it's pretty much across the board really. And that's also very good, that our growth is broadly-based. So I hope that answers your question.
Okay. Then I will move next to the operating leverage. So yes, we do grow fast, but on the other hand, we invest heavily. We invest heavily -- the numbers we already mention for 2018, it's a step-up compared to the past. Also we are -- we keep heavily investing in people as well. We will continue to hire at a high speed because we do believe that there is a potential in the market also in the future to keep -- I mean, the whole automotive market, its innovation is accelerating at the moment. So we also want to use the opportunity, and we keep investing in our engineers. So the two together make it that -- For the time being, the operating leverage is difficult. We invest in growth basically.
And your final question comes from the line of [ Gaspar ] of Montarol.
Congratulations on the results. We've see -- the question is that we've seen an improvement in North America with double-digit growth after 3 quarters of relative growth. And I would like if you could please elaborate on the performance on the changes of the turnaround of business there? What's driving it?
Well, things can change from 1 quarter to another. I'm not sure exactly what especially has driven the U.S. But the U.S. figures are a bit lower than -- or the U.S. growth figures are a bit lower than, for example, Europe or APAC. But that is also in line with the lower growth overall that we see in automotive semiconductor demand in the U.S. I think that from a first perspective, some of the products probably ramped up a bit faster in the U.S. in Q4 than maybe in the previous quarters, that could be. But honestly, I think that it's not really that significant. In some quarters, we grow a bit more in 1 region than the others. It's a quarterly effect. I wouldn't see that as breaking a trend or so.
We do have a final question from the line of [ Farooq Khan ] of [ Kantor Dehook ].
It's very nice to have growth figures year-after-year. But do you also have or can you say that you have your accessibility to raw materials and basics also in line with that? Or do you have a problem with that? Or how is that?
Yes. Well, I think it's no secret that the raw materials are a bit scarce these days. But I think the fact that we've been working with our suppliers for a very, very long time. We know them well. They know us well. We work together well in forecasting the right levels of capacity and materials. In that sense, even if it's a bit more difficult these days, and we might see a bit more of hiccups, which doesn't make it easy on some of our supply-chain people to manage it, but I think overall, we manage it.
Okay. And you can continue with your R&D and ascertain your goals?
Yes, yes. I hope that you do not mean to say that people are materials. But also in the people area, yes, we manage to -- yes, to hire the necessary talent, and we grow it further, of course, as well.
There are no further questions. Please continue.
Okay. So as I said before, we'd like to thank you for the good questions you've asked and for your attention. Our next earnings conference will be on April 20, and that is the same day as our shareholders' meeting. And thank you again, and goodbye for now.
Thank you, ladies and gentlemen. That does conclude our conference for today. Thank you all for participating. You may now disconnect. Put the speakers please to stand by.