|
Q2 2013 – Financial Summary
|
Normalised* |
IFRS |
|
||||
|
Q2 2013 |
Q2 2012 |
% Change |
Q2 2013 |
Q2 2012 |
|
||
|
Revenue ($m) |
264.3 |
213.0 |
24% |
264.3 |
213.0 |
|
|
|
Revenue (£m) |
171.2 |
135.5 |
26% |
171.2 |
135.5 |
|
|
|
Operating margin |
48.6% |
46.4% |
7.4% |
37.8% |
|
||
|
Profit before tax (£m) |
86.6 |
66.5 |
30% |
15.0 |
54.8 |
|
|
|
Earnings per share (pence) |
4.89 |
3.58 |
37% |
0.75 |
2.83 |
|
|
|
Net cash generation** |
96.3 |
46.9 |
|
||||
|
Effective revenue fx rate ($/£) |
1.54 |
1.57 |
|
||||
|
H1 2013 – Financial Summary |
Normalised* |
IFRS |
|||||
|
H1 2013 |
H1 2012 |
% Change |
H1 2013 |
H1 2012 |
|||
|
Revenue ($m) |
528.2 |
422.4 |
25% |
528.2 |
422.4 |
||
|
Revenue (£m) |
341.5 |
268.0 |
27% |
341.5 |
268.0 |
||
|
Operating margin |
49.5% |
45.5% |
22.7% |
37.2% |
|||
|
Profit before tax (£m) |
176.0 |
128.5 |
37% |
82.1 |
106.2 |
||
|
Earnings per share (pence) |
10.19 |
6.93 |
47% |
4.44 |
5.53 |
||
|
Net cash generation** |
155.1 |
105.2 |
|||||
|
Effective revenue fx rate ($/£) |
1.55 |
1.58 |
Q2 Financial Highlights
- Group revenues in US$ up 24% year-on-year (£ revenues up 26% year-on-year)
- Order backlog up more than 10% sequentially
- Normalised profit before tax and earnings per share up 30% and 37% year-on-year respectively (IFRS PBT and EPS down 73% and 73% year-on-year respectively)
- £41.8m costs incurred in Q2, being ARM’s contribution to a full and final settlement of certain patent related litigation, charged in the IFRS reported results
- Record net cash generation of £96m
- Interim dividend increased by 26%
Progress on key growth drivers in Q2
Growth in adoption of ARM® technology
o 25 processor licenses signed for a wide range of applications from smartphones and mobile computers, to storage and embedded microcontrollers
o Advanced technology enables a higher royalty percentage per chip
o 5 Cortex™-A processor licenses signed, including another Partner licensing v8 processors that support ARM’s big.LITTLE technology
o 7 Mali graphics processor licenses signed
o POP™ IP helps optimise ARM processor implementations. ARM signed 5 further POP IP licenses in Q2
Growth in shipments of chips based on ARM processor technology
o 2.4 billion ARM-based chips shipped, up 20% year-on-year
o Continued penetration of processors containing both Cortex-A and Mali graphics processors
Outlook
ARM enters the second half of 2013 with a record order backlog and a robust opportunity pipeline. Relevant data for the second quarter, being the shipment period for ARM’s Q3 royalties, points to a small sequential increase in industry revenues. Building on our strong performance in the first half, we expect overall Group dollar revenues for full year 2013 to be at least in line with market expectations.
Simon Segars, Chief Executive Officer, said:“ARM has delivered another quarter of strong revenue and normalised earnings growth. We continue to see demand for ARM’s next generation technology, and in Q2 we signed five licenses for Cortex-A series processors, and seven licenses for ARM’s Mali graphics processor, demonstrating our leadership in both low-power processor and 3D graphics technology. During the quarter, our Partners announced exciting new design wins as ARM-based chips were selected for high-volume OEM products. These included many new smartphones and tablets, ARM-based 64-bit servers and mobile base stations.
"In Q2, ARM’s processor royalty revenue again outperformed the semiconductor industry, growing at 24% year-on-year. In part this outperformance was driven by the growth in smartphones and mobile computing. These smart devices increasingly contain both ARM’s higher-royalty yielding Cortex-A processor technology and also ARM’s Mali graphics."
|
Q2 2013 – Revenue Analysis |
Revenue ($m)*** |
Revenue (£m) |
|||||
|
Q2 2013 |
Q2 2012 |
% Change |
Q2 2013 |
Q2 2012 |
% Change |
||
|
PD |
|||||||
|
Licensing |
88.3 |
67.0 |
32% |
56.9 |
42.6 |
34% |
|
|
Royalties |
119.3 |
96.3 |
24% |
77.7 |
61.5 |
26% |
|
|
Total PD |
207.6 |
163.3 |
27% |
134.6 |
104.1 |
29% |
|
|
PIPD |
|||||||
|
Licensing |
14.3 |
11.6 |
23% |
9.2 |
7.3 |
25% |
|
|
Royalties1 |
16.0 |
13.7 |
16% |
10.4 |
8.6 |
21% |
|
|
Total PIPD |
30.3 |
25.3 |
19% |
19.6 |
15.9 |
23% |
|
|
Development Systems |
13.4 |
13.3 |
1% |
8.7 |
8.5 |
3% |
|
|
Services |
13.0 |
11.1 |
17% |
8.3 |
7.0 |
19% |
|
|
Total Revenue |
264.3 |
213.0 |
24% |
171.2 |
135.5 |
26% |
1 Includes catch-up PIPD royalties of $1.4m (£0.9m) in Q2 2013 and $1.5m (£1.0m) in Q2 2012.
|
H1 2013 – Revenue Analysis |
Revenue ($m)*** |
Revenue (£m) |
|||||
|
H1 2013 |
H1 2012 |
% Change |
H1 2013 |
H1 2012 |
% Change |
||
|
PD |
|||||||
|
Licensing |
169.1 |
132.2 |
28% |
108.6 |
83.7 |
30% |
|
|
Royalties |
242.7 |
189.2 |
28% |
158.1 |
120.4 |
31% |
|
|
Total PD |
411.8 |
321.4 |
28% |
266.7 |
204.1 |
31% |
|
|
PIPD |
|||||||
|
Licensing |
28.4 |
23.2 |
22% |
18.1 |
14.7 |
23% |
|
|
Royalties1 |
32.6 |
26.8 |
21% |
21.2 |
16.9 |
25% |
|
|
Total PIPD |
61.0 |
50.0 |
22% |
39.3 |
31.6 |
24% |
|
|
Development Systems |
30.0 |
28.8 |
4% |
19.3 |
18.3 |
6% |
|
|
Services |
25.4 |
22.2 |
14% |
16.2 |
14.0 |
15% |
|
|
Total Revenue |
528.2 |
422.4 |
25% |
341.5 |
268.0 |
27% |
1 Includes catch-up PIPD royalties of $1.4m (£0.9m) in H1 2013 and $3.6m (£2.3m) in H1 2012.
* Normalised figures are based on IFRS, adjusted for share-based payment costs, amortisation of intangibles, acquisition-related charges, impairments of investments, IP indemnity and similar charges, Linaro-related charges and share of results of joint venture, and profit or loss on disposal of available-for-sale financial assets. For reconciliation of IFRS measures to normalised non-IFRS measures detailed in this document, see notes 12.13 to 12.16.
** Net cash generation is defined as movement on cash, cash equivalents, short-term and long-term deposits, adding back dividend payments, investment and acquisition consideration, other acquisition-related payments, share-based payroll taxes, payments related to joint ventures and Linaro, and deducting inflows from share option exercises and investment disposal proceeds – see notes 12.8 to 12.12
*** US Dollar revenues are based on the group’s actual dollar invoicing, where applicable, and using the rate of exchange applicable on the date of the transaction for invoicing in currencies other than dollars. Over 95% of invoicing is in US dollars.
For the full results see: http://www.arm.com/about/newsroom/arm-holdings-plc-reports-results-for-the-second-quarter-and-half-year-ended-30-june-2013.php
CONTACTS:
Sarah West/Aideen Lee Ian Thornton/Jonathan Lawton
Brunswick ARM Holdings plc
+44 (0)207 404 5959 +44 (0)1223 400400
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