STMicroelectronics Reports 2021 First Quarter Financial Results
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STMicroelectronics Reports 2021 First Quarter Financial Results

STMicroelectronics Reports 2021 First Quarter Financial Results

Geneva, April 29, 2021 - STMicroelectronics (NYSE: STM), a global semiconductor leader serving customers across the spectrum of electronics applications, reported U.S. GAAP financial results for the first quarter ended April 3, 2021. This press release also contains non-U.S. GAAP measures (see Appendix for additional information).

ST reported first quarter net revenues of $3.02 billion, gross margin of 39.0%, operating margin of 14.6%, and net income of $364 million or $0.39 diluted earnings per share.

Jean-Marc Chery, STMicroelectronics President & CEO, commented:

Quarterly Financial Summary (U.S. GAAP)

(US$ m, except per share data) Q1 2021 Q4 2020 Q1 2020 Q/Q Y/Y
Net Revenues $3,016 $3,235 $2,231 -6.8% 35.2%
Gross Profit $1,175 $1,254 $846 -6.3% 38.9%
Gross Margin 39.0% 38.8% 37.9%  20 bps 110 bps
Operating Income $440 $657 $231 -33.0% 90.3%
Operating Margin 14.6% 20.3% 10.4% - 570 bps 420 bps
Net Income $364 $582 $192 -37.4% 89.6%
Diluted Earnings Per Share $0.39 $0.63 $0.21 -38.1% 85.7%

(1) Non-U.S. GAAP. See Appendix for reconciliation to U.S. GAAP and information explaining why the Company believes these measures are important.


First Quarter 2021 Summary Review

Net Revenues By Product Group (US$ m) Q1 2021 Q4 2020 Q1 2020 Q/Q Y/Y
Automotive and Discrete Group (ADG) 1,043 953 753 9.4% 38.4%
Analog, MEMS and Sensors Group (AMS) 1,083 1,419 852 -23.7% 27.1%
Microcontrollers and Digital ICs Group (MDG) 886 859 623 3.2% 42.2%
Others 4 4 3 - -
Total Net Revenues 3,016 3,235 2,231 -6.8% 35.2%

Net revenues totaled $3.02 billion, a year-over-year increase of 35.2%. On a year-over-year basis, the Company recorded higher net sales in all product groups except the RF Communications (former “Digital”) sub-group. Year-over-year net sales to OEMs and Distribution increased 21.4% and 76.2%, respectively. On a sequential basis, net revenues decreased 6.8%, 270 basis points above the mid-point of the Company’s guidance. ADG and MDG reported increases in net revenues on a sequential basis while AMS decreased.

Gross profit totaled $1.18 billion, a year-over-year increase of 38.9%. Gross margin of 39.0% increased 110 basis points year-over-year, mainly due to lower unloading charges, manufacturing efficiencies and improved mix partially offset by negative currency effects, net of hedging. First quarter gross margin was 50 basis points above the mid-point of the Company’s guidance mainly due to better product mix.

Operating income increased 90.3% to $440 million, compared to $231 million in the year-ago quarter. The Company’s operating margin increased 420 basis points on a year-over-year basis to 14.6% of net revenues, compared to 10.4% in the 2020 first quarter.

By product group, compared with the year-ago quarter:

Automotive and Discrete Group (ADG):

Analog, MEMS and Sensors Group (AMS):

Microcontrollers and Digital ICs Group (MDG):

Net income and diluted earnings per share increased to $364 million and $0.39, respectively, compared to $192 million and $0.21, respectively, in the year-ago quarter.

Cash Flow and Balance Sheet Highlights

        Trailing 12 Months
(US$ m) Q1 2021 Q4 2020 Q1 2020 Q1 2021 Q1 2020 TTM Change
Net cash from operating activities 682 922 399 2,376 1,927 23.3%
Free cash flow (non-U.S. GAAP) 261 512 113 776 677 14.6%


Capital expenditure payments, net of proceeds from sales, were $405 million in the first quarter. In the year-ago quarter, capital expenditures, net, were $266 million.

Inventory at the end of the first quarter was $1.84 billion, compared to $1.77 billion in the year-ago quarter. Day sales of inventory at quarter-end was 91 days compared to 118 days in the year-ago quarter.

Free cash flow (non-U.S. GAAP) was $261 million in the first quarter, up from $113 million in the year-ago quarter.

In the first quarter, the Company paid cash dividends to its shareholders totaling $38 million and executed a $156 million share buy-back as part of its previously announced share repurchase program.

ST’s net financial position (non-U.S. GAAP) was $1.19 billion at April 3, 2021 compared to $1.10 billion at December 31, 2020 and reflected total liquidity of $4.16 billion and total financial debt of $2.97 billion.


Business Outlook

The Company’s guidance, at the mid-point, for the 2021 second quarter is:

The Company expects its 2021 CAPEX to be about $2 billion.

Conference Call and Webcast Information

STMicroelectronics will conduct a conference call with analysts, investors and reporters to discuss its first quarter 2021 financial results and current business outlook today at 9:30 a.m. Central European Time (CET) / 3:30 a.m. U.S. Eastern Time (ET). A live webcast (listen-only mode) of the conference call will be accessible at ST’s website, http://investors.st.com, and will be available for replay until May 14, 2021.

Use of Supplemental Non-U.S. GAAP Financial Information

This press release contains supplemental non-U.S. GAAP financial information.

Readers are cautioned that these measures are unaudited and not prepared in accordance with U.S. GAAP and should not be considered as a substitute for U.S. GAAP financial measures. In addition, such non-U.S. GAAP financial measures may not be comparable to similarly titled information from other companies. To compensate for these limitations, the supplemental non-U.S. GAAP financial information should not be read in isolation, but only in conjunction with the Company’s consolidated financial statements prepared in accordance with U.S. GAAP.

See the Appendix of this press release for a reconciliation of the Company’s non-U.S. GAAP financial measures to their corresponding U.S. GAAP financial measures.

Forward-looking Information

Some of the statements contained in this release that are not historical facts are statements of future expectations and other forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 or Section 21E of the Securities Exchange Act of 1934, each as amended) that are based on management’s current views and assumptions, and are conditioned upon and also involve known and unknown risks and uncertainties that could cause actual results, performance, or events to differ materially from those anticipated by such statements, due to, among other factors:

Such forward-looking statements are subject to various risks and uncertainties, which may cause actual results and performance of our business to differ materially and adversely from the forward-looking statements. Certain forward-looking statements can be identified by the use of forward looking terminology, such as “believes,” “expects,” “may,” “are expected to,” “should,” “would be,” “seeks” or “anticipates” or similar expressions or the negative thereof or other variations thereof or comparable terminology, or by discussions of strategy, plans or intentions.

Some of these risk factors are set forth and are discussed in more detail in “Item 3. Key Information — Risk Factors” included in our Annual Report on Form 20-F for the year ended December 31, 2020, as filed with the SEC on February 24, 2021. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this release as anticipated, believed, or expected. We do not intend, and do not assume any obligation, to update any industry information or forward-looking statements set forth in this release to reflect subsequent events or circumstances.

About STMicroelectronics

At ST, we are 46,000 creators and makers of semiconductor technologies mastering the semiconductor supply chain with state-of-the-art manufacturing facilities. An independent device manufacturer, we work with more than 100,000 customers and thousands of partners to design and build products, solutions, and ecosystems that address their challenges and opportunities, and the need to support a more sustainable world. Our technologies enable smarter mobility, more efficient power and energy management, and the wide-scale deployment of the Internet of Things and 5G technology. Further information can be found at www.st.com.

For further information, please contact:

INVESTOR RELATIONS:
Céline Berthier
Group VP, Investor Relations
Tel: +41 22 929 58 12
celine.berthier@st.com

MEDIA RELATIONS:
Alexis Breton
Head of Corporate External Communications
Tel: + 33 6 59 16 79 08
alexis.breton@st.com

 

STMicroelectronics N.V.      
CONSOLIDATED STATEMENTS OF INCOME      
(in millions of U.S. dollars, except per share data ($))      
       
  Three months ended  
  April 3, March 28,  
  2021 2020  
  (Unaudited) (Unaudited)  
       
Net sales                      3,011                    2,228  
Other revenues                             5                           3  
NET REVENUES                      3,016                    2,231  
Cost of sales                    (1,841)                   (1,385)  
GROSS PROFIT                      1,175                       846  
Selling, general and administrative                       (325)                      (270)  
Research and development                       (444)                      (375)  
Other income and expenses, net                           34                         35  
Impairment, restructuring charges and other related closure costs                             -                          (5)  
Total operating expenses                       (735)                      (615)  
OPERATING INCOME                         440                       231  
Interest income (expense), net                           (9)                           1  
Other components of pension benefit costs                           (2)                          (3)  
Gain on financial instruments, net                             2                            -  
INCOME BEFORE INCOME TAXES AND NONCONTROLLING INTEREST                         431                       229  
Income tax expense                         (66)                        (39)  
NET INCOME                         365                       190  
Net income attributable to noncontrolling interest                           (1)                           2  
NET INCOME ATTRIBUTABLE TO PARENT COMPANY                         364                       192  
       
EARNINGS PER SHARE (BASIC) ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS                        0.40                      0.22  
EARNINGS PER SHARE (DILUTED) ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS                        0.39                      0.21  
       
NUMBER OF WEIGHTED AVERAGE SHARES USED IN CALCULATING DILUTED EPS 931.5 916.7  
       


 

 
     
CONSOLIDATED BALANCE SHEETS      
As at April 3, December 31, March 28,
In millions of U.S. dollars 2021 2020 2020
  (Unaudited) (Audited) (Unaudited)
ASSETS      
Current assets:      
Cash and cash equivalents 3,454 3,006 2,028
Restricted cash - - 10
Short-term deposits 573 581 537
Marketable securities 132 133 135
Trade accounts receivable, net 1,418 1,465 1,294
Inventories 1,843 1,841 1,772
Other current assets 550 584 500
Total current assets 7,970 7,610 6,276
Goodwill 320 330 175
Other intangible assets, net 434 445 298
Property, plant and equipment, net 4,743 4,596 4,022
Non-current deferred tax assets 717 739 694
Long-term investments 10 10 11
Other non-current assets 784 724 454
  7,008 6,844 5,654
Total assets 14,978 14,454 11,930
       
LIABILITIES AND EQUITY      
Current liabilities:      
Short-term debt 837 795 171
Trade accounts payable 1,281 1,166 960
Other payables and accrued liabilities 1,003 966 856
Dividends payable to stockholders 4 42 6
Accrued income tax 75 84 63
Total current liabilities 3,200 3,053 2,056
Long-term debt 2,137 1,826 1,871
Post-employment benefit obligations 490 506 436
Long-term deferred tax liabilities 74 75 36
Other long-term liabilities 461 488 321
  3,162 2,895 2,664
Total liabilities 6,362 5,948 4,720
Commitment and contingencies      
Equity      
Parent company stockholders' equity      
Common stock (preferred stock: 540,000,000 shares authorized, not issued; common stock: Euro 1.04 nominal value, 1,200,000,000 shares authorized, 911,256,920 shares issued, 901,446,386 shares outstanding) 1,157 1,157 1,157
Additional Paid-in Capital 3,127 3,062 3,029
Retained earnings 3,963 3,599 2,938
Accumulated other comprehensive income 559 723 410
Treasury stock (249) (93) (390)
Total parent company stockholders' equity 8,557 8,448 7,144
Noncontrolling interest 59 58 66
Total equity 8,616 8,506 7,210
Total liabilities and equity 14,978 14,454 11,930
       

  

       
STMicroelectronics N.V.      
       
SELECTED CASH FLOW DATA      
       
Cash Flow Data (in US$ millions) Q1 2021 Q4 2020 Q1 2020
       
Net Cash from operating activities                      682                      922                      399
Net Cash used in investing activities                    (413)                    (312)                    (821)
Net Cash from (used in) financing activities                      182                    (321)                    (143)
Net Cash increase (decrease)                      448                      292                    (569)
       
Selected Cash Flow Data (in US$ millions) Q1 2021 Q4 2020 Q1 2020
       
Depreciation & amortization                      256 255 211
Net payment for Capital expenditures                    (405)                    (381)                    (266)
Dividends paid to stockholders                      (38)                      (40)                      (53)
Change in inventories, net                      (32)                      127                      (96)
       

Appendix
STMicroelectronics
Supplemental Financial Information

  Q1 2021 Q4 2020 Q3 2020 Q2 2020 Q1 2020
Net Revenues By Market Channel (%)          
Total OEM 67% 74% 74% 66% 75%
Distribution 33% 26% 26% 34% 25%
           
€/$ Effective Rate 1.19 1.16 1.13 1.10 1.11
           
Product Group Data (US$ m)          
Automotive & Discrete Group (ADG)          
 - Net Revenues 1,043 953 851 727 753
 - Operating Income 85 94 49 16 23
Analog, MEMS & Sensors Group (AMS)          
 - Net Revenues 1,083 1,419 997 624 852
 - Operating Income 187 402 175 56 177
Microcontrollers & Digital ICs Group (MDG)          
 - Net Revenues 886 859 815 733 623
 - Operating Income 172 174 142 117 71
Others (a)          
 - Net Revenues 4 4 3 3 3
 - Operating Income (Loss) (4) (13) (37) (83) (40)
Total          
 - Net Revenues 3,016 3,235 2,666 2,087 2,231
 - Operating Income 440 657 329 106 231


a. Net revenues of Others includes revenues from sales assembly services and other revenue. Operating income (loss) of Others includes items such as unused capacity charges, including reduced manufacturing activity due to COVID-19, impairment, restructuring charges and other related closure costs, management reorganization costs, phase out and start-up costs of certain manufacturing facilities, and other unallocated expenses such as: strategic or special research and development programs, certain corporate-level operating expenses, patent claims and litigations, and other costs that are not allocated to product groups, as well as operating earnings of other products. Others includes:

 

(US$ m) Q1 2021 Q4 2020 Q3 2020 Q2 2020 Q1 2020
Unused Capacity Charges 2 17 38 64 34
Impairment & Restructuring Charges - (1) 2 4 5


(Appendix – continued)

STMicroelectronics
Supplemental Non-U.S. GAAP Financial Information
U. S. GAAP – Non-U.S. GAAP Reconciliation

The supplemental non-U.S. GAAP information presented in this press release is unaudited and subject to inherent limitations. Such non-U.S. GAAP information is not based on any comprehensive set of accounting rules or principles and should not be considered as a substitute for U.S. GAAP measurements. Also, our supplemental non-U.S. GAAP financial information may not be comparable to similarly titled non-U.S. GAAP measures used by other companies. Further, specific limitations for individual non-U.S. GAAP measures, and the reasons for presenting non-U.S. GAAP financial information, are set forth in the paragraphs below. To compensate for these limitations, the supplemental non-U.S. GAAP financial information should not be read in isolation, but only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP.

The Company believes that these non-U.S. GAAP financial measures provide useful information for investors and management because they offer, when read in conjunction with the Company’s U.S. GAAP financials, (i) the ability to make more meaningful period-to-period comparisons of the Company’s on-going operating results, (ii) the ability to better identify trends in the Company’s business and perform related trend analysis, and (iii)  to facilitate a comparison of the Company’s results of operations against investor and analyst financial models and valuations, which may exclude these items.

Net Financial Position (non-U.S. GAAP measure)

Net Financial Position, a non-U.S. GAAP measure, represents the difference between our total liquidity and our total financial debt. Our total liquidity includes cash and cash equivalents, restricted cash, short-term deposits, and marketable securities, and our total financial debt includes short-term debt and long-term debt, as represented in our Consolidated Balance Sheets.

We believe our Net Financial Position provides useful information for investors and management because it gives evidence of our global position either in terms of net indebtedness or net cash by measuring our capital resources based on cash and cash equivalents, restricted cash, short-term deposits and marketable securities and the total level of our financial indebtedness. Our definition of Net Financial Position may differ from definitions used by other companies and therefore comparability may be limited.

(US$ m) Apr 3 2021 Dec 31 2020 Sep 26 2020 Jun 27 2020 Mar 28 2020
Cash and cash equivalents 3,454 3,006 2,714 1,800 2,028
Restricted cash - - - - 10
Short term deposits 573 581 679 687 537
Marketable securities 132 133 134 134 135
Total liquidity 4,159 3,720 3,527 2,621 2,710
Short-term debt (837) (795) (983)(2) (879)(1) (171)
Long-term debt(3) (2,137) (1,826) (1,882) (1,172) (1,871)
Total financial debt (2,974) (2,621) (2,865) (2,051) (2,042)
Net Financial Position 1,185 1,099 662 570 668

(1) 2022 Tranche A of the convertible bond issued in 2017 was reclassified to short-term debt in line with contractual terms.
(2) 2024 Tranche B of the convertible bond issued in 2017 was reclassified to short-term debt in line with contractual terms.
(3) Long-term debt contains standard conditions but does not impose minimum financial ratios. Also, committed credit facilities for $0.8 billion equivalent, are currently undrawn.

(Appendix – continued)
STMicroelectronics

Free Cash Flow (non-U.S. GAAP measure)

Free Cash Flow, which is a non-U.S. GAAP measure, is defined as (i) net cash from operating activities plus (ii) net cash used in investing activities, excluding payment for purchases of (and proceeds from matured) marketable securities and net investment in short-term deposits, which are considered as temporary financial investments. The result of this definition is ultimately net cash from operating activities plus payment for purchase and proceeds from sale of tangible, intangible and financial assets and net cash paid for business acquisitions.

We believe Free Cash Flow provides useful information for investors and management because it measures our capacity to generate cash from our operating and investing activities to sustain our operations. Free Cash Flow does not represent total cash flow since it does not include the cash flows generated by or used in financing activities.

Free Cash Flow reconciles with the total cash flow and the net cash increase (decrease) by including the payment for purchases of (and proceeds from matured) marketable securities and net investment in short-term deposits, the net cash from (used in) financing activities and the effect of changes in exchange rates. Our definition of Free Cash Flow may differ from definitions used by other companies.

(US$ m) Q1 2021 Q4 2020 Q3 2020 Q2 2020 Q1 2020
Net cash from operating activities 682 922 385 387 399
Net cash used in investing activities (413) (312) (400) (509) (821)
Payment for purchase of (and proceeds from matured) marketable securities and net investment in short-term deposits (8) (98) (10) 150 535
Free Cash Flow 261 512 (25) 28 113

  

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