ARM HOLDINGS PLC REPORTS RESULTS FOR THE FOURTH QUARTER AND FULL YEAR
2009
CAMBRIDGE, UK, 2 February 2010-ARM Holdings plc announces its unaudited
financial results for the fourth quarter and full year ended 31
December 2009, reflecting resilient trading performance and further
progress in delivering ARM's strategy.
Q4 Financial Summary Normalised* IFRS
Q4 2009 Q4 2008 % Change Q4 2009 Q4 2008
Revenue ($m) 140.0 149.4 -6% 140.0 149.4
Revenue (GBPm) 85.2 94.4 -10% 85.2 94.4
Operating margin 37.3% 34.6% 23.0% 23.8%
Profit before tax (GBPm) 32.3 33.4 -3% 20.1 23.2
Earnings per share (pence) 1.79 1.94 -8% 1.32 1.35
Net cash generation
(GBPm)** 30.7 28.3
Effective revenue fx
rate($/GBP) 1.64 1.58
FY Financial Summary Normalised* IFRS
FY 2009 FY 2008 % Change FY 2009 FY 2008
Revenue ($m) 489.5 546.2 -10% 489.5 546.2
Revenue(GBPm) 305.0 298.9 +2% 305.0 298.9
Operating margin 31.2% 32.7% 15.0% 20.1%
Profit before tax (GBPm) 96.8 101.0 -4% 47.3 63.2
Earnings per share (pence) 5.45 5.66 -4% 3.11 3.39
Net cash generation
(GBPm)** 86.1 93.1
Full year dividend (pence) 2.42 2.20 +10%
Effective revenue fx
rate($/GBP) 1.60 1.83
Progress against strategy in Q4
* Growth in mobile applications
o ARM opportunity increases as smartphone growth continues and first
ARM® technology-based mobile computers introduced
o 6 processor licenses signed for mobile phone and computing
applications
o ARM achieves an average of 2.4 chips per phone as capability of
mobile phones increases
* Growth beyond mobile
o ARM increases share in target markets such as consumer electronics
and embedded products
o Strong sequential growth with microcontrollers up 60% and
smartcards up 100%
o 19 processor licenses signed for a broad range of applications
including automotive, microcontrollers, printers and smartcards
* Growth in new technology outsourcing
o Leading semiconductor companies continue to license ARM's physical
IP and multimedia IP including: * GLOBALFOUNDRIES licensed ARM's advanced 28nm physical IP
* Samsung licensed ARM's Mali graphics processor for use in
next generation consumer products
Warren East, Chief Executive Officer, said:"We are pleased that in Q4 ARM has continued to outperform the
semiconductor industry as we gain market share. Throughout 2009 we
demonstrated the resilience of the ARM business model in a challenging
trading environment. Despite industry dollar revenues being down about
20% in the relevant period, ARM market share gains resulted in dollar
revenues being down 10% with on-going financial discipline maintaining
normalised operating margins over 30% and delivering strong cash
generation.
The company is well-placed for this strong performance to continue as
leading semiconductor manufacturers are increasingly designing ARM
technology into their products, and as ARM technology becomes ever more
pervasive in markets with long-term structural growth such as
smartphones, digital TVs and microcontrollers. Recently, Infineon and
STMicroelectronics have announced the intention to use, for the first
time, ARM processors in their smartcard and digital TV/set-top-box
product lines respectively."
Outlook
It is generally anticipated that the semiconductor industry will see
improving conditions in 2010 compared to 2009. The rate of improvement
is still unclear as it will be influenced by consumer confidence and
the broader macro-economic environment. Reflecting these generally
anticipated improvements in the semiconductor industry, and given ARM's
strong industry position coming into 2010, we expect group dollar
revenues for the full-year to be at least in line with current market
expectations.
Q4 2009 - Revenue Revenue ($m)*** Revenue (GBPm)
Analysis
Q4 Q4 % Q4 Q4 %
2009 2008 Change 2009 2008 Change
PD
Licensing 35.7 43.0 -17% 21.5 26.5 -19%
Royalties 63.5 65.5 -3% 38.4 42.5 -10%
Total PD 99.2 108.5 -9% 59.9 69.0 -13%
PIPD
Licensing 9.2 9.8 -7% 5.8 6.3 -8%
Royalties1 11.1 10.5 6% 6.7 6.8 -1%
Total PIPD 20.3 20.3 12.5 13.1 -4%
Development Systems 12.7 12.9 -1% 7.9 8.1 -2%
Services 7.8 7.7 1% 4.9 4.2 15%
Total Revenue 140.0 149.4 -6% 85.2 94.4 -10%
1 Includes catch-up royalties in Q4 2009 of $0.8m (GBP0.5m) and in Q4
2008 of $1.0m (GBP0.6m).
FY 2009 - Revenue Revenue ($m)*** Revenue (GBPm)
Analysis
FY FY % FY FY %
2009 2008 Change 2009 2008 Change
PD
Licensing 128.2 145.1 -12% 76.5 79.3 -4%
Royalties 208.1 226.5 -8% 132.5 125.5 6%
Total PD 336.3 371.6 -10% 209.0 204.8 2%
PIPD
Licensing 35.9 44.6 -20% 22.0 24.2 -9%
Royalties1 36.2 40.3 -10% 22.9 22.2 3%
Total PIPD 72.1 84.9 -15% 44.9 46.4 -3%
Development Systems 51.6 57.8 -11% 32.9 31.1 6%
Services 29.5 31.9 -8% 18.2 16.6 10%
Total Revenue 489.5 546.2 -10% 305.0 298.9 2%
1 Includes catch-up royalties in FY 2009 of $5.0m (GBP2.6m) and in FY
2008 of $4.6m (GBP2.5m).
* Normalised figures are based on IFRS, adjusted for
acquisition-related, share-based payment costs and restructuring
charges and profit on disposal and impairment of
available-for-sale investments. For reconciliations of IFRS
measures to normalised non-IFRS measures detailed in this
document, see notes 5.1 to 5.18.
** Before dividends and share buybacks, net cash flows from share
option exercises, disposals of available-for-sale investments,
investment and acquisition consideration and other items excluded
from normalised profits - see notes 5.9 to 5.13.
*** 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. Approximately 95% of invoicing is in dollars.
**** Each American Depositary Share (ADS) represents three shares.
A presentation of these results will be webcast today at 9:30 GMT at
www.arm.com/ir
CONTACTS:
Nick Claydon/Daniel Thole Tim Score/Ian Thornton
Brunswick ARM Holdings plc
+44 (0)207 404 5959 +44 (0)1223 400400
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