STMICROELECTRONICS N.V. Good morning everybody. Thank you for joining us and for your interest in ST.
Today, I will begin with a summary overview, and then Carlo Ferro will review our financial results in detail. Jean-Marc Chery will then cover today's announcement related to our set-top box business and, importantly, our continued focus on the business derived from digital technologies. Georges Penalver will then discuss the market opportunities related to the application areas of our focus. Finally, I will conclude with our 2016 priorities.
So let's begin.
2015 was a year where we made important steps, both from a strategic as well as a financial point of view. First, we focused our product portfolio and application strategy on key investment areas. We also conducted an extensive review of our Digital Products. Today, Digital ICs (general purpose and secure microcontrollers, ASICs, digital automotive ICs, specialized imaging sensors) represent about $2.8 billion of our revenues; they are a major growth opportunity for us and at the core of our strategy.
However, within Digital we acknowledged the need to reconsider our set- top-box business, declining in revenues and loss-making.
Second, we made progress in a number of financial metrics, even if, overall, we did not achieve the level of progress we were expecting at the beginning of the year. To a large extent, our performance was limited due to a weak semiconductor market, particularly in the second half of the year; but also changes in customer plans, as we already outlined a few quarters ago, did not allow us to grow revenues as we had expected.
However, from a financial perspective, we consistently delivered results overall in line with our quarterly outlooks and we well-managed expenses and capital investments. We saw an improvement in operating and net income, excluding the catch-up of R&D funding in 2014, and made very visible progress in terms of free cash flow as Carlo Ferro will detail.
Most importantly, with the work accomplished, we enter 2016 with a sharper strategic focus.
In fact, during 2015, we increasingly focused our R&D and Sales & Marketing efforts on two areas: Smart Driving, enabled by digitalization and electrification, and the Internet of Things, including portable and wearable systems as well as smart home, city and industry applications.
Our products, technologies and system application capabilities are optimized for these areas, which we address with the digital ICs I have already mentioned and with our analog products, power discrete and MEMS.
Looking at our revenues, our performance was mixed during 2015. We had businesses that performed well during the past year, despite the unfavorable market dynamics particularly in the second half. Other businesses were, instead, more affected by the market. And we also had businesses that were affected by specific transitions.
Starting with our microcontrollers, during 2015 we delivered year-on-year growth of over 7% driven by our general purpose STM32 family. This growth was possible thanks to a combination of new innovative products, now totaling over 600 part numbers, as well as a strong customer base expansion.
We broadened our product range with the new ultra low power STM32L4 series and the very high-performance STM32L7 series, while strengthening the surrounding ecosystem with the extension of STM32Cube software tool to the complete product portfolio. We had success across a broad customer base. Our STM32 series are at the heart of many IoT applications and they now serve over 40,000 customers worldwide.
Another area of solid performance was our automotive product group, which, after having grown by 8% in 2014, was stable year-on-year in 2015 when excluding currency effects. Based upon preliminary data, we believe this performance is better than the automotive semiconductor market overall.
Key to our results was strong progress with our individual products, as well as with our complete system solutions. For example, to help make driving safer, we had multiple ADAS wins, including vision processing and new 24 and 77GHz radar-based products. During 2015, 7 out of 10 ADAS-equipped cars on the road had our system on board! Our 3rd generation ADAS vision processor for Mobileye went into full production and we saw the first design wins with the 4th generation, which is being developed with our FD- SOI technology. In 32-bit microcontrollers for automotive we recorded strong growth, materializing business from our impressive design-win pipeline that covers body, powertrain and engine management applications also for hybrid vehicles, such as the new Toyota Prius. And in Smart Power we enjoyed strong market momentum based on our important BCD9S and VIPower technologies.
Moving to IPD, our industrial and power discrete product group was the one most affected by the market slowdown, driven by an industry correction in the channel leading to a sales decrease of 6% in 2015, when excluding currency effects. At the same time, we moved forward during
STMicroelectronics NV issued this content on 27 January 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 27 January 2016 10:50:20 UTC
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