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DIALOG SEMICONDUCTOR REPORTS RESULTS FOR FOURTH QUARTER AND YEAR ENDED 31 DECEMBER 2014.Full year revenue growth of 28% and strong cash flow generation

DGAP-News: Dialog Semiconductor Plc. / Key word(s): Preliminary
Results
DIALOG SEMICONDUCTOR REPORTS RESULTS FOR FOURTH QUARTER AND YEAR ENDED
31 DECEMBER 2014.Full year revenue growth of 28% and strong cash flow
generation

19.02.2015 / 07:30

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London, UK, 19 February 2015 - Dialog Semiconductor plc (FWB: DLG), a
provider of highly integrated power management, AC/DC, solid state lighting
and Bluetooth(R) Smart wireless technology, today reports results for its
fourth quarter and year ended 31 December 2014.

Q4 and full year 2014 financial highlights

- Q4 2014 IFRS Revenue, up 24% over Q4 2013 to $435 million. Full year
IFRS revenue up 28% to $1,156 million.

- Full year IFRS gross margin at 44.5%

- Q4 2014 Underlying (*) EBITDA (**) up 50% to $129.6 million or 29.8% of
revenue. Full year Underlying (*) EBITDA (**) up 55% to $269.4 million
or 23.3% of revenue

- Q4 IFRS operating profit (EBIT) up 49% to $105.1million or 24.2% of
revenue. Full year IFRS EBIT up 81% to $185.9 million or 16.1% of
revenue

- IFRS full year tax rate at 18.5%, including one-off non-cash deferred
tax credit of $17.8 million ; 29.0% IFRS tax rate excluding one-off

- Underlying (*) Q4 2014 diluted EPS up 67% over Q4 2013 to $1.17. Full
year 2014 Underlying (*) diluted EPS up 58% to $2.27

- Cash from operating activities in Q4 2014 was up 158% to $119.3
million. Cash and cash equivalents balance as of 31 December 2014 was
$324 million

Q4 and full year 2014 operational highlights

- Continued momentum with power management design wins, across new
platforms and models at our largest customers

- Successfully delivered a steep ramp of new products to meet our
customers demand

- Increased the content of our products and achieved an ASP of $2.66 in
2014, excluding Power Conversion products

- SmartBondTM remains the world's lowest power and smallest Bluetooth
Smart system-on-chip

- Our quick charging and lighting segments made significant advancement

- Extended our customer base in Asia with our collaboration with MediaTek
and LG

Commenting on the results Dialog Chief Executive, Dr Jalal Bagherli, said:

"I am extremely pleased with the exceptional business performance we have
achieved in Q4 and over the full year. We have delivered uninterrupted
annual revenue growth for the 8th consecutive year; while significantly
increasing margins, investing in R&D and generating high cash returns to
allow the company to return to a bank debt free position significantly
ahead of schedule.

Our financial performance reflects our relentless focus on delivering
competitive and differentiated products in high growth consumer electronics
markets. We now have good visibility of another year of growth ahead in
2015, with Dialog at the core of a new generation of ultra-portable devices
and low-power connected consumer electronics."

Outlook

Given our current visibility, we expect 2015 to be another year of good
growth. As in previous years, revenue performance will be strongly
weighted towards the second half of the year.

Q1 2015 revenue will reflect the expected seasonal pattern and deliver year
on year growth. We expect revenue for Q1 2015 to be in the range of $265 to
$300 million.

In line with the seasonal lower revenue, gross margin in Q1 2015 will
decline sequentially but improve on a year-on-year basis. Gross margin in
2015 is expected to remain broadly at a similar level to the full year
2014.

Financial overview

IFRS                           Fourth                   Full
                               Quarter                  Year
US$ million                      2014   2013  % Var.   2014  2013  % Var.
Revenue                          435.0  351.4  +24%  1,156.1 901.4  +28%
Gross Margin                      46.3%  42.2% 410bps  44.5%  39.0% +550bps
R&D %                             14.3%  14.6% -30bps  18.5%  17.8% +70bps
SG&A %                             8.2%  8.6%  -40bps  10.3%  10.3%  0bps
EBIT                              105.1  70.6   +49%   185.9  102.7  +81%
EBIT %                            24.2%  20.1% +410bps 16.1%  11.4% +470bps
Net income                         70.6  46.6   +52%   138.1  62.2  +122%
Basic EPS $                        1.05  0.71   +48%    2.05  0.95  +116%
Diluted EPS $                      0.95  0.66   +44%    1.93  0.92  +110%
Cash flow from operating          119.3  46.2  +158%   270.5  110.7 +144%
activities

Underlying                         Fourth                 Full
                                  Quarter                 Year
US$ million                        2014  2013  % Var.   2014  2013  % Var.
Revenue                           435.0  352.3  +23%  1,156.1 907.6  +27%
Gross Margin                      46.6%  43.0% +360b   45.3%  40.5% +480b
EBITDA                            129.6  86.2   +50%   269.4  174.2  +55%
EBITDA %                          29.8%  24.5% +530b   23.3%  19.2% +410b
EBIT                              117.9  76.4   +54%   230.3  139.6  +65%
EBIT %                            27.1%  21.7% +540b   19.9%  15.4% +450b
Net income                         89.2  52.1   +71%   172.2  97.6   +76%
Basic EPS $                        1.33  0.79   +68%    2.56  1.49   +72%
Diluted EPS $                      1.17  0.70   +67%    2.27  1.44   +58%

See underlying definition on page 4.
The presentation of income and related expenses from customer specific
research and development costs has changed. Please see note 2 of the
Financials and Selected Notes 2014 Report.

IFRS Revenue in Q4 2014 was 24% above the previous year with strong
performance across most business segments: Mobile Systems was up 24%, Power
Conversion, up 55% (38% on an Underlying (*) basis) and Connectivity was up
18%.
Q4 2014 IFRS gross margin was 410bps above Q4 2013 and 150bps above the
previous quarter. This was the result of the following items:

- Higher revenue achieved in the quarter and the subsequent lower
allocation per unit of the fixed component of Cost of Goods Sold

- Benefits of manufacturing cost optimisation, yield and test time
improvements in high volume products

- Positive product mix contribution from new products in Mobile Systems,
Connectivity and Power Conversion.

In Q4 2014 underlying (*) net OPEX as a percentage of revenue was 19.5%,
180bps below Q4 2013. For the full year, underlying OPEX was 25.4% of
revenue, 30bps above FY 2013.

Q4 2014 underlying (*) R&D investment stood at 13.4% of revenue, 80bps
below Q4 2013 and 520bps below Q3 2014. For the year 2014, underlying (*)
R&D was 17.5%, 30 bps above the previous year as a result of the
acceleration of our R&D investments in both, existing product initiatives
as well as new initiatives that have the potential to support profitable
growth and accelerate the diversification of our business.

Underlying (*) SG&A in Q4 2014 stood at 6.2% of revenue, 100bps below Q4
2013 and 210bps below Q3 2014. During 2014 we continued to manage our SG&A
costs effectively and kept underlying (*) SG&A at 8.1% of revenue, in line
with the previous year.

In Q4 2014 we achieved IFRS and underlying(*) EBIT of $105.1 million and
$117.9 million respectively, 49% and 54% over Q4 2013. Underlying (*) EBIT
margin in the quarter was 27.1%. The Q4 2014 underlying(*) EBIT increase of
54% was primarily driven by the solid performance of the Mobile Systems
segment and the return to profitability of the Connectivity segment (Q4
2014: $2.9 million; Q42013: loss of $3.7 million). During 2014 underlying
(*) EBIT increased by 65%, more than twice the rate of revenue growth in
the same period.

In 2014, a net IFRS tax charge of $31.2 million was recorded (2013: US$27.5
million), which includes a one-off non-cash deferred tax credit of US$ 17.8
million. This credit arose during the year resulting from an intra-group
reorganisation of certain Intellectual Property, which impacted the
recorded value of deferred tax liabilities. This intra-group reorganisation
took place in Q1 2014 but the impact of the recorded value of deferred tax
liabilities was only identified during the detailed preparation of the
year-end financial statements. The one-off non-cash deferred tax credit was
therefore recorded in the full year 2014 results, giving an IFRS group
effective tax rate for the full year of 18.5% (2013:30.7%).The group
effective tax rate excluding this one-off non-cash deferred tax credit was
29.0%.The decrease in our Group effective tax rate, (excluding the one-off
non-cash deferred tax credit), is driven by the on-going exercise to align
our Intellectual Property ownership with the commercial structure of the
group. This has allowed Dialog to utilise and to further partially
recognise previously unrecognised UK loss carry forwards and other UK tax
attributes and to benefit from the favourable UK Tax regime for technology
companies. We believe this gradual decrease is sustainable and will
continue to drive further reductions in our effective tax rate in the years
to come.

In Q4 2014, underlying (*) net income increased 71% over Q4 2013.
Underlying (*) diluted EPS in Q4 2014 was 67% higher than in the same
quarter of 2013 resulting in a full year 2014 underlying diluted EPS
year-on-year growth of 58%.

At the end of Q4 2014, our total inventory level was $99 million (or ~38
days), a decrease of $49 million over the prior quarter. This represents a
50 day decrease in our days of inventory on the back of a record revenue
quarter for Dialog. During Q1 2015 we expect inventory value and inventory
days to increase from Q4 2014 to service our current customer backlog.

As of 31 December 2014, we had cash and cash equivalents balance of $324
million which included the last early bank debt repayment of $40 million.
In the fourth quarter we generated $119 million of cash from operating
activities, an increase of 158% over the same quarter of 2013. The strong
cash generation of the business has allowed the company to return to a bank
debt free position significantly ahead of schedule and generated $213
million of free cash flow(***) during 2014.

(*) Underlying results (net of tax) in Q4-2014 are based on IFRS, adjusted
to exclude share-based compensation charges and related charges for
National Insurance of US$10.0 million, excluding US$0.2 million of
amortisation of intangibles associated with the acquisition of SiTel (now
Dialog B.V.), excluding US$2.1 million non-cash effective interest expense
in connection with the convertible bond, excluding US$ 0.5 million non-cash
effective interest expense related to a licensing agreement, excluding
US$0.9 million acquisition and integration expenses in connection with the
purchase of iWatt, and excluding US$4.9 million of amortisation and
depreciation expenses associated with the acquisition of iWatt.

(*)Underlying results (net of tax) in Q4-2013 are based on IFRS, adjusted
to exclude share-based compensation charges and related charges for
National Insurance of US$2.2 million, excluding US$1.1 million of
amortisation of intangibles associated with the acquisition of SiTel (now
Dialog B.V.), excluding US$2.0 million non-cash effective interest expense
in connection with the convertible bond, excluding US$ 0.2 million non-cash
effective interest expense related to a licensing agreement entered into in
Q3-2012, excluding US$0.5 million acquisition and integration expenses in
connection with the purchase of iWatt and excluding US$2.8 million of
amortisation and depreciation expenses associated with the acquisition of
iWatt, deferred sales and related cost of sales that were reversed in
connection with the iWatt business integration of US$ 0.6 million were
brought back. Furthermore the gain of US$ 3.2 million from the release of
an earn-out provision in relation to the iWatt acquisition was reversed and
a recorded income related to a payment the company received in connection
with the insolvency of BenQ of US$0.7 million was also taken out.

The term "underlying" is not defined in IFRS and therefore may not be
comparable with similarly titled measures reported by other companies.
Underlying measures are not intended as a substitute for, or a superior
measure to, IFRS measures. Underlying results (net of tax) have been fully
reconciled to IFRS results (net of tax) above. All other underlying
measures disclosed within this report are a component of this measure and
adjustments between IFRS and underlying measures for each of these measures
are a component of those disclosed above.

(**) EBITDA in Q4 2014 is defined as operating profit excluding
depreciation for property, plant and equipment, (Q4 2014:US$5.4 million, Q4
2013:US$5.4 million), amortisation of intangible assets (Q4 2014:US$9.8
million, Q4 2013:US$9.1 million) and losses on disposals and impairment of
fixed assets (Q4 2014:US$0.1 million, Q4 2013:US$0.8 million).

(***) Free Cash Flow in FY 2014 is defined as net income of US$138.1
million plus amortisation and depreciation of US$55.6 million, plus net
interest expense of US$14.4 million, plus change in working capital of
US$47.8 million and minus capital expenditure of US$43.0 million.

Operational overview

In Q4 2014 we added new custom PMIC design wins both across new platforms
and next generation models at our largest customers. Additionally, during
the quarter we successfully delivered the beginning of a steep ramp of new
products launched by our customers.

Dialog continued to lead in delivering the highest level of power
management integration and power efficiency in its PMIC products. This
allowed us to increase the Average Sales Price (ASP) of our products by
16%, excluding the Power Conversion segment, from $2.30 in 2013 to $2.66 in
2014.

In support of our diversification programs, Q4 saw the start of high volume
shipments for our SmartBond(TM) - Bluetooth(R) Smart - solution. With the
technology being rapidly adopted across multiple IoT segments, we added new
design wins in applications including wireless charging, wearables, smart
home and human interface devices. Dialog's SmartBondTM remains the
industry's smallest footprint solution in addition to consuming less than
half the power of competing devices, critical parameters for IoT
applications demanding long battery lifetime.

Throughout Q4 2014 and the first few weeks of 2015 we rolled out a number
of new products from the Power Conversion Business segment. We entered the
MR16 - low voltage (12 volt) downlight LED form factor - market segment
with an excellent dimming and universal transformer compatibility solution.
Additionally, we launched a new dimming platform, delivering the ultimate
in dimming performance while eliminating more than 20 external components
from the bill of materials. These two devices allow Dialog to continue its
market leadership in the dimming segment of the fast growing LED domestic
retrofit market.

Power Conversion made also significant progress with large ODMs in Asia in
the quick charge segment with the development of new products which
accommodate the latest proprietary quick charge protocols of various
companies.

Our sub-PMIC multi-phase DC-DC approach in 2014 allowed us to accelerate
adoption of our technology for the China smartphone market. Through our
strategic cooperation with Mediatek with sub-PMIC ICs for their MT6595 and
MT6795 Octa-core reference platforms, we added design wins with Meizu,
Lenovo and other top emerging China smartphone brands. Additionally, Q4 saw
the start of volume production of a new custom PMIC for LG's new NUCLUN
application processor which is sold alongside our sub-PMIC solution in LG's
latest smartphone models.

Leveraging the unique advantages of our touch technology, Q4 2014 also saw
the start of volume production of our Smartwave(TM) multi-touch display
solution by a top US PC OEM in a low cost 23 inch All-in-One PC.

* * * * *
Dialog Semiconductor invites you today at 09.00 am (London) / 10.00 am
(Frankfurt) to take part in a live conference call and to listen to
management's discussion of the Company's Q4 and full year 2014 performance,
as well as guidance for Q1 2015. Participants will need to register using
the link below labelled 'Online Registration'. A full list of dial-in
numbers will also be available.

Webcast & Telephone Registration:
http://wcc.webeventservices.com/r.htm?e=921569&s=1&k=678BC566C5DE430441B4F
2D45A740A95

Conference Number: [phone]
Conference ID: 61960817

In synchronicity with the call, the analyst presentation will be webcasted
on our website at: http://www.dialog-semiconductor.com/investor-relations.
A replay will be posted at the same address four hours after the conclusion
of the presentation and will be available for 30 days.

Full release including the Company's consolidated income statement,
consolidated balance sheet, consolidated statements of cash flows and
selected notes for the period ending 31 December 2014 is available under
the investor relations section of the Company's website at:
http://www.dialog-semiconductor.com/investor-relations

For further information please contact:


Dialog Semiconductor
Jose Cano
Head of Investor Relations
T: [phone]
[e-mail]


FTI Consulting London
Matt Dixon
T: [phone]
[e-mail]

FTI Consulting Frankfurt
Anja Meusel
T: [phone]
[e-mail]

Note to editors
Dialog Semiconductor provides highly integrated standard (ASSP) and custom
(ASIC) mixed-signal integrated circuits (ICs), optimised for Smartphone,
Tablet, IoT, LED Solid State Lighting (SSL) and Smart Home applications.
Dialog brings decades of experience to the rapid development of ICs while
providing flexible and dynamic support, world-class innovation and the
assurance of dealing with an established business partner. With world-class
manufacturing partners, Dialog operates a fabless business model and is a
socially responsible employer pursuing many programs to benefit the
employees, community, other stakeholders and the environment we operate in.

Dialog's power saving technologies including DC-DC configurable system
power management deliver high efficiency and enhance the consumer's user
experience by extending battery lifetime and enabling faster charging of
their portable devices. Its technology portfolio also includes audio,
Bluetooth(R) Smart, Rapid Charge(TM) AC/DC power conversion and
multi-touch.

Dialog Semiconductor plc is headquartered in London with a global sales,
R&D and marketing organisation. In 2014, it had $1.16 billion in revenue
and was one of the fastest growing European public semiconductor companies.
It currently has approximately 1,400 employees worldwide. The company is
listed on the Frankfurt (FWB: DLG) stock exchange (Regulated Market, Prime
Standard, ISIN GB0059822006) and is a member of the German TecDax index. It
also has convertible bonds listed on the Euro MTF Market on the Luxemburg
Stock Exchange (ISIN XS0757015606).


Forward Looking Statements
This press release contains "forward-looking statements" that reflect
management's current views with respect to future events. The words
"anticipate," "believe," "estimate", "expect," "intend," "may," "plan,"
"project" and "should" and similar expressions identify forward-looking
statements. Such statements are subject to risks and uncertainties,
including, but not limited to: an economic downturn in the semiconductor
and telecommunications markets; changes in currency exchange rates and
interest rates, the timing of customer orders and manufacturing lead times,
insufficient, excess or obsolete inventory, the impact of competing
products and their pricing, political risks in the countries in which we
operate or sale and supply constraints. If any of these or other risks and
uncertainties occur (some of which are described under the heading "Risks
and their management" in Dialog Semiconductor's most recent Annual Report)
or if the assumptions underlying any of these statements prove incorrect,
then actual results may be materially different from those expressed or
implied by such statements. We do not intend or assume any obligation to
update any forward-looking statement which speaks only as of the date on
which it is made, however, any subsequent statement will supersede any
previous statement.



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Language: English
Company: Dialog Semiconductor Plc.
Tower Bridge House, St. Katharine's Way
E1W 1AA London
United Kingdom
Phone: [phone]
Fax: [phone]
E-mail: [e-mail]
Internet: www.diasemi.com
ISIN: GB0059822006, XS0757015606
WKN: 927200
Indices: TecDAX
Listed: Regulated Market in Frankfurt (Prime Standard); Regulated
Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich,
Stuttgart


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