Dialog Semiconductor Q4 and Full Year 2019 Results

4 MARCH 2020

This document 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. Examples include statements regarding financial metrics, operational matters, and closing conditions and regulatory approvals required in relation to the announced acquisition of Adesto Technologies Corporation (“Adesto” or “Adesto Technologies”). Forward-looking 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.

▪ Business Review

▪ Financial Review

▪ Appendix

Consumer Mobile Automotive Computing Industrial IoT

▪ Increasing ▪ New design ▪ Over 80 customer ▪ Custom power ▪ Over 40 ASICs number of awards on a range engagements management for and ASSPs connected gaming currently being of mixed-signal ▪ Technologies devices: BLE, low- applications and sold or in products ramping supporting in-cabin power Wi-Fi SSDs development in H1 2021 such as functionalities and ▪ Consumers in-device ▪ Extensive IP demand for better ADAS ▪ Increasing library for charging adoption of audio experience: ▪ Increased adoption of industrial and ▪ CMICs Wireless and USB Increasing technologies such as automotive applications Audio adoption of Power Management, ▪ Complementary CMICs BLE, CMICs ▪ Launched new offering with range of IO-Link CMICs standard products

Transition of Dialog’s Long-Term Revenue Profile ($M)1 Strategic Growth Initiatives

1,420 Broadens presence in growing Strategic Growth industrial market, adding large Initiatives customer base Apple Main 2020 626 PMICs Apple new custom mixed- 2 signal products Adds IIoT custom and standard CAGR 30-35% products 315 Other Dialog Business Units 2019 CAGR 10-15%

448 Including new custom mixed-signal products Extends product portfolio adding IoT Wi-Fi 2019 2022E 2019 ¹ Chart not drawn to scale 2 Includes in-device charging, audio signal chain, new display and power management.

MARKET EXPANSION Increases addressable share of the IIoT market

COMPREHENSIVE IIoT OFFERING Complete gateway for industrial connectivity, complementing

our Creative Chips acquisition term term value + ENHANCED TECHNOLOGY - A Expands high performance mixed-signal capabilities and deep system expertise in Industrial markets DISTRIBUTION, SCALE AND CUSTOMERS

Established industrial channel with 5,000 customers, the Creating long majority of which are new for Dialog SYNERGIES Expects annual cost synergies of approximately $20 million, in addition to considerable revenue synergies

Underlying FY 2019 Long Term Targets Revenue growth (excluding licensed business)1 38% Mid-teens %

Gross Margin2 49.8% 50% to 53%

R&D%2 19.5% 18% to 20%

SG&A%2 9.1% 8% to 10%

Operating Margin2 22.8% 20% to 25%

Effective Tax Rate2 19.8% 19% to 20%

1 Excluding revenue from licensed main PMIC products. Revenue from these products will gradually decline to an insignificant amount by 2022. 2 Total group underlying.

Building on a strong foundation of mixed-signal and power-efficient IC expertise

Sharpening focus on fast-growing segments of IoT, mobile, computing, automotive and industrial

Healthy pipeline of customer design ins across all products, including over $1bn of lifetime revenue for new custom mixed signal devices Significant financial flexibility to pursue growth strategy and commitment to disciplined capital allocation

▪ Business Review

▪ Financial Review

▪ Q&A

Revenue Underlying OPEX%1 Underlying diluted EPS

$246m +47% YoY 26.4% $1.02 $381m +170bps YoY -4% YoY (12)%

Excluding licensed main PMIC

Underlying gross margin Underlying operating margin Free cash flow and margin 50.2% 24.0% $44m 11.7% +150bps YoY 0bps YoY -46% YoY Q4’18: 19.1%

1 SG&A and R&D expenses as a percentage of revenue, excluding other operating income.

Custom Mixed Signal (CMS) $M YoY Movement Revenue Profile $M 328 256 → Expected lower main PMIC for 431 phones -12%YoY 264 134 → Increased content and higher 381 1 113 volumes across multiple Other 58 platforms Q4 2018 Q4 2019 Apple Main 264 -49%YoY 134 PMICs Advanced Mixed Signal (AMS) $M

Apple new custom Increasing demand for rapid → mixed-signal 68 charge products and solid 113 products 2 61 +94% YoY performance of lighting 58 products AMS, C&A (exc. Q4 2018 Q4 2019 → Higher volumes of FCI), and GreenPAK™ CMICs 107 +12% YoY 120 automotive Connectivity & Audio (C&A) $M products reported 50 under CMS → Higher BLE demand and Q4 2018 Q4 2019 increased adoption of more 41 46 75% 3 65% 3 complex audio solutions 1 License revenue and revenue from the acquisitions of FCI and Creative Chips 2 Includes PMICs for Mac and accessories and sub-PMICs. Q4 2018 Q4 2019 3 Revenue from our largest customer recognised in Custom Mixed Signal as a percentage of total Group revenue.

Custom Mixed Signal (CMS) $M YoY Movement Revenue1 Profile $M 1,060 1,042 965 → Expected lower main PMIC for phones 1,442 -2% YoY 1,420 1,353 626 → Increasing content and Strategic Growth 867 Initiatives2 947 extended range of 315 Apple Main 85 149 technologies at largest PMICs customer -28% YoY 626 2017 2018 2019 867 Apple new Advanced Mixed Signal (AMS) $M 947 custom mixed- signal products3 → Higher rate of adoption of CAGR4 30%-35% CMICs and LED backlighting 315 AMS, C&A, 245 253 +112% YoY products 149 automotive 148 85 products reported → Higher volumes of in CMS and new 2017 2018 2019 GreenPAK™ CMICs 426 +5% YoY 448 custom mixed- 321 signal Connectivity & Audio (C&A) $M CAGR4 10%-15% 184 2017 2018 2019 2022E → Increasing adoption of 5 5 5 173 ® 77% 5 70% 66% 35-40% of Revenue 138 154 Bluetooth low energy and more complex audio solutions ¹ Chart not drawn to scale 4 Revenue CAGR from 2018E through 2022E based on ² Includes inorganic growth and ongoing license revenue company projections 2017 2018 2019 3 Includes in-device charging, audio signal chain, new 5 Revenue from Apple recognised in Custom Mixed display and power management. Signal as a percentage of total Group revenue.

▪ Q4 2019 underlying gross margin at 50.2% 150 bps higher than Q4 2018 Underlying gross margin ▪ Including positive contribution from 50.2% license revenue (Q4 2019: $6 million) 48.7% 49.5% ▪ Year-on-year increase due to lower +150 bps manufacturing costs YoY ▪ FY 2019 underlying gross margin at 49.8%, 150 bps higher than FY 2018 ▪ Year-on-year increase mainly due to Q4 2018 Q3 2019 Q4 2019 product mix and lower manufacturing costs 49.8% ▪ Positive contribution from license 48.3% revenue (FY 2019: $18 million) +150 bps YoY

FY 2018 FY 2019

▪ Q4 2019 underlying OPEX decreased by Underlying OPEX $M and OPEX % of Underlying Revenue 106.4 6% year-on-year 24.7% 100.5 26.4% ▪ Q4 2019 underlying R&D expenses 14% below Q4 2018 31.2 7.2% 36.0 9.5% ▪ Transfer of over 300 employees SG&A ▪ Q4 2019 underlying SG&A expenses 75.2 17.5% 64.5 16.9% R&D 15% above Q4 2018 ▪ First time consolidation of FCI and Q4 2018 Q4 2019 Creative Chips into the group 1

▪ FY 2019 underlying OPEX decreased by 416.7 28.9% 405.9 28.6% 3% year-on-year 129.5 122.5 8.5% 9.1% ▪ Excluding acquisitions the decrease was 5% SG&A 294.2 20.4% 276.4 19.5% R&D

FY 2018 FY 2019

Underlying Operating Profit $M and Margin Underlying Diluted EPS $ ▪ Q4 2019 underlying operating margin in 19.5% 22.8% line with Q4 2018 3.47 24.0% 24.0% 2.90 ▪ FY 2019 underlying operating margin 281.6 324.3 +20% YoY 330bps higher than FY 2018 103.4 91.3 1.06 1.02 ▪ Higher gross margin Q4 2018 Q4 2019 FY 2018 FY 2019 Q4 2018 Q4 2019 FY 2018 FY 2019 ▪ Lower OPEX Underlying Operating Profit $M and Margin by Segment ▪ $24 million other operating income FY 2018 ▪ FY corporate costs reduction of FY 2019 13.6 8.9% approximately 51% year-on-year C&A 21.6 11.8% ▪ $18 million license revenue 26.8 10.9% AMS ▪ FY 2019 underlying effective tax rate 15.2 6.0% 200bps below FY 2018 at 19.8% (FY 267.6 25.7% CMS 2018: 21.8%) 281.9 29.2%

-26.4 Corporate 5.6

▪ Inventory value 2% below Q3 2019 Inventory ($M and DIO) ▪ Q4 2019 cash flow from operating activities of $57 million (Q4 2018:$97 155 156 million) 150 125 123 ▪ In Q4 we returned $103 million to 94 shareholders through the 2019 buyback 83 programme 61 54 58 ▪ Q4 2019 free cash flow at $44 million (Q4 2018: $82 million) Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 ▪ Key items driving the YoY movement in Cash and cash equivalents ($M) cash and cash equivalents: 1,171 ▪ $600 million from the closing of the Apple 1,025 licensing agreement ▪ $100 million recoupment of prepayment 678 479 ▪ $252 million outflow for share buyback programme Q4 2017 Q4 2018 Q3 2019 Q4 2019 ▪ $140 million outflow for acquisitions

Revenue Underlying OPEX%1 Underlying diluted EPS $794m +38% Y0Y 28.6% $3.47 $1,420m -30bps YoY +20% YoY (2)%

Excluding licensed main PMIC

Underlying gross margin Underlying operating margin Free cash flow and margin 49.8% 22.8% $449m 31.6% +150bps YoY +330bps YoY +95% YoY FY’18: 15.9%

1 SG&A and R&D expenses as a percentage of revenue, excluding other operating income.

License Transfer of Transfer of Transaction NRE revenue assets employees costs

One-off One-off gain $16.1m IFRS $146m $16m

OPEX2 1 Ongoing One-off Underlying reduction of $18m ~$26m $12.5m

1 Items included in underlying measures are also included in IFRS measures. 2 Annualised headcount related OPEX savings of approximately $35 million

For the three months ended 31 December 2019

For the three months ended 31 December 2018

For the year ended 31 December 2019

For the year ended 31 December 2018

Underlying Revenue Operating profit/(loss) Operating margin $M Q4 2019 Q4 2018 Change Q4 2019 Q4 2018 Change Q4 2019 Q4 2018 Custom Mixed Signal 255.7 327.8 (22)% 81.7 97.5 (16)% 32.0% 29.7% Advanced Mixed Signal 68.4 60.7 +13% 2.7 6.5 (58)% 4.0% 10.7% Connectivity & Audio 50.2 41.0 +22% 4.4 4.6 (5)% 8.7% 11.2% Total segments 374.3 429.5 (13)% 88.8 108.6 +18% 23.7% 25.3% Corporate and other activities 6.3 1.2 +413% 2.5 (5.2) - 39.1% - Total Group 380.6 430.7 -12% 91.3 103.4 -12% 24.0% 24.0%

Underlying Revenue Operating profit/(loss) Operating margin $M FY 2019 FY 2018 Change FY 2019 FY 2018 Change FY 2019 FY 2018 Custom Mixed Signal 964.8 1,042.3 (7)% 281.9 267.6 +5% 29.2% 25.7% Advanced Mixed Signal 253.4 244.5 +4% 15.2 26.8 (43)% 6.0% 10.9% Connectivity & Audio 183.8 154.0 +19% 21.6 13.6 +59% 11.8% 8.8% Total segments 1,402.0 1,440.8 (3)% 318.7 308.0 +3% 22.7% 21.4% Corporate and other activities 18.5 1.3 - 5.6 (26.4) - - - Total Group 1,420.5 1,442.1 (2)% 324.3 281.6 +15% 22.8% 19.5%

1,442 1,420 Full year revenue ($ million) 1,355 1,353 1,156 1,198 6% Revenue CAGR 2016-2019 909 774 527 296 218 87 162

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Quarterly revenue ($ million)

464 435 431 409 384 397 381 363 365 332 336 346 353 311 316 330 295 296 271 256 281 268 241 246 221 219 225 180 180 172 166 160 151 141 116 98 88 69 80 78 61 59 52 32 36 34 45 44 35 14 14 25

▪ At the end of Q4 2019 inventory value was 2% below Q3 2019 and DIO increased by 4 days ▪ In Q1 2020, we expect inventory value to remain broadly in line with Q4 2019 and days of inventory to be above Q4 2019

Inventory ($ million) and Days Inventory Outstanding (# days)

$200

$180 169 83 100 78 (1) 150 94 DIO $160 61 70 64 155 156 Average DIO of 69 days 61 54 58 138 134 141 $140 50 125 123 Finished goods $120 57% 54% 42% 43% 42% 43% Work in process $100 46% 39% 38% 0 Raw materials $80 DIO $60 45% 45% 31% 32% 35% 32% 36% 36% 33% -50 (1) Calculated using average $40 inventory balance over the period. DIO recalculated in line with the $20 23% 25% 23% 25% reclassification of certain R&D costs. 12% 13% 16% 26% $0 7% -100 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19

▪ Over $1 billion cash and cash Cash and cash equivalents ($M) equivalents balance at 31 December 2019 ▪ Q4 2019 cash flow from operating activities of $57 million (Q4 2018:$96 1,171 1,141 1,025 million) 678 690 501 537 617 ▪ Q4 2019 free cash flow at $44 million 479 (Q4 2018: $82 million) Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 ▪ Key items driving the YoY movement in cash and cash equivalents: Cash flow bridge from Q3’19 ($M) 76.7 4.3 (13.7) (23.5) (10.8) (76.8) ▪ $600 million from the closing of the (102.5) Apple licensing agreement ▪ $100 million recoupment of 1,170.9 prepayment 1,024.6 ▪ $252 million outflow from share buyback programme ▪ $140 million outflow from acquisitions

Analyst coverage Financial Calendar Key Events

Alphavalue Hugo Paternoster 6 May 2020 – Q1 Earnings Call NDR London Bank of America Merrill 4-5 March 2020 Adithya Metuku Lynch 5 August 2020 – Q2 Earnings Call NDR Paris Bankhaus Lampe Dr. Karsten Iltgen 5 November 2020 – Q3 Earnings Call 6 March 2020 Barclays Capital Andrew Gardiner

Bloomberg Woo Jin Ho Bryan, Garnier & Co Frédéric Yoboué Credit Suisse Achal Sultania

Deutsche Bank Rob Sanders DZ Bank Harald Schnitzer Contacts Financial PR/IR Advisers: Exane BNP Paribas David O’Connor Jose Cano FTI Consulting – London Hauck & Aufhauser Christian Sandherr Head of Investor Relations Matt Dixon T: +44 (0)1793 756 961 T: +44 (0)20 7831 3113 JP Morgan Cazenove Sandeep Deshpande [email protected] [email protected] Kepler Cheuvreux Sebastien Sztabowicz FTI Consulting – Frankfurt MainFirst Bank AG Juergen Wagner Anja Meusel T: +49 (0)69 9203 7120 ODDO BHF Stephane Houri [email protected] RBC Mitch Steves

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