NXP Semiconductors set ambitious targets for its financial future built around the automotive, industrial and IoT, and mobile communication infrastructure markets, during its first briefing with analysts following Qualcomm’s decision to drop a proposed takeover.

At an analyst day, the Netherlands-headquartered company detailed plans to grow sales by between 5 per cent and 7 per cent each year until end-2021, a rate which would be around 50 per cent higher than the expected growth of the chip sector as a whole, Reuters reported. It also targeted growth in its gross margin from around 53 per cent currently to 55 per cent by the close of 2019 and 57 per cent at end-2021.

The news agency noted NXP Semiconductors’ share price fell 4.4 per cent following the presentation, while equity analysts questioned whether a dividend strategy involving a $0.25 quarterly payment would be sufficient to restore investors’ confidence.

NXP Semiconductors plans to pay the dividend in early October, a move CEO Rick Clemmer said in a statement “represents a meaningful milestone” in the company’s history, demonstrating “confidence in our strong operating performance, significant free cash flow generation and positive long-term financial outlook”.

CFO Peter Kelly said the company is on track to complete a $5 billion share buyback programme by the year-end, having already “repurchased 39.9 million shares, for a total of approximately $3.76 billion”.

Ditched
Rival Qualcomm dropped its $44 billion bid to acquire NXP Semiconductors in July following a nearly two-year pursuit. The company withdrew after encountering resistance from Chinese regulators, which later said Qualcomm had failed to address their concerns regarding the deal.

The analyst event was held a day after NXP Semiconductors announced a management reshuffle in which Kurt Sievers, EVP and general manager of the automotive business, was promoted to president of the company.

Deputy general counsel and chief IP officer Jennifer Wuamett took over from Guido Dierick as EVP and general counsel (Dierick remains as country manager for the Netherlands); while Ruediger Stroh is set to depart from his role as EVP and general manager of the company’s security and connectivity business on 30 September.