Automotive and Discrete
Analog, MEMS and Sensors
Microcontrollers and Digital ICs
Innovation & Profits
Sustain profitable growth, with clear and focused leadership objectives in the four end markets we address.
of revenues generated by new product lines
Our results in 2019 were in line with the full year expectations: net revenues of US$9.56 billion, with a gross margin of 38.7% and an operating margin of 12.6%.
We achieved strong growth of around US$1 billion in the second half of the year compared to the first half, driven by a stronger than expected contribution from engaged customer programs and new products.
Our free cash flow for the year was US$497 million, including capital expenditure of US$1.17 billion, and our net financial position was US$672 million. Net income was US$1.03 billion, translating into US$1.14 diluted earnings per share.
Sales to OEMs represented 70% of total 2019 revenues, while Distribution represented 30%. I 103-2 I 103-3 I
Product group revenues
Automotive and Discrete Group (ADG) revenues were US$3.6 billion in 2019, an increase of 1.4% compared to 2018.
Revenues from our Automotive Product sub-Group were substantially flat, reflecting two opposing dynamics: growth in car digitalization applications with ADAS products and microcontrollers, and a decline in legacy products.
Revenues for the Power Discrete sub-Group increased, mainly driven by Silicon Carbide products, power MOSFET and IGBT, and partially offset by non-power Discrete.
Driven by personal electronics applications, 2019 revenues grew 4.6% for our Analog, MEMS and Sensors (AMS) Group compared to 2018, reaching US$3.3 billion. The increase was partially offset by lower sales in Industrial and hard-disk drives.
Microcontrollers and Digital IC Group (MDG) revenues were US$2.6 billion in 2019, a decrease of 10.3%. This is mainly due to an inventory correction at our distributors, which affected general purpose microcontrollers during the first half of the year. MDG restarted year-on-year growth during the second half of 2019.
The full details of our financial results are available in our Form 20-F and IFRS annual reports, which can be found on our website (see investors.st.com).
President, Finance, Infrastructure and Services, and Chief Financial Officer
In 2019, in a declining semiconductor market, ST was able to show significant resilience in its financial results, testifying to the solid strategy and the superior technology and product portfolio of the Company. The investor community acknowledged this capability of the Company to navigate in difficult waters with a significant share appreciation during the year: around +94% compared to the +60% of the SOX index. Our commitment to sustainability is embedded in our financial strategy, helping us not only to manage risks but to create short-term as well as long-term opportunities.”
Net revenues by region of origin
In order to address our new products ramp-up, customer demand in 2020 and ongoing strategic initiatives, we plan our capital investment in 2020 to be in the range of US$1.0 billion to US$1.2 billion.
Investing in 3 strategic initiatives:
the Agrate 300mm fab, GaN and SiC
This investment includes additional capacity for some of our existing technologies and investments to develop the product mix for our 200mm fabs, support for our R&D activities and maintenance of manufacturing operations. It also includes spending for three strategic initiatives:
- investment in the new Agrate (Italy) 300mm fab to support BCD (Bipolar, CMOS, DMOS), IGBT and other power technologies
- R&D for Gallium Nitride power technologies and production ramp up for Gallium Nitride for radio frequency devices
- investments for Silicon Carbide. These include substrate activities, following our acquisition of Norstel
Each year, socially responsible investment rating agencies, analysts and investors evaluate our corporate behavior and performance based on a wide range of environmental, social and governance (ESG) topics.
In 2019, we were included in the Dow Jones Sustainability Indices World and Europe for the second year in a row. With our best score of 83 points out of 100, ST was ranked fourth among global semiconductor companies invited to participate in the indices. This achievement acknowledges our longstanding commitment to conducting our business responsibly and recognizes our performance in many areas, ranging from business ethics, innovation, and quality, to environment and labor practices.
We were also included in the Bloomberg Gender Equality Index and maintained a strong presence in other major sustainability indices, such as FTSE4Good, Ethibel, and Euronext Vigeo (see ST inclusion in the main sustainability indices in 2019).
Participating in these evaluations gives us an opportunity to assess our performance within a wider context, benchmark ourselves against our peers, measure our progress, and identify areas for further improvement.
Head of ESG Ratings RobecoSAM
We congratulate STMicroelectronics for being included in the DJSI World and Europe. The SAM Corporate Sustainability Assessment has again raised the bar in identifying those companies best-positioned to address future sustainability challenges and opportunities. This year – which marks the 20th anniversary of the DJSI – record corporate interest in the SAM CSA reflects the enduring relevance of the DJSI for measuring and advancing ESG practices.”