$Texas Instruments Incorporated(TXN)$
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Texas Instruments Incorporated (NASDAQ:TXN) Capital management review 2024 February 1, 2024 11:00 PM ET
Company Participants
Dave Pahl - VP, Investor Relations
Rafael Lizardi - SVP & Chief Financial Officer
Conference Call Participants
Timothy Arcuri - UBS
Toshiya Hari - Goldman Sachs
Vivek Arya - Bank of America Securities
William Stein - Truist Securities
Ross Seymore - Deutsche Bank
Tore Svanberg - Stifel
Stacy Raskin - Bernstein Research
Joshua Buchalter - TD Cowen & Company
Chris Danely - Citibank
Harlan Sur - JP Morgan
Joe Moore - Morgan Stanley
Operator
Good morning and welcome to Texas Instruments 2024 Capital Management Call. I'm Dave Pahl, Head of Investor Relations, and I'm joined by our Chief Financial Officer, Rafael Lazzardi. This call is being broadcast live over the web and can be accessed through our website at ti.com.
In addition, today's call is being recorded and will be available via replay on our website, along with the complete presentation and prepared remarks for your convenience. This call will include forward-looking statements that involve risks and uncertainties that could cause TI's results to differ materially from management's current expectations. We encourage you to review the notice regarding forward-looking statements contained in our most recent earnings release, as well as the most recent SEC filings for a more complete description.
During today's presentation, we'll begin with a recap of our objective, strategy, and business model that is built on our sustainable competitive advantages. Next, we'll review the scorecard for 2023 and updates for 2024. Then we'll provide a historical summary of our capital allocation and share a reminder of our approach to capital allocation as we prepare for the opportunity ahead.
Next, we'll provide an update on our progress in strengthening our manufacturing and technology competitive advantage, where you'll see our CapEx plans are unchanged as we prepare to support long-term growth for our customers with geopolitically dependable capacity. Then we'll review R&D allocation priorities and our progress on building closer, direct relationships with our customers. Next, we'll review our free cash flow per share performance. And lastly, we'll wrap up with a review of our cash returns.
If you haven't already, we encourage you to review our investor overview, which provides insight into our business model and competitive advantages. It's also available on our investor relations website at ti.com/ir. Before I go through an executive summary of TI's guiding principles and our objective and strategy, let me pause and make a few important points about today's presentation.
Companies and investors are looking at a world where the semiconductor cycle is playing out at the same time that geopolitical tensions, particularly between China and the U.S., are reshaping supply chains and competitive dynamics for the next 10 to 20 years. We will continue to allocate capital to the best opportunities to prepare for the future, particularly our investments to provide geopolitically dependable, low-cost, 300-millimeter capacity at scale.
History has shown the importance of staying focused on the opportunity ahead, even through weak periods of the semiconductor cycle. It is precisely in times like this that we find it important to remind ourselves and our investors of the principles that guide us on a day-to-day basis. At TI, we run the company with the mindset of being a long-term owner. We believe that the growth of free cash flow per share is the primary driver of long-term value.
Our ambitions and values are integral to how we build TI stronger. When we're successful in achieving these ambitions, our employees, our customers, communities, and shareholders all win. Our strategy is comprised of a great business model, a disciplined approach to capital allocation, and a focus on efficiency. Our business model is built around four sustainable competitive advantages; manufacturing and technology, broad product portfolio, the reach of our market channels, and diverse and long-lived positions.
And after increative investments in the business to grow free cash flow per share for the long term, the remaining cash will be returned over time via dividends and share repurchases. With that as a framework, our objective is to maximize long-term growth of free cash flow per share, which we believe is the best metric to judge our performance and generates long-term value for the owners of the company.
Our strategy to achieve this objective has three elements. First, a business model that is focused on analog and embedded products and built around four sustainable competitive advantages, advantages that we continue to invest in and make even stronger. Second, discipline and allocating capital to the best opportunities, this spans how we select R&D projects, develop new capabilities like ti.com, invest in our new manufacturing capacity, or how we think about acquisitions and returning cash to our owners. And third, striving to constantly increase our efficiency, which is about achieving more output for every dollar of input.
Our strategy is designed around four sustainable competitive advantages that, in combination, provide tangible benefits that are difficult to replicate. First, at the bottom of the slide, we start with a foundation of manufacturing and technology. This provides us lower cost and greater control of our supply chain. The advantage of lower cost has always been recognized as a benefit. The last few years have increasingly highlighted the importance of owning and controlling our supply chain, including manufacturing, process technology, and packaging.
Our second competitive advantage is the broad product portfolio of analog and embedded processing products. These products provide us more opportunities per customer and more value for our investments. And third, the reach of our market channels, including our field sales force team and ti.com. This provides us access to more customers, projects, sockets per project, and insight into their needs. And lastly, we have diverse and long-lived positions, resulting in less single point dependency and longer returns on our investments.
Texas Instruments Incorporated (NASDAQ:TXN) Capital management review 2024 February 1, 2024 11:00 PM ET
Company Participants
Dave Pahl - VP, 投资者关系
拉斐尔·利扎迪 - 高级副总裁兼首席财务官
Conference Call Participants
蒂莫西·阿古里-瑞银证券
Toshiya Hari - 高盛
Vivek Arya - 美国银行证券
William Stein - Truist Securities 威廉·斯坦 - Truist Securities
Ross Seymore - 德意志银行
Tore Svanberg - Stifel 不需要翻译。
Stacy Raskin - Bernstein Research 斯泰西·拉斯金 - 伯恩斯坦研究
Joshua Buchalter - TD Cowen & Company 约书亚·布沙尔特 - TD Cowen & Company
克里斯·丹利 - 花旗银行
Harlan Sur - 摩根大通
乔·摩尔 - 摩根士丹利
Operator
早上好，欢迎参加德州仪器2024年资本管理会议。我是投资者关系总监戴夫·帕尔，与我们的首席财务官拉斐尔·拉扎迪一起出席。本次会议正在网上直播，可以通过我们的网站ti.com进行访问。
此外，今天的通话正在录音，将通过我们的网站提供回放，同时还会提供完整的演示和准备好的讲话供您参考。本次通话将包含涉及风险和不确定性的前瞻性陈述，这可能导致TI的业绩与管理层当前的预期有较大差异。我们鼓励您查看关于前瞻性陈述的通知，该通知包含在我们最近的收益发布中，以及最新的SEC文件，以获取更全面的描述。
今天的演示将从我们的目标、战略和建立在可持续竞争优势基础上的商业模式进行回顾。接下来，我们将审视2023年的绩效得分卡并更新2024年的情况。然后，我们将提供我们资本配置的历史摘要，并提醒大家我们在准备未来机遇时对待资本配置的方法。
接下来，我们将提供关于我们在加强制造业和技术竞争优势方面取得进展的更新，您将会看到我们的资本支出计划并未改变，这是为了准备支持客户的长期增长需求，具有地缘政治可靠性的产能。然后我们将审视研发资源分配的优先事项以及在构建更紧密、直接的客户关系方面的进展。接下来，我们将审查我们的每股自由现金流表现。最后，我们将总结我们的现金回报情况。
如果您还没有的话，我们鼓励您查看我们的投资者概览，这将对我们的商业模式和竞争优势提供见解。您也可以在我们的投资者关系网站 ti.com/ir 上找到这份概览。在我浏览TI公司的指导原则、我们的目标和策略概要之前，让我暂停一下，重点谈一下今天演示的一些重要内容。
公司和投资者正在关注一个情况，半导体周期与地缘政治紧张局势同时进行，特别是中国和美国之间的紧张局势正在重塑未来10到20年的供应链和竞争动态。我们将继续配置资本以应对未来的最佳机遇，特别是我们的投资是为了提供地缘政治可靠、低成本、规模化的300毫米生产能力。
历史已经证明了在半导体周期的低迷时期，专注于前景的重要性。正是在这样的时候，我们发现了重要性，提醒自己和投资者我们每天遵循的原则。在TI，我们以长期持有者的心态经营公司。我们相信，每股自由现金流增长是长期价值的主要驱动因素。
我们的抱负和价值观是构建TI更加强大的重要组成部分。当我们成功实现这些抱负时，我们的员工、客户、社区和股东都会获益。我们的战略包括一个出色的商业模式、资本配置的纪律性和效率的关注。我们的商业模式建立在四大可持续的竞争优势基础之上：制造和技术、广泛的产品组合、市场渠道覆盖范围和多元化和长期持续的地位。
在对业务进行创造性投资以增加长期自由现金流每股的情况下，剩余的现金将通过股息和股票回购逐步返还。以此为框架，我们的目标是最大程度地增加长期自由现金流每股，我们相信这是评判我们业绩的最佳指标，并为公司所有者创造长期价值。
我们实现这一目标的战略有三个要素。首先，一个着眼于模拟和嵌入式产品的商业模式，建立在四个可持续的竞争优势基础上，我们将不断投资并加强这些优势。其次，我们要有资本分配的纪律，把资金用于最佳机会，无论是在选择研发项目、开发诸如 ti.com 这样的新能力、投资新的生产能力，或者考虑收购并向股东返还现金等方面。第三，不断提高效率，这意味着要在每投入一美元的情况下获得更多产出。
我们的战略基于四个可持续的竞争优势，结合起来能够提供难以复制的实际好处。首先，在幻灯片的底部，我们从制造业和技术的基础开始。这为我们提供了更低的成本和更大的供应链控制。低成本的优势一直被认为是一个好处。过去几年越来越突显拥有和控制我们的供应链的重要性，包括制造、工艺技术和包装。
我们的第二个竞争优势是广泛的模拟和嵌入式处理产品组合。这些产品为我们提供更多的客户机会和更大的投资价值。第三，我们的市场渠道覆盖范围广，包括我们的外部销售团队和 ti.com。这为我们提供了更多的客户、项目、每个项目套接字以及对他们需求的洞察。最后，我们拥有多样化和长期存在的地位，减少了单一依赖点，并延长了我们的投资回报周期。
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