Value Creation Awards 2020: #2 Melexis

Value Square |Posted 10 July 2020 by Patrick Millecam

Melexis wins the Silver Value Creation Award, with an annual increase in fundamental value of 27.74%. The stock market return (share price increase + dividends collected) over the past 10 years was 1025%, resulting in an average stock market return of 27.4%. Congratulations to CEO Françoise Chombar, CFO Karen Van Griensven, Chairman Roland Duchatelet and the entire Melexis team for this remarkable achievement. Melexis also celebrated its 30th anniversary in 2019.  

Melexis ranks second in terms of value creation, having been number one for the past three years. 2019 was a particularly difficult year for the semiconductor manufacturer. Net profit almost halved in 2019 compared to 2018. Global car sales fell 5%. Melexis was confronted with inventory corrections at customers, caused by an uncertain economic and geopolitical situation due to tensions in world trade. Because of this uncertainty, everyone seemed to take a wait and see approach. In the fall, however, management had high hopes of a recovery as inventory corrections gradually faded away, until the corona crisis erupted in February. Melexis also announced to reduce the dividend from 2.2 to 1.3 euro.  

Melexis has become a world leader in semiconductor sensor ICs and circuits for the automotive industry over the past decade. Today, there are an average of 11 Melexis products in every new car worldwide. Significant progress has also been made in healthcare, consumer electronics and industrial applications. Over the past decade, Melexis has succeeded in growing faster than the market thanks to the implementation of a consistent strategy that focuses on a number of niches in semiconductor technology. Melexis has an ingrained culture for innovation, solving complex problems of its international customers through creativity, enthusiasm and a pioneering spirit among its many employees. The company is constantly looking for and seeking highly skilled talent and wants to maintain and strengthen this by offering high quality training. It is the people who work at Melexis who make the difference.  

The share of electronics in passenger cars will continue to increase. Melexis targets a penetration of 20 Melexis chips in every new car within a number of years. Melexis focuses on three key long-term trends: further electrification of the car fleet to achieve zero emissions, advanced driver assistance systems (ADAS) to reduce the number of road fatalities to zero, and more personalization that maximizes comfort for each individual. Melexis leverages its knowledge and experience in the automotive industry (by far the most important market) to develop products for two-wheelers, consumer electronics, industrial applications and the promising healthcare sector.

CEO Françoise Chombar and Patrick Millecam
CEO Françoise Chombar and Patrick Millecam

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