6-K 1 ss97492_6k.htm REPORT OF FOREIGN PRIVATE ISSUER

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
Report on Form 6-K dated August 3, 2010
Commission File Number: 1-13546

STMicroelectronics N.V.
(Name of Registrant)
39, Chemin du Champ-des-Filles
1228 Plan-les-Ouates, Geneva, Switzerland
(Address of Principal Executive Offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
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Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
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If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- __________
Enclosure: A presentation relating to ST’s financial performance.

    Financial Performance & Roadmap

    Carlo Ferro
    Chief Financial Officer

    Agenda

    o    Our Financial Results

    o      Our Opportunities

    o      Our Target Financial Model

    2

    Our Results

    3

    In US$M, except EPS     Q308    Q409     Q110      FY09    FY08
    Net Revenues           2,696    2,583   2,325     8,510    9,842
    Gross Margin           35.6%    37.0%   37.7%     30.9%    36.2%
    Adjusted Operating      210      128      81      (499)     468
    Profit before
    Restructuring
    attributable to
    Parent*(1)
    Adjusted Operating
    Margin*(1)              7.8%     5.7%    4.0%     -6.8%    4.8%
    EPS Diluted            (0.32)   (0.08)   0.06    (1.29)    (0.88)
    Adjusted EPS Diluted*   0.15     0.04    0.07    (0.72)    0.40
    RONA attributable to
    Parent*(1)              10.5%    7.6%    5.1%    -28.3%    5.9%
    Net Operating Cash
    Flow
    (before M&A)*            140      221     176       226      647
    Effective Exchange
    Rate (euro)/$            1.54     1.43    1.39      1.37     1.49

    *Some of the measures above are non-GAAP measures that the
    Company believes provides useful
    information. See appendix and below for definition and
    calculation methodology.
    (1) Description of adjusted metrics attributable to parents:
          o Adjusted Operating Profit attributable to parent =
    Reported Operating Profit/Loss before
       restructuring -  1/2 of ST-Ericsson JVS Operating
    Profit/Loss before restructuring
          o Adjusted Operating Margin attributable to parent =
    Operating Profit attributable to parent /
       (Reported Revenues -  1/2 of ST-Ericsson JVS Revenues)
          o RONA attributable to parent = Annualized Operating
    profit attributable to parent / (Reported
       Net Assets -  1/2 of ST-Ericsson JVS Net Assets)

    4

    4 Years of Progress Masked by Currency

    o Divested flash memories
     o 3-step merger and 50% JV in Wireless
     o Technology alliance
    o Reduced CapEx / Sales
     o Savings from restructuring initiatives: ~$1.1B
     o Front-end fabs reduced from 17 to 9
     o Product R&D focus:
              o      Advanced Analog
              o      New ASSP and ASICs
              o      MEMS
              o      Smart power solution
              o      32-bit MCUs

    Operating Income excluding restructuring and
    impairment charges, as reported

    50% of Operating Loss of ST-Ericsson  not attributable to ST

    5

    Net Operating Cash Flow

    Net Operating Cash Flow (ex M&A)*

    *Net Operating Cash Flow (ex M&A) is a non-GAAP measure that,
    the Company believes, provides useful
    information. See appendix for definition.

    6

    A Solid Financial Foundation

    (US$ million)           Dec. 31, 2008 Dec. 31, 2009  Mar. 27, 2010
    Available Cash               1,640        2,394          2,342
    Restricted Cash                250          476            368
    Marketable Securities,
    Non-current                    242           42             47
    TOTAL                        2,132        2,912          2,757
    Total Financial Debt        (2,677)      (2,492)        (2,191)
    Net Financial Position        (545)         420            566

                            DIVESTITURES
    o $1.1B net proceeds from M&A in 2009
    o Sale of Numonyx in May 2010: will increase liquidity
    by estimated over $500M after lock-up period
    o Sale of Phoenix signed in May 2010

                           ARS LITIGATION
    o February 2009: won FINRA award ordering Credit Suisse
    to pay to ST $406M plus interest
    o December 09 collected $75M
    o March 2010: won in US district Court: confirms award
    and denies CS motion to vacate
    o CS may still appeal but based on the award and the
    Federal Court, ST can expect to collect a further
    $354M including interest

                         2016 CONVERT BOND

    o Dec 2009 / Jan 2010: repurchased $314.6M;
    o In Q210 repurchased additional $55M
    o 15.3 M shares to be cancelled
    o Redemption of residual $673M likely due in February 2011

    Dividend Evolution

    Dividend Yield as of
    May 31, 2010:
    Dividend increased to $0.28 per share
    representing 3.6% yield*
    * 2009 annualized dividend is payable in four equal
    installments: May, August and November 2010 and
      February 2011.
    ** Source: Capital IQ

    8

    Our Opportunities

    9

    Assets Lighter Strategy

    o Sustainable 5% to about 7% capex-to-sales ratio in a cycle
    o Targeting ~20% increase in capacity (internal & external)
      Q409 vs. Q410

    CapEx to Sales Ratio

    Depreciation by Wafer

    *Based on assumed (euro)/$ rate of about 1.30.

    Continuous Focus on Cost Reduction

    10

    Continuous Focus on Cost Reduction

    o  Manufacturing focused to reduce wafer costs, after
    return to full loading
    o  Currency, cash costs efficiency and roll-over
    depreciation expected to contribute to about 10%
           wafer cost reduction from Q110 thru Q410*
    o  Further cost reduction after the final phase-out
    of Phoenix fab, from Q210
    o  Assembly cost reductions driven by volume, shift
    to Asia and Gold-Copper conversion

    Wafer Cost Index (Base 100 Q110*)

    *Based on assumed (euro)/$ rate of about 1.30.

    11

    Completing the On-Going Restructuring

    12

    Currency Exposure

    Total Costs (COGS+OpEx) By Currency (Q110)

    Quarterly Currency Effect: +1% change
    o $4 to $5 million impact to gross profit
    o $4 to $5 million impact on operating expenses
    o $8 to $10 million on operating profit

    Hedging: % of Euro exposure currently hedged**

    Other 5%
    SEK 5%

    *Euro ((euro)) includes currencies such GBP, CHF, MAD Morocco.
    **As of May 31, 2010.

    13

    ACCI: Performance & Targets*

    GROUP Q110       Short T     MID TERM TARGET
    APG      ~5%        HSD       Mid Teens
    CCI      >10%       ~ flat        Low Teens
    HED      ~ 5%       ~ 10%      Low /Mid Teens
    IMG      Neg        B/even     Low

    *Q410 assumes revenues based on a substantial
    continuity in market demand trends and an effective
           exchange rate between 1.25 (euro)/$ to 1.30 (euro)/$.
    **Segment operating results exclude, among others,
    unsaturation charges.

    14

    IMS: Performance & Targets*

    GROUP Q110       Short T     MID TERM TARGET
    APM      >10%       High Teens    20%+
    MMS      >10%       High Teens    20%+

    *Q410 assumes revenues based on a substantial continuity
    in market demand trends and an effective
           exchange rate between 1.25 (euro)/$ to 1.30 (euro)/$.
    **Segment operating results exclude, among others,
    unsaturation charges.

    15

    Wireless: Performance & Targets*

    ST-Ericsson plans profitability at quarterly revenue run
    rate of (greater or equal)$750 million, after restructuring is
    complete

    *Q410 assumes revenues based on substantial continuity in market
    demand trends and an effective
           exchange rate between 1.25 (euro)/$ to 1.30 (euro)/$.
    ** See appendix - Q308 included 2 months of former NXP
    business and was before formation of
           ST-Ericsson.
    ***Segment operating results exclude, among others,
    unsaturation charges.

    16

    Our Target Model

    17

    Financial Model*

    Transitional Model:
    All segments at / above break-even
    Low / mid-single-digit operating margin
    Back to net operating cash flow of 6% to 10% of sales

    Q409 - Q110 Achievements
    Operating Margin: 3.5% in Q4 down to 0.5% in Q110 on
    seasonally lower Revenues

    Excluding Wireless: Operating Margin 7.4% in both periods
    Net Operating Cash Flow: 8.6% and 7.6% of Sales respectively
    in the two periods

    ST Financial Model:
    o   9% to 12% operating margin x 1.3-1.4 net assets turns
    o   12% to 18% return on net assets (RONA) target
    o   Double digit net operating cash flow as % of sales

    *See appendix.

    18

    ...achievable in Short Term

    Price

          OpEx Leverage
          New Products
          Manufacturing
          Restructuring
            Currency

      Operating Margin*
            Q110

           Operating Margin*

    * Operating Margin before Restructuring Charges. It is not a GAAP measure, please see Appendix.

    19

    ...by Improvements at All Segments*

    IMS: from 11% to High Teens*

    ACCI: from 5% to High Single Digit*

    Wireless: substantial reduction of losses*

    Operating Margin**
    Q110

    Target
    Operating Margin**

    *Product Segment targets assume substantial continuity
    in market demand trends and an effective
           exchange rate between 1.25 (euro)/$ to 1.30 (euro)/$.
    **Operating Margin before Restructuring Charges.
    It is not a GAAP measure, please see Appendix.

    20

    Appendix

    o    Net operating cash flow is defined as net cash from
         operating activities minus net cash used in investing
         activities, excluding payment for purchases of and
         proceeds from the sale of marketable securities (both
         current and non-current), short-term deposits and
         restricted cash. We believe net operating cash flow
         provides useful information for investors and
         management because it measures our capacity to generate
         cash from our operating and investing activities to
         sustain our operating activities. Net operating cash
         flow is not a U.S. GAAP measure and does not represent
         total cash flow since it does not include the cash
         flows generated by or used in financing activities. In
         addition, our definition of net operating cash flow may
         differ from definitions used by other companies.

    o    Net financial position: resources (debt), represents
         the balance between our total financial resources and
         our total financial debt. Our total financial resources
         include cash and cash equivalents, current and
         non-current marketable securities, short-term deposits
         and restricted cash, and our total financial debt
         include bank overdrafts, the current portion of
         long-term debt and long-term debt, all as represented
         in our consolidated balance sheet. We believe our net
         financial position provides useful information for
         investors because it gives evidence of our global
         position either in terms of net indebtedness or net
         cash by measuring our capital resources based on cash,
         cash equivalents and marketable securities and the
         total level of our financial indebtedness. Net
         financial position is not a U.S. GAAP measure.

    o    Adjusted Net Earnings is a non-GAAP measure and is used
         by the Company's management to help enhance an
         understanding of ongoing operations and to communicate
         the impact of the excluded items. Non-GAAP earnings
         excludes impairment, restructuring charges and other
         related closure costs attributable to Parent Company's
         shareholders, the impact of purchase accounting (such
         as in-process R&D costs and inventory step-up charges),
         other-than-temporary impairment charges on financial
         assets and impairment related to equity investments,
         net of the relevant tax impact.

    o      Financial Model:  Presented at May 2009 Analyst Day

    o      Key Information on Consolidation / Deconsolidation:

    o    ST completed the deconsolidation of its Flash Memory
         Group (FMG) segment and took an equity interest in
         Numonyx on March 30, 2008, which is reported under the
         equity method of valuation with a one quarter lag in
         reporting.

    o    ST-NXP Wireless, a joint venture initially owned 80% by
         ST, began operations on August 2, 2008 and was fully
         consolidated into ST's operating results. On February
         1, 2009 and prior to the closing of the merger of
         ST-NXP Wireless and Ericsson Mobile Platforms to create
         ST-Ericsson, ST exercised its option to buy out NXP's
         20% ownership stake of ST-NXP Wireless.

    o    ST-Ericsson, a joint venture owned 50% by ST, began
         operations on February 3, 2009 and is consolidated into
         ST's operating results as of that date. ST-Ericsson is
         led by a development and marketing company and is
         consolidated by ST. A separate platform design company
         providing platform designs mostly to the development
         and marketing company is accounted for by ST using the
         equity method.

    o    Wireless Segment: As of February 3, 2009, "Wireless"
         includes the portion of sales and operating results of
         the 50/50 ST-Ericsson joint venture as consolidated in
         the Company's revenues and operating results, as well
         as other items affecting operating results related to
         the wireless business.

    o    Sales recorded by ST-Ericsson and consolidated by ST
         are included in Telecom and Distribution

    21

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, STMicroelectronics N.V. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

|  |  | STMicroelectronics N.V.
Date: | August 3, 2010 | By: | /s/ Carlo Ferro
|  | Name: | Carlo Ferro
|  | Title: | Executive Vice President and Chief Financial Officer