Q1 2011 Results Presentation

Joep

van

Beurden,

CEO

|

Will

Gardiner,

CFO

10

th

May 2011

Filed by CSR plc Pursuant to Rule 425

Under the Securities Act of 1933

And Deemed Filed Pursuant to Rule 14a-12

Under the Securities Exchange Act of 1934

Subject Company: Zoran Corporation

Commission File No.: 333-173590

Cautionary note regarding forward looking statements

Cautionary

Note

Regarding

Forward

Looking

Statements

This

release

contains,

or

may

contain,

‘forward

looking

statements’

in

relation

to

the

future

financial

and

operating

performance

and

outlook

of CSR and the proposed merger with Zoran Corporation (the ‘Proposed Merger’), as well as other future events and their potential effects

on CSR. Generally, the words ‘will’, ‘may’, ‘should’, ‘continue’, ‘believes’, ‘targets’, ‘plans’, ‘expects’, ‘estimates’, ‘aims’, ‘intends’,

‘anticipates’

or similar expressions or negatives thereof identify forward-looking statements. Forward-looking statements include statements

relating to the following: (i) expected developments in our product portfolio, expected revenues, expected annualised operating costs

savings,

expected

future

cash

generation,

expected

future

design

wins

and

increase

in

market

share,

expected

incorporation

of

our

products in those of our customers, adoption of new technologies, the expectation of volume shipments of our products, opportunities in our

industry and our ability to take advantage of those opportunities, the potential success to be derived from strategic partnerships, the

potential impact of capacity constraints, the effect of our financial performance on our share price, the impact of government regulation,

expected performance against adverse economic conditions, and other expectations and beliefs of our management, (ii) the expected

benefits of the Proposed Merger, and (iii) the expansion and growth of CSR’s or Zoran’s operations and potential synergies resulting from

the Proposed Merger.

These forward looking statements are based upon numerous assumptions regarding CSR’s business strategies and the environment in

which CSR will operate, including the current beliefs and expectations of the management of Zoran and CSR with respect to the Proposed

Merger, and therefore involve a number of known and unknown risks, contingencies, uncertainties and other factors that could cause actual

results

to

differ

materially

from

those

expressed

in

the

forward-looking

statements.

Many

of

these

risks

and

uncertainties

relate

to

factors

that are beyond CSR’s ability to control or estimate precisely and include, without limitation: the possibility that the Proposed Merger does

not close when expected or at all; the ability to realize the expected synergies from the Proposed Merger in the timeframe anticipated; the

ability to integrate Zoran’s businesses into those of CSR’s in a timely and cost-efficient manner; the development of the markets for CSR’s

products

and

the

products

of

the

combined

company

following

completion

of

the

Proposed

Merger;

the

ability

of

CSR

to

develop

and

market

products integrating CSR’s and Zoran’s technologies in a timely fashion; weak current economic conditions and the difficulty in predicting

sales, even in the short-term; factors affecting the quarterly results of CSR and Zoran; sales cycles; price reductions; dependence on and

qualification of foundries to manufacture the products of CSR and, following completion of the Proposed Merger, the combined company;

production capacity; the ability to adequately forecast demand; customer relationships; the ability of CSR to compete successfully; product

warranties; the impact of legal proceedings; the impact of intellectual property indemnification practices; and other risks and uncertainties,

including

those

detailed

from

time

to

time

under

the

caption

“Risk

Factors”

and

elsewhere

in

CSR’s

and

Zoran’s

periodic

reports

filed

with

the United States Securities and Exchange Commission, including Zoran’s Current Reports on Form 8-K, Quarterly Reports on Form 10-Q

and Annual Report on Form 10-K and CSR’s annual report on Form 20-F and Zoran’s and CSR’s other filings with the SEC. CSR can not

give any assurance that such forward-looking statements will prove to have been correct.

The reader is cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this

announcement. Neither CSR nor any other person undertakes any obligation to update or revise publicly any of the forward-looking

statements set out herein, whether as a result of new information, future events or otherwise, except to the extent legally required.

Page 2

Q1  2011 results

Agenda

Q1 Overview

Joep van Beurden

Q1 Financial Review

Will Gardiner

Update on merger with Zoran

Joep van Beurden

Outlook

Joep van Beurden

Questions

Agenda

Page 3

Q1  2011 results

Q1 Overview

Joep

van

Beurden,

Chief

Executive

Officer

Q1 performance in line with management guidance

Page 5

Q1 financial performance

Revenues in line with management guidance

Gross margin improved by 2.6% to 49.1% YoY, reflecting changing

business mix towards differentiated, higher margin products

Higher operating expense, reflecting continued investment in next

generation products, as well as last of Broadcom litigation expense

Underlying EPS of 2 cents

Progress on key catalysts for growth

Audio & Consumer performed strongly

Automotive & PND ramping for H2 as forecast

Important smartphone design wins for Handset business, Samsung

GALAXY SII and Huawei

Q1  2011 results

Revenues $68.3m (Q1 2010:

$85.7m)

-

Decrease of 20% YOY

-

Decrease of 7% relative to Q4

Traction in smartphones with GPS

Seeing weakness in some parts of

the handset market

Handset Business review

Page 6

Q1  2011 results

Handset Business: catalysts for growth

Page 7

CSR8810 ramping with Tier One customers

Q1  2011 results

Feature

Feature

phones

phones

Stronger for Longer

Stronger for Longer

Smartphones

Smartphones

Repositioned Portfolio

Repositioned Portfolio

SiRFstarIV

penetrating the smartphone market

with 2 key design wins with Samsung and Huawei

Our 40nm SiRFstarV has taped out and is being

evaluated in our labs

CSR 9800 development on track: commitment

from a Tier One smartphone OEM to be lead

customer

Demonstration of SiRFstarIV

video clip   

“They’ve fixed the GPS –

It really works!”

Audio & Consumer Business Review

Revenues $49.9m

(Q1 2010:

$42.9m)

-

Increase of 16% YOY despite

strong comps in Q1 2010

-

Decrease of 11% relative to a

traditionally strong Q4

Maintaining market leadership in

headsets through superior

technology

Continued leadership in gaming

Page 9

Q1  2011 results

Audio & Consumer: catalysts driving strong growth

Page 10

Market leader in headsets through innovation

Market leadership in gaming

Bluetooth design wins with Tier One companies,

including Dell and HP, in the notebook, netbook and

tablet markets

Partnership with Intel progressing well

-

Bluetooth/Wi-Fi combo chips aimed at the PC notebook

and netbook market

GPS in cameras growing through increasing attach

rates

Growing interest in applications for Bluetooth Low

Energy in a range of products such as keyboards,

mice, and health and fitness accessories

Aliph Era

Aliph Icon

BlueAnt Q2

Motorola HX1

Plantronics

975

Plantronics

Voyager Pro+

Sound ID 510

Motorola

S9-HD

Samsung

HM3500

BlueAnt S4

CSR technology supporting all of the top 10 consumer headsets

Q1  2011 results

Audio &

Audio &

Consumer

Consumer

Driving Growth

Driving Growth

Page 11

HOYA / Pentax

Optio WG-1 GPS

FUJIFILM FinePix

F550EXR

Funai Tablet TV

7”

and 10”

Panasonic LUMIX

DMC-

ZS10/TZ20/DMC -

FT3

Canon

PowerShot

SX230 HS

CSR GPS is penetrating in cameras and tablets

Q1  2011 results

Automotive & PND business review

Revenues $45.7m (Q1 2010:

$44.4m)

-

Increase of 3% YOY despite

capacity constraints

-

Decrease of 18% relative to Q4

Capacity constraints due to ease by

the end of Q2

Continued strength of In-Vehicle

Navigation aimed at emerging

markets

No material impact of the events in

Japan so far, but are monitoring

closely

Page 12

Q1  2011 results

Automotive & PND Business: catalysts for growth

Page 13

Continued market leadership with SiRFprima

Tape-out of 40nm SiRFprimaII during the

quarter

-

4 lead customers across 3 different regions

Multiple additional Wi-Fi design wins with

leading customers

10 active programmes

CSR6000 --

world’s 1   fully automotive-

qualified standalone Wi-Fi solution for

connected car platforms

Strong momentum in Bluetooth qualifications,

building on our market leadership position

Q1  2011 results

Automotive &

Automotive &

PND

PND

Continued

Continued

Momentum

Momentum

st

Focus on product development

Good progress with our 40nm product development

–

Multiple commercial 40nm chips taped out (SiRFprimaII, SiRFstarV)

–

SiRFstarV -

preparing

demo samples

to

Tier One customer

Full range of audio products

Bluetooth Low Energy

28 active development programmes for 2011 and 2012

Page 14

Q1  2011 results

Q1 Financial Review

Will

Gardiner,

Chief

Financial

Officer

Q1 financial highlights

Page 16

Revenues $163.9m

Revenues $163.9m

Gross margins up 2.6% to 49.1% from Q1 2010

Gross margins up 2.6% to 49.1% from Q1 2010

Underlying diluted EPS $0.02

Underlying diluted EPS $0.02

Q1  2011 results

Q1 2011

Q1 2010

Change Q1 2010

to Q1 2011

Revenue

$163.9m

$173.0m

($9.1m)

Underlying gross margin

49.1%

46.5%

2.6%

Underlying gross profit

$80.4m

$80.5m

($0.1m)

Underlying R&D expenditure

$49.7m

$43.7m

$6.0m

Underlying SG&A expenditure

$30.7m

$25.3m

$5.4m

Underlying operating profit

$0.0m

$11.5m

($11.5m)

Underlying diluted earnings per share

$0.02

$0.05

($0.03)

Q1 2011 financial highlights

Page 17

Q1  2011 results

Underlying

results

for

Q1

2011

add

back

charges

in

cost

of

sales

for

amortisation

of

acquired

intangible

assets

(Q1

2011:

$1.5m;

Q4

2010:

$1.5m;

Q1

2010:

$1.3m),

in

R&D for the amortisation of acquired intangible assets  (Q1 2011: $1.2m; Q4 2010: $1.2m; Q1 2010: $1.3m) and share option charges (Q1 2011: $1.8m; Q4 2010:

$1.1m; Q1 2010: $1.8m) and in SG&A for amortisation of acquired intangible assets (Q1 2011: $0.9m; Q4 2010: $0.9m; Q1 2010: $0.8m), integration and restructuring

charges (Q1 2011: $0.9m; Q4 2010: $1.1m; Q1 2010: $nil), proposed acquisition fees (Q1 2011: $4.0m; Q4 2010 & Q1 2010: $nil), share option charges (Q1 2011:

$1.5m; Q4 2010: $0.6m; Q1 2010: $1.3m), litigation settlement income (Q1 2011: credit of $14.5m; Q4 2010: $nil; Q1 2010: $nil) and  litigation settlement costs (Q1

2011:

$6.0m;

Q4

2010:

$59.8m;

Q1

2010:

$nil).

Underlying

diluted

earnings

per

share

also

adds

back

the

tax

effects

associated

with

the

above

Items,

as

well

as

the

recognition

of

pre-acquisition

losses

(Q1

2011:

$nil;

Q4

2010:

credit

of

$11.9m;

Q1

2010:

$nil),

the

unwinding

of

discount

on

litigation

(net

of

tax)

(Q1

2011:

$0.5m;

Q4

2010;

$nil:

Q1

2010:

$nil)

and

deferred

tax

on

share

options

(Q1

2011:

$nil;

Q4

2010:

$0.5m;

Q1

2010:

$nil).

Ongoing shift in our business mix

Page 18

Q1  2011 results

Steady improvement in underlying gross margin

Page 19

Q1  2011 results

47.3%

46.5%

47.5%

48.0%

48.7%

49.1%

Q4 2009

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Q1 2011

Operating Expenses –

on track for full year guidance

Page 20

Q1  2011 results

Cash outflows driven by seasonal working capital and investment in buyback

Page 21

$m

Q1 2011

Q4 2010

Q1 2010

Operating cash flow before working capital movements

9.1

(42.1)

16.8

Working capital movements

(18.8)

52.9

(19.0)

Cash generated by operations

(9.7)

10.8

(2.2)

Capex

(6.2)

(2.9)

(4.9)

Free cash flow

(15.9)

7.9

(7.1)

Net Interest

-

-

0.1

Taxation

(0.5)

(0.2)

(0.4)

Repayment of obligations under finance leases

-

(0.3)

-

Purchase of treasury shares

(25.2)

(25.5)

-

Proceeds of issue of share capital

1.4

0.9

3.6

Net funds at the beginning of the period

(40.2)

(17.2)

(3.8)

Cash and cash equivalents at  beginning of period

440.1

457.5

412.4

Effect of foreign exchange rate changes

0.9

(0.2)

(0.5)

Net funds at the end of the period

400.8

440.1

408.1

Q1  2011 results

Working capital analysis

Page 22

Inventory Days

Debtor Days

Payables Days

Increase due to ramp of

new products

Decrease due to strong

cash collection

Stable DPO

Q1  2011 results

Q1 Litigation Update

CSR will continue to take steps which we believe are in the overall interests

of CSR and its stockholders

Typical U.S. Class Action merger lawsuits filed against CSR in connection

with announced Zoran merger

Broadcom settlement announced during the Q1. Total legal recoveries to

date from third parties, including $14.5m obtained in Q1 2011 exceed $20m. 

No further recoveries in favour of CSR toward the Broadcom settlement are

anticipated

Settled Wi-Lan litigation and obtained a multi-year licensing arrangement

with respect to Wi-Lan’s wireless patent portfolio

Multiple

patent

cases

with

Bandspeed,

Inc

are

ongoing.

Recently

asserted

CSR

patents

against

Bandspeed.

In

the

defensive

case,

the

Court

has

not

issued its Markman ruling; trial anticipated in H2 2011

Mosaid and Azure filed patent lawsuits against CSR

NordNav claim for $17.5m acquisition earnout scheduled for arbitration

hearing in Q4 2011

Q1  2011 results

Page 23

Update on merger with Zoran

Joep van Beurden,

Chief Executive Officer

Proposed merger update

The basis of the proposed merger was the attractive

combination of our connectivity and location capabilities

with Zoran’s imaging and video processing as well as

the strong financial case

Feedback from our customers since announcement has

supported the strategic rationale

We have noted Zoran’s latest guidance and are

currently evaluating the implications of these

disclosures

Page 25

Q1  2011 results

Outlook

Joep van Beurden,

Chief Executive Officer

Outlook

Page 27

Audio & Consumer business

growing strongly

Automotive & PND business

should maintain growth through

strong design win pipeline

Tier One smartphone design wins

in handsets

Weakness in some parts of the

handset market

Good progress on catalysts for

growth expected

Q2 revenue guidance $185m to

$200m

Q1  2011 results

Questions

Additional Information and Where to Find It

This communication may be deemed to be solicitation material in respect of the Proposed Merger involving CSR and Zoran. In connection with the Proposed Merger, CSR has filed with the US Securities and Exchange Commission (the “SEC”) a registration statement on Form F-4 containing a proxy statement/prospectus (the “Proxy Statement/Prospectus”) for the stockholders of Zoran. Each of CSR and Zoran plan to file other documents with the SEC regarding the Proposed Merger. WE URGE INVESTORS TO READ THE PROXY STATEMENT/PROSPECTUS AND THE REGISTRATION STATEMENT ON FORM F-4 (INCLUDING ANY SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT CSR OR ZORAN FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Stockholders will be able to obtain, free of charge, copies of the Proxy Statement/Prospectus, the Registration Statement on Form F-4 and any other documents filed by CSR or Zoran with the SEC in connection with the Proposed Merger at the SEC’s website at http://www.sec.gov, at Zoran’s website at http://www.Zoran.com, and at CSR’s website at http://www.csr.com.

Important Additional Information regarding solicitation of Zoran proxies

Zoran and its directors and certain executive officers and CSR, its directors and officers may be deemed to be participants in the solicitation of proxies from stockholders in connection with the approval of the Proposed Merger. CSR has filed the Proxy Statement/Prospectus and Registration Statement with the SEC in connection with the solicitation of proxies to approve the Proposed Merger. Information regarding the names of Zoran’s directors and executive officers and their respective interests in Zoran by security holdings or otherwise is set forth in Zoran’s proxy statement relating to the 2010 annual meeting of stockholders, which may be obtained free of charge at the SEC’s website at http://www.sec.gov and Zoran’s website at http://www.Zoran.com. Information about CSR’s directors and executive officers is set forth in CSR’s annual report for the financial period ended 31 December 2010, which may be obtained free of charge at the SEC’s website at http://www.sec.gov and at CSR’s website at http://www.csr.com. Additional information regarding the interests of such potential participants is included in the Proxy Statement/Prospectus and Registration Statement and other relevant documents to be filed with the SEC in connection with the solicitation of proxies to approve the Proposed Merger.

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