60 slides from Be Semiconductor Industries's investor presentation, November 2021
Slide 1: Investor Presentation November 2021
INVESTOR PRESENTATION November 2021
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains statements about management's future expectations, plans and prospects of our business that constitute forward-looking statements, which are found in various places throughout the press release, including, but not limited to, statements relating to ex
Slide 3: Agenda
Agenda I. Company Overview II. Market III. Strategy IV. Financial Update and Summary V. Appendix November 2021 3
Slide 4: I. Company Overview
I. COMPANY OVERVIEW November 2021 4
Slide 5: Besi Overview
Besi Overview • Leading assembly equipment supplier with #1 and #2 positions in key markets. ~30% addressable market share • Broad portfolio: die attach, packaging and plating Corporate Profile • Strategic positioning in substrate and wafer level packaging • ~75% of systems used for advanced packagi
Slide 6: Company History
Company History Consistent Focus on Advanced Packaging Has 800 Created an Industry Leader 70% •Focus on most rapidly growing segments of assembly market •Growth organically and via acquisitions 65% 700 € 687.2 •Expanded share of wallet with key industry leaders each cycle •Expansion of customer base
Slide 7: History of Superior Long-Term Value Creation
History of Superior Long-Term Value Creation Disciplined Strategic Execution Capital Allocation Program Total Shareholder Return Leader in advanced packaging € 906 million of dividends and Consistent outperformance for assembly equipment share repurchases since 2011* versus peers Total shareholder r
Slide 8: Industry Leading Equipment Portfolio
Industry Leading Equipment Portfolio Die Attach (82% of 2020 Revenue) Multi-Module Attach Epoxy and Soft Solder Die Attach Flip-chip Direct Lid Attach Thermo Compression Hybrid Bonding • 2200 evo • 2200 evo plus • 2200 evo hS • 2100 hS • 2009 SSI • 8800 CHAMEO advanced / PLP • 2200 evo advanced • 21
Slide 9: Customer Ecosystem
Customer Ecosystem Customers OEMs End Products IDMs Subcontractors • Diversified, blue chip customer base, top 10 = ~50% of 2020 revenue • Leading IDMs and subcontractors. 45%/55% order split in 2020 • Also supply leading fabless companies: Qualcomm, Broadcom, MediaTek via subcontractors • Long term
Slide 10: From Processed Wafer to Assembled Chip
From Processed Wafer to Assembled Chip Semiconductor Manufacturing Equipment 2020: $ 73.6B* Front-end: $ 63.6B Assembly: $ 3.6B Test: $ 6.4B (86%) (5%) (9%) Assembly Process Dicing Die Attach Wire Bond Packaging Plating - - Leadframe Assembly - Substrate - - Wire Bond Assembly - Substrate - - Flip C
Slide 11: Current Operational Profile
Current Operational Profile Duiven and ‘s-Hertogenbosch, (NL) Steinhausen, Radfeld, (AT) (CH) Suzhou Chandler Chengdu Korea Shanghai Leshan Taiwan Shenzhen Thailand Philippines Malaysia Sales Office Singapore Production Site Sales and R&D Site LTM September 30, 2021 Europe/NA Asia • Development acti
Slide 12: Summary Financials
Summary Financials Long term, step function growth in cyclical business Year Ended December 31, • Increased revenue, profitability and market share per cycle (€ millions, ex share data) 2018 2019 2020 YTD-20 YTD-21 • Peer leading financial metrics Revenue 525.3 356.2 433.6 323.9 577.6 Favorable tren
Slide 13: Through Cycle Revenue and Gross Margin Trends
Through Cycle Revenue and Gross Margin Trends € millions Revenue Gross Margin Gross Margin 900 70% 800 60.4% 60% 58.2% 765 700 51.1% +76% 50% 600 593 520 40% 500 39.5% 34.1% 424 400 30% 4 year 379 300 averages 302 351 20% 200 164 10% 100 191 0 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 201
Slide 14: Business Model Objectives
Business Model Objectives New Revenue € 1,000MM+ Addressable Market Share 40%+ Gross Margin 57-62% Net Margin 30-35% Headcount Split 80% Asia/20% Europe/NA Scope 1 and 2 Emissions 60% reduction Global Energy Needs 65% from renewable sources November 2021 14
Slide 15: Capital Allocation Trends
Capital Allocation Trends € millions 209.5 200 35.5 Dividends 167.1 163.8 Share Repurchases 150 44.7 34.4 € 905.9 million distributions since 2011*: • € 1.70 dividend/share for 2020 paid in May 2021 (€ 129.4 million) 100 88.8 91.3 Share repurchase program increased 174.0 23.5 17.8 • € 119.1 million
Slide 16: II. Market
II. MARKET November 2021 16
Slide 17: What Drives Besi's Business?
What Drives Besi’s Business? Timing of customer IDM customer and roadmaps and Macro GDP trends supply chain capital spending choice programs Tech capabilities Competitive cycle for 24/7 production times and environment scalability November 2021 17
Slide 18: Assembly Equipment Forecast Upgraded Through 2023
Assembly Equipment Forecast Upgraded Through 2023 7.0 60% Market Size* YoY Growth Rate 52.8% 5.9 5.8 6.0 5.5 40% 25.0% 5.0 4.5 4.4 16.1% 20.0% US$ billions 4.0 3.6 20% 3.6 +52.8% growth now estimated for 3.0 7.3% 3.0 0% 2021 vs. 41.7% at end of Q2 -2.2% -1.7% 2.0 -20% VLSI expects market to grow to
Slide 19: Industry Upturn Continues
Industry Upturn Continues Source: VLSI, October 2021 November 2021 19
Slide 20: Assembly Equipment Market Composition
Assembly Equipment Market Composition Assembly Equipment Market (2020)* Besi Addressable Market (2020)* Wire Bonding Inspection, 22% Dicing,Other Packaging Die Attach 34% 34% 65% $ 3.6 billion $ 1.4 billion Plating Plating 1% 1% Die Attach Packaging 27% 16% * Source: VLSI, June 2021 November 2021 20
Slide 21: Besi Addressable Market Share Increasing
Besi Addressable Market Share Increasing Particularly in Key Die Attach Markets 2016 2017 2018 2019 2020 ∆ ‘20/‘19 ∆ ‘20/’16 Assembly Market ($MM) 3,587 4,503 4,391 2,998 3,603 +20.1% +0.4% Besi Market Share 9.9% 13.1%% 11.6% 10.8% 11.4% +0.6pts +1.5pts Addressable Market ($MM) 1,507 1,942 1,850 1,2
Slide 22: Leader in Addressable Market, Die Attach and Advanced Die Placement
Leader in Addressable Market, Die Attach Market and Advanced Die Placement Adv. Die Placement** Die Attach ($236 million) ($911 million) Others 15% Addressable Mkt* 82% of Revenue SNK 2020 Assembly Mkt 6% ($3.6 billion) ($1.4 billion) ASM-PT 12% Besi Other 67% Other 23% Besi Disco 20% 21% Besi 37% O
Slide 23: Digital Society Drives Greater Computing and Data Needs
Digital Society Drives Greater Computing and Data Needs Technology Drivers 5G AI IoT On the road to augmented intelligence Imaging HD voice Augmented Driverless human processing Audio Motion sensing Olfactometry Disruptive technology Next gen Robot Hyper data Holographic assistant home interaction c
Slide 24: Advanced Packaging Critical to Next Generation Applications
Advanced Packaging Critical to Next Generation Applications Growth Drivers Enablers Greater Mobile Revolution miniaturization • Mobile internet • Messaging • Social media Higher Greater • Shared economy accuracy complexity • Gaming • Geo-location • Audio/video Die Bonding and • Auto electronics Pack
Slide 25: Requiring Increased Density, Higher Accuracy and Smaller Form Factors
Requiring Increased Density, Higher Accuracy and Smaller Form Factors for Next Generation Devices 100 NM Front-End 10 • Transistor scaling 1 • Lithography 0.1 • New structures 3D 2010 2015 2020 2025 2030 Logic Metal Pitch Edge Placement Accuracy Node Name Source: Samsung Source: ASML 3D Conference 2
Slide 26: Advanced Packaging Unit Volume and Market Share Are Increasing
Advanced Packaging Unit Volume and Market Share Are Increasing Advanced Packaging Silicon Demand Growth & Market Share 2011 - 2023 55 48% 50% • Assembly process step now important 47% 43% 45% gating item 40% 42% • Specifications more like front-end 45 38% 37% 40% 35% 34% • Advanced packaging applica
Slide 27: Besi Portfolio Well Positioned by Node Size and Accuracy
Besi Portfolio Well Positioned by Node Size and Accuracy Estimated % of 2020 Revenue Typical Application Besi Equipment Accuracy Size 100% Micron NM Die Attach 90% 10+ 28+ Automotive, SiP 25% Packaging Power 80% Plating 70% Die Attach 20% IOT 60% 10 28 Packaging General ICs Plating 50% 40% Computer,
Slide 28: Assembly Market Growth Expected to Favor Besi's Product Portfolio
Assembly Market Growth Expected to Favor Besi’s Product Portfolio, Particularly Die Attach Growth in Besi Addressable Markets ($MM) 5,890 6,000 5,757 5,479 Die Attach CAGR (2020-2023) 5,000 1,885 +1.9% Die Attach 28.2% 1,428 1,920 +32.0% Packaging & Plating 13.5% 4,000 3,603 +56.8% 707 +3.8% 734 -2.
Slide 29: Besi End User Markets
Besi End User Markets 2019 % Revenue 2020 % Revenue Other Other 10% 9% Mobile Internet Spares/Service Spares/Service Mobile Internet 33% 17% 19% 39% Automotive Automotive 13% 17% Computing Computing 22% 21% Source: Company estimates November 2021 29
Slide 30: Mobile: Besi's Largest End User Market
Mobile: Besi’s Largest End User Market Besi Involved in Almost All Components RF Front End Antennas GPS RF Tranceiver Modem Local Connectivity WiFi/NFC Microphone Cameras Application Sensors Processor Display TouchScreen Power Lidar Battery Memory Source: Unitedlex.com and ifixit.com and System plus
Slide 31: Mobile: 5G Adoption Increasing
Mobile: 5G Adoption Increasing Driven By New Smartphone Applications and Features Growing 5G Smartphone Penetration Number of mobile phones sold per year fairly constant at ~1.7 billion of which 80%+ are represented by smart phones Growth driven by new features and innovation: 5G broader spectru
Slide 32: Computing Demand Expanding Rapidly
Computing Demand Expanding Rapidly Data volumes growing Advanced computing expanding to many commercial applications exponentially Information Created, Captured, Copied and Consumed 200 AI/Vision/Recognition Industry 4.0 Zetabytes 181 150 Autonomous 147 Medical Driving 120 100 97 Super Computers Dat
Slide 33: Automotive: Semiconductor Content and Cost per Car Increasing
Automotive: Semiconductor Content and Cost per Car Increasing EV Adoption Will Further Increase Semi Content and Cost/Car Electric Autonomous Connected Mobility as vehicles vehicles vehicles a service New powertrain Sensors Vehicle Ridesharing Charging Infrastructure Car sharing Content and Cost/Car
Slide 34: Hybrid Die Bonding: Next Generation Bonding Technology
Hybrid Die Bonding: Next Generation Bonding Technology Wire Bond (1975) Flip Chip (1995) TCB Bonding (2012) HD Fan Out (2015) Hybrid Bonding (2018) Heat compression force Contact: Contact: Contact: Via RDL or Contact: Cu to Density: 5-10/mm² Contact: wire Density: 25-400/mm² Solder ball/Cu pillar De
Slide 35: Different Wafer Level Structures Will Drive Growth
Different Wafer Level Structures Will Drive Growth for High End Assembly Market. Hybrid Bonding Will Coexist with TCB/Flip-Chip MANY DIFFERENT FORM FACTORS WILL REQUIRE DIFFERENT BONDING BESI ACTIVE IN ALL KEY DIE TECHNOLOGY PER PACKAGE BONDING PROCESS TECHNOLOGIES HIGHEST LEVEL HYBRID D2W & D2D
Slide 36: Hybrid Die Bonding Market Update
Hybrid Die Bonding Market Update June 2020 estimate Market tracking towards high case developed in June 2020 • High level of customer engagement • Interest expressed by both logic and memory players • AMD recently announced first hybrid bonded 3D chiplet-based processor • Collaboration with AMAT enh
Slide 37: III. Strategy
III. STRATEGY November 2021 37
Slide 38: Summary Strategy
Summary Strategy Maintain best in class technology leadership Increase Reward market shareholders presence in via capital addressable allocation policy markets Strategic Objectives Acquire Enhance companies with scalability. complementary Reduce technologies structural costs and products Balance bus
Slide 39: Strategy Update 2021
Strategy Update 2021 • Maintain employee health and safety in face of new COVID-19 variants • Refining strategic plan 2021-2025, organization and management to Organization support growth of <7 nm and existing advanced packaging portfolio • ESG activities expanded to comply with SASB and TCFD framew
Slide 40: 2021 Revenue Initiatives
2021 Revenue Initiatives “Pick the winners” Hybrid bonding engagement with leading foundry, logic and memory IDMs Expand technical service in US, Taiwan and Korea Revenue New 5G and AI applications Growth Initiatives Wire bonding to flip chip conversion Increased penetration of Korean and Chinese an
Slide 41: Asian Production Transfer Has Reduced Break Even Revenue Levels
Asian Production Transfer Has Reduced Break Even Revenue Levels and Improved Cash Generation Leading to Lower And Reduced Break Asian Production Has Fixed European and Even Revenue And Improved Cash Significantly Expanded NA Headcount Levels Generation Shipments € millions € millions 1,200 2,000 300
Slide 42: Flexible Production Model Has Generated Consistent Gross Margins
Flexible Production Model Has Generated Consistent Gross Margins in Market Cycles Revenue Gross Margin 250 80% 226.1 208.3 75% 200 70% Gross Margin % € millions 150 143.2 124.3 65% 108.3 109.7 62.0% 62.1% 100 92.4 91.3 60.8% 60.4% 58.3% 58.2% 60% 56.3% 56.7% 50 55% 0 50% Q4-19 Q1-20 Q2-20 Q3-20 Q4-2
Slide 43: Flexible Asian Workforce Has Significantly Enhanced Scalability
Flexible Asian Workforce Has Significantly Enhanced Scalability Fixed Headcount 2,000 100% 1,800 1,724 1,692 1,615 1,534 1,523 1,538 1,569 90% 1,600 80% 1,400 Headcount 71% 73% 1,200 70% 70% 70% 70% 70% 70% 1,000 60% 800 50% 600 • Aligning organization to meet projected 40% 400 growth: 200 29% 27% 3
Slide 44: Structural, Through Cycle Outperformance Achieved vs. Direct Peers
Structural, Through Cycle Outperformance Achieved vs. Direct Peers Return on Average Equity 70.0 Gross Margin Besi’s margins and ROE have Δ exceeded direct peers through YTD- 60.0 Besi 2016 2017 2018 2019 2020 2016/ cycles: 21 2021 50.0 Besi 51.0% 57.1% 56.8% 55.8% 59.6% 60.1% +9.1% • Investment in
Slide 45: ESG Infrastructure Established
ESG Infrastructure Established: Three Pillars, 12 Topics, 75 Initiatives. Goals Defined For 2022-2030 Energy use and renewable energy* Carbon emissions* Environmental Water use Responsible Business Impact 10 Waste and hazardous material use* 13% Sustainable design People Diversity and inclusion Envi
Slide 46: ESG Ambitions and Targets
ESG Ambitions and Targets Key Targets 2022 Key Targets 2030 • 100% renewable sources for European energy needs • 65% renewable sources for global energy needs • 15% reduction in Scope 1 and 2 carbon emissions* • 60% reduction in Scope 1 and 2 carbon emissions* • Above-benchmark employee engagement s
Slide 47: IV. Financial Update and Summary
IV. FINANCIAL UPDATE AND SUMMARY November 2021 47
Slide 48: Revenue and Profitability up Strongly in Q3-21 and YTD-21
Revenue and Profitability up Strongly in Q3-21 and YTD-21 Q3-20/Q3-21 YTD-20/YTD-21 Revenue Net Income Revenue Net Income 600 € 577.6 250 € 208.3 + 78.3% + 92.3% 500 € 108.3 200 Gross Margin € 323.9 Gross Margin 60.8% - 0.4 points 60.4% 60.1% + 0.4 points 60.5% OPEX 400 OPEX € 23.9 MM + 27.2% € 30.4
Slide 49: Performance Significantly Above Last Cycle
Performance Significantly Above Last Cycle Orders (€MM) Revenue (€MM) 1000 1000 894 900 900 +43.5% 800 765 800 700 +29.0% • LTM Orders +43.5% vs. 2017 700 623 593 600 600 500 500 356 • 2021E Revenue +29.0% vs. 2017 349 400 349 400 348 300 300 200 200 • 2021E Operating profit +59.3% 100 100 0 2015 LT
Slide 50: Liquidity Position Has Also Expanded
Liquidity Position Has Also Expanded 700 Q3-21 vs. Q2-21 € 129.4MM Cash and Deposits Net Cash dividend • Total cash +79.1 million (15.5%) 598.7 605.8 590.5 • +€ 98.6 million cash flow from operations 600 • - € 14.2 million share repurchases +15.5% 527.8 511.4 • - € 5.5 million capitalized developmen
Slide 51: Guidance Q4-21 and FY 2021
Guidance Q4-21 and FY 2021 € in millions Q3-21 Q4-21 2020 2021E* -5% Revenue € 208.3 - € 433.6 +76% -15% Gross Margin 60.4% 59% - 61% 59.6% ~60% Operating Expenses € 30.4 Flat +/- 5% € 108.7 +19% -15% * 2021E assumes midpoint of guidance for Q4-21 November 2021 51
Slide 52: Investment Considerations
Investment Considerations Market Assembly Long term Disciplined presence has market ever secular trends strategic focus grown via key more critical in drive advanced has created an IDMs, supply semiconductor packaging industry leader chains and value chain growth partners Tech leadership Commitment
Slide 53: V. Appendix
V. APPENDIX November 2021 53
Slide 54: IDM/Subcontractor Order Trends
IDM/Subcontractor Order Trends € millions 1,000 IDMs Subcontractors 893.8 900 800 680.9 700 49% 600 35% 483.1 Orders 472.1 500 400 32% 348.7 39% 53% 39% 55% 300 39% 65% 61% 200 61% 51% 47% 68% 100 61% 45% - 2017 2018 2019 2020 LTM* * Last twelve months ended September 30, 2021 November 2021 54
Slide 55: Operating Expense Trends
Operating Expense Trends Baseline Opex Other Opex* Baseline Opex % of Revenue 40 60% 34.9 35 33.0 33.6 50% 30.4 30.4 Operating Expenses (€ millions) 3.6 30 28.6 8.9 40% 7.6 25.2 3.6 25 23.9 23.3 30% 1.5 27.8% 0.8 25.7% 20.1% 21.3% 21.2% 20 18.2% 30.0 30.4 20% 25.4 25.0 26.0 13.3% 14.6% 23.7 23.1 23.
Slide 56: Net Income Trends
Net Income Trends 100 Quarterly Trends € 93.5 100% Q3-21 vs. Q2-21 € 84.2 • € 84.2 million (-€ 9.3 million) 80 Tax benefit 80% • -7.9% revenue decrease Net Margin • -1.7 point gross margin decrease Adj. Net Margin • Partial offset: 60 60% € 44.6 • +€ 3.2 million (9.5%) opex decrease: € millions € 39
Slide 57: Cash Flow Efficiency Trends
Cash Flow Efficiency Trends € millions % of Revenue 250 227.8 200 184.1 37.4% 168.2 35.0% 33.7% 162.0 33.2% 150 28.4% 26.3% 120.1 98.7 100 50 0 2016 2017 2018 2019 2020 LTM Total Cash Flow from Operations As % of Revenue November 2021 57
Slide 58: Dividend Trends
Dividend Trends Dividend (€) Dividend Payout Ratio 3.00 Cumulative dividends of € 705.6 MM since 2011, or € 9.45 per share 120% 115% 2.50 2.32 110% 2.00 107% 1.70 105% 1.67 1.50 100% 100% 1.01 95% 1.00 0.87 94% 91% 90% 90% 0.50 85% 0.00 80% 2016 2017 2018 2019 2020 Dividend Dividend Payout Ratio* *
Slide 59: Share Repurchase Activity
Share Repurchase Activity Share Repurchases Average Cost per Share 50 80.0 44.6 45 70.0 € 67.81 40 35.5 60.0 34.3 35 Avg Cost per Share 50.0 30 € millions 25 22.4 22.8 40.0 € 38.05 20 17.8 30.0 15 € 23.74 € 24.31 € 21.86 20.0 10 € 12.44 10.0 5 0 0.0 2016 2017 2018 2019 2020 2021* • 0.5 million treas
Slide 60: Shareholder Base and Market Liquidity Has Expanded
Shareholder Base and Market Liquidity Has Expanded Symbol/ • BESI Avg. Daily Volume & Liquidity Avg Vol * Avg Price (€ thousands) 1500 Index • Euronext AEX 50,000 Volume (thousands) 1250 Market Market • € 5.4 billion 1000 40,000 30,000 750 Cap* ($6.2 billion) Profile 500 250 20,000 10,000 Dividend •