Slide 1: Investor Presentation May 2020
INVESTOR PRESENTATION MAY 2020 © 2020 VISHAY INTERTECHNOLOGY, INC. ALL RIGHTS RESERVED.
Slide 2: Notes on Forward-Looking Statements
NOTES ON FORWARD-LOOKING STATEMENTS Comments in this presentation other than statements of historical fact may constitute forward-looking statements. Words such as “believe,” “estimate,” “will be,” “will,” “would,” “expect,” “anticipate,” “plan,” “project,” “intend,” “could,” “should” or other simil
Slide 3: Vishay Today: Drive Stockholder Value
VISHAY TODAY DRIVE STOCKHOLDER VALUE ▪ Intensified organic growth, supplemented by targeted acquisitions. ▪ Regular cash dividend program. ▪ Opportunistic stock buy-backs. ▪ Maintaining prudent capital structure. © 2020 VISHAY INTERTECHNOLOGY, INC. ALL RIGHTS RESERVED. 3
Slide 4: Vishay Today
VISHAY TODAY VISHAY TODAY ▪ Broad and competitive product and technology portfolio: Solution provider and valuable partner for customers. ▪ Broad market penetration • Wide range of end markets. • Balanced geographic manufacturing footprint. • Right mix of sales channels. ▪ Contribution margin of 45%
Slide 5: Broad Product Portfolio
VISHAY TODAY BROAD PRODUCT PORTFOLIO 11% INDUCTORS 8% INFRARED OPTO 25% RESISTORS 21% DIODES 16% CAPACITORS 19% MOSFETs PASSIVES 52% PASSIVES 48% SEMICONDUCTORS VISHAY REVENUES 2019 © 2020 VISHAY INTERTECHNOLOGY, INC. ALL RIGHTS RESERVED. 5
Slide 6: Broadest Line of Discrete Semiconductors and Passive Components
VISHAY TODAY BROADEST LINE OF DISCRETE SEMICONDUCTORS AND PASSIVE COMPONENTS Source: Company estimates = Major Position = Minor Position © 2020 VISHAY INTERTECHNOLOGY, INC. ALL RIGHTS RESERVED. 6
Slide 7: Broad Market Penetration
VISHAY TODAY BROAD MARKET PENETRATION 31% AUTOMOTIVE 35% INDUSTRIAL 4% CONSUMER 7% COMPUTING 5% POWER SUPPLIES 52% DISTRIBUTION 7% MILITARY/AERO 36% ASIA 6% TELECOM 5% MEDICAL 41% OEM 27% AMERICAS END MARKETS 7% EMS 37% EUROPE REGIONS SALES CHANNELS VISHAY REVENUES 2019 © 2020 VISHAY INTERTECHNOLOGY
Slide 8: Well-Positioned to Capitalize on Growth Markets
VISHAY TODAY WELL-POSITIONED TO CAPITALIZE ON GROWTH MARKETS REVENUE SPLIT BY END MARKET Medical 3% 5% 6% Military/Aero 7% 9% 4% Consumer 6% Telecom 12% 5% 7% 10% Power supplies 31% Computing 21% Automotive 15% 35% Industrial 24% 2010 2019 © 2020 VISHAY INTERTECHNOLOGY, INC. ALL RIGHTS RESERVED. 8
Slide 9: Broad Customer Base
VISHAY TODAY BROAD CUSTOMER BASE OEM EMS DISTRIBUTION © 2020 VISHAY INTERTECHNOLOGY, INC. ALL RIGHTS RESERVED. 9
Slide 10: Revenue and GAAP Operating Margin
VISHAY TODAY REVENUE AND GAAP OPERATING MARGIN1 REVENUE OM MILLIONS MILLIONS $5,000 $500 $4,500 $450 $4,000 $400 $3,500 $350 $3,000 $300 $2,500 $250 $2,000 $200 $1,500 $150 $1,000 $100 $500 $50 -1,677 -49 $0 $0 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 OPERATING MARGIN REVENUE 1) Excl. VPG
Slide 11: Revenue and Adjusted Operating Margin
VISHAY TODAY REVENUE AND ADJUSTED OPERATING MARGIN1 REVENUE OM MILLIONS MILLIONS $5,000 $500 $4,500 $450 $4,000 $400 $3,500 $350 $3,000 $300 $2,500 $250 $2,000 $200 $1,500 $150 $1,000 $100 $500 $50 $0 $0 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 OPERATING MARGIN REVENUE 1) Excl. VPG spin-of
Slide 12: Contributive Margin
VISHAY TODAY CONTRIBUTIVE MARGIN1 % % 60 60 55 55 50 50 45 45 40 40 35 35 30 30 25 25 20 20 15 15 10 10 5 5 0 0 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 1) Excl. VPG spin-off in 2010. © 2020 VISHAY INTERTECHNOLOGY, INC. ALL RIGHTS RESERVED. 12
Slide 13: Strong Generation of Free Cash
VISHAY TODAY STRONG GENERATION OF FREE CASH in millions in millions $450 $450 $400 $400 $350 $350 $300 $300 $250 $250 $200 $200 $150 $150 $100 $100 $50 $50 $0 $0 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 1) 19 CASH FLOWS FROM OPERATIONS LESS CAPITAL EXPENDITURES PROCEEDS FROM SALE OF PROPERTY
Slide 14: Reconciliation of GAAP to Adjusted
VISHAY TODAY RECONCILIATION OF GAAP TO ADJUSTED1 in millions USD 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2005 2006 2004 2003 Reconciling items affecting gross margin: Loss on purchase commitments, Ta write-downs 6 16 (1) 17 18 Product quality claims 3 Reconciling items affec
Slide 15: Annualized Cash Dividend $0.38
VISHAY TODAY ANNUALIZED CASH DIVIDEND $0.38 Enhancing stockholder value: ▪ Increased quarterly dividend by 12% to $0.095 Q2 2019. ▪ Increased quarterly dividend by 26% to $0.085 Q2 2018. ▪ Increased quarterly dividend by 8% to $0.0675 Q4 2017. ▪ Increased quarterly dividend by 4% to $0.0625 Q1 2016.
Slide 16: Stock Buybacks
VISHAY TODAY STOCK BUYBACKS ▪ In 2017 spent $39.9 million to repurchase 2.3 million shares. ▪ In 2016 spent $23.2 million to repurchase 1.8 million shares. ▪ From 2010 – 2012 spent $575 million to repurchase 44.3 million shares, financed with 2.25% coupon, 30-year convertibles. • In 2018 we started
Slide 17: Growth Drivers
GROWTH DRIVERS GROWTH DRIVERS Vishay is well positioned to participate in the markets expected to show solid growth over the next years. ▪ Connectivity ▪ Mobility ▪ Sustainability © 2020 VISHAY INTERTECHNOLOGY, INC. ALL RIGHTS RESERVED. 17
Slide 18: 5G – Next-Gen Wireless Platform
GROWTH DRIVERS CONNECTIVITY 5G – NEXT-GEN WIRELESS PLATFORM High frequency SMD resistors for impedance matching Good frequency response High Q HIFREQ MLCCs for RF circuit tuning High stability Long life Ultra precision Smart load switches Low profile, low ESR IHLP®, IHSR composite polymer tantalum m
Slide 19: Connectivity: Gaming Consoles
GROWTH DRIVERS CONNECTIVITY GAMING CONSOLES Low profile, low ESR polymer tantalum capacitors Low profile VRPower® Integrated power High efficiency stage Small solution size Load switch with programmable High power density current limit and slow rate control PowerPAK® MOSFETs IHLP® inductors ESD prot
Slide 20: True Wireless Stereo – TWS
GROWTH DRIVERS CONNECTIVITY TRUE WIRELESS STEREO – TWS Proximity sensor with interrupt, VCSEL, and I2C interface High efficiency IHLP; IHHP, IFCS power Small size inductors High sensitivity Ultra low Ron Bi-directional battery switches TMBS® diodes microBUCK® regulator ICs MICRO FOOT® MOSFETs Analog
Slide 21: Connectivity: Server Power
GROWTH DRIVERS CONNECTIVITY SERVER POWER VRPower® integrated power stages Best performance Up to 1 MHz operation ENYCAPTM EDLC capacitors for memory backup Optimized concept Skip-mode (SMOD) function Thin film SMD resistors: ultra stable, low drift PowerPAK® 8x8 high voltage TMBS® diodes microBUCK®
Slide 22: Mobility: 48 V / 12 V Dual-Voltage Solutions
GROWTH DRIVERS MOBILITY 48 V / 12 V DUAL-VOLTAGE SOLUTIONS PowerPAK® 8x8L MOSFETs Higher voltage capabilities Customized filters and transformers Transient protection Complies with new package safety standard IHLP®, IHTH power inductors Power Metal Strip® MKT1820 film capacitors for SMPC Schottky: l
Slide 23: Mobility: Driver Assistance and Information
GROWTH DRIVERS MOBILITY DRIVER ASSISTANCE AND INFORMATION IHLP® power inductors, size 1212 or 1616 High SFR (> 25 MHz) and lowest EMI High current, low profile Asymmetric MOSFETs Lowest self-inductance packaging Ultra low ringing switches IR bulk emitters and SEDs WSLP0603 shunt resistors Chip resis
Slide 24: Sustainability: Collaborative Robots
GROWTH DRIVERS SUSTAINABILITY COLLABORATIVE ROBOTS Magnetic encoders, high accuracy, high resolution Long useful life Triple-channel transmissive optical sensors for “turn and Robust design push” encoding High precision and stability Pulse proof, high power Safety approvals thick film chip resistors
Slide 25: Cordless – Power Tools
GROWTH DRIVERS SUSTAINABILITY CORDLESS – POWER TOOLS Power Metal Strip® resistors, low value (down to 0.001 Ω) Long life, high reliability High peak power MELF resistors for gate driver and voltage sensing High current density Polymer tantalum PowerPAK® 8x8L MOSFETs and reverse cooled NTC thermistor
Slide 26: Grid Quality – Circuit Breakers
GROWTH DRIVERS SUSTAINABILITY GRID QUALITY – CIRCUIT BREAKERS Professional thin film resistors Long life, high reliability MELF resistors Safety approvals Transient-resistant Low and High Voltage MOSFET‘s Standard recovery rectifiers IEC 60384-14 approved and Zener diodes ceramic capacitors High vol
Slide 27: Smart Grid – Power Meters
GROWTH DRIVERS SUSTAINABILITY SMART GRID – POWER METERS IR receivers, detectors, and emitters Long life, high reliability Safety approvals MELF resistors Custom designs Optocouplers and solid state relays Power Metal Strip® Aluminum and EDLC Interference suppression current sense resistors boost and
Slide 28: Targets and Projections
TARGETS AND PROJECTIONS © 2020 VISHAY INTERTECHNOLOGY, INC. ALL RIGHTS RESERVED.
Slide 29: Goals
GROWTH PLAN GOALS ▪ Increase EPS • Organic growth. • Acquisitions. ▪ Focus on maintaining prudent financial structure. Concrete Growth Plan built business by business from the bottom up. © 2020 VISHAY INTERTECHNOLOGY, INC. ALL RIGHTS RESERVED. 29
Slide 30: Drive Organic Growth
GROWTH PLAN DRIVE ORGANIC GROWTH Strong organic growth strategy Asia Growth Plan: Ensure product Focused development Improve market availability for key of new products & penetration mainly in product lines during technologies industrial and auto demand spikes segments © 2020 VISHAY INTERTECHNOLOGY,
Slide 31: 1. Focused Development of New Products
GROWTH PLAN 1. FOCUSED DEVELOPMENT OF NEW PRODUCTS Focus areas of new product development: ▪ MOSFETs: new platforms in all voltage ranges, extension of automotive offerings and new packages incl. bond wireless. ▪ New generation DrMOS, e-Fuse, and smart power stages. ▪ New generation Trench Schottky
Slide 32: 2. Ensure Product Availability for Key Product Lines
GROWTH PLAN 2. ENSURE PRODUCT AVAILABILITY FOR KEY PRODUCT LINES Get ahead of demand curve for Vishay’s strategic growth products to ensure sufficient capacity during demand spikes. ▪ New generation diodes and MOSFETs (all voltage ranges). ▪ Semiconductor automotive smaller and lower profile Package
Slide 33: 3. Asia Growth Plan: Improve Market Penetration in Industrial and Auto
GROWTH PLAN 3. ASIA GROWTH PLAN: IMPROVE MARKET PENETRATION IN INDUSTRIAL AND AUTO Leverage in Asia Vishay’s strength in automotive and industrial, in addition to the traditional Asian focus markets, computing and consumer: ▪ Transportation—automotive (local customers), trains. ▪ Energy—infrastructu
Slide 34: Assumptions
GROWTH PLAN ASSUMPTIONS ▪ Stable economic environment. ▪ ASP decline per year for Vishay’s products: Passives 0% - 3% Semis 3% - 5.5%, product line specific. ▪ Inflation rates for salaries, wages and overhead: 1.5% - 9.0%, location specific. ▪ Stable FX rates. © 2020 VISHAY INTERTECHNOLOGY, INC. ALL
Slide 35: Operational Parameters
GROWTH PLAN OPERATIONAL PARAMETERS ▪ Contributive margin at historical levels of 45%+ • As consequence of price decline, cost reduction and mix development by specific product line. • Proven track record for last 10+ years of 45%+ margin. ▪ Fixed cost increases per year: • Selling, R&D and engineeri
Slide 36: Supplement Organic Growth with Acquisitions
GROWTH PLAN SUPPLEMENT ORGANIC GROWTH WITH ACQUISITIONS ▪ Three types of small to mid-size acquisitions targeted: • Synergetic. • Specialty. • Closing technological gap. ▪ Cash payback incl. restructuring of ˂ 8 years. ▪ Accretive to earnings in less than 12 months. © 2020 VISHAY INTERTECHNOLOGY, IN
Slide 37: In Summary
GROWTH PLAN IN SUMMARY ▪ Grow at least with the market with CAGR of revenues of between 3% and 6%. ▪ Grow net income with CAGR of 10% to 20%. ▪ Maintain prudent capital structure. ▪ Continued strong generation of cash available to enhance stockholder value. © 2020 VISHAY INTERTECHNOLOGY, INC. ALL RI
Slide 38: Financials and Metrics Q1 2020
FINANCIALS AND METRICS Q1 2020 © 2020 VISHAY INTERTECHNOLOGY, INC. ALL RIGHTS RESERVED.
Slide 39: Highlights Q1 2020
Q1 FINANCIALS AND METRICS HIGHLIGHTS Q1 2020 ▪ Revenues Q1 of $613 million ▪ Gross margin Q1 of 24.0%; adjusted gross margin 24.5% ▪ Operating margin Q1 of 7.7%; adjusting operating margin 8.3% ▪ EPS Q1 of $0.19; adjusted $0.21 ▪ Free Cash¹ for the trailing 12 months Q1 of $107 million ▪ Guidance Q2
Slide 40: Quarterly Financial Results
Q1 FINANCIALS AND METRICS QUARTERLY FINANCIAL RESULTS in millions, except per share amounts Q1 2020 Q4 2019 Q1 2019 Net revenues $613 $610 $745 Gross profit $147 $135 $211 24.0% 22.2% 28.3% Operating income (loss) $47 $24 $108 7.7% 4.0% 14.5% Net earnings (loss) attributable to Vishay stockholders $
Slide 41: Adjusted Quarterly Financial Results
Q1 FINANCIALS AND METRICS ADJUSTED QUARTERLY FINANCIAL RESULTS in millions, except per share amounts Q1 2020 Q4 2019 Q1 2019 Net revenues $613 $610 $745 Gross profit $150 $135 $211 24.5% 22.2% 28.3% Operating income (loss) $51 $41 $108 8.3% 6.7% 14.5% Net earnings (loss) attributable to Vishay stock
Slide 42: Reconciliation of GAAP to Adjusted
Q1 FINANCIALS AND METRICS RECONCILIATION OF GAAP TO ADJUSTED in millions Q1 2020 Q4 2019 Q1 2019 GAAP NET EARNINGS $27 $14 $75 attributable to Vishay stockholders Reconciling items affecting gross profit Impact of COVID-19 outbreak $3 - - Other reconciling items affecting operating income Restructur
Slide 43: Long Term Debt
Q1 FINANCIALS AND METRICS LONG TERM DEBT as of April 4, 2020 in millions Outstanding Debt Comments Interest Long term incl. current portion $552 Revolving Debt $54 Available through June 5, 2024 LIBOR plus 1.75% up to $750 million $603 million principal amount; Cash coupon 2.25% of principal or debt
Slide 44: Book-to-Bill Detail
Q1 FINANCIALS AND METRICS BOOK-TO-BILL DETAIL Q1 2020 Q4 2019 Q3 2019 Q2 2019 Q1 2019 Book-to-bill Vishay 1.17 0.94 0.72 0.69 0.79 Book-to-bill distribution 1.30 0.94 0.55 0.55 0.54 Book-to-bill OEMs 1.04 0.95 0.90 0.86 1.10 Book-to-bill semiconductors 1.27 0.95 0.60 0.56 0.74 Book-to-bill passive c
Slide 45: Operational Metrics
Q1 FINANCIALS AND METRICS OPERATIONAL METRICS Q1 2020 Q4 2019 Q3 2019 Q2 2019 Q1 2019 Change in ASP vs. prior year total Vishay (2.9) (3.0) (1.9) (0.6) 0.8 Change in ASP vs. prior year semis (5.0) (5.9) (4.3) (1.9) 0.7 Change in ASP vs. prior year passives (0.9) (0.2) 0.5 0.6 0.9 FX effect on revenu
Slide 46: Sharecount for EPS Calculation
Q1 FINANCIALS AND METRICS SHARECOUNT FOR EPS CALCULATION in million Total shares outstanding 145 Related to RSUs etc. <1 Average Stock Price Projected Diluted Shares <$32.00 145 $32.00 - $33.00 146 >$33.00 147 The table above summarizes the approximate number of shares for diluted EPS calculation. S
Slide 47: Sales Split Q1 2020
Q1 FINANCIALS AND METRICS SALES SPLIT Q1 2020 12% INDUCTORS 9% INFRARED OPTO 33% AUTOMOTIVE 35% INDUSTRIAL 26% RESISTORS 19% DIODES 3% CONSUMER 4% POWER SUPPLIES 19% MOSFETs 8% COMPUTING 15% CAPACITORS 5% TELECOM 7% MILTARY/AERO 5% MEDICAL 00% BUSINESS SEGMENTS PASSIVES PASSIVES % SEMICONDUCT END MA
Slide 48: Vishay Revenues and Gross Margin % Quarterly
Q1 FINANCIALS AND METRICS VISHAY REVENUES AND GROSS MARGIN % QUARTERLY excl. Spin-Off Vishay Precision Group in 2010 $ in millions % 800 45 750 40 700 35 650 30 600 25 550 20 500 15 450 10 400 5 350 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Slide 49: Vishay Revenues and Gross Margin % Yearly
Q1 FINANCIALS AND METRICS VISHAY REVENUES AND GROSS MARGIN % YEARLY excl. Spin-Off Vishay Precision Group in 2010 $ in millions % 3,400 36 3,100 32 2,800 28 2,500 24 2,200 20 1,900 16 1,600 12 1,300 8 1,000 4 700 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 SALES
Slide 50: Vishay Revenues Quarterly by Product Segment
Q1 FINANCIALS AND METRICS VISHAY REVENUES QUARTERLY BY PRODUCT SEGMENT $ in millions $ in millions 300 300 250 250 200 200 150 150 100 100 50 50 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 51: Vishay Revenues Yearly by Product Segment
Q1 FINANCIALS AND METRICS VISHAY REVENUES YEARLY BY PRODUCT SEGMENT $ in millions $ in millions 1100 1100 1000 1000 900 900 800 800 700 700 600 600 500 500 400 400 300 300 200 200 100 100 0 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 MOSFETs Diodes Opto Resistor
Slide 52: Vishay Gross Margins Quarterly by Product Segment
Q1 FINANCIALS AND METRICS VISHAY GROSS MARGINS QUARTERLY BY PRODUCT SEGMENT 40 40 35 35 30 30 25 25 20 20 15 15 10 10 5 5 0 0 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Slide 53: Vishay Gross Margins Yearly by Product Segment
Q1 FINANCIALS AND METRICS VISHAY GROSS MARGINS YEARLY BY PRODUCT SEGMENT 45 45 40 40 35 35 30 30 25 25 20 20 15 15 10 10 5 5 0 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 MOSFETs Diodes Opto Resistors/Inductors Capacitors Resistors Inductors © 2020 VISHAY INTERT