Be Semiconductor Industries N.v. · EURONEXT:BESI
Be Semiconductor Industries — Investor Presentation (March 2022)
62 slides from Be Semiconductor Industries's investor presentation, March 2022
Slide 1: Investor Presentation March 2022
INVESTOR PRESENTATION March 2022
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 presentation, including, but not limited to, statements relating to exp
Slide 3: Agenda
Agenda I. Company Overview II. Market III. Strategy IV. Financial Update and Summary V. Appendix March 2022 3
Slide 4: I. Company Overview
I. COMPANY OVERVIEW March 2022 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 900 70% Consistent Focus on Advanced Packaging Has Created an Industry Leader 65% 800 •Focus on most rapidly growing segments of assembly market •Growth organically and via acquisitions € 749.3 •Expanded share of wallet with key industry leaders each cycle 60% 700 •Expansion of custo
Slide 7: History of Superior Long-Term Value Creation
History of Superior Long-Term Value Creation Capital Allocation Strategic/Financial Shareholder Return Superior Total Returns: Disciplined execution has Attractive capital created leader in • 55% (1 year) allocation program advanced packaging • 357% (3 year) • 498% (5 year) Superior through cycle fi
Slide 8: Industry Leading Equipment Portfolio
Industry Leading Equipment Portfolio Die Attach (82% of 2021 Revenue) Direct Lid Embedded Thermo Hybrid Multi-Module Attach Epoxy / Soft Solder Flip-chip Attach Bridge Attach Compression Bonding • 2200 evo • 2100 hS • 2009 SSI • 8800 CHAMEO advanced / PLP • 2200 evo plus • 2100 hS i • 2100 SSI New •
Slide 9: Customer Ecosystem
Customer Ecosystem Customers OEMs End Products IDMs Subcontractors • Diversified, blue chip customer base, top 10 = ~53% of 2021 revenue • Leading IDMs and subcontractors. 55%/45% order split in 2021 • Also supply leading fabless companies: Qualcomm, AMD, Broadcom, MediaTek via subcontractors • Long
Slide 10: From Processed Wafer to Assembled Chip
From Processed Wafer to Assembled Chip Semiconductor Manufacturing Equipment 2021: $101.9B* Front end: $87.9B Assembly: $5.6B Test: $8.4B (86%) (6%) (8%) Assembly Process Dicing Die Attach Wire Bond Packaging Plating Leadframe Wire Bond - - Substrate Wire bond - - - Substrate Flip chip/TCB - - - Waf
Slide 11: Current Operational Profile
Current Operational Profile (NL) Duiven and ‘s-Hertogenbosch Steinhausen, Radfeld, (AT) (CH) Chandler Suzhou Chengdu Korea Shanghai Leshan Taiwan Shenzhen Sales Office Thailand Philippines Malaysia Production Site Singapore Sales and R&D Site Full Year 2021 Asia • Development activities in Europe Eu
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) 2019 2020 2021 • Peer leading financial metrics Revenue 356.2 433.6 749.3 Strong upturn in 2021 despite supply cha
Slide 13: Through Cycle Revenue and Gross Margin Trends
Through Cycle Revenue and Gross Margin Trends € millions Revenue Gross Margin Gross Margin 800 70% 700 60% 58.0% 600 51.1% 749 +73% 50% 500 516 593 39.5% 40% 424 400 34.1% 379 30% 300 4 year 302 averages 351 20% 200 164 191 10% 100 0 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 201
Slide 14: Business Model Objectives
Business Model Objectives Revenue € 1 billion++ 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 March 2022 14
Slide 15: Capital Allocation Trends
Capital Allocation Trends 300 Dividends € 1.2 billion distributions since 2011* 259.6 Share Repurchases 250 209.5 200 35.5 179.5 167.1 150 50.1 € millions 44.7 100 88.8 91.3 174.0 17.8 23.5 122.4 129.4 50 65.3 73.5 0 2017 2018 2019 2020 2021 2022 17% 27% 19% 28% 26% 74% 83% 73% 81% 72% * Includes pr
Slide 16: II. Market
Besi comm Il. MARKET March 2022 16
Slide 17: What Drives Besi's Business?
What Drives Besi’s Business? Selection of Timing of Macro GDP IDM and supply customer trends chain partners roadmaps Meeting Performance in Competitive demanding 24/7 production cycle times and technical specs environments scalability March 2022 17
Slide 18: Assembly Equipment Forecast Upgraded vs. December 2021
Assembly Equipment Forecast Upgraded vs. December 2021 7.0 6.4 60% Market Size YoY Growth Rate 55.6% 6.0 6.0 5.6 40% 25.0% 5.0 4.5 4.4 20.0% US$ billions 4.0 3.6 20% 14.3% 3.0 3.0 0% -2.2% -6.3% 2.0 -20% 1.0 -31.8% 0.0 -40% 2017 2018 2019 2020 2021E 2022E 2023E Source: VLSI, February 2022. Assembly
Slide 19: Industry Upturn Continues in 2022
Industry Upturn Continues in 2022 Source: VLSI, February 2022 March 2022 19
Slide 20: Assembly Equipment Market Composition
Assembly Equipment Market Composition Assembly Equipment Market (2021) Besi Addressable Market (2021) Plating 1% Wire Inspection, Bonding Dicing,Other 28% 30% Packaging 33% $5.6 billion $2.4 billion Plating 0% Die Attach 66% Packaging 14% Die Attach 28% Source: VLSI, February 2022 March 2022 20
Slide 21: 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 22: Semiconductor Demand Growing as Everything Gets Smarter
Semiconductor Demand Growing as Everything Gets Smarter Semiconductor 2015 2020 2025E ∆’20-’25E Content/Unit High End Smartphone $100 $170 $275 +61.7% Automotive $310 $460 $690 +50.0% (Global Average) Datacenter Server $1,620 $2,810 $5,600 +99.3% (CPU + Accelerator) Smartphone $2 $4 $9 +125.0% (Glob
Slide 23: 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 24: Requiring Increased Density, Higher Accuracy and Smaller Form Factors
Requiring Increased Density, Higher Accuracy and Smaller Form Factors for Next Generation Devices Front-End Wafer Fab • Transistor scaling • Lithography • New 3D structures Source: Samsung Source: ASML 2021 Back-End Assembly • More contacts • Smaller pitches • Thinner, denser & more complex packages
Slide 25: Moore's Law Helps Drive Growth of Wafer Level Assembly
Moore’s Law Helps Drive Growth of Wafer Level Assembly Wire Bond Flip Chip TCB Bonding HD Fan Out Hybrid Bonding (1975) (1995) (2012) (2015) (2018) Heat compression force Architecture Contact Type Solder ball or copper Wire pillar Copper pillar RDL or copper pillar Copper to copper Contact Density 5
Slide 26: Hybrid Bonding Enables New 3D Structures
Hybrid Bonding Enables New 3D Structures and Growth of Other Wafer Level Assembly Processes 2 3 3D Chiplet 5 1 Chiplet Chiplet Hybrid Bond Bridge Die Interposer 6 4 Bridge die Package Substrate 1 2 3 4 5 6 Chip to Wafer TCB Hybrid Bonding High Bandwidth Embedded Bridge Wafer Level HD Interposer to M
Slide 27: Estimated Timetable for Hybrid Bonding Applications
Estimated Timetable for Hybrid Bonding Applications 2022 2023 2024 2025 2026 2027 2028 Computing Consumer Servers Datacenters Memory/Mobile PC High performance Laptop Auto/Industrial computing High bandwidth memory Gaming High-end smartphone Artificial Intelligence Autonomous driving Entertainment S
Slide 28: 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 Applied
Slide 29: 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 30: Besi Addressable Market Share Increasing, Particularly in Die Attach
Besi Addressable Market Share Increasing, Particularly in Die Attach 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 1,247 1,399 +1
Slide 31: Leader in Addressable Market, Die Attach Market and Advanced Die Placement
Leader in Addressable Market, Die Attach Market and Advanced Die Placement Die Attach Advanced (82% of Revenue) Die Placement** Besi Other 33% 2020 Addressable Market* $911 37% $236 Million Million Other Besi 63% 67% Besi 29% $1.4 Billion Packaging & Plating (18% of Revenue) Other Besi 71% 15% $488
Slide 32: Growth Expected to Favor Besi's Product Portfolio
Growth Expected to Favor Besi’s Product Portfolio, Particularly Die Attach 7,000 CAGR (2020-2023) Die Attach 26.3% 6,420 6,029 6,000 Packaging & Plating 13.5% 5,627 Other Assembly 16.2% 1,912 5,000 Total 18.7% 1,973 1,581 Besi Addressable $ millions 4,000 921 3,603 Market 824 883 3,000 980 603 2,000
Slide 33: Besi End-User Markets
Besi End-User Markets Other Other 12% 10% Mobile Internet Spares/Service Mobile Internet Spares/Service 43% 17% 39% 13% 2020 Revenue 2021 Revenue Automotive Automotive 13% 13% Computing Computing 21% 19% Source: Company estimates March 2022 33
Slide 34: 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 35: 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 36: 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 37: Automotive: Semiconductor Content and Cost per Car Increasing
Automotive: Semiconductor Content and Cost per Car Increasing Growth in Automotive Semiconductors Source: IHS Markit, October 2020 March 2022 37
Slide 38: EV Adoption Will Further Increase Semi Content and Cost/Car
EV Adoption Will Further Increase Semi Content and Cost/Car March 2022 38
Slide 39: III. Strategy
Besi comm Ill. STRATEGY March 2022 39
Slide 40: Summary Strategy
Summary Strategy Maintain best in class technology leadership Reward Expand shareholders presence in via capital wafer level allocation assembly policy Strategic Acquire Objectives Increase companies with market complementary presence in technologies addressable and products markets ESG Integration
Slide 41: Strategy Update
Strategy Update • Supply chain constraints and selected component shortages persist both at Besi and at customer manufacturing sites Production • Impacts H1-22 quarterly delivery schedules • Began Hybrid Bonding shipments to customer in Q4-21 • Ramping capacity for 2022/2024 demand • Gross R&D inves
Slide 42: Revenue Growth Initiatives
Revenue Initiatives Pick the winners Expand wafer level assembly engagement New 5G, AI and HPC applications Revenue Growth Increase penetration of Korean and Chinese android markets Initiatives Expand Chinese market presence Wire bonding to flip chip conversion Expand automotive market share March 2
Slide 43: Asian Production Transfer Has Improved Profitability and Cash Flow
Asian Production Transfer Has Improved Profitability and Cash Flow 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 2,000 99% 2,000 300 300 278 270 1,730 1,6
Slide 44: Flexible Production Model Has Generated Consistent Gross Margins
Flexible Production Model Has Generated Consistent Gross Margins in Market Cycles Revenue Gross Margin Gross Margin adjusted 250 80% 226.1 208.3 75% 200 171.7 70% Gross Margin % € millions 150 143.2 124.3 65% 108.3 109.7 100 91.3 62.0% 62.1% 60.8% 61.0% 60.4% 60% 58.3% 58.2% 56.7% 56.7% 50 55% 0 50%
Slide 45: Flexible Asian Workforce Has Significantly Enhanced Scalability
Flexible Asian Workforce Has Significantly Enhanced Scalability Fixed Headcount 1,800 1,692 1,645 100% 1,534 1,523 1,600 90% 1,400 80% 1,200 Headcount 73% 70% 70% 70% 70% 1,000 60% 800 50% 600 400 40% • Aligning organization to meet projected 200 27% 30% 30% 30% 30% growth: 0 20% • Scaling temporary
Slide 46: Structural, Through Cycle Outperformance Achieved vs. Direct Peers
Structural, Through Cycle Outperformance Achieved vs. Direct Peers Return on Average Equity 60.0 Gross Margin Besi Δ 2016 2021 2016/ 50.0 2021 Besi’s margins and ROE have exceeded direct peers through cycles: Besi 51.0% 59.6% +8.6% 40.0 K&S* ASM PT • Investment in business model has 43.4% 43.8% +0.4
Slide 47: Significant ESG Progress Achieved in 2021
Significant ESG Progress Achieved in 2021 Process Pillar Progress Reduced Scope 1 & 2 and 3 emissions intensity by 27% and 4%, respectively Environmental Impact Relative reductions in fuel, energy, hazardous waste and water consumption Launched sustainable design initiatives for die bonding platform
Slide 48: ESG Ambitions and Targets
ESG Ambitions and Targets Key Targets 2022 Key Targets 2030 100% renewable sources for European 65% renewable sources for global energy needs energy needs 15% reduction in Scope 1 and 2 60% reduction in Scope 1 and 2 carbon emissions* carbon emissions* Above-benchmark employee engagement Reduce ener
Slide 49: IV. Financial Update and Summary
IV. FINANCIAL UPDATE AND SUMMARY March 2022 49
Slide 50: Revenue and Profitability up Strongly in Q4-21 and FY 2021
Revenue and Profitability up Strongly in Q4-21 and FY 2021 Q4-20/Q4-21 FY-20/FY-21 Revenue Net Income Revenue Net Income 200 800 € 749.3 € 171.7 + 72.8% + 56.5% 160 € 109.7 € 433.6 Gross Margin Gross Margin 600 58.3% - 1.6 points 56.7%* 59.6% - 59.6% OPEX OPEX € 23.3 MM + 30.0% € 30.3 MM € 108.7 MM
Slide 51: Performance Significantly Above Last Cycle
Performance Significantly Above Last Cycle Orders (€ millions) Revenue (€ millions) 1000 1000 939 900 900 +37.9% 800 749 800 +26.3% 681 700 700 593 600 600 500 • Orders +37.9% vs. 2017 500 400 349 356 400 348 349 300 300 • Revenue +26.3% 200 200 100 100 0 • Fixed headcount down 5% 0 2015 2017 2019 2
Slide 52: Liquidity Position Expanded in 2021
Liquidity Position Expanded in 2021 800 Cash and Deposits Net Cash € 129.4 million Q4-21 vs. Q3-21 700 dividend 672.2 • Total cash up € 81.7 million (13.8%) • +€ 101.8 million cash flow from operations 598.7 605.8 +13.8% • - € 15.7 million share repurchases 590.5 600 • - € 6.7 million capitalized de
Slide 53: Guidance Q1-22
Guidance Q1-22 Revenue Gross Margin Baseline Operating Expenses +15% € 171.7 (+/- 5%) 56.7%* 59%-61% € 30.3 +0% - +5% Q4-21 Q1-22 Q4-21 Q1-22 Q4-21 Q1-22 € in millions Total Operating Expenses +35% € 30.3 - +40% Q4-21 Q1-22 * Adjusted gross margin of 61.0% excluding inventory impairment charge. Marc
Slide 54: Investment Considerations
Investment Considerations Assembly market Long term secular Disciplined strategic Wafer level assembly ever more critical in trends drive focus has created an new growth semiconductor value advanced packaging industry leader opportunity chain growth Market presence has Tech leadership and Commitment
Slide 55: V. Appendix
V. APPENDIX March 2022 55
Slide 56: IDM/Subcontractor Order Trends
IDM/Subcontractor Order Trends € millions 1,000 939.1 IDMs Subcontractors 900 800 680.9 45% 700 600 35% 483.1 Orders 472.1 500 39% 53% 39% 400 32% 348.7 55% 39% 300 61% 61% 55% 65% 47% 200 68% 61% 45% 100 - 2017 2018 2019 2020 2021 March 2022 56
Slide 57: Baseline Operating Expense Trends
Baseline Operating Expense Trends Baseline Opex Other Opex* Baseline Opex % of Revenue 40.0 60.0% 34.9 33.6 50.0% 33.0 Operating Expenses (€ millions) 3.6 30.4 30.3 30.0 8.9 40.0% 28.6 7.6 3.6 23.9 23.3 30.0% 27.9% 0.8 20.1% 21.3% 21.3% 20.0 18.2% 30.0 30.4 30.3 20.0% 17.6% 25.4 25.0 26.0 14.6% 23.1
Slide 58: Net Income Trends
Net Income Trends Quarterly Trends Q4-21 vs. Q3-21 100 € 93.5 100% € 84.2 • € 67.1 million (-€ 17.1 million) Net Income 80 80% • -17.6% revenue decrease Net Margin € 67.1 • Primarily due to shipment deferrals Adj. Net Margin * • -€ 7.4 million inventory impairment charge 60 60% € 44.6 • Partial offs
Slide 59: Cash Flow Efficiency Trends
Cash Flow Efficiency Trends € millions % of Revenue 300 277.9 250 37.4% 37.1% 35.0% 200 33.7% 184.1 168.2 162.0 28.4% 150 26.3% 120.1 98.7 100 50 0 2016 2017 2018 2019 2020 2021 Total Cash Flow from Operations As % of Revenue March 2022 59
Slide 60: Dividend Trends
Dividend Trends Dividend (€) Dividend Cumulative dividends of € 965.3 million since 2011, or € 12.76 per share* Payout Ratio 3.50 100% 3.33 100% 98% 98% 3.00 96% 2.50 2.32 94% 2.00 92% 92% 1.67 1.70 90% 90% 90% 1.50 1.01 88% 1.00 86% 0.50 84% 0.00 82% 2017 2018 2019 2020 2021 Dividend Dividend Payou
Slide 61: Share Repurchase Activity
Share Repurchase Activity Share Repurchases Average Cost per Share 60 90.0 50.1 80.0 50 44.6 € 69.84 70.0 Avg Cost per Share 40 60.0 35.5 50.0 € millions 30 40.0 22.8 € 38.05 20 17.8 30.0 € 23.74 € 24.31 € 21.86 20.0 10 10.0 0 0.0 2017 2018 2019 2020 2021* • 0.6 million treasury shares at December 3
Slide 62: Shareholder Base and Market Liquidity Has Expanded
Shareholder Base and Market Liquidity Has Expanded Symbol/ • BESI Avg. Daily Volume and Liquidity Index • Euronext AEX Avg Vol * Avg Price (€ millions) 1,500 60 Market Volume (thousands) 1,000 40 Market • € 5.8 billion Cap* ($ 6.6 billion) Profile 500 20 Dividend • Pay out 40-100% of 0 0 net income
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