Be Semiconductor Industries N.v. · EURONEXT:BESI
Be Semiconductor Industries — Investor Presentation (November 2016)
45 slides from Be Semiconductor Industries's investor presentation, November 2016
Slide 1: Investor Presentation November 2016
INVESTOR PRESENTATION November 2016
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 Review V. Outlook & Summary November 2016 3
Slide 4: I. Company Overview
I. COMPANY OVERVIEW November 2016 4
Slide 5: Besi Overview
Besi Overview • Leading assembly equipment supplier with #1 and #2 positions in key products. 30% addressable market share • Broad portfolio: die attach, packaging and plating Corporate Profile • Strategic positioning in substrate and wafer level packaging • Global mfg. operations in 6 countries; 1,
Slide 6: Company History
Company History 60% Die Attach Acquisitions 400 55% € 360.1 •2000 2002 2005 2009 50% 50.2% 300 Restructuring Revenue (€ millions) Gross Margin (%) 45% • European production transferred to Asia • Intellectual property remains in Europe • European headcount and footprint reduced 40% • Break even reven
Slide 7: Best in Class Product Portfolio
Best in Class Product Portfolio Die Attach Die Bonding Multi Module Attach Flip Chip Die Sorting Die Lid Attach • 2100 xP plus / hS New • 2200 evo • 8800 CHAMEO fan-out New • DS9000e • DLA New • 2100 sD plus / PPP plus • 2100 DS • 2200 evo plus • 8800 TCB New • WTT New • 2009 SSI • 2100 SC • 2200 ev
Slide 8: Product Positioning
Product Positioning Semiconductor Manufacturing Equipment (2015: $38.8B) Front end: $32.1B (82%) Assembly: $3.3B (9%) Test: $3.5B (9%) Semiconductor Assembly Process Dicing Die Attach Wire Bond Packaging Plating Die Sort Die Bond Wire Bond Molding Trim & Form Plating Leadframe Assembly Substrate Bal
Slide 9: Customer Ecosystem
Customer Ecosystem Customers OEMs End Products IDMs Subcontractors • Diversified, blue chip customer base, top 10 = 49% of 2015 revenue • Leading IDMs and subcontractors. 60/40% split in 2015 • Assemble chips for leading fabless companies: Qualcomm, Broadcom, MediaTek • Long term relationships, some
Slide 10: Current Operational Profile
Current Operational Profile Duiven & Drunen, (The Netherlands)* Cham, Radfeld, (Austria)* (Switzerland)* Chandler Suzhou Chengdu Korea Shanghai Leshan Sales Office Taiwan Shenzhen Production Site Malaysia Philippines Sales & Production Site Singapore * * R&D Site YTD (as of September 30, 2016) • Dev
Slide 11: Summary Historical Financials
Summary Historical Financials • 2015 Results: • Solid profit and margins maintained Year Ended December 31, YTD YTD despite H2 market downturn (€ millions, except share data) 2013 2014 2015 2015 2016 • Industry leading gross and net margins • Net cash position continues to build Revenue 254.9 378.8
Slide 12: Besi Market Information
Besi Market Information Symbol/ • BESI Average Daily Volume Index • Euronext Midcap AMX (Shares 000s) 400 Market • € 1,155 MM ($1,259 300 Market Profile Cap* MM) 200 100 Dividend • Pay out 40-80% of net 0 Policy income per annum 2013 2014 2015 2016 Top 10 Shareholders By Geography (% of shares outst
Slide 13: Dividend Trends
Dividend Trends Dividend EPS (diluted) Total Dividend Yield (a) 2.00 1.87 12.0% 1.80 10.0% 1.60 1.50 1.40 1.27 8.1% 8.0% 1.20 1.20 Dividend yield Dividend (€) 6.5% 1.00 5.2% 6.0% 1.00 0.80 0.73 4.0% 4.3% 4.0% 0.60 0.42 0.43 0.40 0.30 0.33 0.22 2.0% 0.20 Payout Ratio: 30% 71% 77% 80% 94% 0.00 0.0% 20
Slide 14: II. Market
II. MARKET November 2016 14
Slide 15: Assembly Equipment Market Trends
Assembly Equipment Market Trends Assembly Equipment Market Market Size YoY Growth Rate 5.0 4.0 40% 3.1 4.0 4.1 30% 4.0 3.3 3.6 (US$ billions) 27.9% 20% 3.0 10% 10.0% 9.6% 2.0 3.9% 0% -10% 1.0 -16.3% -20% -21.9% 0.0 -30% 2013 2014 2015 2016E 2017E 2018E Source: VLSI September 2016 Besi Revenue Revenu
Slide 16: Assembly Equipment Market Composition
Assembly Equipment Market Composition Assembly Equipment Market * Besi Addressable Market * (2015: $3.3 billion) (2015: $1.3 billion) Lead Trim & Plating Form 2.3% Other Assembly 6.6% Wire Bonding Molds (Inspection, 21.5% 8.9% Dicing) 31.3% Die Attach 38.8% Presses 14.5% Die Attach 60% Plating 0.9%
Slide 17: Advanced Packaging Is the Future
Advanced Packaging Is the Future Greater Miniaturization Higher Accuracy Greater Complexity Fico Sawing Line Esec DB2100 High Growth End User Areas: Esec DB2009 Mobile internet, Autos, MEMS, Data Mining, Cloud Servers, FML wafer molding IoT, Wearable devices Datacon 8800 CHAMEO fan-out Fico ASM-LM D
Slide 18: 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 Advanced Packaging Wafers Advanced Packaging Unit Market Share (%) 45 45.0% 40 35.2% 36.2% 40.0% 32.7% 34.2% • 32% of wafers use advanced packaging M wafers, 300MM Eq. 35 35.0% AP M
Slide 19: Internet of Tomorrow Drives New Innovation Cycle
Internet of Tomorrow Drives New Innovation Cycle Internet of Tomorrow Driving Improvement in Will Drive Innovation in Mobile Technology/New Many End User Advanced Packaging Applications Solutions Which Will Require A And Lead to Increased New Standard Protocol Data Traffic IP TRAFFIC EB/MONTH 250 20
Slide 20: Generating Strong Forecasted Growth in Internet Connected Devices
Generating Strong Forecasted Growth in Internet Connected Devices • 35% CAGR device growth forecast over next 5 years • Powered primarily by devices used for IoT, Data mining and Cloud applications • Positive trajectory for smart phones, wearables and automotive November 2016 20
Slide 21: Requiring Changes in Process/Equipment Development
Requiring Changes in Process/Equipment Development Front End Today => Tomorrow Transistor scaling Lithography New structures 3D Back End Assembly More contacts Smaller pitches Thinner/denser more complex packages From simple Wire Bond to BGA/Flip Chip to complex 3D structures with TSVs, Stacked stru
Slide 22: Besi End User Application Trends
And Is Reflected in Besi End User Application Trends 2015 35% 32% 30% 25% • Mobile internet devices 22% are 32% of revenue 20% 18% 15% • Automotive has grown 15% to 18% 10% 10% • Computer/PCs holding up due to high end 5% 3% server market 0% • Service/spare parts has increased to 15% Source: Company
Slide 23: New Smart Phone Designs Increase Besi's Addressable Market Potential
New Smart Phone Designs Increase Besi’s Addressable Market Potential Generation Generation Main Components Manufacturer IDM/OSAT Besi system Utilized - New 2012 2014 Processor X X Apple TSMC ->Amkor/Stats/ASE 8800FCQ, AMS-W/LM DRAM Memory X X Hynix/Micron Hynix/Micron 2100sD, FSL NAND Flash X X Hyni
Slide 24: Flip Chip/Wire Bond Process Shift Is Another Revenue Opportunity
Flip Chip/Wire Bond Process Shift Is Another Revenue Opportunity 2015 2021 Wire Bonding Flip Chip Bonding Flip Chip Flip Chip $265 $439 27% 32% Wire Wire Bonding Bonding $712 $936 73% 68% Flip Chip Advantages Reduces board area Offers higher speed CAGR 2015 - 2021 by up to 95%. electrical Flip Chip
Slide 25: TCB/TSV and Fan Out WLP Are Emerging Process Technologies
TCB/TSV and Fan Out WLP Are Emerging Process Technologies TCB/TSV (Substrate Based) Fan Out WLP (Wafer Level) Enabling technology for high Preferred process for high data end memory and optical transfer and optical devices in applications IoT, mobile and power Next step beyond Flip Chip 32 Stacked D
Slide 26: Besi Has Gained Share In Its Addressable Markets
Besi Has Gained Share In Its Addressable Markets Besi Market Share Source: VLSI, May 2016 and Besi estimates 2012 2013 2014 2015 Total Assembly Equipment Sales 8.5% 10.5% 12.7% 11.7% Besi Addressable Market 21.4% 25.9% 29.3% 29.6% Total Die Attach Equipment 26.8% 31.0% 36.1% 36.1% Die Bonding 29.7%
Slide 27: Besi Share of Wallet Increasing
Besi Share of Wallet Increasing Die Attach Packaging In USD 2012 2013 2014 2015 2012 2013 2014 2015 • Customers are largest semi mfrs. Subcontractors • Most advanced packaging applications ASE 65% 60% 70% 80% 35% 65% 35% 25% Amkor 75% 85% 90% 95% 45% 10% 20% 25% JCET (a) 75% 50% 70% 30% 0% 10% 0% 5%
Slide 28: III. Strategy
III. STRATEGY November 2016 28
Slide 29: Summary Strategy
Summary Strategy Maintain best in class tech leadership and market position Expand technology capabilities for: • TCB, thin die, eWLB die bonding • Large area, ultra thin, wafer level molding • Solar and battery plating Increase market share in addressable markets Achieve a more scalable, flexible a
Slide 30: Besi Revenue Growth Drivers
Besi Revenue Growth Drivers World tooling up for new tech cycle <20 nano Emerging Increased process smart phone deployment: functionality TCB and WLP Revenue Increased Growth share of Drivers New device Japanese introductions: supply chain IoT, wearables and China handsets Solar cell plating Wire bo
Slide 31: Key Operational Initiatives
Key Operational Initiatives 2015 2016 Operational Initiatives Transfer certain Die Attach functions to Singapore Transfer die bonding production for local market from Malaysia to China Transfer Plating Production from NL to Malaysia 10% fixed & temporary headcount reduction Transfer die sorting from
Slide 32: Asian Production Transfer Has Helped Reduce Break Even Revenue Levels
Asian Production Transfer Has Helped Reduce Break Even Revenue Levels Asian Production Has Leading to Lower European And Reduced Break Even Significantly Expanded Headcount Revenue Levels 1,800 96% 300 1,200 94% 100% 1,543 1,510 270 1,600 1,479 1,499 84% 86% 90% 1,434 1,000 963 250 235 80% 1,400 927
Slide 33: Workforce Has Become More Asia Centric, Scalable and Flexible
Workforce Has Become More Asia Centric, Scalable and Flexible Fixed Headcount 1,800 1,526 1,547 70% 1,543 1,510 1,499 1,484 1,600 1,479 66% 66% 1,434 63% 64% 1,400 60% 60% 1,200 56% Headcount 54% 1,000 52% 50% 800 48% 46% 600 44% 400 40% 40% • Asia now represents 66% of total 37% 36% 200 34% 34% fix
Slide 34: Materials Cost Reduction Is Also a Key Priority
Materials Cost Reduction Is Also a Key Priority Material costs = 40% of revenue. Largest single cost Supply Chain Actions • Asian supply chain developed • 75% of material now purchased in Asia • Reduced personnel, transport, logistics and inventory • Enhanced cycle time/revenue ramping capability •
Slide 35: IV. Financial Review
IV. FINANCIAL REVIEW November 2016 35
Slide 36: Solid Q3-16 Results. Strong Profit Growth and Margin Development YTD-16
Solid Q3-16 Results. Strong Profit Growth and Margin Development YTD-16 Q3-16/Q2-16 YTD-16/YTD-15* Revenue Net Income Revenue Net Income € 120 300 € € 109.0 90% +4.0% € 282.3 € 271.4 90% -13.5% € 100 80% 80% € 94.3 250 € 70% 70% Gross Margin Gross Margin € 80 200 € 50.9% -0.4 points 50.5% 60% 48.5%
Slide 37: Quarterly Book to Bill Ratio
Quarterly Book to Bill Ratio 1.75 1.63 Assembly Besi Equipment 1.50 1.34 1.26 1.25 1.25 1.15 1.11 1.10 1.10 1.04 1.05 1.08 1.00 1.00 1.10 0.97 0.94 0.91 Total Semi Equipment 0.75 0.72 0.68 0.69 0.50 Mar 13 Jun 13 Sept 13 Dec 13 Mar 14 Jun 14 Sept 14 Dec 14 Mar 15 Jun 15 Sept 15 Dec 15 Mar 16 Jun 16
Slide 38: Quarterly Revenue/Order/Gross Margin Trends
Quarterly Revenue/Order/Gross Margin Trends Revenue Orders • Cyclical quarterly revenue/order Gross Margin Adjusted Gross Margin patterns: 120.0 70.0% • Short term patterns due to customer 109.0 104.2 104.3 103.9 roadmaps, global GDP trends and 100.5 65.0% increased seasonality 100.0 94.9 91.9 94.3
Slide 39: Currency Exposure Trends
Currency Exposure Trends Revenue Expenses 2013 2014 2015 2015 ∆ vs. € 2013 2014 2015 2015 ∆ vs. € Euro 28% 34% 29% - 34% 32% 31% - US dollar 71% 65% 70% +11.4% 7% 4% 5% +11.4% Currency Swiss franc Exposure - (2015) - - Forex 26% Financial 18% Impact 22% +10.7% Malaysian ringgit - - - 22% 37% 28% -9.
Slide 40: Base Line Operating Expense Trends
Base Line Operating Expense Trends 35 32.0 28.7 29.2 29.1 30 28.2 6.3 26.5 25.3 4.3 Other Opex 5.1 5.7 3.6 25 4.1 3.5 Base Opex 20 15 25.7 24.8 24.6 23.6 22.4 23.5 21.8 10 5 0 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Baseline Opex 21.8 25.7 23.6 22.4 23.5 24.8 24.6 Other Operating Expenses Capitali
Slide 41: Net Income Trends
Net Income Trends Quarterly Trends Adjusted Net Income Adjustments Adjusted Net Margin 27 € 24.0 40% € 0.9 24 35% 21 30% € 17.5 € 15.5 € 16.6 (euro in millions) 18 € 0.2 25% 15 € 3.3 21.2% 20% 12 € 9.7 € 23.1 17.7% • Through cycle net margins now range 15.0% 14.6% 14.0% € 8.0 15% between approximate
Slide 42: Liquidity Trends
Liquidity Trends Cash Debt Net Cash 180 169.8 161.6 € 45.4 MM 157.8 160 Dividend 153.3 € 56.9 MM Besi has significantly increased cash flow Dividend 148.4 generation over past 5 years 140 132.8 132.1 • Increased profits, faster cycle times, Asian 136.5 133.1 131.9 supply chain transfer 120 113.7 109
Slide 43: V. Outlook & Summary
V. OUTLOOK & SUMMARY November 2016 43
Slide 44: Q4-16 Guidance
Q4-16 Guidance Revenue Gross Margin € 94.3 50.5% -10% 51% to - -15% 49% Q3 Q4 Q3 Q4 Operating Expenses € 28.2 0% to 5% Q3 Q4 November 2016 44
Slide 45: Summary
Summary Leading semi assembly equipment supplier with #1 Technology leader. Best in Gaining market share in or #2 positions in fastest class product portfolio advanced packaging growing assembly segments Significant upside potential. Scalability and profitability Advanced packaging Committed to enha
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