Amkor Technology, Inc. · NASDAQ:AMKR
Amkor Technology — Investor Presentation (November 2014)
35 slides from Amkor Technology's investor presentation, Nov 10, 2014
Slide 1: Reliability and Trust: Amkor Technology Investor Presentation
Reliability and Trust Amkor Technology, Inc. Investor Presentation NOVEMBER 2014
Slide 2: Disclaimer
Disclaimer 2 Forward-Looking Statement Disclaimer All information and other statements contained in this presentation, other than statements of historical fact, constitute forward-looking statements within the meaning of federal securities laws. These forward-looking statements involve a number of r
Slide 3: Outstanding Market Potential, Strong Forward Progress, Creating Value
OUTSTANDING MARKET POTENTIAL STRONG FORWARD PROGRESS FOCUS ON FUNDAMENTALS LEADERSHIP CREATING VALUE 3
Slide 4: What We'll Cover
What We’ll Cover 4 THE AMKOR STORY OUR COMPANY, OUR INDUSTRY TRENDS THAT MATTER THE AMKOR DIFFERENCE AMKOR BY THE NUMBERS
Slide 5: The Amkor Story
The Amkor Story 5 Our technology is helping change the world Components that are… Smaller and thinner More power efficient Lower cost $3 billion 2013 sales 7% growth, above the semiconductor industry 2014 sales expected to grow 4% to 6%(1,6) $3 Recognized as a leader in our industry Ad
Slide 6: Amkor in the Semiconductor Supply Chain
Packaging & Test Semiconductor Companies Fabless IDM Wafer foundry IDM fab OSAT IDM factory Wafer Fabrication Amkor in the Semiconductor Supply Chain 6 “FABLESS” outsource wafer fabrication and packaging and test IDMs (Integrated Device Manufacturers) employ both in-house and external facto
Slide 7: OSATs Growing and Gaining Share of A&T Market
$25B 56% $25B 50% $30B 47% $20B 44% $25B 50% $34B 53% 2008 2013 2018F IDM and OSAT Assembly and Test Market Share IDM OSAT SOURCE: GARTNER SEMICONDUCTOR ASSEMBLY AND TEST SERVICES, WORLDWIDE. OCTOBER 2014 UPDATE. OSATs Growing and Gaining Share of A&T Market 7 Growth of fabless design houses IDM o
Slide 8: Mobile Communications, a Trend that Matters
$27 $34 $49 $50 $67 $79 $35 $41 $61 $64 $74 $115 Automotive Consumer Other* Networking Computing Mobile Phones & Tablets 5% CAGR $ in Billions 5% CAGR 4% CAGR 4% CAGR 2% CAGR 8% CAGR 2 0 1 3 2 0 1 8 F Mobile Communications, a Trend that Matters $84B GROWTH 5% CAGR MOBILE COMMUNICATIONS GROWTH OUTPAC
Slide 9: Mobile, the Fastest Growing Market
Mobile, the Fastest Growing Market Driving innovation and volume growth Fabless companies are strong Demand is volatile; OSATs spread the investment risk Only OSATs with scale, technology, quality and capital can compete 9
Slide 10: High Amkor Content in Smartphones and Tablets
High Amkor Content in Smartphones and Tablets 10 Applications Processor Digital Baseband Power Management MEMS Sensors Memory Audio Processor RF and FE Modules Touch Screen Controller Connectivity (WiFi, Bluetooth, FM Radio) GPS Fingerprint Sensor Compass, Gyroscope, Accelerometer
Slide 11: What Differentiates Amkor?
THE RIGHT TECHNOLOGIES AND THE RIGHT END MARKETS What Differentiates Amkor? 11 INTELLIGENT R&D TO FUEL GROWTH REPUTATION FOR HIGH QUALITY AND SOLID EXECUTION STRONG CUSTOMER RELATIONSHIPS WORLD CLASS MANUFACTURING THROUGHOUT ASIA
Slide 12: How Have We Earned Our Mantle of Leadership?
How Have We Earned Our Mantle of Leadership? 12 WE DEVELOP INDUSTRY-LEADING TECHNOLOGIES WE PACKAGE AND TEST THE INDUSTRY’S MOST COMPLEX DEVICES WE DELIVER SUPERIOR VALUE BY DELIVERING INCREASED FUNCTIONALITY AT LOWER COSTS
Slide 13: Our Strategy
Our Strategy 13 IMPROVE asset utilization with an expanded customer base LEVERAGE our investment in services for advanced technologies Make SELECT ACQUISITIONS and investments DRIVE REVENUE GROWTH AND IMPROVED PROFITABILITY
Slide 14: Growth Drivers
Growth Drivers 14 Advanced products Fill mature product lines Grow J-Devices Make select investments and acquisitions Richer product mix Improve capacity utilization Drive greater operating efficiency Sales growth Profitability improvement Capital discipline 1 2 3 Sales Growth Profi
Slide 15: J-Devices: Joint Venture Formed in 2009
J-DEVICES: Joint Venture Formed in 2009 15 Acquired Toshiba, Fujitsu and Renesas Japan-based factories Automotive, industrial and consumer end markets Amkor acquired a 60% interest for $84 million; currently treated as an equity investment Expect to increase ownership to 80% by 2016 ~$1B 201
Slide 16: Amkor by the Numbers: Financials
Reliability and Trust Amkor by the Numbers: Financials
Slide 17: LTM 3Q14 Highlights
LTM 3Q14 Highlights 17 (1) AND (2): SEE NOTES INCLUDED IN THE APPENDIX $2.92 $3.03 LTM 3Q13 LTM 3Q14 Net Sales +4% 18.4% 19.2% LTM 3Q13 LTM 3Q14 Adjusted Gross Margin(2) +80 bps $0.50 $0.68 LTM 3Q13 LTM 3Q14 Adjusted EPS(2) +36% $ in Billions Record 3Q14 Sales of $813M Key 20 nanometer design wi
Slide 18: 2014 Expectations
2014 Expectations(1) Full Year 2014 Expectations Sales up 3% to 4%; up 4% to 6% excluding divested Japanese subsidiary(6) Growth in all end markets 4Q14 Guidance Sales down 1% - 7% sequentially Gross margin 17% - 20% Diluted EPS $0.07 - $0.17 18 (as of October 27, 2014) (1) AND (6): SEE NO
Slide 19: Amkor 2013 Market Share
AMKOR 12% SHARE AMKOR + J-DEVICES 15% SHARE $4.7 $3.0 $2.3 $1.6 $1.3 $0.9 $0.8 $0.7 $0.6 $0.5 $8.6 ASE (ATM) Amkor SPIL STATS PTI JCET J-Devices UTAC Chip MOS Chip Bond All Other 2013 Revenue $ in Billions Amkor 2013 Market Share 19 SOURCE: GARTNER MARKET SHARE ANALYSIS: SEMICONDUCTOR PACKAGING AND
Slide 20: LTM 3Q14 End Market Distribution
20 54% 14% 12% 11% 9% COMMUNICATIONS CONSUMER NETWORKING COMPUTING Television Set Top Box Gaming Server Router Switch Infotainment Safety Performance PC / Laptop Hard Disk Drive Peripherals AUTOMOTIVE, INDUSTRIAL Smartphone Tablet Handheld Device LTM 3Q14 End Market Distribution
Slide 21: Revenue and Gross Profit: Profitability Trends
$2,776 $2,760 $2,956 $3,031 $491 $424 $545 $583 18% 15% 18% 19% 0% 5% 10% 15% 20% 25% 30% $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 2011 2012 2013 LTM 3Q14 Revenue Gross Profit Gross Margin % Revenue and Gross Profit 21 $ in Millions (2): SEE NOTE INCLUDED IN THE APPENDIX 2012 adjusted gross
Slide 22: To Sum It Up
To Sum It Up 22 WE’RE GAINING SHARE IN A DYNAMIC MARKET FOCUSING ON OUR STRENGTHS IS CREATING VALUE MOMENTUM IS DELIVERING PROFITABLE GROWTH
Slide 23: Appendix
Reliability and Trust Appendix
Slide 24: 3Q14 and 4Q14 Summary
(In Millions, Except per Share Data) 4Q 2014 Guidance (As of October 27, 2014)(1) 3Q 2014 2Q 2014 3Q 2013 Net Sales $755 - $805 $813 $767 $768 Gross Margin 17% - 20% 18.8% 19.6% 18.4% Net Income $17 - $41 $47 $50 $25 Earnings per Diluted Share $0.07 - $0.17 $0.20 $0.21 $0.11 EBITDA(3) – $207 $198 $1
Slide 25: EPS Trends: Recent Earnings Momentum
EPS Trends: Recent Earnings Momentum 25 $0.39 $0.45(2) $0.54(2) $0.68 2011 2012 2013 LTM 3Q14 (2): ADJUSTED EARNINGS PER DILUTED SHARE. SEE NOTE INCLUDED IN THE APPENDIX Earnings per Diluted Share REVENUE GROWTH and HIGHER MARGINS
Slide 26: Free Cash Flow and EBITDA
$521 $527 $648 $755 2011 2012 2013 LTM 3Q14 EBITDA(3) Free Cash Flow and EBITDA 26 2012 includes a $20 million payment for loss contingency 2012 includes $50 million and 2013 includes $10 million for loss contingency charge $ in Millions $ in Millions (3) AND (4): SEE NOTES INCLUDED IN THE APPENDIX
Slide 27: Capital Expenditures and Capital Intensity
EXPECT 2014 CAPITAL EXPENDITURES(1) OF AROUND $640M $467 $534 $461 $640 $106 $35 17% 19% 16% 21% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 2011 2012 2013 2014F Capital Expenditures K5 Spending Capital Intensity % Capital Expenditures and Capital Inten
Slide 28: Credit Profile
2.6 2.9 2.5 2.0 2011 2012 2013 LTM 3Q14 Debt/EBITDA(3) $1,347 $1,545 $1,653 $1,536 $435 $413 $610 $486 2011 2012 2013 LTM 3Q14 Total Debt and Cash Total Debt Cash $ in Millions $ in Millions Credit Profile 28 Debt/Adjusted EBITDA, excluding loss contingency: 2012 - 2.7x and 2013 - 2.5x(2) (2) AND (3
Slide 29: Debt Maturities
NO SIGNIFICANT DEBT MATURITIES UNTIL 2018 $435M IN AVAILABLE CREDIT LINES Debt Maturities 29 $5 $5 $70 $110 $70 $345 $0 $400 $525 2014 2015 2016 2017 2018 2019 2020 2021 2022 Term Loans Senior Notes Debt Maturities $ in Millions
Slide 30: Endnotes
30 Endnotes (1) This financial guidance is from our October 27, 2014 earnings release and is reproduced here for convenience of reference only. This reference is not intended, and should not be relied upon, as a reaffirmation or other commentary with respect to such financial guidance. Please see pa
Slide 31: Financial Reconciliation Tables
($ in Millions) LTM 3Q14 2013 2012 2011 3Q14 2Q14 3Q13 Net Cash Provided by Operating Activities $588 $558 $389 $517 $170 $103 $174 Less: Payments for Property, Plant and Equipment (607) (567) (534) (467) (212) (134) (179) Free Cash Flow* ($19) ($9) ($144) $50 ($42) ($31) ($5) Net Income $158 $109 $
Slide 32: Financial Reconciliation Tables
Financial Reconciliation Tables 32 We define free cash flow as net cash provided by operating activities less payments for property, plant and equipment. Free cash flow is not defined by U.S generally accepted accounting principles (“U.S. GAAP”). We believe free cash flow to be relevant and useful i
Slide 33: Adjusted Gross Margin, EPS and EBITDA Notes
In the presentation we provide adjusted gross margin, adjusted earnings per diluted share, and adjusted EBITDA for the twelve months ended December 31, 2013 and 2012, respectively, and adjusted gross margin and adjusted earnings per diluted share for the twelve months ended September 30, 2013. We pr
Slide 34: Financial Reconciliation Tables
($ in Millions) 2014F(6) 2013 3Q14 2Q14 3Q13 Low End High End Net Sales $3,030 $3,080 $2,956 $813 $767 $768 Less: Net Sales of Subsidiary Sold to J-Devices (35) (35) (73) - (18) (19) Net Sales Excluding Subsidiary Sold to J-Devices $2,995 $3,045 $2,883 $813 $749 $749 Net Sales Growth Excluding Subsi
Slide 35: Reliability and Trust
These Chinese characters symbolize “reliability and trust” – the lifelong values of our late Honorary Chairman, Hyang-Soo Kim, the founder of Amkor. They illustrate his strong passion for, and dedication to, the highest standards of integrity, respect and fair dealing. Reliability and Trust
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