Nova Ltd. · NASDAQ:NVMI
Nova — Nova Measuring Instruments — Investor Day (January 2011)
33 slides from Nova's investor day presentation, Jan 10, 2011
Slide 1: Sustaining Long-Term Profitable Growth
Sustaining Long-Term Profitable Growth Presenting the Strategy for Taking Nova to the Next level January 10, 2011 Analyst Day Gabi Seligsohn, President & CEO Dror David, CFO
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
2 Cautionary Statement Regarding Forward-Looking Statements This presentation includes statements that constitute forward-looking statements within the meaning of safe harbor provisions of the Private Securities Litigation Reform Act of 1995 relating to future events or our future financial performa
Slide 3: Why are we here today?
3 Why are we here today? § We want to share our story of success: § Becoming a multi-product company § Expanding our customer base § Expanding our addressable markets § Delivering strong financial results § We would like to share our views of the industry § We would like to present our investment st
Slide 4: Innovation Performance
“Tanovation oo Performance “N<OVA
Slide 5: Nova has executed well on its growth strategy
5 Nova has executed well on its growth strategy Expanding Product Portfolio Increased Fab Footprint Displacing Traditional Metrology Integrated Metrology; Standalone Metrology; Software 4 Process Steps 2012 TAM ~$700M 2007 TAM ~$200M 1-2 Process Steps Integrated Metrology
Slide 6: Revolutionized Business Model Leads to Improved financial performance
Revolutionized Business Model Leads to Improved financial performance OEM OEM End User End User Improved Gross Margin Stand-alone (SA) Service Higher productivity & Advanced software capabilities 2008 Gross Margin: 9% 2010 Gross Margin: 30% + NovaMARS® software
Slide 7: Well positioned in growing segments and applications
7 Well positioned in growing segments and applications Nova Customer base includes most of world’s leading IC manufacturers Memory: +135% Foundry: +115% Est. ’10/’09 WFE Growth: Source: Gartner Q2
Slide 8: Nova Optical CD Differentiation Cluster
8 Nova Optical CD Differentiation Cluster 2010 penetrations create more growth potential for 2011 2005 2007 At Year End # Standalone Customers 2011 2009 Best Reliability Best Solution Quality Highest Throughput Best Tool-to-Tool Matching Shortest Time to Solution
Slide 9: Nova's Expansion Within the Fab
9 Nova’s Expansion Within the Fab Wafer In Wafer Out Notes: Based on Foundry with 100,000 wafer starts per month, <65nm, 10 layers Implant Litho Etch CVD/EP CMP $9 Million Opportunity - 2007 Opportunity - - 2010 Opportunity - $30-$40M Million Opportunity Implant Litho Etch CVD/EP CMP
Slide 10: Nova's Market Share in Optical CD (IM and SA)
10 Nova’s Market Share in Optical CD (IM and SA) Continuously Improving Market Position Source: Gartner and Nova’s estimates
Slide 11: Metrology Market Moving to Optical Technology
11 Metrology Market Moving to Optical Technology § Key 2009 Developments: Ø We have taken the lead in the copper metrology market (2009 - 50% of our product revenues) Ø 2009 was our first big year in Optical CD, taking share from market leaders (2009 - 28% of our product revenues) Source: Gartner an
Slide 12: Unification of the Metrology Market
12 Unification of the Metrology Market From Multiple Technologies to Primarily Optical $284M - - Expansion of Nova’s Addressable Market Source: Gartner and Company Estimates Becoming a Unified Metrology Market - All Addressable by Optical Thin Film Metrology Copper Metrology CD Metrology
Slide 13: Strong execution outperforming the industry for second consecutive year
13 Strong execution outperforming the industry for second consecutive year Note: Based on published results and Q4/2010 Guidance Industry - down 50% Nova - up 10% (products) Industry - up 130% Nova - up 140% (products)
Slide 14: Driving Profitability - Strong Momentum
2009 2010E Revenues $39M $85M-$86M Gross Margin Blended % 45% 55% Gross Margin Products 56% 60% Gross Margin Services % 7% 30% Operating Expenses - % of Revenues 38% 30% Net Margin % 7% 25% Net Profit $3M $21M-$22M Earnings Per Share $0.13 $0.80-$0.85 14 Driving Profitability - Strong Momentum Note:
Slide 15: Industry Review - 2011 and Beyond
Industry Review - 2011 and Beyond
Slide 16: Process complexity is THE growth driver for process control
16 Process complexity is THE growth driver for process control Source: Intel
Slide 17: Applications driving growth through 2014
17 Applications driving growth through 2014 Source: Gartner Memory Memory; Foundry Memory; Foundry Memory; Foundry
Slide 18: We are focused where the future is being created
18 We are focused where the future is being created
Slide 19: Nova 2011 - Well positioned in growing segments and applications
Item NAND flash P Mobile DDR DRAM P NOR flash P Serial flash P WCDMA power amplifier P GSM EDGA power amplifier P Baseband P A-GPS P Bluetooth P Power management IC P 3.2-megapixel CIS SAW (surface acoustic wave) filter Connector PCB 19 Nova 2011 - Well positioned in growing segments and application
Slide 20: Largest yearly growth of any electronic system ever!
20 Largest yearly growth of any electronic system ever! Tablet PC market
Slide 21: The love for consumer electronics is growing
21 The love for consumer electronics is growing Asia Pacific fastest growth rate of new cell subscribers - 210% By 2015 will have 3.1 Billion subscribers Source: Euromonitor International from Trade Sources While per capita income shrunk consumer electronics spending grew significantly
Slide 22: The US Economy - plays a smaller role than before
22 The US Economy - plays a smaller role than before Black Friday - the day after Thanksgiving 212 million hit the streets or the Web and spent, on average, $365.34 (~10% higher than last year) 58% was spent on consumer electronics mostly handheld “Americans’ Spending on Consumer Electronics Up 12%
Slide 23: 2011 WFE forecast
23 Analyst WFE Growth 2011/2010 Gartner -3.4% VLSI Research +5% SEMI +23.6% Citi 0% to +10% PiperJaffray +10% 23 Segment 2011/2010 Foundry FLAT NAND Flash UP DRAM DOWN IDM FLAT 2011 WFE forecast Nova Confidential and Internal Use Only
Slide 24: Innovation Performance
“Tanovation oo Performance “N<OVA
Slide 25: Strategy for taking Nova to the next level
25 Strategy for taking Nova to the next level § Strategic focus has been on execution and expense control while maintaining adequate R&D to penetrate standalone market § Main strategic goals for the next 12-18 months: § Expand SAM (Share of Addressable Market) in existing segments § Expand total add
Slide 26: Large scale proliferation still ahead of us
26 Large scale proliferation still ahead of us Expanding Nova’s SAM - 2010 Opportunity - Litho Etch CVD CMP - 2011 and beyond - Litho Etch CVD CMP Capturing the expanded opportunity requires increase of R&D investments in 2011 STI, Poly, Metal 1, Inter Metal, Top metal, STI - ADI, AEI, spacer H, SiN
Slide 27: Leveraging Nova's Position to expand addressable market
Leveraging Nova’s Position to expand addressable market New Process Steps 3D Interconnect Performance & bandwidth Form Factor & Power Consumption Leveraging Customer Base (Foundry & Memory) Existing Process Steps Front End IC manufacturing Implant Litho Etch CVD/EP CMP SOC Horizontal Shrink “More Mo
Slide 28: Smartphones and Mobile Computing: 3D IC benefits
28 SMARTPHONES AND MOBILE COMPUTING 3D IC enables: 15% footprint reduction 30% Thickness reduction 15%-30% less Power Consumption Reduced RC Delay Integration of Heterogeneous devices (with different design rules) DRAM Bandwidth for High Power Computing Multi-core CPU are starved by lack of data (me
Slide 29: 3D IC main process steps
29 3D IC main process steps Several new challenges requiring extensive process control § The transition to 3D IC depends on several factors: p Making the process production worthy - currently estimated to be 18-24 months out p Cost considerations - market demands that added cost per wafer be <$100 (
Slide 30: Strategy requires stepping up investments
30 Strategy requires stepping up investments § Existing markets - expand SAM by enhancing product capabilities: § Develop and role out highly competitive Next Generation Optical CD solution to expand the number of measurable applications at 3x/2x nodes § Improve sensitivity, productivity, time to so
Slide 31: Strategic Objective
31 Strategic Objective Expand business : § Expand addressable market from ~$700M to ~$950M § Continue to increase Optical CD market share by adding significant number of applications at existing customer sites § Successful execution of strategy should result in: p Significant revenue increase from c
Slide 32: Financial Model
32 Financial Model Notes: (1) 2010E - based on published results and Q4/2010 guidance. (2) Long-term tax rate - ~12%.
Slide 33: Further Growth: Ability to continue growth is well founded
33 Further Growth CAGR 2005-2010 Nova: 26% Industry: 2% Ability to continue growth is well founded $50B spent on 15 new fabs over next 2-3 years Recent SA penetrations 14 customers in 2011 (up from 7 in 2009) Outpacing industry growth rate Expanding Fab footprint Litho Etch CVD/EP CMP Focus on 3D-IC
Nova Measuring Instruments — Investor Day (January 2011) on 6ix