BE Semiconductor Industries N.V. · EURONEXT:BESI
BE Semiconductor Industries — Besi — Q2 2019 Earnings Presentation
24 slides from BE Semiconductor Industries's earnings presentation, Jul 25, 2019
Slide 1: Investor Presentation Q2-2019 Results
INVESTOR PRESENTATION Q2-2019 RESULTS July 25, 2019
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: Table of Contents
Table of Contents I. Key Highlights II. Market & Strategy III. Outlook IV. Financial Appendix July 25, 2019 3
Slide 4: I. Key Highlights
I. KEY HIGHLIGHTS July 25, 2019 4
Slide 5: Besi Q2-19 Results Exceed Expectations
Besi Q2-19 Results Exceed Expectations Guidance € millions Q2-19* Q2-19 ∆ Q1-19 ∆ Q2-18 Revenue +5% 92.7 +13.9% -42.5% Orders 82.7 -0.8% -4.2% Gross 55%-57% 56.0% +0.1 -0.5 Margin Opex -5% 26.8 -12.7% -15.7% Net Income 18.9 +98.9% -60.0% EPS Basic 0.26 +100.0% -58.7% Net Cash 86.1 -62.5% -21.9% *As
Slide 6: Q2-19 Net Income Doubles vs. Q1-19
Q2-19 Net Income Doubles vs. Q1-19 Attractive Profit and Margins Maintained Q1-19/Q2-19 HY1-18/HY1-19 Revenue Net Margin Revenue Net Margin 100 100% 360 100% € 92.7 + 13.9% € 316.0 90% 320 90% - 44.9% € 81.4 80 80% 80% 280 Gross Margin Gross Margin € 174.1 + 0.1 points 70% 56.5% - 0.6 points 55.9% 7
Slide 7: Flexible Production Model Generated Consistent Gross Margins
Besi’s Flexible Production Model Has Generated Consistent Gross Margins in Market Cycles Revenue Gross Margin 180.0 170 100.0% 159 161 Current Downturn 160.0 153 155 90.0% 140.0 80.0% 120.0 117 109 110 € millions Gross Margin % 100.0 93 93 93 70.0% 94 81 83 80.0 79 58.7% 58.0% 55.7% 57.3% 56.3% 56.5
Slide 8: Opex Levels Scaled Back Below Q2-16 Levels
Opex Levels Scaled Back Below Q2-16 Levels Operating Expenses (€ millions) Q2-16 Q2-17 Q2-18 Q2-19 High Low Average Base Line Opex 24.8 29.7 30.7 24.7 30.7 24.7 27.5 Other Opex* 4.3 4.4 1.1 2.1 4.4 1.1 3.0 Total 29.1 34.1 31.8 26.8 34.1 26.8 30.5 • Baseline opex has stayed within narrow band over pa
Slide 9: Liquidity Trends
Liquidity Trends Cash and Deposits Net Cash 600 571.0 € 174.0 MM Dividend 507.5 500 2017 475.5 € 122.4 MM Dividend Q2-19 vs. Q1-19 443.5 2018 • Net cash decreased by € 143.6 million (-62.5%) to 395.5 € 86.1 million 400 361.7 • Principally due to € 135.1 million in dividends and € millions share repu
Slide 10: €80 Million Revolving Credit Facility Placed
€ 80 Million Revolving Credit Facility Placed • € 80 million multi currency credit facility expandable to € 136 million • Consolidates various subsidiary credit lines at N.V. • 5 year term extendable to 7 years • No restriction on share buybacks or Besi dividend policy • Provides attractive, flexibl
Slide 11: II. Market & Strategy
II. MARKET & STRATEGY July 25, 2019 11
Slide 12: Assembly Equipment Market Update
Assembly Equipment Market Update Current Environment Looking Forward • Downturn continues post extended super cycle • VLSI anticipates recovery in 2020 (+6.6%) and 2021(+19.1%) • VLSI takes down 2019 to -21% (July) from -17% • Strong secular trends in place: • Besi’s 2019 order trends indicate stabi
Slide 13: Trade Tensions Reshaping Global Supply Chains in 2019
Trade Tensions Reshaping Global Supply Chains in 2019 China Revenue 2014-2019 • US/China trade tensions affect equipment 700 700 companies with Chinese exposure 593 600 600 • Besi China exposure is manageable 525 500 500 • 20-30% of total revenue over past five years 400 379 375 400 • 24% in 2018, 2
Slide 14: III. Outlook
Besi nam Ill. OUTLOOK July 25, 2019 4
Slide 15: Guidance Q3-19
Guidance Q3-19 Revenue Gross Margin Operating Expenses € 92.7 MM 10% 56.0% 55%-57% € 26.8 MM 0-5% Q2-19 Q3-19 Q2-19 Q3-19 Q2-19 Q3-19 -15% July 25, 2019 15
Slide 16: Financial Calendar
Financial Calendar 22-Aug-19 Roadshow New York, organized by Berenberg 4-Sep-19 ING Benelux Conference, London 5-Sep-19 DB European TMT Conference, London 12-Sep-19 KeplerCheuvreux Autumn Conference, Paris 24-Oct-19 2019 Third Quarter Results 13/14-Nov-19 Morgan Stanley TMT Conference, Barcelona 19-
Slide 17: IV. Financial Appendix
IV. FINANCIAL APPENDIX July 25, 2019 17
Slide 18: Assembly Equipment Market Trends
Assembly Equipment Market Trends Assembly Equipment Market Market Size YoY Growth Rate 5.0 30% 22.3% 4.4 4.3 4.3 4.0 20% 3.7 3.5 3.6 US$ billions 25.8% 3.4 19.1% 3.1 10% 3.0 3.0 12.7% 6.6% 0% 2.0 -2.5% -10% 1.0 -20% -16.3% -20.8% 0.0 -30% 2013 2014 2015 2016 2017 2018 2019E 2020E 2021E Source: VLSI
Slide 19: Revenue/Order Trends
Revenue/Order Trends 240 Quarterly Trends Q2-19 vs. Q1-19 206 • Revenue: € 92.7 million (+13.9%) 200 Revenue Orders • Better than guidance (+5%) 155 161 • Higher die bonding shipments to Asian 160 € millions subcontractors 117 120 108 86 93 83 81 83 93 83 • Orders: € 82.7 million (-0.7%) 80 • Stabil
Slide 20: Gross Margin Trends
Gross Margin Trends Quarterly Trends 200 70% Q2-19 vs. Q1-19 180 68% • 56.0% vs. 55.9% 161.1 160 154.9 Revenue Gross Margin 66% • At midpoint of guidance (55-57%) 140 64% • Net forex negative: Revenue USD flat vs. EUR 116.7 Costs +MYR / CNY vs. EUR € millions 120 62% 100 92.5 92.7 60% 58.0% 81.4 80
Slide 21: Organization Levels Aligned with Market Conditions
Organization Levels Aligned with Market Conditions Headcount Trends 2015-2019E 2,040 2,000 • 20% headcount reduction realized from last 316 1,759 peak in Q1-18 to Q2-19 1,695 1,716 1,669 67 69 111 1,539 120 • Asian HC being rationalized in 2019 post 1,500 50 large 2015-2018 ramp Headcount • Both fix
Slide 22: Baseline Operating Expense Trends
Baseline Operating Expense Trends Base Opex Other Opex 45 39.1 40 34.2 35 7.4 31.8 30.7 30.4 3.0 29.1 1.0 30 25.9 26.8 3.3 2.8 5.4 25 0.2 2.1 20 15 31.2 31.7 30.7 27.1 26.3 25.7 25.3 24.7 10 5 0 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Baseline Opex 27.1 31.2 31.7 30.7 26.3 25.7 25.3 24.7 As
Slide 23: Net Income Trends
Net Income Trends Quarterly Trends 50 € 47.2 70% Q2-19 vs. Q1-19 45 Net Income Net Margin 60% • € 18.9 million (+€ 9.4 million) 40 € 37.1 • Net margin of 20.4% vs. 11.7% 35 50% • 13.9% revenue increase 30 € 29.3 • € 3.9 million opex decrease due to: € millions 40% • Lower variable pay 25 € 22.7 € 18
Slide 24: Share Repurchase Activity
Share Repurchase Activity 40 30.0 35.5 35 25.0 € 23.74 30 € 21.86 € 22.26 25.5 20.0 Avg Cost per Share 25 22.4 22.8 € millions 20 15.0 € 12.44 15 10.0 € 8.93 10 5.0 5 4.0 0 0.0 2015 2016 2017 2018 HY1-19 Share Repurchases Average Cost per Share • 2.4 million shares bought cumulatively through June 3