Be Semiconductor Industries N.v. · EURONEXT:BESI
Be Semiconductor Industries — Investor Presentation (March 2021)
59 slides from Be Semiconductor Industries's investor presentation, March 2021
Slide 1: Investor Presentation March 2021
INVESTOR PRESENTATION March 2021
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 Update and Summary V. Appendix March 2021 3
Slide 4: I. Company Overview
I. COMPANY OVERVIEW March 2021 4
Slide 5: Besi Overview
Besi Overview • Leading assembly equipment supplier with #1 and #2 positions in key markets. 32% 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 packagin
Slide 6: Company History and Strategic Execution
Company History 500 Die Attach Acquisitions 70% • € 433.6 65% 400 60% 59.6% Product Strategy 55% • Expanded advanced packaging leadership into die attach area Revenue (€ millions) • Gained market share organically and via acquisitions 300 • Gained mindshare with key industry leaders 50% • Growth in
Slide 7: History of Superior Long-Term Value Creation
History of Superior Long-Term Value Creation Disciplined Strategic Execution Capital Allocation Program Total Shareholder Return € 866 million of dividends and Consistent outperformance vs. Leader in advanced packaging share repurchases since 2011* peers for assembly equipment Total shareholder retu
Slide 8: Best in Class Product Portfolio
Best in Class Product Portfolio Die Attach Die Bonding Multi Module Attach Flip Chip Hybrid Bonding Die Lid Attach • 2009 SSI • 2200 evo • 8800 CHAMEO advanced / PLP New • 8800 CHAMEO ultra plus New • 2100 hS • DLA New • 2100 SSI New • 8800 TC advanced / NEXT • 2100 hS i • 2200 evo plus New • DLA Ne
Slide 9: Customer Ecosystem
Customer Ecosystem Customers OEMs End Products IDMs Subcontractors • Diversified, blue chip customer base, top 10 = ~50% of 2020 revenue • Leading IDMs and subcontractors. 45%/55% order split in 2020 • Also supply leading fabless companies: Qualcomm, Broadcom, MediaTek via subcontractors • Long term
Slide 10: From Processed Wafer to Assembled Chip
From Processed Wafer to Assembled Chip Semiconductor Manufacturing Equipment 2020: $ 72.7B* Front-end: $ 62.9B Assembly: $ 3.6B Test: $ 6.3B (86%) (5%) (9%) Assembly Process Dicing Die Attach Wire Bond Packaging Plating - - Leadframe Assembly - Substrate - - Wire Bond Assembly - Substrate - - Flip C
Slide 11: Current Operational Profile
Current Operational Profile Duiven and Drunen, (NL) Steinhausen, Radfeld, (AT) (CH) Suzhou Chandler Chengdu Korea Shanghai Leshan Taiwan Shenzhen Thailand Philippines Malaysia Sales Office Singapore Production Site Sales and R&D Site Full Year 2020 Europe/NA Asia • Development activities in Europe R
Slide 12: Summary Financials
Summary Financials Year Ended December 31, Long term, step function growth in cyclical business (€ millions, ex share data) 2018 2019 2020 • Increased revenue, profitability and market share per cycle Revenue 525.3 356.2 433.6 • Peer leading financial metrics maintained through cycles and pandemic %
Slide 13: Through Cycle Revenue and Gross Margin Trends
Through Cycle Revenue and Gross Margin Trends € millions Revenue Gross Margin Gross Margin 700 70% 57.1% 59.6% 600 60% 593 51.1% 500 50% 424 +22% 400 39.5% 434 40% 34.1% 379 356 300 302 30% 4 year 351 averages 200 20% 164 191 100 10% 0 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2
Slide 14: Business Model Objectives
Business Model Objectives Business Model Objectives Revenue € 800MM Addressable market share 40%+ Gross margin 55-60% 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 2021 14
Slide 15: Capital Allocation Trends
Capital Allocation Trends € millions 209.5 200 35.5 Dividends 167.1 • € 866.1 million distributions since 2011*: Share Repurchases • Approximately 20% of cumulative revenue 150 44.7 123.9 • € 1.70 dividend proposed for FY-20 • 94% payout ratio 100 88.8 91.3 • € 125 million share repurchase program 1
Slide 16: II. Market
II. MARKET March 2021 16
Slide 17: What Drives Besi's Business?
What Drives Besi’s Business? Timing of customer IDM customer and roadmaps and Macro GDP trends supply chain capital spending choice programs Tech capabilities Competitive cycle for 24/7 production times and environment scalability March 2021 17
Slide 18: Assembly Equipment Forecast Upgraded Through 2023
Assembly Equipment Forecast Upgraded Through 2023 Market Size YoY Growth Rate 6.0 50% 4.5 4.9 5.0 4.3 5.0 4.3 30% US$ billions 3.5 3.6 4.0 3.0 25.8% 19.9% 20.3% 10% 3.0 13.3% 12.5% 2.8% -10% -2.5% 2.0 1.0 -30% -31.5% 0.0 -50% 2016 2017 2018 2019 2020E 2021E 2022E 2023E Source: VLSI, February 2021 Be
Slide 19: Industry Conditions Have Improved Significantly From Q2-19 Trough
Industry Conditions Have Improved Significantly From Q2-19 Trough Source: VLSI, February 2021 March 2021 19
Slide 20: Assembly Equipment Market Composition
Assembly Equipment Market Composition Assembly Equipment Market (2020)* Besi Addressable Market (2020)* Wire Bonding 18% Inspection, Dicing,Other Packaging 33% Die Attach 31% 67% $ 3.6 billion $ 1.6 billion Plating Plating 1% 2% Die Attach 31% Packaging 17% * Source: VLSI, February 2021 March 2021 2
Slide 21: Besi End User Markets
Besi End User Markets 2019 % Revenue 2020 % Revenue Other Other 10% 9% Mobile Internet Spares/Service Spares/Service Mobile Internet 33% 17% 19% 39% Automotive Automotive 13% 17% Computing Computing 22% 21% Source: Company estimates March 2021 21
Slide 22: Besi Market Share Trends
Besi Market Share Trends 2015 2016 2017 2018 2019 Total Assembly Market ($MM) $3,148 $3,541 $4,453 $4,343 $2,974 Besi Market Share 12.3% 11.8% 15.0% 13.8% 13.4% Addressable Market ($MM) $1,271 $1,506 $1,940 $1,848 $ 1,247 Besi Market Share 29.9% 27.6% 34.2% 32.4% 32.0% Die Attach 35.5% 34.2% 42.0% 3
Slide 23: 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 24: 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 25: Requiring Increased Density, Higher Accuracy and Smaller Form Factors
Requiring Increased Density, Higher Accuracy and Smaller Form Factors for Next Generation Devices 100 NM Front-End 10 • Transistor scaling 1 • Lithography 0.1 • New structures 3D 2010 2015 2020 2025 2030 Logic Metal Pitch Edge Placement Accuracy Node Name Source: Samsung Source: ASML 3D Conference 2
Slide 26: 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 2011 - 2023 55 48% 50% • Assembly process step now important 47% 43% 45% gating item 40% 42% • Specifications more like front-end 45 38% 37% 40% 35% 34% • Advanced packaging applica
Slide 27: 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 28: Computing Demand Expanding Rapidly
Computing Demand Expanding Rapidly Advanced computing Data volumes growing Digital society accelerating expanding in largest exponentially sections of economy Data Mining Manufacturing $ 14T Artificial Intelligence Automotive $ 10T CAGR (+28%) Medical Healthcare $ 7T Cloud Infrastructure Cloud Compu
Slide 29: Besi Addressable Market Share of Mobile Increasing
Besi Addressable Market Share of Mobile Increasing Support Virtually All Device Platforms 2018 Generation 2012 Manufacturer IDM/OSAT Besi System Utilized iPhone XS Processor X Apple TSMC ->TSMC 8800CHM, MMS-LM DRAM Memory X X Hynix/Micron/Samsung Hynix/Micron/Hanamicron 2100sD, FSL NAND Flash (Contr
Slide 30: Automotive Growth Rebounding Post COVID Downturn
Automotive Growth Rebounding Post COVID Downturn Semiconductor Cost Content Per Car Is Increasing Electric Autonomous Connected Mobility as vehicles vehicles vehicles a service New powertrain Sensors Vehicle Ridesharing Charging Infrastructure Car sharing HPC infrastructure Better Big data / Cloud F
Slide 31: Hybrid Die Bonding: Next Generation Bonding Technology
Hybrid Die Bonding: Next Generation Bonding Technology Wire Bond (1975) Flip Chip (1995) TCB Bonding (2012) HD Fan Out (2015) Hybrid Bonding (2018) Heat compression force Contact: Contact: Contact: Via RDL or Contact: Cu to Density: 5-10/mm² Contact: wire Density: 25-400/mm² Solder ball/Cu pillar De
Slide 32: Hybrid Die Bonding: Significant Total Market Potential
Hybrid Die Bonding: Significant Total Market Potential Besi Has Leading Position Hybrid Bonding / Bonding Equipment Market Key Advantages Hybrid Bonding Die to Wafer / Die to Die Very high density contacts possible > 1 mio/Sq Mm with no solder Estimated installed base of 700-1,400 systems by 2030
Slide 33: Joint Development Agreement With Applied Materials
Joint Development Agreement With Applied Materials Industry’s first complete, one-stop solution creates best hybrid bonding process suite Front and back-end process expertise Harness leadership positions in Assembly equipment process expertise • Etch front-/back-end • Planarization • Die placement •
Slide 34: MicroLED: Another Emerging Growth Opportunity
MicroLED: Another Emerging Growth Opportunity Watches and phones, automotive IT VR and AR applications Larger size TV and TV+ Mass transfer of individual microLEDs Monolithic based microLEDs solutions Very precise placement over wide area Utilizing Besi’s next generation TCB or Hybrid Bonding Sy
Slide 35: III. Strategy
III. STRATEGY March 2021 35
Slide 36: Summary Strategy
Summary Strategy Maintain best in class technology leadership Increase Reward market shareholders presence in via capital addressable allocation policy markets Strategic Objectives Acquire Enhance companies with scalability. complementary Reduce technologies structural costs and products Balance bus
Slide 37: Strategic Update
Strategic Update • Adjusted business model to cope with COVID-19 pandemic • Continued consolidation and reduction of European footprint 2020 • Reorganized R&D to better align with customer roadmaps • Joint development agreement with Applied Materials • Developed new ESG framework and short, medium a
Slide 38: Strategic Revenue Initiatives
Strategic Revenue Initiatives “Pick the winners” Expand high quality mainstream product offerings Wire bonding/flip chip conversion Hybrid bonding market expansion Revenue Growth New 5G and AI applications Initiatives Increased penetration of Korean and Chinese android markets Expand presence in Chi
Slide 39: Cost Initiatives: €10 Million Target Reduction
Cost Initiatives: € 10 Million Target Reduction • Pursue additional vendor consolidation and volume discounts Supply Chain • Increased production/supply chain flexibility • Achieve cost reduction in each new product generation • Reduce number of platforms Product Design • Increase standardization, r
Slide 40: Asian Production Transfer Has Reduced Break Even Revenue Levels
Asian Production Transfer Has Reduced Break Even Revenue Levels and Improved Cash Generation 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 1,200 2,000 300
Slide 41: Flexible Production Model Has Generated Consistent Gross Margins
Flexible Production Model Has Generated Consistent Gross Margins in Market Cycles Revenue Gross Margin 150 80% 124.3 75% 125 108.3 109.7 70% 100 Gross Margin % 92.7 89.7 92.4 91.3 € millions 65% 81.4 62.0% 60.8% 75 58.3% 60% 56.3% 56.7% 55.9% 56.0% 55.1% 55% 50 50% 25 45% 0 40% Q1-19 Q2-19 Q3-19 Q4-
Slide 42: Flexible Asian Workforce Has Significantly Enhanced Scalability
Flexible Asian Workforce Has Significantly Enhanced Scalability Fixed Headcount 2,000 100% 1,724 1,692 1,800 1,549 90% 1,534 1,523 1,600 80% 1,400 Headcount 73% 1,200 67% 71% 70% 70% 70% • European and NA fixed HC has declined over past 1,000 60% ten years as per ongoing strategic initiatives: 800 6
Slide 43: Structural, Through Cycle Outperformance Achieved vs. Peers
Structural, Through Cycle Outperformance Achieved vs. Peers Return on Average Equity* Gross Margin 45.0 Δ Besi 2016 2017 2018 2019 2020 2016/ 40.0 Besi’s margins and ROE have 2020 exceeded direct peers through 35.0 cycles: Besi 51.0% 57.1% 56.8% 55.8% 59.6% +8.6% 30.0 ASM PT • Investment in business
Slide 44: Besi's ESG Strategic Pillars, Material Topics and Key Targets
Besi’s ESG Strategic Pillars, Material Topics and Key Targets Strategic Environmental People Responsible Pillars: Impact Wellbeing Business • Impact at Besi: • Diversity and inclusion • Ethics and compliance • Energy use and renewable • Employee health and safety • Responsible supply chain energy •
Slide 45: ESG Progress and Highlights 2020
ESG Progress and Highlights 2020 Direct Emissions – Scope 1 & 2 Additional safety, health and organizational measures implemented due to COVID-19 Near and long-term ESG ambitions, targets and KPIs set 100% renewable energy achieved across three operating locations Reduction of Scope 1 and 2
Slide 46: IV. Financial Update and Summary
IV. FINANCIAL UPDATE AND SUMMARY March 2021 46
Slide 47: 2020 Net Income Up 63% vs. 2019 On 22% Revenue Increase
2020 Net Income Up 63% vs. 2019 On 22% Revenue Increase FY-20/FY-19 Q4-20/Q4-19 Revenue Net Margin Revenue Net Margin 500 100% 120 100% € 109.7 + 18.7% € 433.6 90% 90% + 21.7% 100 € 92.4 400 € 356.2 80% 80% Gross Margin Gross Margin 55.8% + 3.8 points 59.6% 56.3% + 2.0 points 58.3% 70% 80 OPEX OPEX
Slide 48: Increased Profitability vs. Last Industry Cycle
Increased Profitability vs. Last Industry Cycle Trough Post Trough € millions 2015 2019 € millions 2016 2020 450 200 450 200 180 180 433.6 +15.5% 400 160 400 34.6% 160 140 149.9 140 Operating Income Operating Income 375.4 350 +2.0% 120 Revenue 350 120 356.2 Revenue 349.2 +99.3% 25.8% 100 100 300 91.
Slide 49: Liquidity Position Enhanced
Liquidity Position Enhanced Cash and Deposits Net Cash 700 598.7 Q4-20 net cash comparison 600 • + € 40.0 million (+25.2%) vs. Q3-20 to € 198.7 million 527.8 +46.6% • + € 68.4 million (+52.5%) vs. Q4-19 500 475.5 Q4-20 cash flow movements 408.4 • +€ 51.7 million cash provided by operations 400 • -€
Slide 50: Guidance Q1-21
Guidance Q1-21 Revenue Gross Margin Baseline Operating Expenses +30% € 109.7 - 58.3% 58%-60% € 23.3 +15% - +40% +20% Q4-20 Q1-21 Q4-20 Q1-21 Q4-20 Q1-21 € in millions Total Operating Expenses +50% € 23.3 - +55% Q4-20 Q1-21 March 2021 50
Slide 51: Summary
Summary Market presence Assembly market Long term secular Disciplined has grown via key ever more critical trends drive strategic focus IDMs, supply in semiconductor advanced has created an chains and value chain packaging growth industry leader partners Tech leadership Commitment to and scalability
Slide 52: V. Appendix
V. APPENDIX March 2021 52
Slide 53: IDM/Subcontractor Order Trends
IDM/Subcontractor Order Trends € millions 800 IDMs Subcontractors 700 680.9 600 35% 500 483.1 472.1 Orders 400 373.8 32% 348.7 55% 300 49% 39% 200 65% 68% 100 51% 61% 45% - 2016 2017 2018 2019 2020 March 2021 53
Slide 54: Operating Expense Trends
Operating Expense Trends Baseline Opex Other Opex* Baseline Opex % of Revenue 35.0 60% 33.0 30.7 50% 30.0 28.6 7.5 Operating Expenses (€ millions) 5.8 26.8 3.6 40% 25.2 2.3 24.2 25.0 23.9 1.5 23.3 0.5 0.9 30.6% 30% 27.9% 26.4% 26.4% 25.7% 20.0 20.1% 21.3% 21.3% 20% 24.9 25.4 25.0 24.5 23.7 23.7 23.1
Slide 55: Net Income Trends
Net Income Trends Net Income Variable Compensation (a) Net Margin € millions 60% 50 48.2 45.0 3.6 50% 6.1 40 37.5 38.2 4.2 40.7% 40% 3.8 36.5% 30 32.0% 26.2 31.3% 30% 3.5 22.4 22.3 22.3 24.5% 44.6 3.5 3.1 20 38.9 15.9 20.4% 21.4% 8.4 20% 33.7 34.0 6.4 15.2% 22.7 10 11.7% 19.2 18.9 10% 13.9 9.5 0 0%
Slide 56: Cash Flow Trends
Cash Flow Trends € millions % of Revenue 200 184.1 180 168.2 162.0 160 +34.9% 140 120.1 120 37.4% 98.7 35.0% 100 33.7% 28.4% 80 26.3% 60 40 20 0 2016 2017 2018 2019 2020 Total Cash Flow from Operations As % of Revenue March 2021 56
Slide 57: Dividend Trends
Dividend Trends Dividend (€) Dividend Payout Ratio 3.00 Cumulative dividends of € 700.2 MM since 2011, or € 9.45 per share * 120% 115% 2.50 2.32 110% 2.00 107% 1.70 105% 1.67 1.50 100% 100% 1.01 95% 1.00 0.87 94% 91% 90% 90% 0.50 85% 0.00 80% 2016 2017 2018 2019 2020** Dividend Dividend Payout Ratio
Slide 58: Share Repurchase Activity
Share Repurchase Activity 50 40 44.6 € 38.05 45 35 40 35.5 30 35 Avg Cost per Share € 24.31 25 30 € 23.74 € millions € 21.86 25 22.4 22.8 20 20 17.8 15 15 € 12.44 10 € 8.93 10 4.0 5 5 0 0 2015 2016 2017 2018 2019 2020 Share Repurchases Average Cost per Share • 5.7 million treasury shares December 31
Slide 59: Shareholder Base Expanded
Shareholder Base Expanded Symbol/ • BESI Avg. Daily Volume and Liquidity 1,250 40,000 Index • Euronext Midcap AMX 1,000 Avg Vol * Avg Price (€ thousands) 30,000 750 Volume (thousands) Market Market • € 3.6 billion 500 20,000 Cap* ($ 4.4 billion) Profile 250 10,000 Dividend • Pay out 40-100% of - - 2
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