Be Semiconductor Industries N.v. · EURONEXT:BESI
Be Semiconductor Industries — Investor Presentation (August 2018)
52 slides from Be Semiconductor Industries's investor presentation, August 2018
Slide 1: Investor Presentation August 2018
INVESTOR PRESENTATION August 2018
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 and Summary V. Appendix August 2018 3
Slide 4: I. Company Overview
I. COMPANY OVERVIEW August 2018 4
Slide 5: Besi Overview
Besi Overview • Leading assembly equipment supplier with #1 and #2 positions in key markets. Approximately 35% 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
Slide 6: Company History
Company History 700 65% Die Attach Acquisitions € 628.5 60% 600 •2000 2002 2005 2009 55% 500 Products • Expanded advanced packaging leadership position and market 50% Revenue (euro millions) 57.0% share organically and via acquisitions Gross Margin (%) 400 • Gained mindshare with key industry leader
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 • 2009 SSI • 2200 evo • 8800 CHAMEO advanced New • WTT New • DLA New • 2100 sD plus / PPP plus • 2100 DS New • 2200 evo plus • 8800 TCB advanced New • TTR New • 2200 ev
Slide 8: Product Positioning
Product Positioning Semiconductor Manufacturing Equipment (2017: $57.7B)* Front end: $48.0B Assembly: $4.6B Test: $5.2B (83%) (8%) (9%) Semiconductor Assembly Process Dicing Die Attach Wire Bond Packaging Plating Die Bond Molding/ Wire Bond Plating Trim & Form** Leadframe Assembly Substrate Wire Bon
Slide 9: Customer Ecosystem
Customer Ecosystem Customers OEMs End Products IDMs Subcontractors • Diversified, blue chip customer base, top 10 = 62% of 2017 revenue • Leading IDMs and subcontractors. 65/35% split in 2017 • Also supply leading fabless companies: Qualcomm, Broadcom, MediaTek via subcontractors • Long term relatio
Slide 10: Current Operational Profile
Current Operational Profile Duiven & Drunen, (The Netherlands) Steinhausen, Radfeld, (Austria) (Switzerland) Chandler Suzhou Chengdu Korea Shanghai Leshan Sales Office Taiwan Shenzhen Production Site Philippines Sales, Production & R&D Site Malaysia Singapore YTD June 30, 2018 Europe/NA Asia • Devel
Slide 11: Summary Historical Financials
Summary Historical Financials • YOY Revenue grew by 58% in 2017 and 13% in H1-18: Year Ended December 31, HY1 HY1 • Industry upturn accelerated from H2-16 start (€ millions, except share data) 2015 2016 2017 17 18 • New advanced packaging capacity added by IDMs Revenue 349.2 375.4 592.8 280.2 316.0
Slide 12: Capital Allocation Trends
Capital Allocation Trends Cumulative distributions: € 459.5 MM since 2011* 200 Current policy: 185.3 • Net cash above € 80 million available for dividends and share 180 11.3 repurchases 160 • Absolute level and mix can vary per annum • Pay 40-100% of net income/annum in dividends 140 • Convertible f
Slide 13: Besi Market Information
Besi Market Information Symbol/ • BESI Avg. Daily Volume & Liquidity Index • Euronext Midcap AMX Avg Vol * Avg Price (€ thousands) 700 12,000 600 10,000 Volume (thousands) Market Market • € 1.6 billion ($1.9 USD) 500 8,000 Cap* • 75 million shares net ** 400 Profile 300 6,000 4,000 200 Dividend • Pa
Slide 14: II. Market
Besi nam Il. MARKET August 2018 14
Slide 15: Assembly Equipment Market Trends
Assembly Equipment Market Trends Assembly Equipment Market Market Size YoY Growth Rate 6.0 30% 4.6 5.1 5.0 3.9 20% 26.8% US$ billions 3.7 23.9% 4.0 3.0 3.2 10% 16.1% 11.8% CAGR 3.0 0% 13-17 2.0 -10% 11% 1.0 -20% -22.0% -17.5% 0.0 -30% 2013 2014 2015 2016 2017E 2018E Source: VLSI June 2018 Besi Reven
Slide 16: Assembly Equipment Market Composition
Assembly Equipment Market Composition Assembly Equipment Market * Besi Addressable Market * (2017: $4.6 billion) (2017: $1.8 billion) Lead Trim & Plating Form 1.5% Molds 5.0% Other 7.2% Assembly Wire Bonding (Inspection, 21.6% Dicing) 31.0% Die Bonding Presses 49.8% 15.4% Die Attach 66% Plating Pack
Slide 17: New Era of Chip Growth and Applications Will Drive Greater Computing and Data Needs
New Era of Chip Growth and Applications Will Drive Greater Computing and Data Needs Digital society Driven by new technologies - 5G - AI – big data - Robotics - Transportation - Environment - Health care Will need continuous new solutions - 1zb = 1,000,000,000 tb - 1zb= 1,000 data centres - 1zb = 18
Slide 18: Which Will Require Increased Density, Higher Accuracy and Smaller Form Factors
Which Will Require Increased Density, Higher Accuracy and Smaller Form Factors 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 struct
Slide 19: And Require Changes in Assembly Processes and Equipment
And Require Changes in Assembly Processes and Equipment New Assembly Structures Assembly Equipment • 2D/2.5D/3D structures • High accuracy 200nm and beyond • Die to Die or Die to Wafer Stacking • Super clean • Integration with Photonics • Photonic element handling • TCB and Direct bonding • Substrat
Slide 20: Advanced Packaging Critical to Next Generation Applications
Advanced Packaging Critical to Next Generation Applications Greater Mobile Revolution Miniaturization • Mobile Internet • Messaging • Social Media • Shared Economy Higher Greater • Gaming Accuracy Complexity • Geo-location • Audio/Video • Auto electronics Die Bond Packaging Digital Society Datacon 8
Slide 21: Besi Portfolio Well Positioned by Node Size and Accuracy
Besi Portfolio Well Positioned by Node Size and Accuracy Estimated % of 2017 Revenue Typical Application Besi Equipment Accuracy Size 100% Micron NM 10+ 28+ Automotive, SiP Softsolder, Epoxy, MultiModule, 90% Power Flip Chip Die Bonders 25% Packaging 80% Plating 70% 10 28 IOT Softsolder, Epoxy, Mult
Slide 22: 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 - 2022 45 45% 42% 40% 39% 40 38% 40% 37% 36% 34% 35 32% 35% • Advanced packaging applications have grown 31% significantly since 2010 M wafers, 300MM Eq. 30 30% • Currently, 36
Slide 23: And Is Reflected in Besi End User Application Trends
And Is Reflected in Besi End User Application Trends 2017 % of Revenue • Mobile Internet devices, Computing 40% and Automotive are largest end 35% markets and most rapidly growing 35% 30% 25% • New device introductions in 2017 25% boosted mobile internet share to 20% 35% 17% 15% 10% 11% • Computer/P
Slide 24: Besi Has Gained Share In Its Addressable Markets
Besi Has Gained Share In Its Addressable Markets Source: VLSI June 2018 2013 2014 2015 2016 2017 and Besi estimates Addressable Market ($ Million) $1,200 $1,616 $1,216 $1,453 $1,844 Besi Market Share 26.4% 30.5% 31.3% 28.6% 36.0% Total Die Attach 31.9% 37.1% 37.5% 35.4% 44.2% Die Bonding 39.1% 40.3%
Slide 25: And Has a Large Share of Wallet at Key Customers
And Has a Large Share of Wallet at Key Customers Share of Wallet Die Attach Packaging 2014 2015 2016 2017 2014 2015 2016 2017 • Customers are largest semi mfrs. Subcons Subcons engaged in most advanced packaging ASE 70% 80% 70% 55% ASE 35% 25% 15% 40% Amkor 90% 95% 95% 75% Amkor 20% 25% 10% 65% appl
Slide 26: What Drives Besi's Business?
What Drives Besi’s Business? Selection of IDM Deliver reliably most customers with demanding technical Macro GDP trends greatest mind share specs in a 24/7 and potential for production success environment Provide customers Timing of customer competitive cycle road maps and times and scalability capi
Slide 27: Besi Addressable Market Share of Mobile Increasing
Besi Addressable Market Share of Mobile Increasing Component Illustration Growth in features vs. units is driving revenue Source: Tech Insights Besi technology can support virtually all device platforms utilized in latest mobile devices August 2018 27
Slide 28: Flip Chip/Wire Bond Process Shift Is Another Revenue Opportunity
Flip Chip/Wire Bond Process Shift Is Another Revenue Opportunity 2017 2022 Wire Bonding Flip Chip Bonding Flip Chip Flip Chip $338 $497 25% 29% Wire Bonding Wire $991 Bonding 75% $1,199 Flip Chip Advantages 71% Reduces board area Offers higher speed CAGR 2017 - 2022 by up to 95%. electrical Flip Chi
Slide 29: Fan Out WLP and TCB/TSV Are Emerging Process Technologies
Fan Out WLP and TCB/TSV Are Emerging Process Technologies Fan Out WLP (Wafer Level) TCB/TSV (Substrate Based) Enabling technology for high end memory and optical Preferred process for high data applications transfer and optical devices in IoT, mobile and power Next step beyond Flip Chip 32 Stacked D
Slide 30: III. Strategy
III. STRATEGY August 2018 30
Slide 31: Summary Strategy
Summary Strategy Maintain best in class tech leadership. Expand capabilities for: • eWLB, TCB, panel size and ultra thin die bonding • Large area, ultra thin, wafer level molding • Solar and lithium ion battery plating Increase market presence and share in addressable markets • Leverage technology l
Slide 32: Revenue Opportunities
Revenue Opportunities Roll out of 3D imaging and other features to 4G and 5G mobile supply chains Ongoing push for ever greater cloud memory/logic capacity Favorable Drivers: Steady growth of electronic content and safety requirements in automotive Digital Society Big Data Substantial expansion of C
Slide 33: Customer Market Share Growth Opportunities
Customer Market Share Growth Opportunities • Increase Share of Wallet of existing and new customers with each new generation of Besi’s advanced packaging portfolio • Reduce unit cost to expand mainstream system sales and gain share vs. competitors • Sell next generation equipment to increase SoW in
Slide 34: Asian Production Transfer Has Reduced Break Even Revenue Levels
Asian Production Transfer Has Reduced Break Even Revenue Levels and Improved Cash Flow Generation Asian Production Has Leading to Lower Fixed And Reduced Break Even Improved Cash Generation Significantly Expanded European + NA Headcount Revenue Levels Cash Conversion Headcount € millions Cycle Days
Slide 35: Materials Cost Reduction Is Also a Key Priority
Materials Cost Reduction Is Also a Key Priority Material costs are largest single cost = ~40% of revenue Supply Chain Actions • 80% of material now purchased in Asia • Asian supply chain expansion: • Enhances revenue scalability (+/-) • Limits Besi capex and inventory investment • Reduces personnel,
Slide 36: Workforce Has Become More Asia Centric, Scalable and Flexible
Workforce Has Become More Asia Centric, Scalable and Flexible Fixed Headcount 2,000 1,724 1,754 1,754 75% 1,800 1,549 71% 71% 72% 1,489 1,489 67% 1,600 1,404 64% 65% 1,400 60% Headcount 57% 1,200 55% 1,000 800 45% 600 43% 40% • Asia now represents 72% of total fixed 400 36% 33% 35% headcount, up fro
Slide 37: Besi's Asian Expansion Supports Future Growth
Besi’s Asian Expansion Supports Future Growth Units Shipped Gross Margin Asian Production Trends Fixed Headcount by Country 1,800 2,000 59% 1,754 1,600 57.1% 57% 1,600 1,400 1,434 459 1,200 55% +8.5% 1,200 423 1,000 1,301 53% 481 +104% 800 236 51.0% 51% 800 68 +221% 600 218 675 49% 48.8% 400 633 400
Slide 38: Besi Strategic CSR Objectives
Besi Strategic CSR Objectives Safeguard safe and CSR Achievements 2017 healthy working conditions Maintain best ✔ Improvement in KPI metrics for supply chain activities Responsible tax practices in all practices environmental and ethical jurisdictions behavior ✔ Conducted surveys: ✔Company wide
Slide 39: IV. Financial Review and Summary
IV. FINANCIAL REVIEW AND SUMMARY August 2018 39
Slide 40: Solid HY1-18 and Sequential Quarterly Performance
Solid HY1-18 and Sequential Quarterly Performance HY1-18/HY1-17 Q2-18/Q1-18 Revenue Net Margin Revenue Net Margin 360 100% 180 100% +12.8% +4.0% € 316.0 € 161.1 320 90% 160 € 154.9 90% € 280.2 280 80% 140 80% Gross Margin Gross Margin 56.7% -0.2 points 56.5% 56.5% = 56.5% 240 70% 120 70% OPEX OPEX €
Slide 41: HY1-18 Performance Varies by Besi End User Market
HY1-18 Performance Varies by Besi End User Market Estimated Revenue % By End User Application 35% 25% 17% • Most Besi end markets continued to grow favorably in HY1-18: 12% 11% • Auto • China • Computing • Spares/Service 2017 2018E 2017 2018E 2017 2018E 2017 2018E 2017 2018E Mobile Computing Auto In
Slide 42: Liquidity Trends
Liquidity Trends Cash and Deposits Net Cash 600 571.0 Cash flow generation has significantly improved over past five years: 527.8 • Has supported shareholder friendly capital allocation: 500 • € 428.6 million of dividends and share repurchases 2013-2018 400 395.5 • Total cash of € 395.5 million & ne
Slide 43: Currency Exposure Trends
Currency Exposure Trends Revenue Expenses 2017 ∆ 2017 ∆ 2015 2016 2017 2015* 2016 2017 vs. €** vs. €** Currency Exposure (2015) Forex Financial Impact Euro 29% 25% 18% 30% 26% 21% US dollar 70% 74% 82% 5% 5% 9% Swiss franc - - - 23% 21% 19% Malaysian ringgit - - - 28% 30% 31% Chinese renminbi - - -
Slide 44: Guidance Q3 and Nine Months 2018
Guidance Q3 and Nine Months 2018 Q3-18/Q2-18 YTD-18/YTD-17* Revenue Revenue € 161.1 € 439.5 -25% 0% - - -30% -2% Q2-18 Q3-18 YTD-17 YTD-18 Gross Margin Gross Margin 56.5% 57.4% 54% 55% - - 56% 57% Q2-18 Q3-18 YTD-17 YTD-18 Operating Expenses Operating Expenses € 31.8 € 95.0 Approx. +8% Equal Q2-18 Q
Slide 45: Summary
Summary • Disciplined strategic focus on most rapidly growing areas of advanced packaging space has created an industry leader • Assembly market ever more critical step in semi production and value chain, particularly for the emerging digital society • Long term secular trends in place to drive cont
Slide 46: V. Appendix
V. APPENDIX August 2018 46
Slide 47: Quarterly Revenue/Gross Margin Trends
Quarterly Revenue/Gross Margin Trends Revenue Gross Margin 200 70.0% 180 170 159 161 160 155 65.0% 153 140 euro in millions Gross Margin % 120 117 60.0% 110 58.7% 100 57.3% 56.3% 56.5% 56.5% 55.7% 80 55.0% 55.0% 60 40 50.0% 20 0 45.0% Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18* * Midpoint of guidance
Slide 48: 2017-2018 Quarterly Backlog and Book to Bill Trends
2017-2018 Quarterly Backlog and Book to Bill Trends Book to Bill Ratio Backlog (euro millions) 2.5 250 Besi Backlog Besi Book to Bill 2.3 206 215 2.2 2.0 200 1.8 166 168 164 1.5 140 150 1.3 1.3 1.0 1.0 1.0 100 0.8 0.8 0.5 0.5 50 0.3 0.0 0 Mar 17 Jun 17 Sep 17 Dec 17 Mar 18 Jun 18 (a) (a) Includes €
Slide 49: Step Function Growth in Revenue and Gross Margin Since 2006
Step Function Growth in Revenue and Gross Margin Since 2006 euro millions Revenue Gross Margin 700 60.0% 600 51.1% 50.0% 500 39.5% 40.0% 424 400 34.1% 30.0% 4 year 300 302 averages 20.0% 200 164 10.0% 100 0 0.0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 August 2018 49
Slide 50: Base Line Operating Expense Trends
Base Line Operating Expense Trends Base Opex Other Opex 45 39.1 40 34.1 34.2 35 30.5 30.4 7.4 31.6 4.4 3.0 30 0.9 4.9 3.3 25 20 15 29.7 31.2 31.7 30.7 25.6 27.1 10 5 0 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Baseline Opex 25.6 29.7 27.1 31.2 31.7 30.7 As % of Revenue 23.2% 17.5% 17.0% 20.4% 20.5% 19.1%
Slide 51: Net Income Trends
Net Income Trends Net Income Variable Compensation (a) Net Margin 60 € 57.1 € 56.6 60% € 4.7 € 3.7 € 51.0 50 € 47.9 € 47.1 50% € 3.8 € 4.3 € 10.0 40 € 52.4 € 52.9 40% € 47.2 euro in millions 33.2% € 43.6 € 29.1 30.8% 30 29.3% 30% 28.4% € 37.1 € 4.8 23.9% 22.0% 20 20% € 24.3 10 10% 0 0% Q1-17 Q2-17 Q
Slide 52: Cash Generation Trends
Cash Generation Trends euro millions Cash Conversion Cycle Days 180 168.2 160 208 140 120 169 149 98.7 100 86.5 127 80 73.3 107 60 40 18.1 20 0 2013 2014 2015 2016 2017 Total Cash Flow from Operations Cash Conversion Cycle* * Cash Conversion Cycle = Avg. Days Inventory Outstanding + Avg. Days Sales
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