Slide 1: Investor Presentation
Investor Presentation NOVEMBER 2020 • VISHAY TODAY • GROWTH DRIVERS • TARGETS & PROJECTIONS • Q3 FINANCIALS & METRICS © 2020 VISHAY INTERTECHNOLOGY, INC. ALL RIGHTS RESERVED.
Slide 2: Notes on Forward-Looking Statements
NOTES ON FORWARD-LOOKING STATEMENTS Comments in this presentation other than statements of historical fact may constitute forward-looking statements. Words such as “believe,” “estimate,” “will be,” “will,” “would,” “expect,” “anticipate,” “plan,” “project,” “intend,” “could,” “should” or other simil
Slide 3: Drive Stockholder Value
Drive Stockholder Value • Intensified organic growth, supplemented by targeted acquisitions. • Regular cash dividend program. • Opportunistic stock buy-backs. • Maintaining prudent capital structure. © 2020 VISHAY INTERTECHNOLOGY, INC. ALL RIGHTS RESERVED. 3
Slide 4: Broad Product Portfolio
Broad Product Portfolio Revenues 2019 8% OPTO 11% INDUCTORS 21% DIODES 25% RESISTORS 19% MOSFETs 16% CAPACITORS 52% PASSIVES 48% SEMICONDUCTORS © 2020 VISHAY INTERTECHNOLOGY, INC. ALL RIGHTS RESERVED. 4
Slide 5: Vishay Today
Vishay Today • Broad and competitive product and technology portfolio: Solution provider and valuable partner for customers. • Broad market penetration • Wide range of end markets. • Balanced geographic manufacturing footprint. • Right mix of sales channels. • Contribution margin of 45% plus. • Reli
Slide 6: Broadest Line of Discrete Semiconductors and Passive Components
Broadest Line of Discrete Semiconductors and Passive Components Source: Company estimates = Major Position = Minor Position © 2020 VISHAY INTERTECHNOLOGY, INC. ALL RIGHTS RESERVED. 6
Slide 7: Broad Market Penetration
Broad Market Penetration Revenues 2019 35% INDUSTRIAL 31% AUTOMOTIVE 27% AMERICAS 41% OEM 4% CONSUMER 36% ASIA 7% COMPUTING 5% POWER SUPPLIES 7% MILITARY/AERO 6% TELECOM 5% MEDICAL END MARKETS 7% EMS 37% EUROPE 52% DISTRIBUTION REGIONS SALES CHANNELS © 2020 VISHAY INTERTECHNOLOGY, INC. ALL RIGHTS RE
Slide 8: Well-Positioned to Capitalize on Growth Markets
Well-Positioned to Capitalize on Growth Markets Revenue Split by End Market Medical 3% 5% 6% Military/Aero 7% Consumer 9% 4% 6% Telecom 12% 5% 7% Power supplies 10% Computing 21% 31% Automotive 15% 35% 24% Industrial 2010 2019 © 2020 VISHAY INTERTECHNOLOGY, INC. ALL RIGHTS RESERVED. 8
Slide 9: Broad Customer Base
Broad Customer Base OEM EMS DISTRIBUTION © 2020 VISHAY INTERTECHNOLOGY, INC. ALL RIGHTS RESERVED. 9
Slide 10: Revenue and GAAP Operating Margin
Revenue and GAAP Operating Margin REVENUE OM MILLIONS MILLIONS $5,000 $500 $4,500 $450 $4,000 $400 $3,500 $350 $3,000 $300 $2,500 $250 $2,000 $200 $1,500 $150 $1,000 $100 $500 $50 -1,677 -49 $0 $0 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 OPERATING MARGIN REVENUE © 2020 VISHAY INTERTECHNOLO
Slide 11: Revenue and Adjusted Operating Margin
Revenue and Adjusted Operating Margin OM REVENUE MILLIONS MILLIONS $5,000 $500 $4,500 $450 $4,000 $400 $3,500 $350 $3,000 $300 $2,500 $250 $2,000 $200 $1,500 $150 $1,000 $100 $500 $50 $0 $0 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 OPERATING MARGIN REVENUE © 2020 VISHAY INTERTECHNOLOGY, INC
Slide 12: Contributive Margin
Contributive Margin % % 60 60 55 55 50 50 45 45 40 40 35 35 30 30 25 25 20 20 15 15 10 10 5 5 0 0 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 © 2020 VISHAY INTERTECHNOLOGY, INC. ALL RIGHTS RESERVED. 1) Excl. VPG spin-off in 2010. 12
Slide 13: Strong Generation of Free Cash
Strong Generation of Free Cash in millions in millions $450 $450 $400 $400 $350 $350 $300 $300 $250 $250 $200 $200 $150 $150 $100 $100 $50 $50 $0 $0 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 CASH FLOWS FROM OPERATIONS LESS CAPITAL EXPENDITURES PROCEEDS FROM SALE OF PROPERTY AND EQUIPMENT 1)
Slide 14: Reconciliation of GAAP Adjusted
Reconciliation of GAAP Adjusted 1) Excl. VPG spin-off in 2010. © 2020 VISHAY INTERTECHNOLOGY, INC. ALL RIGHTS RESERVED. 14
Slide 15: Annualized Cash Dividend $0.38
Annualized Cash Dividend $0.38 Enhancing stockholder value: • Increased quarterly dividend by 12% to $0.095 Q2 2019. • Increased quarterly dividend by 26% to $0.085 Q2 2018. • Increased quarterly dividend by 8% to $0.0675 Q4 2017. • Increased quarterly dividend by 4% to $0.0625 Q1 2016. • Initiated
Slide 16: Stock Buybacks
Stock Buybacks • In 2017 spent $39.9 million to repurchase 2.3 million shares. • In 2016 spent $23.2 million to repurchase 1.8 million shares. • From 2010 – 2012 spent $575 million to repurchase 44.3 million shares, financed with 2.25% coupon, 30-year convertible debentures. • In 2018 started to rep
Slide 17: Growth Drivers
Growth Drivers Vishay is well positioned to participate in the markets expected to show solid growth over the next years. • Connectivity • Mobility • Sustainability © 2020 VISHAY INTERTECHNOLOGY, INC. ALL RIGHTS RESERVED. 17
Slide 18: Connectivity: 5G Next-Gen Wireless Platform
Connectivity 5G- Next-Gen Wireless Platform High frequency SMD resistors for impedance matching Good frequency response High Q HIFREQ MLCCs for RF circuit tuning High stability Long life Smart load switches Ultra precision IHLP®, IHSR Low profile, low ESR composite power polymer tantalum microBUCK®
Slide 19: Connectivity: Gaming Consoles
Connectivity Gaming Consoles Low profile, low ESR polymer tantalum capacitors Low profile VRPower® Integrated power stage High efficiency Small solution size Load switch with programmable current limit and slow rate High power density control ESD protection diodes and PowerPAK® MOSFETs IHLP® inducto
Slide 20: Connectivity: True Wireless Stereo
Connectivity True Wireless Stereo - TWS Proximity sensor with interrupt, VCSEL, and I2C interface High efficiency Small size IHLP; IHHP, IFCS power inductors High sensitivity Ultra low Ron Bi-directional battery switches TMBS® diodes microBUCK® regulator ICs Analog switches MICRO FOOT® MOSFETs © 202
Slide 21: Connectivity: Server Power
Connectivity VRPower® Server Power integrated power stages ENYCAPTM EDLC Best performance capacitors for memory backup Up to 1 MHz operation Optimized concept Thin film SMD resistors: Skip-mode (SMOD) function ultra stable, low drift PowerPAK® 8x8 high voltage TMBS® diodes microBUCK® regulator ICs M
Slide 22: Mobility: Dual-Voltage Solutions
Mobility 48 V / 12 V Dual-Voltage Solutions PowerPAK® 8x8L MOSFETs Higher voltage capabilities Customized filters and transformers Transient protection Complies with new package safety standard IHLP®, IHTH power inductors Power Metal Strip® MKT1820 film capacitors SMPC Schottky: low VF and 4-termina
Slide 23: Mobility: Driver Assistance and Information
Mobility Driver Assistance and Information IHLP® power inductors, High SFR (> 25 MHz) and lowest size 1212 or 1616 EMI High current, low profile Asymmetric MOSFETs Lowest self-inductance packaging Ultra low ringing switches IR bulk emitters and SEDs MicroSMP Schottky Chip resistor arrays WSLP0603 sh
Slide 24: Sustainability: Collaborative Robots
Sustainability Collaborative Robots Magnetic encoders, high accuracy, high resolution Long useful life Triple-channel transmissive optical sensors for “turn and Robust design push” encoding High precision and stability Pulse proof, high power Safety approvals thick film chip resistors High power inf
Slide 25: Sustainability: Cordless Power Tools
Sustainability Cordless – Power Tools Power Metal Strip® resistors, low value (down to 0.001 Ω) Long life, high reliability MELF resistors for gate driver and voltage sensing High peak power High current density Polymer tantalum PowerPAK® 8x8L MOSFETs and reverse cooled NTC thermistors and IHLP® pow
Slide 26: Sustainability: Grid Quality Circuit Breakers
Sustainability Grid Quality – Circuit Breakers Professional thin film resistors Long life, high reliability MELF resistors Safety approvals Transient-resistant Low and High Voltage MOSFET‘s Standard recovery IEC 60384-14 approved rectifiers and Zener ceramic capacitors diodes High voltage and high p
Slide 27: Sustainability: Smart Grid Power Meters
Sustainability Smart Grid – Power Meters IR receivers, detectors, and emitters Long life, high reliability MELF resistors Safety approvals Optocouplers and Custom designs solid state relays Aluminum and EDLC Power Metal Strip® Interference suppression boost and storage current sense resistors film c
Slide 28: Targets and Projections
TARGETS AND PROJECTIONS © 2020 VISHAY INTERTECHNOLOGY, INC. ALL RIGHTS RESERVED.
Slide 29: Goals
Goals • Increase EPS • Organic growth. • Acquisitions. • Focus on maintaining prudent financial structure. • Concrete Growth Plan built business by business from the bottom up. © 2020 VISHAY INTERTECHNOLOGY, INC. ALL RIGHTS RESERVED. 29
Slide 30: Drive Organic Growth
Drive Organic Growth Strong organic growth strategy Asia Growth Plan: Focused development Ensure product availability Improve market for key product lines during penetration mainly in of new products & demand spikes industrial and auto technologies segments © 2020 VISHAY INTERTECHNOLOGY, INC. ALL RI
Slide 31: Focused Development of New Products
1. Focused Development of New Products • MOSFETs: Gen4 and Gen5 high voltage (600 V to 800 V), Gen V mid voltage (80 V to 200 V), GaN devices, high voltage automotive, many new packages including bond-wireless • microBRICK (with integrated power inductor), 4x6 power stage package, smart e-Fuse, and
Slide 32: Ensure Products Availability For Key Product Lines
2. Ensure Products Availability For Key Product Lines Get ahead of demand curve for Vishay’s strategic growth products to ensure sufficient capacity during demand spikes: • New generation MOSFETs (all voltage ranges), integrated power devices • Semiconductor Automotive Grade: Smaller and lower profi
Slide 33: Asia Growth Plan: Improve Market Penetration in Industrial and Auto
3. Asia Growth Plan: Improve Market Penetration in Industrial and Auto Leverage in Asia Vishay’s strength in automotive and industrial, in addition to the traditional Asian focus markets, computing and consumer: • Transportation — automotive (local customers), railroad. • Energy — infrastructure, wi
Slide 34: Assumptions
Assumptions • Stable economic environment. • ASP decline per year for Vishay’s products: Passives 0% - 3% Semis 3% - 5.5%, product line specific. • Inflation rates for salaries, wages and overhead: 1.8% - 10.0%, location specific. • Stable FX rates. © 2020 VISHAY INTERTECHNOLOGY, INC. ALL RIGHTS RES
Slide 35: Operational Parameters
Operational Parameters • Contributive margin at historical levels of 45%+ • As consequence of selling price decline, cost reduction in material price and manufacturing, and mix development, by specific product line. • Proven track record for last 10+ years of 45%+ margin. • Fixed cost increases per
Slide 36: Supplement Organic Growth with Acquisitions
Supplement Organic Growth with Acquisitions • Three types of small to mid-size acquisitions targeted: • Synergetic. • Specialty. • Closing technological gap. • Cash payback incl. restructuring of ˂ 8 years. • Accretive to earnings in less than 12 months. © 2020 VISHAY INTERTECHNOLOGY, INC. ALL RIGHT
Slide 37: In Summary
In Summary • Grow at least with the market with CAGR of revenues of between 3% and 6%. • Grow net income with CAGR of 10% to 20%. • Maintain prudent capital structure. • Continued strong generation of cash available to enhance stockholder value. © 2020 VISHAY INTERTECHNOLOGY, INC. ALL RIGHTS RESERVE
Slide 38: Financials and Metrics Q3 2020
FINANCIALS AND METRICS Q3 2020 © 2020 VISHAY INTERTECHNOLOGY, INC. ALL RIGHTS RESERVED.
Slide 39: Highlights Q3 2020
Highlights Q3 2020 • Revenues Q3 of $640 million • Gross margin Q3 of 23.7%; adjusted gross margin 23.7% • Operating margin Q3 of 9.6%; adjusted operating margin 9.6% • EPS Q3 of $0.23; adjusted EPS $0.25 • Free Cash¹ for the trailing 12 months Q3 of $147 million • Repurchased in Q3 $58.9 million pr
Slide 40: Quarterly Financials Results
Quarterly Financials Results in millions, except per share amounts Q3 2020 Q2 2020 Q3 2019 Net revenues $640 $582 $628 Gross profit $152 $131 $150 23.7% 22.5% 23.9% Operating income $61 $41 $51 9.6% 7.0% 8.1% Net earnings attributable to Vishay stockholders $33 $25 $30 Weighted average shares outsta
Slide 41: Adjusted Quarterly Financials Results
Adjusted Quarterly Financials Results in millions, except per share amounts Q3 2020 Q2 2020 Q3 2019 Net revenues $640 $582 $628 Gross profit $152 $132 $150 23.7% 22.6% 23.9% Operating income $61 $42 $58 9.6% 7.2% 9.3% Net earnings attributable to Vishay stockholders $36 $26 $38 Weighted average shar
Slide 42: Reconciliation of GAAP to Adjusted
Reconciliation of GAAP to Adjusted in millions Q3 Q2 Q3 2020 2020 2019 GAAP net earnings $33 $25 $30 attributable to Vishay stockholders Reconciling items affecting gross profit Impact of the COVID-19 outbreak $0 $1 - Other reconciling items affecting operating income Restructuring and severance cos
Slide 43: Long Term Debt
Long Term Debt as of October 3, 2020 Outstanding in millions Comments Interest Debt Long term incl. current portion $392.3 Revolving Debt - Available through June 5, 2024 LIBOR plus 1.50% up to $750 million Cash coupon 2.25% of principal or $468 million principal amount; $11 million annually Convert
Slide 44: Book-to-Bill Detail
Book-to-Bill Detail Q3 2020 Q2 2020 Q1 2020 Q4 2019 Q3 2019 Book-to-bill Vishay 0.99 0.82 1.17 0.94 0.72 Book-to-bill distribution 0.99 0.75 1.30 0.94 0.55 Book-to-bill OEMs 1.01 0.93 1.04 0.95 0.90 Book-to-bill semiconductors 0.98 0.81 1.27 0.95 0.60 Book-to-bill passive components 1.00 0.83 1.08 0
Slide 45: Operational Metrics
Operational Metrics Q3 Q2 Q1 Q4 Q3 2020 2020 2020 2019 2019 vs. prior quarter (1.1) 0.1 (1.1) (0.8) (1.1) Change in ASP Vishay vs. prior year (2.7) (2.7) (2.9) (3.0) (1.9) vs. prior quarter (1.2) (0.2) (1.3) (1.2) (2.1) Change in ASP semiconductors vs. prior year (4.1) (4.5) (5.0) (5.9) (4.3) vs. pr
Slide 46: Sharecount for EPS Calculation
Sharecount for EPS Calculation in million Total shares outstanding 145 Related to RSUs etc. <1 Average Stock Price Projected Diluted Shares <$32.00 145 $32.00 - $33.00 146 >$33.00 147 The table above summarizes the approximate number of shares for diluted EPS calculation. See Item 7.01 of current re
Slide 47: Revenues Q3 2020
Revenues Q3 2020 12% INDUCTORS 10% OPTO 33% INDUSTRIAL 19% DIODES 34% AUTOMOTIVE 23% RESISTORS 5% CONSUMER 5% POWER SUPPLIES 21% MOSFETs 6% MILTARY/AERO 15% CAPACITORS 8% COMPUTING 4% TELECOM 5% MEDICAL BUSINESS SEGMENTS END MARKETS 43% OEM 42% ASIA 25% AMERICAS 51% DISTRIBUTION 33% EUROPE 6% EMS RE
Slide 48: Vishay Revenues and Gross Margin % Quarterly
Vishay Revenues and Gross Margin % Quarterly $ in millions excl. Spin-Off Vishay Precision Group in 2010 % 800 45 750 40 700 35 650 30 600 25 550 20 500 15 450 10 400 5 350 0 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 2004 2005 2006 2007 200
Slide 49: Vishay Revenues and Gross Margin % Yearly
Vishay Revenues and Gross Margin % Yearly $ in millions excl. Spin-Off Vishay Precision Group in 2010 % 3,400 36 3,100 32 2,800 28 2,500 24 2,200 20 1,900 16 1,600 12 1,300 8 1,000 4 700 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 © 2020 VISHAY INTERTECHNOLOGY,
Slide 50: Vishay Revenues Quarterly by Product Segment
Vishay Revenues Quarterly by Product Segment $ in millions $ in millions 300 300 250 250 200 200 150 150 100 100 50 50 0 0 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Slide 51: Vishay Revenues Yearly by Product Segment
Vishay Revenues Yearly by Product Segment $ in millions $ in millions 1100 1100 1000 1000 900 900 800 800 700 700 600 600 500 500 400 400 300 300 200 200 100 100 0 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 MOSFETs Diodes Opto Resistors/Inductors Capacitors Res
Slide 52: Vishay Gross Margins Quarterly by Production Segment
Vishay Gross Margins Quarterly by Production Segment % % 40 40 35 35 30 30 25 25 20 20 15 15 10 10 5 5 0 0 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 MOSFET
Slide 53: Vishay Gross Margins Yearly by Product Segment
Vishay Gross Margins Yearly by Product Segment % 45 45 40 40 35 35 30 30 25 25 20 20 15 15 10 10 5 5 0 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 MOSFETs Diodes Opto Resistors/Inductors Capacitors Resistors Inductors © 2020 VISHAY INTERTECHNOLOGY, INC. ALL RIGH