Be Semiconductor Industries N.v. · EURONEXT:BESI
Be Semiconductor Industries — Investor Presentation (February 2020)
59 slides from Be Semiconductor Industries's investor presentation, February 2020
Slide 1: Investor Presentation February 2020
INVESTOR PRESENTATION February 2020
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 February 2020 3
Slide 4: I. Company Overview
I. COMPANY OVERVIEW February 2020 4
Slide 5: Besi Overview
Besi Overview • Leading assembly equipment supplier with #1 and #2 positions in key markets. 32% addressable market share Corporate Profile • Broad portfolio: die attach, packaging and plating • Strategic positioning in substrate and wafer level packaging • Global operations in 6 countries; 1,596 em
Slide 6: Company History
Company History Die Attach Acquisitions 65% 400 • 60% € 356.2 55% Product Strategy 300 • Expanded advanced packaging leadership into die attach area 50% Revenue (€ millions) • Gained market share organically and via acquisitions Gross Margin (%) 55.8% • Gained mindshare with key industry leaders • G
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 / hS plus • 2100 DS New • 2200 evo • 8800 CHAMEO advanced New • WTT New • DLA New • 2100 sD plus / PPP plus • 2100 SC • 2200 evo plus • 8800 TC advanced New • TTR New • 2100 sD a
Slide 8: Customer Ecosystem
Customer Ecosystem Customers OEMs End Products IDMs Subcontractors • Diversified, blue chip customer base, top 10 = 44% of 2019 revenue • Leading IDMs and subcontractors. 61%/39% split in 2019 • Also supply leading fabless companies: Qualcomm, Broadcom, MediaTek via subcontractors • Long term relati
Slide 9: Product Positioning
Product Positioning Semiconductor Manufacturing Equipment (2019: $60.6B)* Front end: $52.3B Assembly: $3.0B Test: $5.3B (86.3%) (5.0%) (8.7%) Semiconductor Assembly Process Dicing Die Attach Wire Bond Packaging** Plating Leadframe Assembly Substrate Wire Bond Assembly Substrate Flip Chip Assembly/TC
Slide 10: Operational Profile
Operational Profile Duiven & Drunen, (The Netherlands) Steinhausen, Radfeld, (Austria) (Switzerland) Chandler Suzhou Chengdu Korea Shanghai Leshan Taiwan Shenzhen Sales Office Thailand Philippines Malaysia Production Site Singapore Sales, Production and R&D Site YTD December 31, 2019 Europe/NA Asia
Slide 11: Summary Financials
Summary Financials Year Ended December 31, Long term, step function revenue growth in cyclical business (€ millions, except share data) 2017 2018 2019 • Last peak reached in 2017 at € 592.8 million Revenue 592.8 525.3 356.2 • Current performance affected by downturn starting in Q2-18 % seq. change 5
Slide 12: Increased Profitability vs. Last Downturn
Increased Profitability vs. Last Downturn 2015 2019 € millions 140 350 356.2 349.2 120 25.8% 100 Operating Income 300 91.9 Revenue +58.7% 80 16.6% 60 57.9 250 40 20 200 0 Revenue Operating Income February 2020 12
Slide 13: Business Model Objectives
Business Model Objectives Objectives Revenue € 800MM Addressable 40%+ Market Share Gross Margin 55-60% Net Margin 30-35% Headcount 80% Asia/20% Euro Split February 2020 13
Slide 14: Capital Allocation Trends
Capital Allocation Trends € millions 209.5 200 35.5 Dividends 167.1 Share Repurchases 150 44.7 • € 725.8 million distributions since 2011: • Includes € 72.9 million proposed 2019 dividend 100 88.8 • € 1.01 dividend proposal 2019 174.0 72.9 67.4 23.5 • Current € 75 million share repurchase program: 1
Slide 15: II. Market
Besi nam Il. MARKET February 2020 15
Slide 16: What Drives Besi's Business?
What Drives Besi’s Business? Tech capabilities in IDM customer and Macro GDP trends 24/7 production supply chain environment choice Timing of customer Competitive cycle roadmaps and times and capital spending scalability programs February 2020 16
Slide 17: Assembly Equipment Market Trends
Assembly Equipment Market Trends Assembly Equipment Market Market Size YoY Growth Rate 5.0 4.4 4.3 50% 3.7 4.0 3.5 3.3 3.5 30% US$ billions 3.1 3.0 3.0 25.8% 10% 22.9% 10.3% 12.5% 7.2% 2.0 -2.5% -10% 1.0 -16.5% -30% -30.4% 0.0 -50% 2014 2015 2016 2017 2018 2019E 2020E 2021E Source: VLSI January 2020
Slide 18: Assembly Equipment Market Composition
Assembly Equipment Market Composition Assembly Equipment Market * Besi Addressable Market * (2018: $4.3 billion) (2018: $1.8 billion) Plating Lead Trim & Form 1.7% Other 5.2% Assembly (Inspection, Wire Bonding Dicing) 22.8% 28.1% Molds & Presses 22.9% Die Bonding 44.6% Die Attach 64% Plating 0.7% Si
Slide 19: Besi Market Share Trends
Besi Market Share Trends 2014 2015 2016 2017 2018 • Market share trending upwards Total Assembly Market ($MM) $3,725 $3,119 $3,515 $4,421 $4,313 • Can vary p.a. based on customer Besi Market Share 13.5% 12.4% 11.9% 15.1% 13.9% roadmaps and advanced packaging needs Addressable Market ($MM) $1,622 $1,
Slide 20: Digital Society Increases Computing and Data Needs
Digital Society Increases Computing and Data Needs 3D Deep Deep neural Siri Alexa First SoC HW for graphics neural network with with NPU audio AI cards network GPU Source: Yole, January 2020 February 2020 20
Slide 21: Requiring Increased Density, Higher Accuracy and Smaller Form Factors
Requiring Increased Density, Higher Accuracy and Smaller Form Factors for Next Generation Devices 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 t
Slide 22: 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 23: Besi Portfolio Well Positioned by Node Size and Accuracy
Besi Portfolio Well Positioned by Node Size and Accuracy Estimated % of 2019 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 24: 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 50% 41% 43% • Advanced packaging applications have 45 40% 38% 39% 40% grown significantly since 2010 37% 34% 36% • Currently, estimated 38% of wafers use M wafers, 30
Slide 25: Fan Out WLP and TCB/TSV Are Emerging Advanced Packaging Process Technologies
Fan Out WLP and TCB/TSV Are Emerging Advanced Packaging 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 Fli
Slide 26: Besi End User Application Trends
Besi End User Application Trends • Mobile Internet, Computing and 2019 % of Revenue Automotive are largest end markets 35% 32% • Estimated 71% of revenue in 2019 30% • Percentages vary p.a. based on customer roadmaps 25% 22% 20% • Mobile is largest market 20% 17% • % varies based on timing and succe
Slide 27: Mobile: 5G Is Coming
Mobile: 5G Is Coming Drives Increased Mobile Data Traffic and New Applications Source: Ericsson Mobility Report Nov 2018 February 2020 27
Slide 28: 5G Rollout Creates New Opportunities in Besi End User Markets
5G Rollout Creates New Opportunities in Besi End User Markets Source: KPMG January 2020 February 2020 28
Slide 29: Besi Addressable Market Share of Mobile Increasing
Besi Addressable Market Share of Mobile Increasing Besi technology can support virtually all device platforms utilized in latest mobile devices. February 2020 29
Slide 30: Automotive: Long-Term Outlook Favorable
Automotive: Long-Term Outlook Favorable Electronic Content and Features Continue to Increase Electric vehicles could reach 50% of Electric cars will have 2x more semi market by 2030 content vs ICE cars Global light motor vehicle sales (m) Average $/Car Source: KPMG Automotive Semiconductor Market Mo
Slide 31: Automotive: Requires Variety of Package Formats
Automotive: Requires Variety of Package Formats Source: Amkor investor presentation April 2019 February 2020 31
Slide 32: Computing: Demand for Computing Power Growing Exponentially
Computing: Demand for Computing Power Growing Exponentially Source: Intel May 2019 February 2020 32
Slide 33: Computing: Assembly Process Ever More Critical Step In CPU Value Chain
Computing: Assembly Process Ever More Critical Step In CPU Value Chain 3D STACKING AND MULTI CHIP ARCHITECTURE AS IMPORTANT OR EVEN MORE IMPORTANT THAN FRONT END PROCESSES !!!!!! Source: ASML Investor Day Nov 2018 February 2020 33
Slide 34: III. Strategy
III. STRATEGY February 2020 34
Slide 35: Summary Operating Strategy
Summary Operating Strategy • Expand capabilities for: • Leverage technology leadership to gain share • FOWLP, TCB, panel size, ultra thin die • Increase mainstream penetration of global bonding and hybrid bonding supply chains with high quality, mid-range • Large area, ultra thin, wafer level moldin
Slide 36: Current Technology Roadmap
Current Technology Roadmap • IDMs investing in next Customers generation devices 5G Applications Artificial Intelligence Cloud Infrastructure Advanced Logic Apps • Increasing R&D activities Besi • Highly focused per customer roadmaps February 2020 36
Slide 37: Revenue Opportunities
Revenue Opportunities Roll out next generation 5G applications to mobile customers Expand share of Korean and Chinese Android market Favorable Drivers: Increase share of wallet in Memory/Logic space Digital Society Big Data Smart Everything Expand share of Japanese automotive supply chain Cloud Expa
Slide 38: Asian Production Transfer Has Reduced Break Even Revenue Levels
Asian Production Transfer Has Reduced Break Even Revenue Levels and Improved Cash Generation Asian Production Has Leading to Lower Fixed And Reduced Break Even Improved Cash Generation Significantly Expanded European + NA Headcount Revenue Levels Shipments Headcount € millions € millions 2,000 150 3
Slide 39: Materials Cost Reduction Is Also a Key Priority
Materials Cost Reduction Is Also a Key Priority Material costs are significant = ~35% of revenue Supply Chain Actions • 80% of material now purchased in Asia • Increased outsourcing of modules and high level systems • Vendor consolidation and volume discounts • Increased common parts • Increased Asi
Slide 40: Flexible Production Model Has Generated Consistent Gross Margins
Flexible Production Model Has Generated Consistent Gross Margins in Market Cycles Revenue Gross Margin 180 170 100% 159 161 Downturn 160 153 155 90% 140 80% 120 117 109 110 € millions Gross Margin % 100 93 93 93 92 92 70% 94 90 79 81 80 58.7% 58.0% 55.7% 57.3% 56.3% 56.5% 56.5% 56.4% 55.9% 56.0% 56.
Slide 41: Flexible Asian Workforce Has Significantly Enhanced Scalability
Flexible Asian Workforce Has Significantly Enhanced Scalability Fixed Headcount 2,000 100% 1,724 1,692 1,626 1,800 1,605 90% 1,549 1,546 1,534 1,600 80% 1,400 Headcount 71% 73% 72% 72% 1,200 67% 71% 70% 70% 1,000 60% • Headcount adjusted in downturn: 800 50% • 25.3% reduction from Q1-18 peak to Q4-1
Slide 42: Overhead Alignment With Market Cycles
Overhead Alignment With Market Cycles € millions 140 45% Baseline Opex Trends 2015-2019 40% 120 113.7 Baseline Operating Expense 35% 100 94.8 96.9 30% Opex/Revenues 27.1% 27.2% 80 25% 60 19.2% 20% 15% 40 10% 20 5% 0 0% 2015 2017 2019 Baseline Opex Baseline Opex/Revenues • Overhead aligned with order
Slide 43: CSR Highlights 2019
CSR Highlights 2019 Environmental Footprint • Reduced packaging, energy, waste and water usage • Installed solar panels at Malaysia facility • Developed system to better assess sustainability in product design • Received MISA ‘19 Audience Award for increasing solar panel efficiency • Implemented vid
Slide 44: Besi Strategic CSR Objectives
Besi Strategic CSR Objectives Safeguard safe and 2020 CSR Objectives healthy working conditions Maintain best Responsible practices tax practices environmental in all and ethical jurisdictions behavior Review Sustainability Strategy Reduce Reduce packaging, waste, CSR environmental impact of transpo
Slide 45: IV. Financial Update and Summary
IV. FINANCIAL UPDATE AND SUMMARY February 2020 45
Slide 46: Attractive Profit and Margins Maintained in Downturn
Attractive Profit and Margins Maintained in Downturn FY-19/FY-18 Q4-19/Q3-19 Revenue Net Margin Revenue Net Margin 600 100% 100 100% € 89.7 + 3.0% € 92.4 € 525.3 90% 90% - 32.2% 500 80% 80 80% € 356.2 Gross Margin Gross Margin 56.8% - 1.0 points 55.8% 70% 55.1% + 1.2 points 56.3% 400 70% OPEX OPEX R
Slide 47: Liquidity Trends
Liquidity Trends Cash and Deposits Net Cash 600 527.8 507.5 500 475.5 € 122.4 MM Q4-19 vs. Q3-19 Dividend 2018 • Net cash increased by € 23.4 million 408.4 (+21.9%) to € 130.3 million 400 383.7 361.7 Q4-19 cash movements • +€ 36.3 million cash provided by operations € millions 304.8 300 • - € 5.8 mi
Slide 48: Guidance Q1-20
Guidance Q1-20 Q4-19/Q1-20 Revenue Gross Margin Operating Expenses € 92.4 56.3% € 25.2 -10% +35% - 54%-56% - +10% +40% Q4-19 Q1-20 Q4-19 Q1-20 Q4-19 Q1-20 Baseline Operating Expenses € 23.7 +10% - +15% Q4-19 Q1-20 February 2020 48
Slide 49: Summary
Summary Assembly Long term Market presence Disciplined market ever secular trends has grown via strategic focus more critical in drive advanced key IDM has created an semiconductor packaging customers and industry leader value chain growth supply chains Tech leadership Asian production and scalable
Slide 50: V. Appendix
Besi nam V. APPENDIX February 2020 50
Slide 51: Revenue and Gross Margin Cycles Since 2006
Revenue and Gross Margin Cycles Since 2006 € millions 700 60.0% 55.8% Revenue Gross Margin 600 51.1% 50.0% -32.2% 500 39.5% 40.0% 424 400 34.1% -7.8% -6.9% 356 593 30.0% 4 year 300 302 averages 379 20.0% -12.9% 200 351 164 10.0% 100 191 0 0.0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2
Slide 52: IDM/Subcontractor Order Trends
IDM/Subcontractor Order Trends € millions 800 IDMs Subcontractors 680.9 700 600 35% 483.1 500 Orders 400 373.8 32% 348.3 348.7 300 49% 39% 49% 65% 200 68% 100 61% 51% 51% - 2015 2016 2017 2018 2019 February 2020 52
Slide 53: Baseline Operating Expense Trends
Baseline Operating Expense Trends 40 39.1 Baseline Opex Other Opex* 7.4 31.8 Operating Expenses (€ millions) 30.7 1.0 30 29.1 2.8 5.4 26.8 25.9 25.2 0.2 2.1 24.2 1.5 0.9 31.7 30.7 20 26.3 25.7 25.3 24.7 23.7 23.3 10 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 * Other Opex includes both short ter
Slide 54: Net Income Trends
Net Income Trends Net Income Variable Compensation (a) Net Margin 60% 51.0 50 47.1 3.8 50% 10.0 40 37.5 40% 3.8 € millions 29.3 36.5% 30 3.1 26.2 37.1 29.3% 30% 3.5 22.4 22.3 47.2 25.1% 24.0% 24.5% 3.5 3.1 20 15.9 20.4% 21.4% 20% 33.7 26.2 6.4 22.7 10 11.7% 19.2 18.9 10% 9.5 0 0% Q1-18 Q2-18 Q3-18 Q
Slide 55: Currency Exposure Trends
Currency Exposure Trends Revenue Expenses 2019 ∆ 2019 ∆ 2017 Currency Exposure 2018 (2015) 2019 2017 2018 2019 vs. €* Forex Financial Impact vs. €* Euro 18% 33% 32% 21% 29% 33% US dollar 82% 67% 68% 9% 9% 9% Malaysian ringgit - - - 31% 31% 25% Chinese renminbi - - - 13% 10% 11% Swiss franc - - - 19%
Slide 56: Cash Generation Trends
Cash Generation Trends € millions 200 184.1 180 168.2 160 140 120.1 120 CFO/Revenue 35.0% 33.7% 98.7 100 86.5 28.4% 26.3% 80 24.8% 60 40 20 0 2015 2016 2017 2018 2019 Total Cash Flow from Operations CFO/Revenue February 2020 56
Slide 57: Share Repurchase Activity
Share Repurchase Activity 50 40.0 44.7 45 35.0 40 35.5 30.0 35 Avg Cost per Share € 24.31 25.0 30 € 23.74 € millions € 21.79 25 22.4 22.8 20.0 20 15.0 15 € 12.44 10.0 € 8.93 10 4.0 5.0 5 0 0.0 2015 2016 2017 2018 2019 Share Repurchases Average Cost per Share • 3.1 million shares (€ 67.1 million) pur
Slide 58: Dividend Trends
Dividend Trends Dividend (€) Dividend Yield 3.00 Cumulative dividends of € 577.0M since 2011, or € 7.74 per share* 120% 115% 2.50 2.32 110% 2.00 107% 105% 1.67 1.50 100% 100% 1.01 95% 1.00 93% 0.87 91% 0.60 90% 90% 0.50 85% 0.00 80% 2015 2016 2017 2018 2019** Dividend Dividend Payout Ratio* * Calcul
Slide 59: Besi Shareholder Information
Besi Shareholder Information Symbol/ • BESI Avg. Daily Volume & Liquidity Avg Vol * Avg Price (€ thousands) Index • Euronext Midcap AMX 1000 25,000 Volume (thousands) 800 20,000 Market Market • € 2.8 billion 600 15,000 Cap* ($ 3.0 billion) Profile 400 10,000 200 5,000 Dividend • Pay out 40-100% of P
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