Be Semiconductor Industries N.v. · EURONEXT:BESI
Be Semiconductor Industries — Investor Presentation (November 2018)
50 slides from Be Semiconductor Industries's investor presentation, November 2018
Slide 1: Investor Presentation November 2018
INVESTOR PRESENTATION November 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 November 2018 3
Slide 4: I. Company Overview
I. COMPANY OVERVIEW November 2018 4
Slide 5: Besi Overview
Besi Overview • Leading assembly equipment supplier with #1 and #2 positions in key markets. 36% 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; 1,914 em
Slide 6: Company History and Strategic Plan Execution
Company History Die Attach Acquisitions 65% 600 € 585.9 60% •2000 2002 2005 2009 500 55% Product Strategy • Expanded advanced packaging leadership into die attach area 50% Revenue (euro millions) • Gained market share organically and via acquisitions 56.7% Gross Margin (%) 400 • Gained mindshare wit
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 Leadframe Assembly Substrate Wire Bond Assembly Substrate Flip Chip Assembly/TCB Wafe
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 September 30, 2018 Europe/NA Asia •
Slide 11: Summary Historical Financials
Summary Historical Financials Year Ended December 31, (€ millions, except share data) 2015 2016 2017 YTD 17 YTD 18 Revenue 349.2 375.4 592.8 439.5 432.7 % seq. change (8%) 8% 58% (2%) Gross margin 49% 51% 57% 57% 57% EBITDA 73.0 89.8 222.8 167.3 157.2 Pretax income 57.1 73.6 199.2 150.5 132.9 Net in
Slide 12: Capital Allocation Policy and Distribution Trends
Capital Allocation Policy and Distribution Trends Cumulative distributions: € 470.7 MM since 2011* 196.5 Current policy: 200 Dividends Share Repurchases 22.5 • Net cash above € 80 million available for dividends and share repurchases 160 • Absolute level and mix can vary per annum euro millions 120
Slide 13: Besi Market Information
Besi Market Information Symbol/ • BESI Avg. Daily Volume (c) & Liquidity Index • Euronext Midcap AMX Avg Vol * Avg Price (€ thousands) 1000 25,000 Volume (thousands) Market Market • € 1.4 billion ($1.6 USD) 800 20,000 • 74 million shares net (b) 600 15,000 Profile Cap (a) 400 10,000 Dividend • Pay o
Slide 14: II. Market
Besi nam Il. MARKET November 2018 14
Slide 15: Assembly Equipment Market Trends
Assembly Equipment Market Trends Assembly Equipment Market Market Size YoY Growth Rate 6.0 5.0 30% 4.6 4.5 5.0 3.9 4.7 20% 26.8% US$ billions 3.7 23.9% 4.0 3.0 3.2 10% 16.1% 9.9% 3.0 0% 2.6% 2.0 -3.5% -10% 1.0 -20% -22.0% -17.5% 0.0 -30% 2013 2014 2015 2016 2017 2018E 2019E 2020E Source: VLSI Octobe
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 & Form Plating 5.0% 1.5% Molds Other 7.2% Assembly Wire Bonding (Inspection, 21.6% Dicing) 31.0% Die Bonding Presses 49.8% 15.4% Die Attach 66% Plating Sing
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: 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 19: Changes in Assembly Processes, Structures and Equipment
As Well As Changes in Assembly Processes, Structures 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
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, es
Slide 23: Besi End User Application Trends
And Is Reflected in Besi End User Application Trends 2017 % of Revenue • Mobile Internet devices, Computing 40% 35% and Automotive are largest end 35% markets and most rapidly growing 30% 25% 25% • New device introductions in 2017 grew mobile internet share to 35% 20% 17% 15% • Computer/PC growth du
Slide 24: Besi Has Gained Share In Its Addressable Markets
Besi Has Gained Share In Its Addressable Markets 2013 2014 2015 2016 2017 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% 38.9% 35.3% 48.4% Flip Chip 24.1% 33.2% 3
Slide 25: 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? Tech capabilities in IDM customer and Macro GDP trends 24/7 production supply chain environment choice Timing of customer Competitive cycle road maps and times and capital spending scalability programs November 2018 26
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. November 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 $471 25% 29% Wire Bonding Wire $991 Bonding 75% $1,155 Flip Chip Advantages 71% Reduces board area Offers higher speed by up to 95%. CAGR 2017 – 2022E electrical Require
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 November 2018 30
Slide 31: Summary Strategy
Summary Strategy • Leverage technology leadership to reach • Expand capabilities for: 40-45% market share in next 5 years • eWLB, TCB, panel size, ultra thin die bonding • Market high quality mid-range products to • Large area, ultra thin, wafer level molding increase mainstream penetration • Solar
Slide 32: Revenue Opportunities
Revenue Opportunities Roll out 3D imaging and other features to 4G and 5G mobile customers/supply chains Expand share of Korean and Chinese Android mobile customers Favorable Drivers: Sell next generation equipment to increase SoW in the Memory/Logic space Digital Society Big Data Expand share of Ja
Slide 33: 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 34: 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 capex and inventory investment • Reduces personnel, tran
Slide 35: 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 1,738 1,688 75% 1,800 1,489 1,549 67% 71% 71% 72% 72% 72% • Asia now represents 72% of total fixed 1,600 1,489 65% 1,400 60% 64% headcount, up from 57% in 2013 Headcount 1,200 55% 1,000 • European a
Slide 36: 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% 1,738 1,600 57.1% 56.9% 57% 1,600 1,400 1,434 454 1,200 55% +7.3% 1,200 423 1,000 1,301 53% 482 769 +104% 800 236 51.0% 51% 800 68 +224% 600 220 675 49% 48.8% 4
Slide 37: 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 38: IV. Financial Review and Summary
IV. FINANCIAL REVIEW AND SUMMARY November 2018 38
Slide 39: Solid YTD-18 Performance Despite Softening Market Conditions
Solid YTD-18 Performance Despite Softening Market Conditions. Margins Stay at Elevated Levels YTD-18/YTD-17 Q3-18/Q2-18 Revenue Net Margin Revenue Net Margin 480 100% € 161.1 100% -1.5% 160 € 439.5 440 € 432.7 -27.6% 90% 90% 140 400 80% € 116.7 80% 360 Gross Margin Gross Margin 120 57.4% - 0.5 point
Slide 40: Liquidity Trends
Liquidity Trends Cash and Deposits Net Cash 600 571.0 Cash flow generation significantly improved. Has € 174.0 MM supported shareholder friendly capital allocation: 527.8 Dividend 2017 • Total cash of € 443.5 million & net cash of € 160.1 million as 500 of Q3-18 443.5 • € 196.5 million of dividends
Slide 41: 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 42: Guidance Q4-18 and FY 2018
Guidance Q4-18 and FY 2018 Q4-18E/Q3-18 2018E/2017* Revenue Revenue € 116.7 € 592.8 -20% 11% - - -25% 12% Q3-18 Q4-18 2017 2018 Gross Margin Gross Margin 58.0% 57.1% 54% 56% - - 56% 57% Q3-18 Q4-18 2017 2018 Operating Expenses Operating Expenses € 29.1 €129.2 Approx. Approx. Equal Equal Q3-18 Q4-18
Slide 43: Summary
Summary Long term Assembly market Market presence secular trends Disciplined ever more critical has grown via drive continued strategic focus step in key IDM advanced has created an semiconductor customers and packaging industry leader value chain supply chains growth Successful Asian Tech leadershi
Slide 44: V. Appendix
V. APPENDIX November 2018 44
Slide 45: 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 Gross Margin % euro in millions 120 117 60.0% 110 58.7% 100 58.0% 57.3% 90 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 Q4-18* * Midpo
Slide 46: 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 1.5 140 150 132 1.3 1.3 1.0 1.0 1.0 100 0.9 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) Sep 18
Slide 47: Revenue and Gross Margin Cycles Since 2006
Revenue and Gross Margin Cycles Since 2006 euro millions 700 60.0% 56.6% Revenue Gross Margin 600 51.1% -11.3% 50.0% 526 526 500 39.5% 40.0% 424 400 34.1% -7.8% -6.9% 593 30.0% 4 year averages 300 302 526 -12.9% 379 20.0% 200 351 164 10.0% 100 191 0 0.0% 2006 2007 2008 2009 2010 2011 2012 2013 2014
Slide 48: Base Line Operating Expense Trends
Base Line Operating Expense Trends Base Opex Other Opex 45 39.1 40 34.1 34.2 35 7.4 31.6 30.5 30.4 4.4 3.0 0.9 29.1 30 3.3 4.9 2.9 25 20 15 29.7 31.2 31.7 30.7 25.6 27.1 26.2 10 5 0 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Baseline Opex 25,6 29,7 27,1 31,2 31,7 30,7 26,2 As % of Revenue 23,2% 17,5%
Slide 49: 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% euro in millions 33.2% 43.6 29.1 29.3 30 30.8% 30% 28.4% 29.3% 37.1 3.1 4.8 25.1% 23.9% 47.2 22.0% 20 20% 24.3 26.2 10 10% 0 0% Q1-17 Q2-17 Q3-17 Q4-17 Q1-18
Slide 50: Cash Generation Trends
Cash Generation Trends euro millions % of Revenue 180 Total Cash Flow from Operations As % of Revenue 168.2 160 29.5% 28.4% 140 26.3% 127.5 24.8% 120 98.7 100 19.3% 86.5 80 73.3 60 40 7.1% 18.1 20 0 2013 2014 2015 2016 2017 2018 YTD November 2018 50
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