Asmpt Limited · HKEX:522

Asmpt — H1 2019 Earnings Presentation

48 slides from Asmpt's earnings presentation, Jul 24, 2019

  1. Slide 1: 2019 Interim Results Announcement

    2019 Interim Results Announcement 24 July 2019

  2. Slide 2: Disclaimer

    Disclaimer The information contained in this presentation is provided for informational These forward-looking statements reflect the Company’s current expectations, purpose only, and should not be relied upon for the purpose of making any beliefs, hopes, intentions or strategies regarding the future

  3. Slide 3: Top 100 Global Technology Leaders

    OVERVIEW Top 100 Global Technology Leaders The Only Back-end Equipment Supplier Being Recognized “ The Top 100 Global Technology Leaders are the organizations poised to propel Recognised alongside: the future of technology Microsoft Apple Intel TSMC Brian Scanlon, Chief Strategy Officer Cisco SAP Th

  4. Slide 4: The World's Back-End Equipment Technology & Materials Market Leader

    OVERVIEW The World’s Back-End Equipment Technology & 44.7% Market Leader Q2 2019 Group Revenue: Materials 12.4% SMT Solutions USD 461m 42.9% (CAGR 2009 - Q2 2019 LTM 13.8%) 4

  5. Slide 5: ASMPT Global Presence

    OVERVIEW ASMPT >2,000 >1,400 10 12 Global Presence Global R&D staff Patents on key leading edge R&D centres worldwide Manufacturing facilities technologies Weymouth Beuningen Munich Porto Regensburg Boston Huizhou Taoyuan Hong Kong Shenzhen Sales Offices Chengdu Business Centre / R&D / Johor Manufac

  6. Slide 6: ASMPT's Major Facilities Around The World

    ASMPT’S OVERVIEW Major Facilities Around The World Regensburg Huizhou (惠州) Fuyong (福永) Longgang (龙岗) Weymouth Munich Taoyuan Beuningen Boston Hong Kong Porto Chengdu (成都) Sales Offices Business Centre / R&D / Manufacturing Site Singapore Johor Johor (Expansion) 6

  7. Slide 7: Three Business Segments With Leading Market Positions

    Three Business Segments With OVERVIEW Leading Market Positions SM T SO L UT I O NS #1 in SMT Equipment Market BACK - E ND EQ UI PMENT Since 2016 #1 in Assembly 2018 Worldwide SMT Market Share: & Packaging ~23% Equipment Market Since 2002 2018 Worldwide PAE Market Share: MAT ERI AL S ~25% #3 in Leadf

  8. Slide 8: 2019 Q2 Highlights

    Q2 HIGHLIGHTS 2019 Q2 Highlights

  9. Slide 9: QoQ Bookings Rebound Across the Board

    Q2 HIGHLIGHTS QoQ Bookings Rebound Across the Board USD QoQ  SMT: Bookings surged 54.4% QoQ to a near record Group 602m +30.8%  CIS: Momentum continued to be strong Back-end Equipment Segment 247m +10.9%  Advanced Packaging: Good momentum continuing Materials Segment 59m +28.5%  Materials: Conse

  10. Slide 10: Q2 Bookings – Business Segments

    Q2 Bookings – Business Segments Q2 HIGHLIGHTS QoQ Growth: QoQ Growth: QoQ Growth: +10.9% +54.4% +28.5% Back-end Equipment (USD'M) SMT (USD'M) Materials (USD'M) 450 350 100 400 90 296 300 80 350 250 70 300 59 247 200 60 250 50 200 150 40 150 100 30 100 20 50 50 10 0 0 0 Q1 16 Q4 16 Q3 17 Q2 18 Q1 19

  11. Slide 11: Q2 Billing Highlights

    Q2 HIGHLIGHTS Q2 Billing Highlights USD QoQ  Back-end Equipment bounced back Group 461m -1.2%  Double-digit QoQ growth from Materials Back-end Equipment Segment 206m +5.2%  SMT revenue declined due to weak booking in previous quarter  Strong Q2 orders to translate into good Materials Segment 57m

  12. Slide 12: Q2 Billings – Business Segments

    Q2 Billings – Business Segments Q2 HIGHLIGHTS QoQ Growth: QoQ Growth: QoQ Growth: +5.2% -10.3% +13.2% Back-End Equipment (USD’M) SMT (USD’M) Materials (USD’M) 400 350 80 350 300 300 60 57 250 250 198 206 200 200 40 150 150 100 100 20 50 50 - - - Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q1 Q3 Q1 Q3 Q1

  13. Slide 13: Q2 GM Improvement Across All Three Segments

    Q2 HIGHLIGHTS Q2 GM Improvement Across All Three Segments QoQ  Across the board cost reduction initiatives taking effect Group 35.7% +185 bps  Favourable product mix due to contribution from Advanced Packaging and CIS Back-end Equipment Segment 40.8% +153 bps  Group headcount reduced YoY by ~2,40

  14. Slide 14: Back-end Equipment Segment

    Q2 HIGHLIGHTS Key Highlights: QoQ Bookings Growth: Back-end Equipment Segment +10.9%  CIS  Driven by folded lenses and multiple cameras  More cameras per phone offsetting smartphone shipment rate decline  Advanced Packaging  Contributed close to 20% of Back-end Equipment  More revenue recognit

  15. Slide 15: SMT Segment

    Q2 HIGHLIGHTS Key Highlights: QoQ Growth: +54.4% SMT Segment Quarterly SMT Bookings (USD'M)  Benefited from 5G infrastructure build-up 350 296 300  Strong demand from China market 250 200  Continued demand from Automotive, Industrial and Consumer Applications 150 100 50 0 Q1 16 Q4 16 Q3 17 Q2 18

  16. Slide 16: Materials Segment

    Q2 HIGHLIGHTS QoQ Growth: Key Highlights: +28.5% Materials Segment Quarterly Materials Bookings (USD'M) 100 90  Consecutive two quarters of QoQ Bookings 80 growth 70 59  Leadframe market has bottomed out 60 50 40 30  Likely signaling market recovery; pace? 20 10 0 Q1 16 Q4 16 Q3 17 Q2 18 Q1 19 16

  17. Slide 17: 1H 2019 Revenue Breakdown by Application Markets

    Q2 HIGHLIGHTS 1H 2019 Revenue Breakdown by Application Markets Top 5 Customers Revenue Contribution More Resilient in a Downturn with Multiple Application Markets Strategy 17

  18. Slide 18: Sustainable and Gradually Increasing Dividends

    Q2 HIGHLIGHTS Sustainable and Gradually Increasing Dividends Dividends Per Share (HKD) & Dividend Payout Ratio 2.00 400% 1.80 350% 295% 1.60 1.40 300% 1.40 1.30 1.30 1.30 1.20 250% 1.20 1.10 1.00 1.00 200% 0.80 0.80 150% 0.60 0.40 100% 0.40 50% 0.20 0.00 0% 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18 1H

  19. Slide 19: R&D Commitment Makes Us a Preferred Partner of Choice

    Q2 HIGHLIGHTS R&D Commitment Makes Us a Preferred Partner of Choice R&D expenses 250 1H 2019 R&D 200 expenditure USD million 150 12.9%  US$ 106 million 100  12.9% of 50 Equipment Sales 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1H 2019 USD1,529 million invested in R&D Packa

  20. Slide 20: An Extensive Customer Base

    Q2 HIGHLIGHTS An Extensive Customer Base 1H 2019 Geographical Distribution of Revenue  No single customer accounted for more than 10% of Group revenue Thailand, 2.9% Korea, 2.9%  Top 5 customers accounted for 15% of Group’s Taiwan, 4.7% 1H 2019 revenue Philippines, 2.6% Vietnam, 6.1% Malaysia, 6.4

  21. Slide 21: Endless Opportunities for ASMPT in the Digital World

    Endless Opportunities for ASMPT in the Digital World

  22. Slide 22: Data-Centric Era will spur Semiconductor Demand

    TRENDS Data-Centric Era will spur Semiconductor Demand Collect Transmit Store Analyse Visualise Camera, 3D Sensing, 5G, WiFi, LiFi Big Data Centre, AI, TPU, Data AR, VR, Micro Industry IoT, Sensor, Cloud Computing, Analytics, HPC LED, Mini LED LIDAR Memory ASMPT’s Enabling • CMOS Imaging • Silicon P

  23. Slide 23: Data Traffic To Continue 'Exploding In Waves'

    TRENDS Data Traffic To Continue ‘Exploding In Waves’ Over The Next Years 4.75 3.83 3.05 87x 2.41 1.87 1.46 222x 0.02 2005 - 2017A 2018A 2019F 2020F 2021F 2022F Global Data Traffic Facts (in Zettabytes) Source: Cisco Visual Networking Index: Forecast and Trends, 2017–2022 White Paper (Updated Februar

  24. Slide 24: Smartphone Innovations Continue to Drive CIS Business

    Smartphone Innovations APPLICATIONS Continue to Drive CIS Business Under-Screen Camera (USC) (Super-thin, thread-less lens) Multi-Camera Combo, Folded optics (WFOV -> 50x Super Zoom) Super High Resolution (24MP -> 48MP -> 64MP -> 100MP) Biometrics 3D sensing, Under-Display FPS 24

  25. Slide 25: The Role Of The Camera In The Data Era Redefined

    APPLICATIONS The Role Of The Camera In The Data Era Redefined Today Future Industrial Security: Videos Inspection Features with Drones Recognition Still Images Autonomous AR/VR Vehicles Social Media Artificial Content Intelligence Source: Youtube, Facebook, Instagram, IT World Canada, Nvidia, Precis

  26. Slide 26: Enhanced Technology That Meets Critical Requirements Of The Digital World

    APPLICATIONS Enhanced Technology That Meets Critical Requirements Advanced Packaging Of The Digital World CRITICAL REQ UI REMENT S: Greater Storage 5G Connectivity Higher Bandwidth Infrastructure No Latency Lower Power Heterogeneous Integration 26

  27. Slide 27: Advanced Packaging: The Game Changer In Semiconductor Revolution

    APPLICATIONS Advanced Packaging: The Game Changer In FI RE BI RD NE X X PVD | ECD Bumping,TSV LAS E R 1 2 0 5 Laser Separation Wafer Dicing and TCB Semiconductor Revolution FLI & RDL Grooving S I P LACE CA NUCLE US Die Attach & SMT Pick and Place Wafers and SMT HBM / Wafer and Panel Feeders Memory X

  28. Slide 28: Growth of Packaging Market Mainly Driven by Advanced Packaging

    TRENDS Growth of Packaging Market Mainly Driven by Advanced Packaging A.I. Share within Semi Global Packaging Market (Billion $) Industry Expected to Grow $84 B to >$100B 84 in the Next Decade 70 $53 B 56 ~2X 42 28 Deep Language 14 learning processing 0 2014 2023 Robots Vision Advanced Conventional

  29. Slide 29: Expanding TAM to include AOI

    APPLICATIONS Expanding TAM to include AOI (Automated Optical Inspection) Industry Requirements Application Markets & CIS Automotive Advanced Packaging ▪ Demands High Quality ▪ 100%, on-line high ▪ Zero Foreign Particles ▪ Zero PPM Defects speed inspection ASMPT’s AOI Solutions 1µm Particle 2D and 3D

  30. Slide 30: Future Growth Drivers for OPTO Business

    APPLICATIONS Future Growth Drivers for OPTO Business MiniLED MicroLED Medium to Large Small Gadget & RGB / BLU Display Transparent Display SOGO Department Store, Causeway Bay, Hong Kong ~ 66.1% ~ 139.5% Market Size CAGR Market Size CAGR (2019 – 2027) (2019 – 2027) Source: Yanoresearch, Apr 2019 30

  31. Slide 31: Booming Applications In Photonics Market

    APPLICATIONS Si Photonics-based Transceivers Revenue CAGR (2018 – 2024) Booming Applications ~ 44.5 % In Photonics Market Source: Yole, Apr 2019 Data Center Telecommunication LIDAR & Interconnects Sensors Defence & Intra-car Industrial Medical Aerospace Interconnects Communication 31

  32. Slide 32: How will 'Smart Cars' Drive ASMPT's Growth?

    APPLICATIONS How will ‘Smart Cars’ 5G to Cloud Connectivity Vehicle-to-X (Vehicle, Infrastructure, Drive ASMPT’s Network, Devices) communications Enable “V2X” communications Growth? Sensors Image, LIDAR, Radar The eyes and ears to gather information from the Road Power Management Battery Technology

  33. Slide 33: Outlook

    Outlook ASM 1) Pacific Technology

  34. Slide 34: Outlook

    OUTLOOK Outlook  Q3 Group Billing  Range of USD 550m to USD 600m  All three segments expected to deliver QoQ growth  Q3 Group Booking  Expected ▼ QoQ due to seasonality  Back-end Equipment and Materials Likely ▲QoQ  Q3 Group Gross Margin  Expect slight improvement only, being constrained by

  35. Slide 35: Industry Growth Forecast (2019)

    Industry Growth Forecast (2019) OUTLOOK Semiconductor Industry Forecast Global Assembly & Packaging Equipment Market 40% VLSI, Jan-19 30% -1.0% 20% IHS Markit, Jul-18 4.0% 10% 6.7% IC Insights, Jan-19 1.6% 0% Cowan LRA, Aug-18 -10% 5.0% 2.6% -20% WSTS, Mar-19 -3.0% -30% 2013 2014 2015 2016 2017 2018

  36. Slide 36: Recent Awards & Recognition

    AWARDS Recent Awards & Recognition Recent Awards & Recognition  HKMA Quality Award (2019) Latest  It is conferred to ASMPT (Hong Kong Operations)  Award for business excellence and quality achievement  Technology Achievement Grand Award of HKIA 2017  (for the third time)  Federation of HK Indu

  37. Slide 37: Recent Awards & Recognition VLSI Awards 2019

    AWARDS Recent Awards & Recognition VLSI Awards 2019 Latest 37

  38. Slide 38: 2019 Q2/1H Financial Highlights

    2019 Q2/1H Financial Highlights

  39. Slide 39: Q2/1H Group Bookings

    FINANCIAL REVIEW Q2/1H Group Bookings QoQ Growth: Q2 2019 Bookings 1H 2019 Bookings +30.8% USD YoY QoQ USD YoY HoH 800 700 602 600 Group 602m -17.3% +30.8% 1,062m -28.3% -2.8% 500 400 300 Back-end 200 Equipment 247m -30.3% +10.9% 470m -38.3% -5.4% Segment 100 0 Materials Q1 14 Q4 14 Q3 15 Q2 16 Q1 1

  40. Slide 40: Q2/1H Group Billings

    FINANCIAL REVIEW Q2/1H Group Billings QoQ Growth: Q2 2019 Billings 1H 2019 Billings -1.2% USD YoY QoQ USD YoY HoH Group 461m -31.4% -1.2% 927m -24.4% -26.8% 600 461 400 Back-end Equipment 206m -43.2% +5.2% 402m -37.6% -25.0% Segment 200 Materials 57m -25.0% +13.2% 108m -28.6% -21.3% 0 Segment Q1 14

  41. Slide 41: Q2/1H Group Financial Highlights

    FINANCIAL REVIEW Q2/1H Group Financial Highlights Q2 2019 1H 2019 Q2 2019 1H 2019 YoY QoQ YoY HoH Bookings (USD) 602m -17.3% +30.8% 1,062m -28.3% -2.8% Revenue (USD) 461m -31.4% -1.2% 927m -24.4% -26.8% Gross Margin 35.7% -751 bps +185 bps 34.8% -588 bps -67 bps EBIT (HKD) 221m -81.0% -16.3% 484m -7

  42. Slide 42: Q2/1H Segment Results – Back-End Equipment Business

    FINANCIAL REVIEW Q2/1H Segment Results – Back-End Equipment Business Q2 2019 1H 2019 Amount YoY QoQ Amount YoY HoH Bookings (USD) 247m -30.3% +10.9% 470m -38.3% -5.4% Billings (USD) 206m -43.2% +5.2% 402m -37.6% -25.0% Gross Margin 40.8% -1,003 bps +153 bps 40.0% -794 bps -331 bps Segment Profit (HK

  43. Slide 43: Q2/1H Segment Results – Materials Business

    FINANCIAL REVIEW Q2/1H Segment Results – Materials Business Q2 2019 1H 2019 Amount YoY QoQ Amount YoY HoH Bookings (USD) 59m -23.7% +28.5% 105m -30.4% +12.0% Billings (USD) 57m -25.0% +13.2% 108m -28.6% -21.3% Gross Margin 11.4% -182 bps +103 bps 11.0% -224 bps +144 bps Segment Profit (HKD) 20m -55.

  44. Slide 44: Q2/1H Segment Results – SMT Solutions Business

    FINANCIAL REVIEW Q2/1H Segment Results – SMT Solutions Business Q2 2019 1H 2019 Amount YoY QoQ Amount YoY HoH Bookings (USD) 296m -0.1% +54.4% 487m -14.5% -3.0% Billings (USD) 198m -15.1% -10.3% 418m -3.0% -29.7% Gross Margin 37.5% -376 bps +301 bps 35.9% -347 bps +156 bps Segment Profit (HKD) 209m

  45. Slide 45: Free Cash Flow and Capital Investment

    FINANCIAL REVIEW Free Cash Flow and Capital Investment Free Cash Flow (HK$ m) 2,000 1,500 1079 1,000 806 500 437 0 2013 2014 2015 2016 2017 2018 1H 2019 Capital Investment (US$ m) 200 175 136 150 136 125 26 89 100 26 75 50 104 63 72 82 74 25 57 55 47 0 _ 2014 . , 2015 ^ * 2016 - = 2017 + # 2018 2018

  46. Slide 46: Financial Metrics

    FINANCIAL REVIEW Financial Metrics Return on Invested Capital (ROIC) Return on Equity (ROE) 40% 30% 35% 25% 30% 20% 25% 20% 15% 15% 10% 10% 5% 5% 0% 0% 2014 2015 2016 2017 2018 1H 2019 2014 2015 2016 2017 2018 1H 2019 (Annualized) (Annualized) 46

  47. Slide 47: Working Capital Management

    FINANCIAL REVIEW Working Capital Management 12,000 Working Capital 350 Cash Conversion Cycle (Days) 10,000 300 250 8,000 HKD millions 200 6,000 150 4,000 100 2,000 50 0 0 2014 2015 2016 2017 2018 1H 2019 2014 2015 2016 2017 2018 1H 2019 Accounts Receivable 8,000 Inventory 6,000 7,000 5,000 6,000 HKD

  48. Slide 48: Enabling the Digital World

    NSN ANS BS Pacific Technology \ ENABLING THE DIGITAL WORLD

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