Onto Innovation Inc. · NYSE:ONTO
Onto Innovation — Cowen's 2020 Virtual TMT Conference
21 slides from Onto Innovation's conference presentation, May 27, 2020
Slide 1: Growth in Process Solutions
Growth in Process Solutions Investor Presentation MAY 2020
Slide 2: Safe Harbor
• The information presented herein contains forward-looking statements that relate to anticipated future operating results and performance. These statements are only predictions based on management’s current expectations and assumptions, including market size and forecasted growth, Total Available M
Slide 3: Introducing Onto Innovation
Introducing Onto Innovation Wafer Fab Equipment (WFE) Market Share by Revenue Greater Scope and Scale Benefitting R&D and Customer Support Top 16 Suppliers Comprise 87% of Total Market 4 Suppliers 64% 12 Suppliers 23% 15 Suppliers 7% ALL OTHERS (15+) 6% Source: Company Rank Order based on 2019 Share
Slide 4: Onto Innovation: Q1 Snapshot
Onto Innovation: Q1 Snapshot High tech capital equipment company specializing in process solutions for semiconductor and related markets BALANCE SHEET BALANCED REVENUE COMPANY DISTRIBUTION $292 Million Cash; NYSE (ONTO) No Debt $52 Million Stock Repurchase YTD 21% Q1 2020 REVENUE GROSS MARGIN 44% $1
Slide 5: Business Integration Update
Business Integration Update Operating Expenses Synergies $53 $52 $51 13% $50 $49 ~$25M $48 by 2020 $47 $46 87% $45 $44 Avg 2019 Opex Q1-20 Opex Q4-20 Gross Margin Operating Efficiencies 10% REDUCTION AHEAD OF SCHEDULE 5
Slide 6: Why Invest in Onto Innovation?
Why Invest in Onto Innovation? MARKET AND PRODUCT EXPAND GROSS AND INCREASE DIVERSITY OPERATING MARGINS SHAREHOLDER VALUE Expanding to a ~$25M cost synergies Strong cash generator $3B TAM in 2020 >$120M 6
Slide 7: 5G Contributes to Virtuous Cycle
5G Contributes to Virtuous Cycle Driving multiple Onto Innovation markets Advanced Packaging Memory / Specialty Mobile Logic Devices • Smartphones • Tablets ONTO • Wearables INNOVATION MARKETS 5G Massive IOT More Complex Data Growth • 1M Devices per Km2 Devices Center Beyond (Data) Mobile Infrastruc
Slide 8: Onto Innovation Broadly Serving Semiconductor Leaders
Onto Innovation Broadly Serving Semiconductor Leaders Si WAFER MEMORY/ S PECIALTY ADVANCED FOUNDRY MANUFACTURING LOGIC DEVICES PACKAGING 155 Customers Served* Top 10 Customers Represent 46% of Total Revenue *Proforma customer base: 12 months revenue for combined legacy companies The above logos are
Slide 9: Complementary Products, No Overlap
Complementary Products, No Overlap Dragonfly® G2 NovusEdge™ System System NSX® QS/FTIR System System MetaPULSE® JetStep® System Series IMPULSE® System Control Software R&D Leverage Across Atlas® System Entire Portfolio Discover® AI Software OPTICS SOFTWARE R&D Core Competencies 9
Slide 10: Product and Process Matrix for Onto Innovation
Product and Process Matrix for Onto Innovation Si Wafer Wafer Fab Advanced Packaging Mfg. Deposition / Etch / Bump / Etch / OQA Litho Implant Cleans CMP OQA TSV Dicing Litho Plating NovusEdge Inspection ● ● QS/FTIR Metrology ● ● Atlas III+ Metrology ● ● ● IMPULSE+ Metrology ● ● ● MetaPULSE G Metrolo
Slide 11: R&D Pipeline Supports Innovation and Growth
R&D Pipeline Supports Innovation and Growth New innovation provides increasing value to customers NEW INCREASING OUR PRODUCTS New Products: PACE OF INNOVATION >130M NovusEdge System QS4300/FTIR System of System Integrated Metrology Revenue Dragonfly G2 Atlas III+ 2019 Standalone Planar System System
Slide 12: We Deliver Differentiated Solutions
We Deliver Differentiated Solutions • Extensive software portfolio enhances value of Onto Innovation products SPECIFICATIONS MEET SPECIFICATION TOOL SALE Onto Innovation Quality Data Process Adjustment SOLUTION SALE Onto Solution Adoption Process Solutions >70% Machine External Data Learning Sources
Slide 13: Complementary Technology Expand Our Markets
Complementary Technology Expand Our Markets PRODUCT SYNERGIES R&D INVESTMENTS $500M SAM Expansion $1B TAM Expansion $3 UNPATTERNED WAFER, INDUSTRIAL, & HD DISPLAY Process Control Software Adv. Packaging Lithography $2 Macro Inspection ($B) FILMS Optical Metrology & SOFTWARE $1 $0 SOM SAM TAM Source:
Slide 14: Expanding Footprint in Silicon Wafer Manufacturers
Expanding Footprint in Silicon Wafer Manufacturers Laying foundation for additional growth ~88% Growth in 2019 3 New NovusEdge System customers 90% OF GLOBAL WAFER SUPPLY 4 New QS/FTIR System customers 2018 2019 Future Source: Siltronic investor materials, October 2019 Inspect Measure Analyze Soluti
Slide 15: Leading Edge Processes Require More Optical Metrology
Leading Edge Processes Require More Optical Metrology Atlas III+ Metrology selected for six new process slots in 2019 TRANSISTORS (LOGIC / DRAM) TOOL OF RECORD POSITIONS 7nm FinFet 5nm FinFet 3nm Nano-Sheet 6 NEW IN 2019 16 14 Device Generation & Node 12 1.3X 2X 3X Increases 10 INCREASING COMPLEXITY
Slide 16: Dragonfly G2 Inspection Gains Broad Adoption in 2019
Dragonfly G2 Inspection Gains Broad Adoption in 2019 Lays foundation for growth across multiple segments across the semiconductor value chain 26% Dragonfly System Revenue Growth 25 37% CUSTOMERS OSATs 2 New market expansions Foundry/Logic Memory Automotive Specialty 11% 2 New customers added 11% 16%
Slide 17: Panel Investments Continue in 2019 with Onto Innovation Suite
Panel Investments Continue in 2019 with Onto Innovation Suite Onto Innovation product suite improves productivity and yield for panel lithography WW CAPACITY (PANELS PER MONTH) 100,000 90K 6 7 OUT OF 2 New panel customers 80,000 60,000 SELECTED JETSTEP 40,000 LITHOGRAPHY 2 StepFAST solutions to exis
Slide 18: Synergies Contribute to Financial Operating Model
Synergies Contribute to Financial Operating Model GROSS MARGIN1 OPERATING MARGIN2 >100M +1% +3% FREE CASH FLOW2 • Share Capital Requirements • Better Working Capital Management • Supply Chain Synergies • Public Company Costs • Regional Support Costs • Operational Synergies SYNERGY CONTRIBUTIONS 1. G
Slide 19: Pro Forma Financial Model
Annual Revenue $600M Model $800M Model $1B Model Gross Margin 54% - 55% 55% - 56% 56% - 57% Pro Forma Financial Model* Operating Profit 24% - 25% 29% - 30% 32% - 33% Earnings per $2.40 - $2.50 $3.85 - $4.00 $5.05 - $5.25 Share *Non-GAAP Long Term Financial Model: excludes amortization and merger cos
Slide 20: Key Takeaways
Key Takeaways POSITIONED FOR GROWTH ACROSS STRONG FINANCIAL MODEL FUELS INCREASE SHAREHOLDER VALUE THE VALUE CHAIN PROFITABLE GROWTH Technical wins in 2019 lay foundation for Delivering $20M synergies ahead of plan Cash generation and deployment fuels growth; expanding TAM, SAM, and market Improving
Slide 21: Thank You
Thank You 谢谢 | 謝謝 ありがとう Obrigado Danke 감사합니다 Merci info@ontoinnovation.com www.ontoinnovation.com
Onto Innovation — Cowen's 2020 Virtual TMT Conference on 6ix