Be Semiconductor Industries N.v. · EURONEXT:BESI
Be Semiconductor Industries — Investor Presentation (October 2017)
46 slides from Be Semiconductor Industries's investor presentation, October 2017
Slide 1: Investor Presentation October 2017
INVESTOR PRESENTATION October 2017
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 V. Outlook & Summary October 2017 3
Slide 4: I. Company Overview
I. COMPANY OVERVIEW October 2017 4
Slide 5: Besi Overview
Besi Overview • Leading assembly equipment supplier with #1 and #2 positions in key markets. 35% addressable market share • Broad portfolio: die attach, packaging and plating Corporate Profile • Strategic positioning in substrate and wafer level packaging • Global mfg. operations in 6 countries; 2,0
Slide 6: Company History
Company History 600 65% Die Attach Acquisitions € 532.6 60% 500 •2000 2002 2005 2009 55% Products 400 •Expanded advanced packaging leadership position and market share 50% organically and via acquisitions 56.7% Revenue (€ millions) •Gained mindshare with key industry leaders Gross Margin (%) •Growth
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 • 2100 sD
Slide 8: Product Positioning
Product Positioning Semiconductor Manufacturing Equipment (2016: $43.1B)* Front end: $35.5B Assembly: $3.6B Test: $4.0B (82%) (9%) (9%) * Source: VLSI October 2017 Semiconductor Assembly Process Dicing Die Attach Wire Bond Packaging Plating Die Sort Die Bond Wire Bond Molding Trim & Form Plating Lea
Slide 9: Customer Ecosystem
Customer Ecosystem Customers OEMs End Products IDMs Subcontractors • Diversified, blue chip customer base, top 10 = 47% of 2016 revenue • Leading IDMs and subcontractors. 51/49% split in 2016 • Assemble chips for leading fabless companies: Qualcomm, Broadcom, MediaTek • Long term relationships, some
Slide 10: Current Operational Profile
Current Operational Profile Duiven & Drunen, (The Netherlands) Cham, Radfeld, (Austria) (Switzerland) Chandler Suzhou Chengdu Korea Shanghai Leshan Sales Office Shenzhen Taiwan Production Site Philippines Malaysia Sales, Production & Singapore R&D Site • Development activities in Europe LTM (as of S
Slide 11: Summary Historical Financials
Summary Historical Financials • Renewed revenue growth since 2015: • New advanced packaging (A/P) capacity Year Ended December 31, (€ millions, except share YTD* YTD* • More investment in smart phone data) 2014 2015 2016 2016 2017 features and sensors • Asian capacity build Revenue 378.8 349.2 375.4
Slide 12: Shareholder Returns 2011-2017
Shareholder Returns 2011-2017* 90 Cumulative: € 268.5 MM Dividends and 82.5 80 Share Repurchases 17.2 Dividends Share Repurchases 67.8 70 60.9 60 4.0 22.4 euro in millions 50 40 65.3 30 56.9 21.9 45.4 20 14.0 12.4 15.1 9.0 2.7 10 0.9 11.3 12.4 6.8 8.1 0 2011 2012 2013 2014 2015 2016 2017 YTD * * As
Slide 13: Besi Market Information
Besi Market Information Symbol/ • BESI Avg. Daily Volume & Liquidity Index • Euronext Midcap AMX 350 10,000 Avg Vol * Avg Price (€ thousands) 300 8,000 Market Volume (thousands) Market Profile 250 • € 2,505 MM ($2,957 Cap* MM) 200 6,000 150 4,000 100 Dividend • Pay out 40-80% of net 50 2,000 Policy
Slide 14: II. Market
Besi mam = Lu < oo <x = 14 October 2017
Slide 15: Assembly Equipment Market Trends
Assembly Equipment Market Trends Assembly Equipment Market Market Size YoY Growth Rate 5.0 4.7 30% 3.9 4.5 4.0 20% 26.8% 3.6 23.1% 3.0 3.2 10% (US$ billions) 3.0 13.5% 4.7% 0% 2.0 -10% 1.0 -20% -22.0% -17.5% 0.0 -30% 2013 2014 2015 2016 2017E 2018E Besi Revenue Source: VLSI October 2017 Revenue YoY
Slide 16: Assembly Equipment Market Composition
Assembly Equipment Market Composition Assembly Equipment Market * Besi Addressable Market * (2016: $3.6 billion) (2016: $1.4 billion) Lead Trim & Plating Other Form 2.0% Assembly 6.6% Wire Bonding Molds (Inspection, 21.8% 9.8% Dicing) 29.7% Die Attach 41.0% Presses 16.8% Die Attach 55% Plating 0.8%
Slide 17: Internet of Tomorrow Drives New Innovation Cycle
Internet of Tomorrow Drives New Innovation Cycle SoC 5G Connectivity Mobile Revolution Digital Society Requiring Increased Will Drive Functionality and Internet of Innovation in Many Leading Edge Tomorrow End User Advanced Applications Packaging Solutions October 2017 17
Slide 18: Growth in Internet Connected Devices Requires Changes in Process/Equipment
Growth in Internet Connected Devices Requires Changes in Process/Equipment 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 to complex 3D structures
Slide 19: Advanced Packaging Is the Future
Advanced Packaging Is the Future Greater Miniaturization Higher Accuracy Greater Complexity High Growth Areas: Fico Sawing Line Esec DB2100 • Mobile internet • Auto electronics • Driverless cars Esec DB2009 • Data Mining • Cloud Servers • IoT, Digital Society • Wearable devices FML wafer molding • A
Slide 20: 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 - 2021 45 45% 40% 39% 40 38% 40% 36% 37% • 34% of wafers use advanced packaging 35 34% 35% interconnects currently 31% 32% • Rapid expansion in mobile features 30 30% and autom
Slide 21: Besi End User Application Trends
And Is Reflected in Besi End User Application Trends 2016 % of Revenue 35% 30% 30% • Mobile Internet 25% 24% devices, Computing and Automotive are 20% 18% Besi’s three largest 15% and most rapidly 15% growing end user 10% 10% markets 5% 3% • Computer/PCs holding up due to high end 0% cloud server ma
Slide 22: New Smart Phone Designs Increase Besi's Addressable Market Potential
New Smart Phone Designs Increase Besi’s Addressable Market Potential Generation Generation Main Components Manufacturer IDM/OSAT Besi system Utilized 2012 2016 Processor X X Apple TSMC ->TSMC 8800CHM, MMS-LM Hynix/Micron/Sams DRAM Memory X X Hynix/Micron/Hanamicro 2100sD, FSL ung NAND Flash X X Hyni
Slide 23: Expanding Chinese Market Presence Is a Priority
Expanding Chinese Market Presence Is a Priority China Customer Revenue and Units Shipped 100% 200 20% 23% 30% 80% 50% 150 139 % of total revenue 60% 100 Units 40% 80% 77% 70% 50% 50 20% 33 0% 0 0 2014 2015 2016 Objective Other Besi Revenue China Revenue Units shipped from Chinese plant • Government
Slide 24: Flip Chip/Wire Bond Process Shift Is Another Revenue Opportunity
Flip Chip/Wire Bond Process Shift Is Another Revenue Opportunity 2016 2021 Wire Bonding Flip Chip Bonding Flip Chip Flip Chip $249 $400 22% 27% Wire Bonding Wire $861 Bonding Flip Chip Advantages 78% $1,106 73% Reduces board area Offers higher speed CAGR 2016 - 2021 by up to 95%. electrical Requires
Slide 25: TCB/TSV and Fan Out WLP Are Emerging Process Technologies
TCB/TSV and Fan Out WLP Are Emerging Process Technologies TCB/TSV (Substrate Based) Fan Out WLP (Wafer Level) Enabling technology for high Preferred process for high data end memory and optical transfer and optical devices in applications IoT, mobile and power Next step beyond Flip Chip 32 Stacked D
Slide 26: Besi Has Gained Share In Its Addressable Markets
Besi Has Gained Share In Its Addressable Markets Source: VLSI October 2017 and Besi estimates~ 2012 2013 2014 2015 2016 2017E* Besi Addressable Market 21.7% 26.4% 30.5% 31.3% 29.8% ~38% Total Die Attach 27.5% 31.9% 37.1% 37.5% 37.2% Die Bonding 29.7% 39.1% 40.3% 38.9% 37.5% Flip Chip 22.2% 24.1% 33.
Slide 27: And Has a Large Share of Wallet at Key Customers
And Has a Large Share of Wallet at Key Customers Share of Wallet Die Attach Packaging 2017 Sep 2017 Sep 2014 2015 2016 YTD* 2014 2015 2016 YTD* • Customers are largest Subcons Subcons semi mfrs. engaged in ASE 70% 80% 70% 60% ASE 35% 25% 15% 35% most advanced packaging Amkor 90% 95% 95% 75% Amkor 20
Slide 28: III. Strategy
III. STRATEGY October 2017 28
Slide 29: Strategic Update 2017
Strategic Update 2017 • Successful execution of revenue and cost initiatives continues • Increased addressable market share • Leading technology position in advanced packaging aids market share and margin development • Scalability of business model improved • Production ramp to € 600 million annual
Slide 30: Summary Strategy
Summary Strategy Maintain best in class tech leadership. Expand capabilities for: • eWLB, TCB, ultra thin die bonding • Large area, ultra thin, wafer level molding • Solar and battery plating Increase market presence and share in addressable markets • Increase addressable market share to 35-40% over
Slide 31: Besi Revenue Growth Drivers
Besi Revenue Growth Drivers World tooling up for new tech cycle <20 Higher % of nano mainstream Increased assembly smart phone equipment functionality applications Increased % of Chinese Emerging market and Revenue Growth process deployment Asian Drivers WLP and supply chains TCB New device Solar ce
Slide 32: Asian Production Transfer Has Helped Reduce Break Even Revenue Levels
Asian Production Transfer Has Helped Reduce Break Even Revenue Levels Asian Production Has Leading to Lower Fixed And Reduced Break Even Significantly Expanded European + NA Headcount Revenue Levels 1,800 847 300 900 120.0% 1,543 1,549 270 1,600 800 100.0% 1,400 250 98% 700 1,200 194 600 80.0% 802 2
Slide 33: Workforce Has Become More Asia Centric, Scalable and Flexible
Workforce Has Become More Asia Centric, Scalable and Flexible Fixed Headcount 1,800 1,549 1,701 75% 1,543 1,489 1,489 1,600 1,475 70% 1,404 67% 1,400 64% 65% 60% 1,200 57% 55% Headcount 1,000 54% 52% 800 48% 46% 45% 600 43% • Asia now represents 70% of total 40% 400 36% 35% fixed headcount 33% 200 3
Slide 34: Materials Cost Reduction Is Also a Key Priority
Materials Cost Reduction Is Also a Key Priority Material costs = 40% of revenue. Largest single cost Supply Chain Actions • 75% of material now purchased in Asia • Reduced personnel, transport, logistics and inventory • Enhanced cycle time/revenue ramping capability 50-55% thru • Will consolidate #
Slide 35: IV. Financial Review
IV. FINANCIAL REVIEW October 2017 35
Slide 36: New Benchmark Levels of Revenue, Profit and Margins Achieved in Q3-17 and YTD-17
New Benchmark Levels of Revenue, Profit and Margins Achieved in Q3-17 and YTD-17 Q3-17/Q3-16 YTD-17/YTD-16 Revenue Net Income Revenue Net Income 160 € 159.3 100% € 439.5 450 100% +68.9% 90% +55.7% 90% 140 400 80% 80% € 94.3 350 120 Gross Margin € 282.3 Gross Margin 50.5% +8.2 points 58.7% 70% 70% 50
Slide 37: Quarterly Semi Equipment Book to Bill Ratios
Quarterly Semi Equipment Book to Bill Ratios 1.75 Besi Assembly 1.63 Equipment 1.50 1.34 1.25 1.25 1.25 1.10 1.10 1.05 1.06 1.02 1.00 1.00 1.06 0.98 1.00 Total Semi 0.86 Equipment 0.92 0.90 0.75 0.50 Dec 13 Mar 14 Jun 14 Sept 14 Dec 14 Mar 15 Jun 15 Sept 15 Dec 15 Mar 16 Jun 16 Sep 16 Dec 16 Total E
Slide 38: Quarterly Revenue/Order/Gross Margin Trends
Quarterly Revenue/Order/Gross Margin Trends Revenue Orders Gross Margin • Cyclical quarterly revenue/order 300.0 70.0% patterns: • Short term patterns due to customer roadmaps, global GDP trends and 65.0% 250.0 240 increased seasonality • Industry upturn began in H2-16 and 60.0% continues 200.0 57.3
Slide 39: Currency Exposure Trends
Currency Exposure Trends Revenue Expenses 2016 ∆ 2016 ∆ 2013 2014 2015 2016 2013 2014 2015* 2016 Currency Exposure (2015) vs. €** Forex Financial Impact vs. €** Euro 28% 34% 29% 25% 34% 32% 30% 26% US dollar 71% 65% 70% 74% 7% 4% 5% 5% Swiss franc - - - - 26% 18% 23% 21% Malaysian ringgit - - - - 22
Slide 40: Base Line Operating Expense Trends
Base Line Operating Expense Trends Base Opex Other Opex 40 34.1 35 29.8 30.5 30.4 29.2 29.1 28.2 4.4 30 3.3 4.9 4.3 4.1 5.5 25 5.7 20 15 29.7 25.6 27.1 23.5 24.8 24.1 24.3 10 5 0 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Baseline Opex 23.5 24.8 24.1 24.3 25.6 29.7 27.1 As % of Revenue 29.8% 22.8% 25
Slide 41: Net Income Trends
Net Income Trends • Through cycle net margins now range between approximately 10%-33% Net Income Net Margin • Operating initiatives have increased 55 € 52.4 € 52.9 40% efficiency 50 • Gross margin range has steadily improved despite revenue volatility 45 33.2% • Baseline quarterly opex of € 25 - € 3
Slide 42: Cash Generation of Business Model Enhanced
Cash Generation of Business Model Enhanced Inventory / % of Revenue Cash Conversion Cycle* € 80 72 30% 240 69 208 € 70 65 25% 200 € 60 25.6% 54 55 169 20% 160 149 € 50 18.3% 127 € 40 15.4% 14.7% 15% 120 110 13.5% € 30 10% 80 € 20 5% 40 € 10 €0 0% 0 2013 2014 2015 2016 Q3-17 2013 2014 2015 2016 Q3-17
Slide 43: Liquidity Trends
Liquidity Trends Cash and Deposits Net Cash 350 304.8 309.0 300 297.4 Besi has significantly increased cash flow generation over past five years 263.1 • Net cash up despite € 237.0 million of 250 dividends and share repurchases • Increased profits, faster cycle times, improved working capital 200 ma
Slide 44: V. Outlook & Summary
V. OUTLOOK & SUMMARY October 2017 44
Slide 45: Q4-17 Guidance
Q4-17 Guidance Revenue Gross Margin Operating Expenses € 159.3 58.7% € 30.4 0% 55% 5% to - to 10% 57% 10% Q3-17 Q4-17 Q3-17 Q4-17 Q3-17 Q4-17 • Q4-17E sequential revenue decrease compares to average Q3-Q4 decline of 9.3% past five years • Based on guidance, Q4-17 revenue and operating income will in
Slide 46: Summary
Summary Leading semi assembly Technology leader. Best in equipment supplier with #1 class advanced packaging Gaining market share or #2 positions in fastest product portfolio growing segments Significant upside potential. Scalability and profitability Committed to enhancing of business model greatly
Be Semiconductor Industries — Investor Presentation (October 2017) on 6ix