Be Semiconductor Industries N.v. · EURONEXT:BESI
Be Semiconductor Industries — Investor Presentation (June 2018)
48 slides from Be Semiconductor Industries's investor presentation, June 2018
Slide 1: Investor Presentation June 2018
INVESTOR PRESENTATION June 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 June 2018 3
Slide 4: I. Company Overview
I. COMPANY OVERVIEW June 2018 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; 2,1
Slide 6: Company History and Successful Execution of Strategic Plan
Company History 700 Die Attach Acquisitions 65% € 635.7 60% 600 •2000 2002 2005 2009 55% Products 500 • Expanded advanced packaging leadership position and market 50% Revenue (€ millions) share organically and via acquisitions 57.4% Gross Margin (%) • Gained mindshare with key industry leaders 400 •
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 Die Bond Molding/ Wire Bond Plating Trim & Form** Leadframe Assembly Substrate Wire Bon
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 March 31, 2018 Europe/NA Asia • Deve
Slide 11: Summary Historical Financials
Summary Historical Financials Year Ended December 31, • Revenue and orders grew by 58% and 82% in 2017: (€ millions, except share data) 2015 2016 2017 • Industry upturn accelerated from H2-16 start Revenue 349.2 375.4 592.8 • New capacity by IDMs for leading edge <20 nano applications % seq. change
Slide 12: Capital Allocation Trends
Capital Allocation Trends euro millions 200 Cumulative Distributions: € 457.5 MM Since 2011* 183.4 180 9.4 160 140 120 100 88.1 174.0 80 22.8 67.8 60.9 60 4.0 22.4 40 65.3 56.9 20 14.0 12.4 45.4 2.7 11.3 12.4 0 2013 2014 2015 2016 2017 2018* Dividends Share Repurchases * Dividend and share repurchas
Slide 13: Besi Market Information
Besi Market Information Symbol/ • BESI Avg. Daily Volume & Liquidity Index • Euronext Midcap AMX Avg Vol * Avg Price (€ thousands) 350 12,000 300 10,000 Volume (thousands) Market Market •€ 2.4 billion ($2.8 USD) 250 8,000 Cap* •75 million shares net ** 200 Profile 150 6,000 4,000 100 Dividend • Pay
Slide 14: II. Market
Besi nam Il. MARKET June 2018 14
Slide 15: Assembly Equipment Market Trends
Assembly Equipment Market Trends Assembly Equipment Market Market Size YoY Growth Rate 6.0 30% CAGR 4.6 4.9 5.0 3.9 20% 13-17 27.2% 11% US$ billions 3.7 23.9% 4.0 3.0 3.2 10% 14.0% 3.0 7.7% 0% 2.0 -10% 1.0 -16.1% -20% -22.0% 0.0 -30% 2013 2014 2015 2016 2017E* 2018E** Source: VLSI June 2018* / April
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 Plating 55% 0.8%
Slide 17: New Era of Chip Growth and Applications
New Era of Chip Growth and Applications Digital Society, A.I. & Big Data Era Mobile & Social 5G Media Era PC + Internet Era 2000 2010 2017 2020 Avg. $25B $32B $45B Semi Eq. Avg. $3B $4B $5B Assembly Eq. Source: Applied Materials Analyst Day 2017 Presentation, pp. 27, Company estimates June 2018 17
Slide 18: Will Require Changes in Process/Equipment
Will Require 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 with TSVs, Stacked structures 3D
Slide 19: 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 Datacon 8800 TC Fico AMS-
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 - 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, 36
Slide 21: Reflected in Besi End User Application Trends
And Is Reflected in Besi End User Application Trends 2017 % of Revenue 40% • Mobile Internet devices, Computing 35% 35% and Automotive are largest end markets and most rapidly growing 30% 25% 25% • New device introductions in 2017 20% boosted mobile internet share to 35% 17% 15% 10% 11% • Computer/P
Slide 22: Besi Addressable Market Share of Mobile Increasing
Besi Addressable Market Share of Mobile Increasing Source: Tech Insights WIDE RANGE OF BESI PLATFORMS USED June 2018 22
Slide 23: 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 $283 $370 22% 23% Wire Bonding Wire $1,018 Bonding 78% Flip Chip Advantages $1,226 77% Reduces board area Offers higher speed CAGR 2017 - 2022 by up to 95%. electrical Flip C
Slide 24: 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 25: Besi Has Gained Share In Its Addressable Markets
Besi Has Gained Share In Its Addressable Markets Source: VLSI June 2018 and Besi estimates 2016 2017E Besi Addressable Market 28.6% 36.0% Total Die Attach 35.4% 44.2% Die Bonding 35.3% 48.4% Flip Chip 33.0% 28.9% Die Sorting 44.6% 39.9% Total Packaging 14.9% 17.1% Molding 14.1% 16.0% Lead Trim & For
Slide 26: 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 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 27: III. Strategy
III. STRATEGY June 2018 27
Slide 28: 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 lithium ion battery plating Increase market presence and share in addressable markets • Leverage technology leadership to gr
Slide 29: Strategic Priorities 2018
Strategic Priorities 2018 Increase share of electronics supply chains Further Continue reduce investment in European WLP overhead Agenda 2018 Packaging Common production in platform China development Chinese capacity expansion June 2018 29
Slide 30: Besi Revenue Opportunities
Besi Revenue Opportunities World tooling up for new tech cycle <20 Higher % of nano Increased mainstream smart phone assembly functionality applications Increased % of Chinese Emerging market and Revenue process Asian deployment supply Growth Drivers WLP and chains TCB Solar cell Next gen plating de
Slide 31: 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 32: 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 75% 1,800 1,549 71% 71% 1,489 1,489 67% 1,600 1,404 64% 65% 1,400 60% Headcount 57% 1,200 55% 1,000 800 45% 43% 600 40% 36% • Asia now represents 71% of total fixed 400 35% 200 33% 29% 29% headcount, up f
Slide 33: 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% 1,600 1,724 57.1% 57% 1,600 1,400 1,434 452 1,200 55% +6.9% 1,200 423 1,000 1,301 53% 470 +99.2% 800 236 51.0% 51% 800 68 +207% 600 209 675 49% 48.8% 400 633 40
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 Besi capex and inventory investment • Reduces personnel,
Slide 35: 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 36: IV. Financial Review and Summary
IV. FINANCIAL REVIEW AND SUMMARY June 2018 36
Slide 37: Strong Financial Performance in 2017 and Q1-18
Strong Financial Performance in 2017 and Q1-18 Q1-18/Q1-17 2016/2017 Revenue Net Margin Revenue Net Income € 592.8 160 100% 600 100% € 154.9 +40.5% 90% 550 90% 140 +57.9% 500 80% 80% € 110.2 120 Gross Margin 450 € 375.4 Gross Margin 55.7% +0.8 points 56.5% 70% 70% 51.0% +6.1 points 57.1% 400 OPEX 10
Slide 38: Liquidity Trends
Liquidity Trends Cash and Deposits Net Cash 600 571.0 527.8 500 Cash flow generation has significantly improved over past five years: • Total cash reached € 571.0 million in Q1-18 400 • Net cash grew to € 290.1 million • Reflects € 243.3 million of dividends and share euro in millions 304.8 repurcha
Slide 39: 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 40: Q2-18 and H1-18 Guidance
Q2-18 and H1-18 Guidance Q2-18/Q1-18 HY1-18/HY1-17 Revenue Revenue € 154.9 € 280.2 +10% +16% - - +15% +19% Q1-18 Q2-18 HY1-17 HY1-18 Gross Margin Gross Margin 56.5% 56.7% 55% 56% - - 57% 57% Q1-18 Q2-18 HY1-17 HY1-18 Operating Expenses Operating Expenses € 39.1 € 64.7 5% +15% - - 10% +18% Q1-18 Q2-1
Slide 41: Summary
Summary Leading assembly equipment supplier Best in class Gaining market with #1 or #2 advanced packaging share positions in fastest portfolio growing segments Upside potential Scalability and from next generation profitability greatly Attractive capital and <20 nano enhanced in cyclical allocation
Slide 42: V. Appendix
V. APPENDIX June 2018 42
Slide 43: Quarterly Revenue/Order/Gross Margin Trends
Quarterly Revenue/Order/Gross Margin Trends Revenue Orders Gross Margin 300 70.0% • Cyclical quarterly revenue/order patterns: • Influenced by global GDP trends, customer roadmaps, new 65.0% device introductions and seasonal factors 250 240 206 • Favorable quarterly revenue trends since 2015: 60.0%
Slide 44: 2017-2018 Quarterly Backlog and Book to Bill Trends
2017-2018 Quarterly Backlog and Book to Bill Trends Book to Bill Ratio Backlog (€ millions) 2.5 250 206 215 2.3 2.2 200 2.0 166 168 164 1.8 150 1.5 1.3 100 1.3 1.0 1.0 1.0 50 0.8 0.8 0.5 0 Mar 17 Jun 17 Sep 17 Dec 17 Mar 18 Besi Backlog Besi Book to Bill June 2018 44
Slide 45: Step Function Growth in Revenue and Gross Margin Since 2006
Step Function Growth in Revenue and Gross Margin Since 2006 € millions 700 60.0% 600 51.1% 50.0% 500 39.5% 40.0% 424 400 34.1% 30.0% 300 4 year 302 averages 20.0% 200 164 10.0% 100 0 0.0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Revenue Gross Margin June 2018 45
Slide 46: 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 30.5 30.4 3.0 4.4 30 3.3 4.9 25 20 15 29.7 31.2 31.7 25.6 27.1 10 5 0 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Baseline Opex 25.6 29.7 27.1 31.2 31.7 As % of Revenue 23.2% 17.5% 17.0% 20.4% 20.5% Other Operating Expenses Capita
Slide 47: Net Income Trends
Net Income Trends Net Income Variable Compensation (a) Net Margin • Through cycle net margins ranged between approximately 10%- 60 € 57.1 60% 33% € 56.6 • Net margin reached 29.2% in 2017 € 4.7 € 3.7 • Exceeded 30% for past four quarters ex variable comp 50 € 47.9 € 47.1 50% € 4.3 • Key drivers: € 1
Slide 48: Cash Generation Trends
Cash Generation Trends € millions Cash Conversion Cycle Days 180 168.2 160 208 140 120 169 149 98.7 100 86.5 127 80 73.3 107 60 40 18.1 20 0 2013 2014 2015 2016 2017 Total Cash Flow from Operations Cash Conversion Cycle* * Cash Conversion Cycle = Avg. Days Inventory Outstanding + Avg. Days Sales Out
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