Be Semiconductor Industries N.v. · EURONEXT:BESI
Be Semiconductor Industries — Investor Presentation (February 2019)
52 slides from Be Semiconductor Industries's investor presentation, February 2019
Slide 1: Investor Presentation February 2019
INVESTOR PRESENTATION February 2019
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 February 2019 3
Slide 4: I. Company Overview
I. COMPANY OVERVIEW February 2019 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; 1,759 em
Slide 6: Company History and Strategic Execution
Company History Die Attach Acquisitions 65% 600 60% •2000 2002 2005 2009 € 525.3 500 55% Product Strategy • Expanded advanced packaging leadership into die attach area 50% Revenue (€ millions) • Gained market share organically and via acquisitions 56.7% Gross Margin (%) 400 • Gained mindshare with k
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 (2018: $65.9B)* Front end: $55.3B Assembly: $4.6B Test: $6.1B (84%) (7%) (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 = 54% of 2018 revenue • Leading IDMs and subcontractors. 68/32% split in 2018 • 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 and R&D Site Malaysia Singapore YTD December 31, 2018 Europe/NA Asia •
Slide 11: Summary Historical Financials
Summary Historical Financials Year Ended December 31, (€ millions, except share data) 2016 2017 2018 Step function revenue and gross margin development over four business cycles since 2006 Revenue 375.4 592.8 525.3 • Addressable market share has expanded as well % seq. change 8% 58% -11% Strong prof
Slide 12: Capital Allocation Trends
Capital Allocation Trends € millions 250 Cumulative: € 608.4 MM of distributions since 2011* 209.5 200 35.5 150 129.8 6.9 100 88.8 174.0 67.4 23.5 60.4 122.9 22.0 50 56.9 65.3 12.4 45.4 12.4 0 2014 2015 2016 2017 2018 2019* Dividends Share Repurchases * Assumes proposed dividend payment of € 1.67 pe
Slide 13: Besi Market Information
Besi Market Information Symbol/ • BESI Avg. Daily Volume (b) & Liquidity Index • Euronext Midcap AMX Avg Vol * Avg Price (€ thousands) 1000 25,000 Volume (thousands) Market Market • € 1.6 billion ($1.8 USD) 800 20,000 • 73.3 million shares net 600 15,000 Profile Cap (a) 400 10,000 Dividend • Pay out
Slide 14: II. Market
Besi nam Il. MARKET February 2019 “4
Slide 15: Assembly Equipment Market Trends
Assembly Equipment Market Trends Assembly Equipment Market Market Size YoY Growth Rate 5.0 4.6 30% 3.9 4.6 4.4 4.0 4.0 3.7 20% 26.8% US$ billions 3.0 3.2 23.9% 10% 3.0 16.1% 9.9% 0% 2.0 0.0% -10% 1.0 -12.4% -20% -22.0% -17.5% 0.0 -30% 2013 2014 2015 2016 2017 2018E 2019E 2020E Source: VLSI December
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 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 2018 % of Revenue • Mobile Internet, Computing and 40% 35% Automotive are largest end markets 35% • Estimated 73% of revenue in 2018 30% • Percentages vary p.a. based on customer roadmaps 25% 21% 20% 17% • Steady growth in automotive reflects 15%
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 • Customers are largest semi mfrs. engaged in most advanced packaging applications • Significant share of wallet up to 100% • Customer market shares vary p.a. due to capacity needs, purchasing and development cycles • Primary competition in Besi’s add
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 roadmaps and times and capital spending scalability programs February 2019 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. February 2019 27
Slide 28: Adoption of 5G Will Expand Applications and Features
Adoption of 5G Will Expand Applications and Features With Increased Performance Source: Qualcomm May 2017 ITF Conference February 2019 28
Slide 29: Flip Chip/Wire Bond Process Shift Is Another Revenue Opportunity
Flip Chip/Wire Bond Process Shift Is Another Revenue Opportunity 2017 2023 Wire Bonding Flip Chip Bonding Flip Chip Flip Chip $338 $390 25% 28% Wire Bonding Wire $991 Bonding 75% $983 Flip Chip Advantages 72% Reduces board area Offers higher speed by up to 95%. CAGR 2017 – 2023E electrical Requires
Slide 30: 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 31: III. Strategy
III. STRATEGY February 2019 31
Slide 32: Summary Strategy
Summary Strategy • Leverage technology leadership to reach • Expand capabilities for: 40-45% market share in next five 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 • Sol
Slide 33: 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 34: Asian Production Transfer Has Helped Reduce Break Even Revenue Levels
Asian Production Transfer Has Helped Reduce Break Even Revenue Levels Asian Production Has Significantly Leading to Lower Fixed European + NA And Reduced Break Even Revenue Improved Cash Generation Expanded Headcount Headcount Levels € millions Shipments 2,000 € millions 1,200 1,135 200 184 1,692 30
Slide 35: Materials Cost Reduction Is Also a Key Priority
Materials Cost Reduction Is Also a Key Priority Material costs are largest single cost = ~30% 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 36: Workforce Has Become More Asia Centric, Scalable and Flexible
Workforce Has Become More Asia Centric, Scalable and Flexible Fixed Headcount 1,754 1,738 1,692 2,000 1,549 1,724 1,754 85% • Asia now represents 73% of total fixed 1,800 1,600 1,489 1,489 71% 72% 72% 73% 75% headcount, up from 60% in 2013 71% 1,400 67% 65% Headcount 64% 1,200 1,000 60% 55% • Asian
Slide 37: Besi's Asian Expansion Supports Future Growth
Besi’s Asian Expansion Supports Future Growth 1,200 1,692 Asia 449 800 1,434 +6.2% 423 464 400 +96.6% 236 +230% 225 0 68 Singapore China Malaysia 800 Europe/NA 400 625 -26.1% 462 82 92 0 2013 2018 Other Europe/NA February 2019 37
Slide 38: Besi Strategic CSR Objectives
Besi Strategic CSR Objectives Safeguard safe and healthy CSR Activities 2018 working conditions Maintain best Responsible practices tax practices environmental in all and ethical jurisdictions behavior Improvement in KPI metrics for supply chain activities Reduce Reduce packaging, waste, CSR environ
Slide 39: IV. Financial Review and Summary
IV. FINANCIAL REVIEW AND SUMMARY February 2019 39
Slide 40: Solid FY-18 Performance Despite Challenging Market
Solid FY-18 Performance Despite Challenging Market. Attractive Margins Maintained FY-18/FY-17 Q4-18/Q3-18 Revenue Net Margin Revenue Net Margin 600 € 592.8 100% 100% -11.4% 120 € 116.7 560 € 525.3 -20.7% 90% 90% 520 480 100 € 92.5 80% 80% 440 Gross Margin Gross Margin 57.1% -0.3 points 56.8% 58.0% -
Slide 41: Liquidity Trends
Liquidity Trends Cash and Deposits Net Cash 600 571.0 € 174.0 MM 527.8 Dividend 2017 500 475.5 Strong liquidity position: 443.5 • Total cash of € 475.5 million and net cash of € 199.4 million as 395.5 of Q4-18 400 • € 209.5 million of dividends and share repurchases in 2018 substantially funded by o
Slide 42: Currency Exposure Trends
Currency Exposure Trends Revenue Expenses 2018 ∆ 2018 ∆ 2016 Currency Exposure 2017 (2015) 2018 2016 2017 2018 vs. €* Forex Financial Impact vs. €* Euro 25% 18% 33% 26% 21% 29% US dollar 74% 82% 67% 5% 9% 9% Swiss franc - - - 21% 19% 12% Malaysian ringgit - - - 30% 31% 31% Chinese renminbi - - - 11%
Slide 43: Guidance Q1-19
Guidance Q1-19 Q4-18/Q1-19 Revenue Gross Margin Operating Expenses € 92.5 56.4% € 25.9 -15% +25% 55%-57% - +30% Q4-18 Q1-19 Q4-18 Q1-19 Q4-18 Q1-19 Base Line Operating Expenses € 25.7 +5% - +10% Q4-18 Q1-19 February 2019 43
Slide 44: 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 45: V. Appendix
V. APPENDIX February 2019 45
Slide 46: 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 % € millions 120 117 60.0% 110 58.7% 100 58.0% 93 57.3% 56.3% 56.5% 56.5% 56.4% 78 56.0% 55.7% 80 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 Q1-19
Slide 47: Revenue and Gross Margin Cycles Since 2006
Revenue and Gross Margin Cycles Since 2006 € millions 700 60.0% 56.8% Revenue Gross Margin 600 51.1% -11.4% 50.0% 525 500 39.5% 40.0% 424 400 34.1% -7.8% -6.9% 593 30.0% 4 year averages 300 302 -12.9% 379 20.0% 200 351 164 10.0% 100 191 0 0.0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2
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 25.9 4.9 2.8 25 0.2 20 15 29.7 31.2 31.7 30.7 25.6 27.1 26.3 25.7 10 5 0 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Baseline Opex 25.6 29.7 27.1 31.2 31.7 30.7 26.3 25.7 As
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% € millions 33.2% 43.6 29.1 29.3 30 30.8% 30% 28.4% 29.3% 26.2 37.1 3.1 4.8 25.1% 3.5 23.9% 47.2 22.0% 22.7% 20 20% 24.3 26.2 22.7 10 10% 0 0% Q1-17 Q2-17 Q3-
Slide 50: Cash Generation Trends
Cash Generation Trends € millions % of Revenue 200 Total Cash Flow from Operations As % of Revenue 184.1 180 168.2 35.0% 160 140 28.4% 26.3% 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 February 2019 50
Slide 51: Share Repurchase Activity
Share Repurchase Activity 40 30.0 35.5 35 25.0 € 23.74 30 € 21.79 20.0 Avg Cost per Share 25 22.4 22.8 € millions 20 15.0 € 12.44 15 10.0 € 8.93 10 5.0 5 4.0 0 0.0 2015 2016 2017 2018 Share Repurchases Average Cost per Share February 2019 51
Slide 52: Dividend Trends
Dividend Trends Dividend (€) Dividend Yield(a) 3.00 12% Cumulative dividends: € 6.70/per share since 2011* 2.50 2.32 10% 9.0% 2.00 8.1% 8% 6.6% 1.67 6.5% 1.50 6% 5.5% 1.00 0.87 4% 0.75 0.60 0.50 2% Payout Ratio (b): 77% 79% 93% 100% 91% 0.00 0% 2014 2015 (c) 2016 (c) 2017 2018* Dividend Total Divide
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