BE Semiconductor Industries N.V. · EURONEXT:BESI
BE Semiconductor Industries — Shareholder Meeting (April 2019)
40 slides from BE Semiconductor Industries's shareholder meeting presentation, Apr 26, 2019
Slide 1: Annual General Meeting April 26, 2019
ANNUAL GENERAL MEETING April 26, 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 V. Q1-19 Results, Outlook & Summary April 2019 3
Slide 4: I. Company Overview
I. COMPANY OVERVIEW April 2019 4
Slide 5: Summary Financials 2016 - 2018
Summary Financials 2016 - 2018 € millions except % 2017/18 & EPS 2016 2017 2018 Variance Revenue € 375.4 € 592.8 € 525.3 -11.4% Orders € 373.8 € 680.9 € 483.1 -29.0% Gross Margin 51.0% 57.1% 56.8% -0.3 Net Income € 65.3 € 173.2 € 136.3 -21.3% Net Margin 17.4% 29.2% 25.9% -3.3 EPS (Basic)* € 0.87 € 2
Slide 6: Revenue and Gross Margin Cycles Since 2006
Revenue and Gross Margin Cycles Since 2006 € millions Gross margin 700 60.0% 56.8% Revenue Gross Margin 600 51.1% -11.4% 50.0% 525 500 593 39.5% 40.0% 424 400 34.1% -7.8% -6.9% 30.0% 4 year averages 300 302 379 -12.9% 20.0% 200 351 164 10.0% 100 191 0 0.0% 2006 2007 2008 2009 2010 2011 2012 2013 201
Slide 7: 2018 Total Shareholder Return In Line with Market Peers
2018 Total Shareholder Return In Line with Market Peers Significant Outperformance Over Past 5 Years 2018 Total Shareholder Return Total Cumulative Shareholder Return Besi vs. Peer Group & SOX Index Besi vs. SOX Index 2014-2018 Besi Peer Group Average PHLX Semiconductor (SOX) Besi Peer Group Average
Slide 8: Which is Reflected in Favorable Valuation vs. Peers
Which is Reflected in Favorable Valuation vs. Peers AV/Revenue 2019E vs. Operating Margin 2019E AV/Revenue 2019E (x) 7.0x R² = 60% ASML 6.0x 5.0x BESI 4.0x KLA-Tencor Disco Teradyne Brooks Automation 3.0x Lam Research Applied Materials ASMI Aixtron Coherent MKS Instruments Nanometrics ASMPT Rudolph
Slide 9: Capital Allocation Policy Resulted in € 617.2 Million in Distributions
Besi Capital Allocation Policy Has Resulted in € 617.2 Million in Distributions to Shareholders Since 2011 € millions 250 209.5 200 35.5 150 138.6 15.7 100 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
Slide 10: 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
Slide 11: And Highest Dividend Yield vs. Peers
And Highest Dividend Yield vs. Peers 7.0% 6.3% 6.0% 5.0% 4.0% 3.2% 3.0% 2.9% 2.0% 1.9% 2.0% 1.6% 1.5% 1.3% 1.2% 1.0% 0.0% * Current quarterly dividend (annualized)/current stock price. As of April 8, 2019 Source: Bloomberg April 2019 11
Slide 12: Share Repurchase Activity Increased in 2018
Share Repurchase Activity Increased in 2018 40 30.0 35.5 35 25.0 € 23.74 30 € 21.86 20.0 Avg Cost per Share 25 22.8 22.4 € 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 • Quarterly share repurchase activity increased from appr
Slide 13: Besi Shareholder Information
Besi Shareholder Information Symbol/ • BESI Avg. Daily Volume & Liquidity Index • Euronext Midcap AMX Avg Vol * Avg Price (€ thousands) 1000 25,000 Volume (thousands) Market Market • € 2.0 billion 800 20,000 ($2.3 billion) 600 15,000 Profile Cap* 400 10,000 Dividend • Pay out 40-100% of 200 5,000 Po
Slide 14: II. Market
Besi nam Il. MARKET April 2019 4
Slide 15: Assembly Equipment Market Trends
Assembly Equipment Market Trends Assembly Equipment Market Market Size YoY Growth Rate 6.0 30% 4.6 4.8 5.0 3.9 4.6 4.1 20% 26.8% 3.7 US$ billions 3.7 23.9% 18.3% 4.0 3.2 10% 16.1% 8.6% 3.0 0% -0.1% 2.0 -10% 1.0 -20% -17.5% -18.3% 0.0 -30% 2014 2015 2016 2017 2018E 2019E 2020E 2021E Source: VLSI Apri
Slide 16: New Era of Chip Growth and Applications 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 17: 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 18: 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 19: Adoption of 5G Will Expand Applications and Features
Adoption of 5G Will Expand Applications and Features With Increased Performance Source: Qualcomm ITF Conference April 2019 19
Slide 20: Besi Portfolio Well Positioned by Node Size and Accuracy
Besi Portfolio Well Positioned by Node Size and Accuracy Estimated % of 2018 Revenue Typical Application Besi Equipment Accuracy Size 100% Micron NM Die Attach 90% 10+ 28+ Automotive, SiP 25% Packaging Power 80% Plating 70% Die Attach 20% IOT 60% 10 28 Packaging General ICs Plating 50% 40% Computer,
Slide 21: And In Key End User Application Markets
And In Key End User Application Markets 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% 15% ever incr
Slide 22: III. Strategy
Besi nam Il. STRATEGY April 2019 22
Slide 23: Besi Strategy
Besi Strategy Besi Strategy Enhance Increase scalability of Acquire Maintain best market Shareholder manufacturing companies with in class presence and friendly capital model. complementary technology share in allocation Continually technologies leadership addressable policy reduce and products mark
Slide 24: Besi Revenue Growth Drivers
Besi Revenue Growth Drivers New features for 4G and 5G networks Renewed Korean and interest in WLP, Chinese Panel WLP and Android mobile TCB consumers Digital Society Smart Everything Cloud Expansion Big Data Increased Memory / Logic China market space share Japanese automotive market April 2019 24
Slide 25: Initiatives Underway to Further Drive Cost Reduction
Initiatives Underway to Further Drive Cost Reduction ~€ 15-25 Million Potential Cost Reduction by 2021 Supply Chain (~40%) ● Increased outsourcing ● Vendor consolidation and volume discounts ● Increased common parts ● Increased Asian sourcing/selected products Headcount (~35%) ● West - East Transfer
Slide 26: 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 1,754 1,738 1,692 85% • Asia now represents 73% of total fixed 1,800 1,549 headcount, up from 60% in 2013 1,489 1,489 75% 1,600 71% 71% 72% 72% 73% 1,400 67% 65% • Asian production and supply chain model
Slide 27: Strategic CSR Objectives & Activities
Strategic CSR Objectives & Activities Besi’s Strategic CSR Activities CSR Activities 2018 Safeguard safe and healthy working conditions Maintain best Improvement in Responsible tax practices in all practices environmental KPI metrics for jurisdictions and ethical behavior supply chain activities Red
Slide 28: Have Helped Reduce Besi's Environmental Impact
Have Helped Reduce Besi’s Environmental Impact Energy Usage Waste Usage Water Efficiency 0.05 500 90 (37.3%) (36.2%) (29.7%) 75 0.04 400 60 m3/revenue GWh/revenue 0.03 300 kg/revenue 45 0.02 200 30 0.01 100 15 0 0 0 2015 2018 2015 2018 2015 2018 April 2019 28
Slide 29: IV. Financial Review
IV. FINANCIAL REVIEW April 2019 29
Slide 30: Solid 2018 Performance Despite Challenging Market
Solid 2018 Performance Despite Challenging Market € millions Net Margin 2017/2018 600 € 592.8 -11.4% 550 € 525.3 500 Gross Margin 450 -0.3 points 57.1% 56.8% 400 OPEX 350 € 129.2 MM -2.7% € 125.7 MM Headcount 300 2,040 -281 1,759 250 Effective Tax Rate 13.1% - 1.0 points 12.1% 200 29.2% - 3.3 points
Slide 31: Key Financial Metrics 2016 - 2018
Key Financial Metrics 2016 - 2018 Revenue & Baseline Net Income Gross Margin Opex 700 140 200 45% 129.2 125.7 64% 593 180 173.2 600 116.3 15.6 120 11.3 40% 525.3 160 19.6 500 100 136.3 35% 58% 140 57.1% 56.8% 375 120 € millions 400 80 30% € millions € millions 29.2% Gross Margin 100 52% 25.9% 300 51
Slide 32: 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% 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 April 2019 32
Slide 33: 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 34: 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 April 2019 34
Slide 35: Liquidity Trends
Liquidity Trends Cash and Deposits Net Cash 600 527.8 • Besi has significantly increased liquidity over past 500 475.5 five years • Net cash reached € 199.4 million at year end • Despite € 209.5 million of dividends and share 400 repurchases • Increased profits, faster cycle times, improved working
Slide 36: Q1-19 Results, Outlook and Summary
Q1-19 Results, Outlook and Summary April 2019 36
Slide 37: Besi Q1-19 Results Exceed Expectations
Besi Q1-19 Results Exceed Expectations April 2019 37
Slide 38: Guidance Q2-19
Guidance Q2-19 Revenue Gross Margin Operating Expenses € 81.4 +5% 55.9% 55%-57% € 30.7 -5% Q1-19 Q2-19 Q1-19 Q2-19 Q1-19 Q2-19 -15% -15% April 2019 38
Slide 39: 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 40: Annual General Meeting April 26, 2019
ANNUAL GENERAL MEETING April 26, 2019 April 2019 40
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