INVESTOR PRESENTATION May 2020 - Besi · 32% addressable market share •Broad portfolio: die...
Transcript of INVESTOR PRESENTATION May 2020 - Besi · 32% addressable market share •Broad portfolio: die...
INVESTOR PRESENTATION
May 2020
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 expectations of orders,
net sales, product shipments, expenses, timing of purchases of assembly equipment by customers, gross margins, operating results and capital
expenditures. The use of words such as “anticipate”, “estimate”, “expect”, “can”, “intend”, “believes”, “may”, “plan”, “predict”, “project”, “forecast”, “will”,
“would”, and similar expressions are intended to identify forward looking statements, although not all forward looking statements contain these
identifying words. The financial guidance set forth under the heading “Outlook” contains such forward looking statements. While these forward looking
statements represent our judgments and expectations concerning the development of our business, a number of risks, uncertainties and other important
factors could cause actual developments and results to differ materially from those contained in forward looking statements, including any inability to
maintain continued demand for our products; failure of anticipated orders to materialize or postponement or cancellation of orders, generally without
charges; the volatility in the demand for semiconductors and our products and services; failure to develop new and enhanced products and introduce
them at competitive price levels; failure to adequately decrease costs and expenses as revenues decline; loss of significant customers, including
through consolidation or the emergence of industry alliances; lengthening of the sales cycle; acts of terrorism and violence; disruption or failure of our
information technology systems; inability to forecast demand and inventory levels for our products; the integrity of product pricing and protection of our
intellectual property in foreign jurisdictions; risks, such as changes in trade regulations, currency fluctuations, political instability and war, associated with
substantial foreign customers, suppliers and foreign manufacturing operations, particularly to the extent occurring in the Asia Pacific region; potential
instability in foreign capital markets; the risk of failure to successfully manage our diverse operations; any inability to attract and retain skilled
personnel; those additional risk factors set forth in Besi's annual report for the year ended December 31, 2019; and other key factors that could
adversely affect our businesses and financial performance contained in our filings and reports, including our statutory consolidated statements. We
expressly disclaim any obligation to update or alter our forward-looking statements whether as a result of new information, future events or otherwise.
2May 2020
Agenda
I. Company Overview
II. Market
III. Strategy
IV. Financial Update and Summary
V. Appendix
3May 2020
I. COMPANY OVERVIEW
4May 2020
Besi Overview
• Leading assembly equipment supplier with #1 and #2 positions in key markets. 32% addressable market share
• Broad portfolio: die attach, packaging and plating
• Strategic positioning in substrate and wafer level packaging
• Global operations in 6 countries; 1,621 employees. HQ in the Netherlands
Corporate Profile
• LTM revenue and net income of € 366.1 million and € 85.7 million
• Cash/deposits at Q1-20: € 427.6 million
• Net cash/deposits at Q1-20: € 148.3 million
• € 730.5 million of dividends and share repurchases since 2011*
Financial Highlights
• Applications for digital society key long term drivers: Internet of Everything, AI, Big Data, Cloud computing, 3D imaging, 5G network roll out
• Advanced packaging is critical part of semi value chain
• China market growth and share gains also benefit revenue development
• Asian production optimization, European overhead reduction and common parts initiatives also help drive profit potential
Investment Considerations
5
* Includes 2019 dividend payment of € 1.01 per share and share repurchases through April 30, 2020
May 2020
Company History
€ 85.5
€ 366.1
25.9%
56.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
55.0%
60.0%
0
100
200
300
400
2003 LTM
Reven
ue
(€ m
illio
ns)
Revenue Gross Margin
•
Die Attach Acquisitions
• Expanded advanced packaging leadership into die attach area
• Gained market share organically and via acquisitions
• Gained mindshare with key industry leaders
• Growth in China, key customers and electronics supply chains
Product Strategy
• Asian production transfer combined with European restructuring enhanced profit potential
• Developed Asian production hubs (MY and CN), Singapore development/support center and Asian supply chain
• Scalability enhanced. Break even revenue levels reduced
Successful Execution of Strategic Plan Initiatives
• Achieved peer leading gross and net margins and ROI
• Improved cash flow generation
• Implemented attractive capital allocation policy
Financial Metrics
6May 2020
Best in Class Product Portfolio
Multi Module Attach• 2200 evo
• 2200 evo plus
• 2200 evo hS
• 2200 evo advanced
New
Die Sorting• WTT
• TTR
New
New
Die Bonding
• 2100 xP plus / hS
• 2100 sD plus / PPP plus
• 2100 sD advanced
• 2100 SSI
Flip Chip• 8800 CHAMEO advanced
• 8800 TC advanced
• 8800 FC QUANTUMadvanced
• 2100 FC hS
New
New
Plating• Leadframe
• Solar
•Next generation Die Attach
•Next generation Packaging
•Common modules
AMS-LM• Substrate
AMS-i/X• Leadframe
• MEMS
• Sensors
FML• Wafer
• Panel
New FSL• Singulation
• Sorting
FCL• X
• P
• X/PNew
New
• 2100 DS
• 2100 SC
• 2100 hSi
• 2100 sD advanced i
Die Lid Attach• DLA New
• Film & Foil
• Battery
Die Attach
Packaging
Plating In Development
New
New
New
New
7
New
NewNew
May 2020
Customers OEMs End Products
Customer Ecosystem
• Diversified, blue chip customer base, top 10 = 44% of 2019 revenue
• Leading IDMs and subcontractors. 61%/39% split in 2019
• Also supply leading fabless companies: Qualcomm, Broadcom, MediaTek via subcontractors
• Long term relationships, some exceeding 50 years
IDMs
Subcontractors
8May 2020
Product Positioning
9
Semiconductor Manufacturing Equipment
(2019: $61.7B)*
Front end: $53.2B
(86.2%)
Assembly: $3.0B
(4.8%)
Test: $5.5B
(8.9%)
* Source: VLSI April 2020
** Includes Molding, Trim and Form and Singulation Systems
Dicing
Semiconductor Assembly Process
Die Attach Wire Bond Packaging** Plating
Leadframe Assembly
Substrate
Wire Bond Assembly
Substrate
Flip Chip Assembly/TCB
Wafer Level Packaging
Flip Chip Assembly/Fan Out
May 2020
Operational Profile
10
• Development activities in Europe
• Production in Asia
• Sales/service activities in Asia, US and Europe
Sales Office
Production Site
Sales, Production and R&D Site
Leshan
ChengduShanghai
Korea
Taiwan
Philippines
Malaysia
Singapore
Suzhou
Radfeld, (Austria)Steinhausen,
(Switzerland)
Duiven & Drunen,
(The Netherlands)
Chandler
Shenzhen
LTM March 31, 2020
Europe/NA Asia
Revenue (MMs) € 88.9 24.3% € 277.2 75.7%
Headcount 508 31.3% 1,113 68.7%
Thailand
May 2020
Year Ended December 31, (€ millions, except share data) 2017 2018 2019 Q1-19 Q1-20
Revenue 592.8 525.3 356.2 81.4 91.3
% seq. change 58% -11% -32% +12%
Gross margin 57% 57% 56% 56% 57%
EBITDA 222.8 187.7 11.7 19.7 24.0
Pretax income 199.2 154.9 78.1 10.8 16.2
Net income 173.2 136.3 81.3 9.5 13.9
Net margin 29% 26% 23% 12% 15%
EPS (diluted) (a) 2.17 1.68 1.06 0.13 0.19
EPS (basic) (a) 2.32 1.83 1.12 0.13 0.19
Dividend per share (a) 2.32 1.67 1.01
Net cash 247.6 199.4 130.3 229.7 148.3
Summary Financials
11
(a) Adjusted for 2:1 stock split in May 2018
Long term, step function revenue growth in cyclical business
• Last peak reached in 2017 at € 592.8 million
• Current performance affected by downturn starting in Q2-18
• Recovery limited by COVID-19 pandemic in Q1-20
• Orders +42.2% vs. Q1-19
Strong margins and profit potential
• Attractive quarterly gross margins of 55%+ achieved
• Aligned overhead and production levels with market conditions
• Net margin of 23% in 2019 despite 32% YOY revenue decrease
• Peer leading financial metrics
Improved cash generation supports shareholder friendly capital
allocation policy
• € 167.1 million distributed in 2019: dividends and share
repurchases
• € 77.6 million distributed YTD 2020
May 2020
Increased Profitability vs. Last Market Downturn
12May 2020
349.2356.2
57.9
91.9
0
20
40
60
80
100
120
140
200
250
300
350
2015 2019
Op
era
tin
g In
co
me
Reve
nu
e
Revenue Operating Income
+58.7%
€ millions
16.6%
25.8%
+2.0%
Business Model Objectives
13
Objectives
€ 800MM
40%+
55-60%
30-35%
80% Asia/20% Euro
Revenue
Addressable Market Share
Gross Margin
Net Margin
Headcount Split
May 2020
Capital Allocation Trends
14May 2020
45.4
65.3
174.0
122.4
73.5
22.0
23.5
35.5
44.7
4.167.4
88.8
209.5
167.1
77.6
0
50
100
150
200
2016 2017 2018 2019 2020*
Dividends
Share Repurchases
€ millions
* Includes dividend payment of € 1.01 per share payable in May 2020 and share repurchases through April 30, 2020.
33%
67%
26%
74%
17%
83%
27%
73%
• € 730.5 million distributions since 2011:
• Includes € 73.5 million 2019 dividend
• Current € 75 million share repurchase program:
• 3.2 million shares (€ 71.2 million) bought
at € 22.33 per share
• 7.3 million shares (9.1%) held in treasury
5%
95%
II. MARKET
15May 2020
What Drives Besi’s Business?
Macro GDP trendsTech capabilities in
24/7 production environment
IDM customer and supply chain
choice
Timing of customer roadmaps and
capital spending programs
Competitive cycle times and scalability
16May 2020
Assembly Equipment Market Trends
17
378.8
349.2 375.4
592.8 525.3
356.2 48.6%
-7.8%
7.5%
57.9%
-11.4%
-32.2%
-50%
0%
50%
100%
0
200
400
600
2014 2015 2016 2017 2018 2019
€ m
illio
ns
Besi RevenueRevenue YoY Growth Rate
3.7
3.13.5
4.4 4.3
3.0 2.83.6
3.9
22.9%
-16.5%
12.5%
25.8%
-2.5%
-29.3%
-8.3%
27.3%
9.2%
-50%
-30%
-10%
10%
30%
50%
0.0
1.0
2.0
3.0
4.0
5.0
2014 2015 2016 2017 2018 2019 2020E 2021E 2022E
US
$ b
illio
ns
Assembly Equipment MarketMarket Size YoY Growth Rate
Source: VLSI April 2020
May 2020
• VLSI revised 2019 forecast to -29.3% from
more optimistic view at start of 2019
• 2020 forecast upturn of 10.3% downgraded
to -8.3% in April due to COVID-19
• Assumes economic activity regains traction
in Q3-20
• Strong rebound from depressed levels
anticipated in 2021 and 2022
Semi Equipment Recovery Changed Markedly at End of Q1-20
18
Source: VLSI April 2020
May 2020
Die Bonding44.6%
Flip Chip / TCB14.8%
Die Sorting4.6%
Singulation6.1%
Molds & Presses22.9%
Lead Trim & Form5.2%
Plating1.7%
Assembly Equipment Market Composition
• Roughly half of assembly market represented by die attach and packaging equipment
• Die Attach represents Besi’s largest addressable market
Die Attach
64%
Packaging
34%
Plating
2%
Assembly Equipment Market *
(2018: $4.3 billion)Besi Addressable Market *
(2018: $1.8 billion)
* Source: VLSI July 2019
Wire Bonding22.8%
Die Attach30.3%Packaging
18.1%
Plating0.7%
Other Assembly
(Inspection, Dicing)28.1%
19May 2020
Besi Market Share Trends
Source: VLSI June 2019 and Besi estimates
% Total Revenue 2017 2018
Die Attach 76.4% 81.6%
Packaging 19.2% 15.2%
Plating 4.4% 3.2%
• Market share trending upwards
• Can vary p.a. based on customer
roadmaps and advanced packaging
needs
20
2014 2015 2016 2017 2018
Total Assembly Market ($MM) $3,725 $3,119 $3,515 $4,421 $4,313
Besi Market Share 13.5% 12.4% 11.9% 15.1% 13.9%
Addressable Market ($MM) $1,622 $1,286 $1,540 $1,983 $1,848
Besi Market Share 30.4% 29.6% 27.0% 33.5% 32.4%
Die Attach 36.9% 34.8% 32.9% 40.6% 38.6%
Packaging 17.9% 17.5% 14.4% 16.2% 18.3%
Plating 75.4% 78.5% 85.5% 78.1% 83.6%
May 2020
Move to Digital Society Helps Drive Advanced Packaging Growth
May 2020 21
Requiring Increased Density, Higher Accuracy and Smaller Form Factors for Next Generation Devices
Today => TomorrowFront End
Transistor scaling
Lithography
New structures 3D
Back End Assembly
More contacts
Smaller pitches
Thinner/denser
more complex packages
Stacked structures 3D
WLP/FOWLP packages
From simple Wire Bond to BGA/Flip Chip to complex 3D structures with TSVs,
microbumps and thin dies
to WLP/FOWLP packages
without substrate interposer
22May 2020
Advanced Packaging Critical to Next Generation Applications
23
Greater Miniaturization
Greater Complexity
Increased Density
Higher Performance
Lower Power Consumption
Higher Accuracy
Die Bond
Datacon 8800 TC
Datacon 8800 CHAMEO fan-out
Esec DB2009
Esec DB2100
Packaging
Fico AMS-LM
Fico Singulation Line
FML Wafer Molding
Fico Compact Line - X
Mobile Revolution
• Mobile internet
• Messaging
• Social media
• Shared economy
• Gaming
• Geo-location
• Audio/video
• Auto electronics
Digital Society
• Smart mfg, cities, mobility and homes
• 5G mobile/wearable devices
• Artificial intelligence
• Driverless cars
• Data mining
• Cloud servers
• High performance Computing
• IoT
• VR/AR
• MEMS
May 2020
Advanced Packaging Unit Volume and Market Share Are Increasing
24
• Advanced packaging applications have
grown significantly since 2010
• Currently, estimated 38% of wafers use
advanced packaging interconnects
• Leading growth segment of assembly
equipment market
• Flip chip and WLP are leading AP assembly
processes next five years
Source: VLSI February 2020
13%
19%
26%
31%32%
34%36%
37%38%
39%40%
41%43%
0%
10%
20%
30%
40%
50%
(5)
5
15
25
35
45
55
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
AP
Ma
rket
Sh
are
%
M w
afe
rs, 3
00
MM
Eq.
Advanced Packaging Silicon Demand Growth & Market Share 2011 - 2023
Flip Chip Wafer Level Packaging
Fan-Out Wafer Level Packaging TSV (3D & 2.5D)
Advanced Packaging Unit Market Share (%)
May 2020
Besi Portfolio Well Positioned by Node Size and Accuracy
25
15%
40%
20%
25%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Typical Application Besi Equipment
Automotive, SiP
Power
Die Attach
Packaging
Plating
IOT
General ICs
Die Attach
Packaging
Plating
Computer, PC, Mobile
Cloud Computing
Die Attach
Packaging
High Performance Computing
Memory
Die Attach
Packaging
Accuracy
Micron
10+
10
7
3
Size
NM
28+
28
17
10
Estimated % of 2019 Revenue
• 75% of Besi equipment revenue advanced packaging as per VLSI definition
• 55% equipment revenue is < 7 micron accuracy and sub 17 nanometer
• Most rapidly growing market segment
May 2020
Fan Out WLP and TCB/TSV Are Emerging Advanced Packaging Process Technologies
Enabling technology for high
end memory and optical
applications
Next step beyond Flip Chip
TCB/TSV (Substrate Based)Fan Out WLP (Wafer Level)
Fan Out Advantages:
• Wafer scale. Eliminates expensive substrate
• No wire bonding
• More cost effective than TSV in many applications by factor of 2x
Leading market position:
• Installed base of ~70 systems in production
• Estimated 70% market share
• Principal Competition: Shibaura
32 Stacked Die Capability
Besi TCB Advantage
• 32 die stack at <5 micron accuracy (current market:
4-8 die stack)
• High accuracy over large area placement
• Highly stable
• Industry leading throughput
• Compact form factor
Leading market position
• Installed base of 40 systems in production
• Estimated 25% market share of active systems
• Highest penetration of memory and GPU markets
• Principal competition: Toray, ASM PT, Shinkawa
Preferred process for high data
transfer and optical devices in IoT,
mobile and power
26May 2020
Besi End User Application Trends
Source: Company Estimates
27
• Mobile Internet, Computing and
Automotive are largest end markets
• Estimated 71% of revenue in 2019
• Percentages vary p.a. based on
customer roadmaps
• Mobile is largest market
• % varies based on timing and success
of new product introductions
• Computing growth due to increased
demand for high end logic, cloud and
memory solutions
• Growth in automotive reflects ever
increasing electronic content
• Spares/service: 20% of 2019 revenue
• Growth in installed base
• Less volatile revenue stream
Mobile Internet Devices
32%
Computer, PCs22%
Spares/Service20%
Automotive17%
Industrial / LED9%
2019 % of Revenue
May 2020
Expansion of Cloud Infrastructure and Connected Devices Aids Growth
28May 2020
5G Rollout Creates New Opportunities in Besi End User Markets
29
Source: KPMG January 2020
May 2020
Besi Addressable Market Share of Mobile Increasing
Besi technology can support virtually all device platforms utilized in latest mobile devices.
30May 2020
Source: ASML Investor Day Nov 2018
3D STACKING AND MULTI CHIP ARCHITECTURE AS IMPORTANT OR EVEN MORE IMPORTANT THAN FRONT END PROCESSES !!!!!!
Computing: Assembly Process Ever More Critical StepIn CPU Value Chain
31May 2020
III. STRATEGY
32May 2020
Summary Strategy
33May 2020
Strategic Objectives
Maintain best in class technology
leadership
Increase market presence in addressable
markets
Enhance scalability of
manufacturing model. Reduce structural costs
Pursue CSR strategy
balancing business with
social/ecological responsibilities
Acquire companies with complementary
technologies and products
Reward shareholders via capital allocation
policy
Strategic Plan Update
34
Revenue Initiatives Cost Initiatives
Customer:
• Expand partnership with next-gen leaders to
gain share
• Exploit opportunities for hybrid bonding, micro
LED, memory/TCB, solar plating
• Increase mainstream penetration with high
quality mid range systems
• Expand presence and share of wallet in China
Supply Chain:
• Increased production/supply chain flexibility:
MY, CHN, SGP
• Vendor consolidation and volume discounts
• Increased common parts
Service/Support
• Sustain operational and service excellence to
support installed base growth
• Grow spares/service business
Product Design:
• Cost reduction with each new generation
• Reduce number of platforms
• Increase standardization
• Reduce cycle times
• Cost down engineering
Research and Development
• Organize R&D group to support revenue
objectives
Headcount
• Continue West to East transfer
• Target 80% Asia
May 2020
COVID-19 Update
35May 2020
• Headcount: nearly 70% located in Asia
• Malaysia: Deemed essential business. Permitted to resume full operations recently
• Fully operational China
• Singapore: Deemed essential business. Open but most staff working remotely
• Adjusting Asian production as necessary according to local circumstances and regulations
• Europe R&D, product management, sales working remotely
Besi operating with varying restrictions
• Not optimally, but good enough
• 80% sourced in Asia
• Dual sourcing strategy and inventory stocking of critical parts have lessened bottlenecks so far
• Some non-critical components can cause delays
Supply chain functioning
Current Technology Roadmap
36
• IDMs investing in next generation devicesCustomers
• Increasing R&D activities
• Highly focused per customer roadmaps
Besi
5G Applications
Artificial Intelligence
Cloud Infrastructure
Advanced Logic Apps
May 2020
Asian Production Transfer Has Reduced Break Even Revenue Levels and Improved Cash Generation
37
Asian Production Has Significantly Expanded
Leading to Lower Fixed European + NA Headcount
And Reduced Break Even Revenue Levels
Improved Cash Generation
-
174
396
655 396
829
43%
98%
0
400
800
2010 2019
China Other Asian
% Direct
741
453
802
1,081
1,543 1,534
0
400
800
1,200
1,600
2,000
2011 2019
Europe/NA Fixed HC Asia Fixed HC
270
220
0
50
100
150
200
250
300
2011 2019
€ millionsHeadcountShipments
(38.9%) 49
120
15%
34%
0
50
100
150
2011 2019
Cash Flow Ops
CF from Ops/ Revenue
€ millions
(18.5%)
May 2020
Downturn
Flexible Production Model Has Generated Consistent Gross Margins in Market Cycles
38
* Midpoint of guidance: Revenue +5 to +25% vs. Q1-20, Gross Margin 56-58%.
May 2020
COVID
19
110
170159
153 155161
117
93
81
93 90 92 91
105
55.7%57.3%
58.7%56.3% 56.5% 56.5%
58.0%56.4% 55.9% 56.0% 55.1%
56.3% 56.7% 57.0%
30%
40%
50%
60%
70%
80%
90%
100%
0
20
40
60
80
100
120
140
160
180
Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20*
Gro
ss M
arg
in %
€ m
illio
ns
Revenue Gross Margin
Flexible Asian Workforce Has Significantly Enhanced Scalability
39
1,724 1,692 1,626 1,605 1,546 1,534 1,529
71% 73% 72% 72% 71% 70% 70%
29% 27% 28% 28% 29% 30% 30%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2017 2018 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20
Head
co
un
t
Europe/NA Fixed HC Asia Fixed HC Asia % Europe/NA %
Fixed Headcount
Total Headcount
502 462 452 450 453 453 458
1,222 1,230 1,174 1,155 1,093 1,081 1,071
316 67 69 111
88 62 92
2,040
1,759 1,695 1,7161,634 1,596 1,621
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
0
500
1,000
1,500
2,000
2,500
2017 2018 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20
Tem
p %
of
Tota
l
Head
co
un
t
Europe/NA Fixed HC Asia Fixed HC Temporary HC Temp % of Total
• Headcount adjusted in downturn:
• 25.3% reduction from Q1-18 peak to Q4-19
• Focus on SG&A structure currently
• Temporary help added in Q1-20 to support
increased orders
• Asian HC rationalized in 2019 post large
2015-2018 ramp
• Both fixed and temporary workers
• European and NA fixed HC has declined:
• -37.3% since 2011
• -16.0% vs. 2015
• Stable in 2019 due to R&D ramp
May 2020
Overhead Alignment With Market Cycles
• Overhead aligned with order patterns
• Substantial operating leverage in business model
40May 2020
94.8
113.7
96.9
27.1%
19.2%
27.2%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
0
20
40
60
80
100
120
140
2015 2017 2019
Op
ex
/Re
ve
nu
es
Bas
eli
ne
Op
era
tin
g E
xp
en
se
Baseline Opex Baseline Opex/Revenues
Baseline Opex Trends 2015-2019
€ millions
CSR Objectives
Safeguard safe and healthy working
conditions Maintain best practices
environmental and ethical behavior
Reduce environmental
impact of products and operations
Promote employee
talent, training and diversity
Conserve natural
resources
Develop sustainable
supply chain. Minimize impact of conflict
materials
Reduce packaging,
waste, transportation
and energy
Responsible tax practices
in all jurisdictions
Besi Strategic CSR Objectives
41May 2020
CSR Objectives 2020
Review sustainability strategy
Improve reporting and KPI monitoring
Upscale sustainability initiatives
Progress on CSR Agenda
42
CSR Highlights 2019
Environmental
Footprint
Reduced packaging, energy, waste, and
water usage
Installed solar panels at Malaysia facility
Developed system to better assess
sustainability in product design
Received MISA ‘19 Audience Award for
solar panel efficiency
Implemented video conferencing system to
reduce travel
Human
Resources
New management training, governance and
e-learning programs
Supply Chain
Achieved RBA gold status
Increased supply chain compliance with
RoHs standards
May 2020
17.7
14.9
12
14
16
18
2017 2019
GW
h
Energy Usage
183
159
125
150
175
200
2017 2019
tons
Waste Usage
32.6
27.3
20
25
30
35
2017 2019
m³
(00
0s)
Water Usage
(13.1)%(15.8%)
(16.3%)
IV. FINANCIAL UPDATE AND SUMMARY
43May 2020
Gross Margin
OPEX
Headcount
Effective Tax Rate
€ 92.4 € 91.3
23.9%
15.2%
0%
25%
50%
75%
100%
0
20
40
60
80
100
Q4-19* Q1-20
Net
ma
rgin
%
Reve
nu
e (
€ m
illi
on
s)
Revenue Net Margin
+ 25
- 58.3 points
+ 31.0%
+ 0.4 points
Q1-20 Profit Metrics Better Than Anticipated
44
(43.9%) 14.4%
1,596 1,621
€ 25.2 MM € 33.0 MM
56.3% 56.7%
Q4-19/Q1-20
€ 22.1
Q1-19/Q1-20
€ 13.9
- 1.2%
- 8.7 point
May 2020
€ 81.4
€ 91.3
11.6%
15.2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
20
40
60
80
100
Q1-19 Q1-20
Net
ma
rgin
%
Reve
nu
e (
€ m
illi
on
s)
Revenue Net Margin
Gross Margin
OPEX
Headcount
Effective Tax Rate
+ 12.2%
- 74
+ 7.5%
+ 0.8 points
€ 13.9€ 9.5
12.5% 14.4%
1,695 1,621
€ 30.7 MM € 33.0 MM
55.9% 56.7%
+ 3.6 points
+1.9 points
* Includes € 11.6 million tax benefit at Besi’s Swiss operations in Q4-19
Gross Margin
OPEX
Headcount
Effective Tax Rate
Strong Liquidity Position to Help Navigate COVID-19 Challenge
45
304.8
527.8
475.5
507.5
361.7383.7
408.4427.6
168.1
247.6
199.4
229.7
86.1106.9
130.3148.3
0
100
200
300
400
500
600
2016 2017 2018 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20
€ m
illio
ns
Cash and Deposits Net Cash
€ 122.4 MM
Dividend
2018
Solid Liquidity Base
• Total cash/deposits grew to €427.6 million Q1-20
• Net cash increased by € 18.0 million (+13.8%) to
€ 148.3 million
• Untapped € 80 million revolving credit expandable to
€ 136 million
Strong cash flow generation continues
• Supports capital allocation policy
Q1-20 cash movements
• +€ 26.6 million cash provided by operations
• - € 3.1 million share repurchases
• - € 3.7 million capitalized R&D
• - € 0.9 million capex
May 2020
Guidance Q2-20
46
-15%
Operating Expenses
€ 33.0
Q2-20Q1-20Q1-20 Q2-20
Gross Margin
56.7%
Revenue
Q1-20 Q2-20
€ 91.3 56%-58%
-10%
-
-15%
-15%
+5%
-
+25%
May 2020
€ in millions
Summary
47
Assembly market ever more critical in semiconductor
value chain
Asian production expansion has been a game
changer
Long term secular trends drive
advanced packaging growth
Tech leadership and scalable model have resulted in benchmark
financial returns
Disciplined strategic focus has created an industry leader
Attractive capital allocation policy
rewards shareholders
Market presence has grown via key
IDM customers and supply chains
May 2020
V. APPENDIX
48May 2020
Revenue and Gross Margin Cycles Since 2006
49May 2020
191
351
379
593
356
164
302
424
56.8%
55.8%
34.1%
39.5%
51.1%
0%
10%
20%
30%
40%
50%
60%
0
100
200
300
400
500
600
700
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Revenue Gross Margin€ millions
4 year
averages
Gross Margin
IDM/Subcontractor Order Trends
50
348.3 373.8
680.9
483.1
348.7
384.0
-
100
200
300
400
500
600
700
800
2015 2016 2017 2018 2019 LTM
Ord
ers
IDMs Subcontractors
49%49%
35%
32%
51%51%
65%68%
€ millions
47%
61%
May 2020
53%
39%
Baseline Operating Expense Trends
51
30.7
26.3 25.7 25.3 24.7 23.3 23.7
25.9
1.0
2.8
0.2
5.4
2.1
0.9 1.5
7.1
31.8
29.1
25.9
30.7
26.8
24.2 25.2
33.0
10
20
30
40
Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20
Op
era
tin
g E
xp
en
se
s (
€ m
illio
ns)
Baseline Opex Other Opex*
* Other Opex includes both short term and long term incentive comp, forex effects, restructuring costs and selected one-time effects.
May 2020
Net Income Trends
52
47.2
26.2
22.7
9.5
18.9 19.2
33.7
13.9
3.8
3.1
3.5
6.4
3.5 3.1
3.8
8.0
51.0
29.3
26.2
15.9
22.4 22.3
37.5
21.9
29.3%
25.1%24.5%
11.7%
20.4% 21.4%
36.5%
15.2%
0%
10%
20%
30%
40%
50%
60%
0
10
20
30
40
50
Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20
€ m
illio
nsNet Income Variable Compensation (a) Net Margin
(a) Includes variable compensation from both cost of goods sold and operating expenses
May 2020
Currency Exposure Trends
53
Currency Exposure (2015) Forex Financial Impact
• USD revenue % comparable to 2018
• Long-term cost exposure shifting to Asia:• Production transfer increases importance of MYR, CNY and SGD• Material purchases and production expenses ~60% in Asian currencies (MYR, CNY and SGD) • Lower units produced vs. 2018 decreases % impact of Asian currencies in mix this year
Revenue Expenses
2017 2018 20192019 ∆
vs. €*2017 2018 2019
2019 ∆
vs. €*
Euro 18% 33% 32% 21% 29% 33%
US dollar 82% 67% 68% 9% 9% 9%
Malaysian ringgit - - - 31% 31% 25%
Chinese renminbi - - - 13% 10% 11%
Swiss franc - - - 19% 12% 10%
Singapore dollar - - - 5% 6% 9%
Other - - - 2% 3% 3%
Total 100% 100% 100% 100% 100% 100%
* Currency variance in 2019 based on average forex rates vs. the euro
May 2020
Cash Generation Trends
54
86.5
98.7
168.2
184.1
120.1
98.9
24.8%26.3%
28.4%
35.0%33.7%
27.0%
0
20
40
60
80
100
120
140
160
180
200
2015 2016 2017 2018 2019 LTM
% of Revenue€ millions
Total Cash Flow from Operations As % of Revenue
May 2020
55
Share Repurchase Activity
4.0
22.4 22.8
35.5
44.7
4.1
€ 8.93
€ 12.44
€ 23.74
€ 21.79
€ 24.31
€ 32.57
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
0
5
10
15
20
25
30
35
40
45
50
2015 2016 2017 2018 2019 YTD 2020*
Avg C
ost pe
r S
ha
re
€ m
illio
ns
Share Repurchases Average Cost per Share
• 3.2 million shares (€ 71.2 million) purchased through April 30, 2020 under current € 75 million program (avg price € 22.33)
• 125,543 million shares purchased from January 1, 2020 through April 30, 2020 for € 4.1 million
• 7.3 million shares held in treasury at April 30, 2020 at average price of € 15.32 per share, equal to 9.1% of shares outstanding
May 2020
* Includes share purchases through April 30, 2020
Dividend Trends
56
0.60
0.87
2.32
1.67
1.01 93%
100%
107%
91%90%
80%
85%
90%
95%
100%
105%
110%
115%
120%
0.00
0.50
1.00
1.50
2.00
2.50
3.00
2015 2016 2017 2018 2019
Dividend YieldDividend (€)
Dividend Dividend Payout Ratio*
* Calculated on Basic EPS. Includes value of both cash and stock dividends
Cumulative dividends of € 578.3M since 2011, or € 7.74 per share*
May 2020
Shareholder Base Expanded
Market
Profile
Share
Ownership
41%48%
56%
0%
10%
20%
30%
40%
50%
60%
70%
2017 2018 2019
Top 10 Shareholders**(% of shares outstanding)
• BESI
• Euronext Midcap AMX
Symbol/ Index
• € 2.7 billion ($ 2.9 billion)
Market Cap*
• Pay out 40-100% of net income per annum
Dividend Policy
* As of April 30, 2020 ** Besi estimates
20%31% 35%
22%16%
18%20%
27% 23%
21%
15% 15%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2017 2018 2019
By Geography
Unidentified
57
0
5,000
10,000
15,000
20,000
25,000
0
200
400
600
800
1000
2016 2017 2018 2019 2020YTD
Avg V
ol *
Avg P
rice (
€ thousands)
Vo
lum
e (
tho
usa
nd
s)
Avg. Daily Volume & Liquidity
Europe
ex. NL
NL
UK
US
May 2020