ANALYST PRESENTATION June 6, 2019 - Besi · years in anticipation of next upcycle • Primarily...
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ANALYST PRESENTATION June 6, 2019
Transcript of ANALYST PRESENTATION June 6, 2019 - Besi · years in anticipation of next upcycle • Primarily...
ANALYST PRESENTATION
June 6, 2019
Safe Harbor Statement
2June 2019
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, 2018; 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.
Agenda
3June 2019
I. Strategic Overview Richard Blickman
II. End Markets & Drivers Ruurd Boomsma
III. Product Development Strategy Ruurd Boomsma
IV. Strategic Initiatives Richard Blickman
V. Capital Allocation & Acquisition Strategy Richard Blickman
VI. Outlook & Summary Richard Blickman
I. STRATEGIC OVERVIEW
4June 2019
• 2019 is transition period before next investment round in 2020/2021
• Strategic focus:
• Increasing development spending for next-generation systems
• Exploring new opportunities to exploit technology leadership
• Cost, cost, cost
• Disciplined capital allocation to maximize ROI and shareholder returns
• Profitability versus market share has been a long-term winning strategy
• Structural advantages in business model demonstrated vs. peers
• Well positioned for next upturn
• Favorable long-term drivers in place to generate strong advanced packaging growth well into future
CEO Summary
June 2019 5
Revenue and Gross Margin Cycles Since 2006
6
191
351
379
593
525
164
302
424
56.8%
34.1%
39.5%
51.1%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
0
100
200
300
400
500
600
700
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Revenue Gross Margin
€ millions
4 year
averages
-12.9%
-7.8%
-6.9%
-11.4%
June 2019
• VLSI has been revising downwards 2019 capex forecast. Now -16%
• Particular weakness in mobile and DRAM/flash memory
• Logic and Cloud applications one of few bright spots
Capex Trends of Major Semiconductor Producers
June 2019 7
Source: VLSI May 2019
Source: VLSI May 2019
8
Assembly Equipment Market Trends
254.9
378.8
349.2 375.4
592.8 525.3
154.9 81.4
48.6%
-7.8%7.5%
57.9%
-11.4%
-47.4%
-50%
0%
50%
100%
150%
0
200
400
600
2013 2014 2015 2016 2017 2018 Q1-18 Q1-19
€ m
illio
ns
Besi RevenueRevenue YoY Growth Rate
Source: VLSI April 2019, “The Chip Insider”
• Assembly equipment market last peaked at $4.5 billion
• VLSI revised forecast downwards to -17.1%, with recovery estimated in 2020 and 2021
3.0
3.73.1
3.5
4.4 4.5
3.74.1
4.822.3%
-16.3%
12.7%
25.8%
2.1%
-17.1%
8.6%
18.3%
-30%
-20%
-10%
0%
10%
20%
30%
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2013 2014 2015 2016 2017 2018 2019E 2020E 2021E
US
$ b
illio
ns
Assembly Equipment MarketMarket Size YoY Growth Rate
June 2019
Market Update
June 2019 9
Current Environment
• Downturn of four quarters continues post extended super cycle
• Q1-19 results indicated some stabilization in assembly equipment market
• US/China trade tensions add new element of uncertainty
• GDP growth still favorable although excess chip inventory persists
Looking Forward
• Timing of rebound uncertain; “U” or “Canoe” recovery?
• VLSI anticipates recovery in 2020 and 2021
• 5G could be game changer
• Mobile makers advance 3D and facial recognition
• Data mining, analytical and artificial intelligence needs keep expanding
• Tariff battle is reshaping global semi supply chains
• Manageable China exposure:
• 2018 China revenue of 24%
• Both foreign IDMs and Chinese subcontractors
• Limited exposure Huawei
• Revenue impact neutral so far
• Some order softness from US supply chain offset by increased demand from Chinese
subcontractors
Impact of US/China Trade Dispute
June 2019 10
Strategic Execution Has Helped Maintain Margins At Attractive Levels in Current Downturn
June 2019 11
79
109
94 93
110
170159
153 155161
117
93
81 86
49.2%50.9% 50.5%
53.1%55.7%
57.3%58.7%
56.3% 56.5% 56.5%58.0%
56.4% 55.9% 56.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
-
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
180.0
Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19*
Gro
ss M
arg
in %
€ m
illio
ns
Revenue Gross Margin
* Midpoint of guidance: Revenue +5% vs. Q1-19, Gross Margin 55-57%.
And Increased Gross and Operating Margin Variance vs. Peers
June 2019 12
Gross Margin
Q1-16 Q1-17 Q1-18 Q1-19VarianceQ1-16/Q1-19
Besi 49.2% 55.7% 56.5% 55.9% 6.7%
ASMPT (Backend)
39.9% 46.6% 44.4% 39.2% -0.7%
K&S* 44.5% 45.2% 44.8% 47.9% 3.4%
Operating Margin
Q1-16 Q1-17 Q1-18 Q1-19Variance Q1-16/Q1-19
Besi 12.2% 28.0% 31.4% 18.1% 5.9%
ASMPT (Backend)
12.3% 24.7% 22.7% 3.4% -8.9%
K&S* 7.5% 16.3% 17.3% -2.1% -9.6%
*On calendar year basis
• Baseline opex has stayed within narrow band over past 3 years. € 26.5 million average
• At low end of range currently due to downturn
• Substantial operating leverage in business model
*Includes short-term and long-term incentive compensation, forex effects and restructuring costs.
Opex Levels Reflect Structural Cost Reduction Initiatives and Flexible Production
June 2019 13
Operating Expenses (€ millions)
Q1-16 Q1-17 Q1-18 Q1-19 High Low Average
Base Line Opex 23.5 25.6 31.7 25.3 31.7 23.5 26.5
Other Opex* 5.7 4.9 7.4 5.4 7.4 4.9 5.8
Total 29.2 30.5 39.1 30.7 39.1 29.2 32.4
Besi Market Share Trends
Source: VLSI May 2019 and Besi estimates
Percentage of Total Revenue
2017 2018
Die Attach 76.4% 81.6%
Packaging 19.2% 15.2%
Plating 4.4% 3.2%
2014 2015 2016 2017 2018
Total Assembly Market ($MM) $3,725 $3,119 $3,515 $4,421 $4,516
Besi Market Share 13.5% 12.4% 11.9% 15.1% 13.3%
Addressable Market ($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%
• VLSI recently updated 2018 assembly equipment market data
• Besi addressable market share declined slightly in 2018
• Primarily due to high end mobile order weakness starting Q2-2018
June 2019 14
Current R&D Spending Focus
• Gross R&D spending increasing over past two
years in anticipation of next upcycle
• Primarily focused on new development (~70%)
• ~20% sustaining
• ~10% common platforms
• Key projects include:
• TCB and wafer level process technology
advancement
• Enhancement of existing systems for next
generation applications
2017 2018 2019E
Die Attach 24,300 26,700 28,000
Packaging 9,300 9,800 9,800
Plating 1,000 1,500 2,200
R&D Gross 34,600 38,000 40,000
Cap / Amort 1,300 (2,500) (600)
R&D reported 35,900 35,500 39,400
June 2019 15
Current Business Model Objectives
June 2019 16
Objectives
€ 800MM
40%+
55-60%
30-35%
80% Asia/20% Euro
Revenue
Addressable Market Share
Gross Margin
Net Margin
Headcount Split
II. END MARKETS & DRIVERS
June 2019 17
Digital Society
June 2019 18
Our Markets
June 2019 19
Mobile End Market: Record Data Traffic Again in 2018
Source: Ericsson Mobility Report Update Feb 2019
June 2019 20
Mobile: 5G Is ComingWill Drive Increased Mobile Data Traffic and New Applications
Source: Ericsson Mobility Report Nov 2018
June 2019 21
Mobile: Implementation First in NA, Europe & Northern Asia
Source: Ericsson Mobility Report Nov 2018
June 2019 22
Mobile: 5G Implementation Happening Much Faster Than 4G
Source: Qualcomm
June 2019 23
Mobile: 5G Applications Much Broader Than Just Phones
Source: Qualcomm
Source: Digital Trends
June 2019 24
Mobile: Use of High Frequency Spectrum Enables Faster Data Transmission
5G - Technically:
To get higher data transfer, higher frequencies
are needed (24 GHz and above)
This will need new transmission technology
Will also need more advanced networks
June 2019 25
Mobile: Requiring New Base Stations and Antennas at Both the Transmission and Receiving Ends
Active beamforming in GHz Base station with
several antenna areas
to enable beamforming
Mm waves have shorter range.
Therefore need more base stations.
Source: Google Splash Chart LA Source: Nokia
Mm Waves
June 2019 26
Mobile: 5G Implementation Will Also Require Changes in Handset Assembly
Source: JCET NCAP symposium April 2019
Need new antenna
structures and modules
Multiple antennas
New modems
June 2019 27
Mobile: Many Besi Customers Working on Aspects of 5G RF
Source: Yole
• 5G will also require massive power reduction in
processing and future assembly design changes
First example of Qualcomm 5G Antenna:
June 2019 28
Mobile: Additional Handset Features Also Being Introduced In Next Investment Round
June 2019 29
Automotive End Market
June 2019 30
Automotive: Long-Term Outlook Favorable As Electronic Content and Features Continue to Increase
Source: Yole
June 2019 31
Automotive: Requiring a Variety of Package Formats For Customers
Source: Amkor investor presentation April 2019
June 2019 32
Automotive: Evolving New Technologies Will Require New Assembly Solutions
Source: Yole
June 2019 33
Automotive: Move to SiC and GaN Substrate Materials Also Requires New Assembly Solutions
New materials coming
Higher efficiencies
Higher switching frequencies
Lower losses in on state
Higher temperature
Smaller form factor
Requires new mounting and
packaging technologies
Source: Infineon
June 2019 34
Computing End Market: Explosion in Demand for Computing Power Continues
Source: Intel May 2019
June 2019 35
Computing: Applications Have Greatly Expanded for High End Processors
June 2019 36
Computing: Further Device Shrink is Critical to Meet Increased Computing Power Requirements
Source: ASML ISS Europe April 2019
June 2019 37
Computing: New Device Architectures Required to Facilitate Node Size Reduction
Source: IMEC 3D Conf Dresden 2019
June 2019 38
Computing: As Well as New 3D Assembly Solutions
Source: IMEC 3D Conf Dresden 2019
Requisites for 3D assembly
structures:
Standard interfaces
(Intel just launched)
More bandwidth
Smaller pitches
Higher levels of placement
accuracy
June 2019 39
Source: ASML Investor Day Nov 2018
3D STACKING AND MULTI CHIP ARCHITECTURE AS IMPORTANT OR EVEN MORE IMPORTANT THAN FRONT END PROCESSES !!!!!!
Computing: As a Result, Back End Assembly Becoming Even More Critical Process Step
June 2019 40
Computing: Key Players Working in 3D Memory and Logic Solutions
June 2019 41
III. PRODUCT DEVELOPMENT STRATEGY
June 2019 42
Besi Product Portfolio
June 2019 43
• Next generation TCB systems
• Nano accurate direct Die Bonding systems
• Next generation High Speed, High Accuracy Flip Chip/Fan Out system
• Large Panel Die Bonding
• Enhancements to existing portfolio of die bonding, packaging and plating systems
Key Development Projects Currently
June 2019 44
TCB Next Gen System for 10 uM Pitches
TCB TECHNOLOGY (THERMO COMPRESSION BONDING)
Application area
- Memory
- Advanced 3D structures
2014-2018 GEN 1 TCB
NOW WORKING ON NEXT GEN TCB
- Even higher accuracy
- Advanced planarity features
- More feeding options
- Larger die sizes
- Broader application range
Example Wafer Level TCB Die Attach
June 2019 45
Developing Nano Size, Precise Direct Bonding for Pitches <5 microns
Direct Cu-Cu bonding
Also called Hybrid Bonding
200 nanometer accuracy !!!
For next generation devices with
contact pitch below 5 uM
First field evaluation ongoing
- Accuracy 200 nanometer
- Low particle design
- Complete new bondhead
- Fully controlled position feedback
- Speed 2,000 to 3,600 die/hour
- Factor 10 better than current technology
- Piezo electric nano actuators
June 2019 46
Next Generation Flip Chip / Fan Out
Besi 8800 series is industry standard for high
accuracy, high speed FC and Fan Out bonding
Introducing next gen high speed system for Flip Chip
and Fan Out
• Parallel pick up 4 dies
• Flip or non flip
• Advanced inspection
• Parallel transport to location
• Individual placement
Applications
• Fan Out
• Replacing Wire Bonding in some memory assembly
- Speed 20,000 die/hour reached
- Factor 2 better than current technology
- First evaluations very positive
June 2019 47
Large Panel System
Large panel system
Started R&D in 2016
Goal: high accuracy panel system
- 720mm x 650mm working area
- Panel size => lower overall costs
- Global accuracy 3 uM
- Local accuracy 2uM
- High theta accuracy
- Good speed
Applications
• Fan Out
• Micro LED
• High end embedded substrates
- Accuracy & speed reached is a
- Factor of 2x better than current technology
- First commercial orders received
June 2019 48
Evo Multi Module Systems
Most universal Die Attach system in industry
Over 6,000 systems installed
Many applications 7uM accuracy
- 3D face recognition
- Camera- & 6 axis alignment
- High end SIP
- High end large interposers
- High end LED
- Power
- Sensors
Introducing now 3uM accuracy for specific applications
- Photonics
- High end products
- First commercial orders received
June 2019 49
2100 Fast Epoxy Systems
Most cost effective epoxy Die Attach system in industry
Over 3,000 systems installed
Many applications
- General ICs
- Automotive
- Sensors
- Stacked memory
Introducing now
- Dual dispensing
- High bond line thickness control
- Filet height control
- High precision bondhead
- Active Z compensation
- Auto tool adjustment
- Self learning and AI
- First commercial orders received
June 2019 50
Soft Solder Automotive Power Systems
Our soft solder system is standard in industry
Over 1,000 systems installed
New developments
- Plasma cleaning
- Dual writing/dispensing
- High force bondheads
- Improved illumination
- Bowl feeder
- Silver sintering
- Diffusion bonding
Example high force bondhead
project for 48V embedded technology
More efficient automotive power
- First commercial orders received
June 2019 51
AMS-LM Molding Systems
FOR LEADFRAME AND SUBSTRATE
AMS LM SERIES
Most cost effective molding system in industry
Over 300 systems installed
Key advantages
- Standard in thin die molding
- Exposed die molding
- Superior mold chase design
Many applications
- Mobile/wearables
- Advanced SIP applications
- Automotive
- Memory
Introducing now
- Double side molding exposed die one step
- 120 ton molding capability for larger sizes
(100x300 versus 70x280 90 ton)
- First commercial orders received
June 2019 52
AMS-LM Exposed Die
EXPOSED DIES
Besi has 90% of exposed die market
Dynamic clamping control ensures
equal clamp force on dies and/or solder balls
No solder ball/copper pillar deformation and no
flash on dies
5G DEVICE
June 2019 53
Double Sided Molding
54June 2019
Wafer Panel Molding Line
Next generation wafer molding system
FML fan out
Over 10 systems installed
Key advantages
- No Die Swim
- Narrow gap filling of 50 uM between dies
over full 300 mm
- Wafer placement into mold 100 micrometer
- Mold planarity +/- 5 uM over 300 mm
Many applications
- Mobile/wearables
- Advanced SIP applications
- Automotive
Introducing now
- 150 ton for dense populated wafers
June 2019 55
STANDARD
BUILDING BLOCKS
Wafer Level Molding Exposed Die
Wafer Molding Exposed Die Example
- Perfect die position (no swim)
- Tight filling of lanes between dies
- No mold flash on the dies
First fill completely then pressure up
This prevents movements of dies
June 2019 56
Besi Trim And Form
High precision Trim and Form
Fully modular concept
Over 1,000 systems installed
Key advantages
- Fast configurable
- Full tracking and tracing
- Handling most advanced leadframes
Many applications
- Power/IGBT
- General leadframe based products
- Automotive/industrial
- Charging devices mobile
Introducing now
- Laser marking
- Enhanced sorting and off loading
- Improved vision system
- Selective punching to remove bad dies
- First commercial orders received
June 2019 57
Besi Plating Systems
Besi plating lines
Workhorse of industry
Over 800 lines installed
Key advantages
- Very high plating uniformity leading to thinner layers, as better
minimum-thickness control allows for more efficient material usage
- Very low chemical wastage
- Extremely robust
Many applications
- Leadframes/substrates
- Solar
- Flexible foils
Introducing now
- Wettable Flank Plating
- Flexible Connector Plating (foldable phones)
- Chemical Deflash
- First commercial orders expected soon
June 2019 58
New Besi Plating Process Technology
Besi Plating Lines
3 new areas
Flexible foil (renewed interest)
- System originally for RF Identification
- Now used for connector strips in mobile
- Foldable screens
Chemical deflash line
- Better pre-clean of strips
Wettable flank
- Improved reliability by plating cut edges
FLEX FOIL SYSTEM
CHEMICAL DEFLASH LINE
June 2019 59
Technology Summary
• Assembly process step becoming even more important gating item to realize development of key mobile, automotive
and computing end markets in emerging digital society
• 5G is potential gateway to whole new variety of device structures and applications
• Computing needs continue to explode driving innovation in 3D assembly solutions
• Advanced packaging is only solution to address industry requirements for ever smaller, thinner, more complex, dense
and multi-function devices
• Besi product portfolio and process technology at forefront of advanced packaging trends and leading customer
roadmaps. Substantial progress made in:
• Fan Out WLP and TCB die attach systems
• High speed/high accuracy epoxy die bonding
• Camera and sensor system development
• Exposed die packaging for both substrate and wafer level
• Trim and Form systems for auto sector
• Ultra fine leadframe plating
June 2019 60
IV. STRATEGIC INITIATIVES
61June 2019
Summary Strategy
June 2019 62
Maintain Best in
Class Tech Leadership
Grow Market
Presence and Share
Increase Scalability.
Reduce Cost
Grow via Timely
Acquisitions
Revenue Initiatives
June 2019 63
• Leverage technology leadership
• Introduce next generation products to win business from competitors
• Increase mainstream penetration of global supply chains with high quality mid-range products
• Expand presence and share of wallet in China
• Expand software and process support in Asia
Increase market presence and share
• Besi grew by 16% CAGR in 2013-2018 vs addressable market growth of 8%
Grow in excess of underlying addressable market rates
Favorable Drivers:
Digital Society
Big Data
Smart Everything
Cloud Expansion
Revenue Opportunities
64
Roll out 3D imaging and other features to 4G and 5G mobile customers
Expand share of Korean and Chinese Android mobile customers
Increase share of wallet in Memory/Logic space
Expand share of Japanese automotive supply chain
• Capitalize on steady growth of electronic content and safety requirements
Government expansion of Chinese semi infrastructure
Sale of complete Besi portfolio in local Chinese market
Renewed customer interest in WLP, Panel WLP and TCB processes
June 2019
Besi Spares/Service Is An Attractive Opportunity
June 2019 65
• Spares/Service is positive contributor
• Revenue more than 2x vs. 2013
• 10-15% of total revenue p.a.
• Less cyclical revenue source
• Favorable gross margins
• Steady growth in recent years:
• Growth of installed base
• New customers
• Expanded local market presence
• Some large customers require
dedicated service support
• Unrealized upside potential:
• Efficiency from SGP consolidation
• New web based order system:
• Reduces personnel costs,
inventory investment and customer
response time
37.3 38.8
48.2
55.3
70.2
80.1
15%
10%
14%
15%
12%
15%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
-
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
2013 2014 2015 2016 2017 2018
€ m
illio
ns
Total % of Revenue
Summary Cost Initiatives
June 2019 66
• Expand production capacity to meet € 800 million run rate
• Further develop European owned Asian suppliers
• Outsource higher value systems and modules
• Reduce cycle times
Achieve a more scalable, flexible and lower cost business model
• Gain further supply chain and materials efficiencies
• Optimize production between MY and CH to reduce cost and better meet local needs
Target steady through cycle gross margin
• Supply chain 40%
• Headcount 35%
• Product Design/Common Platforms 25%
Seek € 15-20 million cost savings over next five years
Material costs are largest single cost = ~35% of revenue
Supply Chain Initiatives
June 2019 67
• Increased outsourcing of modules and high level systems
• Vendor consolidation and volume discounts
• Increased common parts
• Increased Asian sourcing/selected products
Supply Chain Actions
Management reviews progress weekly, component by component
Ongoing Asian Personnel Transfer Aids Cost Reduction Efforts
Total Headcount
• Asia now represents 72% of fixed
headcount, up from 60% in 2013
• European and NA fixed headcount
continues to decline:
• -39.1% since 2011
• -16.3% vs. 2015
• Particular focus on SG&A structure
currently
• Flexible production model aligned with
market conditions:
• 20.7% headcount reduction realized
from peak in Q1-18 to Q1-19
• Mostly Asian production temps (279 or
96% reduction)
591 540 508 502 462 452
898 949 1,041 1,222 1,230 1,174
143 50 120
316
67 69
1,6321,539
1,669
2,040
1,7591,695
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
0
500
1,000
1,500
2,000
2,500
2014 2015 2016 2017 2018 Q1-19
Te
mp
% o
f To
tal
Hea
dc
ou
nt
Europe/NA Fixed HC Asia Fixed HC Temporary HC Temp % of Total
68June 2019
Common Platform Development Update
June 2019 69
• Redesign products for common parts, platforms
• Increase standardization
• Lower unit cost, design and maintenance hours
• Shorten cycle times
Development Actions
V. CAPITAL ALLOCATION AND
ACQUISITION STRATEGY
70June 2019
Capital Allocation Trends
71
12.4
56.945.4
65.3
174.0
122.422.0
23.5
35.5
21.4
12.4
60.467.4
88.8
209.5
143.8
0
50
100
150
200
250
2014 2015 2016 2017 2018 2019*
Dividends Share Repurchases
€ millions
* Dividend and share repurchases through May 31, 2019
June 2019
• Shareholder friendly capital allocation
policy
• € 622.4 million distributions since 2011:
• € 143.8 million YTD 2019
• High dividend payout ratio
• Share repurchases increasing as % of mix
Highest Dividend Yield vs. Peers*
June 2019 72
* Current quarterly dividend (annualized)/current stock price. As of May 31, 2019
8.3%
4.2%3.8%
3.0%
2.5%2.1%
1.9%1.7%
1.2% 1.1%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
Source: Morningstar
73
Share Repurchase Activity Has Increased
4.0
22.4 22.8
35.5
21.4
€ 8.93
€ 12.44
€ 23.74
€ 21.86€ 22.51
0.0
5.0
10.0
15.0
20.0
25.0
30.0
0
5
10
15
20
25
30
35
40
2015 2016 2017 2018 YTD*
Avg C
ost pe
r S
ha
re
Share Repurchases Average Cost per Share
• € 21.4 million purchased to date in 2019
• 7.0 million shares held in treasury at May 31, 2019. Average price: € 15.89 per share
• 2.2 million shares bought cumulatively (€ 43.9 million) under current € 75 million share repurchase
program (average price € 20.15)
June 2019
*Through May 31, 2019
€ m
illio
ns
Assembly Market Slowly Consolidating: Peer Group Acquisition History
June 2019 74
1998 2002 2006 2010 2014 2018
Besi
K&S
ASM PT
Probe
Technology
Cerprobe
Orthodyne
Electronics
Siplace/ SEAS
BusinessDEK
€ 52MM
$ 90MM
€ 73MM$ 10MM$ 22MM
€ 36MM + $ 170MM +
$ 30 MM
earn out
$ 98MM
€ 25MM$ 133MM
$ 30MM$ 190MM
$ 65MM
• Direct peers allocated € 364MM -
€ 1.2 billion to capital investments
since 2013
• Besi skewed towards dividends
(69%)
• PT 40%
• K&S none until Q3-18
• Acquisitions were 30% and 26%
of K&S and PT mix
• Besi had no acquisitions
• Besi’s ROE has exceeded peers:
• Investment in business model
has yielded high returns
• Dividend policy and share
repurchases also helped
Peer Group Capital Allocation vs. Return on Equity
June 2019 75
Besi K&S ASM PT
Dividends 365 7 460
Share Buybacks 87 175 70
Acquisitions - 108 303
Capex (& Cap R&D) 78 74 331
Total 531 364 1,164
531
364
1,164
-
200
400
600
800
1,000
1,200
1,400
€ m
illio
ns
Capital Allocation2013-2018
2013 2014 2015 2016 2017 2018
Besi 6.1 24.0 14.8 19.3 44.5 33.8
ASM PT 7.9 20.9 11.7 16.9 27.4 18.8
K&S* 8.3 8.6 6.8 6.2 14.7 6.3
Besi 33.8
ASM PT18.8
K&S*6.3
-
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
RO
E (%
)
Return on Average Equity
*Fiscal year ended October 31
Solid Liquidity Position to Fund Future Growth
Strong liquidity position:
• Total cash of € 507.5 million and net cash of
€ 229.7 million as of Q1-19
• After paying € 209.5 million of dividends and share
repurchases in 2018
Attractive funding obtained to help finance
growth
• € 300 million convertible debt (1.33% blended rate)
• Minimal operating restrictions
• 5 year blended average maturity135.3
157.8
304.8
527.8
475.5
507.5
118.0 136.5
168.1
247.6
199.4
229.7
0
100
200
300
400
500
600
2014 2015 2016 2017 2018 Q1-19
€ m
illio
ns
Cash and Deposits Net Cash
76June 2019
VI. OUTLOOK & SUMMARY
77June 2019
Operating Expenses
€ 30.7
Q2-19Q1-19
Guidance Q2-19
78
Q1-19 Q2-19
Gross Margin
55.9%
Revenue
Q1-19 Q2-19
€ 81.4 55%-57% -5%
-15%
+5%
June 2019
Summary
79
Assembly market ever more critical
step in semiconductor
value chain
Successful Asian production
expansion has been a game
changer
Long term secular trends
drive continued advanced packaging
growth
Tech leadership, scalability and
cycle times have led to 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
June 2019
Financial Calendar
June 2019 80
6-Jun-19 Analyst meeting, Amsterdam
25-Jun-19 Kempen Conference Small & Mid Cap, Paris
27-Jun-19 ABN AMRO Benelux Equities Conference, London
10-Jul-19 11th Annual CEO Summit, San Francisco
25-Jul-19 2019 Second Quarter Results
4-Sep-19 ING Benelux Conference, London
5-Sep-19 DB European TMT Conference, London
12-Sep-19 Kepler Cheuvreux Autumn Conference, Paris
24-Oct-19 2019 Third Quarter Results
28-Nov-19 Kempen conference, London
13/14-Nov-19 Morgan Stanley TMT Conference, Barcelona
17-Dec-19 Annual NY Summit, New York
