INVESTOR PRESENTATION Q3-2014 RESULTS …Q3 2013 Q3 2014 € millions Net margin % Revenue Net...
Transcript of INVESTOR PRESENTATION Q3-2014 RESULTS …Q3 2013 Q3 2014 € millions Net margin % Revenue Net...
October 30, 2014 Page 1
INVESTOR PRESENTATIONQ3-2014 RESULTS
OCTOBER 30, 2014
October 30, 2014 Page 2
Safe Harbor Statement
This presentation contains statements about management's future expectations, plans and prospects of our business thatconstitute forward-looking statements, which are found in various places throughout the press release, including , but notlimited to, statements relating to expectations of orders, net sales, product shipments, backlog, expenses, timing ofpurchases of assembly equipment by customers, gross margins, operating results and capital expenditures. The use ofwords 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 lookingstatements contain these identifying words. The financial guidance set forth under the heading “Outlook” constitutes forwardlooking statements. While these forward looking statements represent our judgments and expectations concerning thedevelopment of our business, a number of risks, uncertainties and other important factors could cause actual developmentsand results to differ materially from those contained in forward looking statements, including the discovery of weaknesses inour internal controls and procedures, our inability to maintain continued demand for our products; the impact on ourbusiness of potential disruptions to European economies from euro zone sovereign credit issues; failure of anticipatedorders to materialize or postponement or cancellation of orders, generally without charges; the volatility in the demand forsemiconductors and our products and services; failure to adequately decrease costs and expenses as revenues decline,loss of significant customers, lengthening of the sales cycle, incurring additional restructuring charges in the future, acts ofterrorism and violence; inability to forecast demand and inventory levels for our products, the integrity of product pricing andprotect 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;potential instability in foreign capital markets; the risk of failure to successfully manage our diverse operations; thoseadditional risk factors set forth in Besi's annual report for the year ended December 31, 2013 and other key factors thatcould adversely affect our businesses and financial performance contained in our filings and reports, including our statutoryconsolidated statements. We are under no obligation to (and expressly disclaim any such obligation to) update or alter ourforward-looking statements whether as a result of new information, future events or otherwise.
October 30, 2014 Page 3
Table of Contents
I. Key Highlights
II. Financial Review
III. Strategic Highlights
IV. Outlook
V. Summary
October 30, 2014 Page 4
I. KEY HIGHLIGHTS
I. KEY HIGHLIGHTS
October 30, 2014 Page 5
Key Financial Highlights Q3 and YTD-14
• € 103.5 million :• -10.9% vs. Q2-14• +58.3% vs. Q3-13
Revenue
• € 90.9 million :• -26.8% vs. Q2-14• +88.7% vs. Q3-13
Orders
• € 21.5 million vs. € 22.9 million in Q2-14 and € 4.4 million in Q3-13
Net Income
• Net cash of € 86.1 million• +€ 23.6 million vs. Q2-14 • Debt of € 19.3 million
Liquidity
Besi Posts Strong Q3-14 and Nine Month Results. Q3-1 4 Profit Exceeds Expectations
• € 289.8 million :• +43.5% vs. 2013
Revenue
• € 326.2 million :• +67.5% vs. 2013
Orders
• € 51.4 million vs. € 14.7 million in 2013
Net Income
• Net cash +€ 30.1 million
Liquidity
Q3-14 YTD-14
October 30, 2014 Page 6
€ 201.9
€ 289.8
7.3%
17.7%
5%
9%
13%
17%
21%
25%
29%
33%
37%
41%
45%
49%
53%
57%
61%
65%
69%
73%
€ 0
€ 25
€ 50
€ 75
€ 100
€ 125
€ 150
€ 175
€ 200
€ 225
€ 250
€ 275
€ 300
2013 YTD 2014 YTD
Net
mar
gin
%
€m
illio
ns
Revenue Net Margin
Gross Margin
OPEX
Headcount
Effective Tax Rate
€ 65.4
€ 103.5
6.8%
20.8%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
60%
65%
70%
75%
80%
85%
90%
95%
€ 0
€ 25
€ 50
€ 75
€ 100
Q3 2013 Q3 2014
Net
mar
gin
%
€m
illio
ns
Revenue Net Margin
Gross Margin
OPEX
Headcount
Effective Tax Rate
Revenue Growth and Operating Leverage Yield Increased Profitability in 2014
15.5% 10.2%
1,493 1,649
€ 20.1 MM
€ 23.0 MM
+10.5%
-5.3 points
+14.2%
39.2% 45.3%
+58.3%
+14.0%
20.4% 10.0%
1,493 1,649
€ 62.1 MM
€ 69.1 MM
+10.5%
-10.4 points
+11.3%
39.8% 43.8%+4.0 points
+43.5%
+10.4%
Q3-14/Q3-13 YTD-14/YTD-13
+6.1 points
€ 4.4
€ 21.5
€ 14.7
€ 51.4
October 30, 2014 Page 7
II. FINANCIAL REVIEW
October 30, 2014 Page 8
Revenue/Order Trends
Q3-14 vs. Q2-14• Revenue: € 103.5 million (-10.9%)
• Seasonal downturn at much higher base line than 2013. Within guidance (-10-15%)
• Lower multi module, flip chip and epoxy die bonding systems for smart phones
• Partial offset: higher packaging and plating
• Orders: € 90.9 million (-26.8%)• Lower orders by Asian subcontractors for die
bonding and molding systems• Partial offset: soft solder and TCB die bonding
orders• +€ 8.1 million (+13.5%) IDMs• -€ 41.4 million (-64.5%) subcontractors
Q3-14 vs. Q3-13• Revenue: +€ 38.1 million (+58.3%)
• Primarily multi module and epoxy die bonding and ultra thin molding systems for smart phones and automotive electronics
• Orders: +€ 42.7 million (+88.7%)
YTD-14 vs. YTD-13• Revenue: +€ 87.9 million (+43.5%)
• Broad based across portfolio• Orders: +€ 131.5 million (+67.5%)
Quarterly Trends
Year to Date Trends
64.0 72.4
65.4 53.1
70.0
116.2 103.5
63.9
82.7
48.2 57.2
111.1
124.2
90.9
0
20
40
60
80
100
120
140
Q1-2013 Q2-2013 Q3-2013 Q4-2013 Q1-2014 Q2-2014 Q3-2014
(eur
o in
mill
ions
)
Revenue Orders
201.9
289.8
194.7
326.2
0
50
100
150
200
250
300
350
2013 2014
(eur
o in
mill
ions
)
Revenue Orders
October 30, 2014 Page 9
64.0 72.4
65.4 53.1
70.0
116.2 103.5
39.6% 40.4%39.2% 40.1%
42.3% 43.2%45.3%
15%
20%
25%
30%
35%
40%
45%
50%
0
20
40
60
80
100
120
140
160
Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14
(eur
o in
mill
ions
)
Revenue Gross Margin
Gross Margin Trends
Q3-14 vs. Q2-14• 45.3% vs. 43.2%• Better than guidance (42-44%)
• Favorable product mix• Lower inventory provisions• Absence of restructuring charges• Lower euro vs. USD
Q3-14 vs. Q3-13 • 45.3% vs. 39.2%
• 58.3% revenue increase• Increased efficiencies:
• Labor• Production overhead• Freight• Materials costs
• Lower provisions• Lower euro vs. USD
YTD-14 vs. YTD-13 • 43.8% vs. 39.8%
Quarterly Trends
201.9
289.8
39.8%
43.8%
30%
35%
40%
45%
50%
55%
60%
0
50
100
150
200
250
300
2013 2014
(eur
o in
mill
ions
)
Revenue Gross MarginYear to Date Trends
October 30, 2014 Page 10
Operating Expense Trends
Q3-14 vs. Q2-14• € 1.6 million lower opex (-6.5%)
• € 0.8 million: absence of restructuring charges• € 0.9 million lower share based compensation• € 0.3 million lower warranty expense/lower
shipments
Q3-14 vs. Q3-13• € 2.9 million higher opex (+14.2%)
• Increased personnel, warranty and commission costs related to higher sales
• € 0.8 million higher amortization of cap. development costs
YTD-14 vs. YTD-13• € 7.0 million higher opex (+11.3%)
• +€ 3.7 million personnel costs • +€ 2.4 million warranty costs • +€ 2.1 million share based comp• -€ 0.6 million G&A ex share based comp
Quarterly Trends
14.1 13.7 14.2 13.1 15.2 17.2 15.5
6.8 6.7 5.9 5.2
6.1 6.6
7.50.2 0.6 0.0 2.2
0.2
0.8 0.021.1 21.0 20.1 20.5 21.5
24.6 23.0
0
5
10
15
20
25
30
Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14
(eur
o in
mill
ions
)
Restructuring/Other R&D SG&A
42.0 48.0
19.3 20.2
0.8 1.0 62.1
69.1
0
20
40
60
80
2013 2014
(eur
o in
mill
ions
)
Restructuring/Other R&D SG&A
Year to Date Trends
October 30, 2014 Page 11
Workforce Trends
• Workforce has become more scalable and flexible
• 2014 revenue ramp achieved using primarily Asian production temps
• Reducing HC in H2-14 with seasonal slowdown
• European/US fixed HC levels have reduced • -3.0% Q3-14/Q3-13
1,510 1,543 1,479 1,434 1,462 1,507 1,506
194 64 60
24 107
165 143
1,704 1,607
1,539 1,458
1,569 1,672 1,649
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
-
500
1,000
1,500
2,000
2,500
2010 2011 2012 2013 Q1 14 Q2 14 Q3 14
Tem
p %
of T
otal
Hea
dcou
nt
Fixed Temp Temp % of Total
October 30, 2014 Page 12
Net Income Trends
• Quarterly net income trends reflect industry and seasonal volatility
• Net margins of 20.8% in Q3-14
• Profit growth aided by significant leverage in operating model• Quarterly opex have ranged between
€ 20-25 million over past 11 quarters• € 23.0 million in Q3-14
• Significant reduction in effective tax rate has also helped• Declined from 20.4% to 10.0% YTD
Quarterly Trends
3.8
6.5 4.4 1.4
7.0
22.9
21.5
5.9%9.0% 6.8%
2.7%
10.0%
19.7%20.8%
-1.0%
4.0%
9.0%
14.0%
19.0%
24.0%
0
4
8
12
16
20
24
28
Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14
(eur
o in
mill
ions
)
Net Income Net Margin
14.7
51.4
7.3%
17.7%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
0
10
20
30
40
50
60
2013 2014
(eur
o in
mill
ions
)
Net Income Net Margin
Year to Date Trends
October 30, 2014 Page 13
Liquidity Trends
Q3-14 vs. Q2-14• Net cash +€ 23.6 million to € 86.1 million• Cash dividends of € 12.4 million in Q2-14
Q3-14/Q2-14 Cash Movements
Sources of cash• € 26.7 million cash from operations
Principal uses of cash• -€ 2.2 million debt payments• -€ 2.0 million capitalized R&D• -€ 1.6 million capex
Q3-14 vs. Q3-13• Net cash +€ 30.1 million primarily due to
increased profit generation
Quarterly Trends
91.9
81.1 78.5
89.6 91.9
83.8
105.4
27.7 24.9
22.5 18.6 19.1
21.3 19.3
64.2
56.2 56.0
71.0 72.8
62.5
86.1
0
20
40
60
80
100
120
Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14
(eur
o in
mill
ions
)
Cash Debt Net Cash
October 30, 2014 Page 14
III. STRATEGIC HIGHLIGHTS
October 30, 2014 Page 15
147.9
351.1 326.9
273.7 254.9
201.9
289.8
-1.0%
137.4%
-6.9%-16.3%
-6.9%
43.5%
-50%
0%
50%
100%
150%
-
100.0
200.0
300.0
400.0
2009 2010 2011 2012 2013 YTD 2013 YTD 2014
(€m
illio
ns)
Besi RevenueRevenue YoY Growth Rate
Assembly Equipment Market Trends
* Source: VLSI Oct 2014
2.1
4.7 4.3
3.9
3.0 3.5
3.7
-27.1%
124.0%
-7.7% -9.6%-23.1%
16.2%5.0%
-50%
0%
50%
100%
150%
-
1.0
2.0
3.0
4.0
5.0
2009 2010 2011 2012 2013 2014E 2015E
(US
$ bi
llion
s)
Assembly Equipment*
Market Size YoY Growth Rate
• VLSI forecasts renewed growth of assembly market in 2014 and 2015• Besi revenue growth exceeding assembly market in 5 of past 6 years
October 30, 2014 Page 16
Mar10
Jun10
Sept10
Dec10
Mar11
Jun11
Sept11
Dec11
Mar12
Jun12
Sept12
Dec12
Mar13
Jun13
Sept13
Dec13
Mar14
Jun14
Sept14
Total Equipment 1.21 1.18 1.03 0.90 0.95 0.94 0.71 0.85 1.12 0.93 0.78 0.92 1.11 1.10 0.97 1.02 1.06 1.10 0.94
Assembly Market 1.51 1.35 0.81 0.86 1.01 0.92 0.81 1.02 1.28 1.11 0.53 0.92 1.08 1.26 0.68 1.06 1.25 1.25 0.69
1.21
0.901.12
0.78
1.060.94
1.51
0.81
1.28
0.53
1.26
0.68
1.25
0.69
0.50
0.75
1.00
1.25
1.50
1.75
2010-2014 Quarterly Book to Bill Ratio
• Besi order trends highly correlated to assembly equipment industry• Strong industry growth in H1 followed by weaker H2 has been the trend• 2014 is no exception
Source: Semi October 2014
Assembly Market
Total Semi Equipment
October 30, 2014 Page 17
New Smart Phone Designs Increase Addressable Market Potential
• Besi systems can assemble 50% of iPhone 4s components and 70% of iPhone 6 components
- NewMain Components iPhone4s iPhone6 Manufacturer IDM/OSAT Besi system UtilizedProcessor X X Apple TSMC ->Amkor/Stats/ASE 8800FCQ, AMS-W/LM
DRAM Memory X X Hynix/Micron Hynix/Micron 2100sD, FSL
NAND Flash X X Hynix/Toshiba Hynix/Amkor/Toshiba 8800FCQ, AMS-W/LM
Power ManagementApple PM IC X Dialog Dialog 2100sD
PMIC X X Qualcomm N/A
M3 Microcontroller X NXP Amkor/NXP 8800FCQ, AMS-W/LM
Accelerometer/Gyroscope/BarometricGyroscope X X Invensense Amkor/ASE/STM 2100xP, 2100sD, AMS-W/LM, FCL
3-ax accelerometer X Bosch Bosch evo
barometric sensor X Bosch Bosch evo
Communications iPhone4s iPhone6 Manufacturer IDM/OSAT Besi system Utilized
Wifi/NFCWifi module X X Murata Murata Murata's equipment
NFC X NXP Amkor 8800FCQ, AMS-W/LM
NFC Booster IC X AMS Daca N/A
LTE
LTE Modem X Qualcomm Amkor/Stats/Spil/ASE 8800FCQ, AMS-W/LM
Low Band LTE PAD X Skyworks Skyworks 2200evo, FSL
Mid Band PAD X Skyworks Skyworks 2200evo, FSL
High Band PAD X Avago ASE/Amkor 2100xP, 2100sD, AMS-W/LM
Receiver/TransceiverRF Transceiver X X Qualcomm Amkor 2100xP, 2100sD, AMS-W/LM
RF Receiver X X Qualcomm N/A
Envelop Tracking IC X Qualcomm TSMC ->Amkor/Stats/ASE 8800FCQ, AMS-W/LM
Antenna Switch X X RFMD Amkor/ASE,/RFMD 2100xP, 2100sD
PA
PA X X Avago ASE/Amkor 2100xP, 2100sD, AMS-W/LM
PA Module X Triquint ASE 2200evo, 2100sD
Video/Audio iPhone4s iPhone6 Manufacturer IDM/OSAT Besi system Utilized
CameraBack side 8M (OSI) X X Apple LG, Sharp, Mitsumi 2200evo
Front 1.2M X X Apple Cowell, Sony 2200evo
Finger print sensor X Apple ASE 2200evo
Audio
2+4 microphones X ST ST 2100 xp
Audio Codec X X Cirrus Logic Amkor 2100xP, 2100sD, AMS-W/LM
Touch screen control
Touch screen control X X Broadcom Signetics 2100sD
Touch Transmitter X TI TI FCL
October 30, 2014 Page 18
Strategic Agenda
Operational Objectives
Expansion of Asian supply chain. System module outsourcing
Die attach integration activities
Development Objectives
Advanced TCB die bonding development
Introduction of next generation die attach and wafer molding systems
Common platform/parts activities
2013 2014 2015
October 30, 2014 Page 19
IV. OUTLOOK
October 30, 2014 Page 20
Q4-14 Guidance
Revenue Gross Margin* Operating Expenses* Capex
Q3 Q4 Q3 Q4 Q3 Q4 Q3 Q4
€ 103.5 45.3% € 23.0 € 1.6
42%-
44%
Down12-18%
Up€ 0.6 MM
* Excluding restructuring
• Revenue up 65-70% above Q4-13. Down 12-18% vs. Q3-14• Besi business is stronger than prior years despite typical H2 seasonal downturn• Gross margins of 42-44% as lower revenue and mix affect levels vs. particularly
strong Q3• Opex up 5-10% vs. Q3-14• Capex of € 2.2 million
Up5-10%
October 30, 2014 Page 21
V. SUMMARY
V. SUMMARY
October 30, 2014 Page 22
Summary
Q3-14 Results Exceed Profit Expectations
Gaining Share in Advanced Packaging
Applications
Strategic Execution Has Greatly
Increased Efficiency and Margins
Strong Q4-14 and 2014 Anticipated
Seasonality and Quarterly Volatility
Continue
Ongoing Operating Initiatives to
Increase Profitability
October 30, 2014 Page 23
Financial Calendar
30-Oct-14 2014 Third Quarter Results
19/20-Nov-14 Morgan Stanley TMT Conference, Barcelona, Spain
20-Nov-14 ABN AMRO US Conference 2014, New York, USA