Annual General Meeting April 24, 2013

Transcription

1 Annual General Meeting April 24, 2013

2 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, backlog, 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 constitutes 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 the discovery of weaknesses in our internal controls and procedures, our inability to maintain continued demand for our products; the impact on our business of potential disruptions to European economies from euro zone sovereign credit issues; 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 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 of terrorism and violence; inability to forecast demand and inventory levels for our products, the integrity of product pricing and protect 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; those additional risk factors set forth in Besi's annual report for the year ended December 31, 2012 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 are under no obligation to (and expressly disclaim any such obligation to) update or alter our forward-looking statements whether as a result of new information, future events or otherwise. 2

3 TABLE OF CONTENTS I. Introduction II. Market III. Strategy IV. Financial Review V. Conclusion 3

4 I. INTRODUCTION

5 KEY FINANCIAL HIGHLIGHTS 2012 Revenue million: -16.3% vs Orders million: -8.3% vs Net Income 15.8 million vs million in 2011 Adjusted net of 18.2 million vs million Includes restructuring charges of 2.4 million in 2012 vs. 0.7 million in 2011 Liquidity Cash million to million Net cash million 5

6 D-10 J-11 F-11 M-11 A-11 M-11 J-11 J-11 A-11 S-11 O-11 N-11 D-11 J-12 F-12 M-12 A-12 M-12 J-12 J-12 A-12 S-12 O-12 N-12 D-12 J-13 F-13 M-13 STOCK PRICE TRENDS BESI SOX Q Besi +15.7% / /2012 Besi +14.9% SOX -6.7% SOX +13.7%

7 Dividend ( ) Dividend yield DIVIDEND TRENDS Base Dividend Special Dividend Base Dividend Yield (a) Total Dividend Yield (a) 5.2% 4.0% 4.3% 3.8% (b) 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% a) Based on year end stock price of 5.79 b) Proposed for approval at April 2013 AGM 7

8 ( million) Cash/Market Value CASH AS % OF MARKET VALUE 250 Cash Market Value Cash/Market Value % % % 48.8% 50.0% % % % 0 As of Dec 31, % 8

9 II. MARKET

10 ELECTRONIC DEVICE TRENDS Computing and Communications Evolution Continues Source: ASE GROUP 10

11 ASSEMBLY EQUIPMENT MARKET FORECAST Assembly Equipment Market Size (Apr 2013 VLSI) YoY Growth Rate (Apr 2013 VLSI) % CAGR 12-17: 2.9% % 140% 120% % 80% 3 60% % -7.8% -0.8% -2.7% 17.7% 7.3% -9.3% 3.4% 40% 20% 0% -20% E 2014E 2015E 2016E 2017E Source: VLSI April % Since 2010 rebound, assembly market has been trending lower Significant market growth anticipated in 2014 (+17.7%) and 2015 (7.3%) 11

12 BESI COMPETITIVE POSITION 40% Assembly Market Share 40% Addressable Market Share #3 leading assembly supplier 20% 0% Competition: 11% Company Position: #3 14% 14% Mkt Size: $4,192MM ASM-PT, K/S, Shinkawa, Tokyo Semitsu, Disco 20% 0% Competition: Company Position: #2 27% 24% 27% Mkt Size: $1,700MM ASM-PT, Disco, Shinkawa, Towa, Hanmi, Hitachi #2 in addressable market with 27% share Leader in die attach Gained market share in 2011: Die attach (die bonding and sorting) Packaging (molding) 40% 20% Die Attach Market Share 29% 29% 32% 40% 20% 13% Packaging Market Share 10% 12% Leader in growth areas: Multi module die attach Flip Chip Ultra thin molding 0% Competition: Mkt Size: $1,015MM ASM-PT, Shinkawa, Panasonic, Muhlbauer 0% Competition: Mkt Size: $668MM Towa, ASM-PT, Yamada, Dai Ichi Seiko, Gallant, Hanmi, Rocco Accuracy, precision and speed distinguishes Besi vs. competition, particularly for mainstream market Company Position: #1 Die Bonding, #1 Multi Module, #1 Flip Chip, #2 Die Sorting Company Position: #2 Molding, #2 T&F #3 Singulation *Source: VLSI Jan

13 Jan 10 Feb 10 Mar 10 Apr 10 May 10 Jun 10 Jul 10 Aug 10 Sept 10 Oct 10 Nov 10 Dec 10 Jan 11 Feb 11 Mar 11 Apr 11 May 11 Jun 11 Jul 11 Aug 11 Sept 11 Oct 11 Nov 11 Dec 11 Jan 12 Feb 12 Mar 12 Apr 12 May 12 Jun 12 Jul 12 Aug 12 Sept 12 Oct 12 Nov 12 Dec 12 Jan 13 Feb 13 % Capacity Utilization 3 Month Avg Pricing ($) IC PRICING AND ASSEMBLY MARKET TRENDS Assembly Capacity Utilization & IC Pricing Book to Bill Ratio 100.0% Semiconductor Equipment Book to Bill Trends (3 month moving average) 90.0% 80.0% 70.0% 60.0% 50.0% 2010 JAN MAY SEP 2011 JAN MAY SEP 2012 JAN MAY SEP 2013 JAN Assembly Equipment 1.40 Total Semi Equipment Assembly Utilization IC ASP Source: VLSI April 2013 Source: Semi April 2013 High degree of industry volatility over past 3 years due to customer uncertainty Assembly equipment market has been more volatile than semi equipment market Book/bill and pricing have improved since Q4-12. Appears to be recent industry trough 13

14 2013 INDUSTRY OUTLOOK Market Environment Cautiously Improving VLSI initially assumed 6.1% assembly market downturn in Now forecasts 2.7% decline Mixed industry picture. Renewed strength in advanced packaging (tablets, smart phones and automotive) Memory and leadframe suffering due to PC slowdown Strong growth expected for Besi in Q2 14

15 CUSTOMER ECO SYSTEM Customers End Products End Use Blue chip customer base, top 10 customers represent 48% of 2012 revenue Leading Asian Subcontractors and IDMs. 57/43% split in 2012 Equipment utilized to produce chips for leading fabless companies: Qualcomm, Broadcom, MediaTek Long term relationships, some exceeding 45 years 15

16 PRODUCT SHIFT TO ADVANCED PACKAGING END USER APPLICATIONS 2012 Auto 13% Industrial 10% Mobile Internet Devices 22% 2008 Service 2% LED 3% Computer, PCs 50% LED 5% Industrial 10% Auto 17% Service 12% Computer, PCs 21% Mobile Internet Devices 35% Mobile internet devices now equal 35% of end user revenue Automotive has also increased in recent years Service/spare parts have grown to 12%. Less cyclical revenue stream Source: 2012 Company Estimates 16

17 million phones MOBILE INTERNET DEVICE MARKET TRENDS 2,500 2,000 1,500 1,000 Smart Phones % 30.8% 62.5% ,500 Rapid unit growth in smart phones and tablets forecast over next 5 years Estimated unit growth rates: , Basic Phones Smart Phones Tablets Smart phones: 2012: 62.5% 2016: 3.5x Tablets: 2012: 120% 2014: 4x Significant potential revenue growth driver Source: Prismark 17

18 FLIP CHIP/WIRE BOND OPPORTUNITY Wire Bonding Flip Chip Bonding E Flip Chip $,238 20% Flip Chip $,334 25% Reduces board area by up to 95%. Requires far less height Flip Chip Advantages Offers higher speed electrical performance Wire Bonding $,938 80% CAGR Flip Chip 7.0% Wire Bond 1.5% Wire Bonding $1,010 75% Greater I/O connection flexibility More durable interconnection method Move to <40 nanometer can only be accomplished by use of flip chip die bonding vs. wire bonding process Flip chip revenue represents only 20% currently of total potential market of $1.2 billion Lower cost for high volume production, with costs below $0.01 per connection Expected to gain share rapidly over next 5 years vs. wire bonding (5.5% CAGR delta) as per VLSI Growth rates could accelerate depending on adoption rates of key IDMs/subcons * Source: VLSI April

19 SEMI EQUIPMENT CONSOLIDATION TRENDS Top 20 Semiconductor Equipment Suppliers (based on 2011 revenues, after all acquisitions consolidated) Source: VLSI Front-end Back-end Besi Acquisition Criteria: Technology led mainstream companies which increase IP and can be incorporated into One Besi platform. Value creation through integration Upstream/downstream companies: further advanced packaging position Most acquisition candidates lack scale and Asian footprint 19

20 III. STRATEGY

21 2012 PRODUCT DEVELOPMENT HIGHLIGHTS Advanced packaging is key focus: tablets, smart phones and intelligent automotive electronics principal end use applications currently Penetration of largest smart phone and tablet ecosystems in 2012 Shipped 100+ evo multi module systems for die attachment of 8 mega pixel lens cap camera modules Gained market share in molding systems for ultra thin packaging Current development activities New assembly challenges such as TCB, TSV, copper pillar and wafer level packaging Received first orders for TCB die bonding equipment for next generation 20 nano device geometries Began development on mm wafer handling for chip sorting and die attach applications Ongoing common platform activities 21

22 2012 OPERATIONAL HIGHLIGHTS Business Model Enhanced In Light of Volatile Semi Environment Asian production transfer nearly completed 35% YOY increase in Asian system production. 274 systems produced in Q2-12 Record 90% of total systems produced in Asia Direct shipments increased to 85% of total Asian shipments Capacity expansion completed Break even revenue levels reduced by 13% European headcount down 11%, primarily production personnel Average cost per production employee down 7% SG&A expenses down 8.3 million or 12% Dutch plating operation rationalized to improve ROI Scalability and flexibility significantly improved Managed 65% H1-12 order ramp and ensuing 47% H2-12 order decline while maintaining profitability in Q1 and Q4-12, industry trough quarters Progress in Asian supply chain expansion 22

23 ( millions) BREAK EVEN REVENUE TRENDS (13.0%) (10.0% %) E 23

24 Shipments % Direct Shipments ASIAN SHIPMENT TRENDS Total Asian Shipments Direct Asian Shipments % Direct 100.0% % 84.0% 80.0% 68.0% % % % 42.9% % 30.0% % 10.0% 0.0%

25 Headcount HEADCOUNT TRENDS Europe/NA Fixed HC 1,800 Asia Fixed HC 1,600 1,400 1,384 1,510 1,543 1,479 1,465 Headcount trends continue to favorably influence break even revenue levels 1,200 1, % % % % % Fixed European headcount gradually reducing as shift to Asian manufacturing progresses: Down by 6% sequentially in Q1-13 Down by 11% year over year Declined from 56% of total in 2009 to 44% at end of Q % % % % % Aggregate of 1,524 at Q1-13 quarter end: Down 1.0% vs. Q4-12 Down 5.8% vs. Q Q

26 STRATEGY TIMELINE Operational Objectives Soft Solder DB production transfer to Malaysia 50% Malaysia/100% China capacity expansion European Die Attach integration activities Expansion of Asian supply chain. System module outsourcing Development Objectives TCB flip chip die bonding development mm wafer handling Common platform activities 26

27 IV. FINANCIAL REVIEW

28 SUMMARY FINANCIAL HIGHLIGHTS Financial transformation since 2008 Year Ended December 31, ( millions, except share data) Revenue Orders Gross margin 39% 40% 40% EBITDA Pretax income Net income EPS (diluted) Net margin 13% 8% 6% Adj. net income (loss) Adj. EPS (diluted) Net Cash Scale and market presence have changed: Esec acquisition expanded mainstream presence and leveraged revenue potential Strategic positioning in advanced packaging has yielded benefits: Enhanced top line growth Increased gross margins Restructuring efforts have aided gross margins and profits in face of 2011/2012 industry downturns due to: Advanced packaging presence Ongoing Asian production transfer Reduction of European based costs Die Attach integration Product line restructurings Scalability of business model increased in response to increased order volatility Solid liquidity base. Expanding net cash 28

29 ( millions) LIQUIDITY TRENDS (20.0) (40.0) (60.0) (80.0) Cash Total Debt Net Cash (24.8) (26.9) (53.5) (46.4) Solid liquidity position million cash at 12/31/ per share relative to share price of 5.79 at year end Net cash has grown to 79.5 million from 19.6 million at year end 2009 Significant increase in profitability Redemption and share conversion of 5.5% convertible notes in Q Improved working capital management Shareholder value enhanced 26 million spent on share repurchases and cash dividends in 2011/ million share buyback program initiated in October 2012 Strong balance sheet supports future organic growth and acquisition strategy 29

30 KEY FINANCIAL HIGHLIGHTS Q1-13 Q1-13 Results Exceed Expectations. Q2-13 Results Expected to Increase vs. Q1-13 Revenue 64.0 million: +13.7% vs. Q % vs. Q1-12 Above guidance (+5%) Orders 63.9 million: +22.8% vs. Q % vs. Q1-12 Pre-tax Income million vs. Q4-12 and 3.4 million vs. Q1-12 Net Income 3.8 million in Q1-13 vs. 1.2 million in Q4-12 and 0.2 million in Q1-12 Includes restructuring charges of 0.2 million Liquidity Sequential cash million to 91.9 million Net cash million to 64.2 million 30

31 Q GUIDANCE Revenue Gross Margin Operating Expenses* Capex % Up 10% 41% - 39% Approx. equal Up 0.6 MM Q1 Q2 Q1 Q2 Q1 Q2 Q1 Q2 * Excluding restructuring 10% sequential revenue growth forecast based on backlog and order trends Gross margins will range between 39%-41% Opex approximately equal to 20.9 million (ex restructuring) No restructuring charges anticipated in Q2-13 Capex of 1.0 million 31

32 V. CONCLUSION

33 SUMMARY Excellent Product Positioning and Market Acceptance Near Term Industry Outlook Has Improved Strategic Initiatives Offer Increased Scalability, Revenue and Higher Profit Potential Development Efforts Underway for Next Generation Advanced Packaging Dividend and Stock Repurchases Enhance Shareholder Value 33