INVESTOR PRESENTATION Q4 and FY 2019 RESULTS February … · Revenue Orders Revenue/Order Trends...
Transcript of INVESTOR PRESENTATION Q4 and FY 2019 RESULTS February … · Revenue Orders Revenue/Order Trends...
INVESTOR PRESENTATION
Q4 and FY 2019 RESULTS
February 20, 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, 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.
2February 20, 2020
Table of Contents
3
I. Key Highlights
II. Market & Strategy
III. Outlook
IV. Financial Appendix
February 20, 2020
I. KEY HIGHLIGHTS
4February 20, 2020
Besi Q4-19 Results Exceed ExpectationsSequential Orders Increase by 22.3%
5February 20, 2020
€ millions
Guidance
Q4-19 Q4-19 ∆ Q3-19 ∆ Q4-18
Revenue -5% - +5%* 92.4 +3.0% -0.1%
Orders 100.5 +22.3% +20.9%
Gross
Margin54%-56% 56.3% +1.2 -0.1
Opex +5% - +10%* 25.2 +4.1% -2.7%
Net Income 33.7 +75.5% +48.5%
EPS Basic 0.47 +80.8% +56.7%
Net Cash 130.3 +21.9% -34.7%
*As compared to Q3-19
€ 89.7 € 92.4
21.4%
36.5%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
20
40
60
80
100
Q3-19 Q4-19*
Net
marg
in %
Revenue (
€ m
illio
ns)
Revenue Net Margin
Gross Margin
OPEX
Headcount
Effective Tax Rate
- 38
- 56.6 points
+ 4.1%
+ 1.2 points
Solid FY-19 Performance in DownturnAttractive Profit and Margins Maintained
6
12.7% - 43.9%
1,634 1,596
€ 24.2 MM € 25.2 MM
55.1% 56.3%
Q4-19/Q3-19
€ 19.2
FY-19/FY-18
€ 22.1
+ 3.0%
+ 15.1 points
February 20, 2020
€ 525.3
€ 356.2
25.9%22.8%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
100
200
300
400
500
600
2018 2019*
Net
marg
in %
Revenue (
€ m
illio
ns)
Revenue Net Margin
Gross Margin
OPEX
Headcount
Effective Tax Rate
- 32.2%
- 163
- 15.0%
- 1.0 points
€ 69.7
€ 136.3
12.1% (4.1%)
1,759 1,596
€ 125.7 MM € 106.9 MM
56.8% 55.8%
- 3.1 points
- 16.2 points
€ 11.6 € 11.6
* Includes € 11.6 million tax benefit at Besi’s Swiss operations in Q4-19
Increased Profitability vs. Last Downturn
7February 20, 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%
Liquidity Trends
8
Q4-19 vs. Q3-19
• Net cash increased by € 23.4 million
(+21.9%) to € 130.3 million
Q4-19 cash movements
• +€ 36.3 million cash provided by operations
• - € 5.8 million share repurchases
• - € 4.2 million capitalized R&D
• - € 0.7 million capex
157.8
304.8
527.8
475.5
507.5
361.7383.7
408.4
136.5
168.1
247.6
199.4
229.7
86.1106.9
130.3
0
100
200
300
400
500
600
2015 2016 2017 2018 Q1-19 Q2-19 Q3-19 Q4-19
€ m
illio
ns
Cash and Deposits Net Cash
February 20, 2020
€ 122.4 MM
Dividend
2018
Capital Allocation Trends
9
45.4
65.3
174.0
122.422.0
23.5
35.5
44.7
67.4
88.8
209.5
167.1
72.9
0
50
100
150
200
2016 2017 2018 2019 2020*
Dividends
Share Repurchases
€ millions
* Includes proposed dividend for approval at April 30, 2020 AGM
• Shareholder friendly capital allocation program
• € 652.9 million distributions since 2011:
• € 167.1 million in 2019
• € 1.01 dividend proposal 2019, for approval at AGM
• Current € 75 million share repurchase program:
• 3.1 million shares (€ 67.1 million) bought
at € 21.91 per share
• 7.8 million shares (9.8%) held in treasury
February 20, 2020
33%
67%
26%
74%
17%
83%
27%
73%
II. MARKET & STRATEGY
10February 20, 2020
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%
150%
0
200
400
600
2014 2015 2016 2017 2018 2019
€ m
illio
ns
Besi RevenueRevenue YoY Growth Rate
Assembly Equipment Market Trends
3.7
3.13.5
4.4 4.3
3.03.3
3.5
22.9%
-16.5%
12.5%
25.8%
-2.5%
-30.4%
10.3% 7.2%
-50%
-30%
-10%
10%
30%
50%
0.0
1.0
2.0
3.0
4.0
5.0
2014 2015 2016 2017 2018 2019E 2020E 2021E
US
$ b
illio
ns
Assembly Equipment MarketMarket Size YoY Growth Rate
Source: VLSI January 2020
• VLSI downwardly revised 2019 forecast to -30.4%
• Rebound anticipated in 2020 and 2021
11February 20, 2020
Semiconductor Equipment Outlook
12February 20, 2020
Source: VLSI February 2020
Q4 VLSI Update
Current Technology Roadmap
February 20, 2020 13
• 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
III. OUTLOOK
14February 20, 2020
Guidance Q1-20
15February 20, 2020
Revenue
Q4-19 Q1-20
€ 92.4 -10%
-
+10%
Operating Expenses
€ 25.2
Q1-20Q4-19Q4-19 Q1-20
Gross Margin
56.3%
Q4-19/Q1-20
54%-56%+35%
-
+40%
Baseline Operating Expenses
€ 23.7+10%
-
+15%
Q1-20Q4-19
Financial Calendar
16
25-Feb-20 Roadshow London, organized by Kempen
26-Feb-20 Roadshow Frankfurt, organized by ING
27-Feb-20 Roadshow the Netherlands, organized by Degroof Petercam
10-Mar-20 Berenberg Benelux Conference, London
12-Mar-20 Susquehanna’s Ninth Annual Technology Conference, New York
12-Mar-20 KBC Securities Tech Conference, London
30- Apr-20 2020 First Quarter Results
30-Apr-20 Besi Annual General Meeting of Shareholders, Duiven
28-Jul-20 2020 Second Quarter Results
22-Oct-20 2020 Third Quarter Results
February 20, 2020
IV. FINANCIAL APPENDIX
17February 20, 2020
Revenue and Gross Margin Cycles Since 2006
18
191
351
379
593356
164
302
424
55.8%
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 2019
Revenue Gross Margin
€ millions
4 year
averages
-12.9%
-7.8%-6.9%
February 20, 2020
-32.2%
Current Downturn
155 161
117
9381
93 90 92
206
86
108
83 83 83 82
101
0
40
80
120
160
200
240
Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19
€ m
illio
ns
Quarterly Trends
Revenue Orders
Revenue/Order Trends
19February 20, 2020
525
356
483
349
0
100
200
300
400
500
600
FY 18 FY 19
€ m
illio
ns
YTD Trends
Revenue Orders
Q4-19 vs. Q3-19
• Revenue: € 92.4 million (+3.0%)
• High end of guidance
• More IDM sales for logic/cloud servers
• Orders: € 100.5 million (+22.3%)
• +Advanced logic applications
• +Market conditions
• Asian subcontractor demand steady
• IDMs 58%/Subcontractors 42%
Q4-19 vs. Q4-18
• Revenue: -€ 0.1 million (-0.1%)
• Orders: +€ 17.4 million (+20.9%)
• +Asian subcontractors/mobile apps
2019 vs. 2018
• Revenue: -€ 169.1 million (-32.2%)
• Adverse market conditions
• Broad based. Mobile and auto hardest hit
• Orders: -€ 134.4 million (-27.8%)
• IDMs 61%/Subcontractors 39%
IDM/Subcontractor Trends
February 20, 2020 20
348.3 373.8
680.9
483.1
348.7
-
100
200
300
400
500
600
700
800
2015 2016 2017 2018 2019
Ord
ers
IDMs Subcontractors
49%
49%
35%
32%
51% 51%
65%
68%
€ millions
39%
61%
Gross Margin Trends
21
Q4-19 vs. Q3-19
• 56.3% vs. 55.1%
•Above guidance (54-56%)
•Favorable product and customer mix
•Lower personnel costs
Q4-19 vs. Q4-18
• 56.3% vs. 56.4%
• Net forex positive: Revenue +USD vs. EUR
Costs +MYR, CHF vs. EUR
YTD-18 vs. YTD-17
• 55.8% vs. 56.8%
• 55%+ margin achieved vs. 32.2% revenue decrease
• Net forex positive: Revenue +USD vs. EUR
Costs +MYR, CHF vs. EUR
* Favorable impact
Unfavorable impact
February 20, 2020
154.9 161.1
116.7
92.5 81.4
92.7 89.7 92.4
56.5% 56.5%
58.0%
56.4%55.9% 56.0%
55.1%56.3%
50%
52%
54%
56%
58%
60%
62%
64%
66%
68%
70%
0
40
80
120
160
200
Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19
€ m
illio
ns
Quarterly Trends
Revenue Gross Margin
525.3
356.2
56.8%55.8%
50%
52%
54%
56%
58%
60%
62%
64%
66%
68%
70%
0
100
200
300
400
500
600
FY 18 FY 19
€ m
illio
ns
YTD Trends
Revenue Gross Margin
Baseline Operating Expense Trends
22February 20, 2020
31.7 30.7
26.3 25.7 25.3 24.7 23.3 23.7
7.4
1.0
2.8
0.2
5.4
2.1
0.9 1.5
39.1
31.8
29.1
25.9
30.7
26.8
24.2 25.2
10
20
30
40
Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19
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.
Headcount Trends
23
540 508 502 462 453
949 1,041
1,222 1,230
1,081
50
120
316
67
62 1,539
1,669
2,040
1,759
1,596
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
0
500
1,000
1,500
2,000
2015 2016 2017 2018 2019
Temp % of TotalHeadcount Headcount Trends
Europe/NA Fixed HC Asia Fixed HC Temporary HC Temp % of Total
February 20, 2020
Net Income Trends
24February 20, 2020
€ 37.1
€ 47.2
€ 29.3
€ 22.7
€ 9.5
€ 18.9 € 19.2
€ 33.7
€ 22.1
23.9%
29.3%
25.1% 24.5%
11.7%
20.4% 21.4%
36.5%
23.9%
0%
10%
20%
30%
40%
50%
60%
70%
0
5
10
15
20
25
30
35
40
45
50
Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19*
€ m
illio
ns
Quarterly Trends
Net Income Net Income Net Margin Adj. Net Margin
€ 136.3
€ 81.3
€ 136.3
€ 69.7
25.9%
22.8%
19.6%
10%
20%
30%
40%
0
20
40
60
80
100
120
140
FY 18 FY 19*
€ m
illio
ns
YTD Trends
Q4-19 vs. Q3-19
• € 33.7 million (+€ 14.5 million)
• € 11.6 million deferred tax benefit at Swiss
operations due to change in Swiss fiscal policy
• Net margin 36.5% (23.9% ex tax benefit) vs. 21.4%
• + € 2.7 million revenue increase
• + 1.2 point gross margin increase
Q4-19 vs. Q4-18
• +€ 10.6 million
• Net margin 36.5% vs. 24.5%
2019 vs. 2018
• € 81.7 million (-€ 55.0 million)
• Effective tax rate of 10.8% (ex tax benefit) vs. 12.1%
in 2018
* Includes € 11.6 million deferred tax benefit recognized in Q4-19
Cash Generation Trends
25
86.5
98.7
168.2
184.1
120.1
24.8%26.3%
28.4%
35.0%33.7%
0
20
40
60
80
100
120
140
160
180
200
2015 2016 2017 2018 2019
€ millions
Total Cash Flow from Operations CFO/Revenue
February 20, 2020
Share Repurchase Activity
26February 20, 2020
4.0
22.4 22.8
35.5
44.7
€ 8.93
€ 12.44
€ 23.74
€ 21.79
€ 24.31
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
0
5
10
15
20
25
30
35
40
45
50
2015 2016 2017 2018 2019
Avg C
ost pe
r S
ha
re
€ m
illio
ns
Share Repurchases Average Cost per Share
• 3.1 million shares (€ 67.1 million) purchased through December 31, 2019 under current € 75 million program (avg price € 21.91)
• 185,405 million shares purchased in Q4-19 for € 5.8 million
• 7.8 million shares held in treasury at December 31, 2019 at average price of € 15.05 per share, equal to 9.8% of shares outstanding
Dividend Trends
27February 20, 2020
0.60
0.87
2.32
1.67
1.0193%
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
** Includes proposed dividend for approval at April 30, 2020 AGM
Cumulative dividends of € 577.0M since 2011, or € 7.74 per share*