ANNUAL GENERAL MEETING

April 30, 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.

April 30, 2020

2

Agenda

  1. Company Overview
  1. Market
  1. Strategy

IV. Financial Review

  1. Q1-20Results, Outlook & Summary

April 30, 2020

3

I. COMPANY OVERVIEW

April 30, 2020

4

Summary Financials 2017 - 2019

€ millions except %

2018/19

2017

2018

2019

Variance

& EPS

Revenue

€ 592.8

€ 525.3

€ 356.2

-32.2%

Orders

€ 680.9

€ 483.1

€ 348.7

-27.8%

Gross Margin

57.1%

56.8%

55.8%

-1.0

Net Income

€ 173.2

€ 136.3

€ 81.3

-40.4%

Net Margin

29.2%

25.9%

22.8%

-3.1

EPS (Basic)*

€ 2.32

€ 1.83

€ 1.12

-38.8%

Net Cash

€ 247.6

€ 199.4

€ 130.3

-34.7%

* Adjusted for two for one stock split effected on May 4, 2018

April 30, 2020

5

Revenue and Gross Margin Cycles Since 2006

€ millions

Revenue

Gross Margin

Gross Margin

700

60%

56.8%

55.8%

600

500

400

4 year

300

averages

51.1%

50%

593

40%

39.5%

424

34.1%

379

356

30%

302

351

20%

164

191

10%

100

0

0%

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

April 30, 2020

6

Attractive Gross Margins Maintained

Revenue

Gross Margin

180

170

159

161

100%

160

153

155

Downturn

90%

140

117

80%

120

109

110

€ millions

Margin %

100

94

93

93

93

90

92

70%

81

80

79

58.7%

58.0%

60%

55.7%

57.3%

56.3%

56.5%

56.5%

56.4%

55.9%

56.0%

56.3%

Gross

55.1%

53.2%

60

50.9%

49.2%

50.5%

50%

40

20

40%

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

Q3-19

Q4-19

30%

April 30, 2020

7

Overhead Alignment With Market Cycles

  • millions
    140

Baseline Opex Trends 2015-2019

45%

120

113.7

40%

Baseline Operating Expense

94.8

96.9

35%

100

30%

Opex/Revenues

80

27.1%

27.2%

25%

60

19.2%

20%

40

15%

10%

20

5%

0

0%

2015

2017

2019

Baseline Opex

Baseline Opex/Revenues

  • Overhead aligned with order patterns
  • Substantial operating leverage in business model

April 30, 2020

8

Increased Profitability vs. Last Market Downturn

2015

2019

€ millions

+2.0%

350

356.2

349.2

25.8%

Revenue

300

91.9

+58.7%

16.6%

57.9

250

200

Revenue

Operating Income

140

120

100

Income

80

Operating

60

40

20

0

April 30, 2020

9

Attractive Capital Allocation. € 167.1 Million Distributions in 2019.

  • 729.5* Million Since 2011.

€ millions

250

Dividends

Share Repurchases

200

209.5

35.5

167.1

150

44.7

100

88.8

174.0

76.6

67.4

23.5

3.1

60.4

122.4

50

3.5

22.0

56.9

65.3

73.5

45.4

0

2015

2016

2017

2018

2019

2020*

6%

33%

26%

17%

27%

4%

94%

67%

74%

83%

73%

96%

* Assumes proposed 2019 dividend payment of € 1.01 per share and share repurchases through March 31, 2020.

April 30, 2020

10

Primary Valuation Drivers (2019)

Leading LTM Profit, Cash Flow and ROE Metrics

Worst

BESI

Peer

Revenue Growth

-36.7%

-36.7%

-32.2%

-24.4%

-13.3%-12.4%

Gross Margin

24.6%

24.6%

41.1%

47.5%

55.8%

60.1%

Operating Margin

2.0%

2.0%

3.9%

6.8%

24.6%

25.9%

Net Margin

1.6%

3.9%

18.9%

1.6%

3.3%

22.8%

CFO/Revenue

-9.2%

17.8%18.5%

-9.2%

6.6%

33.7%

ROE

1.5%

1.5% 2.2%

5.2%

11.9%

24.2%

ASM Pacific

Towa

K&S

Besi

Disco

Source: Bloomberg Consensus April 8, 2020, ASM PT backend segment information used for revenue, gross margin and operating margins

April 30, 2020

Best

Peer

-12.4%

60.1%

25.9%

22.8%

33.7%

24.2%

11

Total Shareholder Return Outpaces Peers and SOX Index In 2019 And For Past Five Years

2019 Total Shareholder Return

Total Cumulative Shareholder Return

Besi vs. SOX Index

Besi vs. Peer Group & SOX Index

2015-2019

Besi

Peer Group Average

PHLX Semiconductor (SOX)

450%

120%

98.7%

400%

100%

350%

80%

71.3%

300%

66.5%

250%

60%

200%

40%

150%

100%

20%

50%

0%

0%

Besi Peer Group Average PHLX Semiconductor (SOX)

395.7%

218.5%

133.2%

  • Total shareholder return includes reinvestment of dividends
  • Besi returns calculated in EUR, Philadelphia SOX returns calculated in USD
  • Peer group average consists of Kulicke & Soffa, ASM PT, Disco Corp, Towa, Tokyo Seimitsu.

Source: Bloomberg

April 30, 2020

12

Shareholder Base Expanded

Market Profile

Symbol/

Index

Market

Cap*

Dividend

Policy

  • BESI
  • Euronext Midcap AMX
  • € 2.0 billion ($ 2.1 billion)
  • Pay out40-100% of net income per annum

Avg. Daily Volume & Liquidity

(thousands)

1000

25,000

800

20,000

600

15,000

Volume

400

10,000

200

5,000

0

0

2015

2016

2017

2018

2019

Avg Vol * Avg Price (€ thousands)

Share

Ownership

* As of March 31, 2020 ** Besi estimates

Top 10 Shareholders**

100%

By Geography

(% of shares outstanding)

90%

Unidentified

15%

Europe

70%

80%

15%

ex. NL

56%

21%

60%

70%

48%

23%

50%

60%

27%

NL

41%

20%

40%

50%

18%

30%

40%

16%

UK

20%

30%

22%

10%

20%

31%

35%

US

0%

10%

20%

2017

2018

2019

0%

2017

2018

2019

April 30, 2020

13

II. MARKET

April 30, 2020

14

Assembly Equipment Market Trends

Assembly Equipment Market

5.0

Market Size

YoY Growth Rate

50%

4.4

4.3

3.7

3.9

4.0

3.5

3.6

30%

billions

3.1

3.0

2.8

3.0

27.3%

10%

22.9%

25.8%

12.5%

9.2%

US$

2.0

-10%

-2.5%

-8.3%

-16.5%

1.0

-30%

-29.3%

0.0

-50%

2014

2015

2016

2017

2018

2019

2020E

2021E

2022E

Source: VLSI April 2020

Besi Revenue

Revenue

YoY Growth Rate

600

592.8

525.3

100%

€ millions

378.8

375.4

57.9%

400

48.6%

349.2

356.2

50%

200

7.5%

0%

-7.8%

-11.4%

-32.2%

0

-50%

2014

2015

2016

2017

2018

2019

  • 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 inQ3-20
  • Strong rebound from depressed levels anticipated in 2021 and 2022

April 30, 2020

15

Move to Digital Society Helps Drive Advanced Packaging Growth

April 30, 2020

16

Expansion of Cloud Infrastructure and Connected Devices Also Aids Growth

April 30, 2020

17

Besi Portfolio Well Positioned For Assembly Requirements of Next Generation Applications

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

Estimated % of 2019 Revenue

Accuracy Size

Micron NM

25%

10+

28+

20%

10

28

40%

7

18

15%

3

10

Typical Application

Besi Equipment

Automotive, SiP

Die Attach

Packaging

Power

Plating

IOT

Die Attach

Packaging

General ICs

Plating

Computer, PC, Mobile

Die Attach

Cloud Computing

Packaging

High Performance Computing

Die Attach

Memory

Packaging

  • 75% of Besi equipment revenue advanced packaging as per VLSI definition
  • 55% equipment revenue is < 7 micron accuracy and sub 18 nanometer
  • Most rapidly growing market segment

April 30, 2020

18

III. STRATEGY

April 30, 2020

19

Besi Strategy

Besi Strategy

Increase

Enhance

Pursue CSR

Acquire

Reward

Maintain best

scalability of

strategy

market

companies with

Shareholders

in class

manufacturing

balancing

presence in

complementary

via capital

technology

model.

business with

addressable

technologies

allocation

leadership

Reduce

social/ecological

markets

and products

policy

structural costs

responsibilities

April 30, 2020

20

2019 End User Application Trends

35%

30%

2019 % of Revenue

32%

  • Mobile Internet, Computing and Automotive largest end markets
    • Estimated 71% of revenue in 2019
    • % vary p.a. based on customer roadmaps

25%

22%

Mobile is largest market

20%

20%

Varies based on timing/success of new

17%

15%

features and product introductions

Computing growth due to increased

9%

10%

demand for high end logic, cloud and

5%

memory solutions

0%

Growth in automotive reflects ever

increasing electronic content

Spares/service: 20% of 2019 revenue

Growth in installed base

Less volatile revenue stream

Source: Company Estimates

April 30, 2020

21

Business Model Objectives

Revenue

Addressable

Market Share

Gross Margin

Net Margin

Headcount

Split

April 30, 2020

Objectives

€ 800MM

40%+

55-60%

30-35%

80% Asia/20% Euro

22

Strategic Plan Update

Revenue Initiatives

Cost Initiatives

Customer:

Supply Chain:

• Expand partnership with next-generation

• Increased production/supply chain flexibility:

leaders to gain share

MY, CHN, SGP

• Exploit opportunities for hybrid bonding, micro

• Vendor consolidation and volume discounts

LED, memory/TCB, solar plating

Increased common parts

Service/Support

Product Design:

• Sustain operational and service excellence to

• Cost reduction with each new generation

support installed base growth

• Reduce number of platforms

• Grow spares/service business

• Increase standardization

Cost down engineering

Research and Development

Headcount

• Organize R&D group to support revenue

• Continue West to East transfer

objectives

April 30, 2020

23

Progress on CSR Agenda

CSR Highlights 2019

Reduced packaging, energy, waste, and water usage

Installed solar panels at Malaysia facility

Environmental

Developed system to better assess sustainability in

Footprint

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

Achieved RBA gold status

Supply Chain

Increased supply chain compliance with RoHs

standards

April 30, 2020

CSR Objectives 2020

Review sustainability strategy

Improve reporting and KPI

monitoring

Upscale sustainability initiatives

24

Reductions in Besi's Environmental Impact

GWh

Energy Usage

1817.7

(15.8%)

16

14.9

14

12

2017 2019

Waste Usage

200

183

175

tons

(13.1)%

159

150

125

2017 2019

Water Usage

35

32.6

(16.3%)

³thousands)(inm

30

27.3

25

20

2017 2019

April 30, 2020

25

IV. FINANCIAL REVIEW

April 30, 2020

26

Solid 2019 Performance In Challenging Market

2018/2019 Comparison

600

Revenue

Net Margin

€ 525.3

550

32.2%

500

€ 356.2

450

Gross Margin

400

56.8%

- 1.0 points

55.8%

OPEX

millions)

350

€ 125.7 MM

- 15.0%

€ 106.9 MM

1,759

- 163

1,596

300

Headcount

(€

Effective Tax Rate

Revenue

250

12.1%

- 16.2 points

(4.1%)

200

25.9%

- 3.1 points

22.8%

150

€ 11.6

100

€ 136.3

50

€ 69.7

0

2018

2019*

  • Includes € 11.6 million tax benefit at Besi Switzerland inQ4-19

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

Net margin %

April 30, 2020

27

Key Financial Metrics 2015 - 2019

Revenue &

Gross Margin

700

600

593

64%

500

356.2

millions€

400

349

58%

57.1%

MarginGross

300

55.8%

200

52%

100

48.8%

0

46%

2015

2017

2019

Revenue

Gross Margin

Baseline

Net Income

Opex

140

129.2

200

45%

120

112.5

15.5

180

173.2

40%

106.9

160

100

17.7

10.0

140

35%

80

120

30%

millions€

millions€

29.2%

81.3

60

25%

100

113.7

80

22.8%

94.8

96.9

60

49.0

40

20%

40

20

20

14.0%

15%

0

0

10%

2015

2017

2019

2015

2017

2019

Base Opex

Other Operating Expenses

Net Income

Net Margin

April 30, 2020

28

Flexible Asian Workforce Has Significantly Enhanced Scalability

Fixed Headcount

2,000

100%

1,724

1,692

1,626

1,800

1,549

1,605

1,546

1,534

90%

1,600

80%

1,400

Headcount

73%

72%

72%

70%

1,200

71%

71%

70%

67%

1,000

60%

800

50%

600

40%

400

200

33%

29%

29%

30%

30%

27%

28%

28%

0

20%

2016

2017

2018

Q1-19

Q2-19

Q3-19

Q4-19

Europe/NA Fixed HC

Asia Fixed HC

Asia %

Europe/NA %

Total Headcount

2,500

20%

18%

2,040

2,000

16%

1,759

1,716

1,669

316

1,695

1,634

1,596

Totalof%Temp

14%

67

Headcount

69

111

120

88

6%

62

1,500

12%

1,222

10%

1,000

1,041

1,230

1,174

1,155

1,093

1,081

8%

500

4%

508

502

462

452

450

453

453

2%

0

0%

2016

2017

2018

Q1-19

Q2-19

Q3-19

Q4-19

Europe/NA Fixed HC

Asia Fixed HC

Temporary HC

Temp % of Total

  • Headcount adjusted in downturn:
    • 25.3% reduction fromQ1-18 peak to Q4-19
    • Focus on SG&A structure currently
  • Asian HC rationalized in 2019 post large2015-2018 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

April 30, 2020

29

Cash Generation Trends

€ millions

% of Revenue

200

Total Cash Flow from Operations

184.1

180

As % of Revenue

168.2

160

140

120.1

120

98.7

35.0%

100

33.7%

86.5

28.4%

8026.3% 24.8%

60

40

20

0

2015

2016

2017

2018

2019

April 30, 2020

30

V. Q1-20 RESULTS, OUTLOOK

AND SUMMARY

April 30, 2020

31

Q1-20 Operating Profit Exceeds Expectations

Revenue, Orders and Net Income Rebound vs. Q1-19

Guidance

€ millions

Q1-20*

Q1-20

∆ Q4-19

∆ Q1-19

Revenue

-10% - +10%*

91.3

-1.2%

+12.2%

Orders

118.6

+18.0%

+42.2%

Gross Margin

54%-56%

56.7%

+0.4

+0.8

Opex

+35% - +40%*

33.0

+31.0%

+7.5%

Net Income

13.9

-58.8%**

+46.3%

EPS Basic

0.19

-59.6%**

+46.2%

Net Cash

148.3

+13.8%

-35.4%

  • As compared toQ4-19
  • Q4-19included € 11.6 million tax benefit at Besi's Swiss operations

April 30, 2020

32

Strong Liquidity Position

Cash and Deposits

Net Cash

600

Strong cash flow generation during downturn:

527.8

Net cash of € 130.3 million at year end

507.5

Includes € 167.1 million of dividends and share

€ 122.4 MM

repurchases

500

475.5

Dividend

2018

Net cash increased to € 148.3 million at Q1-20

427.6

408.4

Improved working capital management and faster

400

361.7

383.7

cycle times

millions

300

Convertible debt:

304.8

Attractive funding to help finance growth:

€ 300 million (2 issues/1.33% blended rate)

247.6

229.7

4.5 year blended average maturity

200

199.4

157.8

168.1

Revolving credit facility:

148.3

136.5

130.3

€ 80 million expandable to € 136 million

100

106.9

86.1

5-year term extendable to 7 years

Consolidates subsidiary credit lines at N.V.

0

2015

2016

2017

2018

Q1-19

Q2-19

Q3-19

Q4-19

Q1-20

April 30, 2020

33

Semi Equipment Recovery Changed Markedly at End of Q1-20

Source: VLSI April 2020

Source: VLSI February 2020

April 30, 2020

34

COVID-19 Update

Besi operating with varying restrictions

  • 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

Supply chain functioning

  • Not optimally, but good enough
  • 80% sourced in Asia
  • Dual sourcing strategy and inventory stocking of critical parts have lessened bottlenecks so far
  • Somenon-critical components can cause delays

Strong liquidity position, flexible Asian production and supply chain help Besi navigate COVID challenges

April 30, 2020

35

Guidance Q2-20

  • in millions

Revenue

€ 91.3

+5%

-

+25%

Q1-20Q2-20

April 30, 2020

Gross Margin

56.7%56%-58%

Q1-20Q2-20

-15%

-15%

Operating Expenses

-10%

€ 33.0

-

-15%

Q1-20Q2-20

36

Summary

Assembly market

Long term secular

Disciplined

Market presence

ever more critical

trends drive

strategic focus

has grown via key

in semiconductor

advanced

has created an

IDM customers

value chain

packaging growth

industry leader

and supply chains

Asian production

Tech leadership

Attractive capital

and scalable

expansion has

model have

allocation policy

been a game

resulted in

rewards

changer

benchmark

shareholders

financial returns

April 30, 2020

37

ANNUAL GENERAL MEETING

April 30, 2020

April 30, 2020

38

Attachments

  • Original document
  • Permalink

Disclaimer

BE Semiconductor Industries NV published this content on 30 April 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 May 2020 21:38:09 UTC