PRESS RELEASE

BE Semiconductor Industries N.V. Announces Q3-21 Results

Revenue of € 208.3 Million and Net Income of € 84.2 Million Up 92.3% and 147.6%,

Respectively, vs. Q3-20.

Orders of € 209.2 Million Up 4.5% vs. Q2-21 and 120.4% vs. Q3-20.

Strong YTD-21 Revenue, Orders and Net Income of € 577.6 Million, € 736.5 Million and € 215.3

Million, Respectively

Duiven, the Netherlands, October 26, 2021 - BE Semiconductor Industries N.V. (the "Company" or "Besi") (Euronext Amsterdam: BESI; OTC markets: BESIY, Nasdaq International Designation), a leading manufacturer of assembly equipment for the semiconductor industry, today announced its results for the third quarter and nine months ended September 30, 2021.

Key Highlights Q3-21

  • Revenue of € 208.3 million declined 7.9% vs. Q2-21 and was in line with prior guidance. Decrease primarily due to lower shipments for mobile applications post H1-21 capacity build and supply chain constraints. Up 92.3% vs. Q3-20 due to increased demand for mobile and automotive applications and higher shipments to Asian subcontractors
  • Orders of € 209.2 million grew 4.5% vs. Q2-21 and 120.4% vs. Q3-20 primarily as a result of increased bookings for hybrid bonding, high performance computing and automotive applications
  • Gross margin of 60.4% declined by 1.7 points vs. Q2-21 principally due to a less favorable product mix. Down 0.4 points vs. Q3-20 primarily due to adverse forex influences
  • Net income of € 84.2 million decreased € 9.3 million (-9.9%) vs. Q2-21 principally as a result of lower revenue and gross margin levels realized. Up € 50.2 million, or 147.6%, vs. Q3-20
  • Net margin of 40.4% declined slightly vs. the 41.3% achieved in Q2-21 but increased by 9.1 points vs. Q3-20 highlighting the significant operating leverage in Besi's business model

Key Highlights YTD-21

  • Revenue of € 577.6 million rose 78.3% vs. YTD-20 reflecting strong demand across Besi's end-user markets, geographies and customers with particular strength in mobile applications
  • Orders of € 736.5 million grew € 421.7 million, or 134.0%, primarily due to significant growth in each of
    Besi's principal end-user markets
  • Gross margin reached 60.5%, up 0.4 points vs. YTD-20 principally related to a more favorable product mix and increased labor efficiencies despite adverse forex influences and additional costs to scale Besi's production capacity
  • Net income of € 215.3 million grew € 127.7 million, or 145.8%, vs. YTD-20. Net margin expanded to 37.3% vs. 27.1% in YTD-20
  • Net cash of € 287.8 million at end of Q3-21 increased by € 129.1 million (+81.3%) vs. Q3-20

Outlook

  • Q4-21revenue to decrease approximately 5-15% vs. Q3-21 as new products are introduced, capacity added in 2021 is deployed and typical H2 seasonal trends. Revenue expected to rise 60-80% vs. Q4-20 highlighting ongoing market strength. Gross margin of 59-61% at similar levels as reported in Q3-21.

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1

Q3-

Q2-

Q3-

YTD-

YTD-

(€ millions, except EPS)

2021

2021

2020

2021

2020

Revenue

208.3

226.1

-7.9%

108.3

+92.3%

577.6

323.9

+78.3%

Orders

209.2

200.2

+4.5%

94.9

+120.4%

736.5

314.8

+134.0%

Operating Income

95.4

106.7

-10.6%

42.0

+127.1%

250.4

109.2

+129.3%

EBITDA

99.7

110.9

-10.1%

46.5

+114.4%

263.1

123.5

+113.0%

Net Income

84.2

93.5

-9.9%

34.0

+147.6%

215.3

87.6

+145.8%

EPS (basic)

1.08

1.23

-12.2%

0.47

+129.8%

2.84

1.21

+134.7%

EPS (diluted)

1.00

1.12

-10.7%

0.43

+132.6%

2.58

1.12

+130.4%

Net Cash & Deposits

287.8

206.7

+39.2%

158.7

+81.3%

287.8

158.7

+81.3%

Richard W. Blickman, President and Chief Executive Officer of Besi, commented:

"Besi reported strong results for both the third quarter and first nine months of 2021 as we leveraged our leadership position in advanced packaging to expand revenue growth, executed strategic initiatives to drive profitability and refined our business model to take advantage of emerging opportunities in wafer level assembly.

For the quarter, revenue of € 208.3 million and net income of € 84.2 million increased by 92.3% and 147.6% versus Q3-20. Results were slightly ahead of the midpoint of guidance despite ongoing supply chain disruptions which constrained the potential number of customer shipments. In addition, we maintained gross margins above 60% and limited operating expense development that aided profitability and resulted in a net margin above 40% for the second consecutive quarter.

Q3-21 orders of € 209.2 million trended favorably relative to typical seasonal patterns, increasing by 4.5% sequentially versus Q2-21 and by 120.4% versus Q3-20. In general, order growth reflected continued strong customer demand for advanced packaging applications as customers increased their investment in AI, 5G, data center, vehicle electrification and cloud infrastructure applications. Versus Q2-21, growth was primarily due to follow-on orders for hybrid bonding systems as well as increased demand for high performance computing and automotive applications, continuing trends we saw in Q2-21. Growth for such end-user markets helped offset reduced demand by Asian subcontractors for mobile applications as incremental capacity ordered in the first half year was installed for new product introductions in H2-21.

Results for the first nine months were also very strong with revenue and orders reaching € 577.6 million and € 736.5 million, respectively, increases of € 253.7 million (78.3%) and € 421.7 million (134.0%), versus the prior year period. Year to date revenue and order growth resulted from significantly increased demand across all Besi's end-user markets, geographies and customers with a particular focus in the first quarter on high-end mobile applications followed by strength in the second and third quarters for automotive and high performance computing applications. Net income also rose strongly, increasing by € 127.7 million, or 145.8%, versus YTD-20 to reach € 215.3 million due to substantial revenue growth combined with tight controls of overhead and personnel costs. As a result, Besi's net margins expanded to 37.3% in YTD-21 versus 27.1% in YTD-20 highlighting the significant operating leverage in our business model.

Our liquidity position continued to grow with cash and deposits and net cash increasing by 15.5% and 39.2%, respectively, versus Q2-21 due to strong cash flow generated from operations post the significant working capital investment required in H1-21. In addition, our capital allocation policy continues to reward investors with total distributions of € 163.7 million in dividends and share repurchases year to date, highlighting our commitment to long-term value creation for shareholders.

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At present, we are completing a strategic review 2021-2025 with refinements to our organization and management planned for the next phase of Besi's development. As such, we hope to realize the potential of a new generation of <7 nanometer chip to wafer assembly applications while maintaining the exciting growth opportunities of our existing advanced packaging portfolio. Toward this end, we will have increased development and service personnel by approximately 20% and 40%, respectively, by year end and increased our presence in the US and Taiwan to help support new fabs planned by customers. In addition, we are in the process of significantly ramping Besi's hybrid bonding production capacity in alignment with customer roadmaps for 2022-2025. Over the past year, the Besi and Applied Materials' teams have made excellent progress working together to process customer materials and accelerate development of advanced heterogeneous integration technologies.

Looking forward, we believe that the market drivers supporting the growth of the assembly equipment market in this upcycle remain intact based on updated industry research forecasts and increased capex spending plans recently announced by our principal customers for mobile, automotive and computing end- user markets. We also see near-term incremental growth opportunities represented by hybrid bonding and other chip to wafer process technologies consistent with favorable order trends over the past two quarters.

For Q4-21, we estimate that revenue will decline by 5-15% versus Q3-21 as new products are introduced by customers, capacity added in 2021 is deployed and typical H2 seasonal trends. However, revenue is anticipated to increase by 60-80% versus Q4-20 highlighting ongoing assembly market strength. In addition, we forecast gross margins between 59-61%, roughly equivalent to Q3-21 and for operating expenses to be flat, plus or minus 5%, versus the € 30.4 million realized in Q3-21."

Third Quarter Results of Operations

Q3-2021

Q2-2021

Q3-2020

Revenue

208.3

226.1

-7.9%

108.3

+92.3%

Orders

209.2

200.2

+4.5%

94.9

+120.4%

Book to Bill Ratio

1.0

0.9

+0.1

0.9

+0.1

Q3-21 revenue of € 208.3 million decreased by € 17.8 million versus Q2-21 as shipments for high-end mobile applications declined after a strong H1-21 capacity build, partially offset by increased shipments for automotive, high performance computing and mainstream electronics applications. The sequential quarterly revenue decrease (-7.9%) was at the favorable end of prior guidance (down 5-15% versus Q2-21). Besi's 92.3% revenue growth versus Q3-20 primarily reflected increased demand for mobile and automotive end- user markets, significantly increased shipments to Asian subcontractors for mainstream mobile and electronics applications and more favorable market conditions generally.

Orders of € 209.2 million increased 4.5% versus Q2-21 and 120.4% versus Q3-20 due primarily to increased bookings for hybrid bonding, high performance computing and automotive applications. On a sequential basis, Q3-21 order growth was partially offset by reduced demand by Asian subcontractors for high-end mobile applications. Per customer type, IDM orders increased € 22.4 million, or 20.1%, versus Q2-21 and represented 64% of total orders for the period. Subcontractor orders decreased by € 13.4 million, or 15.1%, versus Q2-21 and represented 36% of total orders.

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Q3-2021Q2-2021

Q3-2020

Gross Margin

60.4%

62.1%

-1.7

60.8%

-0.4

Operating Expenses

30.4

33.6

-9.5%

23.9

+27.2%

Financial Expense/(Income), net

3.4

2.8

+21.4%

3.2

+6.3%

EBITDA

99.7

110.9

-10.1%

46.5

+114.4%

Besi's gross margin in Q3-21 was 60.4%, a decrease of 1.7 points versus Q2-21 primarily due to a less favorable product mix of systems shipped during the quarter. Versus Q3-20, Besi's gross margin decreased by 0.4 points due to adverse forex movements of the euro relative to the USD and Chinese Yuan which could not be offset by increased labor efficiencies realized from significantly higher revenue levels.

Q3-21 operating expenses declined by € 3.2 million, or 9.5%, as compared to Q2-21 principally as a result of a € 2.2 million reduction in share-based compensation expense. Operating expenses increased by € 6.5 million, or 27.2%, versus Q3-20 primarily due to increased variable sales related expenses associated with higher revenue levels, increased R&D spending for the development of next generation wafer level assembly systems and higher consulting expenses. As a percentage of revenue, operating expenses declined to 14.6% in Q3-21 versus 14.9% in Q2-21 and 22.1% in Q3-20.

Q3-2021

Q2-2021

Q3-2020

Net Income

84.2

93.5

-9.9%

34.0

+147.6%

Net Margin

40.4%

41.3%

-0.9

31.3%

+9.1

Tax Rate*

8.4%

10.0%

-1.6

12.4%

-4.0

  • Effective tax rate reflects € 3.7 million and € 2.4 million of tax benefits recognized in Q3-21 and Q2-21, respectively.

Besi's net income reached € 84.2 million in Q3-21, a decrease of € 9.3 million, or 9.9%, versus Q2-21 primarily due to a 7.9% revenue decrease and lower gross margin realized. Such decreases were partially offset by a 9.5% reduction in operating expenses and a lower effective tax rate due to a € 3.7 million tax benefit recognized at Besi Switzerland. Versus Q3-20, net income increased by € 50.2 million, or 147.6%, principally as a result of a 92.3% revenue increase combined with ongoing cost controls of fixed personnel and overhead which limited operating expense development. As a result, Besi's net margin of 40.4% in Q3- 21 rose by 9.1 points versus the 31.3% realized in Q3-20.

Nine Months Results of Operations

YTD-2021

YTD-2020

Revenue

577.6

323.9

+78.3%

Orders

736.5

314.8

+134.0%

Gross Margin

60.5%

60.1%

+0.4

Operating Income

250.4

109.2

+129.3%

Net Income

215.3

87.6

+145.8%

Net Margin

37.3%

27.1%

+10.2

Tax Rate*

10.2%

13.0%

-2.8

* Effective tax rate reflects € 6.1 million of tax benefits recognized in YTD-21.

YTD-21 revenue reached € 577.6 million, up 78.3% versus YTD-20 reflecting strong demand across Besi's end-user markets, geographies and customers. In particular, revenue growth reflected a large capacity build by customers in H1-21 for high-end smart phones in anticipation of new product introductions in the second

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4

half year. It also reflected increased demand by Asian subcontractors for mainstream mobile and electronics applications.

Similarly, orders of € 736.5 million grew by € 421.7 million, or +134.0%, versus YTD-20 primarily due to significant growth in each of Besi's principal end-user markets and more favorable industry conditions generally. IDM and subcontractor orders represented 51% and 49%, respectively, of YTD-21 orders versus 43% and 57%, respectively, in YTD-20.

Besi's net income rose strongly as well, increasing by € 127.7 million, or 145.8%, versus YTD-20 to reach

  • 215.3 million. Similarly, Besi's net margin of 37.3% increased by 10.2 points versus YTD-20 as increased revenue and gross margin more than offset a 15.8% increase in operating expenses primarily associated with increased share-based compensation expense and variable, sales related expenses due to significantly higher revenue levels.

Financial Condition

Q3

Q2

Q3

YTD-

YTD-

2021

2021

2020

2021

2020

Total Cash and Deposits

590.5

511.4

+15.5%

564.5

+4.6%

590.5

564.5

+4.6%

Net Cash and Deposits

287.8

206.7

+39.2%

158.7

+81.3%

287.8

158.7

+81.3%

Cash flow from Ops.

98.6

51.2

+92.6%

60.9

+61.9%

176.0

110.3

+59.6%

At the end of Q3-21, Besi had a strong liquidity position with total cash and deposits aggregating € 590.5 million. Total cash and deposits increased by € 79.1 million versus Q2-21 primarily due to € 98.6 million of cash flow generated from operations which was used to fund (i) € 14.2 million of share repurchases and (ii)

  • 5.5 million of capitalized development spending. Similarly, net cash of € 287.8 million at quarter end increased by € 81.1 million, or 39.2% versus Q2-21 and by € 129.1 million, or 81.3%, versus Q3-20 primarily due to strong cash flow generated from operations and ongoing conversions of Besi's Convertible Notes due to its upward share price appreciation.

Share Repurchase Activity / Convertible Notes

During the quarter, Besi repurchased 189,838 of its ordinary shares at an average price of € 74.52 per share for a total of € 14.2 million. Cumulatively, as of September 30, 2021, 4.0 million shares have been purchased under the current € 185 million share repurchase program at an average price of € 29.54 per share for a total of € 119.1 million. As of such date, Besi held approximately 0.5 million shares in treasury, equal to 0.6% of its shares outstanding.

During the quarter, € 1.0 million and € 2.6 million principal amount of the 2.5% Convertible Notes due 2023 and the 0.5% Convertible Notes due 2024, respectively, were converted into 105,452 ordinary shares. As a result, the principal amount outstanding of the 2.5% Convertible Notes due 2023 and the 0.5% Convertible Notes due 2024 declined to € 4.7 million and € 172.4 million, respectively.

Outlook

Based on its September 30, 2021 order backlog and feedback from customers, Besi forecasts for Q4-21 that:

  • Revenue will decrease by approximately 5-15% vs. the € 208.3 million reported in Q3-21
  • Gross margin will range between 59-61% vs. the 60.4% realized in Q3-21
  • Operating expenses will be flat, plus or minus 5%, vs. the € 30.3 million reported in Q3-21

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BE Semiconductor Industries NV published this content on 26 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 October 2021 08:15:07 UTC.