2017 annual results announcement - asm pacific€¦ · asm pacific technology © 2018 page 2...
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page 2 ASM Pacific Technology © 2018
Disclaimer
The information contained in this presentation is provided for informational purpose only, and should not be relied upon for the purpose
of making any investment or for any other purpose.
Some of the information used in preparing this presentation was obtained from third parties or public sources. The information contained
in this presentation has not been independently verified. No representation or warranty, expressed or implied, is made as to, and no
reliance should be placed on, the fairness, reasonableness, accuracy, completeness or correctness of such information or opinions
contained herein. It is not the intention to provide, and you may not rely on this presentation as providing, a complete or comprehensive
analysis of our financial or trading position or prospects. The information and opinions contained in this presentation are provided as at
the date of this presentation and are subject to change without notice and will not be updated to reflect any developments which may
occur after the date of this presentation.
All statements, other than statements of historical facts included in this presentation, are or may be forward-looking statements.
Forward-looking statements include, but are not limited to, those using words such as “seek”, “expect”, “anticipate”, “estimate”, “believe”,
“intend”, “project”, “plan”, “strategy”, “forecast” and similar expressions or future or conditional verbs such as “will”, “would”, “should”,
“could”, “may” and “might”. These forward-looking statements reflect the Company’s current expectations, beliefs, hopes, intentions or
strategies regarding the future and assumptions in light of currently available information. Such forward-looking statements are not
guarantees of future performance or events and involve known or unknown risks and uncertainties. Accordingly, actual results may differ
materially from information contained in the forward-looking statements as a result of a number of factors. You should not place undue
reliance on such forward-looking statements, and the Company does not undertake any obligation to update publicly or revise any
forward-looking statements. No statement in this presentation is intended to be or may be construed as a profit forecast.
We also do not undertake any obligation to provide you with access to any additional information or to update this presentation or any
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page 4 ASM Pacific Technology © 2018
A World’s Technology & Market Leader
2017 Group Revenue (CAGR 2007- 2017 12.5 %) A leading Integrated Solutions
Provider in the semiconductor
assembly and packaging industry as
well as in the SMT solutions market
A leading player for CIS, LED, and
Automotive
3 high growth markets accounted
for 52% of group revenue in 2017
SMT
Solutions
38.5%
Back-end
Equipment
49.3%
Materials
12.2%
US$2.25B
page 5 ASM Pacific Technology © 2018
ASMPT Global Presence
USA
Canada
Mexico
Costa RIca
Brazil
UK
The
Netherlands Germany
Spain
Morocco
France
Italy
Sweden
Malta
Czech Republic
Romania
Hungary Austria
Poland
Singapore
Malaysia
Hong Kong
China
Japan
Korea
Taiwan
Philippines
Russia
India
Thailand
Indonesia
Business Centre / R&D /
Manufacturing Site
R&D centres
worldwide global R&D staff
patents on key leading
edge technologies
10 manufacturing
facilities
7 > 1,100 > 1,800
page 6 ASM Pacific Technology © 2018
ASMPT Major Facilities around the World
New facility in Hong Kong
ready by early 2018
Extension of Malaysia plant
ready for operation by 2019
Longgang, China (龙岗)
Fuyong, China (福永) Chengdu, China (成都)
Yishun, Singapore
Johor Bahru, Malaysia Weymouth, UK Beuningen, Netherlands
Munich, Germany
Huizhou, China (惠州)
page 7 ASM Pacific Technology © 2018
Strategic Partner For The Electronics Assembly Industry
2nd Level / Board Level Assembly
Chips and components
on printed circuit Board
(“SMT Solutions”)
1st Level / Chip Level Assembly
Chip Assembly & Packaging
(“Back-End”)
Carrier for chip
interconnection
(“Materials”)
Materials
leadframes
advanced packaging
materials (molded
interconnect substrates)
Back-end Equipment
laser grooving and dicing
wire bonders & die bonders
encapsulation solutions, test
handlers, clip bonders, CIS
equipment
TCB bonders, flip chip
bonders, Mold Under Fill
(MUF), panel molding
SMT Solutions
assembly line solutions
DEK printing systems
SIPLACE placement
systems
ASM smart factory tools
& services
page 8 ASM Pacific Technology © 2018
Three Business Segments With Leading Market Positions Worldwide Market Position & Share
~8.7% (2017)
~25% (2017)
~22% (2017)
Assembly & Packaging
Equipment Market
SMT Equipment Market SMT
Solutions
Back-end
Equipment
Leadframe Market
Materials
SMT
Leadframe
PAE
Sources: Market share for Back-end Equipment is based on information on packaging and assembly equipment market by VLSI, leadframe market by SEMI, and SMT market by ASMPT SIPLACE Market Intelligence
#1 Die Bonders
#2 Wire Bonders
#1/2 Flip Chip Bonders
#1 Thermal Compression Bonders (TCB)
#1 LED Packaging Equipment
#1 CMOS Imaging Sensors (CIS) Equipment
#2 Encapsulation & Post Encapsulation Solutions
#4 Turret Test Equipment (Test Handlers)
#2 Laser Dicing and Grooving
page 10 ASM Pacific Technology © 2018
2017 Financial Highlights: A Record Breaking Year
Billings (US$ m)
Bookings (US$ m)
1,877
2,340
2016 2017
Net Profits (HK$ m)
931 1,108
241
275
664
866 1,836
2,249
2016 2017
1,438
2,796
2016 2017
New
Record!
New
Record!
New
Record!
New
Record!
New
Record!
Close to
historical
peak
page 11 ASM Pacific Technology © 2018
1,108
-
200
400
600
800
1,000
1,200
2013 2014 2015 2016 2017
2,249
-
500
1,000
1,500
2,000
2,500
2013 2014 2015 2016 2017
Yearly Billings
Group Billings (US$ m)
BE EQT Billings (US$ m)
Materials Billings (US$ m)
SMT Billings (US$ m)
275
-
50
100
150
200
250
300
2013 2014 2015 2016 2017
866
-
150
300
450
600
750
900
2013 2014 2015 2016 2017
YoY Growth: +23.0% YoY Growth: +19.5%
YoY Growth: +14.5% YoY Growth: +30.9%
New
Record! New
Record!
New
Record! New
Record!
page 12 ASM Pacific Technology © 2018
2,169
-
500
1,000
1,500
2,000
2,500
2013 2014 2015 2016 2017
2,796
-
500
1,000
1,500
2,000
2,500
3,000
2013 2014 2015 2016 2017
Yearly Profits
Group Net Profit (HK$ m)
BE EQT Segment Profit (HK$ m)
Materials Segment Profit (HK$ m)
SMT Segment Profit (HK$ m)
128
-
50
100
150
200
2013 2014 2015 2016 2017
1,084
-
200
400
600
800
1,000
1,200
2013 2014 2015 2016 2017
YoY Growth: +94.4% YoY Growth: +45.8%
YoY Growth: -24.7% YoY Growth: +87.4%
New
Record!
page 13 ASM Pacific Technology © 2018
2,340
-
500
1,000
1,500
2,000
2,500
2013 2014 2015 2016 2017
Booking & Backlog
Yearly Group Bookings (US$ m)
Quarterly Group Bookings (US$ m)
2017 Booking (YoY % Growth)
Quarterly Group Backlog (US$ m)
496
-
100
200
300
400
500
600
700
Q113
Q213
Q313
Q413
Q114
Q214
Q314
Q414
Q115
Q215
Q315
Q415
Q116
Q216
Q316
Q416
Q117
Q217
Q317
Q417
539
-
100
200
300
400
500
600
700
Q113
Q213
Q313
Q413
Q114
Q214
Q314
Q414
Q115
Q215
Q315
Q415
Q116
Q216
Q316
Q416
Q117
Q217
Q317
Q417
24.7%
20.0%
13.5%
35.4%
Group
BE EQT
Materials
SMT
YoY Growth: +24.7% YoY Growth: +5.5%
YoY Growth: +27.2%
New
Record!
page 14 ASM Pacific Technology © 2018
Multiple Application Markets is a key strategy
Mobility, Comm & IT, Optoelectronics
and Automotive % of Group Revenue
50% 52%
2016 2017
ASMPT Revenue Breakdown by Application Markets (2017)
page 15 ASM Pacific Technology © 2018
2017 Highlights for Group and 3 Business Segments
ASMPT achieved multiple records in 2017
All 3 business segments achieved new record revenue
Group Net Profit very close to historical peak
YoY GM improvement of 264bps to 40.2%
Back-end Equipment Segment achieved new revenue record and a six-year high GM
IC/discrete led the growth in BE segment, next leading pillars being CIS and LED
2017 was a year of digestion for LED customers, expect our LED business to rebound in 2018
Continued to enjoy a dominant position in Power Management
Progress and development in Advanced Packaging well on track including Flip Chip bonders,
TCB, WLFO/PLFO, Laser Grooving & Dicing, Test & Pack (Sunbird)
Materials Segment attained many new records in 2017 including revenue and bookings
Lean manufacturing structure enabling market share gain
Diversifying beyond leadframes to advanced packaging substrates (MIS)
SMT Segment achieved new records in revenue, bookings and segment profit
Strong demand from Automotive and Industrial Electronics drove SMT business to a high level
Further benefited from smartphone upgrade cycle in 2017
Continued to make good progress in offering SMT products to SiP, WLFO and PLFO markets
page 17 ASM Pacific Technology © 2018
Changing Landscape of the Semiconductor Industry
Demand for semiconductor devices at historical high and will become much higher in the next
decade
Driven by market drivers such as IoT, Smart City, Smart Factory, Industry 4.0, AI, AR, VR, Big
Data Analytics, Automotive, and 5G Network
The future is all about data
Huge amounts of data will be collected, transmitted, stored, processed and displayed
Broad-based drivers for the semiconductors market all generate data
Semiconductor industry is anticipated to experience strong growth but cycles bound to be there
Probably shorter cycles
page 18 ASM Pacific Technology © 2018
Dawn of the Data Centric Era
Source: VLSI Research, ISS US, January 2018
page 19 ASM Pacific Technology © 2018
Future Is About Data and Only Just Beginning
Source: Yole Developpement, May 2017
page 20 ASM Pacific Technology © 2018
Data spurs demand for semiconductor devices
Collect
Transmit Analyse
Store
IIOT
Camera
3D Sensing
Sensor
5G
LiFi WiFi
Data Analytics
Big Data
Centre
Memory
AI
Silicon Photonics
Advanced Packaging
Cloud Computing
IOT
LIDAR
CPU/GPU
Display
TCB
LASER Grooving
WLFO
TCB
Advanced Packaging
WLFO
WB
Active Alignment
CIS
LASER Dicing
Silicon
Photonics
TCB
PLFO WB
Precision
Die Attach
Precision
Die Attach
AR
VR
Micro LED
Mini LED
PLFO
page 22 ASM Pacific Technology © 2018
Broad-based Market Growth Drivers
Dual Camera & 3D Sensing Automotive IoT
ADAS 5G Network
Cloud Computing Health Care Industry 4.0
Artificial Intelligence
page 24 ASM Pacific Technology © 2018
Key Strategies for Sustainable Growth & Profitability
Gain
Market Share
Invest in
New Growth Areas
Strategic
M&A
Continue To Fine-tune Organization Structure & Business Strategies
- Wire Bonder - Die Bonder - Lead frames - SMT
- CIS - Advanced Packaging - Automotive - Power management
- Mini LED - Micro LED
page 25 ASM Pacific Technology © 2018
Strategic Transformation at ASMPT
Shifted from purely organic growth to pursuing both
organic growth plus M&A
Moved from 100% vertical integration to increased
external manufacturing/outsourcing and flexible workforce
Pursue robotics and smart manufacturing to
enhance productivity
Engage leading customers in development of new
cutting-edge solutions
Focus on Innovation to create higher values for
customers
Reorganized into three business segments with full P&L
accountability
Top line
TAM
Profitability
(Structural)
Productivity
Bottom line
All 3 segments broke
new records in 2017
Top line
Time to market
Top line
Bottom line
page 26 ASM Pacific Technology © 2018
Continue To Build Business On An Extensive Customer Base
China 49.2%
Europe 15.2%
Malaysia 7.1%
Americas 5.9%
Taiwan 5.7%
Thailand 4.1%
Korea 4.0%
Philippines 2.9%
Japan 2.5%
Others 3.4%
No single customer accounted for more than 10% of the Group’s revenue
Top 5 customers collectively accounted for 17.5% of the Group’s 2017 sales revenue
Top 20 customers include world’s leading IDMs, Tier 1 OSAT, major OSATs in China, key LED players,
major camera module makers, top EMS providers, and leading automotive component suppliers
Among the top 20 customers of the Group, 3 were from SMT Solutions segment, and 3 were key
customers from both Back-end business and SMT Solutions segment
2017 Revenue Contribution from Top 5 Customers 2017 Geographical Distribution of Revenue
18.8% 17.5%
2016 2017
page 27 ASM Pacific Technology © 2018
R&D Commitment Makes Us a Preferred Partner of Choice
2017 R&D
expenditure
US$ 184 million
9.3% of
equipment sales
Laser dicing & grooving SMT
0
20
40
60
80
100
120
140
160
180
200
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
US
D m
illi
on
R&D expenses
USD1,217 million invested in R&D
Package Interconnection Optics precision engineering Vibration control
9.3%
page 28 ASM Pacific Technology © 2018
Pursue Robotics/Smart Manufacturing to Enhance Productivity
Automation/Robots Deployed
At ASMPT Actual production cell at ASM Technology Huizhou
page 29 ASM Pacific Technology © 2018
23 Key Customer Engagements
in Advanced Packaging
(currently) covering:
Foundries/IDMs/Major
OSATs/Substrate Suppliers
(Either In Technical Qualification,
Preparation for HVM mode or HVM
mode)
NUCLEUS(FO WLP & PLP – Pick & Place)
ORCAS(Fan-out Molding)FIREBIRD
(TCB)
SIPLACE CA
(SiP Pick & Place)
SUNBIRD(WLP Test & Pack)
Laser 1205(Singulation)
Most comprehensive and unparalleled AP product portfolio
Strategically engaging in key processes w/ good growth
Investing Ahead of the Curve Bearing Fruits
page 30 ASM Pacific Technology © 2018
New Target Market for ASMPT -- Memory
Wire Bonding System (NAND)
LASER Grooving & Dicing (thin wafer)
TCB (high bandwidth memory)
WLFO / PLFO
page 31 ASM Pacific Technology © 2018
ONLY Back-end Equipment Supplier Being Recognized
“The Top 100 Global Technology
Leaders are the organizations poised
to propel the future of technology”, Brian Scanlon, Chief Strategy Officer
Thomson Reuters, 2018
ASMPT Recognized as TOP 100 Global Tech Leaders
page 33 ASM Pacific Technology © 2018
20.6%
21.0%
20.6%
22.2%
4.3%
10.0%
7.1%
4.0%
7.0%
12.0%
7.8%
7.5%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0%
SIA/WSTS, Nov-17
SemiconductorIntelligence, Dec-17
VLSI, Dec-17
Gartner, Jan-18
Latest 2018 forecast Previous 2018 forecast 2017
Industry Growth Forecast (2017-2018)
2013 2014 2015 2016 2017F 2018F
VLSI Assembly &Packaging Equipment
(Jan-18)-22% 27% -18% 13% 21% 18%
SEMI Assembly &Packaging Equipment
(Dec-17)-26% 33% -18% 20% 26%
-30%
-20%
-10%
0%
10%
20%
30%
40%
Semiconductor Industry Forecast Global Assembly & Packaging Equipment Market
page 34 ASM Pacific Technology © 2018
Semiconductor Shipments Forecast to Exceed 1 Trillion Devices in 2018
Source: IC Insights, January 2018
page 35 ASM Pacific Technology © 2018
Outlook
Customers are generally optimistic about the business environment in 1H 2018
Anticipate Group Booking in Q1 2018 to rebound strongly over Q4 2017
Booking of BE equipment segment expected to take the lead
Anticipate Group Billing in Q1 2018 to achieve YoY growth in the range of a high single digit to a
low double digit percent
All 3 business segments are anticipated to deliver positive YoY growth rate
Expect demand for CIS continue be strong
Expect LED business to rebound in 2018
Anticipate Automotive & Industrial Electronics markets to continue to drive SMT business
Broad based market drivers spurring strong growth of the semiconductor industry
With our strategic transformation and investments, ASMPT is ready to capture the growth
opportunities brought about by the new Data Centric era
page 36 ASM Pacific Technology © 2018
ASMPT Sustainable Competitive Advantages
Multiple product growth drivers (and a strong leader in a few of these drivers
including CIS/AA, LED, Automotive, TCB)
Diversified product portfolio addressing multiple applications markets
Unique and comprehensive product portfolio in Advanced Packaging
Broad and diverse customer base
Breadth and depth of enabling technologies
Investing ahead of the curve and bearing fruits
Strong and extensive marketing/support network
Size, scale and strong balance sheet & financial resources
Steadfast execution of strategies
Keep reinventing itself
page 38 ASM Pacific Technology © 2018
2017 Group Financial Highlights
2017 2H 2017 Q4 2017
YoY HoH YoY QoQ YoY
Bookings 24.7% 15.6% 18.1% 13.6% 5.5%
Billings 23.0% 14.1% 21.0% 17.3% 20.1%
Gross Margin 264bps 50bps 143bps 139bps 167bps
Operating Profits 54.9% 6.4% 33.7% 46.9% 23.8%
Profit After Tax 94.4% 11.1% 37.6% 47.5% 19.8%
Net Profit Margin 586bps 399bps 170bps 617bps 2bps
40.2%
16.0%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
2013 2014 2015 2016 2017
Gross Margin % Net Profit Margin %
Margins (%)
page 39 ASM Pacific Technology © 2018
2017 Segment Results - Back-End Equipment Business
47.9%
25.1%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2013 2014 2015 2016 2017
Gross Margin % Segment Profit Margin %
Margins (%)
2017 2H 2017 Q4 2017
YoY HoH YoY QoQ YoY
Bookings 20.0% 27.4% 6.5% 10.4% 5.6%
Billings 19.5% 4.7% 6.3% 13.1% 13.1%
Gross Margin 456bps 118bps 439bps 65bps 616bps
Segment Profit 45.8% 11.5% 15.3% 29.0% 25.3%
Segment Profit
Margin 453bps 184bps 187bps 485bps 210bps
page 40 ASM Pacific Technology © 2018
2017 Segment Results - Materials Business
Margins (%)
2017 2H 2017 Q4 2017
YoY HoH YoY QoQ YoY
Bookings 13.5% 17.9% 2.9% 3.1% 11.0%
Billings 14.5% 3.1% 12.8% 12.3% 8.1%
Gross Margin 179bps 3bps 74bps 238bps 202bps
Segment Profit 24.7% 27.9% 33.0% 83.7% 82.0%
Segment Profit
Margin 311bps 212bps 338bps 649bps 746bps
Exclude: Goodwill
Impairment
Adjusted Segment
Profit 11.4% 2.4% 4.9% 34.8% 28.3%
Adjusted Segment
Profit Margin 206bps 5bps 131bps 205bps 301bps
13.6%
6.0%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
2013 2014 2015 2016 2017
Gross Margin % Segment Profit Margin %
page 41 ASM Pacific Technology © 2018
2017 Segment Results - SMT Solutions Business
Margins (%)
2017 2H 2017 Q4 2017
YoY HoH YoY QoQ YoY
Bookings 35.4% 1.9% 43.0% 19.4% 29.5%
Billings 30.9% 49.0% 44.6% 22.7% 33.5%
Gross Margin 129bps 158bps 81bps 342bps 281bps
Segment Profit 87.4% 71.4% 80.5% 64.3% 17.7%
Segment Profit
Margin 485bps 222bps 338bps 1192bps 137bps
38.9%
16.1%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
2013 2014 2015 2016 2017
Gross Margin % Segment Profit Margin %
page 42 ASM Pacific Technology © 2018
Return of Capital to Shareholders
Share Buyback Program
Amount exercised up to 26 Jan 2018:
HKD452.7m, 1.03% of shares outstanding
Cash Dividend Policy
Sustainable and gradually increasing
35
80 100
80
120 50
130
40
110
130
85
210
140
190
250
2013 2014 2015 2016 2017
Interim (HK cents) Final (HK cents)
Dividend Per Share (HK cents)
* Per Year-to-date share repurchase and proposed DPS of HKD1.30
939
528
349
104
260
521
926
487
1,288
632
-
200
400
600
800
1,000
1,200
1,400
2013 2014 2015 2016 2017 1H 2018*
HK
D m
Dividend paid Share buyback
Cumulative cash returned: HKD4.1bn
page 43 ASM Pacific Technology © 2018
Capital Investment (US$ m)
437
0
500
1000
1500
2000
2013 2014 2015 2016 2017
Free Cash Flow (HK$ m)
45 57 72
55 82
101
117
61
19
0
25
50
75
100
125
150
Free Cash Flow and Capital Investment
136
19
page 44 ASM Pacific Technology © 2018
27.4%
0%
5%
10%
15%
20%
25%
30%
2013 2014 2015 2016 2017
36.9%
0%
5%
10%
15%
20%
25%
30%
35%
40%
2013 2014 2015 2016 2017
Return On Invested Capital (ROIC) Return On Equity (ROE)
Financial Metrics
page 45 ASM Pacific Technology © 2018
A/R
0
1,000
2,000
3,000
4,000
5,000
6,000
2013 2014 2015 2016 2017
HK
D m
illio
ns
Inventory
0
1,000
2,000
3,000
4,000
5,000
6,000
2013 2014 2015 2016 2017
HK
D m
illio
ns
0
2,000
4,000
6,000
8,000
10,000
12,000
2013 2014 2015 2016 2017
HK
D m
illio
ns
Working Capital
2013 2014 2015 2016 2017
Cash Conversion Cycle (Days)
Working Capital Management
page 47 ASM Pacific Technology © 2018
Recent Awards & Recognition
Technology Achievement Grand Award of HKIA 2017
(for the third time)
Federation of HK Industries
Hong Kong Outstanding Enterprises 2017
HK Economic Digest
Directors of the Year Awards 2017
Hong Kong Institute of Directors
2017 All Stars of the Semiconductor Industry
VLSI Research
page 48 ASM Pacific Technology © 2018
Recent Awards & Recognition
Ranked among Top 5 of the 10 BEST Chip Making Equipment Suppliers
Ranked among Top 3 of Assembly Equipment
Ranked among Top 4 of Test Equipment
Ranked among Top 10 of Best Managed HK Companies
Ranked among Top 10 of Best at Investor Relations
2015 Hong Kong Awards for Industries: Technology Achievement Grand Award
2016-17 Corporate Governance Asia – Best Investor Relations Company (HK)
2017 Corporate Governance Asia – Best CEO (Investor Relations)
Factory of the Year 2016 Award (for SMT) by Produktion/AT Kearney