Q4-23 Revenue and Net Income of € 159.6 Million and € 54.9 Million,
Up 15.9% and 36.6%, Respectively, vs. Q4-22. Results Exceed Prior Guidance.
Orders of € 166.4 Million, Up 30.7% vs. Q3-23
FY-23 Revenue and Net Income of € 578.9 Million and € 177.1 Million, Respectively
Proposed Dividend of € 2.15 per Share for Fiscal 2023. 94% Pay-Out Ratio
DUIVEN, the Netherlands, Feb. 22, 2024 (GLOBE NEWSWIRE) — BE Semiconductor Industries N.V. (the “Company” or “Besi”) (Euronext Amsterdam: BESI; OTC markets: BESIY), a leading manufacturer of assembly equipment for the semiconductor industry, today announced its results for the fourth quarter and year ended December 31, 2023.
Highlights Q4-23
Revenue of € 159.6 million, up 29.4% vs. Q3-23 and 15.9% vs. Q4-22 due to increased shipments for hybrid bonding, photonics and other AI related computing applications
Similarly, orders of € 166.4 million, up 30.7% vs. Q3-23. Down 7.8% vs. Q4-22 due to pull forward of bookings for high-end mobile applications in Q4-22 related to customer supply chain concerns
Gross margin of 65.1% rose 0.5 points vs. Q3-23 and 2.8 points vs. Q4-22 due to favorable advanced packaging product mix and net forex benefits
Net income of € 54.9 million rose 56.9% vs. Q3-23 and 36.6% vs. Q4-22 principally due to higher revenue and gross margin levels and cost control efforts which limited expense growth. Similarly, net margins improved to 34.4% vs. 28.4% in Q3-23 and 29.2% in Q4-22
Net cash increased 25.3% vs. Q3-23 to reach € 113.0 million. Year-end net cash position reflects € 435.5 million capital allocation in 2023
Proposed dividend of € 2.15 per share. Represents pay-out ratio of 94%
Highlights FY 2023
Revenue of € 578.9 million decreased 19.9% due to adverse market conditions and reduced demand for mainstream computing and, to a lesser extent, automotive applications
Similarly, orders of € 548.3 million declined 17.4% partially offset by strong growth in H2-23 for photonics, hybrid bonding and 2.5D logic/memory applications as customers build out generative AI capacity
Gross margin rose to 64.9% vs. 61.3% in 2022 due to successful new product introductions, cost control efforts, effective supply chain management and net forex benefits
Net income of € 177.1 million decreased 26.4% due to lower revenue levels in a challenging industry environment. Besi’s net margin of 30.6% remained highly attractive despite downturn
Outlook Q1-24
Revenue anticipated to decrease 5-15% vs. Q4-23
Gross margin expected to range between 64-66%
Baseline operating expenses expected to increase 0%-5% from € 35.6 million in Q4-23. Total operating expenses expected to increase 50-55% due to an approximately € 15 million increase in share-based, incentive compensation expense
(€ millions, except EPS)
Q4-
2023
Q3-
2023
Δ
Q4-
2022
Δ
FY
2023
FY
2022
Δ
Revenue
159.6
123.3
+29.4%
137.7
+15.9%
578.9
722.9
-19.9%
Orders
166.4
127.3
+30.7%
180.5
-7.8%
548.3
663.7
-17.4%
Operating Income
66.1
42.7
+54.8%
48.7
+35.7%
213.4
294.1
-27.4%
EBITDA
72.7
48.9
+48.7%
54.8
+32.7%
239.1
317.1
-24.6%
Net Income
54.9
35.0
+56.9%
40.2
+36.6%
177.1
240.6
-26.4%
Net Margin
34.4%
28.4%
+6.0
29.2%
+5.2
30.6%
33.3%
-2.7
EPS (basic)
0.71
0.45
+57.8%
0.51
+39.2%
2.28
3.03
-24.8%
EPS (diluted)
0.68
0.45
+51.1%
0.50
+36.0%
2.23
2.90
-23.1%
Net Cash and Deposits
113.0
90.2
+25.3%
346.5
-67.4%
113.0
346.5
-67.4%
Richard W. Blickman, President and Chief Executive Officer of Besi, commented:
“Besi made significant progress this year in building its leadership position in advanced packaging for next generation AI and high-performance computing devices. We focused R&D resources on product innovation for advanced packaging growth anticipated over the next decade and in preparation for the next industry upturn. Progress also continued on Besi’s hybrid bonding agenda as our installed base increased to over 40 systems and adoption expanded from 3 to 9 customers encompassing North American, European, Taiwanese and Korean IDMs, foundries, subcontractors and research institutes for logic and memory applications. In addition, we responded quickly and effectively to a steep industry downturn by rapidly aligning production and overhead levels to enhance our market position, increase gross margins and maintain superior financial performance. Shareholders also benefitted from a 141.2% increase in our share price and the capital allocation of € 435.5 million in the form of dividends and share repurchases.
We also continue to formulate and execute strategic initiatives to position Besi for solid profitability and sustainable growth over the next decade. We expanded our operational footprint in Malaysia and Singapore and established a new high precision tooling facility in Vietnam this year in response to customers’ re-allocation of certain production outside of China and in anticipation of the growth of hybrid bonding and other advanced packaging technologies. Significant progress also was achieved on our ESG agenda as we made advances in the sustainable design of our platforms, positioned ourselves to meet or exceed challenging targets set for 2024 and launched many new initiatives across the company to further reduce Besi’s environmental footprint.
In addition, we formed a Technology Advisory Board to advance our core technology, competitive position and growth prospects. The Board will consist initially of three individuals along with myself and Chris Scanlan, Besi’s SVP Technology. The external members will include Marvin Liao, formerly VP Operations/Advanced Packaging Technology and Service of TSMC, Frits van Hout, formerly EVP and Chief Strategy Officer of ASML NV and Vincent DiCaprio, currently VP Advanced Packaging and ICAPS/Head of Business and Corporate Development of Applied Materials.
Overall, we are encouraged by our performance this year as Besi’s leadership position in advanced packaging lessened the adverse effects of an industry downturn as severe as the 2017-2019 period. For the year, revenue, orders and net income of € 578.9 million, € 548.3 million and € 177.1 million declined by 19.9%, 17.4% and 26.4%, respectively, versus 2022. Revenue and order weakness reflected significantly reduced demand for mainstream computing applications by both IDMs and Asian subcontractors and, to a lesser extent, reduced demand for automotive applications following strong growth over the past two years. Such weakness was partially offset by increased demand in the second half of the year for silicon photonics, hybrid bonding and 2.5D logic/memory applications as customers began to build out their AI and high-performance computing capacity. In particular, hybrid bonding orders and year-end backlog approximately doubled versus comparable levels of the prior year. Of note, approximately half of Q4-23 orders were represented by our most advanced 100nm accuracy hybrid bonding systems.
We achieved peer leading operating and net margins of 36.9% and 30.6% in 2023 due to the alignment of Besi’s operating model to difficult market realities. In fact, gross margins increased to 64.9% versus 61.3% in 2022 due to successful new product introductions supported by a keen focus on cost control efforts, effective supply chain management and net forex benefits.
Besi ended the year with a solid liquidity base consisting of cash, cash equivalents and deposits aggregating € 413.5 million. Of note, we completed a € 300 million share repurchase program in October 2023 and launched a new € 60 million program due for completion in October 2024. As such, share repurchases increased by 45.4% to € 213.4 million in 2023, or 2.6 million shares. In addition, we propose to pay a cash dividend of € 2.15 per share for approval at Besi’s 2024 AGM which represents a pay-out ratio of 94%. Including such dividend, we will have returned approximately € 1.9 billion to shareholders since 2011, or approximately 30% of cumulative revenue during this period.
Q4-23 operating results were significantly better than both Q3-23 and Q4-22 as our favorable market positioning offset continued weakness in demand for mainstream assembly equipment. For the quarter, revenue of € 159.6 million was up 29.4% and 15.9% versus Q3-23 and Q4-22, respectively. The increase was due to higher shipments for hybrid bonding, photonics and other AI-related, 2.5D applications continuing trends we saw last quarter. Of note, we shipped our first in-line, flip chip system for 2.5D HBM/logic applications to address the needs of this growing market segment. Orders of € 166.4 million were up 30.7% versus Q3-23, of which a portion is anticipated to be shipped in Q2/Q3-24. Operating profit also improved versus prior guidance as gross margins increased to 65.1% due to a favorable advanced packaging product mix and net forex benefits as well as cost control efforts which kept overhead levels relatively constant versus Q4-22. As such, net margins rose to 34.4% versus 28.4% in Q3-23 and 29.2% in Q4-22.
We believe we are in the early phase of a new assembly upturn after a revenue decrease of approximately 40% from the last cyclical peak in 2021 (as per TechInsights). Industry analysts anticipate that the market will rebound in 2024-2026 driven primarily by a recovery in mainstream assembly and Chinese markets, additional capacity needed for next generation AI logic/memory applications and new wafer fab facilities coming online requiring advanced packaging capacity. The slope of the recovery this year is uncertain given restrained demand for mainstream applications and weakness in automotive end-user markets currently.
For Q1-24, we expect revenue to decrease by 5-15% versus Q4-23 and for gross margins to range between 64-66% due to a favorable advanced packaging product mix. Baseline operating expenses are forecast to increase by 0-5% versus Q4-23 with total operating expenses expected to increase by 50-55% due to a € 15 million increase in share-based incentive compensation expense.”
Fourth Quarter Results of Operations
€ millions
Q4-2023
Q3-2023
Δ
Q4-2022
Δ
Revenue
159.6
123.3
+29.4%
137.7
+15.9%
Orders
166.4
127.3
+30.7%
180.5
-7.8%
Book to Bill Ratio
1.04x
1.03x
+0.01
1.31x
-0.27
Q4-23 revenue of € 159.6 million increased by 29.4% and 15.9% versus Q3-23 and Q4-22, respectively, and was above prior guidance. The increase was due primarily to increased shipments for hybrid bonding, photonics and other AI-related, 2.5D applications. Similarly, orders of € 166.4 million increased by 30.7% versus Q3-23. Versus Q4-22, orders decreased by 7.8% principally due to the pull forward of high-end smartphone bookings in Q4-22 related to customer supply chain concerns. Per customer type, IDM orders in Q4-23 increased € 12.2 million, or 17.3%, versus Q3-23 and represented 50% of total orders. Subcontractor orders increased by € 26.9 million, or 47.4%, versus Q3-23 and represented 50% of total orders.
€ millions
Q4-2023
Q3-2023
Δ
Q4-2022
Δ
Gross Margin
65.1%
64.6%
+0.5
62.3%
+2.8
Operating Expenses
37.8
36.9
+2.4%
37.1
+1.9%
Financial Expense, net
0.7
1.8
-61.1%
3.6
-80.6%
EBITDA
72.7
48.9
+48.7%
54.8
+32.7%
Besi’s gross margin of 65.1% increased by 0.5 points versus Q3-23 and by 2.8 points versus Q4-22 primarily due to a more favorable advanced packaging product mix and net forex benefits.
Q4-23 operating expenses increased by 2.4% and 1.9% versus Q3-23 and Q4-22, respectively, and were slightly more favorable than guidance. Overhead growth was limited due to the benefits from strategic cost control initiatives despite significantly increased revenue levels.
Q4-23 financial expense, net, decreased by € 1.1 million versus Q3-23 and € 2.9 million versus Q4-22 primarily related to increased interest income earned on cash balances outstanding.
€ millions
Q4-2023
Q3-2023
Δ
Q4-2022
Δ
Net Income
54.9
35.0
+56.9%
40.2
+36.6%
Net Margin
34.4%
28.4%
+6.0
29.2%
+5.2
Tax Rate
16.1%
14.4%
+1.7
10.9%
+5.2
Besi’s Q4-23 net income of € 54.9 million increased by € 19.9 million, or 56.9%, versus Q3-23 due primarily to a 29.4% revenue increase which significantly exceeded operating expense growth of 2.4%. The 36.6% profit increase versus Q4-22 was due primarily to higher revenue levels, a 2.8-point increase in gross margins and a € 2.9 million reduction in financial expense, net. The effective tax rate in Q4-23 of 16.1% was adversely affected by a € 2.3 million downward adjustment of deferred tax assets. Excluding such adjustment, the effective tax rate would have been 12.5%.
Full Year Results of Operations
€ millions
FY 2023
FY 2022
Δ
Revenue
578.9
722.9
-19.9%
Orders
548.3
663.7
-17.4%
Gross Margin
64.9%
61.3%
+3.6
Operating Income
213.4
294.1
-27.4%
Net Income
177.1
240.6
-26.4%
Net Margin
30.6%
33.3%
-2.7
Tax Rate
14.7%
12.6%
+2.1
Besi’s revenue in 2023 declined 19.9% versus 2022 principally due to adverse market conditions in the assembly equipment market which declined by approximately 26% as per TechInsights. It also reflected significantly reduced demand for mainstream consumer electronics by both IDMs and Asian subcontractors and, to a lesser extent, reduced demand for automotive applications. Orders of € 548.3 million declined 17.4% versus 2022 primarily due to decreased demand for mainstream consumer electronics and automotive applications partially offset by strong growth in the second half of the year for silicon photonics, hybrid bonding and 2.50 logic/memory applications.
Besi’s net income of € 177.1 million in 2023 decreased by € 63.5 million, or 26.4%, versus 2022 due primarily to a 19.9% revenue reduction and higher strategic consulting and share-based compensation expense partially offset by a (i) 3.6-point gross margin increase due to a more favorable product mix, net forex benefits and cost control efforts as well as (ii) a € 12.9 million improvement in financial expense, net due to higher interest income earned on cash balances outstanding.
Financial Condition
€ millions
Q4
2023
Q3
2023
Δ
Q4
2022
Δ
FY
2023
FY
2022
Δ
Total Cash and Deposits
413.5
391.2
+5.7%
671.7
-38.4%
413.5
671.7
-38.4%
Net Cash and Deposits
113.0
90.2
+25.3%
346.5
-67.4%
113.0
346.5
-67.4%
Cash flow from Ops.
53.3
65.1
-18.1%
86.6
-38.5%
208.6
271.9
-23.3%
At year-end 2023, Besi had a solid liquidity position with total cash and deposits aggregating € 413.5 million, an increase of € 22.3 million, or 5.7%, versus Q3-23. Growth was primarily due to € 53.3 million of cash flow from operations which was used to fund (i) € 23.1 million of share repurchases, (ii) € 5.8 million of capitalized development spending and (iii) € 1.5 million of capital expenditures. Similarly, net cash of € 113.0 million at quarter end increased by 25.3% versus Q3-23.
For the full year, Besi’s cash and deposits decreased by € 258.2 million primarily due to a total capital allocation of € 435.5 million to shareholders. Similarly, Besi’s year-end net cash position of € 113.0 million decreased by € 233.5 million versus year-end 2022 which also included the conversion into equity of € 31.7 million of our 2016 and 2017 Convertible Notes.
Share Repurchase Activity
On October 27, 2023, Besi completed its € 300 million share repurchase program under which approximately 4.3 million shares were repurchased at an average price per share of € 69.87. On October 26, 2023, Besi announced a new € 60 million repurchase program with an anticipated completion date of October 2024 under which approximately 78,000 shares were purchased in 2023 at an average price of € 123.93 per share for a total of € 9.6 million.
In Q4-23, Besi repurchased approximately 227,000 shares at an average price of € 101.96 per share for a total of € 23.1 million. For the full year, Besi repurchased approximately 2.6 million shares at an average price of € 83.40, for a total of € 213.4 million. As of such date, Besi held approximately 4.1 million shares in treasury equal to approximately 5.1% of its shares outstanding.
Dividend for 2023
Given its earnings, cash flow generation and prospects, Besi’s Board of Management has proposed a cash dividend for 2023 equal to € 2.15 per share for approval at the AGM on April 25, 2024. The proposed dividend reflects a pay-out ratio of 94% and will be payable from May 3, 2024.
Investor and media conference call
A conference call and webcast for investors and media will be held today at 4:00 pm CET (10:00 am EST). To register for the conference call and/or to access the audio webcast and webinar slides, please visit www.besi.com.
Important Dates 2024
Publication Annual Report 2023
March 1, 2024
Publication Q1 results
April 25, 2024
Annual General Meeting of Shareholders
April 25, 2024
Analyst Day
June 6, 2024
Publication Q2/semi-annual results
July 25, 2024
Publication Q3/nine-month results
October 24, 2024
Publication Q4/full year results
February 2025
Dividend Information*
Proposed ex-dividend date
April 29, 2024
Proposed record date
April 30, 2024
Proposed payment of 2023 dividend
Starting May 3, 2024
*Subject to approval at Besi’s AGM on April 25, 2024
About Besi
Besi is a leading supplier of semiconductor assembly equipment for the global semiconductor and electronics industries offering high levels of accuracy, productivity and reliability at a low cost of ownership. The Company develops leading edge assembly processes and equipment for leadframe, substrate and wafer level packaging applications in a wide range of end-user markets including electronics, mobile internet, cloud server, computing, automotive, industrial, LED and solar energy. Customers are primarily leading semiconductor manufacturers, assembly subcontractors and electronics and industrial companies. Besi’s ordinary shares are listed on Euronext Amsterdam (symbol: BESI). Its Level 1 ADRs are listed on the OTC markets (symbol: BESIY) and its headquarters are located in Duiven, the Netherlands. For more information, please visit our website at www.besi.com.
Contacts:
Richard W. Blickman, President & CEO
Leon Verweijen, SVP Finance
Claudia Vissers, Executive Secretary/IR coordinator
Edmond Franco, VP Corporate Development/US IR coordinator
Tel. (31) 26 319 4500
investor.relations@besi.com
Statement of Compliance
The accounting policies applied in the condensed consolidated financial statements included in this press release are the same as those applied in the Annual Report 2023 and were authorized for issuance by the Board of Management and Supervisory Board on February 21, 2024. In accordance with Article 393, Title 9, Book 2 of the Netherlands Civil Code, Ernst & Young Accountants LLP has issued an unqualified auditor’s opinion on the Annual Report 2023. The Annual Report 2023 will be published on our website on March 1, 2024 and proposed for adoption by the Annual General Meeting on April 25, 2024.
The condensed financial statements included in this press release have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union but do not include all of the information required for a complete set of IFRS financial statements.
Caution Concerning Forward Looking Statements
This press release 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; the extent and duration of the COVID-19 pandemic and measures taken to contain the outbreak, and the associated adverse impacts on the global economy, financial markets, global supply chains and our operations as well as those of our customers and suppliers; 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 industry 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; consolidation activity and industry alliances in the semiconductor industry that may result in further increased customer concentration, 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, conflict minerals 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 where we have a substantial portion of our production facilities; potential instability in foreign capital markets; the risk of failure to successfully manage our diverse operations; any inability to attract and retain skilled personnel, including as a result of restrictions on immigration, travel or the availability of visas for skilled technology workers as a result of the COVID-19 pandemic; those additional risk factors set forth in Besi’s annual report for the year ended December 31, 2022 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.
Consolidated Statements of Operations
(€ thousands, except share and per share data)
Three Months Ended
December 31,
(unaudited)
Year Ended
December 31,
(audited)
2023
2022
2023
2022
Revenue
159,635
137,721
578,862
722,870
Cost of sales
55,700
51,940
203,074
279,797
Gross profit
103,935
85,781
375,788
443,073
Selling, general and administrative expenses
24,277
22,582
105,956
95,012
Research and development expenses
13,533
14,494
56,440
53,945
Total operating expenses
37,810
37,076
162,396
148,957
Operating income
66,125
48,705
213,392
294,116
Financial expense, net
729
3,625
5,703
18,626
Income before taxes
65,396
45,080
207,689
275,490
Income tax expense (benefit)
10,501
4,927
30,605
34,843
Net income
54,895
40,153
177,084
240,647
Net income per share – basic
0.71
0.51
2.28
3.03
Net income per share – diluted
0.68
0.50
2.23
2.90
Number of shares used in computing per
share amounts:
– basic
– diluted 1
77,070,082
82,091,299
79,111,438
84,777,360
77,508,722
82,800,279
79,311,366
85,526,157
Consolidated Balance Sheets
(€ thousands)
December
31, 2023
(audited)
September
30, 2023
(unaudited)
June 30,
2023
(unaudited)
March 31,
2023
(unaudited)
December
31, 2022
(audited)
ASSETS
Cash and cash equivalents
188,477
205,025
192,977
489,927
491,686
Deposits
225,000
186,150
185,370
155,000
180,000
Trade receivables
143,218
127,006
158,543
145,921
148,333
Inventories
92,505
103,060
93,863
101,024
92,117
Other current assets
39,092
25,853
24,143
24,126
24,562
Total current assets
688,292
647,094
654,896
915,998
936,698
Property, plant and equipment
37,516
33,907
33,438
32,278
33,272
Right of use assets
18,242
18,559
19,083
16,512
17,480
Goodwill
45,402
45,813
45,564
45,556
45,746
Other intangible assets
93,668
87,639
85,409
82,191
81,218
Deferred tax assets
12,217
16,717
17,158
18,397
19,563
Other non-current assets
1,216
1,227
1,163
1,170
1,213
Total non-current assets
208,261
203,862
201,815
196,104
198,492
Total assets
896,553
850,956
856,711
1,112,102
1,135,190
Current portion of long-term debt
3,144
100
298
2,372
2,361
Trade payables
46,889
48,782
47,371
48,877
41,431
Other current liabilities
87,200
86,099
86,217
109,761
100,099
Total current liabilities
137,233
134,981
133,886
161,010
143,891
Long-term debt
297,353
300,871
304,027
316,779
322,815
Lease liabilities
14,924
15,346
15,907
13,837
14,372
Deferred tax liabilities
12,959
12,883
12,567
12,882
13,303
Other non-current liabilities
12,671
11,906
11,827
12,001
12,274
Total non-current liabilities
337,907
341,006
344,328
355,499
362,764
Total equity
421,413
374,969
378,497
595,593
628,535
Total liabilities and equity
896,553
850,956
856,711
1,112,102
1,135,190
Consolidated Cash Flow Statements
(€ thousands)
Three Months Ended
December 31,
(unaudited)
Year Ended
December 31,
(audited)
2023
2022
2023
2022
Cash flows from operating activities: