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CORPORATE PRESENTATION GROWTH PLAN
JULY 2012
VISHAY TODAY GROWTH DRIVERS ORGANIC GROWTH GROWTH PLAN
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NOTES ON FORWARD-LOOKING STATEMENTS Comments in this presentation other than statements of historical fact may constitute forward-looking statements. Words such as “believe,” “estimate,” “will be,” “will,” “would,” “expect,” “anticipate,” “plan,” “project,” “intend,” “could,” “should” or other similar words or expressions often identify forward-looking statements. Such statements are based on current expectations only, and are subject to certain risks, uncertainties and assumptions, many of which are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results, performance or achievements may vary materially from those anticipated, estimated or projected. Factors that could cause actual results to materially differ are described in our filings with the Securities and Exchange Commission, including our annual reports on Form 10-K and quarterly reports on Form 10-Q, specifically in the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors .” The Company undertakes no obligation to update any forward-looking statements. NON-GAAP FINANCIAL MEASURES Management uses measures which are not recognized in accordance with U.S. generally accepted accounting principles (“GAAP”) to evaluate our business, and may refer to such measures in this presentation. These measures are considered “non-GAAP financial measures” under the U.S. Securities and Exchange Commission rules. These non-GAAP financial measures are intended to supplement our GAAP measures of performance and liquidity. These non-GAAP measures may include: Adjusted net earnings, Adjusted gross margin, Adjusted operating margin, Adjusted earnings per share, Free cash, Cash available to enhance stockholder value, EBITDA, Breakeven point, Contribution margin, and various measures and metrics “excluding VPG”. “Adjusted net earnings” is net earnings (loss) determined in accordance with GAAP, adjusted for various items that Management believes are not indicative of the intrinsic operating performance of the Company, such as restructuring and severance costs, asset write-downs, impairment of goodwill, and other significant charges or credits that are important to understanding our intrinsic operations. The measurement is used by management to evaluate our performance, and also is a key performance metric for executive compensation. Reconciling items to arrive at adjusted net earnings are more fully described in the Company’s annual report on Form 10-K and its quarterly reports on Forms 10-Q. “Adjusted gross margin” is gross margin determined in accordance with GAAP (net revenue less costs of products sold and certain other period costs), adjusted to exclude items that Management believes are not indicative of the intrinsic operating performance of the Company, such as losses on purchase commitments and unusual inventory write-downs. It may be expressed in dollars or as a percentage of net revenue. The measurement is used by management to evaluate the performance of our business segments, as well as the business as a whole. Reconciling items to arrive at adjusted gross margin are also considered in the calculation of adjusted operating margin and adjusted net earnings. Such reconciling items are more fully described in the Company’s annual report on Form 10-K and its quarterly reports on Forms 10-Q. “Adjusted operating margin” is operating income determined in accordance with GAAP, adjusted for items that Management believes are not indicative of the intrinsic operating performance of the Company. It may be expressed in dollars or as a percentage of net revenue. The measurement is used by management to evaluate our performance. Reconciling items to arrive at adjusted gross margin are also considered in the calculation of adjusted operating margin; and reconciling items to arrive at adjusted operating margin are also considered in the calculation of adjusted net earnings. Such reconciling items are more fully described in the Company’s annual report on Form 10-K and its quarterly reports on Forms 10-Q. “Adjusted earnings per share” is “adjusted net earnings” divided by the weighted average diluted shares outstanding for a period, adjusted for the effect of reconciling items, if applicable, on the diluted weighted average shares outstanding. For example, some potential common shares which are anti-dilutive to the computation of GAAP earnings per share may be dilutive after considering reconciling items. “Free cash” is cash generated from operations in excess of our capital expenditure needs and net of proceeds from the sale of assets. Management uses this measure to evaluate our ability to fund acquisitions, repay debt, and otherwise enhance stockholder value through stock buy-backs or dividends. “Cash available to enhance stockholder value” is “free cash” less cash paid for acquisitions (including acquisition-related restructuring) and less debt principal payments. While internal growth and targeted acquisitions also enhance stockholder value through the generation of “free cash”, Management uses this measure to evaluate our ability to fund further enhancements to stockholder value, such as stock buy-backs or dividends. “EBITDA” is earnings before interest income and expense, provision for income taxes, depreciation expense, and amortization expense. Management believes that EBITDA provides additional information with respect to a company’s performance and ability to meet its future capital expenditures and working capital requirements, particularly when evaluating acquisition targets. “Breakeven point” represents the quantity of output where total revenues and total operating costs are equal (in other words, where the operating income is zero). Management uses this measurement in evaluating our cost structure. “Contribution margin,” sometimes referred to as “variable margin,” is calculated as net revenue less costs that vary with respect to quantity produced (or another output-related driver). It may be expressed in dollars or as a percentage of net revenue. Management uses this measure to determine the amount of profit to be expected for any increase in revenues in excess of the break-even point. Measurements “excluding VPG” reflect the historical businesses which are still part of Vishay today. The Company spun-off VPG on July 6, 2010. While VPG does not qualify as a “discontinued operation” under GAAP, Management believes that certain evaluations “excluding VPG” are meaningful, particularly when evaluating growth and other performance metrics. VPG is reported as a separate operating segment in Vishay’s annual report on Form 10-K and its quarterly reports on Forms 10-Q. This discrete data is the basis to calculate any measurements “excluding VPG”. These measures do not have uniform definitions and accordingly, these measures, as calculated by Vishay, may not be comparable to similarly titled measures used by other companies. Such measures should not be viewed as alternatives to GAAP measures of performance or liquidity. However, Management believes such measures are meaningful to an evaluation of our business, as described above.
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Intensified organic growth.
Targeted acquisitions.
Opportunistic stock buy backs.
While maintaining prudent capital structure.
DRIVE STOCKHOLDER VALUE BY INCREASING EPS
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Broad and competitive product and technology portfolio: Solution provider and valuable partner for customers.
Broad market penetration Wide range of end markets. Balanced geographic footprint. Right mix of sales channels.
Contribution margin of 45% plus. Break-even point below $1,850 million. Reliable generation of “free cash”.
VISHAY TODAY
VISHAY TODAY
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BALANCED PRODUCT PORTFOLIO
47% PASSIVES - 53% SEMICONDUCTORS
VISHAY REVENUES 2011
MOSFETS21%
DIODES23%
INFRARED OPTO
9%
RESISTORS INDUCTORS
25%
CAPACITORS22%
VISHAY TODAY
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BROADEST LINE OF DISCRETE SEMICONDUCTORS AND PASSIVE COMPONENTS
= Major Position = Minor Position Source: Company estimates
DIODES MOSFETs MAGNETICS
Diodes, Rectifiers
MOSFETs
Infrared Compo-
nents
Opto-couplers LEDs
Aluminum, Ceramic
Power, Film,
Tantalum
Film, Power
SMD Resistors
Variable, Sensors
Magnetic Compo-nents
VISHAY Avago AVX Fairchild Int. Rectifier Infineon KEMET KOA Murata Nichicon NXP ON Semi Panasonic Rohm Sharp ST Micro TDK/EPCOS Toshiba Yageo
SEMICONDUCTORS PASSIVE COMPONENTSOPTO CAPACITORS RESISTORS
VISHAY TODAY
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BROAD MARKET PENETRATION
END MARKETS
SALES CHANNELS GEOGRAPHY
VISHAY REVENUES 2011
COMPUTING18%
CONSUMER7%
AUTOMOTIVE18%
TELECOM12%
INDUSTRIAL28%
POWER SUPPLIES
8%
MILITARY/AERO6%
MEDICAL3%
AMERICAS22%
EUROPE40%
ASIA38%
EMS6%
OEM38%
DISTRIBUTION*56%
* Distribution includes Logistics Service Providers with 6%
VISHAY TODAY
BROAD CUSTOMER BASE
OEM
EMS DISTRIBUTION
NO SINGLE OEM CUSTOMER REPRESENTS OVER 7% OF SALES
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VISHAY TODAY
9 9
REVENUE AND OPERATING MARGIN1
1) Excl. VPG spin-off.
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
03 04 05 06 07 08 09 10 11
OPERATING MARGIN REVENUE
REVENUE MILLIONS
OM MILLIONS
VISHAY TODAY
10 10
CONTRIBUTIVE MARGIN1
1) Excl. VPG spin-off.
0
5
10
15
20
25
30
35
40
45
50
55
60
0
5
10
15
20
25
30
35
40
45
50
55
60
03 04 05 06 07 08 09 10 11
%
%
VISHAY TODAY
11 11
BREAKEVEN POINT1
1) Excl. VPG spin-off.
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
03 04 05 06 07 08 09 10 11 BEP REVENUE
MILLIONS
MILLIONS
VISHAY TODAY
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RECONCILIATION OF GAAP TO ADJUSTED1
in millions USD 2011 2010 2009 2008 2007 2006 2005 2004 2003
Reconciling items affecting gross margin:
Loss on purchase commitments, Ta write-downs 6 16 (1) 17 18
Product quality claims 3
Reconciling items affecting operating margin:
Restructuring and severance costs 36 57 15 38 27 46 29
Asset write-downs 1 5 4 7 11 27 1
Executive compensation charges 446
Settlement agreement gain (28)
Executive employment agreement charge 58
Impairment of goodwill and indefinite-lived intangibles 1,629
Terminated tender offer expenses 4
Contract termination charge 19
Siliconix transaction-related charges 4
Purchased in-process R&D 10 2
Environmental remediation 4 Gain on sale of building (5) (3)
1) Excl. VPG spin-off.
VISHAY TODAY
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STRONG GENERATION OF FREE CASH CASH FLOWS FROM OPERATIONS LESS CAPITAL EXPENDITURES PLUS PROCEEDS FROM SALE OF PROPERTY AND EQUIPMENT
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
03 04 05 06 07 08 09 10 11
MILLIONS MILLIONS
VISHAY TODAY
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Three stock buy-backs for 44.3 million shares total, a 24% reduction of shares out prior to the repurchases. Total shares out on 30-Jun-2012 were 143.3 million.
Repurchases:
13.9 million shares in May 2012 for $150 million.
8.6 million shares in May 2011 for $150 million. 21.7 million shares in November 2010 for $275 million.
All financed with 2.25% coupon, 30-year convertibles. More efficient than repatriation of non-US cash.
ENHANCING STOCKHOLDER VALUE
VISHAY TODAY
MAY 2012 $150 MILLION CONVERTIBLE Offering size: $150M Security: Convertible Senior Notes Maturity: June 1, 2042 Call features: Non-call 10, Soft-call life @ 150% (Vishay can call,
after year 10, at par if VSH stock price is >150% of the conversion price)
Put features: None, except upon a fundamental change Coupon: 2.25% Conversion premium / price: 13.75%, approximately $11.81 Financial covenants: None Use: Repurchased 13.95 million shares
Offering rationale: We used low coupon, long-dated convertible debt to repurchase stock. Most of our cash is offshore, and using onshore external financing is a
more efficient means to finance the share repurchase. The convertible matures in 30 years, has no financial covenants, and
provides significant financial flexibility for us. 15
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Discrete electronic components—a growth market:
4-6% average/year in value.
8-10% average/year in units.
New macro economic growth drivers:
Connectivity.
Mobility.
Sustainability.
OUR MARKETS
GROWTH DRIVERS
High efficiency Compact size Competitive
performance and price
CONNECTIVITY ULTRABOOKS: THIN CLIENT COMPUTER
17 TMBS® diodes
Power Metal Strip® current sense resistors
Pulse capacitors
Thin Film chip resistors
Analog switches; multiplexers
Slew rate controlled load switches
MOSFETs: MicroFoot ®; PowerPAK ®
GROWTH DRIVERS
High efficiency Low profile Durable construction
MOSFETs: PowerPAIR®, SC-70
IHLP® power inductors
Power Metal Strip® current sense resistors
TMBS® diodes
High CV tantalum capacitors
RX charging coils
CONNECTIVITY WIRELESS CHARGING
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microBUCK ® regulators
GROWTH DRIVERS
CONNECTIVITY MOBILE PAYMENT SYSTEMS - NFC
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High efficiency Small size
Low Voltage MOSFETs
TMBS® diodes
High CV tantalum capacitors
GROWTH DRIVERS
MOBILITY 48V BOARDNET IMPLEMENTATION
Power Metal Strip® 4 -Terminal current sense resistors
MOSFETs: PowerPAK ® 8x8L
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Surface mount PAR® Transient Voltage Suppressors
High voltage capabilities Transient resistant High power and current density
Planar transformers
Filter film capacitors MKT 1820
IHLP® power inductors
GROWTH DRIVERS
MOBILITY ELECTRIC POWER STEERING (EPS)
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Power Metal Strip® current sense resistors
IHLP® power inductors
High current handling Excellent EMI filtering High power B6-MOSFET driver
Electrolytic boost capacitors
Optical sensors for angle steering
Customized B6 MOSFET modules
GROWTH DRIVERS
SUSTAINABILITY WINDMILLS AND SMART GRID
Long life, high reliability High power density Safety approvals Custom design
Power capacitors 22
Discharge and chopper resistors
Phase-leg thyristors, SCR / IGBT-modules
Snap-in and screw terminal electrolytic capacitors
Crowbar resistors
HV disc capacitors 22
GROWTH DRIVERS
SUSTAINABILITY ENERGY EXPLORATION
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High temperature operation Long life High reliability Safety approvals
XMAP / XLMAP inverter modules Wet tantalum
capacitors
Power Schottky by-pass diodes
High temperature molded tantalum capacitors Electro-pyrotechnic initiator
Thin Film chip resistors Thin Film chip resistors
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Accelerate development of new products and technologies.
Improve market penetration.
Expand manufacturing capacities.
Increase technical resources.
Develop markets for specialty products in Asia.
INTENSIFIED ORGANIC GROWTH
INTENSIFIED ORGANIC GROWTH
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High and low voltage MOSFETs (superjunction HVM, split gate LVM).
Integrated solutions beyond DrMOS (diodes, MOSFET, driver, controller, inductor).
Power modules (diodes, MOSFETs, SCRs, IGBTs).
eSMP™ extension to replace big power packages (TO220, DPAK).
High power IR emitters (surface emitter).
Extend integration of opto sensors to more “intelligent” circuits (encoder for printers, high power IR arrays, proximity sensors with ambient light detectors).
ACCELERATED DEVELOPMENT OF NEW PRODUCTS: SEMICONDUCTORS
INTENSIFIED ORGANIC GROWTH
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ACCELERATED DEVELOPMENT OF NEW PRODUCTS: PASSIVE COMPONENTS
Specialty power inductors IHLP® (high current / high temp.).
Heavy duty film capacitors (improved reliability / miniaturization).
Large current sensing resistors (high power Power Metal Strip®).
Specialty custom magnetics and transformers.
Medical high energy wet tantalum capacitors.
INTENSIFIED ORGANIC GROWTH
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Get ahead of demand curve for Vishay’s most successful, leading products: High voltage superjunction and low voltage MOSFETs.
Trench, high voltage and fast recovery diodes.
SMD couplers and receivers.
High current power inductors and specialty magnetics.
Power resistors, current sensors incl. battery shunts.
Power capacitors.
CapEx remains < $200M per year.
IMPROVE MARKET PENETRATION BY CAPACITY EXPANSION
INTENSIFIED ORGANIC GROWTH
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Increase design in by expanding Vishay’s technical resources for providing solutions to customers:
Divisional engineering (product and process).
Field application engineering (FAEs).
IMPROVE MARKET PENETRATION BY INCREASING TECHNICAL RESOURCES
INTENSIFIED ORGANIC GROWTH
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Expand FAE presence in growing markets for specialty products in Asia with focus on China— Leveraging Vishay’s strength in Europe and the Americas in:
Alternative energy (wind and solar power).
White goods (air conditioners).
Automotive (electric cars).
IMPROVE MARKET PENETRATION BY DEVELOPING MARKETS FOR SPECIALTIES IN ASIA
GROWTH PLAN
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GROWTH PLAN
Doubled earnings power compared with before the global economic crisis through fixed cost reduction.
New goal: increase EPS through accelerated internal growth and targeted specialty product acquisitions.
Concrete plan built from the bottom up and stated financial targets. Looking ahead approx. five years taking 2010 as base line.
Focus remains on free cash flow and prudent financial structure.
GROWTH PLAN
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EXTERNAL ASSUMPTIONS
Stable economic environment and FX rates—basis year 2010.
Historical ASP decline per year for Vishay’s products: Passives 0% Semis 3% - 4%
Inflation rates for salaries and raw materials: 1.5% - 4.5% per location and function resp. raw materials.
GROWTH PLAN
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INTERNAL ASSUMPTIONS
Fixed cost increases per year:
R&D and engineering costs 7%.
Selling costs 5%.
G&A 2%.
Plant fixed costs 4%.
Depreciation 1%.
GROWTH PLAN
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TYPICAL ACQUISITION CHARACTERISTICS
Specialty business, likely in passive components.
Sales approx. $100M.
Growing like the market at a rate of approx. 4%.
High contributive margin – low ASP decline.
Synergies, mostly in SG&A, to be realized quickly.
Restructuring costs: payback of 1 year.
Cash payback incl. restructuring of ˂ 8 years.
Accretive to earnings in less than 12 months.
GROWTH PLAN
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TYPICAL ACQUISITION: FINANCIALS
$ in millions
Purchase price assumption: 7.5x EBITDA.
PRE ACQUISTION YEAR 1 YEAR 4
REVENUES 100 100 112
GM 30 32 36 % 30 32 32
SG&A 20 10 11
AMORTIZATION OF INTANGIBLES 3 3
RESTRUCTURING 12
EBITDA 13 13 28 % 13 13 25
FREE CASH 7 17
GROWTH PLAN
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RECENT ACQUISITIONS OF SPECIALTY PRODUCT BUSINESSES
Resistor businesses of Huntington Electric High power and high current resistors, resistor assemblies for industrial applications
Acquisition price (net of cash) approx. $19 million Business segment Resistors & Inductors Closing Sep-11
HiRel Systems High reliability transformers, inductors, coils, and power conversion products
Acquisition price (net of cash) approx. $86 million Business segment Resistors & Inductors Closing Jan-12
GROWTH PLAN
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RESULTS OF GROWTH PLAN NORMALIZED OVER SEVERAL YEARS
Normalized over several years and cycles as well as assuming an only flat contribution margin of 45% plus, the growth plan results in:
CAGR
Revenues growth 8%.
SG&A to increase at lower rate 6%.
Operating and Net Income 10%.
Strong free cash flow even after approx. $110 million per year for acquisitions and restructuring of acquisitions.
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IN SUMMARY
Outgrow the market with CAGR of revenues of approx. 8%.
Increased internal growth.
Targeted acquisitions.
Strong generation of cash available to enhance stockholder value.
Prudent capital structure to be maintained.