Investors Presentation
Rafi Amit, CEOMoshe Eisenberg, CFO
January 2018
Needham Conference 2018
Safe Harbor
2Copyright of Camtek Ltd. 2017 © All rights reserved
The information presented today contains forward-looking statements that relate to anticipated futureoperating results and performance. These statements are only predictions based on management’s currentexpectations and assumptions, including with respect to market size, Total Available Market (or “TAM”) andrevenue targets, and necessarily involve risks and uncertainties. Moreover, our stated revenue targets areinspirational and should not be taken as projections of actual future results. We do not assume any obligationto update the information provided. Actual events or results may differ materially from those projected,including as a result of changing industry and market trends, reduced demand for our products, the timelydevelopment of our new products and their adoption by the market, increased competition in the industry,price reductions and other subsequent developments and business conditions, as well as due to risks and otherimportant information identified in the documents filed with the Securities and Exchange Commission,including the Company’s Annual Reports on Form 20-F and Reports on Form 6-K.
The presentation includes non-GAAP financial measures which are not intended to be considered in isolation oras a substitute for the financial information prepared and presented in accordance with GAAP. Managementuses both GAAP and non-GAAP measures when evaluating the business internally and therefore believes it isimportant to make these non-GAAP measures available to the financial community. Reconciliations of non-GAAP measures to the most relevant GAAP amounts are included in the Company press releases.
This presentation includes the company’s estimations on Market size and TAM, (“Total Available Market,” or“TAM”) these estimations can vary and may be differ materially from the reality and are based on internalestimations. TAM or market size is the company’s estimation on the total yearly market size.
Develops, Manufactures and Sells Inspection and metrology
Systems to the Semiconductors Market
CMOS Image Sensors
Bumping
RDL
MEMS, RF
Advanced Packaging
Post Dicing
Memory
• 2D & 3D metrology• 2D inspection
• 2D & 3D metrology• 2D inspection
• 2D inspection & metrology
• 2D inspection & 3D metrology• 2D inspection &
metrology
• 2D inspection & metrology
• 2D Inspection & metrology
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Camtek ID
Copyright of Camtek Ltd © 2017. All rights reserved
PRESENCE IN
CO $235m UNTRIES
Market Cap *Net Cash
PO ~$45mUNTRIES
*2017E revenues
PO ~$92m>+15% YoY
* Q417E gross margin
PO ~50%
* Q417E op. margin
PO ~15%
Employees
PO 270
Global presence
China, Taiwan, Korea, Singapore, Hong Kong, USA, Europe
Camtek: Strong Customer Base
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Performance highlights
• Doubled our Semi revenues 2013-2017
• Improving our profitability to 15% operating margin
• Net cash – $45M with no debt
• Good start for 2018
• Plan to continue doubling our revenue in the next 3-4 years
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Strong and Improving Operating Performance
~16% growth in revenue expected in 2017• Q4 revenue guidance of $24-25m
Profitability improvements in H2 2017 driven by:• Semi growth - high margin & leverage• Significantly reduced legal expenses• Lower FIT expense structure
New operating model• H217 gross margins grow to ~50%• Operating margins increasing to ~15% by Q4 and
continuing improvement into 2018
More than doubled semi revenue organically from 2013 to 2017
Sem
ico
nd
uct
or
4455
6879
~92
2013 2014 2015 2016 2017E
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Well Positioned Semiconductors Company
Signed agreement to divest PCB business
Reached final legal settlementwith Rudolph
Settlement of $13mRemoved uncertaintiesSaves $2.5-$3m/year in legal fees
Strong PCB market createdopportunity for divestment
Completed sale ofPCB business
Sold for $32m +potential $3m earn-out
Internal Reorganization
Semi onlyNew Offices in China and Taiwan
Reduced overall expenses
NovemberJuly August October
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Q4 – Pure Play Semiconductors Company
Semiconductors Market Growth Engines
Source: Cisco Global Cloud Index, Nov 2016
Mobility & Connected Devices
Autonomous Car
HealthcareVirtual Reality
Artificial Intelligence
Cloud
RF Filters MEMSAdvanced Packaging
Data Centers & Storage
Multiple Growth Drivers
244 TB/seconddouble last year
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Mobile memory density continues to grow
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Automotive Industry Trend
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Today ~70 electronics modules with 4000-8000 chips2020 ~100 electronics modules predicted
Top 10 IDM’s [$B]
12
Samsung, 65.6, 15%
Intel, 61, 14%
SK Hynix, 26.2, 6%
Micron, 23.4, 5%
Broadcom, 17.6, 4%
Qualcomm, 17.1, 4%TI, 13.9, 3%Toshibe, 13.5, 3%
Nvidia, 9.2, 2%
NXP, 9.2, 2%
Others, 182, 42%
Our sales to IDMs in 2017 is ~70%
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2017 Top OSATs by RevenueOutsourced Semiconductor Assembly and Test
13
ASE25%
Amkor20%
JCET15%
SPIL13%
PTI9%
TSHT5%
TFME4%
KYEC3%
UTAC Group3% ChipMost
3%
2017 OSAT MARKET SHARE
Camtek has presence in all top OSATS
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14
14
Advanced Packaging Driving Increased Inspection & Metrology Capital Spending
Bumped wafers number is growing driving AOI spending growth faster
Source: Yole
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Our Target Segments Show Double-digit Growth
Source: Yole, Gartner, IC Insights% 2016-2022 CAGR
Cam
tek
Focu
s
7%
7.6%
7.6%
11%
12%
12%
19%
21%
Semi total
Foundry
Memory
RF
MEMS
CIS
3D IC
Fan-out
Memory will grow in 2017 by 60%
AP
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Installed BaseBased on 760
machines installed worldwide
50%
20%
14%
16%
Advanced Packaging Inspectionand Metrology
CIS
RF/POWER/MEMS
General Inspection
3DIC Growth Rate 19%
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Source: Yole
Memory move to 3DIC
17
• DRAM
3DIC is used at high end application (gaming
was the first application)
Resulting in higher data transfer rate and low
power consumption
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CMOS Image Sensors
18
• Ensuring Defect Free Pixels
• Chipping and inner cracks
• Surface defects down to 1 micron size defect
RGB damaged pixel
Chipping
Source: Yole 2015
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MEMS Market
19
• CAGR 16.7%
• Key growth drivers
include: Automotive, IoT,
wearables, medical and
other smart devices
2017 – 2022 MEMS Market Forecast – In US$B
MEMS packaging market will increase from $2.56 billion last year to $6.46 billion in 2022
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RF Power Market
20
Overall market revenue could increase 75% between 2016 and the end of 2022
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Challenges for RF/Power and MEMS
• Different material (RF)
• Detection and Metrology requiring special image
processing and algorithms on same system
• Customized material handling
• Several wafer sizes on same system
• End Effectors
• Chucks
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RF Filter
Plan Into 2018
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• Continue maintaining our growth rate
Aim to double revenue again in 3-4 years
Growth through organic growth and potentially M&A
• Capitalize our latest new products
Next generation 3D metrology system
New 2D capability (post dicing, RDL)
Our new software tools
• Develop new segments
Macro inspection
2D and 3D special applications
• Higher margins
Through operational leverage
22
Why Are We Winning?
High performance systems
Strong R&D
Flexible operation organization Excellent sales and CS
Dedicated employees
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Recent Financial Highlights
Q3 2017 Summary• Revenues $23.8m, up 13% YoY;
Camtek record for semiconductors
• non-GAAP gross margin: 49.4%
• non-GAAP operating income: $3.0m 9.4% operating margin
• Issued $4.9m dividend
Q4 2017 Guidance• Q4 revenue: $24-25m (~+17% YoY)
• 2018 revenue: continuous growth
• ~50% gross margin
• ~15% operating margin
• Start Q4 with net cash of ~$40m
16.8
19.821 21.5 21.1
22.723.8 24.5
0
5
10
15
20
25
30
Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417
QUARTERLY REVENUE US$M
24
~50%
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Mid-Long Term Target Operating Model*
Double-digit growth from semi
100%
50-52%
Gross MarginRevenue
13-15%
R&D
15-20%
Operating Margin
25
*Illustrative Purposes Only
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Investment Highlights
• We focus on the fastest growing segments of the Semiconductors industry
• Expects operating margin improvement in Q4 2017 and beyond
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Aim to double revenues again within 3-4 years
Thank you!
GAAP Financial Results
Annual 2017FY Q1 Q2 Q3
(US $ in Millions) 2016Revenues 79.2 21.1 22.7 23.8
Gross Profit 32.5 10.2 11.2 11.8
Gross Margin 41% 48% 49% 50%
R&D 12.6 3.5 3.4 3.2
16% 17% 15% 13%
SG&A 21.9 5.4 5.8 5.7
28% 26% 26% 24%
Reorganisation -4.1 - - -
Loss from litigation - - 13 -Operating Profit (Loss) 2 1.4 -11 2.9
Operating Margin 3% 7% -48% 12%
Continuing Operations 0.9 1.3 -5.7 2.8
Discontinued Operations 3.9 2 1.8 8.9
Net Profit (Loss) 4.7 3.3 -3.9 11.7
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