Annual Report 2023
People Drive Innovation
CORE VALUES
Our core values are the essence of our
corporate attitude and provide us
guidance in decision making:
• Respect: We value the richness and
diversity of cultures within our
organization. We promote an open
culture in which we respect each
other’s opinion, feel free to discuss
our concerns and give and receive
feedback. We respect the promises
made to each other, to our business
partners and to our customers.
• Unity: Performing in unity gives us a
competitive advantage. We optimally
utilize the synergy of our
collaborative activities when we
work together and share knowledge.
• Customer focused: We provide
innovative and relevant product
solutions and services to the
marketplace that meet our
customers’ needs and exceed their
expectations.
INVESTMENT CONSIDERATIONS
• Assembly market ever more critical
in semiconductor value chain.
• Long-term secular trends favor
advanced packaging growth.
• Disciplined strategic focus has
created an assembly industry
leader.
• Market presence has grown via key
IDMs, supply chains and partners.
• Wafer level assembly promising
new growth opportunity.
• Tech leadership and scalability
result in significant financial
returns.
• Commitment to sustainable growth
and fighting climate change.
• Attractive capital allocation policy.
ESG HIGHLIGHTS
• Progress continues versus Besi’s
2024 ESG targets.
• Completed 76% of ESG initiatives
developed since 2020.
• Energy from renewable sources
increased to 71% versus 20% in 2021.
• Scope 1 & 2 emissions intensity
declined by 38% versus 2021.
• Set objective of net zero greenhouse
gas emissions by 2030 in operations.
• Launch of Design-to-X initiative to
enhance sustainability and reduce
cost.
• Conducted Double Materiality
Assessment for European CSRD
reporting in 2025.
• Improved ratings with MSCI,
Sustainalytics, ISS ESG and S&P
Global.
MISSION STATEMENT
Besi’s mission is to become the
world’s leading supplier of
semiconductor assembly
equipment for advanced packaging
applications and to exceed industry
average benchmarks of financial
performance.
We also strive to create long-term
sustainable value for stakeholders
and operate our business in a
responsible way, respecting both
the environment and society.
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Highlights 2023
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Revenue
(€ millions)
578.9
-19.9%
2022: 722.9
Gross Margin
(%)
64.9%
+3.6 points
2022: 61.3%
Net income
(€ millions)
177.1
-26.4%
2022: 240.6
Orders
(€ millions)
548.3
-17.4%
2022: 663.7
R&D, gross
(€ millions)
63.9
+0.2%
2022: 63.8
Net cash
(€ millions)
113.0
-67.4%
2022: 346.5
Total distributions
(€ millions)
435.5
+4.6%
2022: 416.3
Proposed 2023
dividend
(€)
Dividend
pay-out ratio
Total shareholder
return
Return on
Average Equity
2.15 94% 149.7% 33.7%
-24.6% -4.9 points
2022: 2.85 2022: 92% 2022: -20.0% 2022: 38.6%
Environment
Scope 1 & 2 emissions
intensity
Scope 3 emissions
intensity
(tCO
₂
/revenue) (tCO
₂e
/revenue)
8.9 17.0
+3.7 +3.4
2022: 5.2 2022: 13.6
People
Fixed headcount Female employees
(% of employees)
1,736 17%
+3.6%
2022: 1,675
2022: 17%
Stock
Year end
share price
Market
capitalization
(€) (€ billions)
136.45 10.5
+141.2% +138.6%
2022: 56.56 2022: 4.4
Finance
Capital
Allocation
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REPORT OF THE BOARD OF MANAGEMENT 3
Company Profile 4
Key Highlights 6
Letter to Stakeholders 10
Market Overview 22
Strategy 32
Financial Review 41
Environmental, Social and Governance Report 50
Risk Management 82
Shareholder Information 98
Corporate Governance 104
REMUNERATION REPORT 110
REPORT OF THE SUPERVISORY BOARD 131
Contents
BOARD OF MANAGEMENT AND SUPERVISORY BOARD MEMBERS 136
FINANCIAL STATEMENTS 2023 138
Consolidated Statement of Financial Position 139
Consolidated Statement of Operations 140
Consolidated Statement of Comprehensive Income 140
Consolidated Statement of Changes in Equity 141
Consolidated Statement of Cash Flows 142
Notes to the Consolidated Financial Statements 143
Parent Company Balance Sheet 188
Parent Company Statement of Income and Expense 189
Notes to the Parent Company Financial Statements 190
OTHER INFORMATION 197
Caution concerning forward-looking statements
This Annual Report 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 this report, 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. While these forward-looking
statements represent our judgements 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. Please refer to the section Risk Management for a detailed description
of the risk factors affecting Besi’s business. We expressly disclaim any obligation to
update or alter our forward-looking statements whether as a result of new information,
future events or otherwise.
Company Profile 4
Key Highlights 6
Letter to Stakeholders 10
Market Overview 22
Strategy 32
Financial Review 41
Environmental, Social and Governance Report 50
Risk Management 82
Shareholder Information 98
Corporate Governance 104
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BE Semiconductor Industries N.V. (“Besi” or the “Company”) is engaged in one line of
business: the development, manufacturing, marketing, sales and service of semiconductor
assembly equipment for the global semiconductor and electronics industries.
Our market
The semiconductor manufacturing process involves two distinct phases: wafer processing,
commonly referred to as the front-end and assembly and test, commonly referred to as
the back-end. Once the semiconductor chip (also referred to as a “die”) has been created
in the front-end wafer fabrication process, Besi’s assembly equipment is used by customers
to produce advanced semiconductor assemblies or “packages” incorporating a number of
process steps such as (i) die sorting or “pick and place” of good versus bad dies, (ii) die
bonding to leadframes, substrates, wafers and other chips to facilitate an electrical
interconnection, (iii) die molding to encapsulate the assembled die and protect it from
external contamination, (iv) chemical plating to provide different physical properties at
various stages of the assembly process and (v) trimming and forming of leadframe carriers
housing chips and/or singulation (cutting) of substrate and wafer level devices prior to
placement on a printed circuit board and ultimately, final testing.
FROM PROCESSED WAFER TO ASSEMBLED CHIP
Assembly Process
Dicing Die Attach Wire Bond Packaging Plating
Leadframe
Wire Bond
Substrate
Wire Bond
Substrate
Flip Chip/TCB
Wafer Level
Hybrid, EMIB, TCB, Flip Chip, FOWLP
Front-end: $ 98.0B
(90%)
Assembly: $ 4.1B
(4%)
Test: $ 6.9B
(6%)
Semiconductor Manufacturing Equipment
2023E: $ 109.0B*
* Source: TechInsights, December 2023
TechInsights, a leading independent industry research firm, estimated that the size of the
assembly equipment market was approximately $ 4.1 billion in 2023, or approximately 4%
of the total semiconductor manufacturing equipment market. Annual growth rates can
fluctuate greatly based on global economic cycles and the capital investment programs of
our semiconductor and industrial customers. Besi’s product strategy focuses primarily on
providing advanced packaging solutions to customers which incorporate leadframe,
Company Profile
substrate and wafer level packaging processes in their semiconductor assembly operations.
This represents the most technologically challenging and most rapidly growing area of the
assembly equipment industry.
Our semiconductor assembly process technologies
Semiconductor assembly involves three primary process technologies depending on the
product application required:
Leadframe assembly: the most traditional approach, involves the electrical connection
of the chip via a wire bonding process to a metal leadframe. Leadframe technology is most
frequently used to assemble semiconductor devices for mass market and consumer
electronics applications as well as power devices for automotive and industrial applications.
Substrate assembly: has gained increased market acceptance over the past three
decades. It is used most frequently in product applications that require relatively high
degrees of miniaturization and chip density such as smartphones, servers, tablets and
laptops as well as wireless, automotive and cloud-based internet applications. In a typical
substrate assembly, no metal leadframes are utilized and the electrical connection of the
chip is made directly either through (i) a wire bonding process to a multi-layer substrate or
(ii) the creation of direct connections to the multi-layer substrate via a flip chip die bonding
process.
Wafer level assembly: the most advanced assembly technology, involves placing single
or multiple dies or chiplets onto high I/O density wafers to form integrated subsystems. In
wafer level packaging, the electrical interconnections are facilitated without the need for
a leadframe carrier or substrate interposer for assembly applications <10 nanometers and
placement accuracy <3 microns. Hybrid bonding represents the most important evolution
of die interconnect technology in wafer level assembly. It replaces traditional reflow flip
chip bumps with a direct copper-to-copper connection between a chip and a wafer. Versus
flip chip assembly, it facilitates significantly higher data transfer speeds and chip density
while lowering energy consumption, heat dissipation and cost of ownership. Hybrid
bonding also facilitates the development of 3-dimensional (“3D”) chip architectures as
well as increased performance, features, complexity and functionality in both logic and
memory applications. In addition, wafer level assembly can also be achieved through TCB
chip to wafer process technology whereby the electrical connection is formed during the
bonding process applying heat and pressure processes. These two technologies are
compatible and complementary for wafer level die bonding whose applications will vary
depending on the size, density, complexity and throughput required as well as the cost of
ownership involved in production environments.
Our products and services
Besi is a leading manufacturer of assembly equipment supplying a broad portfolio of
advanced packaging solutions to the semiconductor and electronics industries. We offer
customers high levels of accuracy, reliability and throughput at a lower cost of ownership
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in each of leadframe, substrate and wafer level assembly. We define advanced packaging
as the assembly of semiconductor devices using advanced interconnect processes
including flip chip, SiP, hybrid, TCB and other wafer level technologies as well as all molding
technologies related thereto. We estimate that approximately 70% of Besi’s system
revenue in 2023 was for advanced packaging applications of which 50% were for the most
leading edge devices with placement accuracy <7 microns. We also supply after sales
service and spares to customers which in 2023 represented approximately 17% of our total
revenue and is a less cyclical and growing part of Besi’s revenue mix.
Our principal product and service offerings are set forth below:
• Die attach equipment: single chip, multi chip, multi module, flip chip, thermal
compression bonding (“TCB”), fan out wafer level packaging (“FOWLP”), hybrid and
embedded bridge die bonding systems and die sorting systems.
• Packaging equipment: conventional, ultra thin and wafer level molding, trim and form
and singulation systems.
• Plating equipment: tin, copper, precious metal and solar plating systems and related
process chemicals.
• Services/Other: tooling, conversion kits, spare parts and other services for our installed
base of customers.
Our customers
Our customers are primarily leading multinational chip manufacturers, assembly
subcontractors and electronics and industrial companies and include Amkor, ASE,
Forehope, Foxconn, Huatian, Infineon, InnoLight, Intel, LG Innotek, Micron, Nvidia, NXP,
STMicroelectronics, TFME, Texas Instruments and TSMC. Customers are either independent
device manufacturers (“IDMs”) which purchase our equipment for internal use at their
production facilities or subcontractors which purchase our equipment to assemble
packages for third parties on a contract basis. Our equipment performs critical functions
in our customers’ assembly operations and in many cases represents a significant
percentage of their installed base of assembly equipment.
Our commitment to sustainability
Our objective is to promote Besi’s business and financial interests in a socially responsible
manner for the benefit of all stakeholders, employees, partners, the environment and the
local communities in which we operate. We are committed to running our operations in
accordance with internationally recognized standards and best practices and to promote
sustainability with stakeholders including topics such as environmental conservation,
climate change, human rights, conflict mineral free supply chains, hazardous materials,
anti-corruption practices and corporate transparency. Our Environmental, Social and
Governance (“ESG”) strategy has three pillars: Environmental Impact, People Wellbeing
and Responsible Business. Within these pillars, we have identified 12 material topics of
which key priorities include energy use and renewable energy, sustainable design, health
and safety and diversity and inclusion. For more information, please refer to our
Environmental, Social and Governance Report.
Our global presence
We are a global company with headquarters in Duiven, the Netherlands. We operate eight
facilities in Asia and Europe for development and production activities as well as 13 sales
and service offices across Europe, Asia and North America. We employed a total staff of
1,736 fixed and 134 temporary personnel at December 31, 2023, of whom approximately 66%
were based in Asia and 34% were based in Europe and North America.
CURRENT COMPANY PROFILE
R&D, Sales &
Service site
Production site
Sales &
Service office
– Development activities in Europe
– Production in Asia
– Sales/service activities in Asia, NA and Europe
Asia
Revenue (€ millions) € 156.0 26.9% € 422.9 73.1%
Headcount 627 33.5% 1,243 66.5%
Chandler
Duiven and 's-Hertogenbosch
(The Netherlands)
Steinhausen
(Switzerland)
Radfeld
(Austria)
Suzhou
Chengdu
Leshan
Shenzhen
Malaysia
Thailand
Singapore
Korea
Shanghai
Taiwan
Philippines
Europe/R0W
Year ended December 31, 2023
Vietnam
India
Our listings
Besi was incorporated under the laws of the Netherlands in May 1995 and had an initial
public offering in December 1995. Our ordinary shares are listed on Euronext Amsterdam
(symbol: BESI) and are included in the Euronext AEX Index. Our level 1 ADRs trade on the
OTC markets (symbol: BESIY). We also have three issues of Senior Unsecured Convertible
Notes outstanding which are listed on the Deutsche Börse’s Freiverkehr market (see
Shareholder Information).
More detailed information about Besi can be found at our website: www.besi.com.
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Key Highlights
(€ millions, except share and non-financial data) Year ended December 31,
2023 2022 2021 2020 2019
Operating data
Revenue 578.9 722.9 749.3 433.6 356.2
Orders 548.3 663.7 939.1 472.1 348.7
Operating income 213.4 294.1 317.6 149.9 91.9
EBITDA¹ 239.1 317.1 335.1 169.0 111.7
R&D expenses, gross² 63.9 63.8 52.1 41.5 38.4
Net income 177.1 240.6 282.4 132.3 81.3
Net income per share (€)
Basic 2.28 3.03 3.70 1.82 1.12
Diluted 2.23 2.90 3.39 1.67 1.06
Dividend per share (€)³ 2.15 2.85 3.33 1.70 1.01
Shares outstanding (in thousands)⁴ 77,016 78,488 77,970 72,866 72,212
Balance sheet data
Cash, cash equivalents and deposits 413.5 671.7 672.2 598.7 408.4
Total debt 300.5 325.2 301.8 400.0 278.1
Net cash⁵ 113.0 346.5 370.4 198.7 130.3
Total equity 421.4 628.5 619.3 371.2 298.5
Financial ratios
Gross profit as % of revenue 64.9 61.3 59.6 59.6 55.8
Operating income as % of revenue 36.9 40.7 42.4 34.6 25.8
Net income as % of revenue 30.6 33.3 37.7 30.5 22.8
Return on average equity (%)⁶ 33.7 38.6 57.0 39.5 24.2
Headcount data
Headcount fixed 1,736 1,675 1,645 1,523 1,534
Headcount temporary 134 144 496 95 62
Total headcount 1,870 1,819 2,141 1,618 1,596
Geographic data
Revenue from Asia as % of total revenue 73.1 75.9 77.8 83.3 72.2
Headcount in Asia as % of total headcount 66.5 67.2 73.1 67.7 68.3
Environmental, Social and Governance data
Scope 1 & 2 emissions intensity (tCO₂/€ million revenue) 8.9 5.2 14.4 19.8 25.4
Scope 3 emissions intensity (tCO₂e/€ million revenue) 17.0 13.6 15.9 16.5 20.8
Renewable energy (% of total energy consumed) 71 76 20 20 18
Female employees (% of headcount) 17 17 17 17 17
¹ EBITDA is defined as operating income (€ 213.4) plus depreciation and amortization (€ 25.7).
² R&D expenses, gross, is defined as research and development expenses as reported (€ 56.4), adjusted for capitalized development expenses (€ 21.1) and amortization on development expenses (€ 13.6).
³ Proposed 2023 dividend for approval at Besi’s AGM to be held on April 25, 2024.
⁴ Net of shares held in treasury.
⁵ Net cash is defined as cash, cash equivalents and deposits (€ 413.5) less total debt (€ 300.5).
⁶ Return on average equity is defined as net income (€ 177.1) divided by the average of the total equity at January 1, 2023 (€ 628.5) and total equity at December 31, 2023 (€ 421.4).
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REVENUE AND GROSS MARGIN TRENDS
356.2
€ millions Gross Margin
75%
70%
65%
60%
55%
50%
800
700
600
500
400
300
200
100
0
2019 2020 2021* 2022 2023
55.8%
433.6
749.3
722.9
59.6%
61.3%
578.9
64.9%
59.6%
Revenue Gross Margin
* Includes € 7.4 million (1.0 point) inventory charge in Q4-21.
NET INCOME TRENDS
81.3
€ millions Net Margin
50%
40%
30%
20%
300
250
200
150
100
50
0
2019 2020 2021 2022 2023
22.8%
30.5%
37.7%
132.3
282.4
33.3%
240.6
30.6%
177.1
Net Income Net Margin
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• Strategic Plan 2023-2027
finalized to help achieve
business, financial and ESG
objectives.
• Singapore cleanroom facility
completed for expanded
hybrid bonding service/
support.
• Technology Advisory Board
formed to enhance Besi’s
advanced packaging strategy
and competitive position.
• Establishing Vietnam tooling
facility to support
customers’ geographic
expansion outside China.
• Cash flow from operations
of € 208.6 million, equal to
36.0% of revenue.
• Capital allocation increased
by 4.6% to € 435.5 million.
• € 300 million share buyback
program completed. New
€ 60 million program
initiated.
• € 1.9 billion distributed since
2011. Equal to 30% of
cumulative revenue during
period.
• Solid liquidity position with
cash of € 413.5 million at year
end.
• Proposed 2023 dividend of
€ 2.15 per share. Pay-out
ratio of 94%.
• Completed 76% of ESG
initiatives developed since
2020.
• Energy from renewable
sources increased to 71%
versus 20% in 2021.
• Scope 1 & 2 emissions
intensity declined by 38%
versus 2021 baseline.
• Set objective of net zero
greenhouse gas emissions in
operations by 2030.
• Launch of Design-to-X
initiative to enhance
sustainability and reduce
cost.
• Conducted Double
Materiality Assessment for
European CSRD reporting in
2025.
• Improved ratings with MSCI,
Sustainalytics, ISS ESG and
S&P Global.
• R&D, gross, rose to 11.0% of
2023 revenue. Up 66% versus
2019.
• Progress continues to build
out Besi’s advanced
packaging portfolio.
• Hybrid bonding adoption
increasing:
• Installed base rose to 40
units (ex. demo units) and
traction in fully integrated
production lines is
increasing with several
systems installed.
• Number of customers
increased to nine.
• Orders and year end
backlog approximately
doubled versus 2022.
• First orders received for
HBM applications.
• First TCB chip to wafer
system delivered.
• First in-line flip chip system
shipped for 2.5D HBM/logic
devices.
• Revenue, orders and
operating profit up 62.5%,
57.2% and 132.2% versus
comparable period of last
industry downturn.
• Revenue development and
profitability significantly
exceeded peers.
• New orders received for 3D,
2.5D and silicon photonics
applications.
• Production model aligned
with changing market
conditions:
• Gross margins rose to
64.9% reflecting Besi’s
leadership position in
advanced packaging.
• Operating and net margins
of 36.9% and 30.6%
achieved despite 20%
revenue decrease.
• High return on average
equity of 33.7% maintained.
Strong cash flow
generation supports
capital allocation
Strategic initiatives
implemented to aid
growth in next
upcycle
Key Highlights 2023
Well positioned
to meet 2024 ESG
targets
•
Peer leading financial
metrics achieved in
challenging market
environment
Expanded R&D
investment for next
generation assembly
applications
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CAPITAL ALLOCATION TRENDS
81%73%
19%
65%
35%
27%
2019 2020 2021 2022 2023
122.4
167.1
44.7
129.4
179.5
50.1
269.5
416.3
146.8
222.1
435.5
213.4
73.5
91.3
17.8
€ millions
500
400
300
200
100
0
72%
28%
51% 49%
Dividends Share Repurchases
SCOPE 3 EMISSIONS*
tCO
2
e tCO
2
e/€ million revenue
50.0
40.0
30.0
20.0
10.0
0.0
12,500
10,000
7,500
5,000
2,500
0
Scope 3
7,407
7,157
Target Scope 3
2019 2020 2021 2023 203020242022
15.9
20.8
16.5
Relative to revenue
17.0
9,843
9,817
Relative target 2024
14.0
12.7
Target
(based on 2021 baseline)
Target Scope 3
emissions intensity 2024
13.6
11,942
LIQUIDITY TRENDS
800
700
600
500
400
300
200
100
0
€ millions
130.3
198.7
370.4
408.4
598.7
672.2
346.5
671.7
113.0
413.5
Cash and Deposits Net Cash
2019 2020 2021 2022 2023
SCOPE 1 & 2 EMISSIONS
2019 2020 2021 20232022 2024 2030
10,812
3,755
Scope 1 & 2 Target Scope 1 & 2
Relative to revenue
9,065
8,587
Relative target 2024
12,500
10,000
7,500
5,000
2,500
0
tCO
2
tCO
2
/€ million revenue
50.0
40.0
30.0
20.0
10.0
0.0
19.8
14.4
5,124
8.9
25.4
Target Scope 1 & 2
emissions intensity 2024
Target net zero
Scope 1 & 2
emissions
Target
(based on 2021 baseline)
5.5
5.2
0.0
* Besi expanded the categories included in its Scope 3 emissions measurement for 2022. Therefore, Scope 3 emissions data
for the years 2019 – 2021 are not fully comparable.
Letter to Stakeholders
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Dear Stakeholders,
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 in preparation for the next industry upturn and
advanced packaging growth anticipated over the next decade. Progress also continued on
Besi’s hybrid bonding agenda as our installed base increased to 40 systems (ex. demo
units) and adoption expanded from three to nine customers encompassing North American,
European, Taiwanese and Korean IDMs, foundries and research institutes for logic and
memory applications. In addition, Besi responded quickly and effectively to a significant
assembly equipment downturn by rapidly aligning production and overhead levels to
enhance its market position, increase gross margins and maintain peer leading financial
performance. Shareholders responded favorably to our progress and prospects for the next
industry cycle, which combined with our financial performance and strong execution of
strategic initiatives, resulted in a total shareholder return of 149.7% this year. Further,
shareholders were also rewarded for their investment in our Company as we returned
€ 435.5 million in the form of dividends and share repurchases.
We also continue to formulate and execute strategic initiatives to position Besi for
profitable and sustainable growth over the next decade. We expanded our operational
footprint in Malaysia, Singapore and 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. Further, forty-two management
members and key customers participated in a four-month, comprehensive strategic review
to analyze current strengths and weaknesses and formulate new initiatives for the
achievement of business model objectives in the 2023-2027 period. 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 our environmental
footprint. Moreover, we performed a Double Materiality Assessment as a precondition for
adherence to CSRD reporting requirements in 2025. Our ESG ratings with the major publicly
recognized frameworks such as Sustainalytics, S&P Global, ISS ESG and MSCI also improved
materially, underscoring our commitment to excel in this area.
Letter to Stakeholders
Business Highlights
• Navigated industry downturn at high profitability levels
• Increased orders for next generation AI, HBM and photonics applications
• Well positioned for next upturn with leading advanced packaging portfolio
• Progress continues on hybrid bonding adoption and wafer level assembly agenda
• ESG initiatives favorably position Besi to meet or exceed 2024 targets
• Operating footprint increased with expansion in Malaysia, Singapore and Vietnam
• Capital allocation of € 435.5 million increased 4.6% versus 2022
MARKET CONDITIONS REACHED A TROUGH IN 2023
TechInsights global chip making climate trend index
Jan-19
Jul-19
Jan-20
Jul-20
Jan-21
Jul-21
Jan-22
Jan-24
Jul-23
Jan-23
Jul-22
120
110
100
90
80
70
60
50
40
30
Temperature in Degrees F
(Average of regional order activity patterns in chip equipment)
Growth Decline Line
5/19: U.S.- China
trade war escalates
2/21: Intel, TSMC,
Samsung hike capex
2/20: COVID-19
outbreak
7/22: Memory
Inventory
Correction
Source: TechInsights, February 2024
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FINANCIAL
STATEMENTS 2023
OTHER
INFORMATION
For the year, revenue and net income of € 578.9 million and € 177.1 million declined by 19.9%
and 26.4%, respectively, versus 2022. Similarly, orders of € 548.3 million declined by 17.4%.
Revenue weakness this year was 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 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. In the aggregate,
we were pleased with our revenue performance this year relative to our assembly
equipment peers as Besi’s leadership position in advanced packaging helped mitigate the
adverse effects of an industry downturn as severe as the one experienced in the 2017-2019
period. Order weakness in 2023 was 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 2.5D logic/memory
applications as customers began to significantly build out their generative AI and high-
performance computing capacity. In particular, hybrid bonding orders and year end backlog
approximately doubled versus comparable levels of the prior year.
END-USER MARKET TRENDS
800
750
700
650
600
550
500
450
400
350
300
722.9
€ millions
578.9
4.1
(21.8)
(15.8)
(78.2)
(32.3)
2022
Revenue
Mobile Computing Automotive Spares/
Service
Industrial/
Other
2023
Revenue
Besi achieved peer-leading operating and net margins of 36.9% and 30.6% in 2023 as we
successfully aligned our 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. Elevated operating margins were maintained despite increased
development spending to support the expansion of our advanced packaging product
portfolio for the next market upcycle.
Moreover, the organization realized a strong performance versus the last industry
downturn and versus peers as measured by a comparison of the trough years 2019 and
2023 which followed cyclical peak levels reached in 2017 and 2021. As evident in the
following chart, revenue, orders and operating income in 2023 grew by 62.5%, 57.2% and
132.2%, respectively, versus the comparable trough period of the prior cycle (2019).
Operating margins also expanded by 11.1 points. Improving through cycle performance
underscores Besi’s successful new product introductions in the advanced packaging
segment as well as the increased profitability of our operations.
PERFORMANCE SIGNIFICANTLY ABOVE LAST INDUSTRY DOWNTURN
Revenue Orders Operating Profit Operating Margin
600
500
400
300
200
100
0
6
00
500
400
300
200
100
0
250
200
150
100
50
0
40%
30%
20%
10%
0%
356.2
2019 2023
+62.5%
578.9
348.7
2019 2023
+57.2%
548.3
91.9
2019 2023
+132.2%
213.4
25.8%
2019 2023
+11.1 pts
36.9%
€ millions
€ millions € millions
Highly focused R&D activities for next generation applications
Over the past five years, Besi has developed leading edge die attach, packaging and plating
systems with a particular emphasis on enhancements to our core technology and
expansion of our advanced interconnect capabilities. Development efforts have been
highly focused on requirements for (i) increased accuracy, performance, chip density,
throughput and complexity, (ii) thinner devices and higher levels of miniaturization,
(iii) new 2.5D and 3D heterogeneous device architectures, (iv) lower power consumption
and heat dissipation and (v) shorter lead times, all offering a lower overall cost of ownership
to customers. We continually re-engineer our existing product platforms to achieve more
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OTHER
INFORMATION
standardized design and manufacturing processes and have collaborated with leading
European universities to optimize the sustainable product design and cost of our systems.
In addition, we have incorporated common parts and common platforms for each successive
generation of die bonding and packaging systems. This is another way we can enhance
their sustainable design and lower production cost by reducing engineering time and
materials consumption while reducing lead times for delivery. In addition, we design
enhanced versions of each product platform every one to two years to ensure that Besi’s
systems maintain their technological leadership.
EXPANSION OF R&D SPENDING
2019 2021 2023
63.9
Gross R&D*
% of Revenue
38.4
80
70
60
50
40
30
20
10
0
€ millions
20%
15%
10%
5%
0%
11.0%
10.8%
52.1
7.0%
+66%
* Gross R&D spending excludes impact from capitalization/amortization of R&D costs.
We have increased gross R&D spending by 66% since 2019 as we developed a complete
wafer level assembly portfolio and enhanced our assembly offerings for 2.5D architectures.
In 2023, gross R&D spending reached € 63.9 million, or 11.0% of total revenue. Besi made
significant investments this year to (i) develop a next generation 100 nm accuracy hybrid
bonding system, (ii) deliver the first TCB chip to wafer system with industry leading
placement accuracy and (iii) ship our first in-line flip chip system for the placement of HBM
and logic devices in 2.5D architectures at industry leading throughput and flexibility.
Increased R&D spending also reflected investment for the completion of a new cleanroom
facility in Singapore to better support hybrid bonding adoption by customers.
R&D Highlights
• Spending increased to 11.0% of revenue in 2023
• Complete wafer level assembly portfolio available for commercial production
• TCB chip to wafer system delivered
• New in-line flip chip system introduced for 2.5D HBM/logic applications
• Singapore cleanroom facility completed
• Technology Advisory Board formed
Capital allocation increased. Strong liquidity base to finance future growth
Shareholders were rewarded for their investment in Besi as we increased dividends and
share repurchases to € 435.5 million this year, an increase of 4.6% versus 2022. Of note, we
completed our € 300 million share repurchase program in October 2023 and launched a
new € 60 million program with an anticipated completion by October 2024. As such, the
amount of share repurchases increased by 45.4% to € 213.4 million in 2023, or 2.6 million
shares. As a result, we ended the year with 77.0 million shares outstanding, which included
4.1 million shares held in treasury (5.1% of shares outstanding). Our objective is to further
reduce Besi’s shares outstanding to offset dilution resulting from prior Convertible Note
issuance. Post our capital allocation to shareholders, Besi ended the year with a liquidity
base consisting of cash, cash equivalents and deposits aggregating € 413.5 million and net
cash of € 113.0 million. Our significant liquidity base positions us favorably to support
Besi’s future growth plans.
Capital Allocation Increased
• € 1.9 billion distributed since 2011. Equals 30% of cumulative revenue
• € 300 million share repurchase program completed
• New € 60 million program initiated
• Proposed dividend of € 2.15 for 2023. 94% payout ratio
Given profits earned in 2023 and Besi’s solid financial position, we will propose a cash
dividend of € 2.15 per share for approval at Besi’s AGM to be held on April 25, 2024.
The proposed distribution is the fourteenth consecutive annual dividend paid.
14
REPORT OF THE BOARD
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FINANCIAL
STATEMENTS 2023
OTHER
INFORMATION
Long-term share price outperformance
Besi’s total shareholder return in 2023 of 149.7% exceeded the 67.0% increase in
the Philadelphia Semiconductor (SOX) index and 82.5% increase reported by direct peers.
Our total return ranked first among our remuneration reference group of 19 public
companies and ranked 1
st
and 2
nd
in the AEX and STOXX Europe 600 indices this year,
respectively. Over the past three and five years, an investment in Besi’s shares has
produced a cumulative total return of 210.3% and 812.5%, respectively, significantly
outpacing returns of the SOX index, our remuneration reference group and direct peers.
In addition, interest in our stock grew significantly with both research analysts and
institutional investors. Currently, 21 research analysts cover Besi’s shares. Trading in our
shares was also enhanced by a 27% increase in our average daily liquidity versus 2022.
TOTAL RETURN OUTPERFORMANCE VERSUS PEERS
2023 Total Shareholder Return
Besi versus Peers, REM Reference Group and SOX Index
160%
140%
120%
100%
80%
60%
40%
20%
0%
149.7%
82.5%
24.0%
67.0%
Besi Peer Group Average REM Reference Group PHLX Semiconductor (SOX)
• Total Shareholder Return includes reinvestment of dividends.
• Besi returns calculated in euro. Philadelphia SOX returns calculated in US dollar.
• Peer group average consists of Kulicke & Soffa, ASM PT, and Disco Corp.
3 Year Cumulative Shareholder Return
Besi versus Peers, REM Reference Group and SOX Index
250%
200%
150%
100%
50%
0%
210.3%
96.3%
54.0%
55.4%
Besi Peer Group Average REM Reference Group PHLX Semiconductor (SOX)
Source: Refinitiv Data Stream
15
REPORT OF THE BOARD
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STATEMENTS 2023
OTHER
INFORMATION
Long-term sustainable value creation continues
Over the past decade, Besi has delivered strong growth and value creation for all
stakeholders while conducting its business in a responsible and sustainable manner.
Besi’s dedicated focus on advanced packaging, technological leadership and the disciplined
execution of strategic initiatives, such as organize Besi for € 1 billion+++ revenue model,
partner with the Winners 2.0, expand leading hybrid bonding position and other initiatives
as described in the Strategy section, has created a leader in the assembly equipment
market with superior through-cycle performance and strong financial metrics. Since 2011,
we have returned approximately € 1.9 billion to shareholders in the form of dividends and
share repurchases (including the dividend proposed for 2023) representing approximately
30% of Besi’s cumulative revenue. In addition, our share price increased by 5,230% and our
market capitalization grew from € 188 million to over € 10 billion at year end. The
profitability of our business has also increased significantly with gross margins increasing
from 40% to 65%, net income growing more than five-fold and return on average equity
increasing from 11.2% to 33.7%.
Besi’s advanced packaging systems critical for next generation AI devices
We believe that we are in the early stages of a transition to an AI enabled digital society
accompanied by a new generation of sustainable and more environmentally friendly
electronics applications. In such a society, intelligence and electronic content will increase
in all facets of our life including medical care, homes, factories, municipalities and
transportation. We see evidence daily of new productivity enhancing technologies such as
cloud computing, advanced 5G networks, Chat GPT, Gemini, Microsoft 365 Co-Pilot and
other artificial intelligence software, data mining and predictive analysis, autonomous
driving, robotics and blockchain software. In response, new leading edge semiconductor
devices are being developed which will play a critical role in furthering the use of many
such applications. In fact, the adoption of generative AI is estimated by analysts to have a
faster adoption rate in our society than any other 21
st
century technology, including the
smartphone.
Consistent with these trends, a new technology cycle is underway wherein customers
increasingly demand more complex advanced packaging solutions containing ever more
functionality in ever smaller form factors requiring also sub-micron die placement
accuracy. Advanced packaging is now recognized by customers as a critical part of the
semiconductor value chain and a gating item to produce next generation devices. We are
well positioned with advanced packaging revenue representing approximately 70% of
Besi’s total system revenue and revenue from the most leading edge applications with <7
micron die placement accuracy representing approximately 50% of total system revenue.
One of the most powerful forces driving growth in Besi’s addressable market today is the
rapid adoption of artificial intelligence and virtual and augmented reality in our daily
business and personal interactions. End-user customers are highly focused on
incorporating generative AI software capabilities in data centers, personal computers,
tablets, smartphones and industrial manufacturing, to name just a few applications. In
addition, we see increased usage of photonics, particularly in pluggable optical transceivers
that are used within high-performance AI servers and data centers to further extend
performance and reduce power consumption. As seen in the chart below, some analysts
expect that the artificial intelligence chip market could grow more than tenfold over the
next decade with a compound annual growth rate of 30%.
AI CHIP REVENUE COULD REACH $ 227 BILLION BY 2032
250
200
150
100
50
0
2022 2024 2026 2028 2030 2032
ArtificiaI Intelligence chip market size
28
17
227
135
80
48
$ billions
CAGR: 29.6%
Source: Precedence Research
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The powerful drivers for high-performance computing growth over the next decade will
require new technologies to extend Moore’s law on a cost-efficient basis via new logic and
memory devices incorporating 2.5D/3D chiplet architectures. As shown in the chart below,
as Moore’s Law scales more slowly approaching 2 nm node sizes, the cost per transistor
increases more rapidly resulting in escalating wafer fab costs for producers. Currently, the
only means of extending Moore’s law on a cost-efficient basis is the adoption of 2.5D and
3D device structures utilizing new advanced packaging solutions.
NEW WAFER LEVEL ASSEMBLY TECHNOLOGIES EXTEND MOORE’S LAW
Moore’s law scaling is slowing Cost per transistor is increasing
2016 2022 2026202420202018 2028 2016 2022 2026202420202018 2028
Traditional transistor scaling
3D Chiplets with hybrid bonding
Moore’s law
(CAGR 41%)
Transistor density
(#xtors/mm^2)
Traditional
transistor
scaling
Source: Qualcomm and Besi
At present, semiconductor producers have made investments in new logic devices in data
center and supercomputer applications utilizing hybrid bonding, TCB chip to wafer,
advanced flip chip and multi module die bonding assembly processes. The significant
increase in the power, performance, functionality and speed of logic devices has also
required new memory solutions such as high bandwidth memory (“HBM”) in vertical 3D
stacks of chips and chiplets to match such performance improvements. The current
generation of HBM3 and future HBM4 and HBM5 architectures in development are also
expected to drive substantial growth in advanced packaging requirements over the next
decade. Besi’s product strategy has focused on providing the industry the most advanced
portfolio of advanced packaging solutions for the upcoming AI era.
BESI’S ADVANCED PACKAGING SYSTEMS AVAILABLE FOR NEXT GENERATION
APPLICATIONS
MOBILE
• New generative AI engines
• Edge/AI enabled phones
• Advanced cameras and 3D
imaging
• Under display biometric ID
• New AR/VR devices
• 5G advanced devices
Besi Solutions
• Hybrid bonding
• TCB chip to wafer
• Embedded bridge die attach
• Evo multi module die attach
• Advanced flip chip
• Wafer/substrate molding
COMPUTING
• New generative AI engines
• Supercomputers
• Datacenters
• Edge AI tablets, PCs, laptops
• Gaming and infotainment
AUTO/
INDUSTRIAL
• EV adoption
• Edge AI enhanced features
• SiC and GaN power devices
• Advanced camera modules
and sensors
• Autonomous driving
• Factory automation 4.0
Progress achieved in expanding hybrid bonding adoption globally
Hybrid bonding is one of the most important leading edge process technologies for the
assembly of generative AI devices as it permits the connection of multiple, heterogeneous
chiplets in die form using direct copper interconnects. Chiplet adoption has been increasing
rapidly in recent years as one of the primary methods to increase the power, performance,
functionality and density of new chip architectures in AI and high-performance computing
applications for Besi’s principal end-user markets.
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HYBRID BONDING INCREASES POWER-EFFICIENT CHIP PERFORMANCE
Off-Package
Copper
Off-Package
Optical
On-Package Advanced
Packaging
3D Stacked
60x
50x
40x
30x
20x
10x
0x
Relative Bits/Joule
Source: AMD
Hybrid bonding has the potential to become the leading assembly solution for device
geometries <7 nanometers over the next decade. Its mainstream acceptance is anticipated
to occur over the next five years. It is anticipated that hybrid bonding adoption should help
drive growth for the assembly equipment market and Besi’s addressable market at rates
higher than those experienced over the past two decades given its importance in extending
Moore’s law. Its utilization will also expand demand for Besi’s other leading edge assembly
technologies, further increasing the potential growth of our addressable market. We aim
to significantly expand both Besi’s revenue potential and market share over the next
decade given our leadership position, technology roadmap and collaboration with Applied
Materials.
Substantial progress was achieved this year to advance our hybrid bonding agenda.
Continued improvements in placement accuracy, throughput, yield and lead times for
delivery all contributed to its more widespread adoption. At year end, our installed base
increased to 40 systems (ex. demo units), and traction in fully integrated production lines
is increasing with several systems installed. As such, adoption increased from three to
nine customers encompassing American, European, Taiwanese and Korean IDMs, foundries
and research institutes for logic and memory applications. Hybrid bonding orders increased
significantly in the second half of 2023 as new logic and memory customers completed
their qualification activities to scale production over the next two years.
CHIPLET ADOPTION INCREASING
Wafer foundry addressable market
2022 2024 2026 2028 20322030
70
197
Monolithic
Chiplet
11
126
24
131
Chiplet Share
300
250
200
150
100
50
0
$ billions
30%
25%
20%
15%
10%
5%
0%
26%
15%
25%
8%
37
149
55
168
20%
1%
1
129
Source: CSM foundry model, ISM foundry model
Besi’s hybrid bonding enables designers to bring chiplets of various process nodes and
technologies into closer physical and electrical proximity so that they perform as well or
better than if they were made on a single large, monolithic die. Hybrid bonding is a major
improvement over conventional chip packaging because it permits increased chip contact
density and shortens the length of the interconnect wiring between chiplets thereby
permitting new 3-dimensional, chiplet-based architectures. It also significantly improves
overall performance, speed, efficiency and cost and reduces energy consumption versus
substrate assembly, which in turn provides additional sustainability benefits.
3.5D hybrid bond packaging motivation:
• The key to power-efficient performance is tight integration.
• 3D hybrid bonding provides by orders of magnitude the densest,
most power efficient chiplet interconnect.
• More compute and HBM in a package.
• Increased system-level efficiency.
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Strategic initiatives undertaken to help position Besi for future growth
We updated our strategic plan last year for the period encompassing 2023-2027 given the
continued strong growth of Besi’s existing advanced packaging portfolio and the significant
growth opportunities offered by wafer level assembly. We set new initiatives for Besi’s
business model to help achieve our revenue objectives in the next industry upcycle as well
as enhanced market share, profit and ESG targets. Our key strategic initiatives outlined in
the most recent strategic plan included the following:
• Organize Besi for € 1 billion+++ revenue model
• Partner with the Winners 2.0
• Accelerate cost savings
• Develop next level supply chain and service excellence
• Exceed ESG targets for 2024/2030
• Expand leading hybrid bonding position
• Expand share of next generation TCB applications
• Grow silicon photonics market share
• Capture further opportunities in 2.5D applications
• Prepare for CSRD compliance
In anticipation of expected hybrid bonding market growth, we have increased our
development and support organization in Austria, Singapore, Taiwan and North America by
approximately 37% over the past four years. In addition, we have expanded cleanroom
R&D, production and service/support facilities in Austria, Malaysia and Singapore. We also
established a new assembly facility in Vietnam and opened a branch office in India in 2023
as many customers began to shift a portion of their production outside of China to other
Asian locations. Further, we relocated our operational headquarters from the Netherlands
to Switzerland in recognition of the anticipated growth of our Die Attach business. Besi’s
statutory seat will remain in the Netherlands.
Progress achieved in advancing Besi’s ESG strategy
Besi has significantly increased its ESG activities and reporting since 2020 including the
development of various short-, mid- and long-term targets through 2050. Since 2019, we have
reduced Scope 1 & 2 emissions intensity by 65%, fuel consumption intensity by 46%, water
usage intensity by 34% and absolute hazardous waste generation by 27%. In addition, we
increased our energy from renewable sources from 18% to 71%. We have also identified and
commenced work on 85 initiatives associated with our ESG pillars (Environmental Impact,
People Wellbeing and Responsible Business). Many of the initiatives launched this year
focused on Besi’s environmental impact in our global operations which will favorably position
us to meet Scope 1 & 2 emissions targets in 2024 and 2030.
NEW ESG INITIATIVES TO REDUCE BESI’S ENVIRONMENTAL IMPACT
MALAYSIA NETHERLANDS AUSTRIA CHINA SWITZERLAND
• Fewer shipments from the
Netherlands to reduce waste
and costs
• Purchased renewable electricity
at the additional Malaysia facility
• Increased lighting energy
efficiency
• Installed smart meters
• Reduced paper waste
• Collaborated with Copernicus
Institute for sustainable design
• Expanded existing solar
PV system
• Installed groundwater heat
pump
• Installed centrifuge to increase
water recycling
• Purchased EV vehicles
• Installed EV charging points
• Collaborated with University of
Applied Sciences and Arts for
sustainable design
• Expanded LED lighting systems
Design-to-X initiative incorporates Design-to-Cost and Design-to-Sustainability concepts in product design
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OTHER
INFORMATION
We are currently on track to meet or exceed most targets established due to a concentrated
focus on the ESG topics most material to Besi’s business and stakeholders and the
commitment of our workforce. In fact, we equaled or exceeded substantially all targets for
2022 set in 2019 and set new targets last year for achievement in 2024 and 2030. In
addition, we set an objective of reaching net zero greenhouse gas emissions in our
operations by 2030, incorporating all Scope 1 & 2 emissions.
In general, we measure our ESG performance in terms of relative intensity targets given
the highly cyclical nature of our revenue development on a year to year or even multi-year
basis. Of note, Besi’s performance with respect to most relative intensity targets in 2023
was adversely affected by two important factors. The first related to the spike we
experienced in our electricity consumption, Scope 2 emissions and waste disposal in the
second and third quarters of 2023 associated with the completion of a new production
facility in Malaysia and the completion of a new cleanroom in Singapore. The second factor
related directly to the 20% revenue decrease we experienced this year associated with the
significant industry downturn. Due to both factors, all relative intensity ratios and some
performance metrics were adversely affected versus absolute 2022 results and 2024
targets. However, relative intensity ratios began to improve significantly in Q4-23 upon the
substantial completion of such projects and increased utilization of renewable energy. We
expect to meet or exceed a significant portion of our 2024 ESG targets next year based on
current performance and initiatives.
Since 2019, Besi has expanded the scale and scope of its initiatives and reporting activities
relative to leading external frameworks such as SASB, GRI, SDG, NFRD, TCFD and the EU
Taxonomy. We have also proactively responded to external questionnaires such as the CDP
Climate Change and the S&P Global Corporate Sustainability Assessment. In 2020 and
2021, we identified 12 material topics most relevant to our business, established three
material ESG pillars and engaged in a four-stage materiality assessment. In 2023, we
performed a Double Materiality Assessment as a precondition to compliance in 2024 with
Corporate Sustainability Reporting Directive (“CSRD”) requirements. We also published a
formal policy on our website which provides a strategic view of Besi’s management
activities across the ESG aspects of our business with respect to both our operations and
value chain.
In addition, our ESG ratings with the major publicly recognized agencies such as
Sustainalytics, S&P Global, ISS ESG and MSCI improved in 2023 further underscoring our
progress. More specifically, we achieved a rating of “AA” in the updated 2023 MSCI ESG
Ratings Assessment, up from “A” in 2022 and “BBB” in 2021. Further, in November 2023,
Besi’s ESG Risk Rating declined to 14.4 as per Sustainalytics versus 17.8 in 2021 highlighting
long-term trend improvement. We also continue to be a component of the AEX Sustainability
Index.
ESG Highlights
• Progress continues versus Besi’s 2024 ESG targets
• Completed 76% of ESG initiatives developed since 2020
• Scope 1 & 2 emissions intensity declined by 38% versus 2021
• Energy from renewable sources increased to 71% versus 20% in 2021
• Set objective of net zero greenhouse gas emissions by 2030 in operations
• Launch of Design-to-X initiative to enhance sustainability and reduce cost
• Employee survey indicated high levels of participation and engagement. Six of seven
categories above high-tech norm
• Conducted Double Materiality Assessment for European CSRD reporting in 2025
• Improved ratings with MSCI, Sustainalytics, ISS ESG and S&P Global
Progress also continues to advance Besi’s sustainable product design as a core component of
our long-term value creation model. Toward this end, we developed an initiative named
“Design-to-X” this year as part of our strategic plan review. This initiative combines Design-
to-Cost and Design-to-Sustainability concepts to identify ESG improvement opportunities in
all product groups while reducing the cost of many mature die attach and packaging
platforms. It is in its early stages and builds upon the environmentally friendly product design
enhancements identified in a collaborative project with the University of Applied Sciences
and Arts (Lucerne, Switzerland) (“UASA”). The UASA collaboration led to the creation of
roadmaps with the potential to achieve absolute energy savings of approximately 10% per die
attach platform over the next five years. Growth in Besi’s installed base of hybrid bonding and
other wafer level systems also contributes to sustainable product design via an improvement
in the overall performance, speed, efficiency, cost and energy efficiency of such systems
versus those using leadframe and substrate assembly technologies.
In addition, we experienced improvement with employee and supplier engagement to further
Besi’s ESG goals. The results of our bi-annual Employee Engagement survey conducted by
Willis Towers Watson further highlighted this progress. In general, Besi scored above the
high-tech norm in six of seven categories in this year’s survey. Specifically, the survey had a
high level of participation (94%) and engagement (89%) by our employees. The engagement
levels were 5 percentage points higher than the sector’s benchmark. Survey results also
indicated a high level of satisfaction with our ESG credentials which scored 4 percentage
points higher than the sector benchmark and was our most improved category.
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SEMICONDUCTOR SALES EXPECTED TO REACH $ 1 TRILLION BY 2030
2000 2005 2010 2015 2020 2025 2030
1,200
1,000
800
600
400
200
0
Annual semiconductor sales
$ billions
Quantum Computing
Edge Computing
AR / VR
Generative AI
Vehicle Electrification
Social Media & Streaming
Smartphone
Tesla Model 3
1B Users
iPhone
Data Source: TechInsights
We believe that the pace of innovation is increasing as the pandemic and generative AI
have accelerated society’s move to an AI-based digital infrastructure wherein technology
adoption has greatly increased in our daily lives. Innovation is an important driver of our
business.
We believe that the long-term prospects of the assembly equipment market are positive,
driven by a variety of secular trends including:
• Increased spending for wafer level assembly technologies as producers seek to further
extend Moore’s law through new chiplet-based, 3D logic and memory architectures.
• Continued investment in cloud and digital infrastructure and high-performance
computing to support the digital society, broad based generative AI adoption and the
Internet of Everything.
• Expansion of 5G networks, infotainment, gaming and online financial services which will
drive new product introductions and software applications related thereto.
• The mass adoption of electric and autonomous driving vehicles requiring advanced
sensors and power devices in more complex assemblies.
• Additional capacity investment for new HBM solutions to support the projected growth
in CPU-processing power.
• Construction of new wafer fabrication facilities due to increased demand from leading
governments globally to secure adequate access to semiconductor IP development and
production.
Besi also saw increased supply chain participation via an enhanced ESG survey. In this regard,
we conducted vendor site visits and stakeholder interviews and circulated questionnaires at
their principal Asian production facilities to ensure that temporary and contracted third party
workers adhered to the standards outlined in Besi’s Supplier Code of Conduct. We also
engaged with our supply chain through an ESG briefing roadshow, training sessions and the
sharing of ESG-related knowledge with key suppliers. In addition, Besi conducted an ESG
assessment survey that focused on our three process pillars. Fifty-five suppliers were sent
this survey with a response received from forty-six (84%), representing approximately 50% of
our total purchasing volume. Moving forward, Besi will incorporate this ESG scorecard into its
periodic audit for annual suppliers. Finally, the percentage of purchasing volume audited and
which answered the RBA Code of Conduct Self-Assessment increased from 62% in 2022 to
66% in 2023 marking further progress in our supply chain engagement.
Improving industry outlook entering 2024
We believe we are in the early phase of a new assembly market upturn based on independent
research data and customer utilization rates after an industry downturn of approximately
40% from the last cyclical peak in 2021 (as per TechInsights). Industry analysts anticipate
that the assembly equipment market will rebound in 2024 and 2025 with forecast growth
by TechInsights of 31% and 18%, respectively. The upturn will be driven primarily by a
recovery in mainstream and Chinese markets and additional capacity needed for next
generation AI logic and memory applications. We saw evidence of increased spending by
customers on next generation advanced packaging solutions such as hybrid bonding,
silicon photonics and 2.5D HBM/logic applications in our second half revenue and order
trends. However, orders for mainstream applications remained relatively restrained
comparatively.
There are many variables which could affect the slope of the assembly equipment market
trajectory for 2024. Supporting a growth model are (i) utilization rates continue to increase
after a severe downturn in assembly capacity starting in the first half of 2022, (ii) new
investment in advanced consumer applications incorporating AI in PCs, tablets, laptops
and mobile phones continues to build, (iii) initial signs of improvement in Chinese demand
for assembly capacity is appearing after a two-year downturn and (iv) customer investment
for hybrid bonding and other next generation advanced packaging solutions is expanding.
Other favorable trends include increased efforts by governments to onshore more capacity
to North America, Europe, Japan and Southeast Asia from China and Taiwan. The growth
trajectory for 2024 could be tempered by the path of global growth, geopolitical conflict,
the timing of new high-end smartphone introductions and weakness in automotive end-
user markets which appeared in the second half of the year.
Looking beyond 2024, the outlook for advanced packaging is positive. Long-term demand
trends for semiconductor and AI devices are favorable with revenue anticipated to reach
$ 1 trillion by 2030.
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The development of these secular trends should particularly benefit Besi’s advanced
packaging product portfolio and increase our addressable market over the next decade.
Besi’s leading position in advanced packaging, engagement with the leaders of the
semiconductor industry as an important, value-added partner and demonstrated
production scalability favorably position us to capitalize on an exciting new era of industry
applications and growth. We also believe that our product portfolio is well positioned to
capitalize on opportunities in the fastest growing segments of the assembly equipment
industry, particularly in leading edge, AI devices.
Technology Advisory Board formed
Besi formed a Technology Advisory Board in 2023 as a means of advancing our knowledge
of, and engagement with, those specific topics which will have the greatest impact on our
core technology, market, competitive position and growth prospects. The Board will
consist initially of three individuals along with Besi’s CEO, Richard W. Blickman and Chris
Scanlan, Besi’s SVP Technology. The external members will initially include Marvin Liao,
formerly VP Operations/Advanced Packaging Technology and Service of TSMC, Frits van
Hout, formerly Executive Vice President and Chief Strategy Officer of ASML NV and Vincent
DiCaprio, currently Vice President at Applied Materials and Head of Business and Corporate
Development for its Heterogeneous Integration and ICAPS Business Unit. We are excited to
welcome this group of industry experts to the Besi advisory team, particularly given their
extensive experience and knowledge of industry trends in advanced packaging and the
semiconductor equipment industry.
In closing, we want to thank our employees, customers, suppliers and other stakeholders
for their efforts to deliver impressive results in this industry downturn and further our
advanced packaging efforts for the next industry upturn.
Board of Management
Richard W. Blickman
February 21, 2024
Market Overview
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Market Overview
Assembly equipment market
The semiconductor manufacturing process involves two distinct phases: wafer processing,
commonly referred to as the front-end, and assembly and test, commonly referred to as
the back-end. Once the semiconductor chip (also referred to as a “die”) has been created
in the front-end wafer fabrication process, Besi’s assembly equipment is used by customers
to produce advanced semiconductor assemblies or “packages” incorporating a number of
process steps such as (i) die sorting or “pick and place” of good versus bad dies, (ii) die
bonding to leadframes, substrates, wafers, chips and chiplets to facilitate an electrical
interconnection, (iii) die molding to encapsulate the assembled die with an epoxy
compound and protect it from external contamination, (iv) chemical plating to provide
different physical properties to the package at various stages of the assembly process and
(v) trimming and forming of leadframe carriers housing chips and/or singulation (cutting)
of substrate and wafer level devices prior to placement on a printed circuit board and
ultimately, final testing.
Besi’s product strategy focuses primarily on providing advanced packaging solutions to
customers which incorporate both substrate and wafer level packaging processes in their
semiconductor assembly operations. This represents the most technologically challenging
and rapidly growing area of the assembly equipment industry. Our product group offerings
for the assembly equipment market include Die Attach and Packaging & Plating which
represented approximately 77% and 23%, respectively, of our revenue in 2023.
ASSEMBLY EQUIPMENT MARKET (2023) BESI ADDRESSABLE MARKET (2023)
Inspection,
Dicing, Other
Wire Bonding
Die Attach
Packaging
1% Plating
Plating
Packaging
Die Attach
36%
18%
15%
23%
64%
34%
2%
Other Bonding
7%
$ 1.5 billion$ 4.1 billion
Source: TechInsights, December 2023
TechInsights, a leading independent industry research firm, estimated that the size of the
assembly equipment market was approximately $ 4.1 billion in 2023, or approximately 4%
of the total semiconductor manufacturing equipment market. The market declined by
$ 1.4 billion, or 25.7% versus 2022 reflecting the adverse impact of an industry downturn
which began in the second quarter of 2022. As per their estimates, die attach systems
represented 23% of the assembly equipment market in 2023. Based on such data, we
estimate that Besi’s addressable market was approximately $ 1.5 billion in 2023 which
represented approximately 37% of the total assembly equipment market. Our estimated
addressable market declined by 24% versus 2022 reflecting general market weakness with
particular softness in demand for computing applications. Besi has a leadership position
in the die attach and advanced die placement markets which are expected to be the most
rapidly growing segments of the assembly equipment market over the next five years.
GROWTH EXPECTED TO FAVOR BESI’S PRODUCT PORTFOLIO,
PARTICULARLY DIE ATTACH
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
$ millions
4,108
959
544
2,605
1,938
896
4,492
1,253
655
3,487
1,644
778
3,966
5,395
6,388
Die Attach Packaging & Plating* Other Assembly
2023E 2024E 2025E 2026E
+30.7%
+17.9%
+31.2%
7,326
* Packaging & Plating includes only Besi’s addressable segments. Non-addressable reported in other assembly market.
Source: TechInsights, December 2023. TechInsights projections exclude hybrid bonding
CAGR (2023-2026)
Die Attach 26.4%
Packaging & Plating 18.1%
Other Assembly 19.9%
Total 21.3%
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Besi’s key end-user markets
Besi has three principal end-user markets: mobile internet, computing and automotive.
They represented in the aggregate an estimated 72% of Besi’s total revenue in 2023 (2022:
74%). In addition, we serve industrial and other markets (11% and 9% of revenue in 2023
and 2022, respectively) and provide spares and service to our installed base of customers
(17% of revenue in each of 2023 and 2022).
BESI END-USER MARKETS
Mobile
Internet
Computing
Automotive
Spares/Service
Industrial/
Other
2023 Revenue
17%
11%
24%
18%
30%
Source: Company estimates
Mobile internet
Besi’s largest end-user market has traditionally been mobile internet devices to which we
sell die bonding, packaging and plating systems to support high-end and mainstream
smartphones, wearable internet devices such as wireless watches, headphones, virtual
headsets and other related wireless devices and logistical systems. Besi’s end-user
customers include the largest mobile handset manufacturers and their global supply
chains worldwide. Revenue from this end-user market can fluctuate significantly per
annum depending on the timing of new product introductions. Through its assembly
solutions, Besi helps manufacturers develop next generation mobile device features and
functionality such as 5G advanced antennas, front-back facing and periscope cameras,
camera modules and enhanced 3D sensing and facial recognition capabilities.
KEY MOBILE MARKET DRIVERS
Mobile
Drivers Assembly solutions
• New generative AI engines
• Edge/AI enabled phones
• Advanced cameras and 3D imaging
• Under display biometric ID
• New AR/VR devices
• 5G advanced devices
• Heterogeneous chiplet architectures
• Co-packaged optics
• Periscope camera modules
• Integrated sensing/camera/display
• Optical wave guide assembly
• Antennae in package
Source: Fonearena, Qualcomm
PREMIUM SMARTPHONE MARKET SHARE GROWING RAPIDLY
6%
8%
13%
15% 15%
19%
21%
24%
2016 2021 20222019 20202017 2018 2023E
Volume growth in 2023
compared to 2016
3x
• Premium segment of smartphone market = ≥ US$ 600 wholesale price.
Source: Counterpoint Research’s Market Pulse Service, January 2024
A significant customer focus currently is the development of die bonding and packaging
solutions for (i) edge computing/AI enabled smartphones, watches, virtual headsets and
AI-enabled glasses requiring even more sophisticated camera modules and imaging
technologies, (ii) enhanced 3D video, gaming and infotainment applications, (iii) the
development of 6G network capacity and (iv) improved security for online payment and
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banking applications. As such, the market share represented by premium smartphones is
expected to grow rapidly over the next decade. Such growth opportunities will require new
device architectures incorporating ever higher data transfer speeds and computing
capabilities, increased circuit consumption and heat dissipation, all of which will require
next generation assembly solutions utilizing Besi’s most advanced multi module die
bonding, flip chip, TCB, hybrid bonding, molding and singulation systems.
EDGE AI COMPUTING DRIVES NEXT GENERATION CONSUMER APPLICATIONS
Edge AI Use Cases
Text Generation
Audio and Video Creation
Image and Video Enhancement
Code Generation
Medical Diagnostics
Auto Self-Driving
Environmental Monitoring
Computing
Computing has traditionally been Besi’s second largest end-user market. It includes sales
of die bonding, hybrid bonding and packaging systems for high-end logic and memory
devices used in supercomputers, data center servers, PCs, tablets, flat panel displays and
many consumer internet applications such as gaming, entertainment and financial
services. Demand for computing power has been growing rapidly over the past decade with
the explosion of data volumes and memory needed to power the IT needs of the largest
sections of the global economy. The outbreak of the global pandemic in 2020 served to
further increase computing demand and growth rates as governments and corporations
moved to build out the digital infrastructure necessary to support decentralized workplace
environments and help lessen chip shortages affecting the global economy.
DATA VOLUMES GROWING EXPONENTIALLY
200
150
100
50
0
Zetabytes
CAGR +23%
97
79
64
120
147
181
2020
2021
2022 2023 2024
2025
Information created, captured, copied and consumed
Source: Statista, December 2022 Source: OpenAI
XR Glasses
IoT
Mobile
Phones
Laptops
Auto
Edge AI
• Since 1955,
computing
demand doubling
every two years
• Since 2015,
computing
demand doubling
every 3-4 months
• AI workloads
significantly
outpacing
Moore’s Law
KEY COMPUTING MARKET DRIVERS
Computing
Drivers Assembly solutions
• New generative AI engines
• Supercomputers
• Datacenters
• Edge AI tablets, PCs, laptops
• Gaming and infotainment
• 2.5D/3D chiplet architectures
• HBM memory stacking
• Co-packaged optics
• Optical transceivers
One of the most powerful forces driving growth in Besi’s computing end-user market today
is the rapid adoption of artificial intelligence and virtual and augmented reality in our daily
business and personal interactions. End-user customers are highly focused on incorporating
generative AI software capabilities in data centers, personal computers, tablets,
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smartphones and industrial manufacturing, to name just a few applications. Some analysts
expect that the artificial intelligence chip market could grow more than twelvefold over
the next decade to reach $ 227 billion by 2032. In addition, the AI PC market is expected to
grow by a compound annual rate of 50% between 2020 and 2030. We also see increased
usage of photonics, particularly in pluggable optical transceivers that are used within
high-performance AI servers and data centers to further extend performance and reduce
power consumption. Silicon photonics units are expected to grow at a compound annual
rate of 34% between 2022 and 2028 to reach 21.9 billion units.
Other computing growth opportunities include the expansion of cloud-based infrastructure
and applications necessary to support the new digital society, the usage of software to
mine, organize and analyze the massive quantities of data being generated and the
proliferation of the Internet of Everything including the smart management of residential,
industrial and municipal equipment and functions.
The powerful drivers for high-end computing growth over the next decade will require not
only new means of extending Moore’s law on a cost-efficient basis through new logic and
memory architectures incorporating 2.5D/3D chiplet architectures but also new wafer
level assembly solutions. At present, the most significant investment by semiconductor
producers has been for next generation logic devices in data center and supercomputer
applications utilizing hybrid bonding, TCB chip to wafer, advanced flip chip and multi
module die bonding assembly processes. The significant increase in power, performance,
functionality and speed of logic devices has also required new memory solutions such as
high bandwidth memory (“HBM”) in vertical 3D stacks of chips and chiplets to match such
performance improvements for next generation devices. In fact, the high bandwidth
memory market is expected to grow by a factor of 10 to approximately $ 33 billion between
2023 and 2027. The current generation of HBM3 memory devices and HBM4 and HBM5
architectures in development utilizing new process technologies such as hybrid bonding
and TCB for die stacking are expected to drive substantial growth in advanced packaging
requirements over the next decade.
Automotive
Besi’s automotive end-user market consists principally of the sale of die bonding,
packaging and plating systems for intelligent automotive components, sensors and
subsystems to leading European, North American and Japanese automotive suppliers.
Besi’s system solutions address critical automotive requirements such as power, safety,
reliability, intelligence and autonomous driving capabilities. Our addressable automotive
market has grown significantly in recent years due to the increased use of semiconductors
and electronics to deliver increased power, performance and functionality to consumers.
FAVORABLE AUTOMOTIVE MARKET OUTLOOK
100
90
80
70
(million units)
1,000
500
0
10
5
0
($/Unit)
(Trillion yen)
2019 2029
Global light vehicle production
TAM of auto semiconductor
1.1x
Source: LMC Automotive Global Light
Vehicle Forecast (Q1 2023)
2019 2029
Content per vehicle
2.4x
Source: TechInsights Automotive Semiconductor
Demand Forecast 2020 to 2029 - January 2023
2019 2029
2.8x
Source: Renesas, May 2023
FAVORABLE AUTOMOTIVE MARKET OUTLOOK
Projected growth in this end-user market reflects (i) the ever-increasing electronic content
and artificial intelligence necessary to deliver increased computing power and functionality
for autonomous driving and infotainment capabilities and (ii) the usage of more dense,
integrated and complex power and silicon carbide (“SiC”) devices as the industry moves to
electric and computer driven vehicles in response to environmental and climate change
concerns. Growth in such applications will also increase the semiconductor content and
the cost of semiconductor content per car in the future.
KEY AUTOMOTIVE AND INDUSTRIAL MARKET DRIVERS
Auto/
Industrial
Drivers Assembly solutions
• EV adoption
• Edge AI enhanced features
• SiC and GaN power devices
• Advanced camera modules and
sensors
• Autonomous driving
• Factory automation 4.0
• Sinter bonding
• Soft solder die attach
• Diffusion bonding
• Multi module die attach
• Power module molding
• Advanced leadframe plating
• Wet chemical processing
• Extreme high precision trim & form
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Industrial and other
In industrial and other end-user markets, Besi sells its full range of systems for a variety
of applications including advanced power, industrial IoT, robotics, medical, high-end
lighting and LED devices, solar cell technology, lithium-ion battery and renewable energy.
In addition, the move to an AI powered Industry 4.0 is creating additional demand for
semiconductors used for sensing, actuation and control in a wide range of industrial
applications. For example, industrial IoT systems are being developed to integrate wireless
communication modules with sensors to provide remote, centralized control of industrial
equipment. Besi systems are also used in the production of industrial power conversion
systems that employ advanced power switching devices to increase their efficiency and
reduce their electrical power consumption. These new applications require the increased
use of Silicon IGBTs, SiC and Gallium Nitride (“GaN”) devices which can significantly
increase efficiency and performance but will require a new range of assembly equipment
solutions.
Spares and service
Revenue from Besi’s spares and service activities represented approximately 17% of total
revenue in each of 2023 and 2022, respectively. In general, revenue from these activities
has grown significantly over the past decade reflecting the increase in our installed base
of systems and increased customer requirements for onsite production assistance
associated with our most advanced packaging systems. Revenue from spares and service
activities is typically less cyclical than from our equipment sales.
Assembly equipment market trends
TechInsights currently estimates that the semiconductor assembly equipment market
decreased by 25.7% versus 2022 and by a total of 37.7% from the last cyclical peak in 2021
to the end of 2023. The current downcycle has been driven primarily by lower demand for
mobile handsets, PCs, laptops, wearables and gaming consoles post large capacity builds
in 2020 and 2021. It also reflected lower growth by hyperscalers for cloud infrastructure
applications as well as an inventory correction by semiconductor producers from elevated
levels during the COVID-19 pandemic. Market growth was further adversely affected by a
significant decline in orders from Chinese subcontractors due to assembly overcapacity
conditions in that country, decelerating economic growth and the adverse effects on
economic activity of COVID-19 lockdowns. Decreased demand for mobile and computing
markets was partially offset by growth in automotive and power end-user markets as
demand for vehicles continued to rebound from 2020 trough levels.
ASSEMBLY EQUIPMENT MARKET TRENDS 2019 - 2026E
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
80%
60%
40%
20%
0%
-20%
-40%
2019 2020 2021 2022 2023E 2024E 2025E 2026E
3.2
3.9
$ billions
22.5%
-29.6%
68.5%
-16.2%
-25.7%
31.3%
14.7%
18.4%
6.6
5.5
4.1
5.4
6.4
7.3
Market Size
YoY Growth Rate
Source: TechInsights, December 2023. Assembly equipment revenue excludes hybrid bonding contribution and service
revenue
Looking forward, TechInsights estimates that the assembly equipment market will
increase by 31% in 2024 as excess inventory is consumed, capacity utilization rates rise and
demand for new advanced packaging solutions increases. They believe that an industry
trough was reached in 2023 and that a new industry upturn has begun which will continue
through 2026 with growth of 78% from trough levels in 2023. Further, their estimates
exclude revenue from hybrid bonding and other wafer level assembly technologies which
could increase growth rates higher.
We believe that the long-term prospects of the assembly equipment market are favorable,
driven by a variety of secular trends including:
• Increased spending for wafer level assembly technologies such as hybrid bonding and
TCB chip to wafer systems as semiconductor producers seek to further extend Moore’s
law through new chiplet-based, 3D logic and memory architectures.
• Continued investment in cloud and digital infrastructure, and high-performance
computing to support the digital society, broad based generative AI adoption and the
Internet of Everything.
• Expansion of 5G networks, infotainment, gaming and online financial services which will
drive new product introductions and software applications related thereto.
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• The mass adoption of electric and autonomous driving vehicles requiring advanced
sensors and power devices in more complex assemblies.
• Additional capacity investment for new high bandwidth memory solutions to support the
projected growth in CPU processing power.
• Construction of new wafer fabrication facilities due to increased demand from leading
governments globally to secure adequate access to semiconductor IP development and
production.
The development of these secular trends should particularly benefit Besi’s advanced
packaging product portfolio and increase our addressable market and market share over
the next decade.
Strategically well positioned for next generation of electronics applications
We believe that we are in the early stages of a transition to an AI enabled, digital society
accompanied by a new generation of sustainable and more environmentally friendly
electronics applications. In such a society, intelligence and electronic content will increase
in all facets of our life including medical care, homes, factories, municipalities and
transportation. We see evidence daily of new productivity enhancing technologies such as
cloud computing, 5G networks, Chat GPT, Gemini, Microsoft 365 Co-Pilot and other artificial
intelligence software, data mining and predictive analysis, autonomous driving, robotics
and blockchain software. In response, new leading edge semiconductor devices are being
developed which will play a critical role in furthering the use of many such applications. In
fact, the adoption of generative AI is estimated by analysts to have a faster adoption rate
in our society than any other 21
st
century technology, including the smartphone.
Consistent with these trends, a new technology cycle is underway wherein customers
increasingly demand more complex advanced packaging solutions containing ever more
functionality in ever smaller form factors with sub-micron die placement accuracy.
Advanced packaging is now recognized by customers as a critical part of the semiconductor
value chain and a gating item to produce next generation devices. As such, Besi is actively
involved with the leading semiconductor producers and supply chains at an early stage in
the design process to help them achieve their future device roadmaps. We are well
positioned with advanced packaging revenue representing approximately 70% of Besi’s
total system revenue and revenue from the most leading edge applications with <7 micron
die placement accuracy representing approximately 50% of total system revenue.
ADVANCED PACKAGING SOLUTIONS CRITICAL TO NEXT GENERATION APPLICATIONS
Higher
Accuracy
Greater
Miniaturization
Greater
Performance
Increased
Density
Higher
Complexity
Lower Power
Consumption
• Hybrid bonding
• TCB chip to wafer
• Embedded bridge die attach
• Evo multi module die attach
• Advanced flip chip
• Wafer/substrate molding
Besi Solutions
ADVANCED PACKAGING REVENUE GROWING RAPIDLY.
2.5D/3D FASTEST GROWING SEGMENT
90
80
70
60
50
40
30
20
10
0
2021 2022 2023 2024 2025 2026 2027 2028
Other
2.5D/3D
44.3
40.3
78.6
72.9
64.4
56.9
51.9
46.8
Market Revenue CAGR
Advanced Packaging 10.0%
2.5D/3D 19.7%
$ billions
Source: Yole, November 2023
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Besi’s leading position in advanced packaging, engagement with the leaders of the
semiconductor industry as an important, value-added partner and demonstrated
production scalability favorably position us to capitalize on an exciting new era of industry
applications and growth. We also believe that our product portfolio is well positioned to
capitalize on opportunities in the fastest growing segments of the assembly equipment
industry, particularly in leading edge, advanced die placement.
LEADER IN ADDRESSABLE MARKET, DIE ATTACH MARKET AND ADVANCED DIE
PLACEMENT
Besi
93%
Other
7%
Besi
53%
Other
47%
Besi
23%
Other
77%
Besi
42%
Other
58%
$ 318
million
$ 1.0
billion
$ 543
million
$ 1.5
billion
2023 Addressable Market*
Die Attach
(77% of Revenue)
Advanced
Die Placement**
Packaging & Plating
(23% of Revenue)
* Excludes wire bonding, dicing, and other.
** Advanced die placement defined as < 7 micron accuracy per TechInsights.
Source: TechInsights, December 2023. Equipment only
Hybrid bonding adoption has potential to significantly increase size of assembly
equipment market, Besi’s addressable market and our market share
A key strategic focus currently is the expansion of Besi’s penetration of both logic and
memory markets accompanying the infrastructure growth necessary to power the digital
society of which advanced packaging plays a critical role. We signed a joint development
agreement with Applied Materials in October 2020 to develop the industry’s first integrated
equipment solution for die-based hybrid bonding. Applied Materials leads the wafer fab
equipment industry in the materials and systems used to create on-chip interconnects,
with products spanning etch, CVD, PVD, copper electroplating, CMP and process control.
Hybrid bonding represents the next evolution of die bonding technology as the
semiconductor market moves from substrate to wafer level assembly. It enables a direct,
copper-to-copper connection between chips, chiplets and wafers with much higher
interconnect density than previously possible.
HYBRID BONDING ENABLES FASTER, MORE COMPLEX DEVICES WITH SUBMICRON
PLACEMENT ACCURACY
Direct Cu-Cu 3D Interconnect
Source: Intel
1,000x increase in contact density
+
Heterogeneous Chiplet Integration
Source: IMEC
More transistors per package
New chip
architectures
•
• Quasi-monolithic 3D
• Optimal use of nodes
• Customized designs
• Highly configurable
Increased
performance
•
• Highest compute power
• Increased data transfer
• Higher bandwidth
• Higher speed
Lower cost of
ownership
•
• Higher die yield
• Lower energy per bit
• Lower cost per contact
• Lower heat dissipation
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Hybrid bonding offers many advantages to customers in terms of form factor, power,
energy efficiency, contact density, data transmission speed and cost of ownership. It can
greatly expand data transmission speeds with substantially higher contact density than
prior assembly process technologies while reducing heat dissipation and consuming less
energy per bit. As such, it also represents an important advancement in ESG semiconductor
manufacturing technology. In addition, the usage of chip scale, wafer level packaging
integrating a variety of heterogeneous chip functions and architectures enables customers
to create ever smaller, more dense, complex and powerful devices in new 3-dimensional
architectures with significantly increased features and functionality versus current
substrate-based process technologies. Given demanding specifications, it is more like a
front-end process technology in that it requires a cleanroom production environment to
eliminate particulate contamination. Equally important, it enables the integration of
heterogeneous functions such as logic, memory and specific feature components in
chiplet-based architectures. Using hybrid bonded chiplets, customers can create the
smallest, most complex and powerful devices in the semiconductor market at geometries
<7 nanometers and at a placement accuracy ten times smaller than the most advanced
assembly technology currently. As such, customers benefit from increased circuitry speed,
density and performance while significantly reducing their overall cost of ownership. The
use of disaggregated chips, or chiplets, in next generation architectures also helps
producers to significantly lower their cost of ownership as they scale down Moore’s Law
curve below 7 nm geometries in the face of rapidly escalating wafer fabrication costs. The
use of chiplet technology in wafer level assembly can also drive increased capital intensity
for hybrid bonding and TCB chip to wafer systems given the increased number of process
steps required to achieve heterogenous integration of disparate semiconductor functions.
CHIPLET ADOPTION DRIVES HIGHER CAPITAL INTENSITY
Single Chip Design Multi Chip Module Multi Chiplet System
1 Step More die attach steps Dozens
10µm Higher accuracy 100nm
Source: Intel
Hybrid bonding process technology has the potential to become the leading assembly
solution for device geometries <3 nanometers over the next decade. Each of the largest
global semiconductor producers is currently evaluating its adoption in their future device
roadmaps. Currently, hybrid bonding has been successfully utilized for the commercial
production of high-end logic devices for data centers and other high-performance
computing applications. Potential applications are numerous including data centers, high-
end servers, high-performance computing, artificial intelligence, photonics, high-end
smartphones, PCs, laptops, wearables, gaming, entertainment, autonomous driving and
medical. They also have the potential to significantly increase the capital intensity and
size of the assembly equipment market over the next decade. Adoption by the largest
semiconductor producers is anticipated to occur over the next five years with further
adoption by assembly subcontractors thereafter. Average selling prices will be significantly
higher than the most advanced flip chip or TCB bonding systems currently given their
complexity, increased number of process steps, cleanroom requirements, throughput and
significant R&D investment. The market potential for hybrid bonding process technology is
significant as indicated in the table below:
HYBRID BONDING MARKET POTENTIAL
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
Cumulative TAM of installed hybrid bonding systems
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
High case
Low case
Mid case
Memory
LogicVolume ProductionDevelopment
Volume ProductionDevelopment
Mobile APVolume ProductionDevelopment
Source: Besi estimates, June 2023
Cases based on potential adoption scenarios.
Monolithic | Integrated SoC Multiple Dies | process optimized Individual IPs | process optimized
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We believe that the hybrid bonding market is tracking at the mid-point of its estimated
market size. Its market acceptance should help drive growth both for the assembly
equipment market and our addressable market at rates higher than those experienced
over the past two decades. In addition, hybrid bonding adoption will also expand demand
for other advanced packaging assembly technologies such as TCB chip to wafer, embedded
bridge die attach, advanced flip chip and multi module die attach systems in new device
architectures, all of which can further increase the potential growth of our addressable
market. Given our initial leadership position in this segment, we hope to expand both
Besi’s revenue potential and market share over the next decade.
Increased focus on sustainability and climate change in production of next
generation devices
Society and customers in each of our end-user markets are increasingly interested in
sustainability as they seek to operate in a safer, more environmentally efficient manner. In
fact, the semiconductor industry will contribute significantly to the long-term energy
transition away from fossil fuels by the development of AI chips to reduce energy
consumption, optimize energy efficiency and facilitate the usage of renewable energy
technologies.
Many of Besi’s assembly systems are used to assemble more efficient semiconductor
devices and reduce material and energy consumption. During the COVID-19 pandemic, our
systems helped facilitate a more decentralized working environment which contributed to
reductions in corporate and personal travel and congestion in urban environments. In
addition, our ability to rapidly scale production during the pandemic played an important
role in helping not only satisfy increased customer demand but also in reducing supply
chain shortages globally, particularly for consumer devices such as smartphones,
automobiles and various computing equipment and software related thereto.
Besi’s advanced packaging technologies have assisted in the development of the digital
society with our systems performing an important role in the development of artificial
intelligence, 5G networks, high-performance data centers and blockchain software. They
also have aided in the development of smart cities, smart manufacturing, smart mobility
and self-driving electric cars with artificial intelligence. Hybrid bonding and TCB chip to
wafer process technologies will further contribute to the development of a digital society
with its promise of significantly increased data transmission speeds and increased power
and functionality in ever-smaller form factors. The use of hybrid bonding systems can also
contribute positively to sustainability as it promises significantly lower resource and
energy consumption in the assembly manufacturing process. Our systems also contribute
to a more efficient and cleaner world by means of longer battery life for electronic devices,
more efficient solar cells and lower power consumption and heat dissipation in
smartphones. Additionally, increased automotive electronic content and intelligence can
help foster the development of next generation electric and autonomous vehicles without
fossil fuel generated combustion engines.
Another trend which affects Besi’s business and end-user markets is the circular economy.
As opposed to a linear economy in which we make, use and dispose of materials, a circular
economy emphasizes (i) the usage of materials for as long as possible, (ii) the extraction of
their maximum value while in use and (iii) the recovery and regeneration of products and
materials at the end of their useful service life. Besi contributes to the circular economy
by designing high quality, flexible systems which have long useful lives and can be
repurposed by customers or by us for other production requirements to extend their useful
lives. In addition, Besi is actively developing more energy efficient equipment with reduced
materials and energy consumption as well as lower failure rates, all of which can help
lessen waste. For more information, please refer to the Environmental, Social and
Governance Report.
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Strategy
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Mission
Besi’s mission is to become the world’s leading supplier of semiconductor assembly
equipment for advanced packaging applications and to exceed industry average
benchmarks of financial performance. We also strive to create long-term value for
stakeholders and operate our business in a sustainable way respecting both the
environment and society.
Summary strategy and long-term sustainable value creation model
Long-term success in the assembly equipment industry requires technological leadership,
customer alignment, system reliability and high levels of accuracy in 24/7, high volume
production environments. Other key factors include production flexibility and scalability in
response to volatile shifts in demand for an industry whose cycle times have become ever
shorter. We also recognize the importance of environmental, social and governance
considerations in the development of our strategy such as our carbon footprint, the
Strategy
sustainable performance of our systems and the development of a business culture which
is diverse, respects the rights of our employees and promotes the skills and talents of our
personnel. Besi’s business strategy has been developed with these considerations in mind.
One of our top priorities is the maintenance of technological leadership in the advanced
packaging segment of the industry. This is the most rapidly growing part of our business
with the greatest potential for future growth. We aim to leverage Besi’s technological
leadership position to generate ever higher levels of through-cycle revenue, profitability
and cash flow via a highly scalable and flexible production model. Weekly analyses of order
development and the supply chain combined with disciplined cost control efforts have
enabled us to respond rapidly to changing market conditions, retain superior margins and
generate high levels of cash flow to support a shareholder friendly capital allocation policy.
BESI’S LONG-TERM SUSTAINABLE VALUE CREATION MODEL
CAPITALS INPUT OUTPUT IMPACT STAKEHOLDERS
Intellectual • Significant investment in research and
development
• Know-how of our people
• Our intellectual property
• Leading edge assembly solutions
• Sustainably designed systems
• Partnership with industry leaders
Environmental footprint
• Promote cleaner environment. Mitigate climate change
• Longer battery life in electronics
• Lower power consumption and heat dissipation in smartphones
• Lead free content in PCBs
• Reduced waste, water, energy, packaging and hazardous materials
• More efficient solar cells
• Electric vehicle usage
• Reduced greenhouse gas emissions
Digital society
• Promote new applications in digital society
• Smart infrastructure, manufacturing and homes
• Better communication, mobility, medical care and security
Communities
• Provide safe and healthy working environment
• Invest in well-being of employees/communities
• Promote training, local sponsorship, investments, diversity and
inclusion and human rights
Shareholders
• Offer attractive total long-term returns
Customers
Human • 1,870 worldwide employees
• Flexible workforce
• Responsible ethics, labor and tax
practices
• Committed and engaged employees
• Long-term customer relationships
• Increased customer satisfaction
• Expand addressable market
Employees
Natural • Minerals, metals and other raw materials
• Natural and renewable energy sources
• Recyclable materials
• A light carbon footprint
• Higher % of renewable energy
• Conservation of natural resources
Society
Industrial • Our global production and supply chain
• Components, modules and semi-finished
products we purchase
• Value-added assembly
• Scalable, sustainable and responsible
supply chain
• Flexible production model
Suppliers
Financial • Strategic planning
• Capital allocation
• Capital markets funding
• Acquisitions
• Peer-leading financial metrics
• € 1.3 billion returned to shareholders (5 years)
• Average ROAE of 39.5% (5 years)
• Total shareholder return 812.5% (5 years)
Shareholders
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Besi’s Board of Management reviews its strategy on a regular basis. We engaged an
independent consulting firm in 2016, 2019, 2021 and 2023 to help assess our strategic plan
and long-term sustainable value creation model and formulate specific market, product,
revenue, ESG and cost initiatives. The most recent plan assessment encompassed the
period 2023-2027, took place over a 16-week timeframe and involved the participation of,
and feedback from, various stakeholders such as extended management, employees,
customers, the Supervisory Board and shareholders to help define key issues and
initiatives. Besi’s development and successful execution of strategic initiatives have
favorably influenced our organizational development, competitive position and financial
performance in recent years.
Strategic objectives
The key initiatives to realize our strategic objectives and long-term sustainable value
creation can be summarized as follows:
Reward
shareholders
via capital
allocation policy
Exceed
challenging ESG
targets for 2024
and 2030
Maintain best
in class
technology
leadership
Expand
presence in
wafer level
assembly
Acquire
companies with
complementary
technologies
and products
Increase
market
presence in
addressable
markets
Enhance
scalability.
Reduce
structural costs
Strategic
Objectives
Through the implementation of these strategic initiatives, Besi seeks to:
• Increase revenue at rates exceeding the growth rate of the assembly equipment market.
• Reduce revenue volatility.
• Become a more efficient and profitable company with increased market share in those
segments of the assembly equipment market with the greatest long-term growth
potential.
• Enhance production scalability and flexibility to better serve our customers and improve
our performance during semiconductor cycles.
• Achieve our strategic objectives responsibly for the benefit of all stakeholders, partners,
the environment and the local communities in which we operate.
• Be a good employer, focused on employee wellbeing and fostering a workplace culture
that encourages employees to grow and excel in their careers.
In addition, Besi wants to be a meaningful partner in the emerging digital society and to
further advance information and communication technologies which can benefit
sustainability themes in the future.
Our key business model objectives for the next five-year period are set forth in the chart
below:
KEY BUSINESS MODEL OBJECTIVES
Business Model
Revenue € 1 billion+++
Addressable market share 40%+
Gross margin 60-64%
Operating margin 30-45%
Headcount split 80% Asia/20% Europe/NA
Scope 1 & 2 emissions 62% reduction
Global energy needs 75% from renewable sources
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Maintain technology leadership
Besi aims to provide global semiconductor manufacturers and subcontractors with a
compelling value proposition consistent with market requirements and new product
development roadmaps. We seek to differentiate ourselves in the marketplace by means
of a technology-led product strategy that capitalizes on revenue opportunities in both
premium and mainstream assembly equipment markets. Besi enters such markets with
leading edge technology and products appealing to the first movers of the industry,
typically leading global semiconductor manufacturers and other advanced industrial end-
users. Upon commercial acceptance, we then attempt to maximize the return on product
investment through continued system cost of ownership reduction so that they appeal to
a broader, more mainstream customer base and extend their product life cycle. Mainstream
customers are often Asian assembly subcontractors. Besi exits product markets when its
technology becomes commoditized and returns on investment become unattractive. In
pursuing its product strategy, Besi uses its core competency to (i) enhance the sustainable
design of its systems, (ii) increase its revenue, addressable market and market share and
(iii) maximize the return on its technology investment.
Over the past five years, Besi has developed next generation die attach and packaging
systems with a particular emphasis on a new portfolio of wafer level assembly systems
facilitating heterogeneous 3D device architectures. Efforts have focused on customer
requirements for (i) increased accuracy, performance, chip density and complexity, (ii)
lower power consumption and heat dissipation, (iii) thinner devices and higher levels of
miniaturization, (iv) sustainable design to reduce material consumption and increase
energy efficiency and (v) shorter lead times, all at a lower overall cost of ownership. In
addition, we design enhanced versions of each product line every one to two years to
ensure that Besi’s systems maintain their technological leadership in the areas of form
factor, placement accuracy, reliability, throughput and sustainability.
Key highlights in recent years include the development for production environments of:
• Hybrid bonding systems capable of integrating multiple heterogeneous chips, chiplet
functions and wafers via a high-density copper interconnect.
• Next generation TCB chip to wafer and embedded bridge die attach systems for use in
wafer level, 3D assembly applications.
• Next generation multi module die bonding systems capable of assembling multiple,
complex devices for advanced features such as 3D image sensing, facial recognition, high
bandwidth memory (“HBM”) and silicon photonics using 2.5D architectures.
• First in-line flip chip system for the placement of HBM and logic devices in 2.5D
architectures at industry leading throughput and flexibility.
• Assembly solutions for advanced 5G smartphones, watches, headphones, virtual
headsets, AR glasses, electric vehicles and autonomous driving.
• Fan out wafer level die bonding systems and wafer level molding systems for 2.5D and 3D
device architectures.
In addition, Besi is re-engineering several of its existing product platforms to enhance
their sustainability and reduce their overall cost and manufacturing cycle time through
more standardized design and manufacturing processes. As part of the streamlining
process, we have incorporated common parts and common platforms for each successive,
next generation die bonding and packaging systems with the objective of decreasing the
number of platforms for such products. This initiative will enable Besi to (i) enhance
sustainability via a reduced number of components and machine parts utilized per system,
(ii) decrease average component costs, (iii) greatly simplify design engineering, (iv) shorten
cycle times and (v) lower warranty expense. In addition, we introduced this year a Design-
to-X initiative to further promote sustainable design across our product portfolio.
The objective is to reduce our customer’s total cost of ownership while optimizing material
consumption and energy efficiency. In such ways, we expect to achieve enhanced labor,
supply chain and working capital efficiencies and lessen its products’ environmental
impact.
Increase market presence in addressable markets
Key to increasing our market presence and addressable market is the development of
close, strategic relationships with customers at the forefront of semiconductor technology
deemed critical to our technological leadership and growth. Besi’s customer relationships,
many of which exceed 50 years, provide us with valuable knowledge about semiconductor
assembly requirements as well as new opportunities to jointly develop assembly systems.
As such, they provide us with important insights into future market trends and opportunities
to broaden the range of products sold to customers.
In order to sustain close relationships with customers and generate new product sales,
Besi believes that it is critical to maintain a significant presence in after-sales and service
in each of its principal markets. As such, Besi currently has 13 regional sales and service
offices in the Asia Pacific region, Europe and North America and a direct sales force and
customer service staff of over 250 people at year end. Consistent with the migration of
customers to Asia, we have strengthened our sales and customer service activities in this
region and have shifted a significant portion of our resources to countries such as
Singapore, China, Malaysia, Thailand, Taiwan, Korea and Vietnam. Further, we centralized
all global spare parts activities in one business unit based in Singapore to increase
customer satisfaction and efficiency. We plan to expand our Asian process support, order
fulfillment and field service capabilities over the next five years to better serve a rapidly
growing installed base of customers in the region.
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We seek to increase long-term, sustainable revenue growth by expanding Besi’s
addressable markets and market presence via the following initiatives:
• Pick the Winners: Leverage our leadership position in substrate and wafer level assembly
technology to engage with customers at the forefront of leading edge applications.
• Expand market position profitably in wafer level assembly via our first mover advantage
in hybrid bonding as well as advanced packaging systems for 2.5D architectures.
• Provide new assembly solutions for next generation mobile, computing and automotive
applications in the areas of cloud and high-performance computing, generative AI, edge
computing, high bandwidth memory, silicon photonics, 5G advanced network
compatibility, autonomous and electric vehicles and virtual and augmented reality.
• Create new assembly solutions for industrial IoT and industrial power conversion
applications requiring the increased use of SiC and GaN devices.
• Achieve net zero greenhouse gas emissions in our operations by 2030 and challenging
ESG targets for 2024 and 2030.
KEY STRATEGIC INITIATIVES
Organize Besi
for € 1 billion+++
revenue model
Partner with the
Winners 2.0
Accelerate cost
savings
Next level supply
chain and service
excellence
Exceed ESG
targets for
2024/2030
Expand leading
hybrid bonding
position
Expand share of
next generation
TCB
Grow silicon
photonics market
share
Capture
opportunities in
2.5D applications
Prepare for CSRD
compliance
Activities undertaken in 2023 to better position Besi for future, sustainable growth
included the following:
• Strategic plan updated through 2027. Confirmed revenue goal of € 1 billion+++ as well as
initiatives to increase market share at peer leading margins.
• Singapore and Malaysian cleanrooms completed to support growth of Besi’s hybrid
bonding and wafer level assembly activities.
• Vietnam assembly facility and Indian service office established to facilitate customer
expansion outside of China.
• ESG initiatives expanded including Design-to-X philosophy for sustainable product
design.
• Goal of net zero greenhouse gas emissions in our operations set for achievement by
2030, incorporating Scope 1 & 2 emissions.
• Double Materiality Assessment conducted in preparation for compliance with the CSRD
in 2025.
The expansion of Besi’s addressable markets and revenue potential will also be aided by
ongoing efforts to further improve our competitive cost position via strategic cost
reduction initiatives.
Expand presence in wafer level assembly applications
A key strategic focus currently is the expansion of Besi’s penetration of both logic and
memory markets in the era of cloud and high-performance computing, artificial intelligence
and the Internet of Everything of which advanced packaging plays a critical role. Toward
this end, we collaborate with Applied Materials, the leader in front-end wafer fabrication
tools and processes, to help promote the adoption of integrated production lines for
hybrid bonding incorporating our hybrid bonding tools. Hybrid bonding represents the next
evolution in interconnect technology as the semiconductor market moves from substrate
to below 1 micron accuracy wafer level assembly. Its adoption will also expand demand for
other Besi advanced packaging solutions such as TCB chip to wafer and embedded bridge
die attach systems and advanced flip chip die bonding systems further increasing the
potential growth of our addressable market. In this regard, we shipped this year our first,
next generation TCB chip to wafer system with industry leading accuracy and our first in-
line flip chip system for the placement of HBM and logic devices in 2.5D architectures at
industry leading throughput and flexibility.
At present, Besi has a leadership position in the development and sale of hybrid bonding
systems to the industry’s leading producers with significant orders received over the past
three years. An important focus of our strategic planning review involved refinements to
Besi’s organization and management structure in order to realize the potential of this new
revenue stream while maintaining the exciting growth opportunities available for our
existing advanced packaging portfolio. Toward this end, we dedicated senior management
personnel to manage a new die bonding unit apart from Besi’s mainstream die bonding
activities in order to provide proper focus and customer engagement for wafer level
applications. In addition, we significantly increased development staff in Austria and
Singapore and added service support in Taiwan and North America for new advanced
packaging and hybrid bonding production lines. We established cleanroom facilities in
Austria, Malaysia and Singapore over the past three years to accommodate future hybrid
bonding production and customer process support. In addition, Besi opened a new 125,000
square foot Malaysian facility to expand our capabilities in alignment with customer
roadmaps. We intend to dedicate additional management, development and production
resources to help ensure the success of this promising growth opportunity.
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Enhance scalability. Reduce structural costs
The semiconductor equipment market has become increasingly more volatile in recent
years due to heightened global economic uncertainty, trade tensions, changing end market
applications, more seasonal purchasing patterns and shorter lead times for delivery. In
response, Besi fundamentally reorganized its global operations and management structure
to streamline operations, transfer production and supply chain activities to its Asian
operations, improve returns from its product portfolio, reduce break-even revenue levels
and increase through cycle profitability. European and North American headcount was
significantly reduced, inefficient operations closed and substantially all European
production and all tooling capacity transferred to our Malaysian and Chinese facilities. In
addition, Besi made strategic capital investments over the past two decades to expand
production, development and administrative activities in Asia including Singapore and
Vietnam to better service a customer base that migrated from Europe and North America
to Asia and more recently, from China to Southeast Asia. In 2023, approximately 76% of
revenue was derived from sales to Asian customer locations. We have also funded
expansions over the past decade of our Malaysian and Chinese production facilities and
Singapore development/sales and service center to expand capacity and better service our
Asian customer base.
In the Besi operating model, all system production, sourcing, product applications
engineering, process and software support and tooling/spares operations take place at
Besi’s Asian locations. All product ownership and new product development remain at our
European operations. Only highly customized systems are produced in Europe for which we
generate attractive gross margins. In recent years, Besi has diversified its Asian
manufacturing and engineering capabilities to further drive cost reduction, increase
capacity, technical and field service support and enhance our local presence.
We have also actively developed and qualified local supply chains for each of our Malaysian
and Chinese operations which produce substantially all modules and subassemblies used
in our assembly and plating system production. The successful development of a flexible
Asian supply chain is an important factor in our profitable navigation of volatile
semiconductor equipment markets and low capital intensity. Strategic initiatives were
also implemented to (i) increase the scalability and flexibility of Besi’s production model
via the use of temporary Asian production personnel and the establishment of high-quality
Asian supply chain networks, (ii) further reduce European facility space and fixed headcount
and (iii) simplify and harmonize diverse manufacturing and IT processes.
As a result, Besi has significantly reduced labor, material and overhead costs, improved
delivery times and inventory turnover and enhanced its local presence. We have also been
able to scale our operations on a timely basis in response to volatile industry trends over
the past five years while consistently improving gross margins. Increased scalability
combined with tight inventory control have also greatly expanded Besi’s cash generation
capabilities and market share potential.
Integration of ESG objectives into Besi’s long-term business strategy
Besi has engaged in a new, more robust approach to managing and reporting on ESG topics.
We have also actively promoted the integration of ESG topics and initiatives into our long-
term value creation model. In 2020, we established a framework with three principal pillars
(Environmental Impact, People Wellbeing and Responsible Business). We defined near and
long-term goals, ambitions and activities for the next decade whose adoption and
acceptance have been well received by our organization and stakeholders. In 2020 and
2021, we identified 12 material topics most relevant to our business and engaged in a four-
stage materiality assessment. In 2023, we conducted a Double Materiality Assessment as
a precondition to compliance with Corporate Sustainability Reporting Directive (“CSRD”)
requirements. The assessment analyzed the impact of Besi on people and the environment
as well as the environmental and social-related risks and opportunities to which we are
exposed. In addition, we significantly expanded the scale and scope of our initiatives and
reporting activities against leading external frameworks. We also published a formal policy
on our website this year which provides a strategic view of Besi’s management activities
across the ESG aspects of our business with respect to both our operations and value
chain.
Cleanroom Besi Austria.
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BESI’S ESG STRATEGIC FRAMEWORK
Focus areas
Our pillars What we do Material issues Relevant SDGs
Environmental
Impact
We build sustainability into our products and operations
to reduce Besi’s environmental footprint and those of our
suppliers and customers
Impact at Besi:
Energy use and renewable energy
Carbon emissions
Waste and hazardous material use
Water use
Impact at suppliers and customers:
Sustainable design
People
Wellbeing
We foster a diverse and inclusive culture and support
the safety, development and wellbeing of our employees
Diversity and inclusion
Employee health and safety
Employee engagement and career
development
Responsible
Business
We act responsibly and ethically across our value chain
and seek to have a positive impact on our local communities
Ethics and compliance
Responsible supply chain
Community impact
Tax practices
The Environmental Impact pillar of our ESG strategy is focused on the impact of our
products, operations and supply chain on the environment and the communities in which
we operate. In recent years, we have reduced the environmental impact of our production
operations through programs designed to:
• Reduce our carbon emissions and increase the share of energy generated from renewable
sources.
• Eliminate materials, processes and hazardous waste deemed harmful to the environment.
• Conserve natural resources such as water and electricity.
• Reduce packaging, waste, transportation and energy consumption.
• Emphasize sustainable design in new product development.
Our People Wellbeing pillar is based on three priorities: (i) diversity and inclusion, (ii)
employee health and safety and (iii) employee engagement and career development. In
addition, Besi strives to employ high social and ethical standards with competitive
employment terms and pay scale. A high level of employee satisfaction is a basic
precondition to achieve our revenue and profit growth objectives.
Our Responsible Business pillar consists of four main components: (i) ethics and
compliance, (ii) responsible supply chain, (iii) community impact, and (iv) tax practices. We
are committed to the UN Universal Declaration of Human Rights, adhere to ethical
standards and expect the same commitment from key stakeholders, particularly across
Besi’s supply chain. To this end, we strive to have a positive impact on the communities
and countries in which we operate via charitable activities, responsible tax practices and
active engagement with our employees and suppliers.
Since 2019, Besi has significantly increased its ESG activities including the development of
various short- and long-term targets through 2050. Between 2019 and 2023, we reduced
Scope 1 & 2 emissions intensity by 65%, fuel consumption intensity by 46%, water usage
intensity by 34%, absolute hazardous waste generation by 27% and increased our energy
from renewable sources from 18% to 71%. We have also identified and commenced work on
85 initiatives associated with our ESG pillars since 2020, of which 76% have been completed.
In fact, Besi met or exceeded approximately 80% of its relative ESG targets set in 2020 for
achievement in 2022. In addition, we set a new objective in 2023 of reaching net zero
greenhouse gas emissions in our operations by 2030, incorporating Scope 1 & 2 emissions.
Moreover, our ESG ratings with the major publicly recognized agencies such as
Sustainalytics, S&P Global, ISS ESG and MSCI improved significantly in 2023 further
underscoring Besi’s progress towards best practice metrics.
ENHANCED ESG TARGETS
2024 2030
75% renewable sources
for global energy needs
100% renewable sources
for global energy needs
62% reduction in Scope 1 & 2
emissions*
Carbon neutral for
Scope 1 & 2 emissions*
12% reduction in Scope 3
emissions*
20% reduction in Scope 3
emissions*
Above-benchmark employee
engagement
Achieve revenue objectives
with lower environmental impact
Compliance with CSRD 80% vendor compliance with
Conflict Free Sourcing Initiative
CARBON NEUTRAL BY 2050
* As per Greenhouse Gas Protocol. Targets relative to 2021 baseline data.
The COVID-19 pandemic and climate change crises have also increased our focus on
potential ESG impacts and our role in limiting their adverse effects on our business,
employees and communities. We adapted our business model in the areas of travel,
interactions and communications both within and outside the organization as a result of
the pandemic, many of which lessened our ESG impact. In addition, Besi made significant
investments in its Malaysian facilities in 2022 to help reduce the potential impact of
climate change related events such as the flooding which caused production disruptions
in the fourth quarter of 2021.
Further, we have launched several sustainable design initiatives focused on design-to-
cost, quality and sustainability via the utilization of our intellectual capital. Such initiatives
have been focused on upgraded versions of Besi’s mainstream die bonding product lines as
well as for new wafer level assembly platforms such as hybrid bonding and next generation
TCB systems. We expect these activities to bring value to our customers in terms of better
yield, throughput, energy conservation and efficiency, lower material consumption and
total cost of ownership. In addition, we have invested in the development of more
environmentally friendly products and services to help customers operate more efficiently
both in terms of environmental impact and cost savings. Toward this end, we developed an
initiative named “Design-to-X” this year as part of our 16-week strategic plan review. This
initiative combines Design-to-Cost and Design-to-Sustainability concepts to identify ESG
improvement opportunities in all product groups while reducing the cost of many mature
die attach and packaging platforms.
For more information on Besi’s ESG priorities, performance and targets, please refer to the
Environmental, Social and Governance Report.
Acquire companies with complementary technologies and products
It is critically important to identify and incorporate new technologies on a timely and
continuous basis in order to provide customers with leading edge process solutions. As a
result, Besi actively identifies and evaluates acquisition candidates that can assist us in:
(i) increasing process technology leadership, (ii) profitably increasing market presence in
those assembly markets with the greatest long-term potential such as wafer level
packaging, (iii) enhancing the productivity and efficiency of our Asian manufacturing
operations and (iv) growing less cyclical, “non-system” related revenues from tooling,
spares and service.
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Besi has made four important acquisitions over the past three decades which have
significantly expanded our advanced packaging strategy:
• RD Automation (USA) was acquired to advance Besi’s product strategy into the front-end
of the assembly process with the addition of flip chip capabilities.
• Laurier (USA) was acquired to add intelligent die sorting capabilities into our product
range.
• Datacon (Austria) was acquired to further extend our presence in the flip chip and die
bonding equipment markets and increase our customer market presence.
• Esec (Switzerland) was acquired to expand Besi’s position in the mainstream die bonding
market.
The successful execution and integration of such acquisitions in combination with
subsequent organic growth related thereto have created a leader in the die bonding
segment of the assembly equipment market.
Reward shareholders via capital allocation policy
The successful execution of Besi’s strategic plan and long-term sustainable value creation
model has significantly benefited shareholders. Peer-leading financial metrics have been
achieved in gross, operating and net margins. Our addressable market share has also
increased. In addition, Besi’s capital allocation plan has resulted in the return to
shareholders of € 1.9 billion since 2011 in the form of dividends and share repurchases
(including the dividend proposed for 2023). Such distributions represented approximately
30% of our aggregate revenue during such period of which € 435.5 million was distributed
in 2023 (up 4.6% versus 2022). Profit generation and capital allocation also resulted in a
peer leading return on average equity of 33.7% in 2023 even despite a significant industry
downturn. Finally, shareholders have benefited from an investment in Besi by an increase
of 149.7%, 210.3% and 812.5%, respectively, over the past one, three and five years in their
total stock market return (share price appreciation plus dividends). This total return
significantly exceeded total returns during such periods from an investment in Besi’s
direct peer group of assembly equipment companies, the SOX index and Besi’s remuneration
reference group.
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Visit of the Dutch prime minister to Besi APac, Malaysia, November 2023.
Financial Review
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Financial Review
General
BE Semiconductor Industries N.V. (“Besi” or the “Company”) is engaged in one line of
business, the development, manufacturing, marketing, sales and service of semiconductor
assembly equipment for the global semiconductor and electronics industries. Since we
operate in one segment and in one group of similar products and services, all financial
segment and product line information can be found in the Consolidated Financial
Statements.
Besi’s revenue and results of operations depend in significant part on the level of capital
expenditures by semiconductor manufacturers, which in turn depends on the current and
anticipated market demand for semiconductors and for products utilizing semiconductors.
Demand for semiconductor devices and expenditures for the equipment required to
assemble semiconductors is highly cyclical, depending in large part on levels of demand
worldwide for mobile internet, computing, automotive and industrial end-user markets as
well as the production capacity of global semiconductor manufacturers. Furthermore, a
rise or fall in the sales levels of semiconductor equipment typically lags any downturn or
recovery in the semiconductor market due to the lead times associated with the production
of semiconductor equipment.
In recent years, Besi has experienced significant upward and downward movements in
quarterly order rates due to global macroeconomic concerns, trade tensions, the COVID-19
pandemic and increased seasonality of end-user application revenue. Customer order
patterns have become increasingly more seasonal due to the growing influence of more
retail-oriented electronics applications in the overall demand for semiconductor devices
such as smartphones, tablets, wearable devices, gaming consoles and automotive
electronics. They have been characterized typically by a strong upward ramp in the first
half of the year to build capacity for anticipated year end demand followed by a subsequent
decline in the second half of the year as capacity additions are digested by customers.
Volatile global macroeconomic conditions and seasonal influences have also contributed
to the significant upward and downward movements in our quarterly and semi-annual
revenue and net income.
Besi’s revenue is generated primarily by shipments to the Asian manufacturing operations
of leading European, North American and Asian independent device manufacturers (“IDMs”)
and Taiwanese, Chinese, Korean, Japanese and other Asian subcontractors. Sales to
individual customers tend to vary significantly from year to year depending on global
economic conditions generally and the specific capital expenditure budgets, new product
THROUGH CYCLE REVENUE AND GROSS MARGIN TRENDS
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 20202019 20232022202120182017
€ millions Gross Margin
800
700
600
500
400
300
200
100
0
70%
60%
50%
40%
30%
20%
10%
0%
Revenue Gross Margin Revenue Average
34.1%
164
39.5%
302
51.1%
424
516
4 year
averages
58.0%
191
351
379
593
749
579
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OTHER
INFORMATION
introductions, production capacity and packaging requirements of its customers. For the
year ended December 31, 2023, no customer represented more than 10% of our revenue and
the largest ten customers accounted for approximately 52% of revenue. In addition, we
derive a substantial portion of our revenue from products that have an average selling
price in excess of € 400,000 and that have lead times of approximately 4-12 weeks between
the initial order and delivery of the product. Besi only recognizes orders upon receipt and
acceptance of a firm purchase order. The timing and recognition of revenue from customer
orders can cause significant fluctuations in operating results from quarter to quarter.
Corporate and financial structure
Besi’s corporate organization consists of a Dutch holding company in which shareholders
own ordinary shares and a network of wholly owned subsidiaries located globally which
reflects its product group operating facilities and business activities. To get a better
overview of our largest shareholders, please refer to Shareholder Information.
In general, Besi funds its operations through available cash on hand, cash generated from
operations and, in some instances, funds the operations of its subsidiaries through
intercompany loans and borrowings under its bank lines of credit. The working capital
requirements of its subsidiaries are affected by the receipt of periodic payments on orders
from its customers. Although its subsidiaries occasionally receive partial payments prior
to final installation, initial payments generally do not cover a significant portion of the
costs incurred in the manufacturing of such systems which requires Besi to finance its
system production with internal resources and, in certain instances, via bank financing.
Currency exposure
Besi’s reporting and functional currency is the euro. In 2023 and 2022, our euro-denominated
revenue represented 25% and 28% of total revenue, respectively, while euro-denominated
costs and expenses represented 32% and 27%, respectively. As seen in the following table,
the substantial majority of Besi’s revenue is denominated in US dollars while in 2023, its
costs were denominated in a variety of European and Asian currencies. In 2023, 55% of our
costs and expenses were denominated in Malaysian ringgit and euro. The remainder of our
costs were primarily represented by the Chinese renminbi, Singapore dollar, US dollar and
Swiss franc. Besi seeks to manage its exposure to currency fluctuations in part by hedging
firmly committed orders denominated in US dollars and, in part, by hedging net exposures
in its principal transaction currencies. Costs for hedging sales contracts and any
ineffectiveness therefrom are recorded in the line item financial income (expense), net in
Besi’s Consolidated Statement of Operations.
Revenue
2023 2022 2021
US dollar 75% 72% 78%
Euro 25% 28% 22%
Total 100% 100% 100%
Costs and Expenses
2023 2022 2021
Euro 32% 27% 27%
Malaysian ringgit 23% 30% 31%
Chinese renminbi 15% 14% 13%
Singapore dollar 10% 8% 7%
US dollar 8% 10% 11%
Swiss franc 8% 8% 8%
Other 4% 3% 3%
Total 100% 100% 100%
Given changes in the foreign currency composition of its revenue, costs and expenses,
Besi’s results of operations can be affected by fluctuations in the value of, and relationships
between, the euro, the US dollar, Malaysian ringgit, Swiss franc, Chinese renminbi and
Singapore dollar. In 2023, our results of operations were favorably influenced primarily by
a depreciation of the Chinese renminbi and the Malaysian ringgit versus the euro. Besi’s
costs denominated in Malaysian ringgit and Chinese renminbi can vary on an annual basis
depending on the number of units produced at each location.
Quarterly results of operations
(€ millions)
1
Q1 Q2 Q3 Q4
2022
Total Q1 Q2 Q3 Q4
2023
Total
Revenue 202.4 214.0 168.8 137.7 722.9 133.4 162.5 123.3 159.6 578.9
Orders 204.8 153.1 125.3 180.5 663.7 142.0 112.6 127.3 166.4 548.3
Net income 67.5 75.6 57.3 40.2 240.6 34.5 52.6 35.0 54.9 177.1
1
Numbers may not reconcile due to rounding.
For the year, Besi’s revenue and net income of € 578.9 million and € 177.1 million declined
by 19.9% and 26.4%, respectively, versus 2022. Similarly, orders of € 548.3 million declined
by 17.4%. Revenue weakness this year was principally due to adverse market conditions in
the assembly equipment market which declined by approximately 26% as per TechInsights.
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2023 compared to 2022
Set forth below is a summary of our key income statement highlights for 2023 versus 2022:
(€ millions, except %)
1
Year ended December 31, Change
2023
% revenue
2022
% revenue
2023/2022
% points
Revenue 578.9 100.0% 722.9 100.0% –
Cost of sales 203.1 35.1% 279.8 38.7% (3.6)
Gross profit 375.8 64.9% 443.1 61.3% 3.6
SG&A expenses 106.0 18.3% 95.0 13.1% 5.2
R&D expenses 56.4 9.7% 53.9 7.5% 2.2
Total operating expenses 162.4 28.1% 149.0 20.6% 7.5
Operating income 213.4 36.9% 294.1 40.7% (3.8)
Financial expense, net 5.7 1.0% 18.6 2.6% (1.6)
Income before income taxes 207.7 35.9% 275.5 38.1% (2.2)
Income taxes 30.6 5.3% 34.8 4.8% 0.5
Net income 177.1 30.6% 240.6 33.3% (2.7)
Effective tax rate 14.7%
2
12.6%
1
Numbers may not reconcile due to rounding.
2
Effective tax rate in 2023 was 13.6%, excluding € 2.3 million downward valuation of deferred tax assets.
Revenue/Orders
(€ millions) Year ended December 31, % Change
2023 2022 2023/2022
Revenue 578.9 722.9 (19.9%)
Orders 548.3 663.7 (17.4%)
IDM 286.5 363.2 (21.1%)
Subcontractors 261.8 300.5 (12.9%)
Besi’s revenue of € 578.9 million in 2023 declined by € 144.0 million, or 19.9%, versus 2022.
The revenue decrease was principally due to adverse market conditions as well as
significantly reduced demand for mainstream computing applications by both IDMs
and Asian subcontractors. To a lesser extent, it also reflected reduced demand for
automotive applications following strong growth over the past two years. Besi’s orders of
It also 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. Besi’s leadership
position in advanced packaging helped mitigate the adverse effects of an industry
downturn as severe as the one experienced in the 2017-2019 period. Order weakness in
2023 was 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 2.5D logic/memory applications.
Besi achieved peer-leading operating and net margins of 36.9% and 30.6% in 2023 as we
successfully aligned our 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. Elevated operating margins were maintained despite increased
development spending to support the expansion of our advanced packaging product
portfolio for the next market upcycle.
QUARTERLY REVENUE AND GROSS MARGIN TRENDS
80%
75%
70%
65%
60%
55%
50%
250
200
150
100
50
0
Q1-22 Q2-22 Q3-22 Q4-23Q4-22 Q1-23 Q2-23 Q3-23
64.2%
65.6%
64.6%
65.1%
60.1%
61.0%
62.3%
62.3%
133.4
162.5
123.3
159.6
202.4
214.0
168.8
137.7
€ millions Gross Margin
Revenue Gross Margin
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€ 548.3 million decreased by 17.4% versus 2022 due primarily 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 2.5D logic/
memory applications as customers began to significantly build out their generative AI and
high-performance computing capacity. In particular, hybrid bonding orders and year end
backlog approximately doubled versus comparable levels of the prior year. In addition,
bookings by IDMs and subcontractors represented approximately 52% and 48%,
respectively, of total orders versus 55% and 45%, respectively, in 2022. Revenue and orders
in 2023 were not adversely affected by trade restrictions and regulations resulting from
geo-political tensions.
ORDER TRENDS
1,000
800
600
400
200
0
2019 2020 2021 2022 2023
348.7
€ millions
61%
39%
472.1
939.1
45%
55%
55%
55%
45%
45%
663.7
52%
48%
548.3
IDMs Subcontractors
Gross profit
Gross profit declined by € 67.3 million, or 15.2%, versus 2022 due to lower revenues, partially
offset by improved gross margin efficiency. Besi's gross margin increased 3.6 points to
reach 64.9%, despite adverse market conditions, due primarily to (i) successful new product
introductions, (ii) effective and timely management of our costs and supply chain activities,
(iii) a more favorable product mix and (iv) forex benefits mainly from the devaluation of
Asian currencies versus the euro and US dollar. In addition, Besi was able to implement
price increases for its systems to help offset labor and material cost inflation.
Selling, general and administrative expenses
Total SG&A expenses increased by € 11.0 million, or 11.6%, versus 2022. The increase was
due primarily to (i) € 3.8 million increased share-based compensation expense, (ii)
€ 3.3 million expenses related to Besi’s strategic plan review as well as (iii) additional
marketing, technical support, and personnel necessary to support the growth of Besi’s
wafer level assembly portfolio. As a percentage of revenue, SG&A expenses increased from
13.1% in 2022 to 18.3% in 2023.
QUARTERLY OPERATING EXPENSE TRENDS
Baseline Opex % of Revenue
50
40
30
20
10
0
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23
32.8
34.2
33.6
35.6
Q4-23
44.0
24.6%
43.7
21.1%
36.9
27.3%
22.3%
€ millions Baseline Opex as % of Revenue
11.2
9.5
3.3
2.2
37.8
30.5
33.2
33.1
34.3
39.9
15.1%
37.9
15.5%
34.0
19.6%
24.9%
9.4 4.7
0.9
2.8
37.1
Baseline Opex Other Opex*
* Other Opex includes both short-term and long-term incentive compensation, seasonal effects, restructuring costs, net
R&D capitalization/amortization and certain one-time items.
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Research and development expenses
Besi’s R&D spending is primarily focused on advancing its leadership position in advanced
assembly process technology and upgrades to its product portfolio on a regular basis.
Spending can vary from year to year depending on specific customer roadmaps and the
timing of new device introductions. The components of research and development
expenses for the years ended December 31, 2023 and 2022, were as follows:
(€ millions) Year ended December 31,
2023 2022
Research and development expenses, gross 63.9 63.8
Amortization of capitalized development expenses 13.6 11.7
Capitalization of development expenses (21.1) (21.6)
Research and development expenses as reported 56.4 53.9
In 2023, R&D expenses of € 56.4 million increased by € 2.5 million, or 4.6%, versus 2022,
due primarily to increased amortization of capitalized development costs primarily related
to new product introductions. As a percentage of revenue, R&D expenses increased to
9.7% in 2023 versus 7.5% in 2022. Gross R&D expenses (excluding the impact of R&D
capitalization and amortization) were € 63.9 million, or 11.0% of revenue, and were roughly
equivalent to 2022 levels.
Operating income
Operating income of € 213.4 million declined by 27.4% versus 2022 principally due to Besi’s
19.9% revenue decrease and a 9.0% increase in operating expenses partially offset by gross
margin improvement of 3.6 points. As a result, Besi's operating margin declined from 40.7%
to 36.9%.
Financial expense, net
The components of financial expense, net, for the years ended December 31, 2023 and
2022, were as follows:
(€ millions)
Year ended December 31,
2023 2022
Interest income 12.3 1.6
Interest expense (11.7) (12.1)
Interest income (expense), net 0.6 (10.5)
Net cost of hedging (7.1) (7.6)
Net foreign exchange effects 0.8 (0.5)
Financial income (expense), net (5.7) (18.6)
Besi’s net financial expense of € 5.7 million improved by € 12.9 million compared to 2022
primarily due to increased interest income on our cash balances outstanding. Exposure to
changes in interest rates on our external funding is limited given the fixed interest rates
on Besi’s Convertible Notes outstanding which represent substantially all of its current
debt outstanding.
Income taxes
Besi recorded income tax expense of € 30.6 million in 2023 versus € 34.8 million in 2022.
The effective tax rate increased to 14.7% versus 12.6% in 2022 primarily due to a
€ 2.3 million downward valuation of tax assets. Excluding such adjustment, Besi’s effective
tax rate for 2023 would have been 13.6%.
Net income
Besi’s net income of € 177.1 million in 2023 decreased by 26.4% versus 2022 and its net
margin decreased from 33.3% to 30.6% primarily due to lower revenue and higher operating
expenses, partially offset by improved gross margins and increased interest income on
cash balances outstanding.
QUARTERLY NET INCOME TRENDS
80
70
60
50
40
30
20
10
0
Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23
25.9%
32.4%
28.4%
34.4%
34.5
52.6
35.0
54.9
33.4%
35.4%
34.0%
29.2%
67.5
75.6
57.3
40.2
€ millions
Net Margin
10%
20%
30%
40%
50%
60%
80%
70%
Net Income Net Margin
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Balance sheet, cash flow development and financing
Cash flow
In 2023, Besi generated cash flow from operations of € 208.6 million which along with cash,
cash equivalents and deposits outstanding, was utilized for the following principal
purposes:
• € 222.1 million of cash dividends were paid to shareholders.
• € 213.4 million of ordinary shares were repurchased and held in treasury.
• € 21.1 million of development expenses were capitalized.
• € 6.9 million of capital expenditures were made.
As a result, Besi’s cash and deposits decreased by € 258.2 million to reach € 413.5 million
at December 31, 2023. Year end cash balances reflected a total capital allocation of
€ 435.5 million in the form of dividends and share repurchases. Similarly, Besi’s year end
net cash position of € 113.0 million (defined as cash, cash equivalents and deposits less
total debt) 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.
CASH FLOW GENERATION TRENDS
300
250
200
150
100
50
0
2019 2020 202320222021
33.7%
120.1
37.1%
37.4%
277.9
37.6%
271.9
36.0%
208.6
162.0
€ millions % of Revenue
45%
40%
35%
30%
25%
20%
Total Cash Flow from Operations As % of Revenue
Working capital
Besi’s working capital (excluding cash and debt) increased by € 17.2 million, or 13.9%, to
reach € 140.7 million at December 31, 2023, due primarily to an increase in other receivables
and a decrease in other payables. As a percentage of revenue, working capital increased to
24.3% at year end 2023 versus 17.1% at year end 2022.
Capital expenditures
Capital expenditures of € 6.9 million were roughly equivalent to 2022 levels. Capital
spending in 2023 primarily related to the completion of Besi's Singapore cleanroom facility
and the establishment of a new assembly facility in Vietnam. We anticipate that capital
expenditures will range between € 8 and € 12 million in 2024 primarily related to increased
purchases of process equipment for our Centers of Excellence in Austria and Singapore
and our tooling and support facility in Vietnam.
Financing
At December 31, 2023, Besi had € 300.5 million of total indebtedness of which
€ 298.5 million related to three issues of Convertible Notes outstanding with a face value
of € 328.2 million and € 2.0 million of government loans. No other indebtedness was
outstanding at such date including amounts owed under Besi’s bank lines of credit.
Bank lines of credit
At December 31, 2023, Besi and its subsidiaries had available bank lines of credit aggregating
€ 97.7 million. At such date, utilization under the lines aggregated € 1.1 million related to
bank guarantees. In general, interest is charged at the banks’ base lending rates or
ESTR/SOFR plus an increment. Most credit facility agreements include covenants requiring
Besi and/or its subsidiaries to maintain certain financial levels or financial ratios.
Besi and all its applicable subsidiaries were in compliance with all loan covenants at
December 31, 2023.
The lines of credit include an € 80 million revolving credit facility with a consortium
of European banks (the “Facility”), which matures in 2026 and can be expanded to
€ 136 million. Interest rates on borrowings vary per currency and the level of cash balances
outstanding and borrowings utilized. It ranks pari passu with the Convertible Notes and is
secured by guarantees from certain operating subsidiaries. Borrowings can be repaid at
any time at 100% of principal amount and used for working capital and other corporate
purposes. The principal covenants associated with the Facility include a maintenance test
of consolidated debt to equity and a limitation on the incurrence of additional permitted
indebtedness.
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Issuance of Convertible Notes
On December 2, 2016, Besi issued € 125 million principal amount of 2.5% Senior Unsecured
Convertible Notes due December 2023 (the “2016 Convertible Notes”). In 2023, the
remaining outstanding principal balance of € 2.4 million was converted into approximately
130,000 shares.
On December 6, 2017, Besi issued € 175 million principal amount of 0.5% Senior Unsecured
Convertible Notes due December 2024 (the “2017 Convertible Notes). The 2017 Convertible
Notes will be repaid at maturity at 100% of their principal amount plus accrued and unpaid
interest or, if converted, into ordinary shares at a conversion price of € 45.75 (subject to
adjustment). The original exercise price of € 99.74 has been adjusted for the two-for-one
stock split effective May 4, 2018 and dividends paid subsequent to the date of issuance in
accordance with the terms and conditions related thereto. In 2023, € 29.3 million principal
amount of the 2017 Convertible Notes were converted into approximately 0.6 million
ordinary shares. As a result, the principal amount outstanding declined to € 3.2 million at
year end 2023 representing approximately 70,000 shares still available for conversion.
On August 5, 2020, Besi issued € 150 million principal amount of 0.75% Senior Unsecured
Convertible Notes due August 2027 (the “2020 Convertible Notes”). The 2020 Convertible
Notes will be repaid at maturity at 100% of their principal amount plus accrued and unpaid
interest or, if converted, into approximately 3.1 million ordinary shares at a conversion
price of € 48.95 (subject to adjustment). The original exercise price of € 51.56 has been
adjusted for dividends paid subsequent to the date of issuance in accordance with the
terms and conditions related thereto.
On April 6, 2022, Besi issued € 175 million principal amount of 1.875% Senior Unsecured
Convertible Notes due April 2029 (the “2022 Convertible Notes”). The 2022 Convertible
Notes will be repaid at maturity at 100% of their principal amount plus accrued and unpaid
interest or, if converted, into approximately 1.5 million ordinary shares at a conversion
price of € 115.50 (subject to adjustment).
Besi may redeem each of the outstanding 2017, 2020 and 2022 Convertible Notes at 100%
of their principal amount after December 27, 2021 (2017 Convertible Notes), August 26,
2024 (2020 Convertible Notes) and April 27, 2026 (2022 Convertible Notes), respectively,
provided that the market value of its ordinary shares exceeds 130% of the then effective
conversion price for a specified period of time. In the event of a change of control (as
defined), each noteholder will have the right to require Besi to redeem all (but not less
than all) of its Convertible Notes at 100% of their principal amount together with accrued
and unpaid interest thereon. In addition, the 2020 and 2022 Convertible Notes may be
redeemed at the option of the holder on August 5, 2025 and April 6, 2027, respectively, at
their principal amount plus accrued interest.
The terms and conditions governing each of the Convertible Notes contain no incurrence
tests nor maintenance covenants which could materially limit Besi’s ability to conduct its
operations in the normal course. The Convertible Notes were privately offered to
institutional investors and are listed on the Deutsche Börse’s Freiverkehr market.
Capital allocation
Besi’s capital allocation policy seeks to provide a current return to shareholders in the
form of cash dividends and share repurchases while retaining a capital base sufficient to
fund future growth opportunities.
Dividends
Besi’s dividend policy considers the payment of dividends on an annual basis based upon
(i) a review of its annual and prospective financial performance, liquidity and financing
needs, the prevailing market outlook and Besi’s strategy, market position and acquisition
strategy and/or (ii) a dividend payout ratio in the range of 40-100% relative to net income
to be adjusted accordingly if the factors referred to under (i) so require.
Donation to Children’s Cancer Aid Tyrol by Besi Austria and its employees.
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Due to Besi’s earnings and cash flow generation in 2022, the Board of Management
proposed and Besi paid a cash dividend to shareholders of € 2.85 per share which resulted
in cash payments to shareholders of € 222.1 million.
DIVIDEND TRENDS
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
100%
98%
96%
94%
92%
90%
88%
86%
84%
82%
80%
2019 2020 2021 2022 2023
Dividend (€) Dividend Payout Ratio
90%
98%
95%
1.01
1.70
92%
2.85
94%
2.15
3.33
Dividend
Dividend Payout Ratio*
Cumulative dividends of € 1.4 billion since 2011, or € 17.78 per share*
* Calculated on Basic EPS. Includes value of both cash and stock dividends. Includes proposed dividend for approval at 2024
AGM.
Due to Besi’s earnings and cash flow generation in 2023, the Board of Management will
propose a cash dividend to shareholders of € 2.15 per share for approval at Besi’s Annual
General Meeting of Shareholders to be held on April 25, 2024.
The payments for the year 2022 and proposed for the year 2023 represent a dividend payout
ratio relative to net income of 92% and 94%, respectively, based on the number of
outstanding shares at year end 2023.
Share repurchase program
On July 21, 2022, Besi announced a € 300 million share repurchase program effective
August 1, 2022. The program was completed in October 2023. Under the program, a total of
4.3 million shares were repurchased between August 1, 2022 (inception) and October 27,
2023 (completion) at an average price per share of € 69.87.
On October 26, 2023, Besi announced a new € 60 million share repurchase program effective
November 1, 2023. The program is aimed at general capital reduction purposes and to help
offset dilution related to Besi’s Convertible Notes and shares issued under employee stock
plans. It is funded using Besi’s available cash resources and expected to be completed by
October 2024.
In 2023, Besi repurchased a total of approximately 2.6 million of its ordinary shares at an
average price of € 83.40, representing an aggregate amount of € 213.4 million.
At present, Besi has shareholder authorization to repurchase up to 10% of its issued share
capital (approximately 8.1 million shares) until October 26, 2024. At December 31, 2023,
Besi held approximately 4.1 million shares in treasury equal to approximately 5.1% of its
ordinary shares outstanding.
Besi believes that its cash position, internally generated funds and available lines of credit
will be adequate to meet its anticipated levels of capital spending, research and
development, debt service requirements, working capital and capital allocation policy for
at least the next twelve months.
SHARE REPURCHASE ACTIVITY
25
0
200
150
100
50
0
2019 2020 2021 20232022
€ 24.31
€ millions
Avg Cost per Share (€)
160.0
140.0
120.0
100.0
80.0
60.0
40.0
20.0
0.0
44.7
€ 38.05
17.8
€ 69.84
€ 54.38
50.1
146.8
€ 83.40
213.4
Share Repurchases
Average Cost per Share
Environmental, Social and Governance Report
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Environmental, Social and Governance Report
This Environmental, Social and Governance ("ESG") Report provides an overview of Besi’s
ESG activities in 2023 including a discussion of the following topics:
• Overview
• Materiality assessment
• Strategy
• Initiatives
• Governance
• Reporting framework
• Environmental impact
• People wellbeing
• Responsible business
A year of progress
Besi has significantly increased its ESG activities and reporting since 2020 including the
development of various short- and long-term targets through 2050. Since 2019, we have
reduced Scope 1 & 2 emissions intensity by 65%, fuel consumption intensity by 46%, water
usage intensity by 34% and absolute hazardous waste generation by 27%. We also
increased our energy from renewable sources from 18% to 71%. We have also identified and
commenced work on 85 initiatives associated with our ESG pillars (Environmental Impact,
People Wellbeing and Responsible Business) many of which have lessened Besi’s ESG
impact. In fact, we equaled or exceeded substantially all targets for 2022 set in 2019 and
set new targets in 2022 for achievement in 2024 and 2030 using 2021 data as a baseline. In
addition, in 2023 we set an objective of reaching net zero greenhouse gas emissions in our
operations by 2030, incorporating Scope 1 & 2 emissions.
In general, we measure our ESG performance in terms of relative intensity targets given
the highly cyclical nature of our revenue development on a year to year or even multi-year
basis. Of note, Besi’s performance with respect to most relative intensity targets in 2023
was adversely affected by two important factors. The first related to the spike we
experienced in our electricity consumption, Scope 2 emissions and waste disposal in the
second and third quarters of 2023 associated with the construction of a new production
facility in Malaysia and the completion of two new cleanrooms in Malaysia and Singapore
to facilitate growth in Besi’s wafer level assembly operations. The second factor related
directly to the cyclical revenue volatility of the semiconductor assembly equipment market
in which we participate. This market experienced a significant downturn in demand starting
in the second quarter of 2022 and continued through year end 2023. As a result, Besi’s
revenue declined from a peak of € 749 million in 2021 to € 579 million in 2023. As a result of
both such factors, all relative intensity ratios and some performance metrics were
adversely affected this year versus 2022 actual results and 2024 targets. Relative intensity
ratios began to significantly improve in Q4-23 upon the substantial completion of such
projects and further migration to renewable energy in Asia. We are currently on track to
meet or exceed substantially all environmental targets established for 2024.
Since 2019, Besi has significantly expanded the scale and scope of its initiatives and
reporting activities relative to leading external frameworks such as SASB, GRI, SDG, NFRD,
TCFD and the EU Taxonomy. We have also proactively responded to external questionnaires
such as CDP Climate Change and the S&P Global Corporate Sustainability Assessment,
with a focus on materiality, clarity and transparency. In 2020 and 2021, we identified 12
material topics most relevant to our business, established three material ESG pillars and
engaged in a four-stage materiality assessment. This framework was applied for our 2023
report. In addition, we conducted a Double Materiality Assessment as a precondition to
compliance in 2024 with Corporate Sustainability Reporting Directive (“CSRD”)
requirements, assessing the impact of Besi on people and the environment as well as the
environmental and social-related risks and opportunities to which we are exposed. The
results of the analysis will be used to further validate our current approach to ESG-related
topics, make any necessary adjustments to our ESG strategy and comply with the CSRD’s
European Sustainability Reporting Standards (“ESRS”) in 2024. We also published a formal
policy on our website this year which provides a strategic view of Besi’s management
activities across the ESG aspects of our business. In addition, Ernst & Young Accountants
LLP provided reasonable assurance on our materiality assessment and limited assurance
on the Environmental, Social and Governance Report included in this Annual Report. Their
assurance report is included in Other Information.
In addition, our ESG ratings with the major publicly recognized agencies such as
Sustainalytics, S&P Global, ISS ESG and MSCI improved significantly in 2023, further
underscoring Besi’s progress towards best practice metrics. More specifically, we achieved
a rating of “AA” in the updated 2023 MSCI ESG Ratings Assessment, up from “A” in 2022 and
“BBB” in 2021. Further, in November 2023, Besi’s ESG Risk Rating declined to 14.4 as per
Sustainalytics versus 17.8 in 2021 highlighting long-term trend improvement. We also were
selected for inclusion as a component of the AEX ESG Index in 2022. Such index identifies
the 25 companies within the combined AEX (large cap) and AMX (mid cap) indices
demonstrating best in class ESG practices as per criteria assessed by Sustainalytics.
Further, progress continues to advance Besi’s sustainable product design as a core
component of our sustainable long-term value creation model. As such, we seek to design
leading edge assembly solutions with high levels of reliability, yield of defect free devices
and throughput with a lower total cost of ownership including efficiencies in energy and
material consumption. Toward this end, we developed an initiative named “Design-to-X”
this year as part of our strategic plan review which included input from our leading
customers and other stakeholders. This initiative combines Design-to-Cost and Design-
to-Sustainability concepts to identify ESG improvement opportunities in all product
groups while reducing the cost of many mature die attach and packaging platforms. It is in
its early stages and builds upon the environmentally friendly product design enhancements
identified in a collaborative project with the University of Applied Sciences and Arts
(Lucerne, Switzerland) (“UASA”) over the past three years. The UASA collaboration led to
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the creation of roadmaps with the potential to achieve absolute energy savings of
approximately 10% per die attach platform over the next five years. Such potential savings
are material as die attach revenue represented approximately 77% of Besi’s total revenue
in 2023. Growth in Besi’s installed base of hybrid bonding and other wafer level systems
also contributes to sustainable product design via an improvement in the overall
performance, speed, efficiency, cost and energy efficiency of such systems versus those
using leadframe and substrate assembly technologies.
In addition, we made considerable progress this year with employee and supplier
engagement with Besi’s ESG goals and objectives. Many of the defined goals, ambitions,
and activities we have promoted with such stakeholders since 2019 have been implemented
and well received by our organization. The results of our bi-annual Employee Engagement
survey conducted by Willis Towers Watson in 2023 further highlighted this progress. In
general, Besi scored above the high-tech norm in six of seven categories in this year’s
survey. Specifically, the survey had a high level of participation (94%) and engagement
(89%) by our employees. The engagement levels were five percentage points higher than
the sector’s benchmark. The survey results also indicated a high level of satisfaction with
our ESG credentials due to a high level of favorable responses to ESG category questions
(87%). This component scored four percentage points higher than the sector benchmark
and was our most improved category this year.
Besi also saw increased supply chain participation with respect to ESG topics via an
enhanced Besi ESG survey. In this regard, we conducted vendor site visits and stakeholder
interviews and circulated questionnaires at their principal Asian production facilities to
ensure that our suppliers as well as temporary and contracted third-party workers adhered
to the standards outlined in Besi’s Supplier Code of Conduct. We also engaged with our
supply chain through an ESG briefing roadshow, training sessions and the sharing of ESG-
related knowledge. In addition, Besi conducted an ESG assessment survey that focused on
Besi’s pillars of Environmental Impact, People Wellbeing and Responsible Business. Fifty-
five suppliers were sent this assessment survey with a response received from forty-six
(84%), representing approximately 50% of our total purchasing volume. Such responses
were used to create a grading system of either Low Risk, Medium Risk or High Risk. Moving
forward, Besi will incorporate this ESG scorecard into its periodic audit for annual suppliers.
Finally, the percentage of purchasing volume which answered the RBA Code of Conduct
Self-Assessment increased from 62% in 2022 to 66% 2023 marking further progress in our
supply chain engagement with Besi’s ESG activities.
Materiality assessment
In 2020, Besi’s management team identified 12 ESG topics most material to our business.
Such topics formed the basis of our ESG approach and foundation of three strategic pillars:
Environmental Impact, People Wellbeing and Responsible Business. In 2021, we conducted
a full assessment of the material topics identified in 2020 by engaging in a four-stage
materiality assessment involving an industry trend analysis (including consideration of
SASB standards for the semiconductor industry), peer group benchmarking, key investor
research and broader stakeholder outreach including employees, customers and suppliers.
The assessment served to substantiate Besi’s current strategy and understanding of
material topics with the collaboration of key stakeholder groups to validate their areas of
interest. In addition, the perspective of investors as a key stakeholder was captured in the
research phase and factored into the final assessment. The assessment highlighted a
variety of important themes that can have the most significant positive impact in the
near-term of which we prioritized four focus areas, (i) energy use and renewable energy, (ii)
sustainable design (iii) health and safety and (iv) diversity and inclusion.
Besi Austria employees participated in the Wings for Life World Run 2023.
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In 2023, Besi reviewed its 2021 materiality assessment and concluded that the material
topics identified were still valid. As a result, the same reporting framework was applied to
ESG reporting for 2023. Besi recognizes increased interest expressed by stakeholders to
report information as to their dependence on biodiversity and ecosystems. As a result,
these topics were included within our materiality assessment. We also began conducting
a Double Materiality Assessment in 2023 according to CSRD requirements as a precondition
to full compliance by year end 2024. Updated results of this assessment will be included in
Besi’s 2024 Annual Report.
Based on the aforementioned materiality assessment performed in 2021 and reviewed in
2023, the ranking of topics of importance per stakeholder group is listed below for each of
Besi’s three process pillars: Environmental Impact, People Wellbeing and Responsible
Business:
Material topics
Strategic Pillars Employees Customers Suppliers
1. Environmental Impact
1. Energy use and renewable energy
2. Carbon emissions
3. Sustainable design
4. Waste and hazardous waste disposal
5. Water use
Sustainable design
1. Energy use and renewable energy
Waste and hazardous waste disposal
4. Carbon emissions
5. Water use
1. Waste and hazardous waste disposal
2. Carbon emissions
3. Energy use and renewable energy
4. Sustainable design
5. Water use
2. People Wellbeing
1. Employee health and safety
2. Employee engagement
3. Diversity and inclusion
1. Employee health and safety
2. Diversity and inclusion
3. Employee engagement
1. Employee health and safety
2. Employee engagement
3. Diversity and inclusion
3. Responsible Business
1. Ethics and compliance
2. Responsible supply chain
3. Community impact
4. Tax practices
1. Ethics and compliance
2. Responsible supply chain
3. Tax practices
4. Community impact
1. Ethics and compliance
2. Responsible supply chain
3. Community impact
4. Tax practices
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Strategic pillars Material topics 2024 targets
*
2030 targets
*
Relevant
SDGs
Energy use and
renewable energy
15%
Reduction in
fuel consumption
11%
Increase in electricity
75%
Renewable energy
globally
25%
Reduction in
fuel consumption
25%
Increase in
electricity
100%
Renewable
energy globally
Carbon emissions
62%
Reduction in
Scope 1 & 2 carbon
emissions
12%
Reduction in Scope 3
carbon emissions
Net zero
Scope 1 & 2 emissions
20%
Reduction in
Scope 3 carbon
emissions
Waste and hazardous
waste disposal
15%
Reduction in
total waste
20%
Reduction in
hazardous waste
18%
Reduction in
total waste
20%
Reduction in
hazardous waste
Water use
2%
Reduction in water
consumption
5%
Reduction in water
consumption
Sustainable design
Develop priority targets for sustainable system design Achieve priority targets for sustainable system design
Diversity
and inclusion
Increase % female
employees in
workforce to
>
–
19%
Increase % female
employees in
management to
>
–
21%
Maintain % local
nationals in
management
>
–
86%
Increase % female
employees in
workforce to
>
–
20%
Increase % female
employees in
management to
>
–
23%
Maintain % local
nationals in
management
>
–
86%
Employee health
and safety
Safety incident record of
0
Employee
engagement and
career development
Maintain employee
engagement
>
–
85%
Remain above
high-tech benchmark
Increase investment in
employee training to
>
–
21
working hours per
employee per year
Maintain employee
engagement
>
–
85%
Remain above
high-tech benchmark
Increase investment
in employee training to
>
–
21
working hours per
employee per year
Ethics and
compliance
Whistleblower procedure in place. Prompt response to violations by Besi senior management
Responsible
supply chain
70%
Purchasing
Volume (“PV”)
audited
75%
PV to sign Self
Assessment
Questionnaire
in our Code of
Conduct
77%
PV to sign
General Work
Agreement
or General
Procurement
Contract
73%
PV to sign
Conflict-Free
Sourcing
Initiative
75%
PV audited
85%
PV to sign Self
Assessment
Questionnaire
in our Code of
Conduct
85%
PV to sign
General Work
Agreement
or General
Procurement
Contract
80%
PV to sign
Conflict-Free
Sourcing
Initiative
Community impact
Report on Besi hours volunteered, monetary donations and education projects supported
Tax practices
Comprehensive compliance with tax obligations where factual economic activities take place
People
Wellbeing
Responsible
Business
Environmental
Impact
Priority focus area
* All targets are based on estimated reductions relative to 2021 baseline levels.
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ESG Strategy
Within our three strategic pillars, Besi’s ESG strategy has identified twelve material topics
and formalized a range of short and long-term targets against which we have committed
to report. Besi follows the objectives of the UN Sustainable Development Goals (“SDGs”) in
such reporting whose 17 interlinked goals are designed to be a blueprint for achievement
by 2030 of a better and more sustainable future. SDG objectives help inform our thinking
and approach to sustainable business growth. We have aligned the SDGs to which we can
make the greatest contribution with our strategic pillars.
ESG initiatives
Since 2020, we increased the number of Besi’s ESG initiatives from 75 to 85 at year end
2023 (up 13%). Of the total initiatives identified, 65 have been completed and 20 are
ongoing or scheduled to be implemented over the next few years. The charts below indicate
the distribution of ESG initiatives per major pillar and Besi’s progress against such
initiatives.
ESG topics and initiatives are widely supported by Besi employees at all levels of the
organization including management, development personnel and production staff.
20
13
65
21
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Completed initiatives
Planned + ongoing initiatives
Environmental impact
People wellbeing
Responsible business
Initiatives implemented during 2023 include:
Environmental Impact:
• All business units
• Inception of Design-to-X initiative to incorporate Design-to-Cost and Design-to-
Sustainability concepts in product design and development.
• Besi APac
• Reduced shipments from Besi Netherlands to Besi APac to once a week versus twice
a week.
• Purchase of renewable electricity at new Glenmarie, Malaysia site.
• Besi Netherlands
• Increased lighting energy efficiency at our Meco facility.
• Installation of smart meters at Meco facility to improve energy management.
• Completion of wastewater treatment project with Copernicus Institute, Utrecht, the
Netherlands, to measure ecological footprint of Besi’s plating systems.
• Reduction of paper waste through sustainable procurement initiative with 70% of
total waste now recycled at this site.
• Besi Austria
• Expansion of existing solar PV system to reduce energy consumption.
• Installation of groundwater heat pump to replace gas usage.
• Besi Switzerland
• Implementation of joint project with UASA Switzerland, which identified potential
energy savings for die attach platforms of approximately 10%.
• Expansion of LED lighting system.
• Besi Leshan
• Installation of centrifuge to reduce water consumption via recycling.
• Purchase of EV vehicles to replace ICE vehicles.
• Installed EV charging points for corporate and employee use.
People Wellbeing
• Six of seven Besi operations are now ISO 45001 compliant. Besi Leshan received external
validation in 2023.
• Active engagement in diversity-related recruitment programs.
• Bi-annual employee engagement survey:
• Survey indicated that employees feel safe in their current physical working environment,
there is effective collaboration between departments to meet customer needs and
a strong feeling of trust exists between team members.
• Employees also had a strong understanding and motivation to contribute to Besi’s
business and ESG objectives.
• Results will be used to improve areas in which we under-performed.
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Responsible Business
• Conducted ESG assessment survey with suppliers focused on Environmental Impact,
People Wellbeing and Responsible Business pillars.
• Fifty-five suppliers were engaged with a response rate of 84% representing approximately
50% of total purchasing volume.
• Continued annual third-party external supplier audits for all significant production and
development facilities with respect to their ISO 9001, ISO 14001, ISO 45001 and RBA
capabilities.
• Supported activities and charities in our local communities, particularly in Malaysia,
China, Switzerland, the Netherlands and Austria.
ESG topics and initiatives are widely supported by Besi employees at all levels of the
organization including management, development personnel and production staff.
ESG governance
Besi’s ESG focus and strategic initiatives are integrated into its operations. The Board of
Management is responsible for setting our ESG strategy and targets as well as its
implementation and execution. The Supervisory Board has oversight responsibility for
Besi’s ESG strategy. In addition, ESG issues are assessed monthly by the management
team including resource allocation and capital investment.
As such, Besi’s ESG governance and approach is fully aligned with its hierarchal structure.
SVPs and facility management monitor and track progress against ESG-related goals.
Progress is then reported to the Board of Management and discussed in detail at Besi’s
monthly management meeting. Incentives for all such employees are aligned with
performance against certain specific ESG targets which forms a portion of their variable
compensation. The Supervisory Board is updated by the Board of Management as to Besi’s
progress on a quarterly basis.
All of Besi’s production sites have environmental, health and safety (“EHS”) officers and
committees and a health and safety management structure. These committees have
representatives from each department responsible for the inspection, enforcement and
promotion of EHS matters in the workplace. EHS inspections are conducted quarterly to
identify and address any unsafe acts and conditions which may exist. Employees also
regularly receive EHS training. In addition, we have implemented externally certified ISO
9001 and ISO 14001 management systems to manage quality and environmental topics as
well as health and safety topics in our operations. Six of seven Besi product operations
have received ISO 45001 certificates of approval for their occupational health and safety
management systems with all expected to have received such certification by the end of
2024.
ESG reporting framework
Reporting scope
The data in this ESG report covers all entities that belong to the scope of the Consolidated
Financial Statements (see Note 2 to the Consolidated Financial Statements, section
"Principles of consolidation") excluding the following “Environmental Impact” data:
• Energy data for four and water data for seven sales and service offices due to their
immaterial significance.
• Energy, emission, water and waste-related data for our operations in Vietnam due to
their immaterial significance this year.
Besi is continuously enhancing its ESG methodology and data collection so as to identify
all material impacts for inclusion in the ESG report. For example, our Scope 3 CO₂ emissions
from inbound freight at our Dutch plating research and development site were added in
2023. Comparable numbers for prior years were not adjusted due to a lack of available data.
External reporting frameworks
As part of our expanded reporting activities, we have analyzed appropriate external
frameworks to enhance and broaden Besi’s ESG strategy. We have aligned our reporting
principles with them as much as possible to ensure that Besi’s reporting is appropriately
aligned with its business and operations.
Besi has prepared the sustainability information in this Annual Report with reference to
the GRI universal standards for the 1. Foundation, 2. General disclosures and 3. Material
topics including the reporting principles as included in chapter 4 of GRI 1. Foundation.
We refer to Annex 2 of our 2023 ESG report for our GRI content index 2023 available at
www.besi.com.
In addition, the Sustainability Accounting Standards Board (“SASB”) published 77 industry
standards to enable business to communicate material sustainability information to their
investors. We believe that the semiconductor industry-specific standards and metrics
provided by the SASB¹ are appropriate for a company of Besi’s business and size. When
material topics are not covered by SASB, we apply topic specific disclosures from the
Global Reporting Initiative (“GRI”) and/or our own developed criteria whenever possible.
A majority of the requisite information for GRI compliance is available and presented on
our website including a list of the key topics, metrics and disclosures necessary for
compliance with SASB as well as a list of material topics with their respective reporting
criteria (Annex 1 of our 2023 ESG Report). In addition, we intend to assess the applicability
of other frameworks such as the IFRS Sustainability Disclosure Standards of the
International Sustainability Standards Board (“ISSB”) and the Taskforce for Nature-related
Financial Disclosures (“TNFD”).
1
The SASB Standards became a resource of the IFRS Foundation as of August 1, 2022, upon consolidation of the Value
Reporting Foundation (which housed the SASB Standards and the Integrated Reporting Framework) into the IFRS
Foundation.
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The CSRD is effective for Besi as of January 1, 2024. As such, we will be required to report
in accordance with the European Sustainability Reporting Standards (ESRS) in Besi’s 2024
Annual Report (published in 2025). In 2023, Besi initiated its CSRD compliance activities,
implementing various actions to ensure readiness on a timely basis. For instance, we
started to assess material topics by means of a ‘double materiality assessment’ according
to ESRS requirements. During 2024, we will conduct a gap assessment against the final
standards and develop an implementation roadmap to ensure compliance.
Additionally, we published both a new ESG policy and a Diversity and Inclusion policy which
can be found on our website. The ESG policy aims to address the material topics involved
in our business in alignment with our long-term value creation strategy for stakeholders
while conducting our business in a sustainable way, respecting both the environment and
society. The Diversity and Inclusion policy outlines what diversity and inclusion means to
Besi, our goals and what we are doing to promote a diverse and inclusive business culture.
Such policies will be updated following completion of our Double Materiality Assessment
and gap analysis versus ESRS standards.
EU Taxonomy
The EU Taxonomy Regulation (EU 2020/852) (“EU Taxonomy”) is a green classification
system that determines which economic activities can be considered environmentally
sustainable under the EU framework. It helps companies, investors, and other stakeholders
identify and invest in activities that contribute to sustainable objectives.
The EU Taxonomy establishes six environmental objectives, each supported by subsequent
delegated acts that define related activities and determine technical screening criteria
(“TSC”):
• Climate change mitigation (“CCM”).
• Climate change adaptation (“CCA”).
• Sustainable use and protection of water and marine resources (“WTR”).
• Transition to a circular economy (“CE”).
• Pollution prevention and control (“PPC”).
• Protection and restoration of biodiversity and ecosystems (“BIO”).
The EU Taxonomy requires that any undertaking which is subject to Directive 2013/34/EU
report on its alignment with the EU Taxonomy’s objectives². The relevant Key Performance
Indicators (“KPIs”) for eligibility and alignment are reported as the proportion of turnover,
capital expenditure (“CapEx”) and operating expenses (“OpEx”). In 2022, the required
disclosure was limited to eligibility and alignment assessment for CCM and CCA activities.
Starting in 2023, the disclosure requirement has been expanded to also include the
eligibility of activities for the remaining four objectives.
BESI’S ESG RATING TRENDS
ESG Rating Agent 2021
Score
2022
Score
2023
Score
Current
Ranking
‘BBB’ ‘A’ ‘AA’
Second highest
possible MSCI ESG
rating
17.8 15.6 14.4
12
th
out of 342
semiconductor
related companies
C- C- C
Top 10% of
industry
39 47 50
Above industry
average (score 21)
Besi’s accounting principles for determining turnover, capital expenditures and operating
expenses under the EU Taxonomy are aligned with the accounting principles included in
Note 2 to the Consolidated Financial Statements. Operating expenses as per the EU
Taxonomy have a different definition and are included as a subset of the operating
expenses reported in the Consolidated Financial Statements.
Circular economy
This year, Besi extended the scope of the EU Taxonomy assessment to the activities
outlined in the Environmental Delegated Act that came into force in June 2023. Besi has
identified the following revenue streams and associated economic activities under the
Circular Economy objective:
• Manufacture of electrical and electronic equipment (CE 1.2), associated with Besi’s core
activity of manufacturing semiconductor assembly equipment.
• Repair, refurbishment, and remanufacturing (CE 5.1), associated with the extended
warranty service on the machines purchased from Besi in the past.
The proportion of the EU Taxonomy eligible revenue is determined as the part of the net
turnover derived from our products and services associated with CE 1.2 “Manufacture of
electrical and electronic equipment” and CE 5.2 “Repair, refurbishment and
remanufacturing”, divided by the net turnover. In addition, Besi derives a portion of its
revenue from the sale of spare parts. However, in the absence of more granular financial
reporting information, Besi is unable to distinguish between spare parts and wear and tear
² The EU Taxonomy Regulation (EU) 2020/852 as supplemented with Commission Delegated Regulation (EU) 2021/2139,
Commission Delegated Regulation (EU) 2021/2178, Commission Delegated Regulation (EU) 2023/2485 and Commission
Delegated Regulation (EU) 2023/2486.
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components (referred to as consumables), a distinction explicitly outlined in the description
of economic activity “Sale of spare parts (CE 5.2)”. As a result, Besi has opted for a more
conservative approach by not reporting eligibility for this revenue stream. This category
will be further examined in the future.
Besi concluded that a portion of the CapEx associated with manufacturing equipment is
essential to its revenue-generating activities. As a result, the investments associated
with Besi’s R&D are classified under the activity “Manufacture of electrical and electronic
equipment (CE 1.2)”. The denominator for the CapEx KPI includes additions to tangible and
intangible assets during the financial year.
Besi further concluded that a portion of the OpEx associated with the non-capitalized R&D
costs is related with its core activity of manufacturing semiconductor assembly equipment.
As a result, these OpEx are classified under the activity “Manufacture of electrical and
electronic equipment (CE 1.2)”. Total OpEx in the scope of the EU Taxonomy are determined
based on the non-capitalized costs associated with R&D, building renovation, short-term
leases, maintenance and repair activities and any other direct expenditures related to the
day-to-day servicing of property, plant and equipment.
The Environmental Delegated Act only mandates the disclosure of eligible amounts under its
specified objectives for 2023. Reporting on alignment is required in 2024. Besi has proactively
conducted a preliminary alignment assessment of activities pursuant to the Circular Economy
objective, as a substantial portion of Besi's revenue falls within the scope of these activities.
However, it is unlikely that Besi will report high levels of alignment next year in the absence
of EU Ecolabels for machines manufactured by Besi and the extensive substantial contribution
and Do Not Significant Harm (“DNSH”) criteria required for the activity pursuant to CE 1.2.
Climate change mitigation
In 2023, Besi made investments to modernize its energy generation system at its site in
Austria by installing heat pumps and solar panels. As a result, Besi allocated related CapEx
to the activities outlined under the category “Installation, maintenance and repair of
renewable energy technologies (CCM 7.6)”.
To evaluate the alignment of its investments as per CCM 7.6, Besi conducted a detailed
examination of Technical Screening Criteria. Besi is taking a conservative approach with
regard to reporting alignment to CCM 7.6 due to insufficient evidence pertaining to the
DNSH criteria for CCA, although the investments in both heat pumps and solar panels
meet the substantial contribution criteria. In particular, the DNSH requires a comprehensive
physical climate risk assessment for sites hosting renewable energy installations. We
believe the granularity of the climate risk assessment performed by Besi in 2022 under the
Task Force on Climate-related Financial Disclosures (“TCFD”) falls below the expectations
set forth in the EU Taxonomy framework. As such, Besi intends to revisit the assessment
in 2024 to ensure that potential future investments align with the criteria.
Key Performance Indicators
In the aggregate, 82% of Turnover was eligible under CE objectives, 66% of CapEx were
eligible under CCM and CE objectives, and 51% of OpEx were eligible under CE objectives. In
2024, Besi will continue to assess revenue, capital expenditures and operating expenses
for eligibility and alignment in accordance with the EU Taxonomy.
International Women’s Day, Besi Singapore.
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Turnover
Financial year N 2023 Substantial Contribution Criteria DNHS criteria
Economic Activities (1)
mEUR % Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable
activities (Taxonomy-aligned)
n/a
Turnover of environmentally
sustainable activities (Taxonomy-
aligned) (A.1)
– 0% 0%
of which Enabling 0% 0% E
of which Transitional 0% 0% T
A.2 Taxonomy-eligible but not
environmentally sustainable (not
Taxonomy-aligned activities)
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
Manufacturing of electric and
electronical equipment
CE 1.2 472.2 82% N/EL N/EL N/EL N/EL EL N/EL n/a
Repair, refurbishment, and
remanufacturing
CE 5.1 2.5 0% N/EL N/EL N/EL N/EL EL N/EL n/a
Turnover of Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
474.7 82% 0%
A. Turnover of Taxonomy-eligible
activities (A.1+A.2)
474.7 82% 0%
B. TAXONOMY-NON-ELIGIBLE
ACTIVITIES
Turnover of Taxonomy-non-eligible
activities
104.2 18%
Total 578.9 100%
Code (2)
Turnover (3)
Proportion of Turnover,
year N (4)
Climate Change
Mitigation (5)
Climate Change
Adaptation (6)
Water (7)
Pollution (8)
Circular Economy (9)
Biodiversity (10)
Climate Change
Mitigation (11)
Climate Change
Adaptation (12)
Water (13)
Pollution (14)
Circular Economy (15)
Biodiversity (16)
Minimum Safeguards
Proportion of Taxonomy-
aligned (A.1) or eligible (A.2)
Turnover, year N-1 (18)
Category enabling
activity (19)
Category transitional
activity (20)
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CapEx
Financial year N 2023 Substantial Contribution Criteria DNHS criteria
Economic Activities (1)
mEUR % Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable
activities (Taxonomy-aligned)
n/a
CapEx of environmentally sustainable
activities (Taxonomy-aligned)
– 0% 0%
of which Enabling 0% 0% E
of which Transitional 0% 0% T
A.2 Taxonomy-eligible but not
environmentally sustainable (not
Taxonomy-aligned activities)
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
Installation, maintenance and repairs
or renewable energy technology
CCM
7.6
0.4 1% EL N/EL N/EL N/EL N/EL N/EL n/a
Manufacturing of electric and
electronical equipment
CE 1.2 21.1 65% N/EL N/EL N/EL N/EL EL N/EL n/a
CapEx of Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
21.5 66% 0%
A. CapEx of Taxonomy-eligible
activities (A.1+A.2)
21.5 66% 0%
B. TAXONOMY-NON-ELIGIBLE
ACTIVITIES
CapEx of Taxonomy-non-eligible
activities
10.9 34%
Total 32.4 100%
Code (2)
CapEx (3)
Proportion of CapEx,
year N (4)
Climate Change
Mitigation (5)
Climate Change
Adaptation (6)
Water (7)
Pollution (8)
Circular Economy (9)
Biodiversity (10)
Climate Change
Mitigation (11)
Climate Change
Adaptation (12)
Water (13)
Pollution (14)
Circular Economy (15)
Biodiversity (16)
Minimum Safeguards
Proportion of Taxonomy-
aligned (A.1) or eligible (A.2)
CapEx, year N-1 (18)
Category enabling
activity (19)
Category transitional
activity (20)
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OpEx
Financial year N 2023 Substantial Contribution Criteria DNHS criteria
Economic Activities (1)
mEUR % Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable
activities (Taxonomy-aligned)
n/a
OpEx of environmentally sustainable
activities (Taxonomy-aligned)
– 0% 0%
of which Enabling 0% 0% E
of which Transitional 0% 0% T
A.2 Taxonomy-eligible but not
environmentally sustainable (not
Taxonomy-aligned activities)
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
Manufacturing of electric and
electronical equipment
CE 1.2 19.2 51% N/EL N/EL N/EL N/EL EL N/EL n/a
OpEx of Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
19.2 51% 0%
A. OpEx of Taxonomy-eligible
activities (A.1+A.2)
19.2 51% 0%
B. TAXONOMY-NON-ELIGIBLE
ACTIVITIES
OpEx of Taxonomy-non-eligible
activities
18.5 49%
Total 37.7 100%
Code (2)
OpEx (3)
Proportion of OpEx,
year N (4)
Climate Change
Mitigation (5)
Climate Change
Adaptation (6)
Water (7)
Pollution (8)
Circular Economy (9)
Biodiversity (10)
Climate Change
Mitigation (11)
Climate Change
Adaptation (12)
Water (13)
Pollution (14)
Circular Economy (15)
Biodiversity (16)
Minimum Safeguards
Proportion of Taxonomy-
aligned (A.1) or eligible (A.2)
OpEx, year N-1 (18)
Category enabling
activity (19)
Category transitional
activity (20)
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Green activity by our customers
We deliver systems which can potentially be used by our customers for a variety of
environmentally friendly applications as set forth in the following table:
Potential green activity
by our customers
Application Contribution by Besi
Power transmission Electrical
vehicles
• Our new equipment generations are used in the fabrication of advanced power packages for automotive and industrial applications
enabling more efficient power conversion and reduced power dissipation.
Communication 5G cellular
networks
• Our advanced SiP technologies allow for faster, more secure, more efficient and higher bandwidth transmission and reception in 5G
advanced cellular networks.
More efficient high-end
computing
Data centers
Mobile
Phones
Edge/AI
Phones
Gaming
Autonomous
driving
• Our next generation die bonding systems allow for ever greater contact density per chip or SiP. As such, they require less power usage and
heat dissipation for data transfer and provide a reduction of overall power usage per bit for both data center and autonomous driving
applications.
• The progress achieved by our hybrid bonding development has also led to significant improvements relative to the energy efficiency,
material consumption and reduced heat dissipation realized by our end-customers versus substrate and leadframe assembly.
• Our system development for the assembly of integrated photonics and co-packaged optics can reduce power consumption in data centers.
Less waste General • We continuously optimize our systems for reduced material consumption during customer operation in the areas of epoxy and molding
compounds as well as the conversion to water-based chemicals in our plating process technologies as a means of reducing waste.
• Our wafer level systems also facilitate the usage of chiplets in device architectures which also can significantly reduce material
consumption.
• We increase the throughput and yield and reduce the waste generation of our systems during customer operation by shortening learning
curves and reducing operator interaction.
Circular economy General • We offer upgrades, retrofits and conversion kits to customers to extend the useful lives of our systems.
• Some of our equipment has been running at customer sites for more than ten years.
• Some customers sell our equipment to third parties in the secondary market further extending the useful lives of our systems.
• We reduce the energy consumption of our systems with comparable output by optimizing process cycles and component selection.
• We work with scientific institutes to further optimize our systems’ material and energy usage and increase their recycling potential.
• We reduce transport-based emissions via local manufacturing and the usage of alternative freight methods.
• We re-use packaging in our operations to reduce waste and enhance sustainability.
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TCFD
Besi recognizes the adverse effects caused by the emerging climate change crisis and
carefully monitors the impact of climate change on our operations. In addition, we
recognize increasing interest from customers and investors on climate topics and support
the activities of the Taskforce on Climate-Related Financial Disclosures (“TCFD”). Our
objective is to comply with its recommendations to provide greater transparency in the
reporting of climate-related risks and opportunities. Additionally, we have used TCFD’s
guidance and conducted a climate change risk assessment using various scenarios to
inform the development of Besi’s climate strategy.
Besi has made certain climate-related disclosures versus TCFD recommendations as part
of this Annual Report. An overview of all TCFD topics and relevant disclosures including the
climate-related scenario analysis used for compliance with TCFD, are available in Besi’s
ESG Report that can be found at www.besi.com.
Our key stakeholders
Besi regularly engages with stakeholders to identify business and performance
opportunities, issues and risks in order to better assess its long-term sustainable value
creation model. Insights are gathered through a variety of channels including dialogue
with investors and customers, management reviews, employee surveys and internal and
external audits. We listen to our stakeholders, strive to be as responsive as possible and
to exceed their expectations.
We identify key stakeholders according to Besi’s impact on their interests as well as their
ability to influence our strategy and objectives. Our key stakeholders include shareholders,
suppliers, customers, employees, local communities, society and local governments.
Stakeholder group Why we engage How we engage
Shareholders • Shareholders expect Besi to protect their investment and
provide a competitive return on capital while operating
responsibly as a corporate citizen.
• Both existing and new investors have shown increased
interest in ESG and have specific ESG criteria with which to
evaluate Besi’s performance.
• Shareholders are engaged through an active investor relations program including quarterly and
annual conference calls, roadshows, conferences, analyst presentations and Besi’s Annual
General Meeting (“AGM”).
• We maintain close contact with investors in Europe, North America and Asia.
• We conduct regular meetings with investment professionals and encourage them to ask
questions during our earnings calls, meetings, conferences and at our AGM.
• We engage in important face-to-face dialogue and receive valuable feedback about our business
and ESG topics.
• We posted a formal ESG policy on our website to better inform shareholders and analysts as to
Besi’s material topics and activities.
Suppliers • Maintaining a responsible supply chain is an important part
of our Responsible Business pillar.
• A high quality, flexible and scalable supply chain is critical to
satisfying customer needs in a cyclical business and to the
long-term success of our business.
• We seek to build long-term, mutually beneficial relationships
with our suppliers.
• We are expanding our efforts to ensure that all suppliers can
match Besi’s own environmental and ethical standards.
• We engage with suppliers through direct dialogue, site visits and audits.
• We perform annual third-party external audits for all significant production and development
facilities with respect to supplier ISO 9001, ISO 14001, ISO 45001, and RBA capabilities.
• We work together with suppliers to lower our joint environmental footprint, create sustainable
products and supply chains and assess and mitigate social, health, safety and ethical risks.
• In 2023, we conducted an ESG roadshow and provided training sessions for key suppliers to
increase their ESG-related knowledge. We also asked 55 material suppliers to respond to an
ESG assessment survey to which 84% responded.
• We have begun engagement with suppliers as to the origin of their imported steel and iron
supplies due to new EU restrictions.
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Stakeholder group Why we engage How we engage
Customers • Building strong relationships is important to attract
customers and to our revenue growth.
• Providing superior customer support is critical to maintaining
strong relationships.
• Besi’s customers increasingly seek products that are
sustainable, environmentally friendly and ethically produced.
• Our ESG strategy is formulated with sustainable design as a
key component.
• Customer satisfaction is an important measure to gauge customer fulfilment.
• We have a very experienced team of 268 sales and service people globally which maintain
customer relationships and engage key customers on topics such as device roadmaps, assembly
equipment requirements and future market trends.
• We conduct annual customer satisfaction surveys to assess existing relationships and identify
areas for improvement.
• Customer satisfaction scores have increased over the past five years. In 2023, customers were
particularly satisfied with the reliability, durability and performance of Besi’s systems.
• We engage with customers to ensure that our products meet their environmental and social
standards.
• We conduct sustainable design training on a regular basis in both Austria and Switzerland to
help engineers promote sustainable design in next generation product development.
Employees • Besi considers satisfied and engaged employees as a key
ingredient for its successful growth.
• Employees expect Besi to have high social and ethical
standards in the conduct of its business.
• Employees also expect us to provide them with equal
treatment and opportunities, safe working conditions and
career development potential.
• Our ESG performance and engagement will become
increasingly important in attracting and retaining talent.
• We promote an atmosphere of open dialogue between managers and employees. During
performance appraisals, both employees and managers are encouraged to voice their concerns
in a collegial exchange.
• Employee interests are also communicated in a more institutional way via local European Works
Council representations.
• We conduct Town Hall meetings for all employees on a quarterly basis to inform them as to
current business and financial developments.
• We have launched ESG resource pages in certain locations to educate and engage our employees
about Besi’s ESG strategy and progress.
• We conduct bi-annual employee engagement surveys. Our most recent 2023 survey reported a
high level of participation (94%) and engagement (89%).
Local communities,
governments and
society
• Besi relies on the health, wellbeing and stability of local
communities in the regions where we operate.
• We aim to have a positive impact on communities through
good corporate and employee conduct.
• Society expects Besi to respect national and international
laws and regulations, positively impact local communities
and provide transparency on economic, environmental and
social topics.
• Besi invests in many community projects, particularly in Asia.
• Senior managers review any concerns raised by local communities. They try to communicate any
issues which may arise to all stakeholders as well as best practices for successful resolution.
• We abide by appropriate social, ethical and environmental standards in our operations.
• We meet or exceed minimum legal and regulatory compliance levels.
• We engage in responsible tax practices.
• We pay our fair share of taxation in all jurisdictions in which we have operations.
• Local governments expect compliance with local laws, regulations and care for the health,
safety and security of their communities.
• Many countries pay close attention to ESG topics in light of increased concern over serious
environmental issues.
• We use international social and ethical standards wherever possible in all our operations.
• We participate in dialogue with local chambers of commerce as appropriate.
• We do not participate in lobbying activities or make political contributions.
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ENVIRONMENTAL IMPACT
Besi is committed to reducing its environmental impact, resource consumption and the
carbon footprint of its operations which includes increasing the sustainability of the
components, modules and systems we produce and purchase from third parties. Material
topics of this pillar include a reduction of carbon emissions and overall usage of energy,
waste, water and hazardous materials. It also focuses on integrating sustainable design
processes into Besi’s development activities and increasing the utilization of renewable
energy sources. We updated our targets for 2024 and 2030 in 2022 and updated the base
year for target setting from 2019 to 2021, as a result of Besi’s successful performance
versus prior targets. In 2023, the Supervisory Board approved a company-wide ESG policy
for publication on our corporate website outlining Besi’s commitment to climate change
mitigation, energy efficiency, renewable energy deployment, waste reduction, re-use and
recycling. In addition, we set an objective of reaching net zero greenhouse gas emissions
in our operations by 2030, incorporating all Scope 1 & 2 emissions.
Set forth below are Besi’s material topics related to its Environmental Impact process
pillar, progress in 2023, progress against Besi’s targets relative to the 2021 baseline and its
targets for 2024:
Material topic 2023 progress update versus 2022 2023 progress update versus 2021 base year 2024 target versus 2021 base year
Energy use and
renewable energy
• Fuel consumption intensity increased by 10% but declined on an
absolute basis (14%).
• Electricity consumption intensity increased by 48% and an increase
of 21% on an absolute basis.
• 100% renewable energy achieved at European operations which
was comparable to 2022.
• Renewable energy utilized globally declined from 76% to 71%.
• Reporting against TCFD framework continued with relevant
disclosures wherever possible.
Projects realized:
• Purchase of renewable electricity at new Glenmarie, Malaysia site.
• Expansion of existing solar PV system and installation of
groundwater heat pump to replace gas usage at Besi Austria.
• Increased lighting energy efficiency at Besi Netherlands.
• Expansion of LED lighting system at Besi Switzerland.
• Installation of smart meters at Meco facility in the Netherlands.
• Fuel consumption: Fuel intensity of 3.2 Kwh/
€million revenue was roughly equal to 2021.
• Electricity consumption: Electricity intensity
increased to 34 Kwh/€million revenue versus 21 Kwh/
€million revenue in 2021 (+62%).
• Renewable energy in Europe increased to 100%
versus 92% in 2021.
• Renewable energy utilized globally increased to 71%
in 2023 versus 20% in 2021.
• 15% reduction in fuel
consumption intensity.
• 11% increase in energy
consumption intensity due to
increased cleanroom
requirements.
• 75% renewable energy
utilized globally.
Suppliers Day at Besi APac, Malaysia.
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Material topic 2023 progress update versus 2022 2023 progress update versus 2021 base year 2024 target versus 2021 base year
Carbon emissions • Scope 1 & 2 emissions intensity increased from 5.2 to
8.9 tCO₂/€million revenue (+71%).
• Absolute Scope 1 & 2 emissions increased from 3,755 to
5,124 tCO₂ (+36%).
• Scope 3 emissions intensity increased from 13.6 to 17.0
tCO₂e/€million revenue (+25%).
• Absolute Scope 3 emissions roughly equal: from 9,817 tCO₂e
to 9,843 tCO₂e.
Projects realized:
• Increased utilization of renewable energy in our Malaysian facilities.
• EV vehicles purchased in China to replace petrol-based ICE vehicles.
• Reduced shipments from Besi Netherlands to Besi APac to once a
week versus twice per week.
• Scope 1 & 2 emissions intensity
of 8.9 tCO₂/€million revenue decreased versus
14.4 tCO
2
/€million revenue in 2021 (-38%) mainly
as a result of the accelerated implementation of
renewable energy usage in Asia.
• Absolute Scope 1 & 2 emissions reduced from 10,812
tCO₂ in 2021 to 5,124 tCO₂ (-53%).
• Scope 3 emissions intensity rose from 15.9
tCO₂e/€million revenue in 2021 to
17.0 tCO₂e/€million revenue (+7%).
• Absolute Scope 3 emissions declined reduced from
11,942 tCO₂e in 2021 to 9,843 tCO₂e (18% reduction).
• 62% reduction in Scope 1 & 2
carbon emissions intensity.
• 12% reduction in Scope 3
carbon emissions intensity.
Waste and
hazardous waste
disposal
• Total waste intensity increased from 319 to 430 kg/€million
revenue (+35%) due to completion of cleanroom facilities in
Singapore and Malaysia.
• Absolute total waste disposal increased by 8% mainly due to
scrapping activities in Besi APac and Besi Austria.
• Hazardous waste decreased by 8% in absolute terms.
• Reduced paper waste at Besi Netherlands through sustainable
procurement initiative with 70% of total waste now recycled
at this site.
• Total waste intensity of 430 kg/€million revenue
increased versus 316 kg/€million revenue (+36%).
• Absolute total waste increased by 5%.
• Absolute hazardous waste decreased by 33%.
• 15% reduction in total waste
intensity.
• 20% reduction in hazardous
waste.
Water withdrawal • Water withdrawal intensity increased from 46 to 51 m
3
/€million
revenue (+11%).
• Absolute water withdrawal decreased by 9%.
• Use of centrifuge at China facility to increase water recycling.
• Water intensity of 51 m
3
/€million revenue increased
by 24% versus 41 m
3
/€million revenue in 2021.
• Absolute water withdrawal decreased by 3%.
• 2% reduction in water
withdrawal intensity.
Sustainable
design
• Projects underway to analyze product lifecycles in multiple product
groups.
• Finished wastewater treatment project in collaboration with
Copernicus Institute of Sustainable Development at Utrecht
University, the Netherlands, to measure ecological footprint of
Besi’s plating systems.
• Launch of Design-to-X initiative to incorporate a Design-to-Cost
and Design-to-Sustainability philosophy in product design.
• Roadmaps, priorities and initiatives developed for
sustainable system design in accordance with
targets.
• Develop additional targets for
sustainable system design.
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SDG alignment
The following SDGs align with the Environmental Impact pillar of Besi's ESG strategy:
Goal/description How we contribute
Ensure access to affordable, reliable,
sustainable and modern energy for all.
We increased the percentage of renewable energy used across our operations to 71% in 2023 which was significantly above the
25% renewable energy target for 2022. On track to meet the revised 2024 target of 75%.
Build resilient infrastructure, promote
inclusive and sustainable industrialization
and foster innovation.
We conduct life cycle assessments as a means of reducing our products’ environmental footprint while increasing their efficiency
and recyclable content. Toward this end, we have collaborative projects underway with several European universities and launched
an initiative called Design-to-X to increase Besi’s sustainable system design for each successive product generation.
Ensure sustainable consumption and
production patterns.
The availability and conservation of natural resources is one of today’s largest global challenges. We accept our responsibility by
concentrating on the procurement of environmentally friendly materials, reducing waste and packaging in our supply chain for
product manufacturing and increasing our participation in the circular economy.
Take urgent action to combat climate
change and its impacts.
We recognize the urgent global challenge of reducing greenhouse gas emissions. We contribute to this effort by investigating
innovative systems and solutions to help reduce emissions during their entire use phase and by providing a transparent overview
of greenhouse gas emissions as part of our Annual Report. In this regard, we significantly outperformed the 2022 targets for
Scope 1, 2 and 3 emissions and fuel and electricity intensity against a 2019 baseline. In 2022, we set new challenging targets for
achievement by 2024 and 2030 against a 2021 baseline. We aim to reach net zero greenhouse gas emissions in our operations by
2030, incorporating all Scope 1 & 2 emissions. Our long-term objective is to reach net zero carbon emissions by 2050 in recognition
of the global ecological and societal imperatives caused by climate change.
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Energy use and renewable energy
We seek to decrease our energy usage via a reduction of fuel and electricity consumption
and increased utilization of renewable energy sources.
FUEL CONSUMPTION
Target
(based on 2021 baseline)
2.5
2.1
1.8
Fuel
Relative to revenue
2.1
2.8
Target
2019
2020
2021 2022 2023 2024
2030
4
3
2
1
0
GWh
KWh/€ million revenue
20
15
10
5
0
3.3
5.9
6.4
3.2
2.5
2.8
Relative target 2024
Target fuel consumption intensity 2024
2.9
ELECTRICITY CONSUMPTION
Renewable energy
Relative to revenue
Non-renewable energy
Target renewable energy
Target non-renewable energy
2019
2020
2021 2022 2023 2024
2030
20
15
10
5
0
GWh
KWh/€ million revenue
100
75
50
25
0
Relative target 2024
Target electricity consumption intensity 2024
Target
(based on 2021 baseline)
80%
20%
15.6
82%
18%
14.0
80%
20%
13.5
21
24%
76%
16.5
29% 25%
71% 75% 100%
19.9
23
26
23
34
31
39
In 2023, Besi's absolute fuel consumption declined by 14% versus 2022. However, Besi’s
electricity consumption increased on both an absolute and relative intensity basis
compared to 2022 due to the expansion of a new production site in Glenmarie, Malaysia,
the completion of cleanrooms at our Singapore and Malaysia facilities. In addition, Besi’s
percentage of renewable energy utilized in 2023 decreased versus 2022 due primarily to
the limited availability of renewable energy at the Glenmarie site in the first half of 2023.
However, we were able to purchase renewable electricity for this site in the second half of
2023 and will continue to do so in 2024. As a result, we expect to meet the 2024 target for
this KPI. At present we purchase 100% of our electricity needs from renewable source at
all our European operations.
Groundwater heat pump project at Besi Austria
During 2023, we invested in a groundwater heat pump at Besi’s Radfeld, Austria facility
to replace natural gas usage for its central heating system. The project’s aim, in the
best-case scenario, is to fully substitute gas usage with renewable heat generation and
to reduce gas usage on an annual basis by approximately 50,000m³, or approximately
100 tCO₂ emissions. The project is expected to be operational in the first quarter of
2024.
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Carbon emissions
Reducing Besi’s carbon footprint is a key focus of our ESG strategy. In reporting carbon
emission levels, we have adopted the standards and methodology put forth by the
Greenhouse Gas Protocol, an independent standard which divides emissions into three scopes:
•
Scope 1 emissions:
cover direct greenhouse gas (“GHG”) emissions resulting from day-to-
day business activities. This category includes on-site fuel combustion such as gas
boilers as well as manufacturing, transport and fugitive emissions.
•
Scope 2 emissions:
cover indirect GHG emissions which result from the electricity, heat
and steam we purchase from external sources.
•
Scope 3 emissions:
include our emissions resulting from upstream and downstream
transportation, business flights and non-renewable electricity consumption,
transmission and distribution losses and well-to-tank, except for the exclusions as
mentioned in the Reporting Scope section.
Our ambition is to reduce carbon emissions intensity (carbon emissions/revenue) across
all three reporting scopes. We exceeded targets in 2022 set in 2019 and intend to meet or
exceed more challenging targets set for 2024. Toward this end, we aim to reach net zero
operational greenhouse gas emissions in our operations by 2030, including all Scope 1 & 2
emissions.
Our absolute Scope 1 emissions decreased by 38% in 2023 relative to 2022 due to improved
energy efficiency. Our absolute Scope 2 emissions increased in 2023 relative to 2022 due to
a variety of construction projects associated with the expansion of our technology and
production capabilities, including the temporary absence of renewable energy available at
the Glenmarie, Malaysia site.
In addition, both Besi’s Scope 1 & 2 and Scope 3 emissions intensity increased in 2023
relative to 2022 due primarily to the significant downturn experienced in the semiconductor
assembly equipment industry which caused our revenue to decline by 20% year over year.
However, Besi has reduced its Scope 1 & 2 emissions intensity versus the 2021 baseline by
5.5 tCO₂ emissions/€million revenue, or 38%, as a result of the accelerated implementation
of renewable energy across our Asian and European facilities.
Furthermore, Besi has reduced its absolute Scope 3 emissions versus our 2021 baseline by
2,099 tCO₂e, or 18%, reflecting progress in the areas of transportation, freight and travel
as well as the beneficial impact of a higher proportion of leading edge assembly systems
in our product mix. In 2023, Besi’s Scope 3 emissions intensity increased to 17.0 tCO₂e
emissions/€million revenue, a 7% increase versus the 2021 baseline.
Installation of solar power reduced energy usage at Besi Austria
We expanded a solar roof and increased the usage of photovoltaics systems in 2023 at
Besi’s Radfeld, Austria facility to help reduce aggregate energy consumption and Scope
2 emissions. The solar cells utilized were assembled using Besi’s own equipment.
River cleaning by Besi Singapore employees.
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SCOPE 1 & 2 EMISSIONS
2019 2020 2021 20232022 2024 2030
10,812
3,755
Scope 1 & 2 Target Scope 1 & 2
Relative to revenue
9,065
8,587
Relative target 2024
12,500
10,000
7,500
5,000
2,500
0
tCO
2
tCO
2
/€ million revenue
50.0
40.0
30.0
20.0
10.0
0.0
19.8
14.4
5,124
8.9
25.4
Target Scope 1 & 2
emissions intensity 2024
Target net zero
Scope 1 & 2
emissions
Target
(based on 2021 baseline)
5.5
5.2
0.0
SCOPE 3 EMISSIONS*
tCO
2
e tCO
2
e/€ million revenue
50.0
40.0
30.0
20.0
10.0
0.0
12,500
10,000
7,500
5,000
2,500
0
Scope 3
7,407
7,157
Target Scope 3
2019 2020 2021 2023 203020242022
15.9
20.8
16.5
Relative to revenue
17.0
9,843
9,817
Relative target 2024
14.0
12.7
Target
(based on 2021 baseline)
Target Scope 3
emissions intensity 2024
13.6
11,942
* Besi expanded the categories included in its Scope 3 emissions measurement for 2022. Therefore, Scope 3 emissions data
for the years 2019 – 2021 are not fully comparable.
Waste and hazardous waste disposal
We seek to reduce the waste and hazardous waste produced by our operations wherever
possible. In all facilities, waste separation systems are in place and the re-use, reduce,
recycle concept is well established. The principal focus of our efforts is the reduction of
waste used in the packaging process wherein we use materials such as plastic, wood and
cardboard to ensure proper protection. There was an increase in Besi’s absolute waste
produced and waste intensity in 2023 relative to 2022. The launch of the new Glenmarie,
Malaysia site, the scrapping of obsolete materials at Besi Austria in the first half of 2023
and refurbishments to the assembly space at Besi Netherlands all contributed to the
increase in absolute waste. The increase in absolute waste combined with the significant
revenue decline experienced by Besi in 2023 led to a significant increase in our waste
intensity this year. Given that these construction activities were completed in 2023, we
anticipate reducing waste intensity materially in 2024 and intend to meet or exceed our
2024 intensity target in this area.
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WASTE
10%14% 5% 7% 6%
Hazardous waste
Relative to revenue
Non-hazardous waste
Target hazardous waste
Target non-hazardous waste
2019
2020
2021 2022 2023 2024
2030
400
300
200
100
0
Tonne kg/€ million revenue
2,000
1,500
1,000
500
0
Relative target 2024
237
159
346
316
230
319
259
268
430
800
447
Target waste intensity 2024
Target
(based on 2021 baseline)
10%9%
249
Water withdrawal
Water conservation is another priority. Virtually all water used in our operations is
discharged back into local water systems. As a result, our net water usage is limited. In
addition, Besi does not operate in any regions with a high or very high-water risk as defined
by the World Resources Institute. Besi utilized approximately 30 million liters of fresh
water in its operations in 2023 of which approximately 90% was utilized in our Asian
production operations. Water withdrawal intensity increased this year due to the
significant revenue decrease experienced.
WATER WITHDRAWAL
Water withdrawal
Relative to revenue
Target
2019
2020
2021 2022 2023 2024
2030
40
30
20
10
0
Thousands m
3
m
3
/€ million revenue
200
150
100
50
0
Relative target 2024
Target water intensity 2024
30
27
26
41
33
46
39
40
51
59
77
Target
(based on 2021 baseline)
30
Sustainable design
Besi develops high quality, premium priced system solutions for customers offering
leading edge reliability, accuracy, throughput, system uptime, yield of defect free devices,
longevity and low environmental impact. We have implemented externally certified ISO
9001 and ISO 14001 management systems to manage quality and environmental issues in
our production operations. In addition, six of seven Besi operations have received ISO
45001 certificates of approval for their occupational health and safety management
system. Our development efforts focus on system efficiency both in terms of environmental
impact and productivity/cost savings with a particular emphasis on:
• Leading edge product innovation.
• Energy efficiency.
• Recycling potential of applied production materials.
• Recycled content used in our products.
• Exclusion of hazardous components in our systems.
• Exclusion of conflict materials from our design process.
We prioritize sustainable design in our system development efforts and conduct life cycle
assessments as a means of reducing their environmental footprint while increasing their
efficiency and recyclable content. As a result, we can provide customers a low total cost
of ownership and an attractive return on initial investment while promoting sustainability
themes.
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In 2021, we launched several sustainable design initiatives focused on design-to-cost,
quality and sustainability. Such initiatives were focused on upgraded versions of our
mainstream die bonding product lines as well as for new wafer level assembly platforms
such as hybrid bonding and next generation TCB chip to wafer systems. We also participated
in a project with the University of Applied Sciences and Arts (Lucerne, Switzerland) to
identify potential areas of cooperation with respect to environmentally friendly product
design. Internal projects were also commenced to analyze product lifecycles in multiple
product groups to further extend their useful lives.
In 2023, Besi increased its focus on sustainable design initiatives related to energy
consumption and greenhouse gas emissions. Toward this end, we developed an initiative
named “Design-to-X” as part of our strategic plan review. This initiative combines Design-
to-Cost and Design-to-Sustainability concepts to identify ESG improvement opportunities
in all product groups while reducing the cost of many mature die attach and packaging
platforms. More specifically, the review analyzed the ways Besi could reduce its greenhouse
gas emissions and energy use and minimize the carbon footprint for its end-users while
increasing product performance and efficiencies in design, procurement and operations.
We have developed certain key deliverables utilizing Besi’s existing sustainable engineering
efforts and plan to engage with customers who derive the greatest value from
decarbonization efforts.
In addition to such initiatives, we completed a wastewater treatment project this year in
collaboration with the Copernicus Institute of Sustainable Development at Utrecht
University, the Netherlands, to measure the ecological footprint of Besi’s plating systems.
The project highlighted reduced electricity consumption as a priority in our sustainable
design efforts for this platform.
Besi’s systems can also be customized, reconfigured and redeployed over their product
lifespan thus extending their useful life as well as reducing their environmental impact
and raw material consumption. Customer utilization of our extensive global network of
field service and spare parts also helps customers extend the useful life of our systems.
Future sustainable design priorities
• Realization of benefits from Design-to-X initiative.
• Optimization of material selection and consumption.
• Optimization of transport packaging.
• Sourcing from more sustainable suppliers.
• Implementation of performance and design initiatives at the component level.
• Logistics optimization.
• Enhance energy efficiency and usage of renewable energy at our Asian facilities.
• Reduction of discretionary travel.
Besi Switzerland collaborating on environmentally friendly product design
In 2021, we commenced participation in a project with the Lucerne University of Applied
Sciences and Arts (Switzerland) to identify potential fields of interest for more
environmentally friendly product design. Different scenarios involving customers,
production locations and processes were examined and highlighted a range of
environmental influences. As a result of our collaborative efforts, we set a target to
reduce energy consumption of our die attach platforms by 10% by 2027. We are
developing a ten-year roadmap to create additional energy savings programs.
Design-to-Sustainability
Circular Design
For existing/future systems
Optimize Across Multiple
ESG metrics (e.g., carbon
emissions, water use,
electricity)
Design-to-X
Combination of Design-
to-Cost and Design-
to-Sustainability
Design-to-Value
Maximizing value for
customers
• Introduce Design-to-
Sustainability (focusing
on ESG metrics)
• Embed Design-to-X in
development process
• Set up requisite
engineering capabilities
and resource allocation
• Continue reducing total
cost of ownership for die
bonding and packaging
systems
Design-to-Cost
Cost-Efficient-Design
Priority in new product
development
Cost-Down-Engineering
Reduce total cost of
ownership
Optimizing for cost
Optimizing for sustainability
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PEOPLE WELLBEING
Material issue 2023 progress update versus 2022 2023 progress update versus 2021 base year 2024 target versus 2021 base year
Diversity and
inclusion
• Female employees as % of total employees was equal to 2022
(17%).
• Female managers as % of total managers decreased from 20%
in 2022 to 17% in 2023.
• Local managers as % of total managers was equal to 2022
(88%).
• Implemented Diversity and Inclusion policy.
• 17% female employees as % of total employees,
equal to 2021.
• Female managers as % of total managers
decreased from 18% in 2021 to 17% in 2023.
• Local managers as % of total managers increased
from 87% in 2021 to 88% in 2023.
• Increase % of female employees as %
of total employees to >19%.
• Increase % of female employees in
management to >21%.
• Maintain % of local nationals in
management >86%.
Health and safety • Reported incidents declined to three versus six in 2022.
• Of the three incidents reported, one was a minor absence
(less than four days) and two were first aid cases in which
the employee could resume work immediately after treatment.
No fatalities were reported.
• Six out of seven Besi facilities (Austria, China, Malaysia,
Singapore, Switzerland and our Meco facility in the
Netherlands) are now ISO 45001 compliant.
• Incidents reported decreased to three versus five
in 2021.
• Achieve safety incident record of
zero.
Employee
engagement and
career development
• 31 average training hours per employee, equal to 2022.
• Bi-annual employee engagement survey conducted by Willis
Towers Watson.
• Survey results indicated that employees feel safe in their
current physical working environment and that there is
effective collaboration between departments to meet
customer needs.
• Employees also had a strong understanding and motivation to
contribute to Besi’s business and ESG objectives and felt that
there is a strong feeling of trust between team members.
• Survey results will be used to improve areas of under-
performance both company-wide and at facility-levels.
• Sustainable design training conducted in Austria and
Switzerland to help engineers promote sustainable design in
next generation product development.
• Quarterly Town Hall meetings for all employees conducted to
share business progress.
• Employee turnover reduced from 11% in 2022 to 7% in 2023.
• 2023 employee engagement survey indicated
high level of participation (94%) and engagement
(89%).
• Besi scored above the high-tech norm in six of
seven categories in the 2023 survey.
• Average training hours per employee increased to
31 hours, up 19% versus 2021.
• Maintain employee engagement
>85%.
• Remain above high-tech benchmark.
• Maintain investment in employee
training >21 working hours per
employee per year.
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SDG alignment
The following SDGs align with the People Wellbeing pillar of Besi's ESG strategy:
Goal/description How we contribute
Ensure healthy lives and promote well-being
for all at all ages.
Employee health, safety and wellbeing are material topics. Besi’s production sites have EHS officers and committees and a
health and safety management system and procedures. EHS committees are responsible for the inspection, enforcement and
promotion of health and safety matters in the workplace. Employees also regularly receive EHS training.
Achieve gender equality and empower all
women and girls.
We are committed to improving gender diversity across all operations and providing equal opportunities for all employees. We
increased the percentage of women in management from 14% in 2019 to 17% in 2023. We are committed to further increasing
the percentage of women in management and women in the workforce but recognize the difficulties achieving such goals per
region due to the limited number of qualified personnel available.
Promote sustained, inclusive and sustainable
economic growth, full and productive
employment and decent work for all.
We are committed to providing a safe and secure working environment for all employees. All employees are made aware of
their rights including the right to freedom of association and collective bargaining.
Besi is committed to being a good employer and promoting a workplace culture supporting
the achievement of its business and ESG objectives. We comply with all applicable
employment laws and regulations in the countries in which we operate. All employees are
made aware of their rights including the right to freedom of association and collective
bargaining. We seek to be a preferred employer by emphasizing the diversity, health, safety
and wellbeing of our employees, flexible working arrangements and career growth and
development. In 2023, the Supervisory Board approved a companywide ESG policy that has
been published on our corporate website. This policy outlines Besi’s commitment to
employee engagement and career development, diversity and inclusion, equal opportunity,
elimination of discrimination and health and safety.
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HEADCOUNT TRENDS
2,500
2,000
1,500
1,000
500
0
35%
30%
25%
20%
15%
10%
5%
0%
FTE
Temp % of Total
2019 202220212020
1,081
62 95
453
1,154
1,060
496
491463
2,141
1,162
144
512
1,819
2023
1,193
134
543
1,870
1,596
1,618
Europe/NA Fixed HC Asia Fixed HC Temporary HC Temp % of Total
Topic 2019 2020 2021 2022 2023
Employee turnover 16% 7% 10% 11% 7%
New hires 6% 8% 19% 11% 10%
As indicated in the tables above, our fixed and temporary headcount levels vary significantly
from year to year depending on conditions in our cyclical semiconductor assembly
equipment market. In market upturns, headcount typically increases. Conversely, in
downturns, headcount is reduced in alignment with decreased demand, particularly as it
relates to temporary production personnel. Similarly, new hiring also follows market
movements with higher percentages experienced in industry upturns and lower ratios
realized in industry downturns. Employee turnover typically, but not always, follows such
cyclical market influences. Turnover is typically lower in downturns where employees are
less likely to seek employment elsewhere and higher in industry upturns where there is
more demand for personnel industry wide.
Diversity and inclusion
Besi values and encourages cultural, age and gender diversity in its workforce. Management
believes that diversity and inclusion help broaden our perspective and contribute to
growth. Diversity and inclusion are priority topics in Besi’s ESG strategy with improved
gender diversity across all operations the most immediate focus. We recognize that
women continue to be underrepresented in science, technology, engineering and
mathematics fields and is thus a priority in recruiting efforts. Many of our product groups
and manufacturing sites engage with local universities to drive growth in diversity
representation. Our newly published ESG policy and Code of Conduct also emphasize equal
opportunity for all employees and applicants. Specifically, the Diversity and Inclusion
policy outlines what diversity and inclusion means to Besi, our goals and what Besi is
doing to promote a diverse and inclusive business culture.
FEMALE EMPLOYEES
% of headcount
2019 2020 20222021 2023 20302024
Female employees
Target
30
20
10
0
Target
(based on 2021 baseline)
17%
17%
17% 17% 17%
20%
19%
FEMALE MANAGERS
14%
18%
16%
20%
17%
23%
21%
30
20
10
0
% of headcount managers
Female managers Target
2019 2020 20222021 2023 20302024
Target
(based on 2021 baseline)
LOCAL MANAGERS
100
75
50
25
0
% of headcount managers
83%
85%
88% 88%
86%86%
87%
Target
2019 2020 20222021 2023 20302024
Local managers
Target
(based on 2021 baseline)
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Besi’s diversity efforts indicate slow but steady progress as measured by an increasing
percentage of female managers and local managers in the workforce since 2019. However
in 2023, Besi reported a decrease in the female managers indicator due to promotion of
several male employees to management positions in Besi APac.
National Future Day
On November 9, 2023, Besi Switzerland participated in National Future Day 2023 which
provides schoolchildren insight into gender atypical professions. The objective was to
provide schoolchildren with the courage and confidence to take charge of their future
outside of gender images. As engineering tends to be an underrepresented female
profession, Besi Switzerland showed participants what a career in the semiconductor
industry involves and provided tutorials on how to use some of Besi’s technology
including a course on how to code and use a soldering iron.
Employee health and safety
Employee health and safety represents another material ESG topic. Besi monitors incidents
in the workplace at all locations worldwide. Incidents are grouped into categories by
severity: (i) fatalities, (ii) major absences (more than four days), (iii) minor absences (less
than four days) and (iv) first aid cases in which employees can resume work immediately
after treatment or the following day. Safety hazards at Besi are limited. There were three
safety incidents recorded last year at Besi’s Malaysian and Meco operations of which two
were first aid cases and one was a minor absence. In general, incidents are few as our
production facilities are predominantly clean environments with no heavy chemicals
present. In addition, there were no legal proceedings related to health and safety incidents
in 2023. We are committed to be compliant with all local laws. Our facilities in Austria,
China, Malaysia, Singapore, Switzerland and our Meco facility in the Netherlands are ISO
45001 compliant. We expect our Duiven, Netherlands facility to be ISO 45001 compliant
and certified by the end of 2024.
SICKNESS RATE
Asia Europe Total
2019 2020 2021 2023
2.1%
1.9%
2.1%
1.7%
1.3% 1.3% 1.3%
0.8%
1.1%
2.2%
1.5%
3.8%
2022
2.1%
1.6%
3.5%
4%
3%
2%
1%
0%
% of headcount
Improved working conditions Besi Leshan
Work began at our Besi Leshan facility to optimize safe working conditions for
employees. The facility received ISO 45001 certification in 2023 which represents further
external validation of Besi’s commitment to occupational health and safety
management.
Employee engagement and career development
One of Besi’s principal challenges is to attract, motivate and retain skilled workers critical
to our success in a highly competitive semiconductor equipment industry. A key component
of our strategy is training and talent development for which we provide a variety of
educational programs companywide. In addition, we monitor employee engagement and
satisfaction across all regional operations and conduct surveys to assess our relative
success in such activities. Increases in training hours per employee in 2022 were favorably
influenced by a Chinese government sponsored online training program. In 2023, training
hours remained roughly equivalent to 2022.
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TRAINING
22
20
26
31 31
2121
Hours/employee
Training hours
40
20
0
Target
2019 2020 20222021 2023 20302024
Target
(based on 2021 baseline)
Future priorities
• Improve gender diversity across all locations.
• Maintain the health and safety of all employees including the maintenance of selected
COVID-19 protocols related to travel, corporate gatherings and testing.
• Continue to improve Besi’s management systems and gain external ISO 45001
certification for all operations by 2024.
RESPONSIBLE BUSINESS
Material issue 2023 progress update versus 2022 2023 progress update versus 2021 base year 2024 targets versus 2021 base year
Ethics and compliance • No reported violations of Besi’s Code of Conduct.
• Training provided to all new employees.
• No reported violations of Besi’s Code of Conduct.
• Training provided to all new employees.
• Increase employee training participation
as it relates to Besi’s Code of Conduct.
Responsible supply
chain
• % of Purchase Volume (“PV”) to sign General Work
Agreement (“GWA”) or General Procurement Contract
(“GPC”) decreased slightly to 76% versus 77%.
• % of PV to sign Conflict Free Sourcing Initiative
(“CFSI”) signatories decreased to 71% versus 73%.
• % of PV compliant with RoHS directive slightly
decreased to 93% versus 94%.
• % of PV to sign Self-Assessment Questionnaire
(“SAQ”) as to our Code of Conduct increased to 66%
versus 62%.
• % of PV audited was 63%, equal to 2022.
• % of Purchase Volume (“PV”) to sign General Work
Agreement (“GWA”) or General Procurement Contract
(“GPC”) increased to 76% versus 64%.
• % of PV to sign CFSI increased to 71% versus 66%.
• % of PV compliant with RoHS directive slightly
decreased to 93% versus 94%.
• % of PV to sign Self-Assessment Questionnaire
(“SAQ”) as to our Code of Conduct increased to 66%
versus 63%.
• % of PV audited increased to 63% versus 59%.
• 77% of PV to sign GWA or GPC.
• 73% of PV to sign CFSI.
• 75% of PV to sign SAQ as to our Code of
Conduct.
• 70% of PV audited.
Community impact • Supported various local charities within the regions
we operate.
• Supported local technical schools through donations
of employee time.
• Volunteered employee hours to local initiatives.
• 35 employees at our Meco facility in the Netherlands
generated € 4,375 in social value in the number of
hours volunteered.
• Besi Netherlands donated € 7,740 to “‘Stichting
Kinderen van de Voedselbank”.
• Besi Leshan provided local schools with 600 hours of
community support and donated ¥ 10,000 RMB to a
local charity.
• Report on Besi hours volunteered,
monetary donations and education
projects supported.
Tax practices • Compliant with tax obligations where factual
economic activities take place.
• Compliant with tax obligations where factual
economic activities take place.
• Compliant with tax obligations where
factual economic activities take place.
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SDG alignment
The following SDG aligns with the Responsible Business pillar of Besi's ESG strategy:
Goal/description How we contribute
Promote peaceful and inclusive societies for sustainable development, provide
access to justice for all and build effective, accountable and inclusive institutions
at all levels.
Besi’s ESG policy, Code of Conduct and Whistleblower procedure guide the activities of our
employees. Our ESG policy provides a strategic view of Besi’s management across the
environmental, social and governance aspects of our business related to both our
operations and value chain. All new employees are required to sign the Code of Conduct
and undertake training upon hiring. All other employees undergo training on a regular
basis. Besi’s Supplier Code of Conduct outlines the standards expected of our suppliers in
areas such as human rights, product quality, health and safety and the environment.
Besi operates in a responsible and sustainable manner for the benefit of all stakeholders.
We are committed to the UN Universal Declaration of Human Rights, adhere to high ethical
standards and expect the same commitment from key stakeholders, particularly across
our supply chain. We strive to have a positive impact on the communities and countries in
which we operate via charitable activities, by following responsible tax practices and by
maintaining open, constructive and mutually respectful relations with tax authorities. In
2023, the Supervisory Board approved a companywide ESG policy that has been published
on our corporate website. This policy outlines the Company’s commitment to ethics and
corporate culture, engagement with employees and external stakeholders, political
involvement, and transparent reporting.
Ethics and compliance
The importance of appropriate anti-corruption and human rights policies has increased
with the expansion of Besi’s Asian operations, supply chain and logistics activities. In this
regard, Besi has an ESG policy, Code of Conduct and Whistleblower procedure (all of which
are available on our website) to guide employee activities and to set out the responsibilities,
procedures and support functions in reporting violations. In addition, all employees are
required to sign our Code of Conduct and undertake training upon hiring. Further, we
conduct training for all employees globally on a regular basis. Besi’s Code of Conduct also
prohibits anti-competitive practices. There were no legal proceedings associated with
anti-competitive behavior over the past three years.
Our confidential Whistleblower procedure enables employees to report suspected cases of
misconduct. These cases are investigated immediately and overseen by local management
and the Board of Management, who have responsibility for approving appropriate corrective
measures.
Responsible supply chain
Besi adheres to high ethical standards and expects the same from its suppliers. As such,
we have three policies in place to promote a sustainable supply chain: a Conflict Minerals
policy, a Supply Chain policy and a Supplier Code of Conduct based on the code published
by the Responsible Business Alliance (“RBA”). The Code of Conduct is based on international
norms and standards including the Universal Declaration of Human Rights, International
Labor Standards and the OECD Guidelines for Multinational Enterprises. Besi’s Supply
Chain policy and Code of Conduct have been fully in accordance with RBA requirements
since 2018. In addition, we seek to align our operations and supply chain with the Restriction
of Hazardous Substances (“RoHS”) directive. In 2023, 93% of our relevant purchasing
volume was compliant with the RoHS directive. In addition, we have begun engagement
with suppliers as to the origin of their imported steel and iron supplies due to new EU
restrictions.
Besi is committed to improving the sustainability of its supply chain. Our supply chain
activities include the sourcing of raw materials, components and semi-finished products
from vendors. The issue of conflict minerals is an important topic for supply chain
management, particularly in Europe and North America. We seek to minimize the impact of
conflict minerals wherever possible. In 2023, Conflict Mineral Reporting Template
Questionnaires were returned by suppliers representing 71% of material related purchasing
volume, a slight decrease versus the 73% recorded in 2022.
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With respect to human rights, we follow the RBA Code of Conduct both in our production
facilities and supply chain. Labour standards in the RBA Code of Conduct include:
• Freely chosen employment
• Young workers
• Working hours
• Wages and benefits
• Humane treatment
• Non-discrimination/non-harassment
• Freedom of association
In 2019, Besi achieved gold status with the RBA which is externally audited and accredited.
In 2023, 88 suppliers were responsible for approximately 80% of Besi’s total purchasing
volume. As a result, we established a risk map matrix to assess the importance, reliability,
financial condition and sustainability of all suppliers on a more regular basis. Besi evaluates
suppliers by means of its quarterly business review process under which we regularly
conduct performance reviews and key supplier audits. In 2023, the number of supplier
performance reviews and audits was 63% of our total purchasing volume, equal to 2022.
Engagement with suppliers also resulted in additional progress on ESG topics in 2023. Our
Malaysian and Chinese operations began a more comprehensive engagement strategy
with suppliers this year through an ESG briefing roadshow, training sessions and the
sharing of ESG-related knowledge. We also conducted an ESG assessment survey that
posed questions related to Besi’s material ESG pillars of Environmental Impact, People
Wellbeing and Responsible Business. Concerning the Environmental Impact pillar, we
asked suppliers whether targets had been set to help reduce Besi’s energy usage, carbon
emissions, waste and hazardous material usage as well as their usage of renewable
energy. Fifty-five suppliers were sent this assessment survey with a response received
from forty-six (84%), representing approximately 50% of our total purchasing volume.
Such responses were used to create a grading system of either Low Risk, Medium Risk or
High Risk. For each risk category, an action plan was created for supplier engagement to
ensure improvement in their management of ESG-related issues. Moving forward, Besi will
incorporate this ESG scorecard into its periodic audit for annual suppliers.
Finally, the percentage of purchasing volume which answered the RBA Code of Conduct
Self-Assessment increased from 62% in 2022 to 66% in 2023 marking further progress in
our supply chain engagement with Besi’s ESG activities.
SUPPLY CHAIN
Purchasing Volume (“PV”) Audited
42%
61%
59%
63% 63%
75%
70%
% of PV
Audited Suppliers
100
50
0
Target
2019 2020 20222021 2023 20302024
Self Assessment Questionnaire
62%
62% 63%
66%
85%
75%
62%
% of PV
Code of Conduct Self Assessment Questionnaire (“SAQ”) Signatories
100
50
0
Target
2019 2020 20222021 2023 20302024
Code of Conduct Supplier Agreements
61%
64% 64%
76%
77%77%
85%
% of PV
General Work Agreement (“GWA”) or
General Procurement Contract (“GPC”) Signatories
100
50
0
Target
2019 2020 20222021 2023 20302024
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Conflict Free Sourcing Initiative Signatories
65%
66%
64%
71%
73%
73%
80%
% of PV
Conflict Free Sourcing Initiative (“CFSI”) Signatories
100
50
0
Target
2019 2020 20222021 2023 20302024
Community impact
Besi supports activities in the local communities in which it operates, particularly in Asia
where the assistance is more greatly needed. In Malaysia, activities undertaken in 2023
included a tree planting hiking trail in Taman Botani Negara. In addition, Besi’s Chinese
operations supported their community by providing lectures to Leshan primary school
children and by training eight school students for Leshan’s vocational school. In total,
both initiatives amounted to 600 hours of community support. Besi Leshan also donated
¥ 10,000 RMB to the ‘Star Charity’ which was endorsed by the Leshan Import and Export
Chamber Commerce. The charity raised ¥ 728,000 RMB to provide support to those in
poverty.
At Besi Netherlands, we conducted a Christmas promotion to raise funds for
“Stichting
Kinderen van de Voedselbank”
, a charity that combats the social consequences of child
poverty in the Netherlands. It is the only foundation in the Netherlands that donates
clothing packages to children, all of which are new clothes rather than those that have
been used and donated. Besi employees managed to raise € 7,740 for this charity. At our
Meco facility in the Netherlands, 35 of our employees engaged in community service with
a charity called Cello. This program generated € 4,375 in social value through the number
of hours volunteered.
Besi Austria supported local technical universities and schools through donations, active
interchange and dialogue. In addition, they hosted a Girls Day career orientation project for
girls and young women. Points of contact were established between female students for
future-oriented professions in the fields of technology, natural sciences, and computer
science. Other career orientation days were also held during the year.
On November 9, 2023, Besi Switzerland participated in National Future Day 2023 which
provides schoolchildren insight into gender atypical professions. The purpose of the day
was to provide schoolchildren with the courage and confidence to take charge of their
future outside of gender images. As engineering tends to be an underrepresented female
profession, Besi Switzerland showed participants what a career in the semiconductor
industry involves and provided tutorials on how to use some of Besi’s technology including
courses on coding and the use a soldering iron.
Besi APac partnership with the Ideas Academy
Besi APac continued its long-term partnership with the Ideas Academy which provides
high quality, affordable virtual education and in-person classes for students in Kuala
Lumpur.
Tax practices
Besi’s global tax policy views taxation, including the payment and collection of taxes, as
an integral part of its business and an important part of its social responsibility and
contribution to society. Besi’s tax policy is aligned with its ESG Strategy and follows the
principle of responsible tax practices whereby Besi’s legitimate interests, reputation and
corporate social responsibility are taken into consideration. In this respect, the interests
of all stakeholders are taken into consideration including customers, shareholders, local
governments and the communities and countries in which Besi operates. Besi’s global tax
policy is annually updated and signed off by the Board of Management.
It consists of the following principles:
• We commit to paying taxes on time and in accordance with all applicable laws and
regulations.
• Our tax policy follows Besi’s business. As such, our profits are allocated to the countries
in which business value is created, taxes are paid and where factual economic activities
are executed. In addition, all transactions must have a business rationale.
• Intra-group transactions are entered into on an arm’s length basis and adhere to the
guidelines issued by the Organization for Economic Co-operation and Development
(“OECD”).
• We strive to comply with the letter and spirit of applicable tax laws and regulations and
are guided by relevant international standards.
• We seek a competitive, stable, sustainable and explainable effective corporate tax rate
whereby tax incentives and subsidies are used. Any tax optimization must be based on
opportunities provided by law or case law and must be aligned with our business and
objectives.
• Besi does not undertake transactions whose sole purpose is to create an abusive tax
result. In addition, Besi does not use artificial tax structures in tax haven jurisdictions as
defined by the OECD.
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• We seek to establish and maintain an open and constructive dialogue with tax authorities
and other government bodies in all jurisdictions where we operate based on the
disclosure of all relevant facts and circumstances. We discuss important fiscal aspects
upfront with the relevant tax authorities if questions arise as to proper taxation policy.
We also seek rulings from tax authorities to confirm the applicable treatment. In the
Netherlands and Switzerland, jurisdictions where Besi has substantial operations, we
engage with the Tax Authorities through regular meetings, telephone calls and other
correspondence.
The effective tax rate for 2023 was 14.7% (2022: 12.6%). Similar to 2022, income tax expense
for the 2023 fiscal year was affected by foreign tax rates differentials, non-deductible
expenses, tax-exempt income, tax credits, changes in valuation allowances on deferred
tax assets and benefits from preferential tax regimes legislated by the countries concerned
in order to promote economic development and investment. Further details regarding
income tax expense are provided in Note 29 to the Consolidated Financial Statements.
Future Responsible Business priorities
• Conduct supply chain audits representing 75% of Besi’s purchasing volume by 2030 in
accordance with our new supply chain risk matrix.
• Enhance our supplier evaluation process in the areas of lead time, quality and
technological capabilities.
• Encourage more suppliers to join the CFSI such that 80% of Besi’s purchasing volume
has signed by 2030.
Besi’s future ESG priorities
Besi’s mission is to become the world’s leading supplier of semiconductor assembly
equipment for advanced packaging applications and to exceed industry average
benchmarks of financial performance. We also strive to create long-term value for our
stakeholders and operate our business in a sustainable way, respecting the environment,
our own employees and the wider society. Besi is committed to running its operations in
accordance with internationally recognized standards and best practices and to promote
sustainability with all stakeholders through the reporting on material ESG topics on an
annual basis in line with regulatory standards.
Our key objectives include the priorities set forth in the chart below:
Implement
Design-to-X
initiative
Increase supply
chain audits to
75% of PV by 2030
Expand best
practice reporting
against ESG
frameworks
including CSRD
compliance
Exceed 2024 and
2030 ESG targets
Target 80% PV
compliance with
CFSI by 2030
Reach net zero
Scope 1 & 2
emissions in our
operations by
2030
Increase
diversity in
female and local
management
Future ESG
Priorities
Achieve 100%
renewable energy
sources at global
operations
Improve
customer and
employee
satisfaction
Risk Management
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Besi’s risk management program seeks to identify and control potential (fraud) risks and
events which may affect Besi’s strategy, continuity, business and performance. Our efforts
extend throughout our processes, management, employees and systems and are the
subject of continuous focus. In recent years, the importance of internal control and risk
management systems has grown substantially as a result of Besi’s increased size and
complexity, changing market conditions and expansion of our global business operations.
Besi’s internal control and risk management systems have been designed to address and
help mitigate such risks and risk factors.
RISK MANAGEMENT PROCESS
Reporting
Monitoring
Activities
Risk
Identification
Risk
Measurement
Management
of Risk
Risk
Management
Integration of a risk-conscious culture as part of managing our business
Risk identification Risk measurement Risk management Monitoring risk activities Risk reporting
• Business risks identified as
a result of dialogue with senior
management.
• Alignment of risk categories
with Value Creation Model.
• Risk categories and underlying
risks reviewed bi-annually with
the Board of Management.
• Explicit risk ownership assigned.
• Risk appetite discussed with
and determined by the Board
of Management.
• Standard risk management
methodology established for
risk categories and underlying
risks.
• Mitigation actions (controls) are
established for all risks
identified.
• Action plans are established
when controls are needed for
risk mitigation efforts.
• Explicit mitigation controls and
responsibilities assigned for
action plan execution.
• Effectiveness of mitigation
actions (controls) and action
plan status are monitored
across three lines of defence.
• Internal audit reviews risk
management effectiveness and
drives improvements.
• Bi-annual reporting to the Board
of Management and Supervisory
Board of top 10 risk categories,
underlying risks and
effectiveness of mitigation
actions.
• Risk management framework
and cycle improvements are
reported and approved by the
Board of Management.
Risk Management
In 2023, the most important components of Besi’s internal control and risk management
system to manage and mitigate our risks were:
• An extensive and documented process for preparing Besi’s annual budget, quarterly
estimates and reports of its monthly financial and non-financial information compared
with the budgeted and quarterly estimated information.
• Monthly business reviews with product group and production site managers with respect
to their monthly and quarterly bookings, revenue, working capital and results of
operations, together with discussions of general market, economic, technological, ESG
and competitive developments.
• Daily reviews of the foreign currency positions of all significant operating companies.
• Annual documentation and analysis of key risks and the development and control of
such risks.
• Weekly management reviews of Besi’s business, operations, cash, supply chain and
inventory development.
• Compliance with finance and controlling guidelines governing our financial accounting
and reporting procedures.
• Compliance with internal controls over financial reporting that have been implemented
at all significant operating companies.
• Monthly, quarterly and annual reviews of Besi’s ESG performance, risks and risk
management and its progress versus KPIs.
• Regular management review of key staff development.
• Regular analyses of operational risks at the subsidiary level.
• Regular analyses of Besi’s capital structure, financing requirements, cash and short-
term deposits, tax position and transfer pricing system.
Operational risks such as the hedging of financial exposures, internal financial reporting
and transfer pricing are governed by a set of internal Besi guidelines. In addition, insurance
policies are in place to cover the typical business risks associated with Besi’s operations
and are reviewed every year. Besi’s policies regarding foreign currency hedging, interest
rate, credit, market and liquidity risks are further described in the Financial Statements.
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In addition, our use of global and diverse information technology systems could expose our
IT security, data resources and intellectual property to a variety of security risks as a result
of natural disasters, power outages, cyberattacks, acts of terrorism and malware and/or
ransomware infiltration. In response, we have established an information-security program
which implements measures to prevent, detect and respond to security threats. Such
measures and tools include, among others, vulnerability management tools, access
control management, log management, advanced malware protection, perimeter network
defense and endpoint detection and response tools. We have also implemented incident
response procedures and a disaster recovery plan which are regularly reviewed and
updated. On an annual basis, limited and focused cyber maturity assessments are
performed by an external party. In recent years, we also have significantly raised awareness
among our employees of the risks and potential risks of cybercrime by annual mandatory
cyber awareness training.
Besi also evaluates non-financial risks which could affect both its strategy and business
operations including emerging risks such as (i) climate change, natural resource
conservation and pollution and (ii) human resources challenges, such as diversity, human
rights and the recruitment of qualified technical personnel. Non-financial risks are
governed by a set of internal and external guidelines and instructions. Short- and long-
term topics are assessed through measures such as materiality analyses, key performance
indicators for Scope 1, 2 and 3 emissions, water, energy and waste, customer and employee
satisfaction metrics, supplier audits and continuous stakeholder dialogue.
Risk governance
The Board of Management is responsible for (i) the management of internal and external
risks associated with our business activities and (ii) compliance with applicable legislation
and regulations. The management team is responsible for the monitoring and reporting of
identified risks as well as leading the response across the organization related to any new
risks which may arise.
All material findings that result from the use of Besi’s internal control and risk management
system for financial and non-financial risks are discussed with the Audit Committee as
part of the Supervisory Board on a quarterly or half yearly basis, including:
• Development of Besi’s revenue, orders, results of operations and balance sheet versus
budget as well as developments in the global economy and semiconductor assembly
equipment market and their impact on Besi’s financial results.
• Progress of ongoing strategic initiatives and cost reduction efforts.
• Status of key customer relationships.
• Analysis of orders lost to competitors and the development of Besi’s competitors’
businesses.
• Material developments in Besi’s research and development activities.
• Impacts of actual or potential inflationary pressures, interest rate and risk premium
adjustments and global macroeconomic conditions.
• Foreign currency exchange rate developments.
• Status of Besi’s current corporate governance procedures.
• Status of systems, procedures and activities to monitor and evaluate risks from fraud,
bribery or corruption in Besi’s operations.
• Cyber security threats and risk remediation related thereto.
• Climate change exposures.
• ESG related KPIs and progress versus targets.
In addition to internal controls over financial reporting, the operation of Besi’s internal
control system is also assessed by the external auditor if deemed relevant in the context
of the audit of the annual Financial Statements. The results of this audit are discussed
with the Board of Management and the Audit Committee of the Supervisory Board.
There were no indications that Besi’s internal control and risk management systems did
not function properly in 2023. Please refer to Internal Control and Risk Management of the
Corporate Governance section for further information.
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Risk universe
Besi’s risk universe can be classified as follows:
Besi does not rank the individual risks identified by management in its risk universe. We
believe that all risks described herein have significant relevance and that a ranking process
would negate the purpose of a comprehensive risk assessment.
Strategic
General
• General market conditions
• Trade, political and economic frictions
• Significant operations in Europe
• Supply chain or other manufacturing
disruptions
• Impacts from the COVID-19 or future
pandemics
• Impact of climate change
• Acts of war or terrorism
• Acquisitions
Semiconductor industry related
• Cyclical and seasonal nature of demand
for semiconductors
• Timely new product introductions
• Timing of sales cycle
• Competition
• Price competition
• Industry consolidation
Financial
• Fluctuation in quarterly and annual financial results
• Seasonal and cyclical order volatility
• Timely adjustment of costs and overhead levels to fluctuating market conditions
• Customer concentration
• Impacts of actual or potential inflationary pressures and interest rate and risk premium adjustments
• Currency exchange rate volatility
• Variability of dividend per annum
Operational
• Inventory shortages or surpluses
• Dependence on suppliers for timely delivery of critical components
• Undetected problems in products
• Use of global and diverse IT systems
• Recruitment and retention of qualified personnel
• Disruption in operations
• Impacts of the prolonged Ukraine/Russia conflict or Israel/Hamas conflict
• Dependence on international operations
• Usage of conflict minerals in supply chain
• Corruption and human rights in the Asian Pacific region
Legal and compliance
• Protection of intellectual property
• Environmental rules and regulations
• Unethical behavior and non-compliance with Besi’s Code of Conduct
• Anti-takeover provisions contained in Besi’s articles of association
Legal and
compliance
Financial
Strategic Operational
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Risk appetite
Besi’s risk appetite is primarily based on defined and agreed upon strategies and the
individual objectives and initiatives within such strategies. Management believes that
Besi’s risk appetite is aligned with its strategy and priorities. The Board of Management
monitors the operation of its internal control and risk management systems and carries
out a systematic assessment of its design and effectiveness at which time it also assesses
its risks, including residual risks, net of risk mitigation measures. The Board of Management
discusses the effectiveness of the design and operation of Besi’s internal control and risk
management system with the Audit Committee and provides input to the Supervisory
Board as to the status of specific risk management initiatives.
Our risk appetite differs per risk type:
Risk category Risk appetite
Strategic risks and
risks related to the
semiconductor
industry
Besi seeks to realize its strategic ambitions and priorities
and is willing to accept reasonable risks to achieve such
objectives.
Operational risks
Besi has a variety of operating initiatives and challenges
in its strategic planning that require an appropriate level
of management attention. We seek to mitigate risks that
could negatively affect our realization of operating
initiatives and efficiency targets while ensuring that our
quality standards are unaffected in the process.
Financial risks
Besi’s financial strategy is focused on generating
increased revenue, profit and cash flow from its business
model, maintaining a strong financial position and
creating long-term value for shareholders. We seek to
mitigate risks which could negatively influence our results
of operations, financial condition and access to capital
markets while maintaining optimal operating and
financing flexibility and an attractive capital allocation
policy for the benefit of stakeholders.
Legal and
compliance risks
Besi strives to be fully compliant with its Code of Conduct
and all applicable national and international laws and
regulations in the markets and jurisdictions in which it
operates. In addition, we seek to comply with all
environmental and labor laws and use our best efforts to
comply with best practice standards in the jurisdictions in
which Besi operates.
Risk factors
We confront many risks in conducting our business that may limit our ability to realize
Besi’s business objectives. We assess our risk exposure by referencing the four risk
categories comprising Besi’s risk universe. Any of the specific risks which form a part of
such categories have the potential to materially and adversely affect our business,
financial condition, results of operations and reputation. In addition, there may exist some
risks currently which are not yet known to us or risks deemed immaterial at present which
could become material in the future. Many of the risks described below may be exacerbated
by impacts from the prolonged Ukraine/Russia conflict and the Israel/Hamas conflict,
increased weather events caused by climate change and any worsening of global business
and economic conditions.
Strategic risks
Besi’s business and results of operations may be negatively affected by general economic
and financial market conditions and volatile spending patterns by its customers.
Although the semiconductor industry’s business cycle can be independent of the general
economy, global economic conditions often have a direct impact on demand for
semiconductor devices and ultimately demand for semiconductor manufacturing
equipment. Accordingly, Besi’s business and financial performance are affected, both
positively and negatively, by fluctuations in the macroeconomic environment. As a result,
the Company’s visibility as to future demand is generally limited and its ability to forecast
future demand is difficult.
For example, an abrupt decline in demand for mobile applications (in particular order
cancellations by a single IDM customer) in 2018 caused second quarter 2018 orders to
decline by 58% relative to the first quarter of 2018. Such order weakness continued in the
second half of 2018 and throughout 2019 as customers digested significant capacity added
in 2017. Conversely, in both 2017 and 2021, orders grew by 82.2% and 98.9%, respectively,
versus the respective prior year reflecting broad based and rapid industry upturns with
capacity increases experienced in each of Besi’s principal end-user markets.
Besi believes that historic volatility in capital spending by customers is likely to persist in
the future. In addition, future economic downturns and/or geopolitical events could
adversely affect Besi’s customers and suppliers which would in turn have an impact on
Besi‘s business and financial condition.
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Trade, political and economic frictions could adversely affect Besi’s revenue and results of
operations.
Due to the complex relationships among the European Union, China, Japan, Korea, Taiwan
and North America, there is inherent risk that political and diplomatic influences might
lead to trade disruptions. In particular, heightened trade tensions, retaliatory tariffs and
intellectual property transfer issues between North America and China in recent years
could potentially limit or restrict the sale of Besi’s semiconductor assembly equipment to
China. In addition, increased global tensions have also occurred due to China’s challenges
to Taiwan’s independent governance status as well as Taiwan’s increasing importance to
the global supply chain of advanced semiconductor devices. A significant trade disruption
in any area where we do business could have a material adverse impact on our future
revenue and profitability. Tariffs, additional taxes or trade barriers may increase our
manufacturing costs, decrease margins, reduce the competitiveness of our products or
inhibit Besi’s ability to sell products or purchase necessary equipment and supplies, all of
which could have a material adverse effect on our business, results of operations and
financial condition.
In addition, there are risks that governments may, among other things, insist on the use of
local suppliers, compel companies to partner with local companies to design and supply
equipment on a local basis, require the transfer of intellectual property rights and/or local
manufacturing or provide special incentives to government backed local customers to buy
from local competitors even if their products are inferior to ours, all of which could
adversely impact our revenue, margins and financial condition. Many of these challenges
are particularly applicable in China, which is a fast-developing market for the semiconductor
equipment industry and an area of anticipated growth for Besi’s business. Further, the
political and economic climate in China at both the national and regional levels can be fluid
and unpredictable. China has implemented state-sponsored initiatives to build domestic
semiconductor capacity and supply chains. In addition, North America and the European
Union have adopted legislation to provide government funding for semiconductor
manufacturing expansions in their respective regions, but there is uncertainty as to the
amounts and timing of funding and as to any restrictions on recipients. As such, Besi may
be at a disadvantage in competing with entities participating in such government efforts
based on their lower cost of capital, access to government subsidies and decision making,
preferential sourcing practices and stronger local relationships or otherwise.
Besi’s business includes significant operations in Europe. Disruptions to European
economies could have a material adverse effect on Besi’s operations, financial performance,
share price and access to credit.
Given the scale of its European operations and scope of its relationships with customers
and counterparties, Besi’s results of operations and financial condition could be materially
and adversely affected by persistent disruptions in European financial and commodity
markets, the attempt of a country to abandon the euro, the impact of a prolonged Ukraine/
Russia conflict or Israel/Hamas conflict, the failure of a significant European financial
institution, even if not an immediate counterparty to Besi, persistent weakness in the
value of the euro and the potential adverse impact on global economic growth and capital
markets if eurozone issues spread to other parts of the world as a result of the default of
a eurozone sovereign or corporate issuer.
Supply chain disruptions or other manufacturing interruptions or delays could affect Besi’s
ability to meet customer demand on a timely basis or lead to higher costs.
Besi’s business depends on its timely supply of equipment, services and related products
to meet the changing technical and volume requirements of its customers, which depends
in part on the timely delivery of parts, materials and services, including components and
subassemblies, from suppliers and contract manufacturers. Significant and sudden
increases in demand for Besi’s products, as well as worldwide demand for electronic
products, have resulted in, and may continue to result in, a shortage of parts, materials
and services needed to manufacture Besi’s products. Such shortages, as well as delays in
and the unpredictability of shipments due to transportation interruptions, have adversely
impacted, and may continue to adversely impact, our suppliers’ ability to meet our demand
requirements. Difficulties in obtaining sufficient and timely supplies of parts, materials or
services and delays in and the unpredictability of shipments due to transportation
interruptions, have adversely impacted, and may continue to adversely impact, Besi’s
manufacturing operations and its ability to meet customer demand. Some key parts,
components and sub-assemblies are subject to long lead times or are available only from
a single supplier or limited group of suppliers, and some sourcing or subassembly is
provided by suppliers located in countries other than the countries where Besi conducts
its manufacturing. Volatility of demand for manufacturing equipment can increase capital,
technical, operational and other risks for Besi and for companies throughout its supply
chain and may cause some suppliers to exit businesses, or scale back or cease operations,
which could also impact our ability to meet customer demand.
Besi may also experience significant interruptions to its manufacturing operations, delays
in its ability to deliver or install products or services, increased costs or customer order
cancellations as a result of:
• Volatility in the availability and cost of parts, materials or services, including rising
prices due to inflation.
• Difficulties or delays in obtaining required import or export approvals.
• Shipment delays due to transportation interruptions or capacity constraints.
• A worldwide shortage of semiconductor components as a result of sharp increases in
demand for semiconductor products in general.
• Information technology or infrastructure failures, including those of a third-party
supplier or service provider.
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Besi faces risks related to COVID-19 and global pandemics that could significantly disrupt
or materially adversely affect its business and financial performance.
The COVID-19 pandemic had a significant adverse impact on global supply chains and
commercial activity over the past four years. The pandemic also had a sustained adverse
impact on economic and market conditions and limited global economic growth for a
prolonged period of time, all of which adversely affected spending on semiconductor
manufacturing equipment, semiconductor supply chains and cycle times, demand for
Besi’s product offerings and Besi’s business and operating results.
Significant uncertainty exists as well concerning the impact of any new COVID-19 variants
on the business and operations of Besi’s customers and their supply chain ecosystems.
Besi’s revenue may be negatively impacted in future periods by its ability to source
components and make timely customer deliveries and complete orders. Furthermore,
some of Besi’s customers could also experience significant adverse effects from supply
chain shortages as a result of a pandemic which could adversely affect the timing of orders
placed with us and/or accepted by them. In addition, any future pandemic could adversely
impact semiconductor and global supply chains and result in labor shortages, inflationary
pressures and increased transportation/logistics costs. As a result, the financial
projections Besi uses as the basis for estimates and assumptions used in its quarterly
financial statements could be adversely affected by any further volatility in these
uncertainties.
Considerable uncertainty still surrounds the potential long-term economic effects of the
COVID-19 pandemic. Although Besi continues to actively monitor the situation across its
operations and may take further actions as required by government authorities or as more
information becomes available, the full extent to which COVID-19, variants thereof or any
future pandemic may have on our business and operating results, manufacturing
operations, delivery lead times, sourcing of components and customer service efforts and
our customers, suppliers and employees, remains highly uncertain.
Besi may be materially and adversely affected by the impact of climate change including
laws and regulations implemented in response to climate change related issues.
Besi’s business and operations, and those of its customers and suppliers, can be disrupted
by acute and chronic physical risks from climate change. Acute physical risks refer to
those that are event-driven, including natural disasters, interruptions of service from
utilities or other catastrophic events that may be exacerbated by climate change. Chronic
physical risks refer to natural disasters occurring more frequently with greater intensity
and less predictability in all regions of the world. Catastrophic events such as earthquakes,
floods, hurricanes, drought and tornadoes could make it difficult or impossible to
manufacture or deliver products to Besi’s customers, receive materials from Besi’s
suppliers or perform critical functions whether on a timely basis or at all, which could
adversely affect our revenue, operating costs, employee productivity and/or existing
assets. Furthermore, if our customers or suppliers cannot timely resume their own
operations due to a catastrophic event, we may be unable to fulfill customer orders and/
or experience reduced or cancelled orders even if Besi’s operations are marginally affected.
For example, in September 2023, territories in the East Asian monsoon region, including
Guangdong, Hong Kong, Fujian and Taiwan, experienced significant typhoons and storm
surges, resulting in disruptions to business operations. Such disruptions impacted some
of the semiconductor factories and suppliers that operate in the region. The long-term
effects of climate change on the global economy, and the semiconductor industry in
particular, are unclear but could be severe.
Compliance with existing or future climate-related land use, energy, environmental and
other laws and regulations may: (i) result in significant costs to Besi for additional capital
equipment or other process requirements, (ii) restrict the ability to expand our operations
and/or (iii) cause Besi to curtail its operations. Besi also could incur significant costs,
including fines or other sanctions and third-party claims, as a result of violations of, or
liabilities under, such laws and regulations. In addition to regulatory compliance, increasing
customer sustainability requirements as well as Besi’s own internal targets, could cause
us to alter our manufacturing, operations or equipment designs from time to time and
incur substantial expense to satisfy such increased regulatory and sustainability
requirements. To the extent that higher costs result in higher prices for our products, Besi
may experience a reduction in the demand for such products, which could negatively affect
our results of operations. Conversely, Besi may not be able to pass such increased costs
through to customers in the form of higher prices, as a result of which our results of
operations may also be adversely affected. Any failure to comply with or meet such climate
change related regulations, customer requirements or sustainability targets could
adversely impact the demand for Besi’s products and subject us to significant costs and
liabilities and reputational risks that could adversely affect our business, financial
condition and results of operations.
Acts of war or terrorism could adversely affect Besi’s business and results of operations.
Threats or acts of war or terrorism may adversely affect our business. Terrorist attacks in
Europe and other regions globally as well as continuing hostilities in the Middle East,
Ukraine and elsewhere have created significant instability and uncertainty in the world. In
addition, terrorist attacks, including cyberterrorism, that directly impact our employees
and facilities or those of our suppliers or customers could have an adverse impact on our
sales, supply chain, production capabilities and costs. Any such event could have a material
adverse effect on world markets, our business and our results of operations.
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Besi may acquire or make investments in companies or technologies that could disrupt its
ongoing business, distract its management and employees, increase its expenses and
adversely affect its results of operations.
As part of its growth strategy, Besi may acquire or make investments in companies and
technologies from time to time. Besi could face difficulties in integrating personnel and
operations from the acquired businesses or technology and in retaining and motivating key
personnel from such businesses. In addition, these acquisitions may disrupt Besi’s ongoing
operations, divert management resources and attention from day-to-day activities,
increase its expenses and adversely affect its results of operations and the market price
of its ordinary shares. In addition, these transactions often result in charges to earnings
for items such as business unit restructuring, including charges for personnel and facility
termination and the amortization of intangible assets or in-process research and
development expenses. Any future acquisitions or investments in companies or
technologies could involve other risks including the assumption of additional liabilities,
dilutive issuances of equity securities, the utilization of cash and the incurrence of debt.
Semiconductor industry related risks
Besi’s revenue and results of operations depend in significant part on demand for
semiconductors which is highly cyclical and has increasingly become more seasonal in
nature.
Capital expenditures for semiconductor manufacturing equipment depend on the current
and anticipated market demand for semiconductors and products using semiconductors.
The semiconductor industry is highly cyclical and volatile and is characterized by periods
of rapid growth followed by industry-wide retrenchment. These periodic downturns have
included, among other things, diminished product demand, production overcapacity,
oversupply and reduced prices, all of which have been regularly associated with substantial
reductions in capital expenditures for semiconductor facilities and equipment and
a reduction of Besi’s revenue.
Over the past decade, Besi has experienced significant upward and downward movements
in quarterly order rates due to global macroeconomic concerns, the timing of industry
capacity additions and seasonality associated with end-user application revenue which
materially affected and, in certain instances, materially adversely affected its revenue,
results of operations and orders. Customer order patterns have become increasingly more
seasonal due to the growing influence of more retail-oriented electronics applications in
the overall demand for semiconductor devices such as smartphones, tablets, wearables,
infotainment, gaming and automotive electronics and the timing of new product
introductions. As such, typical annual order patterns have been characterized by a strong
ramp in the first half of the year to build capacity to meet anticipated year end demand
followed by a subsequent decline in the second half of the year as capacity additions are
digested by customers.
Due to the lead times associated with the production of semiconductor equipment, a rise
or fall in the level of sales of semiconductor equipment typically lags any downturn or
recovery in the semiconductor market by approximately three to six months. This cyclicality
has had, and is expected to continue to have, a direct adverse effect on Besi’s revenue,
results of operations and orders. Industry downturns can be severe and protracted and will
continue to adversely affect Besi’s revenue, results of operations and orders.
Besi must introduce new products in a timely fashion and its success is dependent upon
the market acceptance of such products.
The semiconductor equipment industry is subject to rapid technological change and new
product introductions and enhancements. The success of Besi’s business strategy and
results of operations are largely based upon accurate anticipation of customer and market
requirements. Besi’s ability to implement its overall strategy and remain competitive will
depend in part upon its ability to develop new and enhanced products and introduce them
at competitive price levels in order to gain market acceptance. Besi must also accurately
forecast commercial and technical trends in the semiconductor industry so that its
products provide the functions required by its customers and are configured appropriately
for use in their facilities. Besi may not be able to respond effectively to technological
changes or to specific product announcements by competitors. As a result, the introduction
of new products embodying new technologies or the emergence of new or enhanced
industry standards could render Besi’s existing products uncompetitive from a pricing
standpoint, obsolete or unmarketable.
In addition, Besi is required to invest significant financial resources in the development of
new products or upgrades to existing products and sales and marketing efforts before
such products are made commercially available and before Besi is able to determine
whether they will be accepted by the market. Revenue from such products will not be
recognized until long after Besi has incurred the development costs associated with
designing, creating and selling such products. In addition, a customer may cancel or modify
a product order before or during Besi’s manufacturing process and before it receives
revenue from the customer. While Besi typically imposes a fee when its customers cancel
an order, that fee may not be sufficient to offset costs incurred to design and manufacture
such product. In addition, the customer may refuse to pay the cancellation fee. It is difficult
to predict with any certainty the frequency with which customers will cancel or modify
their orders or the effect that any cancellation or modification would have on Besi’s results
of operations.
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Because of the lengthy and unpredictable sales cycle for its products, Besi may not
succeed in closing transactions on a timely basis, if at all, which could adversely affect its
revenue and operating results.
The sales cycle for Besi’s systems are often lengthy and unpredictable due to the
technological sophistication of its products and premium prices related thereto. Factors
affecting the sales cycle include:
• General economic conditions.
• Customers’ capital spending plans, capacity utilization rates, technology roadmaps and
budgetary constraints.
• Timing related to the adoption, testing, qualification and introduction of new devices
and process technologies and related equipment.
• The timing of customers’ budget cycles.
• Customers’ internal approval processes.
Lengthy sales cycles may cause Besi’s revenue and results of operations to vary from
period to period and it may be difficult to predict the timing and amount of any variations.
Besi may not succeed in closing such large transactions on a timely basis or at all, which
could cause significant variability in its revenue and results of operations for any particular
period.
Besi may fail to compete effectively in its markets.
Besi faces substantial competition on a worldwide basis from established companies
based in Japan, Korea, Singapore, China, various other Asia Pacific countries and North
America, which may have greater financial, engineering, manufacturing and marketing
resources than Besi. Besi believes that once a semiconductor manufacturer has decided to
buy semiconductor assembly equipment from a particular vendor, the manufacturer often
continues to use that vendor‘s equipment in the future. Accordingly, it is often difficult to
achieve significant sales to a particular customer once another vendor‘s products have
been installed. Furthermore, some companies have historically developed, manufactured
and installed assembly equipment internally, and it may be difficult for Besi to sell its
products to these companies or, in attempting to make sales to such companies, risk
exposing Besi’s proprietary technology to a potential competitor.
Besi’s ability to compete successfully in its markets depends on a number of factors both
within and outside its control including:
• Price, product quality and system performance to customer specifications.
• Ease of use and reliability of its products.
• Manufacturing lead times, including the lead times of Besi’s subcontractors.
• Cost of ownership.
• Success in developing or otherwise introducing new products.
• Market and economic conditions.
• Local market presence, particularly in Asian markets, and the quality of Besi’s after-
market sales and service support in each region in which it operates.
• Ability to attract and retain qualified personnel, particularly in Asia.
If Besi fails to compete effectively based upon these or other factors, its business and
results of operations could be adversely affected.
Besi may experience increased price pressure on its product sales.
Besi’s ability to maintain pricing levels for its systems depends, in part, on its ability to
continually develop and introduce new products and next generations of its principal
products on a timely basis. In addition, pricing discipline has been aided by the successful
execution of cost reduction initiatives including the consolidation and transfer of
production operations to lower cost areas, expansion of its lower cost Asian supply chain,
flexible Asian production workforce and ongoing structural overhead reduction. The failure
of new product development and/or cost reduction efforts could limit Besi’s ability to
offset future pricing pressure, and, as such, could materially and adversely affect Besi’s
financial condition and operating results.
Recent consolidation activity and industry alliances in the semiconductor industry have
further increased customer concentration and the risk of loss.
There has been, and Besi expects that there will continue to be, consolidation within the
semiconductor industry resulting in fewer potential customers for its products and
services. In addition, and, perhaps more significantly, industry consolidation could result
in the potential loss of business from existing customers that are a party to a merger if the
combined entity decides to purchase all of its equipment from one of Besi’s competitors.
Further industry consolidation could result in additional negative consequences to Besi
including increased pricing pressure, increased customer demands for enhanced or new
products, greater sales and promotional costs and the potential for increased oversight
from regulatory agencies. Any of the foregoing events would have an adverse impact on
Besi’s business, results of operations and financial condition.
Some of our customers and potential customers are entering into alliances or other forms
of cooperation with one another to expedite the development of processes and other
manufacturing technologies. One of the results of this cooperation may be the definition
of a system or particular tool set for a certain function or a series of process steps that
uses a specific set of manufacturing equipment. These decisions could work to Besi’s
disadvantage if a competitor’s equipment becomes the standard equipment for such
function or process. Even if Besi’s equipment was previously used by a customer, that
equipment may be displaced in current and future applications by the equipment
standardized through such cooperation. These forms of cooperation may have a material
adverse effect on Besi’s business, financial condition and results of operations.
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In addition, various industries have experienced consolidation and other ownership
changes or the emergence of dominant firms and supply chains within those industries,
including the mobile smartphone, computing and automotive industries. Any future
changes in market structure to industries in which we sell our equipment could decrease
the number of potential customers for our product offerings and/or risk an increase in
competition for our clients’ equipment purchases. Moreover, our competitors may respond
to such changes in market conditions by lowering prices and attempting to lure away our
customers.
Operational risks
Difficulties in forecasting demand for Besi’s products may lead to periodic inventory
shortages or surpluses.
Besi typically operates its business with limited visibility of future demand. As a result, it
sometimes experiences inventory shortages or surpluses. Besi generally orders supplies
and otherwise plans production based on internal forecasts for demand. During the
COVID-19 pandemic, we held larger quantities of critical components and parts in inventory
to help ensure timely deliveries to customers. Besi has in the past failed, and may fail
again in the future, to accurately forecast demand for its products. This has led to, and
may in the future lead to, delays in product shipments or, alternatively, an increased risk
of inventory obsolescence. If it fails to accurately forecast demand for its products, Besi’s
business, results of operations and financial condition may be materially and adversely
affected.
Besi depends on its suppliers for critical raw materials, components and subassemblies on
a timely basis. If suppliers do not deliver their products on a timely basis, particularly
during a large order ramp, our revenue, customer relationships and market share could be
materially and adversely affected.
Besi’s assembly equipment, particularly its advanced packaging systems, is highly complex
and requires raw materials, components, modules and subassemblies having a high degree
of reliability, accuracy and performance. Besi relies on subcontractors to manufacture
most of these components and subassemblies (and, in certain instances, on sole suppliers
for such items) on a timely basis as our order ramps can be steep and cycle times relatively
short. As a result, Besi is exposed to a number of significant risks including:
• Increased outsourcing of Besi’s manufacturing process including modules and
subassemblies produced by subcontractors.
• Shortages caused by disruptions at our suppliers and subcontractors for a variety of
reasons including work stoppage or fire, earthquake, flooding or other natural disasters.
• Changes in our manufacturing processes in response to changes in the market, which
may delay our shipments.
• Potential for inadvertent use of defective, contaminated or conflict mineral raw
materials.
• Relatively small operations and limited manufacturing resources of some of our suppliers
which may limit their ability to manufacture and sell subassemblies, modules,
components or parts in the volumes Besi requires and at acceptable quality levels, prices
and delivery timetables.
• Potential inability of suppliers to meet customer demand requirements during volatile
cycles.
• Reliability or quality issues with certain key components, modules and subassemblies
provided by single source suppliers as to which Besi may not have any short-term
alternative.
• Delays in the delivery of raw materials, modules or subassemblies, which, in turn, may
delay shipments to our customers.
• Loss of suppliers as a result of industry consolidation, bankruptcy or insolvency.
• Potential copying or theft of proprietary designs for unauthorized use or sale to third
parties including competitors.
If Besi were unable to deliver products to its customers on time and at expected costs for
these or any other reasons, or it were unable to meet customer expectations as to cycle
time, or it were unable to maintain acceptable product quality or reliability, then its
business relationships, market share, financial condition and operating results could be
materially and adversely affected.
Undetected problems in Besi’s products could directly impair its financial results.
If flaws in the design, production, assembly or testing of its products (by Besi or its
suppliers) were to occur, we could experience a rate of failure in our products that could
result in substantial repair, replacement or service costs and potential damage to Besi’s
reputation. Continued improvements in manufacturing capabilities, controls of material
and manufacturing quality and costs and product testing are critical factors to Besi’s
future growth. There can be no assurance that our efforts to monitor, develop, modify and
implement appropriate tests and manufacturing processes for Besi’s products will be
sufficient to permit us to avoid a rate of product failure that results in substantial delays
in shipments, repair, replacement or service costs and/or potential damage to our
reputation, any of which could have a material adverse effect on Besi’s business, results
of operations and financial condition.
The costs of product defects and errata (deviations from product specifications) due to, for
example, problems in Besi’s design and manufacturing processes could include:
• Writing off the value of inventory.
• Disposing of products that cannot be fixed.
• Retrofitting products that have been shipped.
• Providing product replacements or modifications.
• Defending against litigation.
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Besi’s use of global and diverse information technology systems could result in ineffective
or inefficient business management and could expose it to security threats to its data
resources and intellectual property.
Besi currently utilizes a variety of information technology (“IT”) systems to run its global
operations. At present, Besi’s operations rely on a range of different software systems to
manage sales, administrative and production functions. Some of these systems are
proprietary and others are purchased from third party vendors. In addition, some of these
systems are maintained on-site by Besi personnel while others are maintained off-site by
third parties.
We maintain and rely extensively on IT systems and network infrastructure for the effective
operation of our business and protection of technological resources. We also hold large
amounts of data in data center facilities around the world upon which our business
depends. We could experience a disruption or failure of our systems, or of the third-party
hosting facilities or other services that we use. Such disruptions, failures or threats could
include a major earthquake, flood, fire, cyber-attack, act of terrorism, ransomware or
other catastrophic event as well as power outages or telecommunications infrastructure
outages or a decision by one of our third-party service providers to close facilities that we
use without adequate notice or other unanticipated problems with the third-party services
that we use, including a failure to meet service standards. As a highly automated business
with a significant amount of our customers, suppliers and employees working remotely,
any such disruptions or failures could (i) result in the destruction or disruption of our
critical business operations, controls or procedures or IT systems, (ii) severely affect our
ability to conduct normal business operations, including delaying completion of sales and
provision of services, (iii) result in a material weakness in our internal control over financial
reporting, (iv) harm our reputation and (v) adversely affect our ability to attract and retain
customers, any of which could materially adversely affect our future operating results.
Besi believes that there has been a global increase in IT security threats and higher levels
of professionalism in computer crime which pose a greater risk to the confidentiality,
availability, distribution and integrity of our internal data and information. Besi relies on
commercially available systems, software, tools and monitoring to provide security for the
processing, transmission and storage of confidential information. A disruption, infiltration
or failure of our IT systems or any of our data centers could occur as a result of technological
error, computer viruses, or third-party action including intentional misconduct by computer
hackers, physical break-ins, the actions of state actors, industrial espionage, ransomware
efforts, fraudulent inducement of employees or customers to disclose sensitive information
such as usernames or passwords, and employee or customer error or malfeasance.
A security breach could result in unauthorized access to or disclosure, modification,
misuse, loss, or destruction of our or our customer’s data (including proprietary design
information, intellectual property or trade secrets). Because there are many different
security breach techniques and such techniques continue to evolve, we may be unable to
anticipate attempted security breaches and implement adequate preventative measures.
Any security breach or successful denial of service attack could result in a loss of customer
confidence in the security of our products and damage to our brand, reduce the demand for
our offerings, disrupt our normal business operations, compromise our competitive
technological position, require us to spend material resources to investigate or correct the
breach, expose us to legal liabilities including litigation, regulatory enforcement and
indemnity obligations and materially adversely affect our operating results.
Our business may be harmed if we fail to attract and retain qualified personnel.
Besi’s future success depends in significant part on the continued contribution of its
senior executive officers and key employees including a number of specialists with
advanced university qualifications in the fields of engineering, electronics, software and
computing. In addition, we need to attract and retain other qualified management,
technical, sales and support personnel for our operations, particularly to help expand
Asian production and technical capabilities.
Besi’s business and future operating results also depend on the continuous monitoring
and adjustment of our Asian production capacity given the cyclical nature of our business
and increased seasonal influences on order rates. We believe that our ability to increase
manufacturing capacity has from time to time been constrained by the limited number of
skilled technical and production personnel available. Competition for such personnel is
intense and may be amplified by evolving and periodic restrictions on immigration, travel
or availability of visas for skilled technology workers. In addition, labor costs in the various
countries in which we operate are rising. The loss of any key executive or employee or the
inability to attract and retain skilled executives and employees as needed could adversely
affect our business, financial condition and results of operations.
Any significant disruption to Besi’s operations could reduce the attractiveness of our
products and result in a loss of customers.
The timely delivery and satisfactory performance of Besi’s products are critical to our
operations, reputation and ability to attract new customers and to retain existing
customers. Besi’s administrative, development and systems manufacturing are located all
over the world including locations in the Netherlands, Malaysia, Singapore, Austria, China,
Vietnam and Switzerland. Some of Besi’s facilities are in locations that have experienced
severe weather conditions, fire, natural disasters, flooding, political unrest and/or terrorist
incidents. For example, the operations of Besi’s die bonding facility located near Kuala
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Lumpur, Malaysia were disrupted by a severe flood in the fourth quarter of 2021 which
caused us to defer shipments by four to eight weeks with a revenue value of approximately
€ 20-25 million and to incur € 7.4 million of costs to repair systems affected by the flood.
If the operations at any of our facilities in the future were damaged or destroyed as a result
of any of the foregoing, or as a result of other factors, Besi could experience interruptions
in its service, delays in product deliveries and would likely incur additional costs to arrange
new production facilities which may not be available on timely or commercially reasonable
terms, or at all. Any interruptions to Besi’s operations or delays in delivering its products
could harm our customer relationships and brand reputation, divert employees’ attention,
decrease revenue, increase our liability exposure and could potentially cause order
cancellations, any of which could adversely affect Besi’s business, financial condition and
results of operations. It is unclear whether Besi’s insurance policies would adequately
compensate for any losses incurred as the result of a production or service disruption or
delay.
Besi is largely dependent upon its international operations.
Besi has manufacturing and/or sales and service facilities and personnel in the Netherlands,
Austria, Malaysia, Korea, Hong Kong, Singapore, China, the Philippines, Taiwan, Thailand,
Switzerland, Vietnam and North America. Its products are marketed, sold and serviced
worldwide. In addition, 84% of its sales in 2023 were to customers outside of Europe and
68% of its employees at year end 2023 were located in facilities outside of Europe.
Besi’s operations are subject to risks inherent in international business activities including,
in particular:
• General economic, banking and political conditions in each country.
• Unexpected changes in regulatory requirements, compliance with a variety of foreign
laws and regulations including restrictions on immigration, travel, or availability of visas.
• The overlap of different tax structures and potentially conflicting interpretations of tax
regulations.
• Management of an organization spread over various countries.
• Currency fluctuations which could result in reduced revenue, increased operating
expenses and foreign currency controls.
• Greater difficulty in accounts receivable collection and longer collection periods.
• Difficulty in enforcing or adequately protecting Besi’s intellectual property in foreign
jurisdictions.
• Less developed and predictable legal systems.
• Tariffs, import and export licensing requirements, trade restrictions, restrictions on
foreign investments and changes in freight rates.
• Political unrest and terrorist activities in the countries in which it operates.
• Ethical issues such as corruption, bribery and human rights violations.
• Varying impacts per region from climate change events.
In addition, each region in the global semiconductor equipment market exhibits unique
characteristics that can cause capital equipment investment patterns to vary significantly
from period to period.
Geographically focused disruptions or failures, such as natural disasters, acts of terrorism,
geopolitical conflict or other localized catastrophic events as well as power outages or
telecommunications infrastructure outages in our Asian operations could have a material
adverse effect on our business and results of operations.
In addition, compliance with foreign laws and regulations that are applicable to our
international operations is complex and may increase our cost of doing business in
international jurisdictions. Further, our international operations could expose us to fines
and penalties if we fail to comply with regulations such as anti-bribery laws and local laws
prohibiting corrupt payments to governmental officials. Although we have implemented
policies and procedures designed to help ensure compliance with such laws, there can be
no assurance that our employees, partners and other persons with whom we do business
will not take actions in violation of our policies or these laws. Any violations could subject
us to civil or criminal penalties including substantial fines or prohibitions on our ability to
offer our products and services to one or more countries and could also materially damage
Besi’s reputation and brand identity.
Recent regulations and increased customer focus on the usage of conflict minerals in
product supply chains may force us to incur additional expenses, make our supply chain
more complex and result in damage to Besi’s customer reputation.
US, European and Chinese regulatory authorities have established initiatives with respect
to the usage by corporations of certain minerals and metals known as conflict minerals in
their products, regardless of whether such products are manufactured by third parties.
Regulations require companies to conduct due diligence and disclose whether the subject
minerals originated from the Democratic Republic of Congo (“DRC”) and/or certain adjoining
countries. The implementation of such regulations could adversely affect the sourcing,
availability and pricing of minerals used in the manufacture and assembly of semiconductor
devices. Besi’s reputation could also be harmed since our supply chain is complex and
verification of the origins of these materials in our products through due diligence
procedures may be difficult and costly and may not be possible at all. In such an event, we
may also face difficulties in satisfying customers who require that all our product
components be certified as conflict-free. Please refer to Besi’s Conflicts Mineral and
Supply Chain Policy in the ESG section of this Annual Report.
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Asian production and personnel expansion could expose us to additional risks related to
corruption and human rights issues in the region.
In recent years, we have significantly increased our production, engineering and supply
chain capabilities in Asia (Malaysia, China and Singapore) to increase our local presence
and operational efficiency. Asian personnel represented 66% of our total headcount at
year end 2023. Further, revenue from Asian customers represented approximately 73% of
consolidated revenue in 2023. As a more active Asian participant, we may be confronted
with incidents of corruption and human rights violations which are significant issues in the
region. In addition, expanded Asian operations could expose us to the risk of fraud or
bribery in our supply chain activities.
Financial risks
Besi’s historical financial results have fluctuated significantly and may continue to do so
in the future.
Besi’s quarterly revenue, orders and operating results have fluctuated significantly in the
past and may continue to do so in the future. Besi believes that period to period comparisons
of its operating results are not necessarily indicative of future operating results. Factors
that have caused our operating results to fluctuate in the past and which are likely to
affect them in the future include the following, many of which are beyond our control:
• Global macroeconomic trends and geopolitical events, which may influence levels of
gross domestic product, purchasing power and consumer confidence of various regions
including both developed and lesser developed countries and which may affect customer
willingness to invest in new production capacity.
• The number and frequency of new electronics introductions, particularly for retail
applications such as mobile, computing, gaming, infotainment and automotive end-user
markets.
• The volatility and seasonality of the semiconductor industry and its impact on
semiconductor equipment suppliers.
• Industry capacity utilization, pricing and inventory levels.
• The timing of new customer device introductions and production processes which could
require the addition of new assembly equipment capacity.
• The success of Besi’s research and development activities including new hybrid bonding
and other wafer level assembly systems and volume production related thereto.
• The length of sales cycles and lead times associated with Besi’s product offerings.
• The timing, size and nature of Besi’s transactions.
• The financial health and business prospects of Besi’s customers.
• The impact on potential orders from consolidation trends among semiconductor
producers.
• The proportion of semiconductor demand represented by industrial and retail
applications.
• Our ability to scale operations on a timely basis consistent with product demand.
• The ability of Besi’s suppliers to meet our demand for components, subassemblies and
modules on a timely basis.
• The market acceptance of new products or product enhancements by Besi or its
competitors.
• The timing of new personnel hires and the rate at which new personnel become
productive.
• Changes in pricing policies by Besi’s competitors.
• Changes in Besi’s operating expenses.
• Besi’s ability to adequately protect its intellectual property.
• Besi’s ability to integrate any future acquisitions and any restructuring charges related
thereto.
• The fluctuation of foreign currency exchange rates.
• The impact of any future pandemic on our customers, suppliers and employees.
Because of such factors, investors should not rely on quarter to quarter comparisons of
Besi’s results of operations as an indication of future performance. In future periods,
Besi’s results of operations could differ from estimates of public market analysts and
investors. Such discrepancies could cause the market price of its securities to decline.
Besi’s orders at any particular date may not be indicative of future operating results.
Besi’s orders aggregated € 548.3 million in 2023 which reflected a 17.4% decrease versus
2022 primarily due to a significant assembly equipment downturn which commenced in the
second quarter of 2022 and continued throughout 2023. Orders are subject to customer
cancellation at any time upon payment of a negotiated cancellation fee. During market
downturns, semiconductor manufacturers historically have cancelled or deferred
additional equipment purchases. Besi’s bookings may also be influenced by seasonal
factors which typically cause order levels to decline in the second half of the year from
peak levels reached in the first half year. Orders can also be affected by customer
cancellations. For example, orders declined by 58% in the second quarter of 2018 versus
the first quarter of 2018 primarily due to the cancellation by a single customer of
€ 28 million in orders.
Because of the possibility of changes in delivery schedules, expedited cycle times,
cancellations and delays in product shipments, Besi’s orders at any particular date may
not be representative of actual revenue for any succeeding period. Besi’s current and
future dependence on a limited number of customers increases the potential revenue
impact of any delay or deferral activity by customers.
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Besi may not be able to adjust its costs and overhead levels quickly enough to offset
revenue declines that it may experience in the future.
A portion of Besi’s business is characterized by relatively fixed costs including personnel,
facility and general and administrative as well as expenses related to the maintenance of
our manufacturing equipment. Expense levels in future periods will be based, in large part,
on expectations regarding future revenue sources. As a result, our operating results for
any given period in which material orders fail to occur, are delayed or are deferred could
vary significantly. Due to the nature of such fixed costs, we may not be able to reduce our
fixed costs sufficiently or in a timely manner to offset any future revenue declines. Our
inability to align revenue and expenses in a timely and sufficient manner would have an
adverse impact on Besi’s gross margins and results of operations.
A limited number of customers have accounted for a significant percentage of Besi’s
revenue, and its future revenue could decline if it cannot maintain or replace these
customer relationships.
Historically, a limited number of Besi’s customers have accounted for a significant
percentage of its revenue. In 2023, no customer represented more than 10% of Besi’s
revenue and its largest ten customers accounted for 52% of revenue. We anticipate that
our results of operations in any given period will continue to depend to a significant extent
upon revenue from a relatively limited number of customers. In addition, we anticipate
that the composition of such customers will continue to vary from year to year so that the
achievement of our long-term goals will require the maintenance of relationships with
existing customers and obtaining additional customers on an ongoing basis. Besi’s failure
to enter into and realize revenue from a sufficient number of customers during a particular
period could have a significant adverse effect on our revenue development.
In addition, there are a limited number of customers worldwide interested in purchasing
semiconductor manufacturing equipment and an even more limited number of major
customers and supply chains for specific end market applications such as smartphones,
tablets, wearables, laptops, computers and automotive electronics. As a result, if only a
few potential customers were to experience financial difficulties or file for bankruptcy
protection or if there were further customer or supply chain consolidation, the
semiconductor equipment manufacturing market as a whole, and Besi’s revenue and
results of operations specifically, could be negatively affected.
Besi’s results of operations have in the past and could in the future be affected by currency
exchange rate fluctuations.
The following tables set forth Besi’s revenue and costs and expenses by principal functional
currency for 2023, 2022 and 2021:
Revenue
2023 2022 2021
Euro 75% 28% 22%
US dollar 25% 72% 78%
Total 100% 100% 100%
Costs and Expenses
2023 2022 2021
Euro 32% 27% 27%
Malaysian ringgit 23% 30% 31%
Chinese renminbi 15% 14% 13%
Singapore dollar 10% 8% 7%
US dollar 8% 10% 11%
Swiss franc 8% 8% 8%
Other 4% 3% 3%
Total 100% 100% 100%
Besi’s principal reporting currency is the euro. Due to its global operations and differences
in the foreign currency composition of its revenue and costs and expenses, Besi’s results
of operations could be adversely affected by fluctuations in the values of, and the
relationships between, the euro, the US dollar, Swiss franc, Malaysian ringgit, Chinese
renminbi and Singapore dollar. We seek to manage our exposure to currency fluctuations
in part by hedging firmly committed sales contracts denominated in US dollars. While
management will continue to monitor its exposure to currency fluctuations and may use
financial hedging instruments to minimize the effect of such fluctuations, Besi cannot
assure that exchange rate fluctuations will not have a material adverse effect on its
results of operations or financial condition.
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Besi’s principal competitors are domiciled in countries utilizing primarily US dollar and/or
Japanese yen as their principal currencies for the conduct of their operations. Besi believes
that a decrease in the value of the US dollar and US dollar linked currencies or Japanese
yen in relation to the euro could lead to intensified price-based competition in its markets
resulting in lower prices and margins and could have a negative impact on our business
and results of operations.
We may not declare dividends at all or in any particular amount in any given year.
Besi aims to pay an annual dividend in accordance with its dividend policy and seeks to
increase the amount over time. On an annual basis, the Board of Management (with
Supervisory Board approval) will submit a proposal for approval at the Annual General
Meeting of Shareholders with respect to the dividend amount to be declared for the prior
financial year. The proposal in any given year will be subject to (i) Besi’s review of (a) its
annual and prospective financial performance, liquidity and financing needs, (b) the
prevailing market outlook, (c) its strategy, market position and acquisition strategy and/or
(ii) a target dividend payout ratio in the range of 40-100% relative to net income to be
adjusted accordingly if the factors referred to under (i) so require.
Accordingly, the Board of Management may decide not to pay a dividend, or a lower
dividend, with respect to any particular year in the future which could have a material
adverse effect on the price of Besi’s ordinary shares.
Legal and compliance risks
Besi may not be able to protect its intellectual property rights which could make it less
competitive and cause it to lose market share.
Although Besi seeks to protect its intellectual property rights through patents, trademarks,
copyrights, trade secrets, confidentiality and assignment of invention agreements and
other measures, there can be no assurance that we will be able to protect our technology
adequately, that our competitors will not be able to develop similar technology
independently, that any of Besi’s pending patent applications will be issued or that
intellectual property laws will protect our intellectual property rights. In addition, Besi
operates internationally and intellectual property protection varies among the jurisdictions
in which we conduct our business operations. In certain jurisdictions, the prevention of
theft or copying can be challenging. Litigation may be necessary to enforce our patents,
copyrights or other intellectual property rights, to protect our trade secrets, to determine
the validity and scope of the proprietary rights of others or to defend against claims of
infringement. Litigation could result in substantial costs and a diversion of resources,
distract Besi’s management from operating the business and could have a material adverse
effect on our business and operating results.
In addition, third parties may seek to challenge, invalidate or circumvent any patent issued
to Besi. Further, the rights granted under any patent issued to Besi may not provide
competitive advantages and third parties may assert that our products infringe patents,
copyrights or trade secrets of such parties. Also, third parties may challenge, invalidate or
circumvent technology which Besi licenses from third parties. If any party is able to
successfully claim that Besi’s creation or use of proprietary technology infringes upon
their intellectual property rights, we may be forced to pay damages. In addition to any
damages we may have to pay, a court could require us to stop the infringing activity or
obtain a license which may not be available on terms which are favorable to Besi or at all.
Besi is subject to environmental rules and regulations in a variety of jurisdictions.
We are subject to a variety of governmental regulations related to the use, storage,
discharge and disposal of chemical by-products and water used in our manufacturing
processes. The failure to comply with any present or future regulations and/or
environmental claims related thereto could result in the assessment of damages or
imposition of fines against Besi, the suspension of production or the cessation of
operations. New regulations could require us to acquire costly equipment or to incur other
significant expenses to remediate environmental issues. In addition, any failure by us to
control the use or adequately restrict the discharge of hazardous substances into the
environment could subject Besi to future liabilities.
Our business, reputation and financial position may be harmed by unethical behavior and
non-compliance with Besi’s Code of Conduct.
Besi seeks to conduct its business in accordance with internationally recognized standards
and best practices. We have adopted social, ethical and environmental standards for our
operations that typically exceed minimum legal and regulatory compliance levels and
applied European social and ethical standards in the conduct of our operations wherever
possible. Besi has established a Code of Conduct which governs the behavior of our
employees worldwide on matters such as corruption and human rights behavior as well as
integrity and ethical behavior, all of which are important values to the Company.
However, we might still encounter unethical behavior and breaches to our Code of Conduct
due to intentional fraudulent behavior by individual employees. Issues can arise
unintentionally or from a lack of adherence to appropriate rules and regulations. Unethical
behavior and misconduct could lead to fines, penalties and claims by injured parties as
well as material financial loss and damage to the reputation of Besi and its stakeholders.
Moreover, environmental, social and governance matters continue to evolve rapidly. To the
extent such matters have the effect of negatively impacting our reputation, they may also
impede our ability to compete as effectively or to recruit and/or retain employees, which
may adversely affect our operations.
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Anti-takeover provisions could delay or prevent a change of control including a takeover
attempt that might result in a premium over the market price for Besi’s ordinary shares.
Besi’s articles of association provide for the possible issuance of preference shares. In
April 2000, Besi established the foundation “Stichting Continuïteit BE Semiconductor
Industries” (the “Foundation”) whose board consists of five members, three of whom are
independent of Besi. Besi has granted the Foundation a call option pursuant to which the
Foundation may purchase preference shares in a maximum amount equal to the total
number of Besi’s ordinary shares outstanding at the time of exercise of the option minus
one. If the Foundation were to exercise the call option, it may result in delaying or
preventing a takeover attempt including a takeover attempt that might result in a premium
over the market price for Besi’s ordinary shares.
Shareholder Information
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Euronext Amsterdam listing
Besi’s ordinary shares are listed on Euronext Amsterdam and are included in the Euronext
AEX index. The stock symbol is BESI and the ISIN code is NL0012866412.
At December 31,
2023 2022
Number of ordinary shares, net of shares held in treasury 77,015,794 78,487,926
Average daily shares traded* 958,008 1,170,670
Highest closing price (€) 140.85 88.28
Lowest closing price (€) 57.32 41.38
Year end share price (€) 136.45 56.56
* Includes Euronext and all secondary markets.
OTC Markets
Besi’s Level 1 ADRs are traded on the OTC markets (symbol: BESIY).
Convertible Notes listings
At December 31, 2023, Besi had outstanding (i) € 3.2 million of its 0.5% Senior Unsecured
Convertible Notes due 2024 (the “2017 Convertible Notes”) ISIN XS1731596257,
(ii) € 150 million of its 0.75% Senior Unsecured Convertible Notes due 2027 (the “2020
Convertible Notes”) ISIN XS2211511949 and (iii) € 175 million of its 1.875% Senior Unsecured
Convertible Notes due 2029 (the “2022 Convertible Notes”) ISIN XS2465773070, all of which
are listed on Deutsche Börse’s Freiverkehr market www.boerse-frankfurt.de.
Besi’s equity structure
Besi’s authorized share capital consists of 160,000,000 ordinary shares and 160,000,000
preference shares. At December 31, 2023, Besi had 81,146,738 issued and outstanding
ordinary shares of which Besi held 4,130,944 shares in treasury.
The foundation “Stichting Continuïteit BE Semiconductor Industries” (the “Foundation”)
has been granted an option to acquire preference shares, which would, if the option were
exercised, allow the Foundation to acquire a maximum of 50% of the total issued share
capital including the preference shares.
Shareholder Information
BESI MARKET INFORMATION
Symbol/Index
• BESI
• Euronext AEX
Market Cap* • € 10.5 billion ($ 11.6 billion)
Dividend Policy • Pay-out 40-100% of net income per annum
* As of December 31, 2023.
AVERAGE DAILY VOLUME AND LIQUIDITY
Avg. Daily Volume Liquidity
810
1,171
2019 2023202220212020
100
90
80
70
60
50
40
30
20
10
0
1,400
1,200
1,000
800
600
400
200
0
20
695
53
25
Volume (in thousands) Avg Vol * Avg Price (€ millions)
758
69
958
87
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Issuance of ordinary shares and pre-emptive rights
Ordinary shares may be issued pursuant to a resolution of the General Meeting of
Shareholders. The General Meeting of Shareholders may grant the authority to issue
ordinary shares to the Board of Management for a maximum period of five years. After such
designation, the Board of Management may determine the issuance of ordinary shares
subject to the approval of the Supervisory Board. The foregoing applies accordingly to the
granting of rights to subscribe for ordinary shares but shall not be applicable to the
issuance of ordinary shares to a party exercising a previously acquired right to subscribe
for ordinary shares.
Currently, the General Meeting of Shareholders has delegated its authority to the Board of
Management until October 26, 2024, subject to the approval of the Supervisory Board, to
issue ordinary shares and grant rights to subscribe for ordinary shares up to a maximum of
10% of Besi’s issued share capital as from April 26, 2023.
Holders of ordinary shares have a pro-rata, pre-emptive right in relation to any ordinary
shares issued, which right may be limited or excluded. Such shareholders have no pro-rata
pre-emptive right with respect to (i) any ordinary shares issued against contributions
other than in cash, (ii) any issuance of preference shares, or (iii) any ordinary shares issued
to employees (including members of the Board of Management). The foregoing applies
accordingly to the granting of rights to subscribe for ordinary shares but shall not be
applicable to the issuance of ordinary shares to a party exercising a previously acquired
right to subscribe for ordinary shares. On the basis of a designation by the General Meeting
of Shareholders, the Board of Management has the power, subject to the approval of the
Supervisory Board, to limit or exclude the pre-emptive right in relation to any ordinary
shares issued and rights to subscribe for ordinary shares granted until October 26, 2024,
subject to the 10% maximum as described above. The designation may be renewed for
a maximum period of five years. In the absence of such designation, the General Meeting
of Shareholders has the power to limit or exclude such pre-emptive right.
Issuance of preference shares
The provisions in Besi’s articles of association for the issuance of preference shares are
similar to the provisions for the issuance of ordinary shares described herein. However,
an issuance of preference shares will require the prior approval of the General Meeting of
Shareholders if it would result in an outstanding number of preference shares exceeding
100% of the number of outstanding ordinary shares and the issuance is effected pursuant
to a resolution of a corporate body other than the General Meeting of Shareholders, such
as the Board of Management. Furthermore, within two years after the first issuance
of such preference shares, a General Meeting of Shareholders will be held to determine
the repurchase or cancellation of the preference shares. If no resolution to repurchase or
cancel the preference shares is adopted, another General Meeting of Shareholders with
the same agenda must be convened and held within two years after the previous meeting
and this meeting will be repeated until no more preference shares are outstanding.
This procedure does not apply to preference shares that have been issued pursuant to
a resolution by the General Meeting of Shareholders. In connection with the issuance of
preference shares, it may be stipulated that an amount not exceeding 75% of the nominal
amount ordinarily payable upon issuance of shares may be paid only if the Company
requests payment.
The Foundation
Under the terms of an agreement entered in April 2002 between the Company and the
Foundation, the Foundation has been granted a call option, pursuant to which it may
purchase a number of preference shares up to a maximum of the total number of
outstanding ordinary shares at the time of exercise of the option minus one. This call
option agreement was revised in May 2008 to comply with applicable laws. The purpose of
the Foundation is to safeguard the interests of the Company, the enterprise connected
therewith and all the parties having an interest therein and to exclude as much as possible
influences which could threaten, among other things, the Company’s continuity,
independence and identity. Until the call option is exercised by the Foundation, it can be
revoked by the Company, with immediate effect. The aim of the preference shares is,
amongst other things, to provide a protective measure against unfriendly take-over bids
and other possible influences that could threaten the Company’s continuity, independence
and identity, including, but not limited to, a proposed resolution to dismiss the Supervisory
Board or the Board of Management.
The Foundation was established in April 2000. The board of the Foundation currently
consists of five members, three of whom are independent of Besi and two of whom are
former members of the Supervisory Board. Please refer to the chapter Other Information
for additional information about the Foundation and its board members.
Voting rights
Each share (whether it is an ordinary share or a preference share) carries the right to cast
one vote. Resolutions by the General Meeting of Shareholders require the approval of an
absolute majority of votes validly cast, unless otherwise required by Dutch law or Besi’s
articles of association.
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Repurchase and cancellation of shares
The Board of Management may cause the Company to repurchase for consideration any
class of shares in its own share capital which have been paid-up, subject to certain
provisions of Dutch law and Besi’s articles of association, if (i) the shareholders’ equity
less the payment required to make the acquisition does not fall below the sum of the paid-
up and called part of the issued share capital and any reserves required to be maintained
by Dutch law or Besi’s articles of association and (ii) the Company and its subsidiaries
would thereafter not hold shares (in pledge) with an aggregate nominal value exceeding
50% of the Company’s issued share capital. Shares held by the Company or any of its
subsidiaries will have no voting rights and the Company may not receive dividends
on shares it holds in its own share capital. Any such repurchases may only take place if
the General Meeting of Shareholders has granted the Board of Management the authority
to effect such repurchases, which authorization may apply for a maximum period of
18 months. The Board of Management, with the approval of the Supervisory Board,
is currently authorized to repurchase up to 10% of Besi’s issued share capital from
April 26, 2023 through October 26, 2024.
Upon a proposal of the Board of Management, with the approval of the Supervisory Board,
the General Meeting of Shareholders has the power to reduce the Company’s issued share
capital by means of cancelling shares held in treasury or by reducing the nominal value of
the shares by way of an amendment of the Company’s articles of association. Any such
proposal is subject to the relevant provisions of Dutch law and Besi’s articles of association.
Upon the proposal of the Board of Management, with the approval of the Supervisory
Board, the General Meeting of Shareholders agreed to authorize the cancellation of
ordinary shares held in treasury of up to a maximum of 10% of the Company’s issued share
capital as at April 26, 2023. In accordance therewith, the Board of Management was
authorized to determine the exact number of ordinary shares to be so cancelled.
Change of control provisions in significant agreements
Each of Besi’s 2017, 2020 and 2022 Convertible Notes contain change of control provisions
under which in the event of a change of control of Besi (as defined), the holder of
a Convertible Note will have the right to require Besi to redeem that Convertible Note
at 100% of its principal amount together with accrued and unpaid interest thereon.
In addition, Besi’s revolving credit facility with a consortium of banks contains a provision
requiring the repayment of all borrowings outstanding upon a change of control of Besi
(as defined) at 100% of its principal amount outstanding. At December 31, 2023, there was
no change of control provision contained in any other of Besi’s material agreements.
Dividend policy
Besi considers the payment of dividends on an annual basis based upon (i) a review of its
annual and prospective financial performance, liquidity and financing needs, the prevailing
market outlook and Besi’s strategy, market position and acquisition strategy and/or
(ii) a dividend payout ratio in the range of 40-100% relative to net income to be adjusted if
the factors referred to under (i) so require.
Due to Besi’s earnings and cash flow generation in 2022, the Board of Management, with
the approval of the Supervisory Board, proposed and Besi paid a cash dividend to
shareholders equal to € 2.85 per share for 2022 which resulted in cash payments to
shareholders of € 222.1 million. Due to Besi’s earnings and cash flow generation in 2023,
the Board of Management will, with the approval of the Supervisory Board, propose a cash
dividend to shareholders equal to € 2.15 per share for 2023 for approval at Besi’s Annual
General Meeting of Shareholders to be held on April 25, 2024. The payments for the year
2022 and proposed for the year 2023 represent a dividend payout ratio relative to net
income of 92% and 94%, respectively.
Ownership interests in the ordinary shares
Under the Dutch Financial Supervision Act (
Wet op het financieel toezicht,
“Wft“), the
following parties have notified the Dutch Authority for the Financial Markets (
Autoriteit
Financiële Markten,
“AFM”) of their share interests in the Company equal to or exceeding
3%:
Notification effective
Share
interest
Voting
rights
BlackRock Inc. February 14, 2024 10.11% 11.57%
FMR LLC May 11, 2023 6.00% 6.00%
Goldman Sachs Group Inc. December 6, 2023 4.28% 4.28%
BE Semiconductor Industries N.V. October 19, 2023 5.00% 0.00%
Norges Bank August 24, 2023 3.29% 3.29%
T. Rowe Price Group, Inc. September 13, 2023 3.21% 3.08%
Société Générale S.A. February 22, 2023 3.05% 3.05%
Sylebra Capital Limited October 18, 2021 3.04% 3.04%
A list of share and voting interests in the Company of 3% or more can be found on the AFM
website: www.afm.nl.
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Analysts
The following sell side analysts cover Besi’s shares:
Alliance Bernstein Sara Russo
Arete Research Jim Fontanelli
Barclays Simon Coles
Berenberg Trion Reid
B of A Securities Didier Scemama
BNP Paribas Exane Martin Jungfleisch
Citi Andrew Gardiner
Degroof Petercam Michael Roeg
Deutsche Bank Rob Sanders
Goldman Sachs Alexander Duval
ING Marc Hesselink
KBC Securities Thibault Leneeuw
Kepler Chevreux Ruben Devos
Morgan Stanley Nigel van Putten
Needham & Company Charles Shi
NewStreet Research Rolf Bulk
ODDO BHF/ABN AMRO Martin Marandon-Carlhian
Redburn Atlantic Timm Schulze-Melander
Stifel Florian Sager
UBS Madeleine Jenkins
Van Lanschot Kempen Nikos Kolokotronis
Investor relations
Besi uses a range of activities to initiate and maintain contact with investors. After
publication of its annual and quarterly results, (virtual) roadshows are typically held for
institutional investors in Europe, the United States and Asia. Planned roadshows and
presentations can be found on the Besi website. Contacts with institutional investors are
further maintained by means of conference calls, conferences and investor visits. The
Company’s investor outreach also includes meetings with retail investors, research
analysts, private investors, journalists and media outlets to help communicate the Besi
story to the investment community and general public. Shareholders are also engaged
through quarterly and annual conference calls and participation at Besi’s Annual General
Meeting of Shareholders.
Investors in European, North American and Asian markets are increasingly considering
sustainability and Environmental, Social and Governance (“ESG”) themes as part of their
investment process. Investors are requesting more ESG information from us than in
previous years particularly in the areas of climate change, fossil fuels, carbon emissions,
conflict minerals and human rights within the supply chain. Shareholders expect Besi to
protect their investment and provide a competitive return on invested capital while
operating in a sustainable and responsible manner as a good corporate citizen. Besi has
engaged in important dialogue with stakeholders and received valuable feedback about its
business and ESG issues as a result of its investor relations program.
Important investor relations dates in 2024 that are currently planned (subject to change)
are as follows:
April 25, 2024 2024 first quarter results
April 25, 2024 Annual General Meeting of Shareholders
July 25, 2024 2024 second quarter results
October 24, 2024 2024 third quarter results
February 2025 2024 fourth quarter and annual results
Prevention insider trading
Besi has implemented a Code of Conduct governing the use of inside information by the
members of the Supervisory Board, the member of the Board of Management and any
other designated persons, including key staff members. In addition, there is a separate
Code of Conduct governing the use of inside information by Besi employees generally.
Designated persons have agreed in writing to observe the relevant Code of Conduct
concerning the reporting and regulation of transactions in Besi securities (and other
designated securities) and the treatment of price-sensitive information. Besi has appointed
a compliance officer who is responsible for monitoring compliance with the Codes of
Conduct and communication with the AFM.
Besi Incentive Plan
Besi may grant performance shares on an annual conditional basis to the member of the
Board of Management, key employees and officers under the current Besi Incentive Plan.
Further information on this subject is given in the Remuneration Report.
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Besi’s share price development
BESI’S SHARE PRICE VERSUS SOX INDEX AND STOXX EUROPE 600 INDEX
(Since January 1, 2021 until December 31, 2023; rebased to 100)
300
200
100
0
+49.4%
+19.7%
+175.2%
Besi STOXX Europe 600SOX
Jan-21 Apr-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23
Dec-23
Source: Capital iQ
BESI’S SHARE PRICE VERSUS SOX INDEX AND STOXX EUROPE 600 INDEX
(Since January 1, 2023 until December 31, 2023; rebased to 100)
Besi STOXX Europe 600SOX
Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23
Dec-23
+64.9%
+141.2%
+12.7%
300
250
200
150
100
50
Source: Capital iQ
Corporate Governance
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Besi acknowledges the importance of good corporate governance, the most important
elements of which are transparency, independence and accountability. Important corporate
governance developments in applicable jurisdictions are followed closely and rules are
implemented where appropriate.
Besi’s ordinary shares are listed on Euronext Amsterdam. Accordingly, Besi complies with
all applicable listing rules of Euronext Amsterdam.
Besi applied the Dutch Corporate Governance Code which was updated in 2022. Deviations
from the Dutch Corporate Governance Code are explained below under Explanation of
Deviations from the Dutch Corporate Governance Code. The Dutch Corporate Governance
Code can be found at www.mccg.nl.
Board of Management
The role of the Board of Management is to manage the Company and its affiliated
enterprises and to ensure their continuity, which includes, among other things:
• The formulation of a sustainable long-term value creation strategy.
• The identification, analysis and management of the risks inherent in Besi’s business and
sustainable long-term value creation strategy and initiatives related thereto.
• The establishment of Besi’s risk appetite and implementation of measures necessary to
mitigate any risks undertaken.
• The proper regard for environmental, social and governmental issues relevant to Besi
and the global communities in which we operate as further described in our Environmental,
Social and Governance Report.
• The proper regard for the impact of new technologies on our society, products, employees,
stakeholders and business model in such areas as digitalization, artificial intelligence,
and automation, amongst others.
In discharging their role, members of the Board of Management shall be guided by the
interests of the Company and its affiliated enterprises as well as the interests of Besi’s
shareholders and other stakeholders. Members of the Board of Management are required
to put the interests of the Company ahead of their own interests and to act critically and
independently when carrying out their responsibilities. The Board of Management is also
charged with establishing and maintaining internal procedures which ensure that all
relevant information is provided to the Supervisory Board in a timely manner.
The Company’s articles of association provide that certain resolutions of the Board of
Management require the prior approval of the Supervisory Board. Pursuant to Dutch law
and the Company’s articles of association, any decisions of the Board of Management
involving a major change in the identity or character of the Company and/or its affiliated
enterprises are subject to approval by the General Meeting of Shareholders.
Corporate Governance
Appointment and replacement of members of the Board of Management
Members of the Board of Management are appointed by the General Meeting
of Shareholders. A resolution of the General Meeting of Shareholders to appoint a member
of the Board of Management requires an absolute majority of the votes validly cast in
the event and to the extent the appointment occurs pursuant to, and in accordance with,
a proposal of the Supervisory Board. Such resolution requires at least two thirds of the
votes validly cast representing more than one third of the issued share capital in the event
and to the extent the appointment does not occur pursuant to, and in accordance with,
a proposal thereto of the Supervisory Board.
Members of the Board of Management may at any time be suspended or dismissed by
the General Meeting of Shareholders. A resolution for suspension or dismissal of a member
of the Board of Management requires an absolute majority of the votes validly cast in the
event and to the extent the suspension or dismissal occurs pursuant to, and in accordance
with, a proposal by the Supervisory Board. Such resolution requires at least two thirds
of the votes validly cast representing more than one third of the issued share capital in
the event and to the extent the suspension or dismissal does not occur pursuant to, and
in accordance with, a proposal thereto of the Supervisory Board. Members of the Board of
Management may also be suspended by the Supervisory Board.
Remuneration Report
The Remuneration Report is included in a separate section in this Annual Report.
Conflicts of interest – members of the Board of Management
Any appearance of a conflict of interest between the Company and members of the Board
of Management should be prevented. If a member of the Board of Management has an
actual or potential direct or indirect personal conflict of interest with the Company, he or
she shall not participate in the deliberations and the decision-making process of the Board
of Management for such matter. If, as a result thereof, no resolution of the Board of
Management can be adopted, the resolution may be adopted by the Supervisory Board.
No conflict of interest of material significance to Besi and/or the member of the Board of
Management was reported in 2023.
Supervisory Board
The role of the Supervisory Board is to supervise the policies executed by the Board
of Management and the general affairs of the Company and its affiliated enterprises and
to assist the Board of Management by providing advice. In discharging their role,
Supervisory Board members shall be guided by the interests of Besi and its affiliated
enterprises as well as the relevant interests of Besi’s shareholders and other stakeholders.
Supervisory Board members are required to put the interests of Besi ahead of their own
interests and to act critically and independently vis-a-vis one another, the Board of
Management and any particular third-party interests involved. Further, the Supervisory
Board also has due regard for environmental, social and governance issues that are
relevant to Besi. The Supervisory Board annually evaluates its own functioning.
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Each member of the Supervisory Board is currently considered independent within the
meaning of best practice provision 2.1.8 of the Dutch Corporate Governance Code. Each
Supervisory Board member has the specific expertise required for the fulfilment of his or
her duties. The composition of the Supervisory Board shall be diverse such that the
requisite expertise, experience, nationality and cultural or other background, age, gender
identity, competencies, other personal qualities and independence are present for it to
carry out its duties properly as well as to better promote the interchange of ideas and
different points of views amongst members. A Supervisory Board member shall be
reappointed only after careful consideration. The profile criteria referred to above shall
also be taken into account in the event of a reappointment.
Regulations governing the Supervisory Board (“Regulations Supervisory Board”) are posted
on Besi’s website: www.besi.com.
Appointment and replacement of members of the Supervisory Board
Members of the Supervisory Board are appointed with due observance of the requisite
profile for its size and composition as adopted by the Supervisory Board from time to time,
subject to the provisions of Dutch law and Besi’s articles of association.
Members of the Supervisory Board are appointed by the General Meeting of Shareholders.
A resolution for appointment requires an absolute majority of the votes validly cast in the
event and to the extent the appointment occurs pursuant to, and in accordance with,
a proposal of the Supervisory Board. Such resolution requires at least two thirds of the
votes validly cast representing more than one third of the issued share capital in the event
and to the extent the appointment does not occur pursuant to, and in accordance with,
a proposal thereto of the Supervisory Board.
Members of the Supervisory Board may be suspended or dismissed at any time by the
General Meeting of Shareholders. A resolution for suspension or dismissal requires an
absolute majority of the votes validly cast in the event and to the extent the suspension
or dismissal occurs pursuant to, and in accordance with, a proposal of the Supervisory
Board. A resolution for suspension or dismissal requires at least two thirds of the votes
validly cast representing more than one third of the issued share capital in the event and
to the extent the suspension or dismissal does not occur pursuant to, and in accordance
with, a proposal thereto of the Supervisory Board.
Supervisory Board committees
The Supervisory Board has three committees: the Audit Committee, the Remuneration
Committee and the Nomination Committee. The function of the committees is to prepare
and facilitate the decision-making of the Supervisory Board. The terms of reference of the
committees are posted on Besi’s website: www.besi.com.
Remuneration Supervisory Board
The General Meeting of Shareholders shall determine the remuneration of the Supervisory
Board members with due observance of the Remuneration Policy for the Supervisory Board
that was adopted at the Annual General Meeting of Shareholders held on April 30, 2020.
The remuneration of the members of the Supervisory Board is fixed and does not depend
on the results of the Company. In addition, Besi does not grant Supervisory Board members
any shares or rights to acquire shares in Besi, personal loans, guarantees or advance
payments as remuneration. The Remuneration Report contains the information prescribed
by applicable Dutch law on the level and structure of the remuneration of individual
Supervisory Board members.
Further, none of the members of the Supervisory Board personally maintains a business
relationship with Besi other than as a member of the Supervisory Board. As of
December 31, 2023, none of the members of the Supervisory Board owned shares of the
Company.
Conflicts of interest – members of the Supervisory Board
Any appearance of a conflict of interest between the Company and Supervisory Board
members shall be prevented. If a member of the Supervisory Board has an actual or
potential direct or indirect personal conflict of interest with the Company, he or she shall
not participate in the deliberations and the decision-making process of the Supervisory
Board for such matter. The Supervisory Board is responsible for resolving conflicts of
interest involving members of the Board of Management, members of the Supervisory
Board and majority shareholders. If all members of the Supervisory Board are conflicted,
then the Supervisory Board shall remain authorized to adopt resolutions. No conflicts of
interest of material significance to Besi and/or the members of the Supervisory Board
were reported in 2023.
Diversity and inclusion
The Supervisory Board has a diverse composition in terms of experience, expertise,
nationality and cultural or other background, competencies, education, gender identity
and age, and is on all those points in line with the objectives of its profile and Diversity and
Inclusion policy. Diversity and inclusion is a high priority on its agenda. Diversity in general
and gender diversity in particular are important factors in the selection process of
Supervisory Board candidates. When considering new candidates, the Supervisory Board
will retain an active and open attitude with respect to the selection of female candidates.
Gender is, however, only one factor of diversity. The qualifications of a particular person
and the requirements for the position shall in principle always prevail over all other factors
and considerations when filling a vacancy, unless otherwise required by Dutch law.
The current Supervisory Board’s male/female ratio is 60/40 and as such in compliance with
the Supervisory Board’s profile and Diversity and Inclusion policy as well as with article
2:142b of the Dutch Civil Code.
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The Supervisory Board considers its current composition to be aligned with its objective
for an adequate and diverse composition and in relation to the technological and global
character of Besi’s business as well as an adequate level of knowledge and experience in
financial, economic, technological, social and legal aspects of international business and
government and public administration.
At present, the Board of Management consists of one person who is Besi’s Chief Executive
Officer and Chairman of the Board of Management.
Besi values and encourages diversity and inclusion in its workforce and management. Besi
believes diversity and inclusion helps broaden its perspective and contributes to Besi’s
growth. It is a priority in Besi’s business strategy with a particular focus on gender diversity
across its operations. Besi also recognizes the importance of diversity and inclusion in
recruiting. For example, many of its product groups engage with local universities to
increase diversity, inclusion and gender representation. Besi’s Code of Conduct also
emphasizes equal opportunity for all employees and applicants.
Besi’s Diversity and Inclusion policy is focused on a comprehensive inclusion and equality
approach throughout the organization, including management. Gender diversity is one of
the key elements of this policy. At December 31, 2023, management consisted of 193
persons of which 17% were female (2022: 20%). Besi has the following objectives to improve
diversity and inclusion within management: (i) maintain a sound balance with respect to
the various aspects of diversity and inclusion (experience, expertise, nationality and
cultural or other background, competencies, education, gender identity and age) within
management and (ii) increase gender diversity such that a minimum of 21% of management
will consist of women by 2024. Besi intends to achieve these objectives by making diversity
and inclusion aspects in general and gender diversity in particular important factors in the
selection process of candidates for management functions. Besi maintains an active and
open attitude with respect to the selection of female candidates. In case of equal
qualifications, Besi will choose the female candidate. Diversity objectives are also taken
into account for employee recruitment, retention, selection, promotion, mentoring and
coaching, succession planning, training and talent development. A professional executive
search firm is engaged, when appropriate, to support the search process for new
candidates.
Directors and Officers insurance policy
Members of the Board of Management and the Supervisory Board and certain senior
management members are covered under Besi’s Directors and Officers’ insurance policy.
Although the insurance policy provides for broad coverage, members of the Board of
Management and the Supervisory Board and certain senior management members may be
subject to uninsured liabilities. Besi has agreed to indemnify members of the Board of
Management and the Supervisory Board and certain senior management members against
certain claims brought against them in connection with their position with the Company
provided that such individual acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of Besi and, with respect to any
criminal action or proceedings, such individual had no reasonable cause to believe his or
her conduct was unlawful.
Shareholders and the General Meeting of Shareholders
Good corporate governance requires the participation of shareholders. It is in the interest
of the Company that as many shareholders as possible participate in Besi’s decision-
making at the Annual General Meeting of Shareholders or any Extraordinary General
Meeting of Shareholders. Significant shareholder participation enables the General
Meeting of Shareholder to exert such influence on the policies of the Board of Management
and the Supervisory Board such that they provide important checks and balances to the
conduct of the Company’s business. Pursuant to Dutch law and the Company’s articles of
association, any decision of the Board of Management involving a major change in the
identity or character of the Company and/or its affiliated enterprises are subject to the
approval of the General Meeting of Shareholders.
The Board of Management provides shareholders and other parties in the financial markets
with equal and simultaneous information about matters that may influence Besi’s share
price. Contacts between the Board of Management on the one hand and the press, analysts
and shareholders on the other hand should be handled and structured carefully and with
due observance of the applicable laws and regulations. Besi should do nothing which
might compromise the independence of analysts in relation to the Company and vice versa.
The Board of Management and the Supervisory Board shall provide the General Meeting of
Shareholders with the information that it requires for the exercise of its powers subject to
such limitations allowable under applicable law. If price-sensitive information is provided
during a General Meeting of Shareholders or if a response to shareholders’ questions has
resulted in the disclosure of price-sensitive information, then such information will be
made public without delay. Good corporate governance requires significant attendance by
shareholders at Besi’s General Meeting of Shareholders. Therefore, Besi is actively involved
in proxy solicitation as a means of increasing the attendance and participation of its
shareholders at its General Meeting of Shareholders.
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Amendment of Besi’s articles of association
Besi’s articles of association may be amended by a resolution of the General Meeting of
Shareholders. A resolution of the General Meeting of Shareholders to amend the articles
of association may only be adopted at the proposal of the Board of Management, which
proposal requires the approval of the Supervisory Board. Those who have convened
a General Meeting of Shareholders at which a proposal to amend the articles of association
will be brought up for discussion must deposit at Besi’s office simultaneously with the
convocation a copy of the proposal in which the proposed amendment has been included
for inspection by every person entitled to attend the General Meeting of Shareholders
until the end of the relevant meeting. The persons entitled to attend the General Meeting
of Shareholders must be given the opportunity to obtain a copy of the proposal free
of charge. The proposal will also be published on Besi’s website: www.besi.com.
External audit
The Board of Management is primarily responsible for the quality and completeness of any
publicly disclosed financial reports. The Supervisory Board oversees the Board of
Management as it fulfills this responsibility.
The General Meeting of Shareholders appoints the external auditor. The Supervisory Board
submits a nomination for the appointment of the external auditor to the General Meeting
of Shareholders upon the advice of the Audit Committee and as facilitated by the Board of
Management. The Supervisory Board negotiates the terms of engagement of the external
auditor, including its remuneration, the scope of the audit and the materiality to be
applied, upon the proposal of the Audit Committee and after consultation with the Board
of Management. The Chairman of the Audit Committee acts as the principal contact for the
external auditor if, during the performance of its audit, it discovers or suspects an instance
of misconduct or an irregularity. The external auditor attends the meeting of the
Supervisory Board at which the report of the external auditor is discussed. The external
auditor also discusses the findings and outcomes of its audit work and the management
letter with the Audit Committee and the Board of Management simultaneously. The Audit
Committee also meets with the external auditor without the presence of the Board
of Management. The Supervisory Board supervises the external auditor’s functioning.
Internal control and risk management
Besi has an internal control and risk management system that is suitable for the Company.
The form and structure of this system is outlined under Risk Management.
The Company’s internal control and risk management function operates under the
responsibility of the Board of Management and is monitored on an ongoing basis.
The Board of Management reviews the effectiveness of the design and operation of the
internal control and risk management system twice a year as part of Besi’s internal control
procedures. The Supervisory Board oversees the internal control and risk management
function and maintains regular contact with the persons fulfilling this function.
Besi’s internal control system consists of a formal framework defining key risks and key
controls over financial reporting, an internal control charter outlining audit systems and
procedures as well as the internal control and audit plan for the year. Operational, IT,
compliance, tax and fraud controls are included in this framework. The internal control
system over financial reporting also contains clear accounting rules. It has been
implemented in substantially all operations and material subsidiaries and supports
common accounting and regular financial reporting in standard forms. In 2023, Besi’s
finance staff carried out all planned internal control activities and reported its findings to
the Board of Management and the Audit Committee.
Besi has used an independent audit firm since 2018 to help identify and monitor potential
risks of fraud, bribery and corruption in its Asian supply chain, logistics and purchasing
activities and seeks to continuously enhance its internal control procedures related
thereto. In addition, Besi has enhanced its global internal audit function and systems and
procedures for such areas in recent years in view of increased business and risk management
activities at our Chinese, Malaysian and Singapore operations.
In consideration of the above factors, the Board of Management states that for the year
ended December 31, 2023:
• This Annual Report provides sufficient insights into any failings in the effectiveness of
Besi’s internal control and risk management systems.
• Besi’s internal control and risk management systems provide reasonable assurances
that the financial reporting contains no material inaccuracies.
• It is justified that Besi’s financial reporting is prepared on a going concern basis
considering the current state of affairs.
• This Annual Report refers to those material risks and uncertainties which are relevant to
Besi’s continuity for the twelve months following the preparation of this Annual Report.
Explanation of deviations from the Dutch Corporate Governance Code
Deviations from the Dutch Corporate Governance Code are listed and explained below.
Provision 1.3.1
Since the internal audit function is the responsibility of the Board of Management, the
appointment and dismissal of the senior internal auditor by the Board of Management is
not submitted for approval to the Supervisory Board. Instead, the Supervisory Board only
oversees the appointment and dismissal of the senior internal auditor.
Provision 1.4.2 item iv
The sensitivity of the Company’s results to material changes in external factors is not
provided for competitive reasons. For a detailed description of material risks, reference is
made to Risk Management.
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Provision 2.2.1
The Company respects the rights of the member of the Board of Management who was
a member at the time of the first implementation of the Dutch Corporate Governance
Code. For that reason, there was no adjustment of his employment agreement.
Provision 3.2.3
The Company respects the rights of the member of the Board of Management who was
a member at the time the Dutch Corporate Governance Code came into force. For that
reason, it did not adjust his employment agreement as it was signed prior to that date.
Provision 4.2.3
The Company acknowledges the importance of disclosing material information to all
shareholders similarly at the same moment in time. It is currently not practically possible
to make every meeting and presentation to analysts and investors accessible to all
shareholders. As far as practicably possible, meetings and presentations will be announced
and posted on Besi’s website: www.besi.com.
Disclosures required by the Dutch Decree Article 10 of the Takeover Directive
Under the Dutch Decree Article 10 of the Takeover Directive, the Company, being a company
whose securities are admitted to trading on a regulated market, must disclose the
following information in its Annual Report:
• As of December 31, 2023, the Company’s issued share capital consisted exclusively of
ordinary shares. Information about the Company’s share capital structure can be found
in “Besi’s equity structure” in the Shareholder Information section and in Note 21 “Equity”
to the Notes to the Consolidated Financial Statements. Information on the rights and
obligations attached to such shares can be found in the Company’s articles of association.
• The Company has not imposed any limitations on the transfer of ordinary shares.
• The Company is not aware of any shares having been exchanged for depositary receipts
for shares.
• The Company’s articles of association do stipulate a blocking procedure for the transfer
of preference shares.
• The Company is not aware of any agreements with shareholders which may result in
restrictions on the transfer of shares or the exercise of any voting rights.
• Information concerning ownership interests in the Company’s ordinary shares as per
AFM notification can be found in the Shareholder Information section under “Ownership
interests in the ordinary shares”.
• There are no special control rights attached to the shares.
• There is no system of control regulating any scheme granting employees’ rights to
acquire shares in the share capital of the Company or of a subsidiary where the control
rights are not exercised directly by the employees.
• No restrictions or deadlines apply to the exercise of voting rights.
• The Company’s articles of association contain the following information:
• The appointment and dismissal of members of the Board of Management or Supervisory
Board members which are also summarized in “Appointment and replacement of
members of the Board of Management” and “Appointment and replacement of
members of the Supervisory Board”.
• The amendment of the Company’s articles of association which is also summarized in
“Amendment of Besi’s articles of association”.
• The powers of the Board of Management.
• The issuance of shares in the share capital of the Company and the repurchase of
shares in the share capital of the Company (including the powers of the Board of
Management related thereto) which are also summarized in “Issuance of ordinary
shares and pre-emptive rights”, “Issuance of preference shares” and “Repurchase and
cancellation of shares”.
• The Company is not a party to any material agreements which take effect or are altered
or terminated upon a change of control of the Company following a takeover bid other
than (i) the agreement between the Company and the Foundation by which the
Foundation has been granted a call option. Such information is summarized in Besi’s
equity structure and The Foundation contained in the Shareholder Information section
and in Preference Shares contained in the Other Information section and (ii) in the
indentures governing Besi’s € 97.7 million bank lines of credit and in each of its Convertible
Notes due 2024, 2027 and 2029.
• There is no agreement between the Company and the member of the Board of
Management if his employment ceases because of a takeover bid.
Director’s Statement of Responsibilities
In accordance with statutory provisions, the member of the Board of Management states,
to the best of his knowledge, that:
• The Financial Statements provide a true and fair view of the assets, liabilities, financial
position and result for the financial year of Besi and its subsidiaries included in the
consolidation as a whole.
• The Report of the Board of Management provides a true and fair view of the position at
the balance sheet date and of the performance of the business during the financial year
of Besi and its subsidiaries, details of which are contained in the Financial Statements.
The Report of the Board of Management provides information on any material risks to
which Besi is exposed.
Board of Management
Richard W. Blickman
February 21, 2024
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2023 Remuneration Report
Introduction
We are pleased to present the 2023 Remuneration Report to stakeholders.
The Remuneration Committee (the "Committee") concluded that the Board of Management
delivered impressive results this year with respect to the key metrics most relevant to the
Company's short- and long-term sustainable value creation and business objectives
despite a significant industry downturn in the assembly equipment market. Besi, under
the leadership of the Board of Management, responded quickly and effectively to adverse
market conditions by rapidly aligning its production and overhead with changing market
conditions in order to enhance its market position, increase gross margins and maintain
peer leading financial performance. Increased R&D investment continued as Besi further
built out its wafer level assembly portfolio and responded effectively to the industry’s
capacity expansion for future generative AI and high-performance computing applications.
Shareholders responded favorably to Besi’s progress and prospects for the next industry
upcycle, which combined with superior financial metrics and strong execution of strategic
initiatives resulted in a total shareholder return of 149.7% in 2023. In addition, we
distributed € 435.5 million to shareholders in the form of dividends and share repurchases
which has increased the total capital allocation to shareholders since 2011 to € 1.9 billion
repurchases (including the dividend proposed for 2023), representing approximately 30%
of cumulative revenue during this period.
In addition, we expanded our operational footprint in Malaysia, Singapore and 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.
Further, forty-two management members and key customers participated in a four-month,
comprehensive strategic review to analyze current strengths and weaknesses and
formulate new initiatives for the achievement of business model objectives in the 2023-
2027 period. Significant progress also was achieved on Besi’s 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 our environmental footprint. Moreover, we performed a Double
Materiality Assessment as a precondition for adherence to CSRD requirements in 2024. Our
ESG ratings with the major publicly recognized frameworks such as Sustainalytics, S&P
Global, ISS ESG and MSCI also improved materially, underscoring Besi’s commitment to
excel in this area. In addition, we set an objective of reaching net zero greenhouse gas
emissions in our operations by 2030, incorporating all Scope 1 & 2 emissions. All such
actions continued to advance Besi’s future business prospects, market position and long-
term sustainable value creation for shareholders.
Besi achieved exceptional value creation during the period of the current Remuneration
Policy 2020-2023 including its financial and stock market performance, capital allocation,
strategic positioning, new product development and ESG progress. Specifically, over the
period 2020-2023, revenue, gross margins and net income each increased by 62.5%,
9.1 points and 117.8%, respectively. In addition, a total of € 1.1 billion was returned to
shareholders in the form of dividends and share repurchases. Similarly, the market
capitalization of Besi’s shares increased from € 2.5 billion to € 10.5 billion at year end 2023.
Further, our estimated market share of our addressable market increased from 28.5% in
2020 to 32.3% in 2022 with an estimated 74% market share in the advanced die placement
market as defined by TechInsights. Further, we invested € 221 million in R&D during the
period to develop the industry’s most advanced wafer level and advanced packaging
assembly portfolios. In addition, Besi organized an important development agreement
with Applied Materials to enhance the commercial adoption of hybrid bonding assembly, a
generational shift in advanced packaging. Hybrid bonding and other wafer level assembly
technologies will usher in a new generation of heterogeneous device architectures to
further artificial intelligence and high-performance computing applications in our principal
end-user markets and facilitate the extension of Moore’s law beyond its current limits.
Finally, Besi made a substantial commitment to further its ESG ambitions during the 2020-
2023 period, organizing challenging targets through 2030 including compliance with
substantially all relevant frameworks and reporting requirements. We have already
exceeded initial goals set for 2022 and are well on our way to meeting or exceeding targets
set for 2024.
EXCEPTIONAL VALUE CREATION 2020 - 2023*
€ 2.5B to € 10.5B Leader advanced
packaging
Best in class
4.2x increase +62.5% + 9.5 points
Peer leading Superior through
cycle profitability
€ 1.1B
+ 7.8 points +9.1 points 45% of revenue
* Market capitalization at year end 2023 versus year end 2019. Income statement items and capital allocation for four-year
period 2020-2023.
Market
Cap
Net
Margin
Revenue
Gross
Margin
ROAE
Capital
Allocation
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SHARE PRICE OUTPERFORMANCE
Total Return 1 year 3 years 5 years
Besi 149.7% 210.3% 812.5%
Direct peers 82.5% 96.3% 276.8%
SOX index 67.0% 55.4% 289.7%
• Total Shareholder Return includes reinvestment of dividends.
• Besi returns calculated in euro. Philadelphia SOX returns calculated in US dollar.
• Peer group average consists of Kulicke & Soffa, ASM PT, and Disco Corp.
Source: Refinitiv Data Stream
Our outreach with shareholders has also increased substantially over the past five years
as more investors and industry analysts have expressed interest in Besi’s market segment,
business and progress. The increase has been due, in part, to significant changes in our
future prospects, scale, efficiency, profitability, market capitalization, shareholder
composition and increased trading liquidity. As such, Besi was upgraded to the AEX in 2021.
In addition, the number of research analysts covering the Company more than doubled
from 9 in 2020 to 21 currently. On an ongoing basis, Besi maintains extensive and ongoing
dialogue with its global shareholder base via an active investor relations program
comprised of one-on-one investor calls, conferences in North America, Europe and Asia
and frequent conversations with industry analysts on topics including Besi’s business
development, prospects, ESG and corporate governance.
Shareholder issues addressed in 2024 Remuneration Policy
A new Remuneration Policy 2024 was approved by shareholders at Besi’s Annual General
Meeting on April 26, 2023 (“2023 AGM”) which received 94.7% support. In formulating the
new policy, we hired an independent external consultant, conducted extensive shareholder
engagement with approximately 25% of our shareholder base and evaluated changes in
legislation, market developments and external market best practices. We gathered
valuable feedback from other stakeholders as well.
The new Remuneration Policy 2024 reflects best market practices, taking into account
further contribution to sustainable long-term value creation and is responsive to
shareholder concerns and replaces, in particular, additional discretionary LTI performance-
based awards as part of the Board of Management’s remuneration in favor of traditional
LTI awards only. In addition, the new remuneration policy applicable as from 2024 provides
for a cap on the Board of Management’s remuneration in any particular year, meaning that
the total compensation award opportunity for any member of the Board of Management
shall not exceed 10 times their base salary in any financial year.
The new Remuneration Policy 2024 successfully addressed a key investor concern relating
to the granting of additional performance-based LTI awards on a discretionary basis. Going
forward, there will be no further awards of such type. However, executive remuneration in
2024 will reflect the application of the last year of the Remuneration Policy 2020-2023. In
this regard, the last block of additional performance-based LTI awards under the old policy
associated with Besi’s performance over the financial year 2023 was granted in January
2024.
2023 in review
The Supervisory Board applied the current Remuneration Policy 2020-2023 during 2023.
This policy seeks to achieve three broad goals in connection with Besi’s Remuneration
Policy and decisions regarding individual compensation:
• It structures the Company’s remuneration programs in a manner it believes will enable
Besi to retain, motivate and attract executives capable of achieving its business
objectives in an increasingly competitive global market.
• It creates a performance-oriented environment for company executives by linking
remuneration to the achievement of specified business, financial and ESG objectives or
related to the member’s particular product group or specific area of expertise. Notably,
they are linked to, and depend on, the execution of the Company’s strategy in a socially
responsible and sustainable manner.
• It designs remuneration programs for the Board of Management well aligned with the
interests of stakeholders by linking a portion of executive compensation with the long-
term performance of Besi’s ordinary shares, strategy and financial performance.
The Supervisory Board also (i) reviews Besi’s business and strategic objectives, (ii)
undertakes risk assessments, (iii) assesses Besi’s overall performance with respect to its
business and strategic objectives and (iv) considers the performance of the individual
member of the Board of Management versus specific business objectives. Based on these
considerations, the Supervisory Board then determines a balanced mix between fixed and
variable remuneration components. It also determines a set of key performance indicators
linked to variable remuneration components that are aligned with Besi’s business and
strategic objectives.
In determining the remuneration of the Board of Management, the Committee also
assesses performance realized relative to Besi’s strategy and Code of Conduct. Further,
the Committee takes into account the impact of the overall remuneration of the Board of
Management relative to pay differentials within the Company and obtains the views of the
Board of Management with respect to the level and structure of remuneration. In addition,
the Committee analyzes the possible outcomes of its variable remuneration elements and
how they may affect the total remuneration of the Board of Management. In this respect,
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the Committee evaluates the development of Besi’s underlying share price as well as
other factors that create variable remuneration exposure such as the Company’s financial
performance, business, strategy and ESG execution. Variable remuneration is primarily
linked to predetermined, challenging, assessable and quantifiable financial targets which
are predominantly of a sustainable nature. It is also linked to Besi’s strategy including
associated business, financial and sustainability objectives, values, purpose and vision, all
of which are aligned with sustainable long-term shareholder value creation.
In establishing remuneration for the Board of Management, the Supervisory Board
consulted PwC, an external remuneration consultant. In its evaluation of the efficacy of
Besi’s Remuneration Policy, the Supervisory Board asked PwC to conduct scenario analyses
of the variable remuneration components under the policy including the usage of the
Monte Carlo stochastic model for the expected Total Shareholder Return (“TSR”)
performance analysis. The probability of vesting and payout of the performance share
awards was also considered in the scenario analyses. The Supervisory Board has set the
performance targets based on the outcome of the scenario analyses, pay differentials, the
executive’s position at Besi and its internal pay ratio. Furthermore, when drafting the
remuneration proposal for the member of the Board of Management, the Supervisory
Board annually considers the views of the member of the Board of Management with
respect to the level and structure of his own remuneration. The member of the Board of
Management is not present when the Committee discusses his fixed and variable pay
components.
Set forth below is a description and analysis of the circumstances contributing to
compensation decisions by the Supervisory Board in 2023. Key topics include an
understanding of corporate and individual performance metrics underlying remuneration
decisions and feedback received from stakeholders.
Company performance
Set forth below is a table presenting Besi’s key financial performance indicators for long-
term value creation in 2023 versus 2022.
BESI VALUE CREATION 2023 VERSUS 2022
(€ millions) 2023 2022 Δ Highlights
Revenue
Gross Margin
Net Income
Net Margin
Return on Avg. Equity
Total Shareholder Return
Capital Allocation
578.9
64.9%
177.1
30.6%
33.7%
149.7%
435.5
722.9
61.3%
240.6
33.3%
38.6%
-20.0%
416.3
-19.9%
+3.6 pts
-26.4%
-2.7 pts
-4.9 pts
NM
+4.6%
• Assembly equipment downturn.
Trough in Q2-23.
• Performance significantly above
peers.
• Significant gross margin
improvement despite downturn.
• Peer leading ROAE maintained.
• Ranked #1 in TSR in Remuneration
Reference Group.
• Record shareholder distributions.
Other important factors contributing to value creation in 2023 included the following:
Peer leading financial metrics in challenging business environment
• Revenue, orders and operating profit up 62.5%, 57.2% and 132.2% versus comparable
period of last industry downturn.
• Revenue development and profitability significantly exceeded peers.
• New orders received for 3D, 2.5D and silicon photonics applications for next generation
AI, logic and memory devices.
• Production model aligned with changing market conditions:
• Gross margins rose to 64.9% reflecting Besi’s leadership position in advanced packaging.
• Operating and net margins of 36.9% and 30.6% achieved despite 19.9% revenue
decrease.
• Maintained high return on average equity of 33.7%.
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Expanded R&D investment in support of next generation applications
• R&D, excluding amortization and capitalization, rose to 11.0% of 2023 revenue. Up 66%
versus 2019.
• Progress continued to build out Besi’s advanced packaging portfolio:
• Hybrid Bonding adoption increasing:
• Installed base rose to 40 systems (ex. demo units), and traction in fully integrated
production lines is increasing with several systems installed.
• Number of customers increased to nine.
• Orders and year end backlog approximately doubled versus 2022.
• First orders received for HBM applications.
• First TCB chip to wafer delivered.
• First in-line flip chip system shipped for 2.5D HBM/logic devices.
Well positioned to meet 2024 ESG targets
• Completed 76% of ESG initiatives developed since 2020.
• Energy from renewable sources increased to 71% versus 20% in 2021.
• Scope 1 & 2 emissions intensity reduced by 38% versus 2021 baseline.
• Set objective of net zero greenhouse gas emissions in operations by 2030.
• Launch of Design-to-X initiative to enhance sustainability and reduce cost.
• Conducted Double Materiality Assessment for European CSRD reporting in 2025.
• Improved ratings with MSCI, Sustainalytics, ISS ESG and S&P Global.
Strategic initiatives implemented to help position Besi for future growth
• Strategic Plan 2023-2027 finalized to help achieve business, financial and ESG objectives.
• Singapore cleanroom facility completed for expanded hybrid bonding service/support.
• Vietnam facility established to support customers’ geographic expansion outside China.
• Technology Advisory Board formed to enhance Besi's advanced packaging strategy and
competitive position.
Strong cash flow generation supports increased capital allocation to shareholders
• Solid cash flow from operations of € 208.6 million, equal to 36.0% of revenue.
• Capital allocation increased by 4.6% to € 435.5 million.
• € 300 million share buyback program completed. New € 60 million program initiated.
• € 1.9 billion returned to shareholders since 2011, including the dividend proposed for
2023.
• Solid liquidity position with cash of € 413.5 million at year end.
• Proposed 2023 dividend of € 2.15 per share. Pay-out ratio of 94%.
BESI PERFORMANCE/VALUATION IN UPPER QUARTILE OF ALL SEMICONDUCTOR
EQUIPMENT COMPANIES
16.0x
14.0x
12.0x
10.0x
8.0x
6.0x
4.0x
2.0x
0.0x
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%
45.0%
Operating Margin% (2024E)
Besi
EV/Revenue (2024E)
ASML
ASMI
AMAT
Nova
KLA-Tencor
Lam Research
Ultra Clean
Tokyo Electron
Cohu
Disco
ASMPT
Suss MicroTec
Tokyo Seimitsu
TOWA
Kulicke & Soffa
Teradyne
Aixtron
Besi Back-End Front-End
EV/Revenue (2024E) versus Operating Margin (2024E)
OntoAdvantest
Mycronic
Photronics
Axcelis
Dai-ichi Seiko
Hitachi
Nikon
Ebara
Veeco
SCREEN
MKS Instruments
Coherent
Source: Morgan Stanley & CaplQ. January 17, 2024. All values calendarized per year end December 2023.
As a result of the activities and leadership of the member of the Board of Management, the
Supervisory Board determined that the Company is fit for purpose, has successfully
retained and enhanced its position (i) as a technological leader in the highly cyclical
assembly equipment industry with timely and sustainable forward strategic thinking as to
Besi’s internal development, (ii) in the assembly equipment market and with its key
customers and (iii) relative to its direct competition. Other items were also considered by
the Supervisory Board such as market developments and the views of society.
Besi strives to align the incentives for its Board of Management with its annual goals,
strategic plan objectives and the long-term interests of our shareholders for sustainable
growth. The Company made substantial progress on its strategic agenda and achieved
exceptional financial performance during the prior Remuneration Policy period, in most
cases exceeding our most optimistic targets in a highly cyclical industry. We look forward
to similar success in the next Remuneration Policy period 2024-2027.
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Remuneration Policy 2020-2023
The following is a summary of Besi’s Remuneration Policy applicable during 2020-2023,
which expired in January 2024 and was applied during the year of review, 2023. For more
information, please see the Remuneration Policy 2020-2023, adopted on April 26, 2019,
which is available on our website.
Remuneration Reference Group
The components underlying the remuneration of the Board of Management are regularly
compared to a remuneration reference group of companies selected based on industry,
size, profitability, market capitalization and geography. The following companies are
included in the current remuneration reference group as adjusted per annum for any
acquisition or stock delisting related thereto.
Remuneration Reference Group
Aixtron SE Jenoptik AG
AMG N.V. Kendrion N.V.
ASM International N.V. Kulicke & Soffa Industries, Inc.
Axcelis Technologies, Inc. MTS Systems Corporation
Brooks Automation, Inc. Siltronic AG
Cohu, Inc. TKH Group N.V.
Corbion N.V. Ultra Clean Holdings, Inc.
Entegris, Inc Veeco Instruments, Inc.
Ichor Holdings, Inc. Xperi Corporation
IMCD N.V.
The remuneration reference group composition is reviewed by the Supervisory Board
regularly and updated, if necessary, to ensure an appropriate composition. Any changes to
the composition of the remuneration reference group is subject to approval of the Annual
General Meeting of Shareholders.
1. Base salary
Each year, the Supervisory Board reviews the annual base salary for the member of the
Board of Management and considers whether to adjust his base salary level. The base
salary of the member of the Board of Management is determined relative to the median
and 90
th
percentile base salary levels of the remuneration reference group. The Supervisory
Board also considers the historic salary levels of the individual and the nature of the
individual’s roles and responsibilities in positioning the base salary level relative to the
remuneration reference group.
2. Benefits
Benefits awarded to the Board of Management such as expense compensation, medical
insurance and social security premiums are linked to base pay and are in accordance with
generally prevailing market practice.
3. Pension
Different pension arrangements are provided to the Board of Management based on their
salaries, local customs and the rules existing in their countries of origin. A defined
contribution scheme is in place for statutory directors, of whom the CEO is currently the
only one. The pension contribution on behalf of the statutory director is based on a
premium ladder as in effect from 2014 of which a portion is funded directly to his personal
pension account as a tax-exempt contribution and the remaining balance is paid as a
taxable pension allowance which can be used to build up his net pension on a voluntary
basis.
4. Short-Term Incentive (annual performance-based cash bonus)
The annual cash bonus opportunity for the member of the Board of Management is linked
to the achievement of two predetermined performance conditions which include net
income as a percentage of revenue and personal performance goals set by the Supervisory
Board on an annual basis. As such, the performance conditions incorporate financial, non-
financial and ESG objectives according to the following performance/pay-out grid.
Performance versus payout
Metric and weighting as % of total award At minimum
performance
(below
threshold)
At target
performance
At maximum
performance
as % of the individual’s gross annual base salary
Net income as % of revenue (70% of STI) 0% 70% 105%
Personal performance targets (30% of STI) 0% 30% 45%
Total annual bonus pay-out 0% 100% 150%
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These two performance conditions are explained in more detail below:
•
Net income expressed as a percentage of revenue (70% of STI):
The financial measure net income is preferred over other financial ratios for the Short-
Term Incentive because net income is:
• A key indicator in evaluating Besi’s overall performance for the year and therefore an
important contributor to shareholder value.
• A key factor given the cyclical nature of the market in which Besi operates.
• A financial measure that can be influenced by the member of the Board of Management.
• A key component utilized to help determine Besi’s stock market valuation.
•
Personal performance of the member of the Board of Management (30% of STI):
The annual criteria used to measure the personal performance of the member of the
Board of Management are at the sole discretion of the Supervisory Board. Each year, the
Committee proposes to the Supervisory Board a set of specific goals for the member of
the Board of Management based on a variety of business, strategic, financial and ESG
targets considered important to Besi’s achievement of sustainable value creation in the
medium-term and long-term in alignment with the Company’s strategic planning.
5. Long-Term Incentive (annual conditional award of performance shares and additional
performance share awards)
The Long-Term Incentive for the member of the Board of Management consists of a
conditional award of performance shares based on the achievement of predetermined
objectives set by the Supervisory Board over a three-year performance period, subject to
continued service. The performance metrics utilized as the basis for this award include:
•
Net income as a percentage of revenue over three calendar years (50% of LTI):
Net income as a percentage of revenue over a three-year performance period is
considered a key measure for creating sustainable long-term shareholder value.
•
Relative Total Shareholder Return (“TSR”) over three calendar years (50% of LTI):
The TSR over a three-year performance period is also considered a key measure for
determining the development of shareholder value and Besi’s relative share price
performance versus peers in the semiconductor equipment industry. It is also an
appropriate performance measure to align the interests of the Board of Management
with those of shareholders. This metric measures the development of Besi’s share price,
including the reinvestment of dividends, over a three-year performance period as
compared to a comparator group of 19 publicly listed companies operating in the
semiconductor equipment industry. Three-month share price averaging is applied at the
start and at the end of the TSR performance period. The composition of the comparator
group will be reviewed and adjusted by the Supervisory Board if circumstances arise
which could affect the comparability of the companies involved, particularly in the event
of a merger, acquisition or material change of business. Adjustments to the comparator
group, including replacements, will be based on predetermined internal guidelines.
The TSR comparator group currently consists of the following companies:
TSR comparator group
Aixtron SE Kulicke & Soffa Industries, Inc.
Applied Materials, Inc. Lam Research Corporation
ASM International N.V. MKS Instruments, Inc.
ASML Holding N.V. Nova Ltd.
ASM Pacific Technology Ltd. Onto Innovation, Inc.
Axcelis Technologies, Inc. SÜSS MicroTec SE
Cohu, Inc. Tokyo Electron Ltd.
DISCO Corporation Tokyo Seimitsu Co., Ltd.
Entegris, Inc. Veeco Instruments, Inc.
FormFactor, Inc.
Conditional award
The at target number of performance shares conditionally awarded will be determined by
the Supervisory Board based on a ratio equal to (i) 175% of the individual’s gross annual
base salary divided by (ii) the average closing price of Besi’s shares for all trading days in
the calendar quarter immediately preceding the start of the three-year performance
period.
Vesting of performance shares
The vesting of performance shares awarded will be determined at the end of the three-
year performance period depending on Besi’s actual performance during such period
according to the following grid:
Performance versus payout
Metric and weighting as% of total award At minimum
performance
(below
threshold)
At target
performance
At maximum
performance
as % of the individual’s gross annual base salary
Net income as % of revenue (50% of LTI) 0% 50% 75%
Relative TSR performance (50% of LTI) 0% 50% 75%
Total number of shares vesting 0% 100% 150%
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As shown in the table above, 50% of the vesting of the conditional awards is linked to
Besi’s net income relative to its revenue over a three-year performance period. The other
half is linked to Besi’s relative TSR performance over a three-year performance period. The
performance shares awarded from 2020 onwards subject to Besi’s TSR performance are
based on the actual absolute ranking of Besi within the comparator group. In addition,
vested shares are subject to a two-year lock-up period which means that the member of
the Board of Management will have to retain such shares for two years following the
vesting date. However, he will be allowed to sell shares sufficient to cover any income tax
liability resulting from the vesting of performance shares.
Vesting is determined based on the following schedule whereby straight-line vesting
percentages are applied on a pro rata basis between ranks 3 and 12 for awards made as
from 2020:
Besi TSR ranking relative to comparator group Vesting percentage
Top 3 75%
Rank 6 50% (at target)
Rank 12 25%
Rank 13 – Rank 20 0%
Performance adjustment
Under the previous policy, the Supervisory Board may at its absolute discretion upwardly
or downwardly adjust the number of performance shares awarded by a maximum of 20%.
This discretionary performance adjustment may be applied to reflect the Company’s
overall performance and market developments and further align the interests of the Board
of Management with those of shareholders. In accordance with the Remuneration Policy
2020-2023, this performance adjustment was eliminated for performance shares granted
as from 2020 onwards.
Clawback and ultimate remedium
The Short-Term Incentive and Long-Term Incentive components for the Board of
Management are subject to clawback provisions. In addition, risk assessment tests are in
place and measures are included in the variable remuneration documentation for the
Board of Management to ensure that shareholders’ interests are protected. In this respect,
the Supervisory Board holds the discretionary authority to reclaim all or part of the Short-
Term Incentive and Long-Term Incentive if such variable remuneration was made based on
incorrect financial data or other data or in the case of fraud, gross negligence, willful
misconduct or any activity detrimental to the Company. This clawback is applicable to both
the vested and unvested part of the Long-Term Incentive components.
The Short-Term Incentive and Long-Term Incentive components for the Board of
Management are also subject to ultimate remedium clauses under which the Supervisory
Board can adjust the value of the conditional variable remuneration components
downwards as well as upwards. The adjustment can be made if the Supervisory Board is of
the opinion that an unfair result would be produced due to extraordinary circumstances.
Additional performance share awards
The Supervisory Board may, at its absolute discretion and upon the recommendation of the
Committee, award up to a maximum of 120,000 additional performance shares to the
Board of Management in the event of extraordinary achievements or exceptional
performance during a fiscal year. Market developments and the views of society are also
considered in addition to the performance of the Company and the Board of Management.
If the number of Long-Term Incentive performance shares awarded under the policy vest
between at target and maximum performance levels (stretched performance), such
Performance Shares related to stretched performance levels will be included as part of the
maximum 120,000 additional performance shares that can be awarded to members of the
Board of Management at the discretion of the Supervisory Board. In addition, the
Supervisory Board has the right to downwardly adjust the number of additional performance
shares awarded to the Board of Management by up to a maximum of 20% in case of a
market downturn or a high underlying share price.
Additional performance shares awarded vest immediately but are subject to a five-year
lock-up period, which means that the Board of Management will have to retain them for
five years following the award date. However, the Board of Management is allowed to sell
shares sufficient to cover any income tax liability arising from the vesting of additional
performance shares. Additional performance share awards may also be subject to
additional terms and conditions as determined by the Supervisory Board.
Number of shares available
The aggregate total number of performance shares available under Besi’s Long-Term
Incentive arrangement (for all participants including the Board of Management) shall not
exceed 1.5% of the total number of outstanding shares at December 31 of the year prior to
the year in which the performance shares are awarded.
Loans
As a matter of policy, the Company does not provide loans to members of the Board of
Management.
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INFORMATION
Employment contracts/service contracts
Service contracts with any new member of the Board of Management will in principle be
entered into for a period of four years. Existing employment contracts for members of the
Board of Management with an indefinite period of time will not be replaced by contracts
with a limited period or by contracts with different conditions. The current notice period
applicable to the member of the Board of Management is six months.
Severance payment
In the event of dismissal, the remuneration paid to members of the Board of Management
may not exceed the individual’s gross annual base salary (fixed component). If the
maximum of one-year’s base salary would be manifestly unreasonable for a member of the
Board of Management who is dismissed during his first term of office, such member of the
Board of Management shall be eligible for severance pay not exceeding two times their
annual base salary.
Application Remuneration Policy 2020-2023
This section refers to the decisions made during the year under review according to the
2020-2023 Remuneration Policy. The Supervisory Board, upon the recommendation of the
Committee, applied the Remuneration Policy 2020-2023 in 2023 without exception as set
forth below. The only member of the Board of Management in 2023 was Richard W.
Blickman, Besi’s CEO.
1. Base salary
The base salary of the CEO is reviewed annually, considering the remuneration reference
group. At the end of 2022, the base salary of the CEO was reviewed taking into consideration
the remuneration reference group as well as developments at the Company and in the
industry. The Committee analyzed and considered the outcome of this review and
recommended to the Supervisory Board a base salary set between the median and 90
th
percentile levels of the remuneration reference group. The Supervisory Board, upon the
recommendation of the Committee, decided to increase the 2023 base salary of the CEO
from € 600,000 to € 650,000. This increase was also included and approved in the
Remuneration Policy 2024.
2. Benefits
Other benefits include expense compensation, medical insurance and social security
premiums.
3. Pension
Since the CEO has reached the applicable retirement age in the Netherlands, contributions
to all of his pension plans have terminated. Any pension contribution is based on the
premium ladder in the policy (32% of base salary) and is paid as a taxable pension allowance.
4. Short-Term Incentive (annual performance-based cash bonus)
The Short-Term Incentive awarded to the member of the Board of Management is based on
the following predetermined performance conditions: (i) net income as a percentage of
revenue and (ii) personal performance of the member of the Board of Management relative
to certain non-financial and ESG goals of importance for 2023. The Committee reviewed at
year end the quality of the predetermined financial, non-financial and ESG performance
goals and the sustainable value delivered with respect thereto in determining the Short-
Term Incentive awarded for 2023.
As a result, the total annual cash bonus for the member of the Board of Management was
as follows:
Metric and weighting as % of total award Payout (€)
Net income as % of revenue (70% of STI) 682,500
Personal performance targets (30% of STI) 292,500
Total annual bonus pay-out 975,000
(a) Net income as a percentage of revenue (70% of STI)
The targets set for the ‘net income expressed as a percentage of revenue metric are as
follows:
Metric and weighting as % of total award At minimum
performance
(below
threshold)
At target
performance
At maximum
performance
as % of the individual’s gross annual base salary
Net income as % of revenue (70% of STI) 0% 70% 105%
Personal performance targets (30% of STI) 0% 30% 45%
Total number of shares vesting 0% 100% 150%
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Outcome
Target Net Income as % of revenue Vesting Schedule
Minimum <5% 0%
Target 5-12% 0-70%
Maximum 12-20% 70-105%
Actual NIR/STI payout 30.6% 105%
Besi’s 2023 net income as a percentage of revenue was 30.6%, well above the maximum
pre-defined target range of 20%. As a result, and upon the recommendation by the
Committee, the Supervisory Board awarded the member of the Board of Management a
cash bonus equal to 105% of his annual base salary, or € 682,500, for this financial
performance condition.
(b) Personal performance of the member of the Board of Management (30% of STI)
The Committee reviewed the performance realized by the member of the Board of
Management with respect to five equally weighted and pre-defined personal, non-financial
and ESG performance objectives representing 30% of the potential total STI cash bonus.
These five pre-defined personal, non-financial and ESG performance objectives are set
forth below along with achievements against such objectives in 2023:
Pre-defined performance objectives Weighting Achievements / Overachievements 2023
• Update Besi’s Strategic Review 2023-2027 and
the initiatives related thereto.
• Identify resources, expenditures and timescale
to carry out these initiatives and review
quarterly with the Supervisory Board.
• The Strategic Review should include competitive
analysis.
20% • Strategic review 2023-2027 completed in July 2023.
• Review conducted over 16 weeks. Involved participation of 42 management members and key customers.
• Review focused on:
• Performance versus current initiatives.
• Development of new initiatives.
• Analysis of Besi’s business model and ESG targets and the means to achieve such targets.
• Review of Engine 1 and Engine 2 business, product strategy and financial plans.
• Competitive analysis and management and financial resources required to execute such targets.
• Board of Management shared findings with the Supervisory Board at regular intervals.
• Opened new tooling facility in Vietnam. First production in Q4-23.
• Office established in India. First orders received.
• Significant financial outperformance versus peers.
• Bi-weekly reviews on progress of strategic initiatives by management.
• Technology Advisory Board established to enhance Besi’s advanced packaging development and market
position.
• Define and investigate potential M&A roadmap;
big picture and adding additional products.
20% • Several deep dives performed on potential M&A candidates, particularly in wafer level assembly.
• Implement Management Development and
Succession Planning for CEO, Management
Team and key staff, including top performers.
• Review with the Supervisory Board.
20% • Overall management succession plan reviewed bi-annually including key staff related thereto.
• CTO responsibilities re-assigned to various senior management personnel.
• New senior personnel hired for oversight and management of ESG activities.
• No vacancies in senior management at year end 2023.
• Specific succession topics and planning for the Board of Management and management team members
discussed with the Supervisory Board.
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Pre-defined performance objectives Weighting Achievements / Overachievements 2023
• Implement the 2023 R&D programs (below
10 nm) for major customers.
• Continue to assess requirement, timescales
and expenditure and report regularly on these
important programs.
• Include assessment of account penetration.
• Hybrid bonding:
• Continue roll-out hybrid bonding to logic and
memory applications.
• Develop partnership with Applied Materials to
next level, installing integrated tools at major
customers.
• Establish customer application lab for hybrid
bonding and chip to wafer in Besi Singapore.
20% • Expanded R&D investment continues in support of next generation, <10 nm assembly applications.
• Gross R&D spending of € 63.9 million equal to 11.0% of 2023 revenue. Up 66% since 2019.
• Hybrid bonding progress continues:
• Broad based engagement with leading semiconductor manufacturers for generative AI and high-performance
computing.
• Commercial adoption expanded to nine customers.
• Installed base increased to 40 units (ex. demo units), and traction in fully integrated production lines is
increasing with several systems installed.
• Significant orders received in H2-23 for delivery in 2024.
• Orders and year end backlog approximately doubled versus comparative levels in 2022.
• First orders received for use in HBM applications.
• First orders received from leading subcontractors.
• Shipped first 100nm hybrid bonding system to customers.
• First TCB chip to wafer system shipped.
• In-line high-performance flip chip system delivered for 2.5D HBM/logic applications.
• Singapore cleanroom facility completed for sales/service support of Besi’s wafer level portfolio.
• Significant orders received in H2-23 for silicon photonics and HBM and AI devices.
• Further enhance environmental, social and
corporate governance and sustainability
strategy as presented in our Annual Report
2022.
• Prepare for reporting based on CSRD in 2025.
• Prepare a plan to meet the net zero commitment
as set out in the Annual Report.
20% • Progress continues versus Besi’s 2024 ESG targets.
• Conducted Double Materiality Assessment for European CSRD reporting in 2025.
• Improved ratings with MSCI, Sustainalytics, ISS ESG and S&P Global.
• Scope 1 & 2 emissions intensity declined by 38% versus 2021 baseline.
• Set net zero carbon emissions by 2030 for Scope 1 & 2 emissions.
• Energy from renewable sources increased to 71% versus 20% in 2021.
• Completed 76% of ESG initiatives developed since 2020.
• Launch of Design-to-X initiative to enhance sustainability and reduce cost.
• New initiatives developed particularly aimed at reducing Besi’s environmental footprint.
• 2023 employee survey indicated high levels of participation and engagement. Six of seven categories above
high-tech norm.
• On target to meet 2024 ESG targets.
TOTAL 100%
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INFORMATION
During 2023, the Committee regularly reviewed the progress of the pre-defined personal,
non-financial and ESG performance objectives including the assessment of new initiatives
developed during the year. The effectiveness and progress of the objectives set were
tested and monitored by the Supervisory Board during the year based on strategic updates
provided. An overall assessment was also completed after year end 2023 including a review
of customer satisfaction, strategic plan execution and effectiveness, wafer level assembly
and ESG progress achieved and cost reduction initiatives realized.
Based on this review and upon the recommendation by the Committee, the Supervisory
Board decided to award the member of the Board of Management a cash bonus related to
his personal performance equal to 45% of his annual base salary for 2023, or € 292,500.
Total Short-term Incentive
The sum of the financial and non-financial components, including ESG targets, comprising
the total cash bonus for the year 2023 equaled € 975,000, or 150% of the annual base
salary of the member of the Board of Management. The Supervisory Board, upon the
recommendation of the Committee, unanimously agreed on such cash bonus based on the
Company’s peer leading revenue, net income and cash flow and operating efficiency in the
face of a significant industry downturn, increased gross margins, progress on its wafer
level assembly agenda as well as its return on average equity, relative share price
development, increased capital allocation, strategic plan execution, peer leading financial
metrics and progress on ESG and sustainability goals.
5. Long-Term Incentive (annual conditional award of performance shares)
Grants of LTI shares
The at target number of conditional performance shares awarded was calculated based on
175% of the gross annual base salary of the member of the Board of Management divided
by the average closing share price for all trading days in the last calendar quarter of the
year immediately preceding the start of the three-year performance period. The number of
shares that will actually vest will be based on the following predetermined performance
conditions:
(i) Net income as a percentage of revenue over three calendar years (50% of LTI).
(ii) Besi’s share price development including the reinvestment of dividends during a
three-year performance period versus the TSR comparator group of 19 listed companies
operating in the semiconductor equipment industry (50% of LTI).
The Long-Term Incentive is subject to continued employment. Outstanding conditional
grants, made on annual basis are as follows:
Conditional grants outstanding
as of December 31, 2023
Performance period
2023-2025 2022-2024 2021-2023
Conditionally awarded at target 20,604 13,927 25,143
Average share price Q4 preceding year (€) 55.2070 75.3924 41.7606
Year of vesting 2026 2025 2024
Range of shares potential vesting (0-150%) 0-30,906 0-20,891 0-37,715
Vesting of LTI shares
The vesting of LTI shares (conditional performance shares) for the member of the Board of
Management for the 2021-2023 period was based on the following factors:
(i) Net income as percentage of revenue over the three-year performance period of
34.4% over-achieved the maximum pre-defined target of 15% resulting in a vesting of
75% of performance shares associated with this portion of the award (50% of the
LTI).
(ii) Besi ranked fourth within the TSR comparator group resulting in a vesting of 66.67%
associated with this portion of the award (50% of the LTI).
Target Net Income as
% of revenue
over 3 years
(50% of LTI)
Vesting
percentage
Besi TSR
ranking
relative to
comparator
group (50% of
LTI)
Vesting
percentage*
Total LTI
award vested
Minimum < 5% 0% Top 3 75%
Target 5%-11.7% 0-50% Rank 6 50%
Maximum 11.7%-15% 50-75% Rank 12 25%
Rank 13 - 20 0%
Actual 34.4% 75% Rank 4 66.67% 141.67%
* Vesting percentage based on linear extrapolation between Top 3, Rank 6 and Rank 12 levels.
As a result, 141.67% of the 25,143 shares related to the 2021 performance share award will
vest on April 25, 2024, subject to the member of the Board of Management’s continued
employment until such date. The vested shares are subject to a two-year lock-up period
except for those shares necessary to be sold to cover any withholding/income tax liabilities
arising therefrom.
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INFORMATION
The following table presents a summary of the applicable performance incentive zones and
performance realized for both the STI and LTI awards in 2023:
BESI SHARE PRICE OVER LTI PERIOD
150
130
110
90
70
50
30
€
Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22
Sep-22
Dec-22 Mar-23 Jun-23 Sep-23 Dec-23
Performance incentive zones (as % of base salary)
Executive Performance criteria
applicable for STI and LTI
Relative
weighting
Threshold levels Target levels and
corresponding award
Maximum performance
levels and corresponding
award
Performance
realized and actual
award outcome 2023
R.W. Blickman, CEO
STI
Net income as % of revenue (“NIR”) 70% Below threshold (0%);
vesting starting at
threshold levels
Target performance (70%);
€ 455,000
Maximum performance
(105%);
€ 682,500
Maximum performance (105%);
€ 682,500
Personal performance (see above) 30% Below threshold (0%);
vesting starting at
threshold levels
Target performance (30%);
€ 195,000
Maximum performance
(45%);
€ 292,500
Maximum performance (45%);
€ 292,500
LTI
Net income as % of revenue 50% At threshold (25%);
0 shares
Below threshold (0%)
At target (50%);
12,572 shares
Maximum performance
(75%);
18,857 shares
Vesting at maximum level
(75%);
18,857 shares
Relative Total Shareholder Return
(performance incentive zone depending on
actual ranking of Besi in reference group,
see above)
50% At threshold (25%);
6,286 shares
Below threshold (0%)
At target (50%);
12,571 shares
Maximum performance
(75%);
18,857 shares
Vesting at rank 4 level
(66.67%);
16,763 shares
Additional performance shares (see below) 88,020 shares
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Additional performance share awards for the member of the Board of Management
Under the Remuneration Policy 2020-2023, the Supervisory Board may, upon
recommendation of the Committee, award additional performance shares to the member
of the Board of Management for extraordinary achievements or exceptional performance
in the prior year, up to a maximum of 120,000 shares. In January 2023, the Supervisory
Board awarded the member of the Board of Management 88,020 additional performance
shares for achievements realized in 2022. This award was made following the review, inter
alia, of quantitative and qualitative financial and strategic/non-financial performance
criteria applied for determining whether overperformance was achieved. The award
reflected (i) a downward adjustment (24,000 shares) from the potential maximum award
and (ii) the subtraction of 7,980 LTI shares due to their vesting between target and
maximum performance (stretching performance) of the NIR element, both in accordance
with the provisions of the Remuneration Policy 2020-2023. The value of the downward
adjustment equaled € 1.5 million.
The financial criteria used to determine exceptional performance in a particular year
represent a broader and more challenging set of financial targets than Besi’s STI and LTI
financial criteria including Return on Average Equity (“ROAE”) and Cash Flow from
Operations (“CFO”)/Revenue in addition to Net Margin (“Net Income/Revenue”). They
represent 90% of the total potential additional performance share award and are based on
exceeding thresholds for each of 1- and 3-year average periods. Such criteria are set forth
below:
Performance versus payout for one year and
three-year average periods
2022 performance
Measure No award 50%+ award
(pro-rata)
100%
max award
1 year 3 year
average
Net margin (30% of award) < 20% ≥ 20% < 25% ≥ 25% 33.3% 34.4%
ROAE (30% of award) < 20% ≥ 20% < 25% ≥ 25% 38.6% 45.1%
CFO/Revenue (30% of award) < 25% ≥ 25% < 30% ≥ 30% 37.6% 37.3%
• Net margin defined as Net Income/Revenue. ROAE defined as Return on Average Equity. CFO/Revenue defined as Cashflow
from Operations/Revenue.
The award of additional performance shares pursuant to this component was also made
due to the recognition of the following other important business factors in 2022:
• Exceptional performance above STI and LTI targets.
• Achievement of peer and industry leading gross and net margins of 61.3% and 33.3%,
respectively, and return on average equity of 38.6.%.
• Continued maintenance of the significant performance gap between Besi and its peers in
terms of key financial metrics such as gross margin, net margin, average return on equity
and cash flow generation relative to revenue even despite adverse pandemic influences,
supply chain challenges and a significant industry downturn.
• Achieved first commercial production of hybrid bonded devices in Q4-22.
• Successful development and commercial introduction of hybrid bonding and embedded
bridge die attach systems.
• Capital allocation of € 416.3 million, representing an increase of 131.9% over 2021.
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In addition, the Committee reviewed the performance realized by the member of the Board of Management with respect to four equally weighted and pre-defined personal, non-financial
and ESG performance objectives representing 10% of the potential award of 120,000 shares. These four pre-defined personal, non-financial and ESG performance objectives were:
Pre-defined performance objectives Weighting Achievements / Overachievements 2022
• Progress on product strategy 25% • Successfully completed enhancements as per plan for next generation platforms.
• Overcame supply chain and COVID-19 risks to deliver systems on timely basis to customers.
• Gross margin increased to 61.3% versus 59.6% in 2021 despite 29.3% order decrease. Re-affirmed Besi’s
leading market position.
• Gross R&D investment increased by € 11.7 million, or 23% versus 2021. 66% increase over past three years.
• Capital allocation – optimize shareholder
value through dividends, share repurchases,
acquisitions and external financing
25% • In 2022, capital allocation increased to € 416.3 million, up 132% versus € 179.5 million in 2021.
• Successful placement of € 175 million Convertible Notes due 2029 at exercise price of € 115.50 per share.
• € 185 million share repurchase program completed in July 2022.
• New € 300 million share repurchase plan initiated in August 2022.
• Dividend proposed of € 2.85 per share. Represents ~92% payout ratio.
• Peer leading return on average equity of 38.6% in 2022 maintained despite significant assembly market
downturn.
• Total capital allocation since 2011 increased to € 1.3 billion. Represented ~25% of total revenue during period.
• Five-year average return on average equity of ~40% based on organic growth and effective capital allocation
program.
• Over past three years, Besi market capitalization has increased by 80% to € 4.4 billion in 2022.
• TSR of 84% past three years and 108% past five years.
• Significant outperformance versus direct peers, SOX index and REM reference group over three-year period.
• Shareholder value also enhanced via increased shareholder outreach including: (i) expanded research
coverage, (ii) expanded number of investor conferences, (iii) expanded number of research and investor calls
during year.
• Research coverage expanded to 14 companies.
• People wellbeing – diversity and inclusion,
employee health and safety, employee
development and engagement
25% • Increased % of female managers to 20% versus 18% in 2021 and 14% in 2019 (base line year for comparison).
• Increased % local managers to 88% versus 87% in 2021.
• Maintained COVID-19 health and safety measures.
• Responsible business – ethics and
compliance, responsible supply chain,
community impact, tax practices
25% • No reported violations of Besi’s Code of Conduct.
• Compliant with tax obligations where factual economic activities take place.
• Participated in several community outreach projects.
• Improved overall responsible supply chain targets.
• Purchasing Volume ("PV") General Work Agreement or General Procurement Contract signed increased from
64% to 77%.
• PV Conflict Free Sourcing Initiative signed increased from 66% to 73%.
TOTAL 100%
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OTHER
INFORMATION
Based on the actual performance relative to the strategic/ESG objectives set for 2022, the
Supervisory Board judged that the execution of strategic initiatives proved to exceed the
challenging goals and timelines initially set at the beginning of the year. As such, 10% of
the maximum potential award of 120,000 shares (12,000 shares) was available to be
awarded to the member of the Board of Management in January 2023.
Based on the actual performance achieved against each of the defined financial and non-
financial targets, the Supervisory Board approved an award of 88,020 additional
performance shares relative to the maximum potential award of 120,000 shares available
to the member of the Board of Management. In so doing, the Supervisory Board applied the
maximum downward adjustment from the maximum award permitted under the plan (20%
or 24,000 shares). The Supervisory Board considered several issues in applying the
maximum discount permitted under the plan to the compensation paid to the member of
the Board of Management in 2023. They considered the absolute quantum payment due to
the member of the Board of Management resulting from the overperformance of the
compensation metrics and the substantial long-term increase in Besi’s share price
between 2019 and 2022 in their decision to apply a maximum discount of 20%. In addition,
they compared executive compensation paid at Besi versus comparable companies with
similar business, geographic and market capitalization metrics such as Besi. Further, they
considered how the award would be perceived relative to wider workforce pay, the views of
society and the use of downward adjustments according to local market practice.
The shares vested on January 19, 2023 and are subject to a five-year lock-up period which
means that the member of the Board of Management will have to retain such shares for
five years following the vesting date.
In addition, the award of additional performance shares to the member of the Board of
Management was supported by an analysis of (i) Besi’s performance versus the median of
all industry peers used in our TSR-comparator group and (ii) its alignment with the median
remuneration of all companies used in our remuneration reference group. This analysis
included both one-year and three-year rolling performance periods wherein return on
average equity, gross margin and the ratio of cash flow as a percentage of revenue were
also considered, reviewed and analyzed in addition to the net income as a percentage of
revenue metric as applied under the Remuneration Policy.
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OTHER
INFORMATION
The following table presents the shares awarded or due to the member of the Board of
Management for the last five reported financial years and unvested or subject to a holding
period as of December 31, 2023:
Information regarding the reported financial year
The main conditions of share award plans Opening
balance
During the year Closing balance
Name of
Director,
position
Specification
of plan
Performance
period
Award
date
Vesting
date
End of
holding
period
Shares
awarded
at the
beginning
of the year
Shares
awarded
Performance
adjustments
Shares
vested
Shares
subject to a
performance
condition
Shares
awarded and
unvested at
year end
Shares
subject to
a holding
period
R. W. Blickman,
CEO
2019 PSP Jan 1, 2019 -
Dec 31, 2021
Apr 26, 2019 Apr 29, 2022 Apr 29, 2024 – – – – – – 41,109
2020 add. PSP Jan 23, 2020 Jan 23, 2020 Jan 23, 2025 – – – – – – 103,000
2020 PSP Jan 1, 2020 -
Dec 31, 2022
Apr 30, 2020 Apr 26,2023 Apr 26, 2025 37,241 _ – 37,241 – – 37,241
2021 add. PSP Jan 21, 2021 Jan 21, 2021 Jan 21, 2026 – – – – – – 100,000
2021 PSP Jan 1, 2021 -
Dec 31, 2023
Apr 30, 2021 Apr 25, 2024 Apr 25, 2026 25,143 – 10,477 – 35,620 35,620 –
2022 add. PSP Jan 20, 2022 Feb 17, 2022 Feb 17, 2027 – – – – – – 70,000
2022 PSP Jan 1, 2022 -
Dec 31, 2024
Apr 29, 2022 AGM 2025 AGM 2025 +
2 years
13,927 – – – 13,927 13,927 –
2023 add. PSP Jan 19, 2023 Jan 19, 2023 Jan 19, 2028 – 88,020 – 88,020 – – 88,020
2023 PSP Jan 1, 2023 -
Dec 31, 2025
Apr 26, 2023 AGM 2026 AGM 2026 +
2 years
– 20,604 – – 20,604 20,604 –
Total 76,311 108,624 10,477 125,261 70,151 70,151 439,370
In January 2024, the Supervisory Board approved an award of 70,000 additional performance
shares relative to the maximum potential award of 120,000 shares available to the member
of the Board of Management, subject to adoption of the 2023 annual accounts at the 2024
AGM. The award reflected (i) a 20% downward adjustment (24,000 shares) from the
potential maximum award and (ii) the subtraction of 10,477 LTI shares due to their vesting
between target and maximum performance (stretched performance) of the NIR and TSR
elements, both in accordance with the provisions of the Remuneration Policy. In addition,
a further downward adjustment of 15,523 shares was agreed with the member of the
Board of Management due to Besi's 141.2% share price increase in 2023. As a result, a total
of 70,000 additional performance shares were awarded to the member of the Board of
Management. The downward adjustment of additional performance shares in 2024 related
primarily to the quantum amount of the award in 2023 and in no way reflected dissatisfaction
with his performance, which was deemed to be exceptional.
Such shares are subject to a five-year lock-up period, which means that the member of the
Board of Management will have to retain such shares for five years following the vesting
date. In accordance with IFRS 2 (“share-based payments”), expenses for such additional
performance shares will be recognized in the first quarter of 2024 since the award was
made and communicated in the first quarter of 2024. This 2024 award reflects the last
payment of additional performance shares to the member of the Board of Management
under the Remuneration Policy 2020-2023.
Clawback and ultimate remedium
In accordance with Dutch law and the Remuneration Policy, the Short-Term Incentive and
Long-Term Incentive components for the member of the Board of Management are subject
to clawback provisions and ultimate remedium clauses. During 2023, no circumstances
were identified by the Supervisory Board that could result in any adjustments or clawback.
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Remuneration of the Board of Management
Remuneration of the member of the Board of Management recognized by the Company in
its Financial Statements for the years ended December 31, 2023 and 2022 was as follows:
(€, except for performance shares) Year ended December 31,
2023 2022
Base salary 650,000 600,000
Annual cash bonus 975,000 900,000
Other benefits
1
257,529 232,910
Total cash benefits 1,882,529 1,732,910
Pension contribution – 12,430
Equity compensation benefits: Incentive Plan
2
1,547,777 1,326,796
Total remuneration, excluding discretionary elements 3,430,306 3,072,136
Equity compensation benefits: additional performance shares
3
5,529,416 5,223,400
Total remuneration 8,959,722 8,295,536
Conditional performance shares awarded
4
20,604 13,927
1
Other benefits include expense compensation, medical insurance, employer social security contributions and for 2023 and
2022 a taxable pension allowance of € 214,756 and € 187,262, respectively.
2
Expenses recognized in 2023 and 2022 for performance shares awarded from 2019 to 2023 made under the Incentive Plan
as determined in accordance with IFRS.
3
Expenses recognized in 2023 and 2022 for the additional performance share award of 88,020 shares which vested on
January 19, 2023 and of 70,000 shares which vested on February 17, 2022 as determined in accordance with IFRS.
4
Performance shares for 2023 and 2022 may vest in 2026 and 2025, respectively, subject to continued service and the actual
performance during the performance period 2023-2025 and 2022-2024, respectively.
Other remuneration information
The actual cash remuneration paid by the Company to the member of the Board of
Management and the value of the vested equity remuneration for the member of the Board
of Management for the years ended December 31, 2023 and 2022 were as follows:
(€) Year ended December 31,
2023 2022
Base salary 650,000 600,000
Fringe benefits 257,529 232,910
Total fixed remuneration 907,529 832,910
One-year variable 6,504,416 6,123,400
Equity compensation benefits: Incentive Plan 3,049,293 2,414,743
Total variable remuneration 9,553,709 8,538,143
Pension expense – 12,430
Total remuneration 10,461,238 9,383,482
Proportion of fixed and variable remuneration 9%/91% 9%/91%
The difference between the total remuneration paid to the member of the Board of
Management in 2023 as recognized in the Company’s Financial Statements (€ 8,959,722) and
the actual cash remuneration paid and value of the vested equity remuneration for the
member of the Board of Management (€ 10,461,238) was primarily due to the share price
variation between the grant dates and vesting date used for determining the value of LTI
share-based compensation.
Loans
At the end of 2023, no loans, advances or guarantees were provided or outstanding to the
CEO in accordance with the Remuneration Policy.
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Summary compensation and key performance metrics 2019-2023
The following table presents the items used to evaluate remuneration and company
performance over the last five reported financial years:
Year ended December 31,
2023 2022 2021 2020 2019
Director’s actual cash remuneration and value of equity remuneration
R.W. Blickman, CEO Board of Management (€) 10,461,238 9,383,482 8,698,528 7,066,003 6,068,127
Annual change 11% 8% 23% 16% -33%
Company performance
Net income as % of revenue realized 30.6% 33.3% 37.7% 30.5% 22.8%
Total shareholder return (base 2018 = 100%) 913% 365% 457% 294% 199%
Average actual cash remuneration and value of equity remuneration
Employees of the Company, excluding CEO (€ thousands) 80.4 73.6 70.8 68.2 64.8
Annual change 9% 4% 4% 5% 0%
Internal pay ratio* 115 115 128 100 72
* The internal pay ratio is calculated based on the annual total remuneration of the CEO relative to the average annual
remuneration of the employees of the Company as reported in accordance with IFRS and in accordance with the
requirements under the Dutch Corporate Governance Code. The Remuneration Committee noted that certain factors
influence the internal pay ratio. The internal pay ratio of 115 in 2023 was equal to 2022 and decreased versus 2021 as the
total 2023 remuneration of the CEO as reported in accordance with IFRS increased by 1.7% versus 2021, whereas the
average remuneration of the other employees in accordance with IFRS increased by 17%. The internal pay ratio is mainly
impacted by the value of the equity compensation awarded to the CEO and as such aligned with the share price
performance. Given the dependence on the share price development, the Remuneration Committee does not have a
preferred ratio. Instead, remuneration of employees and the CEO should be in line with the relevant internal and external
references for the relative weight of the position, responsibilities and performance.
Shares held by members of the Board of Management
Members of the Board of Management are expected to hold Besi shares as a long-term
investment to better align their interests with those of shareholders. As per a resolution
approved at the 2023 AGM, the Chairman of the Board of Management is expected to hold
shares in an amount equal to three times his base salary (or € 1,950,000 based on his 2023
salary). Other members of the Board of Management are expected to hold shares in an
amount equal to two times their base salary. The table below shows the holdings of the
member of the Board of Management as of December 31, 2023:
Board of Management 2023 base salary in € Number of shares held Ownership ratio*
Richard W. Blickman 650,000 1,342,098 282x
* The ownership ratio is calculated based on the number of shares held by the member of Board of Management multiplied
with the share price at December 31, 2023, divided by the base salary.
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Remuneration members of the Supervisory Board
The remuneration of the members of the Supervisory Board is reviewed on an annual basis.
The Annual General Meeting of Shareholders on April 26, 2023 approved the Remuneration
Policy of the Supervisory Board.
The total cash remuneration of the members of the Supervisory Board for the five years
ended December 31, 2023 was as follows, as reported by the Company:
(€) Year ended December 31,
2023 2022 2021 2020 2019
R. Norbruis – Chairperson
1
52,800 – – – –
N. Hoek – Member and Chair Audit Committee 66,000 66,000 66,000 66,000 66,000
C. Bozotti – Member and Chair Remuneration Committee 66,000 66,000 64,900 62,700 62,700
E. Eckstein – Member and Chair Nomination Committee 66,000 64,900 20,900 – –
L. Oliphant – Member 68,700 62,700 41,800 – –
Former members of the Supervisory Board:
L.J. Hijmans van den Bergh
1
25,800 79,200 79,200 79,200 53,900
D.J. Dunn – – 22,000 66,000 66,000
M. ElNaggar – – 41,800 68,700 70,700
T. de Waard – – – – 26,400
K.W. Loh – – – – 26,900
Total remuneration 345,300 338,800 336,600 342,600 372,600
1
Mr Richard Norbruis was appointed as a member of Besi’s Supervisory Board at the 2023 AGM on April 26, 2023. Mr Norbruis
succeeded Mr L.J. Hijmans van den Bergh, who did not seek reappointment to his position as a Supervisory Board member
at the 2023 AGM. Their respective remuneration is pro-rated.
The current remuneration of Supervisory Board members as per the new Remuneration
Policy 2024 and as approved by shareholders at the 2023 AGM, is as follows:
• Member of the Supervisory Board, including committee membership(s): € 62,700.
• Member of the Supervisory Board and Chairperson of a committee: € 66,000.
• Chairperson of the Supervisory Board: € 79,200.
• Meeting attendance fees, including conference calls: None.
• Intercontinental travel allowance: € 6,000 for physical attendance at a minimum of
three meetings.
The members of the Supervisory Board are not entitled to any performance or equity
related compensation and are not entitled to any pension allowance or contribution.
Proposed increase in Supervisory Board compensation
Compensation for members of Besi’s Supervisory Board has not been increased for the
past six years. The Committee reviewed its compensation structure in 2023 with the help
of a third-party consultant and concluded that the pay levels for some roles were below
the benchmark of market median rates for other reference companies in accordance with
the Remuneration Policy 2024. Consequently, a proposal will be made at the 2024 AGM to
increase the compensation for members of Besi’s Supervisory Board.
Loans
At the end of 2023, no loans, advances or guarantees were outstanding for any members
of Besi’s Supervisory Board.
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Remuneration Policy 2024
The key principles underlying the new Remuneration Policy 2024, which was approved at
the 2023 AGM include the (i) placement of a cap on total compensation available to the
member of the Board of Management in any given year, (ii) elimination of the discretionary
element in share-based compensation, (iii) simplification of the remuneration structure,
(iv) updating of the current remuneration reference group to better reflect Besi’s improved
business and financial profile and (v) establishment of a minimum level of share ownership
for members of the Board of Management.
Besi will apply this Remuneration Policy 2024 as from January 1, 2024.
In accordance with this policy, the Supervisory Board, upon the recommendation of the
Committee, decided to increase the 2024 base salary of the CEO from € 650,000 to
€ 700,000. The Committee considered a 7.7% salary increase reasonable considering
comparable industry peer group metrics and other industry benchmarks.
For more information, please see the Remuneration Policy 2024, which is available on our
website.
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Report of the Supervisory Board
Annual Report
Besi is pleased to present its 2023 Annual Report prepared by the Board of Management.
The Annual Report includes Besi’s Financial Statements as prepared by the Board
of Management for the financial year ended December 31, 2023. At its meeting on
February 21, 2024, the Supervisory Board approved these Financial Statements. Ernst &
Young Accountants LLP (“EY”), independent external auditors, duly examined the 2023
Besi Financial Statements and issued an unqualified opinion thereon.
The Supervisory Board recommends that the General Meeting of Shareholders adopts the
2023 Financial Statements as submitted by the Board of Management and approved by the
Supervisory Board. The Board of Management, with the approval of the Supervisory Board,
has also submitted a proposal to declare a cash dividend of € 2.15 per share for the year
ended December 31, 2023.
Supervision
Besi has a two-tier board structure consisting of a Board of Management and a Supervisory
Board that is responsible for supervising and guiding the Board of Management. The Board
of Management is currently comprised of one member, Mr Richard Blickman.
The Supervisory Board is currently comprised of five members, all of whom are considered
independent within the meaning of best practice provision 2.1.8 of the Dutch Corporate
Governance Code. In the opinion of the Supervisory Board, the independence requirements
referred to in best practice provisions 2.1.7 to 2.1.9 (inclusive) of the Dutch Corporate
Governance Code have been fulfilled.
Name
Year first
appointed
Year
reappointed
Term end
Mr Richard Norbruis 2023 – 2027
Mr Niek Hoek 2018 2022 2026
Mr Carlo Bozotti 2018 2022 2026
Dr Laura Oliphant 2021 – 2025
Ms Elke Eckstein 2021 – 2025
Mr Richard Norbruis was appointed as Supervisory Board member for a four-year term at
Besi’s Annual General Meeting of Shareholders held on April 26, 2023 (“2023 AGM”).
Subsequently, Richard Norbruis was elected as Chairperson of the Supervisory Board.
Mr Lodewijk Hijmans van den Bergh, former Chairperson of the Supervisory Board did not
seek reappointment for another term upon the expiration of his four-year term at Besi’s
2023 AGM.
Composition and diversity
The Supervisory Board considers its composition to be aligned with its objective
for an adequate spread of knowledge and experience amongst its members in relation
to the technological and global character of Besi’s business as well as an adequate
level of knowledge and experience in financial, economic, technical, social and legal
aspects of international business and government and public administration.
The Supervisory Board believes that it has the requisite expertise, background,
competencies and independence to carry out its duties properly and that all members of
the Supervisory Board have sufficient time to spend on their respective duties and
responsibilities.
The Supervisory Board has a diverse composition in terms of experience, expertise, cultural
or other background, competencies, education, gender identity, age and nationality. On all
such points, its composition is in line with the objectives of the Supervisory Board’s profile
and Diversity and Inclusion policy. The current Supervisory Board male/female ratio
of 60/40 is in compliance with the Supervisory Board’s profile and Besi’s Diversity
and Inclusion policy as well as with Dutch legislation on gender diversity effective
January 1, 2022. When considering new candidates, the Supervisory Board will retain an
active and open attitude with respect to the selection of female candidates. Gender is,
however, only one factor of diversity. The qualifications of a particular person and the
requirements for the position shall in principle always prevail over all other factors and
considerations when filling a vacancy, unless otherwise required by Dutch law.
Meetings and attendance
In 2023, the Supervisory Board held six meetings, of which four were combined meetings
of the Supervisory Board and the Audit Committee. Four meetings were held in-person and
two meetings were held virtually. The Supervisory Board also held three virtual update
meetings during the year. In addition, the Supervisory Board visited Besi’s locations in
Switzerland, Malaysia and Singapore and met with local management.
During the year, the Audit Committee held four meetings to discuss the topics set forth
below and the scope and results of EY’s audit of the Financial Statements. EY attended
two meetings of the Audit Committee in 2023. The Audit Committee separately met with
EY once without the presence of the member of the Board of Management.
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The Remuneration Committee and the Nomination Committee both met once in 2023 to
discuss the topics set forth below. The member of the Board of Management was not
present during the Remuneration Committee meeting.
Meeting attendance by individual Supervisory Board members was as follows:
Name
Supervisory
Board
Audit
Committee
Remuneration
Committee
Nomination
Committee
Mr Richard Norbruis, Chairperson¹ 4/4 2/2 -/- 1/1
Mr Niek Hoek 6/6 4/4 1/1 -/1
Mr Carlo Bozotti 6/6 4/4 1/1 1/1
Ms Laura Oliphant 6/6 4/4 1/1 1/1
Ms Elke Eckstein 6/6 4/4 1/1 1/1
Mr Lodewijk Hijmans van den Bergh 2/2 2/2 1/1 -/-
¹ Prior to his appointment on April 26, 2023., Mr Norbruis attended all meetings of the Supervisory Board and its Committees
as an observer.
Supervisory Board meeting topics
Key topics discussed by the Supervisory Board during 2023 included:
Strategic
• Semi-annual reviews of current strategic planning initiatives and the principal risks
associated therewith as well as the implementation of Besi’s sustainable long-term
value creation strategy.
• Besi’s technology roadmap and related research and development programs.
• Potential strategic alliances and acquisitions.
• The hybrid bonding joint development agreement with Applied Materials.
• ESG related topics including a review of Besi’s current policies, strategies and
performance more fully discussed in our Environmental, Social and Governance Report
included elsewhere in this Annual Report.
• Progress on the Corporate Sustainability Reporting Directive (“CSRD”) roadmap.
• Review of Besi’s strategic planning 2023-2027 with participation of third-party consulting
firm.
Financial
• Besi’s annual budget as well as quarterly revised estimates related thereto.
• Quarterly business reviews and a review and discussion of Besi’s 2023 annual budget
with the Board of Management and senior management.
• Besi’s capital allocation policy including completion of the € 300 million share repurchase
program in October 2023 and initiation of a new € 60 million share repurchase program
effective November 1, 2023.
Operations
• The ongoing transfer of operations from Europe to Asia and reductions to Besi’s cost
structure.
• The general risks associated with Besi’s operations.
• The progress of the Sub Micron Die Attach product group focused on wafer level assembly.
• The expansion of Besi’s facilities including the completion of a new cleanroom in
Singapore in support of future hybrid bonding process development.
• The opening and investment in Besi Vietnam’s tooling facility.
• The establishment of a branch office in India to support customer expansion.
• The progress of Besi’s development programs including new enhancements to Besi’s
current portfolio.
• The ongoing operational development of Besi’s processes, procedures, ERP and IT
systems.
• The assessment and review provided by the Board of Management of the structure and
operation of Besi’s internal control and risk management systems as well as any
significant changes thereto.
Governance
• The functioning and performance evaluation of the Board of Management,
the Supervisory Board, the Audit Committee, the Remuneration Committee and
the Nomination Committee and the individual members of the Supervisory Board.
• A self-assessment conducted by the Supervisory Board (without the presence of the
member of the Board of Management), facilitated by an external advisor, the results of
which concluded that there is a proper mix of background and skills at the Supervisory
Board level and that the Supervisory Board works well as a team with open and direct
communication. The conclusion of the evaluation has been shared with the member of
the Board of Management and members of the Supervisory Board.
• Succession planning and related career development programs for members of senior
management and key Besi staff.
• The remuneration of the Board of Management and the Remuneration Report.
• Proposal and approval of a new Remuneration Policy 2024 at Besi’s 2023 AGM.
• The compensation of the Supervisory Board.
Capital allocation policy
The Board of Management is responsible for Besi’s optimal capital allocation and has
adopted a policy which aims to enhance shareholder returns via dividends and share
repurchases.
Due to Besi’s earnings and cash flow generation in 2023, the Board of Management, with
the approval of the Supervisory Board, will propose a cash dividend to shareholders equal
to € 2.15 per share for 2023 for approval at Besi’s Annual General Meeting of Shareholders
to be held on April 25, 2024.
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On July 21, 2022, Besi announced a € 300 million share repurchase program effective
August 1, 2022. Under this program, a total of 4.3 million shares were repurchased from
August 1, 2022 (inception) through October 27, 2023 (completion) at an average price per
share of € 69.87. On October 26, 2023, Besi announced a new € 60 million share repurchase
program effective November 1, 2023. The program is aimed at general capital reduction
purposes and to help offset dilution related to Besi’s Convertible Notes and shares issued
under employee stock plans. It will be funded using Besi’s available cash resources and is
expected to be completed by October 2024. In 2023, a total of 2.6 million shares were
repurchased under both programs at an average price of € 83.40 per share for an aggregate
amount of € 213.4 million.
Supervisory Board committees
The Supervisory Board has established three committees, the Audit Committee, the
Remuneration Committee and the Nomination Committee. These committees operate
under terms of reference that have been approved by the Supervisory Board. Members of
these committees are appointed from among the Supervisory Board members.
Audit Committee
The Audit Committee consists of all Supervisory Board members. The Chairperson is
Mr Niek Hoek who is considered a financial expert. The Audit Committee fulfills its
responsibilities by carrying out the activities enumerated under its terms of reference,
including assistance provided to the Supervisory Board in fulfilling its oversight
responsibilities in its review of:
• The effectiveness of Besi’s internal control and risk management systems and the
internal audit function are described under Risk Management and in the chapter Internal
control and risk management under Corporate Governance in this Annual Report.
• The analysis and assessment provided by the Board of Management of the structure and
operation of Besi’s internal control and risk management systems and any significant
changes thereto.
• Besi’s capital structure, financing and treasury operations.
• Besi’s European and global tax structure and transfer pricing policy, including,
in particular, developments affecting fiscal Base Erosion and Profit Shifting (“BEPS”).
• Auditing, accounting and financial reporting processes and critical accounting policies,
new accounting pronouncements and the further development of International Financial
Reporting Standards as adopted by the EU (“IFRS”).
• Auditing, accounting and reporting of non-financial (ESG) reporting.
• The quality of work, reporting, expertise and independence of EY, Besi’s independent
external auditor on a regular basis, including, in particular, the appropriateness of the
provision of non-audit services.
• The terms of EY’s engagement, including the scope of the audit, the materiality
thresholds to be used and the audit fee.
• The approval of non-audit/assurance services by EY.
• The receipt, retention and treatment of complaints and the anonymous submission
of confidential concerns by employees involving accounting matters on the basis
of Besi’s Whistleblower procedure, which can be found on the Company’s website:
www.besi.com.
• Information and communication technology deployment including ongoing enhancements
to Besi’s global ERP system.
• Besi’s cyber security profile including risks and measures available to counter the rising
threat of cybercrime and cyber terrorism.
The Audit Committee terms of reference are posted on Besi’s website: www.besi.com.
Remuneration Committee
The Remuneration Committee consists of all Supervisory Board members. The Chairperson
of the Remuneration Committee is Mr Carlo Bozotti. It has the following responsibilities
with respect to remuneration for which it fulfills its obligations by:
• The proposal to the Supervisory Board of the Remuneration Policies to be pursued.
• The review and proposal on an annual basis of the corporate goals and objectives related
to the remuneration of the Board of Management.
• The proposal to the Supervisory Board for the remuneration of the Board of Management
within the scope of the Remuneration Policy as adopted by the General Meeting of
Shareholders. Such proposal shall, in any event, deal with:
• The strategic objectives for the implementation of sustainable long-term value
creation.
• The remuneration structure.
• The amounts of the fixed and variable remuneration components and the ratio thereof.
• The performance criteria used.
• The scenario analyses carried out.
• Company-wide pay ratios.
• The terms and conditions governing conditional share awards or share options.
• The development of the market price of the ordinary shares.
• The overall compliance with the requirements imposed by the Dutch Civil Code and the
Dutch Corporate Governance Code.
• Overseeing Besi’s equity incentive plans.
• Preparing the Remuneration Report.
The Remuneration Committee terms of reference are posted on the Company’s website:
www.besi.com.
Remuneration Report
The Remuneration Report is included in a separate section of this Annual Report.
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The Nomination Committee
The Nomination Committee consists of all Supervisory Board members. The Chairperson
of the Nomination Committee is Ms Elke Eckstein. It has the following responsibilities with
respect to the selection and nomination of Supervisory Board members and members
of the Board of Management for which it fulfills its obligations by:
• Determining selection criteria and appointment procedures for Supervisory Board
members and members of the Board of Management.
• Periodically assessing the size and composition of the Supervisory Board and the Board
of Management and making proposals for the composition profile of the Supervisory
Board.
• Periodically assessing the functioning of individual Supervisory Board members and
members of the Board of Management and providing reports to the Supervisory Board.
• Creating and updating succession plans for Supervisory Board members and members
of the Board of Management.
• Making proposals for appointments and reappointments.
• Supervising the policy of the Board of Management on selection criteria and appointment
procedures for senior management.
The Nomination Committee terms of reference are posted on the Company’s website:
www.besi.com.
Corporate governance
The Supervisory Board acknowledges the importance of good corporate governance,
the most important elements of which are transparency, independence and accountability.
It continuously reviews important corporate governance developments. Reference is made
to the Corporate Governance section of this Annual Report. Deviations from the Dutch
Corporate Governance Code are explained in that section.
The Supervisory Board would like to express its thanks and appreciation to all involved for
their hard work and dedication to the Company in 2023. In particular, we would like to
thank management and employees for their actions taken this year to help Besi achieve an
excellent performance in a challenging industry environment.
The Supervisory Board
Richard Norbruis, Chairperson
February 21, 2024
Board of Management and Supervisory Board Members
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Board of Management and Supervisory Board Members
Board of Management
Richard W. Blickman (male, 1954)
Dutch nationality
Appointed since 1995
Chief Executive Officer, Chairman of the
Board of Management
Additional functions
Member of the Netherlands Academy
of Technology and Innovation
Technology Advisory Board
Marvin D. Liao (male, 1955)
Formerly VP Operations/Advanced
Packaging Technology and Service of
TSMC.
Frits van Hout (male, 1960)
Formerly Executive Vice President and
Chief Strategy Officer of ASML N.V.
Vincent DiCaprio (male, 1966)
Vice President at Applied Materials and
Head of Business and Corporate
Development for its Heterogeneous
Integration and ICAPS Business Unit.
From left to right: Richard Blickman, Carlo Bozotti, Laura Oliphant, Richard Norbruis,
Elke Eckstein and Niek Hoek.
Supervisory Board
Richard Norbruis (male, 1957)
Chairperson
Dutch nationality
Member since 2023
Current term 2023 – 2027
Partner at Norbruis Clement Advocaten
Additional functions
Chairman of Stichting Administratie-
kantoor van gewone aandelen A Van
Lanschot Kempen.
Carlo Bozotti (male, 1952)
Italian and Swiss nationality
Member since 2018
Current term 2022 – 2026
Industrial Partner of FSI, private equity
firm
Additional functions
Non-executive member of the board of
directors of Avnet Inc. and Nice S.p.A.
Elke Eckstein (female, 1964)
German nationality
Member since 2021
Current term 2021 – 2025
Non-executive member of the board of
directors of Jenoptik, KK Wind, Saferoad,
u-blox and ViaCon.
Niek Hoek (male, 1956)
Dutch nationality
Member since 2018
Current term 2022 – 2026
Managing director of Brandaris Capital
Holding B.V.
Additional functions
Chairman of the Supervisory Boards of
Anthony Veder Group N.V. (Netherlands
Antilles) and Van Oord N.V., Chairman of
the Board of Stichting Preferente
Aandelen Nedap and Vice Chairman of
Cabka N.V.
Laura Oliphant (female, 1963)
American nationality
Member since 2021
Current term 2021 – 2025
Managing Partner of Serendibite Partners
Additional functions
Non-executive member of the board of
directors of Aehr Test Systems, NextNet
Inc. and USA Triathlon.
The Supervisory Board has formed the
following committees:
Audit Committee
Members: Niek Hoek (Chairperson), Carlo
Bozotti, Elke Eckstein, Richard Norbruis
and Laura Oliphant
Nomination Committee
Members: Elke Eckstein (Chairperson),
Carlo Bozotti, Richard Norbruis, Niek
Hoek and Laura Oliphant
Remuneration Committee
Members: Carlo Bozotti (Chairperson),
Elke Eckstein, Richard Norbruis, Niek
Hoek and Laura Oliphant
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Financial Statements 2023
Consolidated Statement of Financial Position 139
Consolidated Statement of Operations 140
Consolidated Statement of Comprehensive Income 140
Consolidated Statement of Changes in Equity 141
Consolidated Statement of Cash Flows 142
Notes to the Consolidated Financial Statements 143
Parent Company Balance Sheet 188
Parent Company Statement of Income and Expense 189
Notes to the Parent Company Financial Statements 190
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Consolidated Statement of Financial Position
(€ thousands) | Note | December 31, | December 31, |
| 2023 | 2022 | ||
| Assets | |||
Cash and cash equivalents | 3 | ||
Deposits | 4 | ||
Trade receivables | 5 | ||
Inventories | 6 | ||
Income tax receivable | |||
Other receivables | 7 | ||
Prepayments | 8 | ||
Total current assets | |||
Property, plant and equipment | 9 | ||
Right of use assets | 19 | ||
Goodwill | 10 | ||
Other intangible assets | 11 | ||
Deferred tax assets | 29 | ||
Other non-current assets | 12 | ||
Total non-current assets | |||
Total assets |
(€ thousands) | Note | December 31, | December 31, |
| 2023 | 2022 | ||
| Liabilities and equity | |||
Current portion of long-term debt | 18 | ||
Trade payables | 14 | ||
Income tax payable | |||
Provisions | 15 | ||
Lease liabilities | 19 | ||
Other payables | 16 | ||
Other current liabilities | 17 | ||
Total current liabilities | |||
Long-term debt | 18 | ||
Lease liabilities | 19 | ||
Deferred tax liabilities | 29 | ||
Provisions | 20, 25 | ||
Other non-current liabilities | 17 | ||
Total non-current liabilities | |||
Share capital | 21 | ||
Share premium | |||
Retained earnings | |||
Other reserves | 21 | ||
Equity attributable to owners of the Company | |||
Total liabilities and equity |
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Consolidated Statement of Operations
| (€ thousands, except share and per share | Note | Year ended December 31, | |
| data) | 2023 | 2022 | |
Revenue | 23, 24 | ||
Cost of sales | |||
Gross profit | |||
Selling, general and administrative expenses | |||
Research and development expenses | |||
Total operating expenses | |||
Operating income | |||
Financial income | 28 | ||
Financial expense | 28 | ( | ( |
Financial income (expense), net | ( | ( | |
Income before income tax | |||
Income tax expense | 29 | ||
Net income | |||
| Total net income per share | |||
Basic | |||
Diluted¹ | |||
Weighted average number of shares used to compute income per share | |||
Basic | 30 | ||
Diluted | 30 | ||
¹ The calculation of the diluted income per share for the year 2023 and 2022 assumes the exercise of equity-settled share-
based payments. The calculation also assumes the conversion of the Company’s Convertible Notes due 2023, 2024, 2027
and 2029, respectively, as such conversion would have a dilutive effect.
Consolidated Statement of Comprehensive Income
(€ thousands) | Year ended December 31, | |
2023 | 2022 | |
Net income | ||
| Other comprehensive income | ||
Actuarial gain (loss), net of income tax | ( | |
| Items that will not be reclassified | ||
to profit and loss | ( | |
Currency translation differences | ||
Unrealized hedging results, net of income tax | ( | |
| Items that may be reclassified subsequently | ||
to profit or loss | ||
Other comprehensive income, net of income tax | ||
Total comprehensive income | ||
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Consolidated Statement of Changes in Equity
| (€ thousands, | Number of | Share | Share | Retained | Other | Total |
| except for share data) | ordinary | capital | premium | earnings | reserves | share- |
| shares | (Note 21) | holders’ | ||||
| outstanding¹ | equity | |||||
Balance at January 1, 2023 | 81,146,738 | |||||
Currency translation differences | - | |||||
Actuarial loss | - | ( | ( | |||
Unrealized hedging results | - | ( | ( | |||
Other comprehensive income for the year | - | |||||
Net income | - | |||||
Total comprehensive income for the year | - | |||||
Dividend paid to owners of the Company | - | ( | ( | |||
Convertible Notes converted into equity | - | |||||
Changes in legal reserve | - | ( | ||||
Equity-settled share-based payments | - | |||||
Purchase of treasury shares | - | ( | ( | |||
Balance at December 31, 2023 | 81,146,738 | |||||
Balance at January 1, 2022 | 78,567,842 | |||||
Currency translation differences | - | |||||
Actuarial gain | - | |||||
Unrealized hedging results | - | |||||
Other comprehensive income for the year | - | |||||
Net income | - | |||||
Total comprehensive income for the year | - | |||||
Dividend paid to owners of the Company | - | ( | ( | |||
Convertible Notes converted into equity | 2,578,896 | |||||
Changes in legal reserve | - | ( | ||||
Equity-settled share-based payments | - | |||||
Purchase of treasury shares | - | ( | ( | |||
Equity component new Convertible Notes | - | |||||
Balance at December 31, 2022 | 81,146,738 |
¹ The outstanding number of ordinary shares includes 4,130,944 and 2,658,812 treasury shares at December 31, 2023 and December 31, 2022, respectively.
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Consolidated Statement of Cash Flows
(€ thousands) | Note | Year ended December 31, | |
2023 | 2022 | ||
| Cash flows from operating activities | |||
Income before income tax | |||
| Adjustments to reconcile income before income tax to net cash flows | |||
Depreciation, amortization and impairment | 9, 11, 19 | ||
Share-based payment expense | 25 | ||
Financial expense, net | 28 | ||
| Effects on changes in assets and liabilities | |||
Decrease (increase) in trade receivables | ( | ||
Increase in inventories | ( | ( | |
Increase (decrease) in trade payables | ( | ||
Changes in provisions | ( | ||
Changes in other working capital | ( | ( | |
Interest received | |||
Interest paid | ( | ( | |
Income tax paid | ( | ( | |
Net cash provided by operating activities | |||
| Cash flows from investing activities | |||
Capital expenditures | 9, 11 | ( | ( |
Capitalized development expenditures | 11 | ( | ( |
Repayment of (investments in) deposits | 4 | ( | |
Net cash provided by (used in) investing activities | ( | ||
| Cash flows from financing activities | |||
Proceeds from debts | 18 | ||
Proceeds from Convertible Notes | 18 | ||
Payments on lease liabilities | 18, 19 | ( | ( |
Purchase treasury shares | ( | ( | |
Dividend paid to shareholders | ( | ( | |
Net cash used in financing activities | ( | ( | |
Net change in cash and cash equivalents | ( | ||
Effect of changes in exchange rates on cash and cash equivalents | ( | ||
Cash and cash equivalents at beginning of the period | 3 | ||
Cash and cash equivalents at end of the period | 3 | ||
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Notes to the Consolidated Financial Statements
Industries N.V .‘s principal executive office is located at Ratio 6, 6921 RW Duiven,
of Commerce is 09092395.
The Consolidated Financial Statements of BE Semiconductor Industries N.V. for the year
ended December 31, 2023, were authorized for issue in accordance with a resolution of the
directors on February 21, 2024. The Consolidated Financial Statements of the Company as
at December 31, 2023 will be presented to the Annual General Meeting of Shareholders for
their adoption on April 25, 2024.
The Consolidated Financial Statements are prepared on the basis that it will continue to
operate as a going concern.
Ukraine
As a result of the conflict in Ukraine, many countries have imposed, and may continue to
impose, new sanctions on specified Russian entities and individuals. The direct impact to
the Company in 2023 was negligible from a revenue and sourcing perspective as Besi has
no presence in Russia, Ukraine or Belarus. However, the conflict and its direct and indirect
consequences have and may continue to exert a drag on the global economy through
inflation via energy and commodity prices. The Company implemented price increases on
its systems to help compensate for inflationary cost pressures.
Israel/Hamas
The ongoing conflict between Israel and Hamas has had no direct impact on our Company
in 2023, as we do not maintain a presence in that specific region.
Statement of compliance
The Company’s Consolidated Financial Statements have been prepared in accordance with
International Financial Reporting Standards (“IFRS”) as adopted by the European Union.
They also comply with the financial reporting requirements included in section 9 of Book 2
of the Netherlands Civil Code, as far as applicable.
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Name | Location and country of | Percentage of |
| incorporation | ownership | |
BE Semiconductor Industries Holding GmbH | Radfeld, Austria | 100% |
BE Semiconductor Industries USA, Inc. | Chandler, Arizona, USA | 100% |
Besi APac Sdn. Bhd. | Shah Alam, Malaysia | 100%¹ |
Besi Asia Pacific Holding B.V. | Duiven, the Netherlands | n/a³ |
Besi Austria GmbH | Radfeld, Austria | 100% |
Besi Korea Ltd. | Seoul, South Korea | 100% |
Besi Leshan Co., Ltd. | Leshan, China | 100% |
Besi Netherlands B.V. | Duiven, the Netherlands | 100% |
Besi North America, Inc. | Chandler, Arizona, USA | 100% |
Besi Philippines, Inc. | Muntinlupa City, Philippines | 100% |
Besi (Shanghai) Trading Co., Ltd. | Shanghai, China | 100% |
Besi Singapore Pte. Ltd. | Singapore, Singapore | 100% |
Besi Switzerland AG | Steinhausen, Switzerland | 100% |
Besi (Thai) S&S Ltd. | Bangkok, Thailand | 100%¹ |
Besi USA, Inc. | Chandler, Arizona, USA | 100% |
Cong Ty Tnhh Besi Viet Nam | Ho Chi Minh City, Vietnam | 100%² |
Datacon Beteiligungs GmbH | Radfeld, Austria | 100% |
Esec China Financial Ltd. | Hong Kong, China | 100% |
Esec International B.V. | Duiven, the Netherlands | n/a³ |
Fico Hong Kong Ltd. | Hong Kong, China | 100% |
Fico International B.V. | Duiven, the Netherlands | 100% |
Meco Equipment Engineers B.V. | ’s-Hertogenbosch, the Netherlands | 100% |
Meco International B.V. | ‘s-Hertogenbosch, the Netherlands | n/a³ |
| Consolidated Statement | Consolidated Statement of | |||
| of Financial Position | Operations and Consolidated | |||
| Statement of Comprehensive Income | ||||
2023 | 2022 | 2023 | 2022 | |
US dollar | 1.11 | 1.07 | 1.08 | 1.06 |
Swiss franc | 0.93 | 0.98 | 0.97 | 1.01 |
Malaysian ringgit | 5.08 | 4.70 | 4.90 | 4.64 |
Chinese renminbi | 7.85 | 7.36 | 7.63 | 7.09 |
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Category | Estimated useful life |
Land | Not depreciated |
Buildings | 15–30 years |
| Leasehold improvements¹ | 10–15 years |
Machinery and equipment | 2–10 years |
Office furniture and equipment | 3–10 years |
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| Category | |
Land and buildings | 1–10 years |
Office furniture and equipment | 1–10 years |
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Category | Estimated useful life |
Software | 3–5 years |
Development expenses | 3–7 years |
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€ thousands) | December 31, | December 31, |
2023 | 2022 | |
Cash at banks | 33,966 | 78,496 |
Deposits | 43,095 | 268,073 |
Money market funds and reverse repos | 111,416 | 145,117 |
Total cash and cash equivalents | 188,477 | 491,686 |
4. Deposits
At December 31, 2023 and 2022, an amount of € 225.0 million and € 180.0 million,
respectively, was placed on deposit for various periods and with initial maturity exceeding
three months. The expected credit loss on deposits is considered immaterial.
(€ thousands) | December 31, | December 31, |
2023 | 2022 | |
Trade receivables | 143,690 | 149,188 |
Allowance for expected credit losses | (472) | (855) |
Total trade receivables, net | 143,218 | 148,333 |
(€ thousands) | 2023 | 2022 |
Balance at January 1 | 855 | 856 |
Additions | 8 | 2 |
Usage | (368) | (3) |
Foreign currency translation | (23) | - |
Balance at December 31 | 472 | 855 |
Inventories consist of the following:
(€ thousands) | December 31, | December 31, |
2023 | 2022 | |
Raw materials | 32,025 | 30,306 |
Work in progress | 54,368 | 59,967 |
Finished goods | 6,112 | 1,844 |
Total inventories, net | 92,505 | 92,117 |
The movements in the provision for obsolescence are as follows:
(€ thousands) | 2023 | 2022 |
Balance at January 1 | 15,430 | 14,674 |
Additions | 2,584 | 1,540 |
Usage | (601) | (923) |
Foreign currency translation | (752) | 139 |
Balance at December 31 | 16,661 | 15,430 |
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(€ thousands) | December 31, | December 31, |
2023 | 2022 | |
Research and development grants | 12,496 | 8,110 |
Forward foreign currency exchange contracts | 9,467 | 6,803 |
VAT receivables | 3,348 | 2,051 |
Interest to be received | 2,627 | 369 |
Revenue to be invoiced | 493 | 416 |
Other | 468 | 350 |
Total other receivables | 28,899 | 18,099 |
8. Prepayments
Prepayments consist of the following:
(€ thousands) | December 31, | December 31, |
2023 | 2022 | |
Prepaid licenses | 2,082 | 1,463 |
Prepaid suppliers | 1,260 | 364 |
Prepaid insurances | 291 | 289 |
Prepaid pensions and social security | 22 | 21 |
Other prepayments | 582 | 772 |
Total prepayments | 4,237 | 2,909 |
Prepayments do not include any amounts with expected remaining terms of more than one
year. Other prepayments consist of prepaid registration and listing fees, prepaid
exhibitions, prepaid maintenance and other prepayments.
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Property, plant and equipment, net consist of the following:
(€ thousands) | Land, buildings | Machinery | Office | Assets | Total |
| and leasehold | and | furniture and | under | ||
| improvements | equipment | equipment | construction | ||
| Balance at January 1, 2023 | |||||
Cost | 36,148 | 47,475 | 8,930 | 441 | 92,994 |
Accumulated depreciation and impairment | (21,023) | (31,266) | (7,433) | - | (59,722) |
Property, plant and equipment, net | 15,125 | 16,209 | 1,497 | 441 | 33,272 |
| Changes in book value in 2023 | |||||
Capital expenditures | 2,746 | 2,429 | 847 | 565 | 6,587 |
Transfers from inventory | - | 6,406 | - | - | 6,406 |
Disposals (cost) | (179) | (482) | (270) | - | (931) |
Disposals (accumulated depreciation) | 154 | 452 | 269 | - | 875 |
Depreciation | (1,827) | (5,014) | (866) | - | (7,707) |
Foreign currency translation | (555) | (455) | (15) | 39 | (986) |
Total changes | 339 | 3,336 | (35) | 604 | 4,244 |
| Balance at December 31, 2023 | |||||
Cost | 37,211 | 52,126 | 9,206 | 1,045 | 99,588 |
Accumulated depreciation and impairment | (21,747) | (32,581) | (7,744) | - | (62,072) |
Property, plant and equipment, net | 15,464 | 19,545 | 1,462 | 1,045 | 37,516 |
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(€ thousands) | Land, buildings | Machinery | Office | Assets | Total |
| and leasehold | and | furniture and | under | ||
| improvements | equipment | equipment | construction | ||
| Balance at January 1, 2022 | |||||
Cost | 32,678 | 45,856 | 10,240 | 415 | 89,189 |
Accumulated depreciation and impairment | (18,550) | (31,932) | (8,823) | - | (59,305) |
Property, plant and equipment, net | 14,128 | 13,924 | 1,417 | 415 | 29,884 |
| Changes in book value in 2022 | |||||
Capital expenditures | 2,591 | 3,045 | 870 | 37 | 6,543 |
Transfers from inventory | - | 3,575 | - | - | 3,575 |
Disposals (cost) | 191 | (3,098) | (2,292) | - | (5,199) |
Disposals (accumulated depreciation) | (178) | 3,065 | 2,284 | - | 5,171 |
Depreciation | (1,571) | (4,324) | (795) | - | (6,690) |
Impairment | - | - | - | - | - |
Foreign currency translation | (36) | 22 | 13 | (11) | (12) |
Total changes | 997 | 2,285 | 80 | 26 | 3,388 |
| Balance at December 31, 2022 | |||||
Cost | 36,148 | 47,475 | 8,930 | 441 | 92,994 |
Accumulated depreciation and impairment | (21,023) | (31,266) | (7,433) | - | (59,722) |
Property, plant and equipment, net | 15,125 | 16,209 | 1,497 | 441 | 33,272 |
(€ thousands) | Year ended December 31, | |
2023 | 2022 | |
Cost of sales | 1,491 | 1,609 |
Selling, general and administrative expenses | 5,198 | 4,427 |
Research and development expenses | 1,018 | 654 |
Total depreciation and impairment | 7,707 | 6,690 |
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(€ thousands) | 2023 | 2022 |
| Balance at January 1 | ||
Cost | 65,946 | 65,370 |
Accumulated impairment | (20,200) | (20,200) |
Goodwill, net | 45,746 | 45,170 |
| Changes in book value | ||
Foreign currency translation | (344) | 576 |
Total changes | (344) | 576 |
| Balance at December 31 | ||
Cost | 65,602 | 65,946 |
Accumulated impairment | (20,200) | (20,200) |
Goodwill, net | 45,402 | 45,746 |
(€ thousands) | December 31, | December 31, |
| 2023 | 2022 | |
Die Attach | 43,421 | 43,765 |
Plating | 1,981 | 1,981 |
Total | 45,402 | 45,746 |
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(€ thousands) | Software | Development | Total |
| expenses | |||
| Balance at January 1, 2023 | |||
Cost | 10,539 | 105,178 | 115,717 |
Accumulated amortization | (10,165) | (24,334) | (34,499) |
Other intangible assets, net | 374 | 80,844 | 81,218 |
| Changes in book value in 2023 | |||
Capitalized development expenses | - | 21,121 | 21,121 |
Capital expenditures | 312 | - | 312 |
Disposals (cost) | - | (13,896) | (13,896) |
Disposals (accumulated depreciation) | - | 13,896 | 13,896 |
Amortization | (310) | (13,635) | (13,945) |
Foreign currency translation | 27 | 4,935 | 4,962 |
Total changes | 29 | 12,421 | 12,450 |
| Balance at December 31, 2023 | |||
Cost | 10,878 | 122,724 | 133,602 |
Accumulated amortization | (10,475) | (29,459) | (39,934) |
Other intangible assets, net | 403 | 93,265 | 93,668 |
(€ thousands) | Software | Development | Total |
| expenses | |||
| Balance at January 1, 2022 | |||
Cost | 13,374 | 87,361 | 100,735 |
Accumulated amortization | (12,573) | (19,416) | (31,989) |
Other intangible assets, net | 801 | 67,945 | 68,746 |
| Changes in book value in 2022 | |||
Capitalized development expenses | - | 21,613 | 21,613 |
Capital expenditures | 237 | - | 237 |
Disposals (cost) | (1,874) | (7,572) | (9,446) |
Disposals (accumulated depreciation) | 1,755 | 7,572 | 9,327 |
Amortization | (546) | (11,723) | (12,269) |
Foreign currency translation | 1 | 3,009 | 3,010 |
Total changes | (427) | 12,899 | 12,472 |
| Balance at December 31, 2022 | |||
Cost | 10,539 | 105,178 | 115,717 |
Accumulated amortization | (10,165) | (24,334) | (34,499) |
Other intangible assets, net | 374 | 80,844 | 81,218 |
(€ thousands) | Year ended December 31, | |
2023 | 2022 | |
Cost of sales | 11 | 11 |
Selling, general and administrative expenses | 181 | 451 |
Research and development expenses | 13,753 | 11,807 |
Total amortization | 13,945 | 12,269 |
(€ thousands) | December 31, | December 31, |
2023 | 2022 | |
Marketable securities for pension liability | 549 | 522 |
Guarantee deposits | 667 | 691 |
Total other non-current assets | 1,216 | 1,213 |
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(€ thousands) | 2023 | 2022 |
Balance at January 1 | 5,578 | 6,641 |
Additions | 6,016 | 6,409 |
Usage | (5,894) | (6,467) |
Releases | (1,175) | (1,170) |
Foreign currency translation | 226 | 165 |
Balance at December 31 | 4,751 | 5,578 |
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(€ thousands) | December 31, | December 31, |
2023 | 2022 | |
Payroll accruals | 19,716 | 16,561 |
Volume rebate and commissions | 5,758 | 10,042 |
Project costs | 3,589 | 4,237 |
Audit and consultancy fees | 1,940 | 1,610 |
Invoices to be received | 1,746 | 1,419 |
Interest expenses | 1,370 | 1,352 |
Temporaries | 991 | 691 |
Forward foreign currency exchange contracts | 443 | 98 |
Freight and packaging costs | 383 | 488 |
Other payables | 1,886 | 5,963 |
Total other payables | 37,822 | 42,461 |
(€ thousands) | December 31, | December 31, |
2023 | 2022 | |
Contract liabilities | 12,168 | 14,825 |
Advances from customers | 8,175 | 7,227 |
Payroll liabilities | 4,258 | 4,163 |
Other | 357 | 1,700 |
Total other liabilities | 24,958 | 27,915 |
Contract liabilities non-current portion | (699) | (927) |
Total other current liabilities | 24,259 | 26,988 |
(€ thousands) | December 31, | December 31, |
2023 | 2022 | |
| Long-term debt | ||
Convertible Notes | 298,455 | 323,134 |
| Research and development loan from Österreichische | ||
| Forschungsförderungsgesellschaft mbH, Wien, Austria | ||
(interest rate at 0.75% at December 31, 2023) | 2,042 | 2,042 |
Total | 300,497 | 325,176 |
Less: current portion | (3,144) | (2,361) |
Total long-term debt | 297,353 | 322,815 |
(€ thousands) | Long-term debt |
2024 | 3,200 |
2025 | 2,042 |
2027 | 150,000 |
2029 | 175,000 |
Total | 330,242 |
Less: current portion of long-term debt | (3,200) |
Non-current portion of long-term debt (principal value) | 327,042 |
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Reconciliation of liabilities arising from financing activities
The tables below detail the changes in the Company’s liabilities arising from financing
activities, including both cash and non-cash changes. Liabilities arising from financing
activities are those for which cash flows were, or future cash flows will be, classified in the
Company’s Consolidated Statement of Cash Flows as cash flows from financing activities.
(€ thousands) | January 1, | Financing | Additional | Amortization/ | Conversion of | Foreign | December 31, |
| 2023 | cash flows | lease liabilities | accretion | Convertible | currency | 2023 | |
| of interest | Notes | translation | |||||
Convertible Notes | 323,134 | - | - | 6,173 | (30,852) | - | 298,455 |
Government loans | 2,042 | - | - | - | - | - | 2,042 |
Lease liabilities | 17,709 | (4,307) | 4,587 | 423 | - | 251 | 18,663 |
Total | 342,885 | (4,307) | 4,587 | 6,596 | (30,852) | 251 | 319,160 |
(€ thousands) | January 1, | Financing | Equity | Additional | Amortization/ | Conversion of | Foreign | December 31, |
| 2022 | cash flows | component | lease liabilities | accretion | Convertible | currency | 2022 | |
| of new | of interest | Notes | translation | |||||
| Convertible | ||||||||
| Notes | ||||||||
Convertible Notes | 300,254 | 172,176 | (22,334) | - | 6,292 | (133,254) | - | 323,134 |
Government loans | 1,548 | 494 | - | - | - | - | - | 2,042 |
Lease liabilities | 10,673 | (4,101) | - | 10,417 | 231 | - | 489 | 17,709 |
Total | 312,475 | 168,569 | (22,334) | 10,417 | 6,523 | (133,254) | 489 | 342,885 |
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(€ thousands) | Land and | Office | Total |
| buildings | furniture and | ||
| equipment | |||
Balance at January 1, 2023 | 16,660 | 820 | 17,480 |
Additions | 4,313 | 274 | 4,587 |
Depreciation | (3,712) | (368) | (4,080) |
Foreign currency translation | 281 | (26) | 255 |
Balance at December 31, 2023 | 17,542 | 700 | 18,242 |
(€ thousands) | Land and | Office | Total |
| buildings | furniture and | ||
| equipment | |||
Balance at January 1, 2022 | 10,052 | 554 | 10,606 |
Additions | 9,807 | 610 | 10,417 |
Depreciation | (3,683) | (350) | (4,033) |
Foreign currency translation | 484 | 6 | 490 |
Balance at December 31, 2022 | 16,660 | 820 | 17,480 |
(€ thousands) | Year ended December 31, | |
2023 | 2022 | |
Depreciation expense of right of use assets | 4,080 | 4,033 |
Interest expenses on lease liabilities | 423 | 231 |
Expenses related to short-term leases | 154 | 143 |
Expenses related to leases of low-value assets | 119 | 135 |
Total | 4,776 | 4,542 |
(€ thousands) | December 31, | December 31, |
2023 | 2022 | |
Current | 3,739 | 3,337 |
Non-current | 14,924 | 14,372 |
Total lease liabilities | 18,663 | 17,709 |
(€ thousands) | Lease liabilities |
2024 | 4,119 |
2025–2028 | 9,669 |
2029 and thereafter | 6,610 |
Total payments due on lease liabilities | 20,398 |
Discount | (1,735) |
Lease liabilities | 18,663 |
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Extension options
Below schedule provides an overview of the contractually agreed extension options and
the Company’s assessment and accounting treatment:
(€ thousands) | Within | More than | Total |
| 5 years | 5 years | ||
Extension option reasonably certain to be exercised - included in lease | |||
liabilities | 1,340 | - | 1,340 |
| Extension option not reasonably | |||
| certain to be exercised - excluded | |||
from lease liabilities | 1,454 | 1,454 | 2,908 |
Total (undiscounted) | 2,794 | 1,454 | 4,248 |
20. Provisions
Provisions consist of the following:
(€ thousands) | December 31, | December 31, |
2023 | 2022 | |
Pension liabilities Switzerland | 4,837 | 5,169 |
Pension liabilities Austria | 490 | 454 |
Severance obligations Austria | 3,896 | 3,617 |
Severance obligations Korea | 2,049 | 1,873 |
Other provisions | 700 | 234 |
Provisions | 11,972 | 11,347 |
Reference is made to Note 25 for more details.
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(€ thousands) | Accumulated | Legal reserve | Legal reserve | Legal reserve | Legal reserve | Total |
| other | currency | capitalized | cash flow | subsidiaries | other | |
| comprehensive | translation | R&D expenses | hedging | reserves | ||
| income (loss) | adjustment | |||||
Balance at January 1, 2023 | (7,092) | 54,238 | 80,844 | 4,474 | 4,521 | 136,985 |
Total comprehensive income (loss) for the period | (1,191) | 2,631 | - | (331) | - | 1,109 |
Transfer from retained earnings | - | - | 12,422 | - | (837) | 11,585 |
Balance at December 31, 2023 | (8,283) | 56,869 | 93,266 | 4,143 | 3,684 | 149,679 |
Balance at January 1, 2022 | (11,613) | 44,771 | 67,945 | 607 | 4,418 | 106,128 |
Total comprehensive income (loss) for the period | 4,521 | 9,467 | - | 3,867 | - | 17,855 |
Transfer from retained earnings | - | - | 12,899 | - | 103 | 13,002 |
Balance at December 31, 2022 | (7,092) | 54,238 | 80,844 | 4,474 | 4,521 | 136,985 |
(€ thousands) | December 31, | December 31, |
2023 | 2022 | |
Actuarial gains (losses) | (9,924) | (8,633) |
Deferred taxes | 878 | 778 |
Other | 763 | 763 |
Accumulated other comprehensive income (loss) | (8,283) | (7,092) |
(€ thousands) | December 31, | December 31, |
2023 | 2022 | |
€ |
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(€ thousands) | Year ended December 31, | |
2023 | 2022 | |
China | 205,303 | 187,572 |
United States | 50,970 | 59,263 |
Malaysia | 48,658 | 87,437 |
Ireland | 43,492 | 46,036 |
Korea | 42,189 | 73,339 |
Taiwan | 37,443 | 86,884 |
Thailand | 20,844 | 38,724 |
| Other Asia Pacific¹ | 68,433 | 74,682 |
Other Europe¹ | 47,862 | 43,708 |
Rest of the World¹ | 13,668 | 25,225 |
Total revenue | 578,862 | 722,870 |
(€ thousands) | Year ended December 31, | |
2023 | 2022 | |
Die Attach | 444,601 | 572,373 |
Packaging | 100,417 | 117,808 |
Plating | 33,844 | 32,689 |
Total revenue | 578,862 | 722,870 |
(€ thousands) | December 31, | December 31, |
2023 | 2022 | |
Receivables, which are included in trade receivables and other receivables | 143,711 | 148,749 |
Contract liabilities | 12,168 | 14,825 |
Volume rebates | 5,396 | 9,490 |
(€ thousands) | 2023 | 2022 |
Balance at January 1 | 14,825 | 11,415 |
| Revenue recognized that was included in the contract | ||
| liability balance at the beginning of the period | (13,465) | (9,815) |
| Increases due to cash received, excluding amounts | ||
| recognized as revenue during the period | 10,327 | 12,720 |
Foreign currency translation | 481 | 505 |
Balance at December 31 | 12,168 | 14,825 |
(€ thousands) | December 31, | December 31, |
2023 | 2022 | |
Within 12 months | 22,853 | 20,732 |
From 12-36 months | 648 | 492 |
Total | 23,501 | 21,224 |
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(€ thousands) | The Netherlands | Switzerland | Austria | Singapore | Malaysia | Other | Total |
| Year ended December 31, 2023 | |||||||
Total revenue | 107,016 | 373,145 | 13,430 | 577,751 | 118,962 | 59,142 | 1,249,446 |
Intercompany revenue | (106,216) | (373,073) | (12,347) | (1,534) | (118,838) | (58,576) | (670,584) |
External revenue | 800 | 72 | 1,083 | 576,217 | 124 | 566 | 578,862 |
Non-financial assets | 17,723 | 138,946 | 15,816 | 10,051 | 8,350 | 6,942 | 194,828 |
Capital expenditures | 205 | 152 | 1,875 | 3,284 | 840 | 543 | 6,899 |
| Year ended December 31, 2022 | |||||||
Total revenue | 120,464 | 484,664 | 6,719 | 730,573 | 189,705 | 68,483 | 1,600,608 |
Intercompany revenue | (119,346) | (484,498) | (6,719) | (13,148) | (189,242) | (64,785) | (877,738) |
External revenue | 1,118 | 166 | - | 717,425 | 463 | 3,698 | 722,870 |
Non-financial assets | 16,883 | 125,191 | 13,534 | 3,891 | 10,268 | 7,949 | 177,716 |
Capital expenditures | 534 | 167 | 1,425 | 184 | 3,783 | 687 | 6,780 |
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| December 31, | December 31, | |
| 2023 | 2022 | |
Discount rate | 1.50% | 2.25% |
Future salary increases | 2.50% | 2.50% |
Future pension increases | 0.10% | 0.10% |
(€ thousands) | 2023 | 2022 |
Liability for defined benefit obligations at January 1 | 43,105 | 50,539 |
Current service cost | 987 | 1,323 |
Interest expense | 955 | 132 |
| Actuarial loss (gain) arising from changes in economic | ||
assumptions | 3,408 | (11,605) |
Actuarial loss arising from experience | 104 | 680 |
Plan participants’ contribution | 508 | 483 |
Plan amendments | (1,442) | - |
Benefits paid through pension assets | (345) | (709) |
Foreign currency translation | 2,924 | 2,262 |
Liability for defined benefit obligations at December 31 | 50,204 | 43,105 |
(€ thousands) | Year ended December 31, | |
2023 | 2022 | |
Current service costs | 987 | 1,323 |
Interest expense on benefit obligation | 955 | 132 |
Interest income on plan assets | (860) | (112) |
Plan amendments | (1,442) | - |
Administration expenses | 35 | 33 |
Defined benefit cost (benefit) recognized in net income | (325) | 1,376 |
Remeasurement from changes in financial assumptions and experience | 3,512 | (10,925) |
Return on plan assets (excluding amounts in net interest) | (2,693) | 6,929 |
Defined benefit cost (benefit) recognized in comprehensive income | 494 | (2,620) |
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(€ thousands) | 2023 | 2022 |
Fair value of plan assets at January 1 | 37,936 | 42,030 |
Interest income | 860 | 112 |
| Return on plan assets (excluding amounts included in net | ||
interest) | 2,693 | (6,929) |
Plan participants’ contribution | 508 | 483 |
Company contributions | 1,105 | 1,054 |
Benefits paid through pension assets | (345) | (709) |
Administration expenses | (35) | (33) |
Foreign currency translation | 2,645 | 1,928 |
Fair value of plan assets at December 31 | 45,367 | 37,936 |
December 31, | December 31, | |
2023 | 2022 | |
Qualified insurance policies | 29% | 31% |
Bonds | 20% | 19% |
Real estate | 20% | 20% |
Equities | 23% | 22% |
Other/cash | 8% | 8% |
Total | 100% | 100% |
(€ thousands) | December 31, | December 31, |
2023 | 2022 | |
Defined benefit obligations | 50,204 | 43,105 |
Fair value of plan assets | (45,367) | (37,936) |
Net liability | 4,837 | 5,169 |
(€ thousands) | Defined benefit obligations | |
0.5% increase | 0.5% decrease | |
Discount rate | (3,362) | 3,848 |
Salary increase | 281 | (263) |
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| December 31, | December 31, | |
| 2023 | 2022 | |
Discount rate | 3.40% | 3.90% |
Future salary increases (severance payments) | 3.10% | 3.50% |
(€ thousands) | Pension | Severance | 2023 |
| liabilities | obligations | Total | |
Liability for defined benefit and severance obligations at January 1 | 454 | 3,617 | 4,071 |
Current service cost | 6 | 149 | 155 |
Interest expense | 18 | 132 | 150 |
Actuarial loss (gain) recognized | 20 | (2) | 18 |
Benefits paid | (8) | - | (8) |
| Liability for defined benefit | |||
| and severance obligations | |||
at December 31 | 490 | 3,896 | 4,386 |
(€ thousands) | Pension | Severance | 2022 |
| liabilities | obligations | Total | |
Liability for defined benefit and severance obligations at January 1 | 657 | 4,719 | 5,376 |
Current service cost | 22 | 204 | 226 |
Interest expense | 7 | 45 | 52 |
Actuarial gain recognized | (224) | (1,351) | (1,575) |
Benefits paid | (8) | - | (8) |
| Liability for defined benefit | |||
| and severance obligations | |||
at December 31 | 454 | 3,617 | 4,071 |
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(€ thousands) | 2023 | 2022 |
Liability for severance obligations at January 1 | 2,050 | 2,278 |
Current service cost | 162 | 211 |
Interest expense | 98 | 56 |
Actuarial loss (gain) recognized | 73 | (291) |
Benefits paid (partly through plan assets) | (33) | (206) |
Foreign currency translation | (132) | 2 |
Liability severance obligations at December 31 | 2,218 | 2,050 |
(€ thousands) | Year ended December 31, | |
2023 | 2022 | |
Current service cost | 162 | 211 |
Interest expense on severance obligation | 98 | 56 |
Administration expenses | 1 | - |
Interest income on plan assets | (9) | (4) |
Defined benefit cost recognized in net income | 252 | 263 |
Remeasurement loss (gain) recognized | 73 | (291) |
Return on plan assets (excluding amounts in net interest) | 6 | 2 |
Defined benefit cost recognized in comprehensive income | 331 | (26) |
(€ thousands) | 2023 | 2022 |
Fair value of plan assets at January 1 | 177 | 183 |
Interest income | 9 | 4 |
| Return on plan assets (excluding amounts included | ||
in net interest) | (6) | (2) |
Benefits paid through pension assets | - | (8) |
Administration expenses | (1) | - |
Foreign currency translation | (10) | - |
Fair value of plan assets at December 31 | 169 | 177 |
(€ thousands) | December 31, | December 31, |
2023 | 2022 | |
Severance obligations | 2,218 | 2,050 |
Fair value of plan assets | (169) | (177) |
Net liability | 2,049 | 1,873 |
(€ thousands) | Severance obligations | |
0.5% increase | 0.5% decrease | |
Discount rate | (40) | 42 |
Salary increase | 42 | (41 |
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Pension plan - other countries
The Company’s US, Malaysian, Chinese and Singapore subsidiaries have defined
contribution plans that supplement the governmental benefits provided under local
legislation.
| TSR comparator group (excluding Besi) | |
Aixtron SE | Kulicke & Soffa Industries, Inc. |
Applied Materials, Inc. | Lam Research Corporation |
ASM International N.V. | MKS Instruments, Inc. |
ASML Holding N.V. | Nova Ltd. |
ASM Pacific Technology Ltd. | Onto Innovation, Inc. |
Axcelis Technologies, Inc. | SÜSS MicroTec SE |
Cohu, Inc. | Tokyo Electron Ltd. |
DISCO Corporation | Tokyo Seimitsu Co., Ltd. |
Entegris, Inc. | Veeco Instruments, Inc. |
| FormFactor, Inc. | |
Besi TSR ranking relative to comparator group | Vesting percentage | |
Top 3 | 75% | |
Rank 4 | – Rank 6 | 50% (at target) |
Rank 7 | – Rank 12 | 25% |
Rank 13 – Rank 20 | 0% |
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2023 | 2022 | |
Outstanding at January 1 | 312,587 | 382,234 |
Performance shares granted (at target level) | 112,007 | 74,996 |
Shares discretionary granted to the Board of Management | 88,020 | 70,000 |
Shares discretionary granted to key employees | 57,800 | 57,200 |
Performance adjustments | 39,724 | 53,227 |
| Performance shares settled in equity instruments (re-issued | ||
from treasury shares) | (322,088) | (306,774) |
Performance shares forfeited | - | (18,296) |
Outstanding at December 31 | 288,050 | 312,587 |
Performance shares | Year of grant | Three-year | Number of |
| performance | performance | ||
| period | shares | ||
2021 | 2021-2023 | 109,943 | |
2022 | 2022-2024 | 71,421 | |
2023 | 2023-2025 | 106,686 | |
Total | 288,050 |
2023 | 2022 | |
Market price of the Company’s ordinary shares (in euro) | 81.81 | 58.74 |
Expected volatility | 45.7% | 45.7% |
Expected dividend yield | 3.42% | 5.51% |
Vesting period (in years) | 3 | 3 |
Risk-free interest rate | 2.49% | 0.49% |
(€ thousands) | Year ended December 31, | |
2023 | 2022 | |
| Performance shares granted and delivered | ||
to the Board of Management | 5,529 | 5,223 |
Performance shares granted and delivered to key employees | 4,258 | 3,762 |
Conditional performance shares Board of Management | 1,548 | 1,327 |
Conditional performance shares key employees | 7,772 | 4,947 |
Total expense recognized as personnel expenses | 19,107 | 15,259 |
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BE Semiconductor Industries N.V. and all its subsidiaries are consolidated and all
transactions between these entities have been eliminated in these financial statements.
There are no non-consolidated companies considered as related parties.
(€) | Year ended December 31, | |
2023 | 2022 | |
| Salaries and other short-term employee benefits¹ | 1,882,529 | 1,732,910 |
| Post-employment benefits² | - | 12,430 |
Equity compensation benefits: Incentive Plan | 1,547,777 | 1,326,796 |
Equity compensation benefits: Discretionary grant | 5,529,416 | 5,223,400 |
Total | 8,959,722 | 8,295,536 |
Ordinary number of shares | December 31, | December 31, | |
2023 | 2022 | ||
Board of Management | 1,342,098 | 1,516,837 | |
Performance shares | Year | Three-year | Number of |
| of grant | performance | performance | |
| period | shares | ||
Board of Management | 2021 | 2021-2023 | 25,143 |
2022 | 2022-2024 | 13,927 | |
2023 | 2023-2025 | 20,604 | |
Total | 59,674 |
(€ thousands) | Year ended December 31, | |
2023 | 2022 | |
Wages and salaries | 106,827 | 102,359 |
Social security expenses | 13,487 | 12,140 |
Pension and retirement expenses defined contribution | 6,131 | 5,888 |
Pension and retirement expenses defined benefit | 1,389 | 1,724 |
Pension plan amendments | (1,442) | - |
Share-based compensation plans | 19,107 | 15,259 |
Total personnel expenses | 145,499 | 137,370 |
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The average number of fulltime equivalent employees during 2023 and 2022 was 1,700 and
1,686, respectively. For pension and retirement expenses, reference is made to Note 25.
The total number of fulltime equivalent employees per department is:
December 31, | December 31, | |
2023 | 2022 | |
Sales and Marketing | 454 | 432 |
Manufacturing and Assembly | 676 | 657 |
Research and Development | 444 | 434 |
General and Administrative | 162 | 152 |
Total number of personnel | 1,736 | 1,675 |
As of December 31, 2023 and 2022, a total of 157 and 153 fulltime equivalent employees,
respectively, were employed in the Netherlands.
(€ thousands) | Year ended December 31, | |
2023 | 2022 | |
Interest income | 12,260 | 1,634 |
Net foreign currency gains | 774 | - |
Subtotal financial income | 13,034 | 1,634 |
Interest expense | (11,664) | (12,203) |
Net cost of hedging | (7,073) | (7,559) |
Net foreign currency losses | - | (498) |
Subtotal financial expense | (18,737) | (20,260) |
Financial income (expense), net | (5,703) | (18,626) |
(€ thousands) | December 31, | December 31, |
2023 | 2022 | |
Deferred tax assets | 12,217 | 19,563 |
Deferred tax liabilities | (12,959) | (13,303) |
Total deferred tax assets (liabilities), net | (742) | 6,260 |
(€ thousands) | December 31, | December 31, |
2023 | 2022 | |
| Deferred tax assets (liabilities) | ||
Swiss tax credits | 10,443 | 17,429 |
Lease liabilities | 2,773 | 3,008 |
Provision for pensions | 1,936 | 1,885 |
Operating losses carry forward | 1,543 | 1,660 |
Inventories | 1,378 | 1,677 |
Interest | - | 593 |
Right of use assets | (2,704) | (2,962) |
Convertible Notes | (6,827) | (8,417) |
Intangible assets | (9,176) | (9,182) |
Other items | (108) | 569 |
Total deferred tax assets (liabilities), net | (742) | 6,260 |
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(€ thousands) | January 1, | Profit and loss | Other | Equity | Foreign | December 31, |
| 2023 | 2023 | comprehensive | currency | 2023 | ||
| income | translation | |||||
| Deferred tax assets (liabilities), net | ||||||
Swiss tax credits | 17,429 | (7,732) | - | - | 746 | 10,443 |
Lease liabilities | 3,008 | (236) | - | - | 1 | 2,773 |
Provision for pensions | 1,885 | (66) | 100 | - | 17 | 1,936 |
Operating losses carry forward | 1,660 | (113) | - | - | (4) | 1,543 |
Inventories | 1,677 | (293) | - | - | (6) | 1,378 |
Interest | 593 | (623) | - | 30 | - | - |
Right of use assets | (2,962) | 261 | - | - | (3) | (2,704) |
Convertible Notes | (8,417) | 1,371 | - | 219 | - | (6,827) |
Intangible assets | (9,182) | 14 | - | - | (8) | (9,176) |
Other items | 569 | (600) | - | - | (77) | (108) |
Total | 6,260 | (8,017) | 100 | 249 | 666 | (742) |
(€ thousands) | January 1, | Profit and loss | Other | Equity | Foreign | December 31, |
| 2022 | 2022 | comprehensive | currency | 2022 | ||
| income | translation | |||||
| Deferred tax assets (liabilities), net | ||||||
Swiss tax credits | 24,216 | (7,772) | - | - | 985 | 17,429 |
Lease liabilities | 1,927 | 1,029 | - | - | 52 | 3,008 |
Operating losses carry forward | 2,108 | (447) | - | - | (1) | 1,660 |
Provision for pensions | 2,708 | (17) | (825) | - | 19 | 1,885 |
Inventories | 1,954 | (250) | - | - | (27) | 1,677 |
Interest | 390 | 203 | - | - | - | 593 |
Right of use assets | (1,913) | (997) | - | - | (52) | (2,962) |
Convertible Notes | (5,579) | 980 | - | (3,818) | - | (8,417) |
Intangible assets | (9,865) | 683 | - | - | - | (9,182) |
Other items | 520 | 350 | (355) | - | 54 | 569 |
Total | 16,466 | (6,238) | (1,180) | (3,818) | 1,030 | 6,260 |
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| (€ millions) | 2023 | 2022 | ||
| Recognized | Unrecognized | Recognized | Unrecognized | |
USA | 1.3 | - | 1.7 | - |
Austria | 0.2 | - | - | - |
Total tax losses carried forward | 1.5 | - | 1.7 | - |
Switzerland tax free reserves | 10.4 | 8.7 | 17.4 | 5.8 |
Withholding taxes | - | 0.5 | - | 0.4 |
Total | 11.9 | 9.2 | 19.1 | 6.2 |
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The Dutch domestic statutory tax rate is 25.8% for the year ended December 31, 2023
(2022: 25.8%). The reconciliation between the actual income tax shown in the Consolidated
Statement of Operations and the expense (benefit) that would be expected based on the
application of the domestic tax rate to income before income tax is as follows:
(€ thousands) | Year ended December 31, 2023 | Year ended December 31, 2022 | ||
| in % of income | in % of income | |||
| before taxes | before taxes | |||
| Expected income tax expense | ||||
based on domestic rate | 53,584 | 25.8% | 71,076 | 25.8% |
Foreign tax rate differential | (23,563) | (11.3%) | (32,313) | (11.8%) |
Recognition of Swiss tax credit | - | - | (2,553) | (0.9%) |
Non-deductible expenses | 3,363 | 1.6% | 2,956 | 1.1% |
Tax incentive | (4,176) | (2.0%) | (6,298) | (2.3%) |
Tax exempt income | (1,337) | (0.6%) | (725) | (0.3%) |
Valuation allowance adjustments | 2,279 | 1.1% | 3,404 | 1.2% |
Changes in enacted tax rates | - | - | 720 | 0.3% |
Adjustments prior years | (114) | (0.1%) | (1,396) | (0.5%) |
Other | 569 | 0.2% | (28) | 0.0% |
Income tax expense reported | 30,605 | 14.7% | 34,843 | 12.6% |
The difference between the effective tax rate and the statutory rate in the Netherlands is
mainly due to different statutory tax rates in the countries in which Besi operates outside
the Netherlands, primarily in Switzerland. The tax incentives mainly relates to the
application of the innovation box regime in the Netherlands and preferential tax rate in
Singapore. The adjustment of the valuation allowance of € 2.3 million in 2023 relates to the
revaluation of tax credits at Besi Switzerland due to the 2023 financial performance and
revised projections.
(€ thousands) | Year ended December 31, | |
2023 | 2022 | |
Current | 22,588 | 28,605 |
Deferred | 8,017 | 6,238 |
Total | 30,605 | 34,843 |
There are no income tax consequences attached to the proposed payment of dividends by
the Company to its shareholders.
The Company is currently not in scope of Pillar Two legislation.
Tax risk
Given the international business structure of the Company and the increasing number and
amounts of intercompany transactions certain tax risks hereto may exist. Profits are
allocated to countries where factual economic activities are executed in accordance with
national and international rules and standards and intragroup transactions have a business
rationale. Besi has controls and procedures in place, including oversight, to manage its tax
risks. These risk management and governance arrangements are embedded in an Internal
Besi Framework. Besi has appropriate tax knowledge in-house to deal with its tax affairs,
supplementing this with external advice where appropriate. Besi monitors new and
developing tax legislation, ensures appropriate training is provided to its staff, and adapts
procedures and processes to comply with changes.
The Austrian Tax Authorities have finalized the tax audit over the period 2015 to 2018 and
have issued a final assessment which results in an additional € 1.7 million tax payable over
this period. The assessment is related to an adjustment with respect to the transfer
pricing policy implemented. The Company is of the view that the transfer pricing policy
historically applied is in line with the arm’s length principle as set forth by the OECD
Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations and
Austrian transfer pricing regulation. The assessment issued by the Austrian Tax Authorities
would trigger double taxation for the Company. As such, in order to defend the Company’s
tax filing position in Austria and, if applicable, to avoid any remaining double taxation, a
Mutual Agreement Procedure (“MAP”) request has been filed with the relevant Competent
Authorities. This process can extend to several years until it comes to conclusion.
As the Company has applied the same transfer pricing policy for the subsequent years, it
is likely that the Austrian Tax Authorities will challenge the applied transfer pricing
practice also for the subsequent years based on the assessment issued for the 2015 to
2018 tax audit period. The total potential additional tax expenses related to the period
2015 to 2023 amounts to approximately € 4.1 million being the single best estimate of the
uncertainty and considers an offsetting corresponding adjustment on the Swiss taxable
income.
Based on the relevant facts and circumstances, the Company has determined that it is
probable that the MAP will confirm the Company’s transfer pricing policy and as such
determined the taxable profit consistently with the tax treatment used in its income tax
filings, not reflecting these additional tax expenses associated with the uncertainty.
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30. Earnings per share
The following table reconciles ordinary shares outstanding at the beginning of the year to
average shares outstanding used to compute income per share.
2023 | 2022 | |
Shares outstanding at beginning of the year | 78,487,926 | 77,969,623 |
| Shares re-issued from treasury shares for the vesting of performance | ||
stock awards (LTI) | 176,268 | 179,574 |
| Shares re-issued from treasury shares for the vesting of shares | ||
discretionary granted | 145,820 | 127,200 |
Shares re-issued from treasury shares for partial conversion of the 2016 and 2017 Convertible Notes | 762,445 | 328,335 |
Shares issued for partial conversion of the 2017 Convertible Notes | - | 2,578,896 |
Shares bought under the share repurchase program | (2,556,665) | (2,695,702) |
Shares outstanding at end of the year | 77,015,794 | 78,487,926 |
Average shares outstanding - basic | 77,508,722 | 79,311,366 |
Dilutive effect of outstanding performance shares | 370,874 | 380,590 |
Dilutive effect of all outstanding Convertible Notes | 4,920,683 | 5,834,201 |
Average shares outstanding - diluted | 82,800,279 | 85,526,157 |
Net income in 2023 used in calculating dilutive earnings per share amounts to
€ 185.0 million (2022: € 248.3 million) and is adjusted for the after tax effects of interest
charges related to the 2016, 2017, 2020 and 2022 Convertible Notes amounting to
€ 7.9 million in 2023 (2022: € 7.6 million).
(€ thousands) | December 31, 2023 | |||
Note | Carrying | Level | Fair value | |
| amount | ||||
| Financial assets | ||||
Forward foreign currency exchange contracts | 7 | 9,467 | 2 | 9,467 |
Marketable securities for pension liability | 12 | 549 | 1, 2 | 549 |
Total | 10,016 | 10,016 | ||
| Financial liabilities | ||||
Forward foreign currency exchange contracts | 16 | 443 | 2 | 443 |
| Long-term debt¹ | 18 | 300,497 | 1 | 661,308 |
Total | 300,940 | 661,751 | ||
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(€ thousands) | December 31, 2022 | |||
Note | Carrying | Level | Fair value | |
| amount | ||||
| Financial assets | ||||
Forward foreign currency exchange contracts | 7 | 6,803 | 2 | 6,803 |
Marketable securities for pension liability | 12 | 522 | 1, 2 | 522 |
Deposits¹ | 4 | 25,000 | 2 | 24,265 |
Total | 32,325 | 31,590 | ||
| Financial liabilities | ||||
Forward foreign currency exchange contracts | 16 | 98 | 2 | 98 |
| Long-term debt² | 18 | 325,176 | 1 | 402,036 |
Total | 325,274 | 402,134 | ||
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(€ thousands) | 2023 | 2022 |
Balance at January 1 | 4,830 | 639 |
Amount recognized in equity | (9,416) | 12,635 |
Amount recycled in Consolidated Statement of Operations | 9,417 | (9,368) |
Amount reclassified to Consolidated Statement of Operations due to ineffectiveness | (156) | 924 |
Balance at December 31 | 4,675 | 4,830 |
(€ thousands) | Nominal | Average | Maturity | Fair Value, |
| Value | rate | net | ||
| December 31, 2023 | ||||
To sell US dollars for Swiss francs | 135,261 | 1.139 | < 4 months | 7,187 |
To sell US dollars for euros | 47,409 | 1.075 | < 4 months | 1,167 |
To buy Malaysian ringgits for Swiss franc | 16,316 | 5.436 | < 1 month | (146) |
To buy Malaysian ringgits for euros | 14,128 | 5.114 | < 2 months | 32 |
To sell Malaysian ringgits for euros | 28,163 | 5.080 | < 1 month | (4) |
To sell euros for Swiss francs | 35,924 | 0.948 | < 2 months | 925 |
Other FX pair contracts | 16,497 | < 1 month | (137) | |
Total | 293,698 | 9,024 | ||
| December 31, 2022 | ||||
To sell US dollars for Swiss francs | 194,637 | 1.064 | < 4 months | 4,673 |
To sell US dollars for euros | 44,628 | 1.033 | < 4 months | 1,685 |
To buy Malaysian ringgits for Swiss franc | 5,832 | 4.762 | < 1 month | (16) |
To sell Malaysian ringgits for euros | 17,027 | 4.627 | < 2 months | 291 |
To sell euros for Swiss francs | 23,200 | 0.982 | < 2 months | (12) |
Other FX pair contracts | 30,268 | < 2 months | 84 | |
Total | 315,592 | 6,705 |
(€ thousands) | 2023 | 2022 | ||
Positive | Negative | Positive | Negative | |
| Forward foreign currency exchange contracts | ||||
Fair value | 9,467 | 443 | 6,803 | 98 |
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(€ thousands) | December 31, | December 31, |
2023 | 2022 | |
Proceeds | 302,722 | 322,297 |
Payments | (293,698) | (315,592) |
Net | 9,024 | 6,705 |
(€ thousands) | Effect on | 2023 | Effect on | 2022 | |
| profit | Effect | profit | Effect | ||
| before tax | on equity | before tax | on equity | ||
| Increase/decrease in US dollar rate | |||||
compared to euro | +10% | - | (2,500) | - | (2,300) |
-10% | - | 2,500 | - | 2,300 | |
| Increase/decrease in US dollar rate | |||||
compared to Swiss franc | +10% | - | (8,000) | - | (12,000) |
-10% | - | 8,000 | - | 12,000 |
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| (€ | Total | Impaired | Current | Past due | ||||
| thou- | ||||||||
| sands) | 30–60 | 60–90 | 90–120 | > 120 | ||||
| < 30 days | days | days | days | days | ||||
2023 | 172,117 | (472) | 139,536 | 13,018 | 11,174 | 3,765 | 1,675 | 3,421 |
2022 | 166,432 | (855) | 132,991 | 8,026 | 11,476 | 2,405 | 1,430 | 10,959 |
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(€ thousands) | On | Less than | 3 to 12 | 1 to 5 | > 5 years | Total |
| demand | 3 months | months | years | |||
| December 31, 2023 | ||||||
Convertible Notes (assuming no conversion) | - | - | 3,200 | 150,000 | 175,000 | 328,200 |
Other long-term debt | - | - | - | 2,042 | - | 2,042 |
Lease liabilities (Note 19) | - | 1,044 | 3,075 | 9,669 | 6,610 | 20,398 |
Interest payable convertible | - | 563 | 3,860 | 16,500 | 1,641 | 22,564 |
Trade payable | 13,149 | 33,740 | - | - | - | 46,889 |
Other payables | 140 | 10,534 | 25,335 | - | - | 36,009 |
Total | 13,289 | 45,881 | 35,470 | 178,211 | 183,251 | 456,102 |
(€ thousands) | On | Less than | 3 to 12 | 1 to 5 | > 5 years | Total |
| demand | 3 months | months | years | |||
| December 31, 2022 | ||||||
Convertible Notes (assuming no conversion) | - | - | 2,400 | 182,500 | 175,000 | 359,900 |
Other long-term debt | - | - | - | 2,042 | - | 2,042 |
Lease liabilities (Note 19) | - | 1,120 | 2,518 | 8,845 | 6,947 | 19,430 |
Interest payable convertible | - | 563 | 4,066 | 17,788 | 4,922 | 27,339 |
Trade payable | 13,920 | 27,486 | 25 | - | - | 41,431 |
Other payables | 2,903 | 8,938 | 29,280 | - | - | 41,121 |
Total | 16,823 | 38,107 | 38,289 | 211,175 | 186,869 | 491,263 |
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Capital management
The primary objective of the Company’s capital management is to ensure healthy capital
ratios, with focus on liquidity and financial stability throughout the industry cycles, in
order to support its business and maximize shareholder value.
The Company manages its capital structure and makes adjustments to it, in light of
changes in economic conditions. To maintain or adjust the capital structure, the Company
may make a dividend payment to shareholders, return capital to shareholders or issue new
shares. No changes were made in the objectives, policies or processes during the years
ended December 31, 2023 and December 31, 2022. The Company only regards equity as
capital. This capital is managed using solvency ratio (excluding intangible assets) and
return on investment.
(€ thousands, except for percentages) | 2023 | 2022 |
Equity | 421,413 | 628,535 |
Solvency ratio¹ | 47.0% | 55.4% |
Solvency ratio (excluding intangible fixed assets)² | 37.3% | 49.7% |
Return on average equity³ | 33.7% | 38.6% |
¹ Solvency ratio is defined as total equity (€ 421.4) divided by total assets (€ 896.6).
² Solvency ratio (excluding intangible assets) is defined as total equity (€ 421.4) divided by total assets (€ 896.6), both under
subtraction of intangible assets (€ 139.1).
³ Return on average equity is defined as net income (€ 177.1) divided by the average of the total equity at January 1, 2023
(€ 628.5) and total equity at December 31, 2023 (€ 421.4).
The total number of ordinary shares that will be awarded under the 2020 Framework
Incentive Plan may not exceed 1.5% of the total number of outstanding shares at
December 31 of the year prior to the year in which the award is made.
32. Events after the balance sheet date
There are no events to report.
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Parent Company Balance Sheet
(Before appropriation of the result)
(€ thousands) Note December 31, December 31,
2023 2022
Assets
Intangible fixed assets 3 100 155
Tangible fixed assets 4 19 41
Investments in subsidiaries 5 355,828 490,021
Loans due from subsidiaries 5 11,913 10,683
Financial fixed assets 367,741 500,704
Total fixed assets 367,860 500,900
Amounts due from subsidiaries 10 31,158 29,647
Other receivables 4,773 1,850
Receivables 35,931 31,497
Deposits 6 225,000 180,000
Cash and cash equivalents 6 149,736 302,161
Total current assets 410,667 513,658
Total assets 778,527 1,014,558
Shareholders’ equity, provisions and liabilities
Share capital 7 811 811
Share premium 7 108,144 271,350
Retained earnings 7 (14,305) (21,258)
Legal reserves 7 157,962 144,077
Other comprehensive income (loss) 7 (8,283) (7,092)
Undistributed result 7 177,084 240,647
Shareholders’ equity 421,413 628,535
Deferred tax liabilities 14 5,702 5,720
Provisions 5,702 5,720
Convertible Notes 9 295,311 320,773
Non-current liabilities 295,311 320,773
Current portion of long-term debt 3,144 2,361
Trade payables 4,746 4,333
Income tax payable 1,157 1,287
Amounts due to subsidiaries 10 43,925 48,797
Other payables 3,129 2,752
Current liabilities 56,101 59,530
Total shareholders’ equity, provisions and liabilities 778,527 1,014,558
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Parent Company Statement of Income and Expense
(€ thousands) Note Year ended December 31,
2023 2022
General and administrative expenses 9,809 7,851
Total operating expenses 9,809 7,851
Operating income (loss) (9,809) (7,851)
Financial income 12 13,237 1,902
Financial expense 12 (12,138) (11,706)
Financial income (expense), net 1,099 (9,804)
Loss before income tax and income from subsidiaries (8,710) (17,655)
Income tax expense (benefit) 14 1,115 (1,918)
Income from subsidiaries, after taxes 5 186,909 256,384
Net income 177,084 240,647
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Notes to the Parent Company Financial Statements
1. General
BE Semiconductor Industries N.V. acts as a holding company. The description of the
activities and the structure of the Company, as included in the Notes to the Consolidated
Financial Statements also apply to the Parent Company Financial Statements.
BE Semiconductor Industries N.V.‘s principal executive office is located at Ratio 6, 6921 RW
Duiven, the Netherlands. Statutory seat of the Company is Amsterdam; number at
Chamber of Commerce is 09092395.
2. Summary of significant accounting policies
The Financial Statements of the parent company have been prepared using the option of
article 362.8 of Book 2 of the Netherlands Civil Code, meaning that the accounting
principles used are the same as for the Consolidated Financial Statements.
Foreign currency amounts have been translated, assets and liabilities have been valued,
and net income has been determined, in accordance with the principles of valuation and
determination of income presented in the summary of significant accounting policies
included in the Notes to the Consolidated Financial Statements. Subsidiaries of the parent
company are accounted for using the net equity value. The net equity value is determined
on the basis of IFRS accounting principles applied in the Consolidated Financial Statements.
In case of a negative net equity value of a subsidiary, the negative value is deducted from
the loan due from the respective subsidiary.
In addition, the Company will apply the option provided to eliminate the impact of IFRS 9
on intercompany receivables and payables in the Parent Company Financial Statements
against their book value of these receivables and payables in order to have no impact on
the reconciliation between the consolidated equity and company equity position.
BE Semiconductor Industries N.V. is parent of the fiscal unity BE Semiconductor
Industries N.V. All current and deferred tax positions attributable to the fiscal unit are
reported at the level of BE Semiconductor Industries N.V., whereby income tax expense is
allocated to the Dutch subsidiaries based on the individual income before tax and the
statutory tax rate taking the innovation box regime into account.
3. Intangible fixed assets
Intangible assets, net consist of the following:
(€ thousands) 2023 2022
Balance at January 1,
Cost 2,856 3,370
Accumulated amortization (2,701) (2,930)
Intangible fixed assets, net 155 440
Changes in book value
Capital expenditures - 147
Disposals (cost) - (661)
Disposals (accumulated depreciation) - 548
Amortization (55) (319)
Total changes (55) (285)
Balance at December 31,
Cost 2,856 2,856
Accumulated amortization (2,756) (2,701)
Intangible fixed assets, net 100 155
The intangible fixed assets consist of capitalized licenses and are amortized in three to
five years.
4. Tangible fixed assets
The tangible fixed assets include right of use assets for leased cars.
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5. Financial fixed assets
The movement is as follows:
(€ thousands) Investment
in
subsidiaries
Loans due
from
subsidiaries
Long-term
deposits
Total
Balance at January 1, 2023 490,021 10,683 - 500,704
Income for the period 186,909 - - 186,909
Negative equity adjustments (1,243) 1,243 - -
Dividend payments (322,303) - - (322,303)
Establishment of Besi Vietnam 612 - - 612
Loans to subsidiaries - 452 - 452
Merger of group companies 244 - - 244
Changes in accumulated other
comprehensive income (1,522) - - (1,522)
Currency translation adjustment 3,110 (465) - 2,645
Balance at December 31, 2023 355,828 11,913 - 367,741
(€ thousands) Investment
in
subsidiaries
Loans due
from
subsidiaries
Long-term
deposits
Total
Balance at January 1, 2022 485,338 10,379 25,000 520,717
Income for the period 256,384 - - 256,384
Negative equity adjustments (1,289) 1,289 - -
Reclassification of deposits - - (25,000) (25,000)
Repayment of loans - (2,079) - (2,079)
Dividend payments (267,173) - - (267,173)
Changes in accumulated other
comprehensive income 8,388 - - 8,388
Currency translation adjustment 8,373 1,094 - 9,467
Balance at December 31, 2022 490,021 10,683 - 500,704
Investments in subsidiaries
The negative equity adjustments in the movement schedule are adjustments of the income
for the period related to the net income of the subsidiaries with a negative equity value.
Loans due from/to subsidiaries
Interest on loans due from subsidiaries is calculated based on monthly base rates plus
a market-conform mark-up. An amount of € 11.9 million primarily relates to loans granted
by BE Semiconductor Industries N.V. to its US subsidiaries. These loans are repaid upon
lenders’ demand for repayment. Therefore, no interest is calculated on these loans.
Following is an overview of all direct subsidiaries:
Name Location and country of
incorporation
Percentage of
ownership
BE Semiconductor Industries Holding GmbH Radfeld, Austria 100%
BE Semiconductor Industries USA, Inc. Chandler, Arizona, USA 100%
Besi Leshan Co., Ltd. Leshan, China 100%
Besi Switzerland AG Steinhausen, Switzerland 100%
Cong Ty Tnhh Besi Viet Nam Ho Chi Minh City, Vietnam 100%
Fico International B.V. Duiven, the Netherlands 100%
Meco Equipment Engineers B.V. ‘s-Hertogenbosch, the Netherlands 100%
On April 5, 2023, Besi Asia Pacific Holding B.V., Esec International B.V. and Meco
International B.V. were merged into BE Semiconductor Industries N.V. As a result of such
merger, Besi Switzerland AG and Meco Equipment Engineers B.V. became direct
subsidiaries.
6. Cash and cash equivalents and deposits
Interest rates on cash at banks are variable. Short-term deposits have a maturity or notice
period between one and three months and carry interest at the respective short-term
deposit rates and are reported as part of the cash and cash equivalents. Deposits with
initial maturities longer than three months are reported under deposits and deposits with
a remaining maturity exceeding twelve months are reported under financial fixed assets.
The expected credit loss on cash and cash equivalents and deposits is considered
immaterial.
At December 31, 2023 and 2022, no amount in cash and cash equivalents and deposits was
restricted.
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Besi’s authorized share capital consisted of 160,000,000 ordinary shares, nominal value
€ 0.01 per share, and 160,000,000 preference shares, nominal value € 0.01 per share.
(€ thousands,
except for share data)
Number of
ordinary shares
outstanding¹
Share
capital
Share
premium
Retained
earnings
Legal reserves Other
compre hensive
income (loss)
Undistributed
result
Total share-
holders’
equity
Balance at January 1, 2023 81,146,738 811 271,350 (21,258) 144,077 (7,092) 240,647 628,535
Total comprehensive income for the period - - - - 2,300 (1,191) 177,084 178,193
Dividend paid to owners of the Company² - - - - - - (222,109) (222,109)
Convertible Notes converted into equity³ - - 31,074 - - - - 31,074
Changes in legal reserve - - - (11,585) 11,585 - - -
Appropriation of the result - - - 18,538 - - (18,538) -
Equity-settled share-based payments
expense⁴ - - 19,107 - - - - 19,107
Purchase of treasury shares⁵ - - (213,387) - - - - (213,387)
Balance at December 31, 2023 81,146,738 811 108,144 (14,305) 157,962 (8,283) 177,084 421,413
¹ The outstanding number of ordinary shares includes 4,130,944 and 2,658,812 treasury shares at December 31, 2023 and December 31, 2022, respectively.
² Represents € 2.85 dividend per share, approved at Besi’s AGM on April 26, 2023 and paid in cash in May 2023.
³ Represents the carrying amount of the 2016 and 2017 Convertible Notes upon conversion by bondholders. Further reference is made to the Notes to the Consolidated Financial Statements, Note 18.
⁴ Reference is made to the Notes to the Consolidated Financial Statements, Note 25.
⁵ The Company repurchased 2,556,665 ordinary shares in 2023 for an aggregate value of € 213.4 million.
Balance at January 1, 2022 78,567,842 786 251,149 (21,208) 117,741 (11,613) 282,419 619,274
Total comprehensive income for the period - - - - 13,334 4,521 240,647 258,502
Dividend paid to owners of the Company - - - - - - (269,467) (269,467)
Convertible Notes converted into equity 2,578,896 25 135,151 - - - - 135,176
Changes in legal reserve - - - (13,002) 13,002 - - -
Appropriation of the result - - - 12,952 - - (12,952) -
Equity-settled share-based payments
expense - - 15,259 - - - - 15,259
Purchase of treasury shares - - (146,781) - - - - (146,781)
Equity component new Convertible Notes - - 16,572 - - - - 16,572
Balance at December 31, 2022 81,146,738 811 271,350 (21,258) 144,077 (7,092) 240,647 628,535
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Changes in legal reserves during 2023 and 2022 are as follows:
(€ thousands) Currency
translation
adjustment
Capitalized
research and
development
expenses
Reserves for
subsidiaries
Cash flow
hedging
Total legal
reserves
Balance at January 1, 2023 54,238 80,844 4,521 4,474 144,077
Total comprehensive income (loss) for the period 2,631 - - (331) 2,300
Transfer from retained earnings - 12,422 (837) - 11,585
Balance at December 31, 2023 56,869 93,266 3,684 4,143 157,962
Balance at January 1, 2022 44,771 67,945 4,418 607 117,741
Total comprehensive income (loss) for the period 9,467 - - 3,867 13,334
Transfer from retained earnings - 12,899 103 - 13,002
Balance at December 31, 2022 54,238 80,844 4,521 4,474 144,077
Foreign currency translation adjustment
The foreign currency translation adjustment comprises all foreign currency differences
arising from the translation of the financial statements of foreign operations.
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Accumulated other comprehensive income (loss)
Accumulated other comprehensive income (loss) consists of:
(€ thousands) December 31, December 31,
2023 2022
Actuarial gains (losses) (9,924) (8,633)
Deferred taxes 878 778
Others 763 763
Accumulated other comprehensive income (loss) (8,283) (7,092)
Actuarial gains (losses)
The reserve for actuarial gains and losses arises from the actuarial calculations for the
defined benefit pension plans.
Deferred taxes
The deferred taxes in accumulated other comprehensive income (loss) primarily relate to
the deferred tax on the recognized actuarial gains and losses on the pension plans and
cash flow hedges.
Dividends
Proposed for approval at the Annual General Meeting of Shareholders to be held on
April 25, 2024 (not recognized as a liability as at December 31, 2023 and December 31, 2022):
(€ thousands) December 31, December 31,
2023 2022
€ 2.15 per ordinary share (2022: € 2.85) 165,584 223,691
The Board of Management proposes to allocate the part of the net income for the year
2023 remaining after payment of the dividend to the retained earnings. The Supervisory
Board has approved this proposal.
8. Borrowing facilities
A summary of Besi’s principal credit lines is as follows:
• A € 80 million committed revolving credit facility with a consortium of European banks
(“the Facility”), which matures in 2026. Outstanding amounts under this credit facility will
bear interest at ESTR/SOFR plus a margin that depends on the Company’s financial
position. The agreement can be increased to € 136 million. Borrowings under the Facility
can be repaid at any time at 100% of principal amount and can be used for working capital
and other corporate purposes. The principal covenants associated with the Facility include
a maintenance test of Consolidated Debt to Equity and a limitation on the incurrence of
additional permitted indebtedness. The Facility is granted without securities.
• An uncommitted overdraft facility of € 10.0 million for the purpose of short-term overdrafts
(maximum of 15 days) in current accounts. The facility has no contractual maturity date.
• A credit line of € 1.0 million for bank guarantees is granted without securities. The
borrowing facility has no contractual maturity date.
No borrowings were utilized.
9. Convertible Notes
Reference is made to the Notes to the Consolidated Financial Statements, Note 18.
10. Amounts due from/due to subsidiaries
Amounts due from/due to subsidiaries consist of non-interest bearing short-term receivables
and payables and interest bearing cash pool positions, which are calculated based on
market-rates.
11. Commitments and contingencies
BE Semiconductor Industries N.V. has assumed joint and several liabilities in accordance
with article 403 Part 9 of Book 2 of The Dutch Civil Code with respect to all its Dutch
subsidiaries.
BE Semiconductor Industries N.V. is parent of the fiscal unit BE Semiconductor
Industries N.V. and is therefore liable for the liabilities of the fiscal unit as a whole.
The fiscal unit consists of BE Semiconductor Industries N.V., Fico International B.V.,
Besi Netherlands B.V., and Meco Equipment Engineers B.V.
The credit facilities of Besi Leshan Co. Ltd. and Besi Singapore Pte. Ltd. for an aggregate
value of € 6.2 million are secured by a parent company guarantee.
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12. Financial income and expense
The components of financial income and expense are as follows:
(€ thousands) Year ended December 31,
2023 2022
Interest income 11,439 1,008
Interest income from subsidiaries 1,269 591
Net cost of hedging 529 284
Net foreign currency results - 19
Subtotal financial income 13,237 1,902
Interest expense (10,984) (11,423)
Interest expense to subsidiaries (1,140) (283)
Net foreign currency results (14) -
Subtotal financial expense (12,138) (11,706)
Financial income (expense), net 1,099 (9,804)
13. Selected operating expenses and additional information
Personnel expenses for all employees are as follows:
(€ thousands) Year ended December 31,
2023 2022
Wages and salaries 2,745 2,654
Social security expenses 158 133
Pension and retirement expenses 349 323
Share-based compensation plans 19,107 15,259
Other personnel costs 555 519
Total personnel expenses 22,914 18,888
Certain selected operating expenses are recharged to subsidiaries.
The average number of employees during 2023 and 2022 was 12 and 11, respectively.
The remuneration paragraph is included in Note 25 of the Consolidated Financial
Statements and reference is also made to the Remuneration Report included in this Annual
Report.
14. Income taxes
The deferred tax liabilities of € 5.7 million at December 31, 2023 is mainly related to
temporary difference in the fiscal and commercial valuation on the Convertible Notes and
inventories. A summary of the changes is as follows:
(€ thousands) 2023 2022
Balance at January 1 5,720 3,117
Movement through profit and loss 201 (1,215)
Movement through equity (219) 3,818
Deferred tax liabilities December 31 5,702 5,720
The reconciliation of income tax benefit is as follows:
(€ thousands) Year ended December 31, 2023
in % of loss
before taxes
Year ended December 31, 2022
in % of loss
before taxes
Expected income tax expense
(benefit) based on domestic rate (2,247) 25.8% (4,555) 25.8%
Non-deductible expenses 3,120 (35.8%) 2,779 (15.7%)
Tax incentive 62 (0.7%) (150) 0.8%
Other 180 (2.1%) 8 (0.0%)
Income tax expense (benefit)
reported 1,115 (12.8%) (1,918) 10.9%
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15. Additional information
Cost of services provided by external auditor
Ernst & Young Accountants LLP has served as our independent registered public accounting
firm for the year 2023 and 2022. The following table sets out the aggregated fees for
professional audit services and other services rendered by Ernst & Young Accountants LLP
and its member firms and/or affiliates in 2023 and 2022.
(€ thousands) Ernst & Young
Accountants LLP
E&Y
Network
Year ended
December 31,
2023
Ernst & Young
Accountants LLP
E&Y
Network
Year ended
December 31,
2022
Audit services 436 213 649 377 210 587
Other assurance services 154 7 161 98 - 98
Other non-audit services - - - - 7 7
Total costs 590 220 810 475 217 692
16. Events after the balance sheet date
There are no events to report.
Duiven, February 21, 2024
Board of Management Supervisory Board
Richard W. Blickman Richard Norbruis
Carlo Bozotti
Elke Eckstein
Niek Hoek
Laura Oliphant
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Other Information
Corporate Information
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Corporate Office
BE Semiconductor Industries N.V.
Ratio 6, 6921 RW Duiven
Tel. (31) 26 319 4500
www.besi.com
e-mail: info@besi.com, investor.relations@besi.com
For addresses of Besi’s offices and manufacturing facilities
worldwide, please visit Besi’s website: www.besi.com.
Transfer Agent
Ordinary shares (euro)
ABN AMRO Bank N.V., Amsterdam, the Netherlands
Independent Auditors
Ernst & Young Accountants LLP, Eindhoven, the Netherlands
Legal Counsels
Freshfields Bruckhaus Deringer, Amsterdam, the Netherlands
Taylor Wessing N.V., Amsterdam, the Netherlands
Trade Register
Chamber of Commerce, Arnhem, the Netherlands
Number 09092395
Statutory Financial Statements
The statutory financial statements of BE Semiconductor
Industries N.V. will be filed with the Chamber of Commerce,
Arnhem, the Netherlands.
Annual General Meeting
The Annual General Meeting of Shareholders will be held on
April 25, 2024, 10.30 a.m.
Board of Management
Richard W. Blickman (1954)
Chief Executive Officer,
Chairman of the Board of Management
Management Team Members
Chris Scanlan (1969)
SVP Technology
Christoph Scheiring (1970)
SVP Die Attach
Peter Wiedner (1970)
SVP Sub Micron Die Attach
Jeroen Kleijburg (1974)
SVP Packaging
Bart Berenbak (1971)
VP Plating
Henk Jan Jonge Poerink (1970)
SVP Global Operations
Jong Kwon Park (1966)
SVP Sales & Customer Service APac
René Hendriks (1961)
SVP Sales Europe/North America
Leon Verweijen (1976)
SVP Finance
Other Members of Management
Kin Mun Kok (1980)
VP Besi Product Asia
Seng Poh Ho (1972)
VP Support Center Asia
Michael Leu (1962)
VP Strategic Supply Management
Andrea Kopp-Battaglia (1978)
VP Finance Die Attach
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To: the shareholders and Supervisory Board of BE Semiconductor Industries N.V.
Report on the audit of the financial statements 2023 included
in the Annual Report
Our opinion
We have audited the financial statements for 2023 of BE Semiconductor Industries N.V.
(“the Company”) based in Amsterdam. The financial statements comprise the Consolidated
and Parent Company Financial Statements.
In our opinion:
• The accompanying Consolidated Financial Statements give a true and fair view of the
financial position of BE Semiconductor Industries N.V., as at December 31, 2023 and of its
result and its cash flows for 2023 in accordance with International Financial Reporting
Standards as adopted by the European Union (EU-IFRSs) and with Part 9 of Book 2 of the
Dutch Civil Code.
• The accompanying Parent Company Financial Statements give a true and fair view of the
financial position of BE Semiconductor Industries N.V. as at December 31, 2023 and of its
result for 2023 in accordance with Part 9 of Book 2 of the Dutch Civil Code.
The Consolidated Financial Statements comprise:
• The Consolidated Statement of Financial Position as at December 31, 2023.
• The following statements for 2023: the Consolidated Statement of Operations, the
Consolidated Statement of Comprehensive Income, the Consolidated Statement of
Changes in Equity and the Consolidated Statement of Cash Flows.
• The Notes comprising a summary of the significant accounting policies and other
explanatory information.
The Parent Company Financial Statements comprise:
• The Parent Company Balance Sheet as at December 31, 2023.
• The Parent Company Statement of Income and Expense for 2023.
• The Notes comprising a summary of the accounting policies and other explanatory
information.
Basis for our opinion
We conducted our audit in accordance with Dutch law, including the Dutch Standards on
Auditing. Our responsibilities under those standards are further described in the “Our
responsibilities for the audit of the financial statements” section of our report.
We are independent of BE Semiconductor Industries N.V. in accordance with the EU
Regulation on specific requirements regarding statutory audit of public-interest entities,
the “
Wet toezicht accountantsorganisaties”
(Wta, Audit firms supervision act), the
“
Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten”
(ViO,
Independent Auditor’s Report
Code of Ethics for Professional Accountants, a regulation with respect to independence)
and other relevant independence regulations in the Netherlands. Furthermore, we have
complied with the “
Verordening gedrags- en beroepsregels accountants”
(VGBA, Dutch
Code of Ethics).
We believe the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Information in support of our opinion
We designed our audit procedures in the context of our audit of the financial statements
as a whole and in forming our opinion thereon. The following information in support of our
opinion and any findings were addressed in this context, and we do not provide a separate
opinion or conclusion on these matters.
Our understanding of the business
BE Semiconductor Industries N.V. is the holding company for a worldwide business engaged
in the development, production, marketing and sales of back-end equipment for the
semiconductor industry. The group is structured in components and we tailored our group
audit approach accordingly. We paid specific attention in our audit to a number of areas
driven by the operations of the group and our risk assessment.
We determined materiality and identified and assessed the risks of material misstatement
of the financial statements, whether due to fraud or error in order to design audit
procedures responsive to those risks and to obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion.
Materiality
Materiality € 10,000,000 (2022: € 13,750,000)
Benchmark applied Around 5% of profit before tax
Explanation Based on our professional judgement we have considered an earnings-based
measure as the appropriate basis to determine materiality. We consider income
before income tax to be the most relevant measure given the nature of the
business and the users of the financial statements.
We have also taken into account misstatements and/or possible misstatements that in
our opinion are material for the users of the financial statements for qualitative reasons.
We agreed with the Supervisory Board that misstatements in excess of € 500,000, which
are identified during the audit, would be reported to them, as well as smaller misstatements
that in our view must be reported on qualitative grounds.
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Scope of the group audit
BE Semiconductor Industries N.V. is at the head of a group of entities. The financial
information of this group is included in the Consolidated Financial Statements.
Because we are ultimately responsible for the opinion, we are also responsible for directing,
supervising and performing the group audit. In this respect we have determined the nature
and extent of the audit procedures to be carried out for group entities. Decisive were the
size and/or the risk profile of the group entities or operations. On this basis, we selected
group entities for which an audit had to be carried out on the complete set of financial
information or specific items.
Our group audit mainly focused on significant group entities in China, Malaysia, Singapore,
Switzerland (full scope components) and Austria and the Netherlands (specific scope
components). We allocated components an audit of the complete financial information
(full scope components) or we allocated components a specific scope to perform audit
procedures on specific account balances that we considered had the potential for the
greatest impact on the significant accounts in the financial statements, either because of
the size of these accounts or their risk profile. The central audit team performed audit
procedures on accounting areas managed centrally, such as the key audit matter related
to revenue recognition, the assessment of forward-looking information, the majority of
the audit procedures of the Swiss and Dutch components and other centralized accounts.
We used EY offices in the other countries for the remaining full scope and specific scope
components. We performed analytical procedures for the other group entities not assigned
a full scope or specific scope.
In total these procedures resulted in the following coverage:
ASSETS PRE-TAX INCOME REVENUES
Full scope
Specific scope
Analytical procedures
By performing the procedures mentioned above at components of the group, together with
additional procedures at group level, we have been able to obtain sufficient and appropriate
audit evidence about the group’s financial information to provide an opinion on the
Consolidated Financial Statements.
Teaming and use of specialists
We ensured that the audit teams both at group and at component levels included the
appropriate skills and competences which are needed for the audit of a listed client in the
semiconductor industry. We included specialists in the areas of IT audit, forensics,
sustainability and income tax and have made use of our own experts in the areas of transfer
pricing and valuation.
Our focus on climate risks and the energy transition
Climate change and the energy transition are high on the public agenda. Issues such as CO₂
reduction impact financial reporting, as these issues entail risks for the business operation,
the valuation of assets (stranded assets) and provisions or the sustainability of the
business model and access to financial markets of companies with a larger CO₂ footprint.
The Board of Management summarized BE Semiconductor Industries N.V.’s commitments
and obligations, and reported in the Environmental, Social and Governance Report how the
Company is addressing climate-related and environmental risks.
As part of our audit of the financial statements, we evaluated the extent to which climate-
related risks and the effects of the energy transition and the Company’s commitments and
(constructive) obligations, are taken into account in estimates and significant assumptions,
especially in the area of impairment of goodwill, as well as in the design of relevant internal
control measures. Furthermore, we read the Report of the Board of Management and
considered whether there is any material inconsistency between the non-financial
information in the Environmental, Social and Governance Report and the Consolidated
Financial Statements.
Based on the audit procedures performed, we do not deem climate-related risks to have a
material impact on the financial reporting judgements, estimates or significant
assumptions as at December 31, 2023.
Our focus on fraud and non-compliance with laws and regulations
Our responsibility
Although we are not responsible for preventing fraud or non-compliance and we cannot be
expected to detect non-compliance with all laws and regulations, it is our responsibility to
obtain reasonable assurance that the financial statements, taken as a whole, are free
from material misstatement, whether caused by fraud or error. The risk of not detecting a
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material misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
Our audit response related to fraud risks
We identified and assessed the risks of material misstatements of the financial statements
due to fraud. During our audit we obtained an understanding of the Company and its
environment and the components of the system of internal control, including the risk
assessment process and management’s process for responding to the risks of fraud and
monitoring the system of internal control and how the Supervisory Board exercises
oversight, as well as the outcomes. We refer to the “Risk Management” section of the
Report of the Board of Management for management’s fraud risk assessment.
We evaluated the design and relevant aspects of the system of internal control and in
particular the fraud risk assessment, as well as the code of conduct, whistleblower
procedures and incident registration. We evaluated the design and the implementation of
internal controls designed to mitigate fraud risks.
As part of our process of identifying fraud risks, we evaluated fraud risk factors with
respect to financial reporting fraud, misappropriation of assets and bribery and corruption,
in close co-operation with our forensic specialists. We evaluated whether these factors
indicate that a risk of material misstatement due to fraud is present.
We incorporated elements of unpredictability in our audit. We also considered the outcome
of our other audit procedures and evaluated whether any findings were indicative of fraud
or non-compliance.
We addressed the risks related to management override of controls, as this risk is present
in all companies. For these risks we have performed procedures among other things to
evaluate key accounting estimates for management bias that may represent a risk of
material misstatement due to fraud, in particular relating to important judgement areas
and significant accounting estimates as disclosed in Note 2 to the financial statements.
We have also used data analysis to identify and address high-risk journal entries and
evaluated the business rationale (or the lack thereof) of significant extraordinary
transactions, including those with related parties. Additionally, in order to respond to the
identified risks of management override of controls, we specifically tested manual journal
entries in revenues with supporting evidence.
The following fraud risk identified did require significant attention during our audit:
Presumed risks of fraud in revenue recognition
Fraud risk Our audit approach
When identifying and assessing fraud risks we presume that
there are risks of fraud in revenue recognition. The Company
recognizes revenue when it transfers control over a product or
service to a customer. Revenue recognition is considered a fraud
risk as revenue is a focus area for the Company. These revenues
are disclosed in Note 2 and 23 to the Consolidated Financial
Statements for the significant accounting policies on revenue
recognition.
We describe the audit procedures
responsive to the presumed risk of
fraud in revenue recognition in the
description of our audit approach
for the key audit matter “Revenue
Recognition”.
We considered available information and made enquiries of relevant executives, directors
(including internal audit, and regional directors) and the Supervisory Board.
The fraud risk we identified, enquires and other available information did not lead to
specific indications for fraud or suspected fraud potentially materially impacting the view
of the financial statements.
Our audit response related to risks of non-compliance with laws and regulations
We performed appropriate audit procedures regarding compliance with the provisions of
those laws and regulations that have a direct effect on the determination of material
amounts and disclosures in the financial statements. Furthermore, we assessed factors
related to the risks of non-compliance with laws and regulations that could reasonably be
expected to have a material effect on the financial statements from our general industry
experience, through discussions with the Board of Management, reading minutes,
inspection of internal audit and compliance reports and performing substantive tests of
details of classes of transactions, account balances or disclosures.
We also inspected lawyers’ letters and we have been informed by the Board of Management
that there was no correspondence with regulatory authorities and remained alert to any
indication of (suspected) non-compliance throughout the audit. Finally we obtained
written representations that all known instances of non-compliance with laws and
regulations have been disclosed to us.
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Our audit response related to going concern
As disclosed in Note 1 to the Consolidated Financial Statements and the “Internal control
and risk management” section in the Report of the Board of Management, the financial
statements have been prepared on a going concern basis. When preparing the financial
statements, the Board of Management made a specific assessment of the Company’s
ability to continue as a going concern and to continue its operations for the foreseeable
future.
We discussed and evaluated the specific assessment with the Board of Management
exercising professional judgement and maintaining professional skepticism. We considered
whether management’s going concern assessment, based on our knowledge and
understanding obtained through our audit of the financial statements or otherwise,
contains all relevant events or conditions that may cast significant doubt on the Company’s
ability to continue as a going concern. If we conclude that a material uncertainty exists, we
are required to draw attention in our auditor’s report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify our opinion.
Based on our procedures performed, we did not identify material uncertainties about going
concern. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause a Company to cease to
continue as a going concern.
Our key audit matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the financial statements. We have communicated the key audit
matter to the Supervisory board. The key audit matters are not a comprehensive reflection
of all matters discussed.
In comparison with previous year, the nature of our key audit matter did not change.
Revenue recognition
Risk Our audit approach Key observations
The Company recognizes revenue when it transfers control over a
product or service to a customer. Revenue recognition is considered a
key audit matter as revenue is a focus area for the Company.
We identified the following fraud risks related to improper revenue
recognition for the Company:
1. Cut-off of sales transactions before year end for machine sales.
2. Issuance of invoices and manual journal entries for fictious
transactions in external revenues (which are never settled in cash).
Reference is made to Note 2 and 23 to the Consolidated Financial
Statements for the significant accounting policies on revenue
recognition.
We have assessed the appropriateness of the Company’s revenue
recognition accounting policies, understanding the internal control
environment and assessed compliance with EU-IFRS accounting
policies (IFRS 15). Our audit procedures included, amongst others,
testing individual sales orders and transactions to assess proper
identification of the identifiable performance obligations in the
contracts and correct allocation of the transaction price to these
performance obligations and recognition hereof.
We also tailored our audit procedures to address our fraud risk. We
used data analytics to correlate revenues to cash receipts and
performed subsequent collection testing on trade receivables.
Furthermore, we tested manual journal entries with supporting
evidence. We also selected sales transactions before and after year
end to assess whether revenue was recognized in the correct period
by, amongst others, inspection of sales contracts, client acceptance
documents and shipping documents. We also evaluated the
adequacy of the disclosures provided by the Company in Note 2 and
23.
We assessed that the Company’s revenue recognition accounting
policies were appropriately applied and disclosed in Note 2 and 23 in
the Consolidated Financial Statements.
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OTHER
INFORMATION
Report on other information included in the Annual Report
The Annual Report contains other information in addition to the financial statements
and our auditor’s report thereon.
Based on the following procedures performed, we conclude that the other information:
• Is consistent with the financial statements and does not contain material misstatements.
• Contains the information as required by Part 9 of Book 2 of the Dutch Civil Code for the
Report of the Board of Management and the other information as required by Part 9 of
Book 2 of the Dutch Civil Code and as required by Sections 2:135b and 2:145 sub section
2 of the Dutch Civil Code for the remuneration report.
We have read the other information. Based on our knowledge and understanding obtained
through our audit of the financial statements or otherwise, we have considered whether
the other information contains material misstatements. By performing these procedures,
we comply with the requirements of Part 9 of Book 2 and Section 2:135b sub-Section 7 of
the Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed
is substantially less than the scope of those performed in our audit of the financial
statements.
The Board of Management is responsible for the preparation of the other information,
including the Report of the Board of Management in accordance with Part 9 of Book 2 of
the Dutch Civil Code and other information required by Part 9 of Book 2 of the Dutch Civil
Code. The Board of Management and the Supervisory Board are responsible for ensuring
that the remuneration report is drawn up and published in accordance with Sections 2:135b
and 2:145 sub section 2 of the Dutch Civil Code.
Report on other legal and regulatory requirements and ESEF
Engagement
We were engaged by the general meeting as auditor of BE Semiconductor Industries N.V.
on April 26, 2018, as of the audit for the year 2018 and have operated as statutory auditor
ever since that date.
No prohibited non-audit services
We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU
Regulation on specific requirements regarding statutory audit of public-interest entities.
European Single Electronic Reporting Format (ESEF)
BE Semiconductor Industries N.V. has prepared the Annual Report in ESEF. The requirements
for this are set out in the Delegated Regulation (EU) 2019/815 with regard to regulatory
technical standards on the specification of a single electronic reporting format (hereinafter:
the RTS on ESEF).
In our opinion the Annual Report prepared in the XHTML format, including the (partially)
marked-up Consolidated Financial Statements as included in the reporting package by
BE Semiconductor Industries N.V., complies in all material respects with the RTS on ESEF.
BE Semiconductor Industries N.V. is responsible for preparing the Annual Report, including
the financial statements, in accordance with the RTS on ESEF, whereby management
combines the various components into a single reporting package.
Our responsibility is to obtain reasonable assurance for our opinion whether the Annual
Report in this reporting package complies with the RTS on ESEF.
We performed our examination in accordance with Dutch law, including Dutch Standard
3950N, “
Assurance-opdrachten inzake het voldoen aan de criteria voor het opstellen van
een digitaal verantwoordingsdocument”
(assurance engagements relating to compliance
with criteria for digital reporting). Our examination included amongst others:
• Obtaining an understanding of the entity’s financial reporting process, including the
preparation of the reporting package.
• Identifying and assessing the risks that the Annual Report does not comply in all
material respects with the RTS on ESEF and designing and performing further assurance
procedures responsive to those risks to provide a basis for our opinion, including:
• Obtaining the reporting package and performing validations to determine whether the
reporting package containing the Inline XBRL instance document and the XBRL
extension taxonomy files, has been prepared in accordance with the technical
specifications as included in the RTS on ESEF.
• Examining the information related to the Consolidated Financial Statements in the
reporting package to determine whether all required mark-ups have been applied and
whether these are in accordance with the RTS on ESEF.
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OTHER
INFORMATION
Description of responsibilities regarding the financial statements
Responsibilities of the Board of Management and the Supervisory Board for the
financial statements
The Board of Management is responsible for the preparation and fair presentation of the
financial statements in accordance with EU-IFRSs and Part 9 of Book 2 of the Dutch Civil
Code. Furthermore, the Board of Management is responsible for such internal control as
the Board of Management determines is necessary to enable the preparation of the
financial statements that are free from material misstatement, whether due to fraud or
error.
As part of the preparation of the financial statements, the Board of Management is
responsible for assessing the Company’s ability to continue as a going concern. Based on
the financial reporting framework mentioned, the Board of Management should prepare
the financial statements using the going concern basis of accounting unless the Board of
Management either intends to liquidate the Company or to cease operations, or has no
realistic alternative but to do so. The Board of Management should disclose events and
circumstances that may cast significant doubt on the Company’s ability to continue as a
going concern in the financial statements.
The Supervisory Board is responsible for overseeing the Company’s financial reporting
process.
Our responsibilities for the audit of the financial statements
Our objective is to plan and perform the audit engagement in a manner that allows us to
obtain sufficient and appropriate audit evidence for our opinion.
Our audit has been performed with a high, but not absolute, level of assurance, which
means we may not detect all material errors and fraud during our audit.
Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of these financial statements. The materiality affects the
nature, timing and extent of our audit procedures and the evaluation of the effect of
identified misstatements on our opinion.
We have exercised professional judgement and have maintained professional skepticism
throughout the audit, in accordance with Dutch Standards on Auditing, ethical requirements
and independence requirements. The “Information in support of our opinion” section above
includes an informative summary of our responsibilities and the work performed as the
basis for our opinion.
Our audit further included among others:
• Performing audit procedures responsive to the risks identified, and obtaining audit
evidence that is sufficient and appropriate to provide a basis for our opinion.
• Obtaining an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company’s internal control.
• Evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the Board of Management.
• Evaluating the overall presentation, structure and content of the financial statements,
including the disclosures.
• Evaluating whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
Communication
We communicate with the Supervisory Board regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant
findings in internal control that we identify during our audit. In this respect we also submit
an additional report to the Audit Committee of the Supervisory Board in accordance with
Article 11 of the EU Regulation on specific requirements regarding statutory audit of
public-interest entities. The information included in this additional report is consistent
with our audit opinion in this auditor’s report.
We provide the Supervisory Board with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all
relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with the Supervisory Board, we determine the key audit
matters: those matters that were of most significance in the audit of the financial
statements. We describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances,
not communicating the matter is in the public interest.
Eindhoven, February 21, 2024
Ernst & Young Accountants LLP
N. van Es
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Assurance report of the independent auditor on the ESG Report
To: the shareholders and Supervisory Board of BE Semiconductor Industries N.V.
Our conclusions
We have performed a limited assurance engagement on the chapter “Environmental,
Social and Governance Report”, with the exception of the section “EU Taxonomy” (hereafter:
the ESG Report) of the accompanying Annual Report for 2023 of BE Semiconductor
lndustries N.V. (hereafter: the Company) at Amsterdam.
Furthermore, we have performed a reasonable assurance engagement on the section
“Materiality assessment” included as part of the ESG Report on pages 52 and 53 in the
Annual Report 2023.
Based on our procedures performed and the assurance information obtained, nothing has
come to our attention that causes us to believe that the ESG Report does not present
fairly, in all material respects:
• the policy with regard to Environmental, Social and Governance matters;
• the business operations, events and achievements in that area in 2023;
in accordance with the applicable criteria as included in the section “Criteria”.
In our opinion the section “Materiality assessment” is prepared, in all material respects, in
accordance with the applicable criteria as included in the section “Criteria”.
Basis for our conclusions
We have performed our assurance engagement on the ESG Report in accordance with
Dutch law, including Dutch standard 3810N, “
Assurance-opdrachten inzake
duurzaamheidsverslaggeving”
(Assurance engagements relating to sustainability
reporting), which is a specified Dutch Standard that is based on the International Standard
on Assurance Engagements (ISAE) 3000, “Assurance engagements other than audits or
reviews of historical financial information”. Our responsibilities in this regard are further
described in the section “Our responsibilities” of our report.
We are independent of BE Semiconductor lndustries N.V. in accordance with the
“
Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten”
(ViO,
Code of Ethics for Professional Accountants, a regulation with respect to independence).
This includes that we do not perform any activities that could result in a conflict of interest
with our independent assurance engagement. Furthermore, we have complied with the
“
Verordening gedrags- en beroepsregels accountants”
(VGBA, Dutch Code of Ethics for
Professional Accountants).
We believe that the assurance evidence we have obtained is sufficient and appropriate to
provide a basis for our conclusions.
Criteria
The criteria applied for the preparation of the ESG Report are the Sustainability Reporting
Standards of the Global Reporting Initiative (GRI Standards) and the Semiconductors
Sustainability Accounting Standards of the Sustainability Accounting Standard Board
(SASB), supplemented with own developed reporting criteria as disclosed in section
“ESG reporting framework” of the Annual Report 2023 and in the “Appendices to
the Environmental, Social and Governance Report 2023” on the Company’s website.
The ESG Report is prepared with reference to the GRI Standards. The GRI Standards used
are listed in the GRI Content Index as disclosed in the “Appendices to the Environmental,
Social and Governance Report 2023” on the Company’s website.
The comparability of the ESG information between entities and over time may be affected
by the absence of a uniform practice on which to draw, to evaluate and measure this
information. This allows for the application of different, but acceptable, measurement
techniques.
Consequently, the ESG Report needs to be read and understood together with the criteria
applied.
Corresponding sustainability information not assured
The information in the ESG Report for the periods prior to 2021 has not been part of an
assurance engagement. Consequently, the corresponding information in the ESG Report
and thereto related disclosures for the periods prior to 2021 are not assured with limited
assurance. Our conclusions are not modified in respect of this matter.
Limitations to the scope of our assurance engagement
The ESG Report includes prospective information such as ambitions, strategy, plans,
expectations and estimates. Prospective information relates to events and actions that
have not yet occurred and may never occur. We do not provide assurance on the assumptions
and achievability of this prospective information.
The references to external sources or websites in the ESG Report are not part of the ESG
Report as included in the scope of or the criteria applied in our assurance engagement,
with the exception of the “Appendices to the Environmental, Social and Governance Report
2023” on the Company’s website. We therefore do not provide assurance on this information.
Our conclusions are not modified in respect of these matters.
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OTHER
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Responsibilities of the Board of Management and the Supervisory Board for
the ESG Report
The Board of Management is responsible for the preparation and fair presentation of the
ESG Report in accordance with the criteria as included in the section “Criteria”, including
the identification of stakeholders and the definition of material matters. The Board of
Management is also responsible for selecting and applying the criteria and for determining
that these criteria are suitable for the legitimate information needs of stakeholders,
considering applicable law and regulations related to reporting. The choices made by the
Board of Management regarding the scope of the ESG Report and the reporting policy are
summarized in the chapter “ESG reporting framework” of the Annual Report.
Furthermore, the Board of Management is responsible for such internal control as it
determines is necessary to enable the preparation of the ESG Report that is free from
material misstatement, whether due to fraud or error.
The Supervisory Board is responsible for overseeing the sustainability reporting process of
BE Semiconductor lndustries N.V.
Our responsibilities
Our responsibility is to plan and perform the assurance engagement in a manner that
allows us to obtain sufficient and appropriate assurance evidence for our conclusions.
Our assurance engagement of the ESG Report is aimed to obtain a limited level of assurance
to determine the plausibility of the ESG Report. The procedures vary in nature and timing
from, and are less in extent, than for a reasonable assurance engagement. The level of
assurance obtained in a limited assurance engagement is therefore substantially less than
the assurance that is obtained when a reasonable assurance engagement is performed.
Our assurance engagement of the section “Materiality assessment” has been performed
with a high, but not absolute, level of assurance, which means we may not have detected
all material fraud and errors during our assurance engagement.
We apply the “
Nadere voorschriften kwaliteitssystemen”
(NVKS, regulations for quality
management systems) and accordingly maintain a comprehensive system of quality
management including documented policies and procedures regarding compliance with
ethical requirements, professional standards and other relevant legal and regulatory
requirements.
For a more detailed description of our responsibilities, we refer to the appendix of this
assurance report.
Amsterdam, February 21, 2024
Ernst & Young Accountants LLP
J. Niewold
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INFORMATION
Our assurance engagement included amongst others:
• Performing an analysis of the external environment and obtaining an understanding of relevant sustainability themes and issues and the characteristics of the Company.
• Evaluating the appropriateness of the criteria applied used, their consistent application and related disclosures in the ESG Report. This includes the evaluation of the Company’s materiality assessment and
the reasonableness of estimates made by the Board of Management.
• Reading the information in the Annual Report which is not included in the scope of our assurance engagement to identify material inconsistencies, if any, with the ESG Report.
• Reconciling the relevant financial information with the financial statements.
Our limited assurance engagement of the ESG Report included amongst others:
• Obtaining through inquiries a general understanding of the internal control environment, the reporting
processes, the information systems and the entity’s risk assessment process relevant to the preparation
of the ESG Report, without obtaining assurance information about the implementation or testing the
operating effectiveness of controls.
• Identifying areas of the ESG Report where misleading or unbalanced information or a material
misstatement, whether due to fraud or error, is likely to arise. Designing and performing further assurance
procedures aimed at determining the plausibility of the ESG Report responsive to this risk analysis. These
procedures consisted amongst others of:
• Making inquiries of management and relevant staff at corporate level responsible for the sustainability
strategy, policy and results.
• Interviewing relevant staff responsible for providing the information for, carrying out controls on, and
consolidating the data in the ESG Report.
• Obtaining assurance evidence that the ESG Report reconciles with underlying records of the Company.
• Reviewing, on a limited sample basis, relevant internal and external documentation.
• Considering the data and trends.
• Considering the overall presentation and balanced content of the ESG Report.
• Considering whether the ESG Report as a whole, including the sustainability matters and disclosures,
is clearly and adequately disclosed in accordance with the criteria applied.
Our reasonable assurance engagement of the section “Materiality assessment” included amongst others:
• Obtaining an understanding of the systems and processes for collecting, reporting, and consolidating the
section “Materiality assessment”, including obtaining an understanding of the internal control
environment relevant to our assurance engagement, but not for the purpose of expressing an opinion on
the effectiveness of the Company’s internal control.
• Identifying and assessing the risks that the section “Materiality assessment” is misleading or unbalanced,
or contains material misstatements, whether due to fraud or error. Designing and performing further
assurance procedures responsive to those risks, and obtaining assurance evidence that is sufficient and
appropriate to provide a basis for our opinion. These procedures consisted amongst others of:
• Making inquiries of management and relevant staff at corporate level responsible for the sustainability
strategy, policy and results.
• Reading minutes of the meetings that are important for the content of the section “Materiality
assessment”.
• Interviewing relevant staff responsible for providing the information for, carrying out controls on, and
consolidating the data in the section “Materiality assessment”.
• Obtaining assurance evidence that the section “Materiality assessment” reconciles with underlying
records of the Company.
• Evaluating relevant internal and external documentation, on a sample basis, to determine the reliability
of the information in the section “Materiality assessment”.
• Evaluating the data and trends.
• Evaluating whether the section “Materiality assessment” is presented and disclosed free from material
misstatement in accordance with the criteria applied.
We communicate with the Supervisory Board regarding, among other matters, the planned
scope and timing of the assurance engagement and significant findings, including any
significant findings in internal control that we identify during our assurance engagement.
Appendix to the assurance report of the independent auditor on the ESG Report
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OTHER
INFORMATION
Preference shares
At December 31, 2023, the Company’s authorized capital consisted of 160,000,000 ordinary
shares, nominal value € 0.01 per share, and 160,000,000 preference shares, nominal value
€ 0.01 per share.
No preference shares were outstanding at December 31, 2023.
In April 2000, the foundation “Stichting Continuïteit BE Semiconductor Industries” (the
“Foundation”) was established. The Foundation is an independent legal entity and is not
owned or controlled by any other legal person. The purpose of the Foundation is to
safeguard the interests of the Company, the enterprise connected therewith and all the
parties having an interest therein and to exclude as much as possible influences which
could threaten, among other things, the Company’s continuity, independence and identity.
The aim of the preference shares is, amongst other things, to provide a protective measure
against unfriendly take-over bids and other possible unsolicited influences that could
threaten the Company‘s continuity, independence and identity, including, but not limited
to, a proposed resolution to dismiss the Supervisory Board or the Board of Management.
The issue of preference shares would enable the Company to consider its position in the
then-existing circumstances.
By agreement of May 19, 2008 between the Company and the Foundation, which replaced
a similar agreement dated April 19, 2002, the Foundation has been granted a call option
pursuant to which it may purchase a number of preference shares up to a maximum of the
number of outstanding ordinary shares at the time of exercise of the option minus one.
The Company has also granted to the Foundation the right to file an application for an
inquiry into the policy and conduct of the business of the Company with the Enterprise
Chamber of the Amsterdam Court of Appeal
(“Ondernemingskamer”)
. The Company
believes that this may be a useful option in the period before the issuance of preference
shares, without causing a dilution of the rights of other shareholders at that stage.
The members of the board of the Foundation are W.L.J. Bröcker (Chairman), J.N. de Blécourt,
D.J. Dunn, F.J. van Hout and T. de Waard. Except for Mr De Waard and Mr Dunn who are
former Supervisory Board members, none of the other members of the board of the
Foundation are connected to the Company. The Foundation therefore qualifies as an
independent legal entity within the meaning of section 5:71 paragraph 1 sub c of the Dutch
Financial Supervision Act
(“Wet op het financieel toezicht”)
.
Other Information
Appropriation of the result
The Articles of Association provide that the Company can only distribute profits from its
free distributable reserves. The Board of Management, with the approval of the Supervisory
Board, will propose to the Annual General Meeting of Shareholders to determine the total
dividend over 2023 at € 2.15 per ordinary share, amounting to a total of € 165.6 million.
The Board of Management proposes to allocate the part of the net income for the year
2023 remaining after payment of the dividend to the retained earnings. The Supervisory
Board has approved this proposal.
The General Meeting of Shareholders approved the 2022 statutory financial statements on
April 26, 2023.
www.besi.com