Investors Presentation
Rafi Amit, CEOMoshe Eisenberg, CFO
February 2018
Safe Harbor
2Copyright of Camtek Ltd. 2017 © All rights reserved
The information presented today contains forward-looking statements that relate to anticipated futureoperating results and performance. These statements are only predictions based on management’s currentexpectations and assumptions, including with respect to market size, Total Available Market (or “TAM”) andrevenue targets, and necessarily involve risks and uncertainties. Moreover, our stated revenue targets areinspirational and should not be taken as projections of actual future results. We do not assume any obligationto update the information provided. Actual events or results may differ materially from those projected,including as a result of changing industry and market trends, reduced demand for our products, the timelydevelopment of our new products and their adoption by the market, increased competition in the industry,price reductions and other subsequent developments and business conditions, as well as due to risks and otherimportant information identified in the documents filed with the Securities and Exchange Commission,including the Company’s Annual Reports on Form 20-F and Reports on Form 6-K.
The presentation includes non-GAAP financial measures which are not intended to be considered in isolation oras a substitute for the financial information prepared and presented in accordance with GAAP. Managementuses both GAAP and non-GAAP measures when evaluating the business internally and therefore believes it isimportant to make these non-GAAP measures available to the financial community. Reconciliations of non-GAAP measures to the most relevant GAAP amounts are included in the Company press releases.
This presentation includes the company’s estimations on Market size and TAM, (“Total Available Market,” or“TAM”) these estimations can vary and may be differ materially from the reality and are based on internalestimations. TAM or market size is the company’s estimation on the total yearly market size.
2017 Strategic Changes at Camtek
Signed agreement to divest PCB business
Reached final legal settlementwith Rudolph
Settlement of $13mRemoved uncertaintiesSaves $2.5-$3m/year in legal fees
Strong PCB market createdopportunity for divestment
Completed sale ofPCB business
Sold for $32m +potential $3m earn-out
Internal Reorganization
Semi onlyNew Offices in China and Taiwan
Reduced overall expenses
NovemberJuly August October
3
Q4 – Pure Play Semiconductors Company
Partnered with leading inkManufacturer for FIT
Lowers FIT expenseReduced from $2m/yrTo $100-125/qtr
Camtek ID
$230m
MARKET CAP NET CASH
$45m
2017 REVENUES
$93m+18% YoY
2017 NET INCOME
$10m+315% YoY
Q417E OP. MARGIN
15%
EMPLOYEES
270
GLOBAL PRESENCE
China, Taiwan, Korea, Singapore, Hong Kong, USA, Europe
develops, manufactures and sells inspection and metrology systems to the semiconductor market
Camtek: Strong Customer Base
5
44
55
68
79
93
3
10
2013 2014 2015 2016 2017 2018E
Strong and Improving Operating Performance
Rev
en
ue
d
ou
ble
dig
it g
row
th
6
Camtek semiconductor revenue and operating income ($m)
~15% OIgrowth from
leverage
More than doubled semi revenue organically from 2013 to 2017
Performance highlights
• Doubled semiconductor revenues 2013-2017
• Successfully improved profitability to 15% op. margin
• Strongest ever balance sheet: net cash $45m @ YE 2017
• Highest ever semi backlog: strong start to 2018 with a number of wins
• Significant margin improvement: expect to continue in 2018
• Growth engines to drive 2018+ performance
Goal: Double revenues again in next 3-5 years
Copyright of Camtek Ltd © 2017. All rights reserved
Semiconductor Market Growth Engines
Source: Cisco Global Cloud Index, Gartner, Camtek estimates
Mobility & Connected Devices
Autonomous Car
Digital Healthcare
Augmented & Virtual Reality
Artificial Intelligence & Machine Learning
Cloud
RF Filters MEMSAdvanced Packaging
Multiple Growth Drivers
244 TB/seconddouble year-over-year
8
Blockchain Technologies
Data Centers & Storage
Processing Power
2010 2017 2025Semi-market size $300B $400B $500-600B
9
9
Advanced Packing Driving Increased Inspection & Metrology Capital Spending
...and # of bumps/wafer is growing driving AOI spending growth much faster
Advanced Packaging penetration expected to double 2016-2020...
Copyright of Camtek Ltd. 2017 © All rights reserved
Automotive Industry Trends
10
Today ~70 electronics modules with 4-8k chipsBy 2020 ~100+ electronics modules expected
10
Most Cost effective solution for cracks detection that cause field failures
More than 90% correlation to IR Inspection
ICI – 4.9um /pixNormal – 1.7um /pix IR– 2.3um /pix focus on metal
FIB Cross Section
Inner Crack Imaging (ICI)
11
Our Target Segments Show Double-digit Growth
Source: Yole, Gartner, IC Insights% 2016-2022 CAGR
Cam
tek
Focu
s
7%
7.6%
7.6%
11%
12%
12%
19%
21%
Semi total
Foundry
Memory
RF
MEMS
CIS
3D IC
Fan-out
Ad
van
ced
P
acka
gin
g
Installed BaseBased on 800
machines installed worldwide
50%
20%
14%
16%
Advanced Packaging Inspectionand Metrology
CIS
RF/POWER/MEMS
General Inspection
12
Why Are We Winning?
High performance systems
Strong R&D
Flexible operation organization Excellent sales and CS
Dedicated employees
13
Copyright of Camtek Ltd © 2017. All rights reserved
Our Potential Market is Growing
Copyright of Camtek Ltd © 2017. All rights reserved
0 100 200 300 400 500 600 700 800
2015
2017
2019
2021
55
80
120
180
200
245
325
413
80
100
120
3D Bump Metrology ME 2D Inspection & Metrology Macro Inspection
Our share: ~27%
Our share (*): ~29%
(*) Excluding new market(**) CIS, RF, MEMS, General 2D, Post Dicing
Growth driven by demand for higher reliability, 100% inspection, defect-free products
Penetrate new marketMaintain leading position Increase market share (**)
Source: Yole, Gartner, Camtek
Strategic Plan Ahead
• Double Revenue in 3-5 years:
• Growth though organic growth and leverage cash for potential M&A
• Capitalize on new products
• Next generation metrology system
• Leverage strength in 3D: growth in 2D through new 2D capabilities
• Inner Cracks detection capability: brand new market solution
• Increased software sales – higher margins and recurring revenues
• New growth engines and new segments in expanding markets
• Macro inspection
• Leverage on Chinese market expansion where Camtek is well positioned
• Growing margins
• Operating leverage, lower ongoing expenses & increased software component
15
Ongoing Revenue Growth
16
Camtek Quarterly Revenue Growth (US$) since Q1 2016Q4 2017: record semi results:• $25.8m revenue; +20% YoY• GM of 48.7%, approaching
target model• operating income (non-GAAP):
$3.8m ;14.8% margin
Looking ahead…• based on highest ever level of
semiconductor backlog• Q118 revenue guidance of $26-
27m; +25% YoY• Double-digit growth for the
year;• 50% GM & 15% OM
16.8
19.821.0 21.5 21.1
22.723.8
25.8 26-27
Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118E
Progress to Long-Term Operating Model*
Double-digit growth from semi
100%
50-52%
Gross MarginRevenue
15-20%
Operating Margin
17
*Illustrative Purposes Only
17
46%
49%
2014 (inc. PCB)
2017
6%
11%
2014 (inc. PCB)
2017
Q4 2017 15%
Rafi Amit, CEO: “we expect double-digit revenue growth in 2018, and combined with our strong operating leverage, we expect to enjoy a strong year of profitability.”
drivers-> software sales, leverage drivers-> efficiencies, leverage
Investment Highlights
• End markets continue to grow quickly
• Focus on the fastest growing segments of the semiconductor industry
• Continued improvement in margins & profitability
18
Goal: double revenues again within 3-5 years
Thank you!
GAAP Financial Results
Annual Annual 2017
FY FY Q1 Q2 Q3 Q4
(US $ in Millions) 2016 2017
Revenues 79.2 93.5 21.1 22.7 23.8 25.8
Gross Profit 32.5 45.5 10.2 11.2 11.8 12.3
Gross Margin 41% 49% 48% 49% 50% 48%
R&D 12.7 13.5 3.5 3.4 3.2 3.5
16% 14% 17% 15% 13% 13%
SG&A 21.9 22.0 5.4 5.8 5.7 5.2
28% 15% 26% 26% 24% 20%
Reorganisation -4.1 - - - - -
Loss from litigation - 13 - 13 - -
Operating Profit (Loss) 30.5 -3.0 1.4 -11 2.9 3.7
Operating Margin 39% -3% 7% -48% 12% 14%
Continuing Operations 0.9 1.7 1.3 -5.7 2.8 3.3
Discontinued Operations 3.9 12.3 2 1.8 8.9 -0.5
Net Profit (Loss) 4.7 14.0 3.3 -3.9 11.7 2.9
Copyright of Camtek Ltd. 2017 © All rights reserved