Richard Blickman - CEO Cor te Hennepe - SVP, Finance

Nigel van Putten - ING Peter Olofsen - Kepler Cheuvreux Robert Sanders - Deutsche Bank Edwin de Jong - NIBC Markets

Good morning, and good afternoon ladies and gentlemen. Welcome to Besi's Quarterly Conference Call on the Audio Webcast to discuss the Company's 2016 Fourth Quarter and Annual Results. The audio webcast is available on Besi's Web site www.besi.com. Joining us today are Mr. Richard Blickman, Chief Executive Officer; and Mr. Cor Te Hennepe, Senior Vice President of Finance. At this time, all participants are in listen-only mode. Later, we will conduct the question-and-answer session, and instructions will follow at that time. As a reminder, ladies and gentlemen, this conference is being recorded and cannot be reproduced in whole or in part without written permission of the Company. Now, I'd like to turn the call over to Mr. Richard Blickman. Go ahead please.

Thank you. Thank you all for joining the call today. We will begin by making a few comments in connection with the press release we issued earlier today, and then take your questions. I would like to remind you that some of the comments made during this call and some of the answers in response to questions by management may contain forward looking statements. Such statements may evolve uncertainties and risks as described in the earnings release and other reports filed with the AFM. For today's call, we'd like to review the key highlights for our fourth quarter and year-ended December 31, 2016, and also spend some time updating you on the market, our strategy and the outlook; first, on overall thoughts on the past quarter and year-to-date results. 2016 was a year of unexpected industry growth, strong financial performance and strategic positioning for the future. Besi generated revenue of €375.4 million and net income of €65.3 million, increases of 7.5% and 33.3% respectively versus 2015. Net income grew even more rapidly than sales this year as gross margins reached 51% and cost control initiatives kept expense growth in check. In addition, our financial position strengthened with net cash at year-end reaching €168.1 million, an increase of 23.2% versus 2015. Revenue growth both progressively during 2016 stimulated by expanded investment by Chinese and Taiwanese subcontractors for new state-of-the-art advanced packaging capacity, accelerating demand for flash memory devices, and a continued proliferation of intelligent automotive electronics. In addition, growth was aided by a new technology cycle, which encouraged capital spending for next generation below 20 nanometers application. In the smartphone arena, there was expanded customer investment in more advanced features and functionality, such as fingerprint sensors and advanced dual camera and flashlight modules. The second half 2016 witnessed much stronger than anticipated order, revenue, and profit levels with particular strength in the fourth quarter. During a traditional weak period of the year, revenue and net income reached €93.1 million and €16.7 million respectively and significantly exceeded expectations. In addition, gross and net margins rose to 53.2% and 18% respectively. Besi’s results significantly exceeded guidance due primary to much stronger than anticipated shipments of epoxy and flip chip die bonding systems for mobile and automotive applications, and faster customer cycle times. Our quarterly and annual results reflect industry benchmark gross and net margins, highlighting the strength of our advanced packaging portfolio in the marketplace. Besi's capital allocation policy seeks to provide recurrent return to shareholders, while retaining sufficient cash to fund future growth opportunities. In aggregate, total dividends and share repurchases of 67.8 million in 2016 increased by 11.3% versus 2015, and since 2011, totaled €186 million. In September, we completed the 2015 buyback program under which 1 million shares for repurchased for €22.5 million. Upon completion, we initiated a new 1 million share repurchasing program in October under which we bought so far 227.907 shares for €7.4 million through February 22nd. In total, we have approximately 2.8 million shares in treasury currently at an average price of €13.47 per share. Given continued strong cash flow generation, our healthy financial position and prospects, we propose to pay a 2016 cash dividend of €1.74 per share, of which €0.35 per share represents a special dividend for approval at Besi's AGM on May 1st of this year. The proposed distribution represents 35% increase versus 2015 and is the seventh consecutive payment. The proposed payout ratio relative to net income is 100% in 2016 versus 93% in 2015. With that, I'll turn the presentation over to Cor.

Thank you, Richard. As Richard mentioned, we had a much better financial performance than anticipated at the start of 2016. Latest Q4 '16 revenue decreased by only 1.3% versus Q3 '16 as we experienced particularly strong customer demand for flip chip and multi module die bond systems for mobile and automotive applications versus Q4 '15 revenue increased by 19.7% due primarily to higher demand from our Asian subcontractors for new advanced packaging capacity and improved industry conditions. Similarly, orders increased by 17% versus Q3 '16 and by 18.2% versus Q4 of '15. Order strength of board-base with subcontractor orders up sequentially by €5.8 million or 16.9%, our IDM orders increased by €7.5 million or 17.2%. For the year, Besi's revenue and orders grew by 7.5% and 7.3% respectively and particularly strong growth experienced by our leading epoxy, multi module and eWLB die bonds, and ultra-thin molding equipment for mobile and automotive applications. Orders by IDMs and subcontractors were roughly equal. Given the change in our customer profile and production model in recent years, the euro is becoming less prominent as a transactional currency. About 70% of our revenue is in USD which has fluctuated between 65% and 75% in recent years. However, on the cost side given our agent producing transfer and diversification and Malaysian Ringgit, Chinese Renminbi, and Singapore dollar has become more important versus the Euro and Swiss Franc. In fact, agent-based costs now represent 45% of total costs versus 50% three years ago. We expect this trend to continue. Besi's gross margin of 53.2% in Q4 '16 increased about 2.7% versus Q3 '15 and by 3.2% versus Q4 '15. Similarly, for the full year, gross margins reached 51%, an increase of 2.2%. In general, Besi's gross margins continued to benefit from the optimization of our Asian production and supply chain, shorter lead-times, improved working capital management, and tailwinds from a stronger dollar and weaker Malaysian Ringgit versus the euro. OpEx trends for the quarter and the year reflects the benefits of Besi's ongoing cost control initiatives. Although, Q4 '16 operating expenses increased sequentially by €1.6 million or 5.7%, baseline OpEx increased by €0.2 million. The €1.6 million increase was primarily due to higher performance-based compensation and one-time consulting costs from our strategic planning work. For the year, OpEx growth of €3.8 million was due to similar factors, as well as increased warranty expenses related to higher sales levels. OpEx actually decreased by €0.8 million or 0.7% versus 2015 when you exclude restructuring benefits taken in 2015 and strategic consulting costs in this year. Consistent with better than expected revenue and gross margin, Besi's Q4 '16 net income was up by €0.1 million versus Q3 '16. Moreover, net income was up by €7 million or 72.2% versus Q4 '15, and net margins were up strongly to 18% versus 12.4%. Similarly, 2016 net income increased by €16.3 million versus 2015 with net margins growing from 14% to 17.4%. Our financial position continued to improve in 2016. At year-end, Besi's cash and deposits increased by €150.5 million versus Q3 '16 to reach €304.8 million, primarily due to the net proceeds from the €125 million convertible note offering in December. In addition, net cash increased sequentially in Q4 '16 by €36.2 million to reach €168.1 million due to profit generation and improved working capital management. This was partially offset by €4.5 million of share repurchase made. On a year-over-year basis, net cash increased by €31.6 million or 23% due to strong profit and cash flow generation. Cash flow from operations reached €98.7 million in 2016, an increase of 14.1% versus previous year. Cash flow was utilized primarily to enhance shareholders returns in the form of €67.4 million paid in dividends and share repurchase. And with that, I'll turn the presentation back over to Richard. A - Unidentified Company Speaker: Now, I'd like to update you on our strategy, the markets and our targets for the first quarter of this year. Besi's strategy focuses on technological leadership and assembly equipment markets with the greatest long-term potential. Of equal importance, we seek to reduce costs to enhance our competitive position and increase profitability. On the product side, we’ve refreshed systems every one to two years to meet ever demanding industry specs with speed, accuracy and miniaturization. In addition, we are at a forefront of leading edge technologies, such as fan out, wafer level processing, TCB, thin dies, and wafer level molding, all of which have favorable influence on revenue developments last year. On the operational side, our strategy seeks to generate at the high-end levels of through cycle profitability and cash flow from the execution of initiatives designed to further reduce European structure cost, move operations close to customers, and improve cycle times and working capital management. In 2016, we executed all key operational and R&D initiatives, including an update of our strategic planning. Key objectives for 2017 include ramping our production and supply chain to meet projected industry growth. We’re facing products so that we maintain advanced packaging leadership, further reducing European based costs and assimilating newly hired Singapore and Chinese personnel. One important initiative this year was the expansion of our local Chinese production capabilities. We decided to set-up parallel production in 2014 with certain die bonding lines at Besi’s Beijing China facility, dies specifically for the local of chine markets. By such actions top selling epoxy and multi-module diagonal systems produced at Beijing, APAC and Malaysia could also be tailored specifically for local Chinese customer demand. In this way, we could better increase local brand equity and further reduce cycle times and cost. The timely expansion of Besi’s Chinese production capacity favorably coincided with the launch by the Chinese government of a five year plan to become the greater force in global semiconductor markets. To meet strong demand, we could double production [indiscernible] from 33 units in 2015 to 139 units in 2016, reflecting growth of this important markets Besi’s revenue from Chinese customers increased to 30% of consolidated revenue versus 23% in 2015. Looking forward, there still remains much unrealized potential to increase Besi’s market position and profitability in the years ahead. We completed in the fourth quarter a comprehensive review of our business strategic positioning and cost structure with an independent consulting firm. Revenue and cost initiatives were agreed for implementation over the next five years. Key actionable items included initiatives to increase our share of high and mid range segments of assembly equipment market and further drives structural cost reductions by a continued west to east personnel transfer, acceleration of our common platform initiatives and further optimization of our Asian supply chain. In addition, Besi's issuance of the convertible note will help us, amongst others, to get realize on the future growth opportunities in this next growth phase. Now, couple of words about the markets and our first quarter guidance [indiscernible] forecast continued industry growth of 9.3% and 5.3% in 2017 and '18 respectively. Global geopolitical developments add an element of uncertainty to the path of global GDP growth and assembly equipment trends this year but the underlying industry baseline still to be as favorable. Low return there're many reasons to be optimistic about the industry prospects, exciting new applications for the digital society, such as driverless and electric cars, artificial intelligence, virtual reality and increased automation in our daily lives will complement the ongoing mobile and cloud revolutions. Such applications provide strong underpinning for future growth in equipment spending. In addition, a new technology cycle is underway, which will require new advanced packaging solutions. This is also a favorable growth driver for our business. Besi's first quarter 2017 guidance, gross for revenue growth of 15% and 20% versus the first quarter of last quarter based on strong Q4 '16 bookings. The midpoint of revenue guidance suggests substantial growth versus the first quarter of 2016 of around 38%. All the patterns to-date in 2017 confirm a continued industry upswing well into the first half year with Besi's bookings to-date in the first quarter significantly exceeding levels realized in all of the fourth quarter last year. We are scaling our agent supply chain and production capabilities rapidly to me anticipated demands. In Q1 '17, gross margin is expected to be in the range between 52% and 54%, and OpEx should increase by 5% to 10% sequentially, mostly due to higher share base incentive compensation expense. We anticipate that our tax rate will remain in the 10% to 15% range for the full year of 2017. That ends our prepared remarks. And I would like to open the call now for some questions. Operator?

Ladies and gentlemen, we'll start the question-and-answer session now [Operator Instructions]. The first question is coming from Mr. Nigel van Putten, ING. Go ahead please.

I have two questions, first on the advanced packaging applications, you already alluded just now. Could you perhaps provide some estimate of how big that segment is now relative to your overall revenue for last year? And what you believe the growth rate might be in the near-to-medium term? And then as a follow-up also on the market, 2016, in terms of absolute revenue, euro was already quite close to the absolute record in 2014. But this year, 2017, seems particularly strong in terms of growth rate at least so far, and also in terms of your guidance. Could you perhaps contrast this up cycle to the previous one, what might be similar or different, and particularly what the sustainability of this cycle going forward?

Let's answer your first question. And as a percentage of revenue, advanced packaging applications is around 30%. It's of course somewhat subjective for definitions of what really is contained in advanced packaging. But if we focus on [indiscernible] TCB also the directly attached for the high end processers, those are the most predominant advanced packaging. You could also argue that fingerprint sensors, stacking of routers and dies, also are part of the advanced packaging. But that's a question of definition. You could say overall Besi is of course focused on the high-end of advanced packaging, but the major part of our revenue is in the high end of the overall applications of semiconductor assembly in the three areas computing area, telecommunication devices, smartphones, et cetera, and also automotive. Those are the three cornerstones. And revenue wise, it's about 25% computer world, slightly over 30% communication devices, and around 18% to 20% automotive. On your second question, the growth rate for '17, if we look at the current guidance for the first quarter, the quick math tells you that we will not be far off from the peak in the second quarter of 2014. About 8% to 10% depends a bit. Then if you take the guidance we gave on the order intake so far until February 23rd, which is significantly above the total order intake in Q4, you could imagine that all things moving positively forward second quarter should be higher than the first quarter. How much, we do not guide. And so how will this unfold? As it looks now stronger than what we had in the last peak cycle. Whether this year will be the big, is also questionable. CFSI expects ongoing growth, a broad based strong eighth quarter growth trajectory for investments in CapEx, driven by new technology cycle, also Chinese expansion. So this could be with those elements, a stronger growth cycles than the previous one. But this is all to be seen. As we know, we are highly dependent upon GDP. So whatever happens in the worldwide economical situation will have the direct impact on the demand for semiconductor equipment. Does this answer your questions?

[Operator Instructions] The next question is coming from Peter Olofsen, Kepler Cheuvreux. Go ahead please.

I had a couple of questions actually, maybe first one. If I look at Q4 and also Q1, sales are clearly higher than what you have as the order backlog going into the quarter. So that's quite some orders that you already shipped within the quarter. Is that coursing any capacity constraints on your side? And do you see any rich orders from your clients, or are you well able to manage the increase in demand?

The first is of course proven by what we have demonstrated in several quarters last year, but also the year before, we are able to adopt our ramps evermore faster. So several years ago, we had quarterly defined revenue more or less by backlog at the end of the quarter. We can now ship for many products in four to six weeks and that end with underlying demand strengths, translates into higher revenue and backlog at the end of the previous quarter. Are there bottlenecks? So, far there are no bottlenecks. So, we are able to ramp. We've demonstrated in the past ramps quarter-over-quarter by 80%. And that we have further improved. So, the key is of course to be able to turn around any business in a time frame of a quarter and even shorter for many for our products.

Then maybe looking at seasonality in your business, I think in the past, typically H1 was a bit better than H2. We didn't really see that last year when the business remained very strong in the second half. And any thoughts on what seasonality we might see in 2017. And maybe on the outlook for Q1, is there any effect from the fact that Chinese New Year is relatively easy early this year, is that affecting the dynamics in terms of sales and order trends?

First of all, you're asking the seasonality in the year. This industry is well known that the first half year is typically stronger than the second half year. And that has to do with the launch of new end products, mostly in the second half of the year and sometimes with certain consumer products Christmas sales focus. Whether that in 2017 will be the same is to be seem, but that also ties to the first question. We manage this business on a weekly planning basis. And whether we go up or whether we go down, it is for us important to response immediately to market changes both up and down. Chinese New Year, the impact for the first quarter, there is no relationship between when Chinese New Year, whether it's early or somewhat later. What is often the case is that before Chinese New Year sub-contractors are not yet really moving and they typically move directly after Chinese New Year with new orders. And this year with the order trends what we have guided that is somewhat different. But that is -- there is no direct link.

But you already saw some quite descent ordering before the Chinese New Year?

Yes we have to. Otherwise, we would not be able to make these statements.

Then coming back on the earlier question, the Nigel on advanced packaging, you mentioned eWLB and TCB. There was a lot of talk about eWLB or BSN are driving packaging last year. Do you expect fan out rate for wafer related spending in '17 to be up compared with '16? And when it comes to TCB, it seems that 2016 was relatively quiet. Do you think 2017 will be a better year for TCB?

So we have always, in the past several years, tried to inform you that these new developments take time, simply because it's a matter of cost and also whether the previous technologies can be further stretched. So, the life cycles lengthened. And every year there is a certain push by certain technologies, whether that’s logic or memory specific applications where customers are trying to push the envelope. Last year was a specific eWLB fan out investment round, less in TCB that was more in '15. Next year, '17 still to be seen. There are some programs of course further span outs eWLB, but there is also, and look at the bookings information we provided so far, and also pointing towards China. In many of the high-end products, there is still a significant sub-straight shifted based assembly solutions, which are definitely leading edge technology. So it's not all fan out or eWLB or TCB, in an immediate shift. Gradually, year-by-year, you will see more adoption simply forced by ever smaller design geometry on chip level. So concluding this year, yes, some more in fan outs, some more maybe again in TCB. But don’t expect that to take over the entire markets.

Then I had a question on the slide on the 2017, 2021 initiatives, where you talk about expanding market share in mainstream assembly. Are you referring to the S&P market, or are you referring maybe moving lower in your existing markets? It's not pretty clear to me which market you will address?

First of all, it's not any S&P market. We’re not going downstream.

Okay.

If you also look at the slides we updated regularly on the channel, as well as at certain customers, at key customers also. Today, 50-50 split revenue [IBMs or Samsung]. The statement is very much clear to with the further reduction of our cost base in Asia, the faster turnarounds, cycle times, we already see that. We are convinced that there is still much more in that market we can address successfully also with high margins. So, that is behind statement; so not new markets but expanding market shares in existing markets with similar gross margins, which directly translates to the bottom line.

That brings me to my final question. In recent quarters, we saw gross margin of around 50% and now in Q4, and also Q1 it's more like 53%. That is a sustainable margin, even with you going more into main stream?

As I just said to repeat that, but we've said that many times. This is not a market where your fate is determined on market share. You have to be very much focused on those applications where your product is really better than that of your competitors, and that determines your pricing. And at the same time, when you continue to reduce your costs with also the initiatives, which we have again tried to explain to you, it's not only cost on supply chain selections but also further development of common modules, common products, and also expanding production in China, so more closer to the Chinese customers. And those effects are translating into ever stronger gross margins. On the other hand, and we've also said that in the notes and [indiscernible], two years of course exchange rates. This industry is very much a dollar industry, and a dollar industry ties to the strength of the U.S. economy, and those influences are very important for overall gross margin. So, you can also say we've had tailwind as we have mentioned in the notes from a high dollar, a weak euro, this offsets by a strong Swiss Franc, but less since we've moved a lot of the applications and support to Singapore; 2015 mainly, we've low Malaysian Ringgits, Chinese currency is still low; but if these things change, at least look at the metrics in our presentation, that will have an impact on the sustainability of our gross margins. But that is something which is an effect for all of us.

The next question is Mr. Robert Sanders, Deutsche Bank. Go ahead please.

My first question was around camera modules, just the trend that dual cameras in smartphones. I know your exposure is not as great as high as Asia-Pacific. But I was just wondering if you could quantify the impact that you've seen from that trend there on your orders, I mean SNBT talks about it being 10% of their sales, so that would my first question. Can you just give some color around that? Second one would just be around the fan out trend. Does seem like the span out trend does seem to be losing a bit of momentum, maybe tracking high convention to be moving forward with info,. And a lot of the customers are swift to struggling with the cost and complexity. So I was just wondering if you saw any potential in the panel level of fan out market, because certainly that's something that we're seeing as a new trend and how you get to that. Thank you.

First of all, we are fortunate that we are not exposed to any of our products to an extent; first of all, the top 10 customers represent 47% of revenue and there's no customer with a larger revenue percentage of about 80%. So, on the other hand and we have a beautiful slide on that, about 70% of the active components in smartphones are manufactured with Besi equipment. So, yes, the dual camera module is a special module. We deliver for that all the equipment, which makes the brackets, but then they're also lenses and also other components. But we have fingerprint sensors where we have a very large share, but they're also all kinds of other components. As I mentioned earlier, just over 30% of our revenue, which is quite a lot, is related to mobile Internet devices. And on the other hand what is also important to note, we are very strong in a broad base of smartphones. Chinese, the leading edge Chinese models also our technology and that also ties in to your second question, the envelope of existing flip chip interconnect technologies using --not using fan out but using substrate still is, from a cost but also performance. So far similar to that of using wafer level solutions using fan out, and the cost is significantly higher of this fan out technology. So, in that sense, you're very-very right in your statement. The breakthrough is not yet as one might have expected with all the commentary from many in those areas. We think it will still take several generations before the limitations of current assembly technology will force the world into wafer level solutions. Simply, technology will force at some point that transition. So, it will happen, the question is only when. Your question about peril is maybe somewhat different, that's another way of reducing costs. So if you look today at the density of the assembly of devices in every nature, there's a lot of development going on to increase that density. And by that way, reducing the cost by less equipment needed for the same volumes. We are enforced that since many years. We've been right in the forefront of the ever further increase of that density. And panel is used simply because some designs go as far as 540 by 540 millimeter perils, but that is still very early days. So, that’s in our direction to reduce further costs by higher density differences. Does this answer your questions?

And next question is Mr. Edwin de Jong, NIBC. Go ahead please.

A couple of questions left, and also getting back to Peter's question on improving the position in mainstream assembly. So should we think of flip chip maybe even the lower flip chip, or is that the direction we should look at in mainstream assembly?

No, there are several areas start with epoxy die molding is a nice avenue. Simply because we were able to increase the throughput from 13,000 UPAs to 18,000 for ultra thin devices has increased our market share last year significantly. And that is in the big mainstream of semiconductor assembly, Android systems are not only faster but they are more flexible easy to program. So, many customers in China manage their contractors, simply because of these features by our machines in the mainstream applications. Flip chip is still a smaller segment. Yes, we are very successful in flip chip and ever more, but that is not the area which we mean specifically without tending the mainstream.

So then we're talking about epoxy die bonder, but do you have -- or a simple shortfall…

Same with molding, which is [indiscernible] is very strong at this moment with also the same reason, cost which is very comparative, machines which are faster, more accurate and it's all about cost of running these products, and that's let's say in a higher sense it's technology, it's more dominant but also cost on more of the mainstream. It is both technology and very much the cost. So, these systems are tested every single day side-by-side with our competitors and the true cost of ownership we are winners in more and more areas. So, it's not looking at new markets, not going downstream. It's focus on building the best cost of ownership systems in the world.

That may reach you up…

Everyone still…

And then maybe still on [indiscernible] and then also on wafer level packaging and TCB, could you maybe just frame a little bit what the position is of competition nowadays? Are they getting more in-roads or are you still more or less the only one in these fields?

No, we're never the only one. But the important thing to understand is that, first of all, the requirements from the customers are not 100% fixed. And even more so far less than 100%. There are choices to be made on all these process requirements. So we have to choose for which applications do redevelop our system solutions, whether that’s in fan out or TCB, or any of these new developments. And that’s unknown that is general roadmap saying that at some point using sub straights as interposer is not any more feasible. So wafer level is determined simply by the requirements of interconnect but still then in that work, there are different choices and are competitors, and we are choosing different avenues. And in the end, it's still unknown which will be the prevailing solution.

Okay, so basically -- mainly for the interconnect…

Yes. But you can say on average, the Japanese are certainly focused on the most far reaching type specifications. Asian companies are more focused on the faster solutions, which with less advanced accuracies and we are somewhere in the middle. And so far in the middle seems to be a very good choice. It's not an easy -- so the telephone explaining always a bit -- you have to be careful, because you generalize but the main message is they are definitely competitors because simply these new technologies was higher cost systems will increase the total markets for the interconnect of those devices and there are models which predicts that from a 3.5 billion market today our assembly equipment markets may well go to 6 billion in the next step using wafer level et cetera. So, there are many companies focusing on those exciting growth areas.

And what Besi still needs is probably a company or equipment that can reduce the interconnect, is that…

No, there are simple processes, which we do not service today. So, if you take the whole process flow for wafer level, we deliver beautiful fan outs systems or some molding systems, simulation for the certain applications. But there are many process steps in between where we do not offer any equipment. So, there is still a huge world open in the next years to come with very interesting growth.

And then my last one -- two question lastly on cycle times. So, the cycle times have been reduced to four to six weeks now, and that’s what I see, which is stated in the presentation I think before, has come down quite a lot, I think. But could you give an idea of how much it has to make? Was it two years ago, six to eight weeks and, and can it go even further to let's say two to four weeks?

Well, this is in eight to 10 weeks four years ago, and by moving to Asia by changing designs also dramatically changing our whole supplier base, we have been able to reduce that. And of course we are reducing that further. As I mentioned, China, for Chinese customers this is very important because it takes out transportation and import process, at least four weeks. So the delivery to the shop floors to customer is really four weeks reduced by building the systems in China. But that's where it's all about.

That’s probably also one of the reason that you have not -- that’s not necessary to invest a lot in the new facility, or so?

We have invested timely in new facilities. And as we've mentioned in the past responding to questions about it, we are definitely able to handle the expected growth in our current facilities. And with China ramping, this will even give us more capabilities expanding volume in the future.

And the last question is on solar. How is that developing at the moment?

Solar, you can say has witnessed in the last two years reasonable recovery that has slowed down somewhat, whether that has to do with change of administration in America, is a question. And some programs have been pushed out. On the other hand, our technology is being proven better and better. So we expect definitely again some pick-up in the solar world going forward.

So, 5% of revenues now?

Slightly less, because revenue is growing a bit more, but around 5%, yes. [indiscernible] semiconductors is doing again very well, so some offset between last year's stronger solar, but now stronger semiconductor.

The next question Mr. Peter Olofsen with Kepler Cheuvreux. Go ahead please.

Yes, I had a follow-up on cash. I know this that you have invested 80 million in deposits. Do you still confirm that you have immediate access to that money, or are there any restrictions there?

No significant restrictions.

So, basically it's cash.

Yes.

[Operator Instructions] Mr. Chairman, there are no further questions.

We thank everyone for taking the time and asking questions. If there're any further questions, you know where to reach us. Thank you very much. Bye-bye.

Ladies and gentlemen, this will conclude the Besi conference call and the audio webcast. You may now disconnect your line. Thank you. Have a nice day.