BE Semiconductor Industries N.V.

Interim / Quarterly Report • Jul 31, 2013

BE SEMICONDUCTOR INDUSTRIES N.V.

DUIVEN, THE NETHERLANDS

UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2013

Contents Unaudited Condensed Interim Consolidated Financial Statements June 30, 2013

Contents	2
Condensed Interim Consolidated Financial Statements Six Months Ended June 30, 2013
Board Report Condensed Interim Consolidated Statement of Financial Position Condensed Interim Consolidated Statement of Comprehensive Income Condensed Interim Consolidated Statement of Cash Flows Condensed Interim Consolidated Statement of Changes in Equity Notes to the Condensed Interim Consolidated Financial Statements	3 5 6 7 8 9
Review Report	10

Semi-annual financial report

This report contains the semi-annual financial report of BE Semiconductor Industries N.V. ("Besi" or "the Company"), a Company which was incorporated in the Netherlands in May 1995 as the holding company for a worldwide business engaged in one line of business, the development, production, marketing and sales of backend equipment for the semiconductor industry. Besi's principal operations are in the Netherlands, Switzerland, Austria, Asia and the United States. Besi's principal executive office is located at Ratio 6, 6921 RW Duiven, the Netherlands.

The semi-annual financial report for the six months ended June 30, 2013 consists of the condensed consolidated semi-annual financial statements, the semi-annual management report and responsibility statement by the Company's Board of Management. The information in this semi-annual financial report is unaudited.

The Board of Management of the Company hereby declares that to the best of their knowledge, the semi-annual financial statements, which have been prepared in accordance with IAS 34, "Interim Financial Reporting" as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Company and the undertakings included in the consolidation taken as a whole, and the semi-annual management report gives a fair review of the information required pursuant to section 5:25d(8)/(9) of the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht).

Duiven, July 30, 2013

Richard W. Blickman Cor te Hennepe

President & CEO Senior Vice President Finance

Management Report

Performance

For the first half year of 2013, Besi's revenue decreased by € 6.3 million or 4.4% to € 136.5 million as compared to the first half year of 2012 due to lower sales of multi module die attach systems for high end smart phones. The revenue decrease was partly offset by higher shipment of epoxy die bonding systems for mainstream electronics applications and increased packaging system sales principally for smart phones and tablet applications.

Orders for the first half year of 2013 were € 146.5 million, down by € 28.9 million, or 16.5%, as compared to the first half year of 2012 reflecting decreased demand for Besi's advanced packaging systems for tablet, smart phone and automotive end user applications partially offset by increased orders for die attach systems serving mainstream electronics applications.

For the first half year of 2013, Besi recorded net income of € 10.3 million versus € 10.2 million for the first half year of 2012. Lower revenue and gross margins in the first half year were offset by (i) € 0.8 million of increased financial income, net due to foreign exchange gains on hedging activities, (ii) € 0.6 million of lower operating expenses and (iii) a lower effective tax rate (22.3% vs 33.0%) due to change in the profit mix of its European subsidiaries.

At the end of the second quarter of 2013, Besi's cash and cash equivalents declined to € 81.1 million, a decrease of € 25.3 million versus December 31, 2012, while total debt and capital leases decreased by € 2.0 million to € 24.9 million. As a result, net cash decreased by € 23.3 million to € 56.2 million. The net cash reduction in the first half year of 2013 was necessary to finance (i) a € 21.1 million increase in working capital related to revenue growth and order ramp in the first half year, (ii) € 11.2 million of cash dividend payments, (iii) € 2.7 million of repurchased treasury shares, (iv) € 4.2 million of capitalized development spending and (v) € 1.5 million of capital expenditures.

Risks and uncertainties

In our Annual Report 2012, we have extensively described certain risk categories and risk factors, which could have a material adverse effect on our financial position and results. The Company believes that the risks identified for the second half of 2013 are in line with the risks that Besi presented in its Annual Report 2012.

Condensed Interim Consolidated Statement of Financial Position

(euro in thousands)	Note	June 30, 2013	December 31, 2012
		(unaudited)	(audited)
Assets
Cash and cash equivalents		81,140	106,358
Trade receivables		79,313	58,552
Inventories		76,626	69,403
Income tax receivable		727	897
Other receivables		4,946	5,689
Prepayments		3,241	1,909
Total current assets		245,993	242,808
Property, plant and equipment Goodwill		25,212 43,973	26,061 43,854
Other intangible assets		34,072	32,858
Deferred tax assets		15,879	16,345
Other non-current assets		1,518	1,476
Total non-current assets		120,654	120,594
Total assets		366,647	363,402
Liabilities and equity
Notes payable to banks		21,862	24,513
Current portion of long-term debt and financial leases		413	415
Trade payables		33,655	24,010
Income tax payable		7,749	6,661
Provisions		6,706	9,420
Other payables		12,781	14,010
Other current liabilities		7,050	3,965
Total current liabilities		90,216	82,994
Long-term debt and financial leases		2,622	1,926
Deferred tax liabilities		4,410	4,481
Other non-current liabilities		9,115	9,050
Total non-current liabilities		16,147	15,457
Issued capital		36,431	36,431
Share premium		188,078	190,134
Retained earnings		21,492	22,486
Foreign currency translation adjustment		17,791	19,409
Accumulated other comprehensive income (loss)		(4,778)	(4,666)
Equity attributable to equity holders of the parent		259,014	263,794
Non-controlling interest		1,270	1,157
Total equity	5	260,284	264,951
Total liabilities and equity		366,647	363,402

Condensed Interim Consolidated Statement of Comprehensive Income

(euro in thousands, except share and per share data)	For the six months ended June 30,
	2013	2012
	(unaudited)	(unaudited)
Revenue	136,456	142,792
Cost of sales	81,811	84,658
Gross profit	54,645	58,134
Selling, general and administrative expenses	28,386	29,305
Research and development expenses	13,620	13,319
Total operating expenses	42,006	42,624
Operating income	12,639	15,510
Financial income	831	350
Financial expense	(270)	(603)
Income before taxes	13,200	15,257
Income tax (benefit)	2,945	5,040
Net income	10,255	10,217
Attributable to:
Equity holders of the parent	10,174	10,090
Non-controlling interest	81	127
Net income	10,255	10,217
Other comprehensive income (loss):
(will be reclassified subsequently to profit and loss when
specific conditions are met)
Exchange rate changes for the period	(1,587)	2,031
Unrealized hedging results	(112)	(338)
Other comprehensive income (loss) for the period,
net of income tax	(1,699)	1,693
Total comprehensive income (loss) for the period	8,556	11,910
Total comprehensive income (loss) attributable to:
Equity holders of the parent	8,444	11,759
Non-controlling interest	112	151
Income (loss) per share attributable to the equity holders
of the parent
Basic Diluted	0.27 1 0.27	0.27 1 0.27
Weighted average number of shares used to compute
income (loss) per share
Basic	37,366,454	37,028,658
Diluted	37,581,9271	37,385,1661

1 The calculation of the diluted income per share assumes the exercise of the equity settled share based payments.

Condensed Interim Consolidated Statement of Cash Flows

(euro in thousands)	For the six months ended June 30,
	2013	2012
	(unaudited)	(unaudited)
Cash flows from operating activities:
Operating income	12,639	15,510
Depreciation, amortization and	4,815	5,757
impairment Loss (gain) on disposal of assets	(71)	1
Share based compensation	681	(241)
Other non-cash items	15	-
Effects of changes in working capital	(21,144)	(20,978)
Income tax received (paid)	(713)	(502)
Interest received	513	377
Interest paid	(138)	(385)
Net cash provided by (used for) operating activities	(3,403)	(461)
Cash flows from investing activities:
Capital expenditures	(1,476)	(1,669)
Capitalized development expenses	(4,240)	(6,441)
Proceeds from sale of property, plant and equipment	120	-
Net cash provided by (used for) investing activities	(5,596)	(8,110)
Cash flows from financing activities:
Proceeds from (payments on) bank lines of credit	(2,438)	2,267
Proceeds from (payments on) debts and financial	696	708
leases
Dividend paid to shareholders	(11,168)	(5,093)
Purchase treasury shares	(2,737)	(109)
Other financing activities	-	-
Net cash provided by (used for) financing activities	(15,647)	(2,227)
Net change in cash and cash equivalents	(24,646)	(10,798)
Effect of changes in exchange rates on cash and cash	(572)	586
equivalents
Cash and cash equivalents at beginning of the period	106,358	87,484
Cash and cash equivalents at end of the period	81,140	77,272

Condensed Interim Consolidated Statement of Changes in Equity

(for the six months ended June 30)

(euro in thousands, except share data)	Number of Ordinary Shares outstanding1	Issued capital	Share premium	Retained earnings (deficit)	Accumulated other comprehensive income (loss)	Total attributable to equity holders of the parent	Non controlling interest	Total equity
Balance at January 1, 2013	40,033,921	36,431	190,134	22,486	14,743	263,794	1,157	264,951
Exchange rate changes for the period Unrealized hedging results	- -	- -	- -	- -	(1,618) (112)	(1,618) (112)	32 -	(1,586) (112)
Other comprehensive income	-	-	-	-	(1,730)	(1,730)	32	(1,698)
Net income (loss) Total comprehensive	-	-	-	10,174	-	10,174	81	10,255
income for the period	-	-	-	10,174	(1,730)	8,444	113	8,557
Dividends to owners of the Company Shares bought and taken into equity	- -	- -	- (2,737)	(11,168) -	- -	(11,168) (2,737)	- -	(11,168) (2,737)
Equity-settled share based payments	-	-	681	-	-	681	-	681
Balance at June 30, 2013 (unaudited)	40,033,921	36,431	188,078	21,492	13,013	259,014	1,270	260,284
Balance at January 1, 2012	40,033,921	36,431	190,741	13,123	14,746	255,041	1,022	256,063
Exchange rate changes for the period Unrealized hedging results	- -	- -	- -	- -	2,007 (338)	2,007 (338)	24 -	2,031 (338)
Other comprehensive income	-	-	-	-	1,669	1,669	24	1,693
Net income (loss)	-	-	-	10,090	-	10,090	127	10,217
Total comprehensive income for the period	-	-	-	10,090	1,669	11,759	151	11,910
Dividends to owners of the Company Equity-settled share based payments	- -	- -	- (241)	(5,093) -	- -	(5,093) (241)	- -	(5,093) (241)
Balance at June 30, 2012 (unaudited)	40,033,921	36,431	190,500	18,120	16,415	261,466	1,173	262,639

1 The outstanding number of Ordinary Shares includes 2,804,313 and 2,404,773 Treasury Shares at June 30, 2013 and January 1, 2013 respectively (2,253,143 at June 30, 2012 and 3,346,853 at January 1, 2012 respectively).

Notes to the Condensed Interim Consolidated Financial Statements

1. Corporate information

BE Semiconductor Industries N.V. ("Besi" or "the Company") was incorporated in the Netherlands in May 1995 as the holding company for a worldwide business engaged in one line of business, the development, production, marketing and sales of back-end equipment for the semiconductor industry. Besi's principal operations are in the Netherlands, Switzerland, Austria, Asia and the United States. Besi's principal executive office is located at Ratio 6, 6921 RW, Duiven, the Netherlands. Statutory seat of the Company is Amsterdam.

2. Basis of preparation and accounting policies

Statement of Compliance

The condensed interim consolidated financial statements for the six months ended June 30, 2013 have been prepared in accordance with IAS 34 as adopted by the EU.

The accounting policies adopted are consistent with those applied in the IFRS consolidated financial statements for the year ended December 31, 2012.

The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Besi's annual financial statements as at December 31, 2012.

Changes in accounting policies

IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, IFRS 12 Disclosure of Interests in Other Entities (2011)

IFRS 10 introduces a single control model to determine whether an investee should be consolidated. Under IFRS 11, the structure of the joint arrangement, although still an important consideration, is no longer the main factor in determining the type of joint arrangement and therefore the subsequent accounting. IFRS 12 brings together into a single standard all the disclosure requirements about an entity's interest in subsidiaries, joint arrangements, associates and unconsolidated structured entities. The Company adopted the standard on January 1, 2013.

IFRS 13 Fair Value Measurement (2011)

IFRS 13 provides a single source of guidance on how value is measured, and replaces the fair value measurement guidance that is currently dispersed throughout IFRS. Subject to limited exceptions, IFRS 13 is applied when fair value measurements of disclosures are required of permitted by other IFRSs. The Company adopted the standard on January 1, 2013.

Segment information

The Company has changed its internal organizational structure and the management structure in 2009. The Company identifies four operating segments (Product Groups). Each Product Group is engaged in business activities from which it may earn revenues. Consequently, the Company has defined each Product Group as individual cash-generating unit. The four Product Groups are aggregated into a single reporting segment, the design, manufacturing, marketing and servicing of assembly equipment for the semiconductor's back-end segment. Since the Company operates in one segment and in one group of similar products and services, all financial segment information can be found in the Consolidated Financial Statements.

3. Dividend

In April 2013, the Company announced a dividend payment of € 0.30 per ordinary share. The dividend was payable fully in cash.

The Company paid an amount of € 11.2 million to shareholders.

4. Share repurchase program

In October 2012, Besi announced a new share repurchase program under which it may buy back up to approximately 1.5 million Ordinary Shares (4% of its shares outstanding at September 30, 2012) on the open market from time to time and depending on market conditions through October 2013. Besi commenced the program in light of the price of its shares relative to anticipated future earnings as well as to further reduce share dilution resulting from the conversion of the Notes. As of June 30, 2013, Besi had purchased 581,170 shares at a weighted average price of € 6.07 per share for € 3.5 million. (of which € 2.7 million in 2013). In aggregate, Besi has shareholder authorization to purchase up to 10% of its Ordinary Shares outstanding (approximately 4.0 million shares) until October 2013.

5. Financial instruments

The fair values of financial assets and financial liabilities, together with the carrying amounts in the condensed consolidated statements of financial position, are as follows,

June 30, 2013
(unaudited)
(euro in thousands)	Carrying amount	Fair value
Financial assets
Cash and cash equivalents	81,140	81,140
Trade receivables	79,313	79,313
Forward exchange contracts	139	139
Other receivables	4,807	4,807
Total	165,399	165,399
Financial liabilities
Notes payable to banks	21,862	21,862
Current portion of long-term debt and financial leases	413	413
Trade payables	33,655	33,655
Forward exchange contracts	935	935
Other payables	11,846	11,846
Long-term debt and financial leases	2,622	2,622
Total	71,333	71,333

The only recurring fair value measurement is the valuation of forward exchange contracts for hedging purposes. According to IFRS 13 this measurement is categorized as Level 2. The fair value measurement is based on observable calculations. Non recurring fair value measurements were not applicable in the reporting period.

Review report

To: the Supervisory Board and the Board of Management of BE Semiconductor Industries N.V.

Introduction

We have reviewed the accompanying condensed interim consolidated financial statements of BE Semiconductor Industries N.V., Amsterdam, as set out on page 5 to 10, which comprises the condensed interim consolidated statement of financial position as at June 30, 2013, the condensed interim consolidated statement of comprehensive income, changes in equity, and cash flows for the period of six months ended June 30, 2013, and the notes. The Board of Management of BE Semiconductor Industries N.V. is responsible for the preparation and presentation of these condensed interim consolidated financial statements in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union. Our responsibility is to express a conclusion on this interim financial information based on our review.

Scope

We conducted our review in accordance with Dutch law including standard 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity'. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with auditing standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed interim consolidated financial statements as at June 30, 2013 are not prepared, in all material respects, in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union.

Eindhoven, July 30, 2013

KPMG Accountants N.V.

M.J.A. Verhoeven RA