Slide 1: ASM Q3 2022 Results
Slide 2: Forward-looking statements
All matters discussed in this presentation, except for any historical data, are forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These include, but are not limited
Slide 3: October 25, 2022 | ASMI proprietary information | 3
October 25, 2022 | ASMI proprietary information | 3
Slide 4: Investment Highlights
INVESTMENT HIGHLIGHTS ~
Slide 5: Investment highlights
ASM is focused on enabling deposition technologies, with key strengths in innovation Leader in the ALD market, which is expected to grow by a CAGR of 16%-20% from 2020 to 2025 Expanding our position in the Epi market (CAGR of 13%-18% from 2020 to 2025) Selective growth in PECVD and Vertical Furnaces
Slide 6: Q3 2022 Results
Slide 7: Record-high revenue of €610m, above the higher end of guidance
Record-high revenue of €610m, above the higher end of the guidance of €570-600m Revenue was led by foundry, followed by memory, and then logic New orders of €676m, down compared to record-high €943m in Q2 2022 Orders have been adjusted to reflect the expected negative impact of the recent US export
Slide 8: Net earnings impacted by €321m non-cash impairment charges
R&D and SG&A further increased in Q3 driven by new R&D projects, headcount growth, and higher employee compensation Net earnings impacted by €321m non-cash impairment charges to account for the reduced market valuation of the stake in ASMPT Healthy free cash flow of €122m in Q3 2022 WFE spending now
Slide 9: Q3 2022 key figures
€ million, year-on-year comparisons +8% +41% €670m Orders: €676m Revenue: €610m Cash position (+1% at constant currencies) (+33% at constant currencies) 48.1% 26.2% €155m Gross margin Operating margin Cash from operations (47.2% in Q3 2021) (27.1% in Q3 2021) -29% +32% €122m Share in income of Norma
Slide 10: Q3 new orders
€ million € million 1.7 1.4 1,525 1.1 1,408 943 676 625 648 Book-to-bill ratio • Q3 new orders at €676m were slightly up 1% at constant currencies YoY (+8% as reported) and included the expected negative impact from the recent U.S. export restrictions • Taking a prudent view, we decided to reduce th
Slide 11: Q3 revenue and gross margin
€ million € million 610 48.1% 560 47.2% 47.5% 98 92 293 433 266 78 204 467 512 354 Spares & services revenue Equipment revenue Gross profit margin • Q3 revenue increased 41% YoY (+33% at constant currencies). QoQ revenue increased 9% (6% at • Gross margin increased YoY and QoQ mainly constant curren
Slide 12: Research and development expenses
€ million 12.0% 12.5% 12.9% 8.8% 9.1% 10.0% 78 € million 70 Gross R&D expenses 52.0 70.2 78.4 52 Capitalization development expenses (20.1) (27.3) (26.7) Amortization capitalized development 6.2 8.0 9.0 61 exp. 51 38 Impairment capitalized development exp. 0.0 (0.1) 0.0 Net R&D expenses 38.1 50.9 60
Slide 13: SG&A and operating margin
€ million € million 27.1% 26.4% 26.2% 12.1% 11.9% 11.2% 148 160 73 117 68 48 SG&A as % of revenue Operating margin • SG&A increased 50% YoY and 7% QoQ. • Q3 2022 operating margin was 26.2%, a decrease of • YoY increase due to headcount growth (+31% YoY at 0.9% pts YoY and 0.2% pts sequentially, with
Slide 14: Share in income of associates and net earnings
€ million € million € million 28 27 Normalized net earnings 132 164 175 3 3 20 Amortization intangible assets (3) (3) (4) 4 25 24 Non-cash impairment charges - - (321) 16 Reported net earnings 129 160 (150) Amortization intangible assets(1) Share in income of investments in associates • Share in inc
Slide 15: Cash position and free cash flow
€ million € million 670 121 122 552 98 492 • Cash position of €670m, driven by strong FCF of • Q3 2022 free cash flow in line with Q2 2022, €122m in Q2 2022 (including ASMPT dividend of supported by continued strong profitability and lower €17m) cash outflow for working capital (1) Defined as cash f
Slide 16: CapEx and working capital
€ million € million 62 64 58 432 386 316 21 17 16 Days of working capital • In FY 2022 CapEx is expected to be at the high end • Working capital increased to €432m mainly due to of the €60-100m target. YTD CapEx of €64m higher inventories October 25, 2022 | ASMI proprietary information | 16
Slide 17: Q4 2022 outlook
As included in the Q3 2022 earnings press release published on October 25, 2022: “For Q4, at constant currencies, we expect sales of €600-630 million, which includes a negative impact from the new US export regulations, as explained above. The revenue guidance for Q4 also includes the revenue contri
Slide 18: Business Environment, Strategy, and Targets
Slide 19: WFE market estimates
US$ billion US$ billion 120 100 100 ≤7nm 80 80 10nm 60 14nm 60 22nm 40 40 32nm 45nm 20 20 >65nm - 0 Source: TechInsights, September 2022 Source: Gartner, October 2022 • Strongest growth in leading-edge nodes, spending on • Estimates above are from September 2022. On 7nm and below expected to grow fr
Slide 20: WFE by segment and customer concentration
US$ billion IN % 80 40 0 Logic & foundry Memory Other 3 largest customers From 4th to 10th customer Rest of customers Source: TechInsights, September 2022 • The 10 largest customers accounted for about 79% • Logic & foundry is expected to account for more of revenue in FY 2021 than half of total WFE
Slide 21: ALD and Epi expected to be fastest growing deposition segments
US$ billion 3.1 - 3.7 US$ billion CAGR 16-20% 1.5 - 1.8 1.5 CAGR 0.8 13-18% • ALD and Epi expected to be the fastest growing segments in the deposition market driven by increasing device complexity, 3D structures, and new materials • Mid-term targets: maintain ALD market share (2025: >55% vs 2020:~5
Slide 22: Our purpose and strategic priorities
Grow ALD business by maintaining leadership in Best people logic/foundry and expanding in memory Increase Epi market share Leading-edge innovation Selective growth in VF and PECVD niches Early customer engagements Grow spares & services business Flawless operational excellence Accelerate sustainabil
Slide 23: Our Net Zero target
Our Net Zero target: 2021 achievements include: Reduce environmental footprint of our operations Transitioned most of our key sites to renewable energy in 2021 100% renewable electricity by 2024 CDP Climate and Water Security scores improved from C to B Aim to be net zero by 2035 (scope 1, 2 and 3 e
Slide 24: Mid-term financial targets to 2025
FY 2020 FY 2021 FY 2025 Revenue €1.3 billion €1.7 billion €2.8 to €3.4 billion1 22% CAGR 16-21% CAGR Revenue growth 34% YOY1 (FY16-FY20) (FY20-FY25) 46-50% Gross margin % 47.0% 47.9% (FY21-FY25) High single digit SG&A % revenue 11.9% 11.0% (FY25) High single digit R&D (net) % revenue 10.5% 8.7% to l
Slide 25: Capital allocation priorities
Priority 1 Priority 2 Priority 3 Priority 4 Invest to support Maintain a strong Sustainable dividend Return of excess cash future growth balance sheet payments to shareholders through share • R&D • Increase targeted buybacks • Capex minimum cash position • M&A towards €600m in coming years October 2
Slide 26: Annex: Detailed Financials
Slide 27: ASM's focus is on deposition
US$ billion Test Assembly Lithography Other wafer processes ASM’s focus is on deposition We are market leader in ALD (~55% share). ALD accounts for more than half of our total equipment Process diagnostics revenue Expanding our position in the Epi market Selective growth in PECVD and Vertical Furnac
Slide 28: Quarterly income statement
€ million New orders 625 645 706 943 676 Backlog 648 811 1,000 1,408 1,525 Book-to-bill ratio 1.4 1.3 1.4 1.7 1.1 Revenue 433 491 517 560 610 Cost of sales (229) (260) (270) (294) (316) Gross profit 204 231 247 266 293 Other income (expenses) (0.5) 4 (0.1) 0.1 (0.1) Selling, general and administrati
Slide 29: Balance sheet
€ million Cash and cash equivalents 525 492 550 552 670 Accounts receivable 371 447 502 483 520 Inventories 187 212 256 341 464 Other current assets 76 70 76 80 98 Right-of-use assets - net 22 27 28 27 30 Investments in associates 808 849 884 918 637 Property, plant and equipment 226 257 274 284 297
Slide 30: Cash flow statement
€ million Net earnings 129 135 142 160 (150) Depreciation, amortization and impairments 24 27 25 27 32 Share in income of investments in associates (25) (23) (20) (24) (16) Impairment of investments in associates - - - - 321 Evaluation tools (4) 12 (7) (1) (15) Other adjustments 8 (35) 21 13 14 Chan
Slide 31: Quarterly sales and working capital
€ million Quarterly sales 700 120 Working capital Days of working capital (rhs) 600 100 500 80 400 60 300 40 200 100 20 0 (1) (1) 0 Numbers based on reported financials October 25, 2022 | ASMI proprietary information | 31 (1) Excluding the impact of patent litigation and arbitration settlements
Slide 32: Backlog and orders
€ million Backlog 1,800 Orders 1,600 1,400 1,200 1,000 800 600 400 200 0 (1) (1) Numbers based on reported financials October 25, 2022 | ASMI proprietary information | 32 (1) Excluding the impact of patent litigation and arbitration settlements
Slide 33: Revenue and operating result
€ million Revenue (lhs) 1,800 600 Operating result (rhs) 1,600 500 1,400 1,200 400 1,000 300 800 600 200 400 100 200 0 0 (1) (1) Excluding settlement gains of €159m October 25, 2022 | ASMI proprietary information | 33
Slide 34: Dividends and share buybacks
€ paid over € million 3.00 2.50 1.50 2.00 1.00 0.80 0.70 0.70 0.60 1.50 0.50 0.50 0.50 0.40 Regular dividend Extraordinary dividend Buyback convertibles Return of capital Dividends Share buybacks October 25, 2022 | ASMI proprietary information | 34
Slide 35: For more information visit asm.com