Slide 1: ASM Q4 and FY 2023 results
ASM Q4 and FY 2023 results February 27, 2024 ASM proprietary information | 1
Slide 2: Cautionary note regarding forward-looking statements
Cautionary note regarding 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-
Slide 3: Contents
Contents 1 Investment highlights 2 Q4 2023 and FY 2023 results 3 Business environment, strategy, and targets 4 Annex: detailed financials February 27, 2024 ASM proprietary information | 3
Slide 4: Investment highlights
Investment highlights February 27, 2024 ASM proprietary information | 4
Slide 5: Investment highlights
Investment highlights Strong long-term prospects • 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 10%-14% from 2022 to 2027 • Expanding our position in the silicon epitaxy (Si Epi) market (CAGR o
Slide 6: Q4 and FY 2023 results
Q4 and FY 2023 results February 27, 2024 ASM proprietary information | 6
Slide 7: FY 2023 financial highlights
FY 2023 financial highlights €678m €2,634m 49.3% New orders (Q4 2023) Revenue Normalized gross margin(1) (-14% yoy at constant currencies) (+13% yoy at constant currencies) (47.5% in 2022) 26.6% €21m €583m Normalized Income from investment Normalized operating margin(1) in associates(2) net earnings
Slide 8: Q4 and FY 2023 financial highlights
Q4 and FY 2023 financial highlights Orders and revenue • Q4 2023 orders of €678 million driven by GAA-pilot line orders and continued strength in China demand • Q4 2023 revenue of €633 million, in line with our guidance of €600-640 million • FY 2023 revenue came in at €2,634 million (+13% yoy at con
Slide 9: Q4 orders led by GAA & continued China strength
Q4 orders led by GAA & continued China strength Orders and backlog (€m) 2,000 1.1 Q4 2023 new orders came in at €678m, 1.0 1.1 -14% yoy at constant currencies (cc) and -18% as 1,669 reported. Compared to Q3 23, new orders were up 7% 1,600 at constant currencies. 1,404 1,434 -2.0 New orders were led
Slide 10: FY23 revenue up 13% at cc, outperforming WFE
FY23 revenue up 13% at cc, outperforming WFE Quarters Annuals Q4 2023 revenue (€m) (€m) Q4 2023 revenue increased to €633 million, down 8% yoy at cc but up 1% qoq at cc. Revenue was driven by foundry, followed by 1,000 2,634 power/analog/wafer, and then memory. 2,411 428 800 725 377 FY 2023 revenue
Slide 11: Demand for mature nodes was a key driver in 2023
Demand for mature nodes was a key driver in 2023 Revenue by customer segment as % of equipment revenue In 2023 combined logic/foundry sales were up moderately and continued to account for the larger part of equipment sales. 2022 2023 In Q1 2023, the advanced part of the logic/foundry market was stil
Slide 12: Gross margin increased due to healthy mix in '23
Gross margin increased due to healthy mix in ‘23 Quarters Annuals Q4 2023 normalized gross margin (€m) (€m) While the mix remained favorable in Q4 2023, including a continued strong contribution from China sales with 60.0% above average profitability, the gross margin in Q4 2023 49.3% was impacted b
Slide 13: SG&A: yoy growth rate moderated in '23
SG&A: yoy growth rate moderated in ‘23 Quarters Annuals Q4 2023 normalized SG&A (€m) (€m) SG&A increased 12% yoy and 9% qoq. The increase is mainly due to increased headcount and variable compensation, as well continued investments in 13.2% 14.0% 11.4% 11.5% IT initiatives. 350 12.3% 12.0% 304 300 2
Slide 14: Continued investments in R&D
Continued investments in R&D Quarters Annuals Q4 2023 normalized R&D (€m) (€m) R&D increased to 12% compared to the previous quarter and increased by 5% year-on-year. The yoy increase in R&D is driven by continued investment in R&D 14.0% 11.2% 12.0% 12.5% capabilities to support future growth. 11.3%
Slide 15: FY23 operating margin was flat yoy
FY23 operating margin was flat yoy Quarters Annuals Q4 2023 normalized operating result (€m) (€m) The decrease in operating result reflected lower gross profit due to lower sales and higher SG&A and R&D 26.6% 26.6% expenses. 26.2% 25.3% 22.3% 25.0% 805 FY 2023 normalized operating result 699 Full-ye
Slide 16: Net earnings at €583 million
Net earnings at €583 million Interest expense, investment in associates, net earnings Normalized income from investments in associates (€m) (25% shareholding in ASMPT) Q4 2023 share in income investments in associates Q4 22 Q3 23 Q4 23 FY 2022 FY 2023 increased by €2 million in comparison to Q3 2023
Slide 17: Capex in line with target; working capital improved
Capex in line with target; working capital improved Capital expenditures Capital expenditures Working capital Capex increased to €155 million for 2023, from €101 (€m) (€m) million in 2022, mainly related to the expansion of our 68 R&D labs. 549 62 60 Capex guidance for the period 2024-2027 is €100-1
Slide 18: Solid cash of €637m, FCF up 17% yoy
Solid cash of €637m, FCF up 17% yoy Cash Free cash flow Cash (€m) (€m) Cash position increased to €637 million Free cash flow 637 FY23 free cash flow improved 17% yoy, mainly thanks to 636 500 improved working capital and despite an increase in 547 578 520 capex 462 447 400 419 405 381 300 347 289 2
Slide 19: Financial outlook
Financial outlook As included in the Q4 2023 earnings press release published on February 27, 2024: While the broader semiconductor market is expected to recover in 2024, the softer WFE market conditions we saw in the second half of 2023 are expected to continue into the first part of 2024. For the
Slide 20: Business environment, strategy, and targets
Business environment, strategy, and targets February 27, 2024 ASM proprietary information | 20
Slide 21: Digital transformation drives structural growth
Digital transformation drives structural growth Megatrends driving the semiconductor market Semiconductor revenue (US$ billion) 1,200 Doubling to US$ 1 trillion by 2030 1,000 800 600 400 200 0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Source: TechInsights Decemb
Slide 22: AI to drive increased capacity requirements
AI to drive increased capacity requirements AI semiconductor sales outlook (US$b) What it means for ASM: 120 • Increased capacity • More datacenters with higher content 100 servers GPU, ASIC, communications, HB DRAM 80 • More silicon content edge device (ex. phone GPU, NPU, Auto ADAS systems) 60 → M
Slide 23: WFE spending expected to grow in 2024-2027
WFE spending expected to grow in 2024-2027 WFE market forecast WFE growth driven by secular trends of AI, (US$b) 5G, EV, edge computing, etc. 140 • Longer-term trend supported by multi- year investments 120 • Further scaling, 3D transitions and GAA driving investments in advanced CMOS 100 • In recen
Slide 24: WFE by application & ASM customer concentration
WFE by application & ASM customer concentration WFE market by ASM FY23 revenue by WFE market by application application customer Logic and foundry to account for more than half of in US$b concentration total WFE sales in 2024 in % ASM FY 2023 revenue by customer 100 concentration The 5 largest custo
Slide 25: Growth through Innovation - strategy unchanged
Growth through Innovation - strategy unchanged Our purpose is to improve people’s lives through advancing technologies that unlock new potential Drive continued strong financial Maintain leading ALD share in performance logic/foundry, expand in memory Accelerating progress in Strategic Increase Si E
Slide 26: ALD market to increase to $4.2-5.0b by 2027
ALD market to increase to $4.2-5.0b by 2027 Single-wafer ALD market outlook Logic/foundry (US$b) • GAA transition • High-k gate & Vt tuning >55% • Sacrificial layers, HM, ESL >55% share • Metals share • Selective ALD 5 US$5.0bn >55% • High aspect ratio TSV share US$4.2bn 4 US$3.7bn Memory 3 US$2.6bn
Slide 27: Si epi market to reach $2.3-2.9b by 2027
Si epi market to reach $2.3-2.9b by 2027 Si epitaxy market outlook Leading-edge (US$b) • Continued growth in leading-edge driven by GAA and high-performance >30% DRAM >30% share target Non-leading-edge share 3 16% target • Wafer, power, analog share US$2.9bn • Continued growth in wafer, power, US$2b
Slide 28: Increased ALD and Epi SAM with move to GAA
Increased ALD and Epi SAM with move to GAA Increases served available market for ASM by ~ US$400 million per 100k wafer starts per month (WSPM) Single-wafer ALD • High-k gate & Vt tuning • Sacrificial layers, HM, ESL • Metals • Selective ALD • High aspect ratio TSV Epitaxy • GAA nanosheet stack • So
Slide 29: Logic GAA creates new ALD/Epi opportunities
Logic GAA creates new ALD/Epi opportunities New interconnect metals: MIM • Molybdenum replacing CVD Tungsten and PVD Copper Selective deposition processes for performance and Yield: Channel Epi Source/Drain Epi • DoD and MoD M1 Increasing embedded M0 functionality: a) additional memory with Epi Si M
Slide 30: ASM investing in capacity ahead of needs
ASM investing in capacity ahead of needs Indexed manufacturing capacity (2020=100) 400 370 330 330 300 2023 demand 2020 200 180 demand 170 100 100 0 2020 2021 2022 2023 2024 2025 Capacity in place for targeted growth through 2027 following Singapore second floor expansion, completed in 2023, and Kor
Slide 31: Target net zero by 2035
Target net zero by 2035 SBTi verified ASM Net Zero 2035 target, announced in August 2023 Target 100% renewable electricity (RE) by 2024 • Use of RE increased from 73% to 88% in 2023 Scope 3 use of our products is the majority of our GHG footprint • Product sustainability fully incorporated in the pr
Slide 32: Sustainability fully integrated into product development
Sustainability fully integrated into product development Our vision is to develop differentiated & eco-efficient tools & processes, while maximizing energy saving through product innovation. Our aim is to lower energy/precursor usage, emissions and cost per wafer February 27, 2024 ASM proprietary in
Slide 33: FY23 results, in line with our FY25 & FY27 targets
FY23 results, in line with our FY25 & FY27 targets FY2022(1) FY2023(1) FY2025 FY2027 Revenue €2.4 billion €2.6 billion €3.0 - €3.6 billion €4.0 - €5.0 billion Revenue growth 33% yoy(2) 9% yoy(2) 16 - 21% CAGR (FY20-FY25) 11 - 16% CAGR (FY22-FY27) Gross margin % 47.5% 49.3% 46 - 50% (FY21-FY25) 46 -
Slide 34: People are at the heart of our success
People are at the heart of our success Headcount growth Retention 5,000 4,542 4,258 All employees 4,000 3,312 2020 89.3% 3,000 2,583 2021 87.5% 2,000 1,453 1,146 730 2022 88.1% 1,000 Headcount 515 New hires 2023 90.8% 0 2020 2021 2022 2023 Culture Diversity 2023 engagement study Gender Nationalities
Slide 35: Annex: detailed financials
Annex: detailed financials February 27, 2024 ASM proprietary information | 35
Slide 36: (Estimated) amortization and earn-out expenses
(Estimated) amortization and earn-out expenses Q4 2023 2023 FY 2024 FY 2025 2026 € million Estimate Actual Actual Estimate Estimate Cost of sales (4.7) (27.0) — — — Net research and development expenses (3.5) (14.0) (14.0) (14.0) (14.0) Selling, general and administrative expenses (1.2) (4.8) (4.9)
Slide 37: Normalized and reported P&L reconciliation
Normalized and reported P&L reconciliation Q4 2023 Q4 2023 FY 2023 FY 2023 € million Δ Δ normalized Reported Normalized reported Revenue 633 633 2,634 2,634 Gross profit 303 (5) 299 1,299 (27) 1,272 Gross margin 47.9% 47.2% 49.3% 48.3% SG&A (83) (1) (85) (304) (5) (309) SG&A as a % of revenue 13.2%
Slide 38: Income statement (reported)
Income statement (reported) € million Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2022 FY 2023 New orders 829 647 486 627 678 3,153 2,438 Backlog 1,669 1,584 1,400 1,404 1,434 1,669 1,434 Book-to-bill ratio 1.1 0.9 0.7 1.0 1.1 1.3 0.9 Revenue 725 710 669 622 633 2,411 2,634 Cost of sales (388) (359)
Slide 39: Balance sheet
Balance sheet € million Dec. 22 Mar. 23 Jun. 23 Sep. 23 Dec. 23 Right-of-use assets 32 34 34 36 35 Property, plant and equipment 312 315 338 384 385 Evaluation tools at customers 69 73 71 71 80 Goodwill 318 318 320 321 320 Other intangible assets 646 647 664 696 706 Investments in associates 686 892
Slide 40: Cash flow statement
Cash flow statement € million Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2022 FY 2023 Net earnings from operations 237 380 151 130 91 389 752 Adjustments to reconcile net earnings to net cash from (73) (188) 23 27 16 280 (123) operating activities Depreciation, amortization and impairments 38 42 44
Slide 41: Gross and net R&D expenses (reported)
Gross and net R&D expenses (reported) € million Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2022 FY 2023 Gross R&D expenses 93 94 104 102 111 302 410 Capitalization of development expenses (25) (29) (37) (39) (42) (103) (147) Amortization of capitalized development expenses 11 11 11 11 11 35 44 Impai
Slide 42: ASM is focused on deposition equipment
ASM is focused on deposition equipment WFE market segments in 2023 ($b) • ASM’s focus is on deposition • We are market leader in ALD (mid 50s% share). ALD accounts for more 24 than half of our total equipment 25 revenue • Expanding our position in the Si Epi market and entered the high-growth 28 13
Slide 43: Working capital: historical development
Working capital: historical development €m 800 120 700 100 600 80 500 400 60 300 40 200 20 100 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2017 2018 2019 2020 2021 2022 2023 Working capital (lhs) Quarterly sales (lhs) Days of working capital (rhs) Numbers
Slide 44: Orders and backlog: historical development
Orders and backlog: historical development €m 1,800 1,600 1,400 1,200 1,000 800 600 400 200 - Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2018 2019 2020 2021 2022 2023 Backlog Orders Numbers based on reported financials Q1 and Q4 2019 exclude the impact of patent litigati
Slide 45: Revenue and operating result: historical development
Revenue and operating result: historical development €m 3,000 800 700 2,500 600 2,000 500 1,500 400 300 1,000 200 500 100 - - 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Revenue (lhs) Operating result (rhs) 2019 numbers exclude settlement gains of €159m 2022 and 2023 operating m
Slide 46: Cash returned to shareholders
Cash returned to shareholders Dividend per share Cumulative cash returned to (€ paid over) market (€m) 3,000 2,500 2,000 3.00 2.75* 1,500 2.50 2.50 1.50 2.00 1,000 1.00 0.80 500 0.60 0.70 0.70 0.40 0.50 0.50 0.50 1.50 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2012 2013
Slide 47: For more information visit asm.com
For more information visit asm.com February 27, 2024 ASM proprietary information | 47