Soitec Sa · EURONEXT:SOI
Soitec Sa — Shareholder Meeting (July 2023)
66 slides from Soitec Sa's shareholder meeting presentation, Jul 25, 2023
Slide 1: 2023 Annual General Meeting
2023 ANNUAL GENERAL MEETING Paris | July 25th, 2023
Slide 2: Disclaimer
DISCLAIMER This document is provided by Soitec (the “Company”) for information purposes only. The Company’s business operations and financial position are described in the Company’s 2022-2023 Universal Registration Document (which notably includes the 2022-2023 Annual Financial Report) which was fil
Slide 3: Introduction – Éric Meurice, Chairman of the Board
Éric Meurice – Chairman of the Board of Directors 1 I NTR OD UC TI ON 2 3 4 5 6 7 © Soitec 2023. No copying or distribution permitted. PAGE 3
Slide 4: Participants
PARTICIPANTS On stage Chairman of the Board of Directors and Chief Executive Officer Chairman of this meeting General Secretary of the Board of Chief Financial Officer Directors and Secretary of this meeting The scrutineer Sa Representing Bpifrance Participations Representing NSIG Sunrise S.à.r.l. S
Slide 5: Agenda
AGENDA #01 #02 #03 Éric Meurice Pierre Barnabé Pierre Barnabé #04 #05 #06 Éric Meurice Laurent Genin and Benjamin Malherbe Léa Alzingre Questions & Answers #07 Emmanuelle Bely
Slide 6: Presentation of the Company's Activity – Pierre Barnabé
Pierre Barnabé – Chief Executive Officer 1 2 PR ESENTATI ON OF TH E C OM PANY ’S AC TI VI TY 3 4 5 6 7 © Soitec 2023. No copying or distribution permitted. PAGE 6
Slide 7: Deploying our sustainable value creation model to strengthen our global leadership
Technology megatrends to Deploying our sustainable value FY26 REVENUE / EBITDA fuel MASSIVEDEMAND for creation model to STRENGTHEN OBJECTIVES ON TRACK semiconductors and increased OUR GLOBALLEADERSHIP x2 EBITDA in 3 years adoption of ENGINEERED in engineered substrates SUBSTRATES BEYOND FY26 EXPAND
Slide 8: Semiconductor global sales to reach ~$1T by 2030
SEMICONDUCTOR GLOBAL SALES TO REACH Toward ~$1T by 2030 Global semiconductor sales ($B) ~$575B $400B $300B $200B $100B 1995 2000 2005 2010 2015 2020 2025 2030 Source: SIA, IBS 1 2 PR ESENTATI ON OF TH E C OM PANY ’S AC TI VI TY 3 4 5 6 7 © Soitec 2023. No copying or distribution permitted. PAGE 8
Slide 9: $300B $200B PR ESENTATI ON OF TH E C OM PANY ’S AC TI
$300B $200B 1 2 PR ESENTATI ON OF TH E C OM PANY ’S AC TI VI TY 3 4 5 6 7 © Soitec 2023. No copying or distribution permitted. PAGE 9
Slide 10: A critical component of the semiconductor industry
ARE A CRITICAL COMPONENT OF THE SEMICONDUCTOR INDUSTRY TECHNOLOGY EXPERTISE MOBILE Smart CutT M Interface PROCESSED WAFER COMMUNICATIONS engineering Compound Epitaxy AUTOMOTIVE & INDUSTRIAL SMART BULK DEVICES WAFERS ENGINEERED SUBSTRATES DIE CHIP SYSTEM EXTENSIVE EXPERTISE DIFFERENTIATION 1 2 PR ESE
Slide 11: Value creation across 3 strategic end markets
TO FUEL OUR DIVISIONS VALUE CREATION PREPARING EXPANSION BEYOND ACROSS 3 STRATEGIC END MARKETS EXPANDING INTO COMPOUND SEMICONDUCTORS STRENGTHENING SOI LEADERSHIP + LICENSING / PATENT MONETIZATION 1 2 PR ESENTATI ON OF TH E C OM PANY ’S AC TI VI TY 3 4 5 6 7 © Soitec 2023. No copying or distribution
Slide 12: To benefit all stakeholders
TO BENEFIT ALL STAKEHOLDERS 1 2 PR ESENTATI ON OF TH E C OM PANY ’S AC TI VI TY 3 4 5 6 7 © Soitec 2023. No copying or distribution permitted. PAGE 12
Slide 13: Financial model: revenue and EBITDA margin objectives
~$2.1B REVENUE (FINANCIAL MODEL) EXPAND $1.2B ~$1.2B ~40% MARKET SHARE, STRATEGIC REVENUE REVENUE EBI TDA MARGIN PARTNERSHIPS & IP MONETISATION PRODUCT PORTFOLIO (INNOVATION & BOLT-ON M&A) ~36% ~36% SUSTAINABLE CAPACITY EBI TDA MARGIN EBI TDA MARGIN AND GLOBAL FOOTPRINT FY23 FY24 FY25 FY26 FY30 EBIT
Slide 14: ESG Strategy – Pierre Barnabé
Pierre Barnabé – Chief Executive Officer 1 2 3 ESG STR ATEGY 4 5 6 7 © Soitec 2023. No copying or distribution permitted. PAGE 14
Slide 15: Reducing environmental footprint through innovation and operations
INNOVATING TO REDUCE ACTING TO REDUCE OUR RESPONSIBLE THE ENVIRONMENTAL CARBON FOOTPRINT WATER MANAGEMENT FOOTPRINT ACROSS THE IN LINE WITH THE 1.5°C TO SUPPORT OUR THROUGH OUR PRODUCT LIFE CYCLE PATHWAY GROWTH INNOVATION AND OPERATIONS x10 -25% -50% RE-USABILITY OF DONOR REDUCTION OF OUR SCOPE 1 RE
Slide 16: Company culture
COMPANY MAKING SOITEC AN SHARING THE AIMING FOR CULTURE ATTRACTIVE EMPLOYER TO SUPPORT OUR FRUIT OF GROWTH WITH ALL OUR GENDER PARITY GROWTH EMPLOYEES 18% 100% 40% ELIGIBLE EMPLOYEES EMPLOYEES ELIGIBLE TO FREE TARGET FOR THE PROPORTION PROMOTED INTERNALLY PERFORMANCE SHARE PLAN OF WOMEN ACROSS IN FY
Slide 17: Industry-leading governance standards
WITH INDUSTRY- INCREASED A COMPENSATION POLICY SET HIGH ETHICAL LEADING NUMBER OF BOARD INDEPENDENT AND GOVERNING BODIES ALIGNED WITH OUR STANDARDS FOR OURSELVES AND STANDARDS TO DIRECTORS SUSTAINABLE AMBITION FOR OUR BUSINESS RELATIONS BECOME A REFERENCE 58% 20% 100% OF INDEPENDENT WEIGHT OF ESG CR
Slide 18: Financial Statements – Léa Alzingre
Léa Alzingre– Chief Financial Officer 1 2 3 4 F I NANC I AL STATEM ENTS 5 6 7 © Soitec 2023. No copying or distribution permitted. PAGE 18
Slide 19: FY23 key figures: P&L, cash flow, balance sheet
P&L CASH FLOW BALANCE SHEET €1,089M SALES €263M OPERATING CASH FLOW (1) €1.3B EQUITY 36.0% EBITDA (1) MARGIN €244M CAPEX (1)(2) €788M GROSS CASH POSITION €233M NET PROFIT €34M FREE FLOW CASH (1) €140M NET CASH POSITION €6.63 EPS (1) From continuing ope rations. EBITDA represe nts ope rating income (
Slide 20: Revenue by end market
Cha nge Cha nge €M FY 23 FY 22 13% as reported a t constant FX and scope Automotive & Industrial Mobile Communications 731 624 +17% +10% 20% €1,089M 67% Automotive & Industrial 141 74 +89% +77% Mobile Smart Communications Smart Devices 217 165 +32% +26% Devices Total Revenues 1,089 863 +26% +19% • I
Slide 21: Income statement
€M FY23 FY22 Change Revenue 1,089 863 +26% Current operating margin improved by ~2pts to 24.5% of revenue Gross profit 402 316 +28% • Robust increase in gross profit as a % of revenue 37.0% 36.6% • Tight c ontrol over operating Gross R&D expenses before capitalization (123) (108) +14% expenses while
Slide 22: Operating income to net profit
€M FY23 FY22 Change Current operating income 267 195 +37% FY22 benefitted from a €10M non-recurring operating income - Other operating income and expenses 0 10 (reversal of an impairment loss Operating income 268 205 +31% related to Singapore industrial building) - Financial expenses (10) (13) Net f
Slide 23: Cash flow
€M FY23 FY22 Operating income 268 205 - Depreciation and amortization 106 81 Improvement in operating cash flow from strong EBITDA (€391M, up €83M vs FY22) partially offset by a higher increase in - Other items 18 23 working capital requirement (+€44M vs FY22) EBITDA(1) 391 309 €96M negative change
Slide 24: Balance sheet
ASSETS - in €M 31 March 2023 31 March 2022 LIABILITIES AND EQUITY - in €M 31 March 2023 31 March 2022 Intangible assets 128 108 Total equity 1,306 1,044 Tangible assets 705 562 Long-term financial debt 578 518 Other non- current assets 84 35 Provisions and other non- 80 79 current liabilities Deferr
Slide 25: FY24 outlook
FY24 EXPECTED TO MARK A PAUSE IN PROFITABILITY MAINTAINED THROUGH CAPACITY INVESTMENTS TO SUPPORT FAST GROWTH TRAJECTORY STRICT COSTS CONTROL STRONG GROWTH THROUGH FY26 TOWARD FY26 • Inflation, including bulk price SOI INVESTMENTS • Weaker smartphone market with strong • Sustained effort in R&D inve
Slide 26: Corporate Governance – Éric Meurice
Éric Meurice – Chairman of the Board of Directors 1 2 3 4 5 C OR POR AT E GOVER N AN C E 6 7 © Soitec 2023. No copying or distribution permitted. PAGE 26
Slide 27: Board of Directors
I Éric Meurice Pierre Barnabé Satoshi Onishi François Jacq Wissème Allali Didier Landru Chairman CEO (CEA Investissement) Employee Director Employee Director I I I 9 Meetings 92,07% 4 Attendance rate Committees during FY23 Françoise Chombar Laurence Delpy Christophe Gégout Samuel Dalens (Bpifrance (
Slide 28: Board work: strategy, governance, financial policy
Strategy Governance • Review of strategic initiatives • Review of the composition of the Board of Directors and Committees • Investment studies • Board self-assessment • Review of various presentations and market research • Revision of the Board of Directors’ Internal Regulation • Review of the mult
Slide 29: Strategic Committee
I Éric Meurice Pierre Barnabé Satoshi Onishi François Jacq Wissème Allali Didier Landru Chairman CEO (CEA Investissement) Employee Director Employee Director I I I 4 Meetings 85% Attendance rate 58% Independence during FY23 Françoise Chombar Laurence Delpy Christophe Gégout Samuel Dalens (FSP) Refer
Slide 30: Audit and Risks Committee
7 meetings 100% attendance rate 67 Independence during FY23 Christophe Gégout Éric Meurice Samuel Dalens Referent Director (Bpifrance Chairman Participations) In addition to its recurring annual work, the Audit and Risks Committee worked in particular on the following topics: • confirmation of the r
Slide 31: Compensation and Nomination Committees
+4 meetings 97% attendance average rate 67% Independence during FY23 Prior to the merger, in addition to its recurring annual work, the Compensation Committee, which met 3 times Delphine Segura-Vaylet Éric Meurice Wissème Allali (100% attendance rate), worked in particular on the following topics: C
Slide 32: ESG Committee
2 meetings 100% 60% attendance rate Independence during FY2023 Laurence Delpy Françoise Chombar Christophe Gégout (FSP) Referent Director Chairwoman The Committee worked on: • update of ESG priorities and definition of the ESG strategic plan; • review of the adoption of governance recommendations;
Slide 33: Compensation – Éric Meurice
Éric Meurice – Chairman of the Board of Directors 1 2 3 4 5 C OR POR AT E GOVER N AN C E 6 7 © Soitec 2023. No copying or distribution permitted. PAGE 33
Slide 34: Chairman compensation FY2023
€230,000 According to the compensation policy approved by the 2022 AGM: • This compensation is not paid out of the budget allocated for the compensation of the members of the Board of Directors. • He does not benefit of any variable or exceptional compensation, performance share allocations, termina
Slide 35: Former CEO compensation FY2023
€175,939.58 calculated pro rata to the length of his term of office. €176,291 calculated pro rata to the length of his term of office (100,2% achievement of the financial and strategic objectives). He did not receive any performance shares or any other long-term benefits in FY2023. €4,237.25 under t
Slide 36: CEO compensation FY2023
€325,714.29 calculated pro rata to the length of his term of office. €380,109 calculated pro rata to the length of his term of office (116,7% achievement of the financial and strategic objectives). €332,286.84 i.e. 9,612 performance shares, representing 0.01% of the share capital. €5,748.99 under th
Slide 37: Chairman compensation policy
€230,000 (unchanged since FY2021) This level of compensation was benchmarked in March 2022 by an independent firm, based on two panels: one consisting of 33 comparable companies in the CAC Mid 60 index and the other comprising 20 comparable European companies operating in the semiconductor or techno
Slide 38: Directors' compensation policy
TOTAL AMOUNT €820,000 ALLOCATION • All Directors receives a compensation for their directorship duties, except the CEO, the Chairman of the Board and the employee Directors. • The total amount of compensation will be calculated on Seat on the Board of €46,000 a pro rata basis. Directors • The Direct
Slide 39: CEO compensation policy
Will be fixed taking into account the duties and responsibilities of the CEO Maximum: 165% of his annual fixed compensation Objectives: financial (60%) and strategic (40%) + add. criterion allowing for a 10% increase in his total variable compensation Performance share allocations representing up to
Slide 40: Performance share plan and criteria
€480,000 (unchanged from FY2023) Compliant Free performance shares within authorization of shareholders, Over and within general rules of the LTI yearly program Weighting performance* Revenue 20% 30% EBITDA 20% 30% Operating Cash flow 20% 30% Fair Aligned Number of free LTI scheme and criteria are F
Slide 41: Auditors' Reports
Benjamin Malherbe – Representing Ernst & Young Audit Laurent Genin – Representing KPMG S.A. 1 2 3 4 5 6 AUD I TOR S’ R EPOR TS 7 © Soitec 2023. No copying or distribution permitted. PAGE 41
Slide 42: Statutory Auditors' reports
• Statutory Auditors’ report on the financial statements • Statutory Auditors’ report on the consolidated financial statements • Statutory Auditors’ report on related party agreements • Statutory Auditors’ report on the issue of shares and/or securities with or with a waiver of shareholders’ preempt
Slide 43: Q&A
Q&A
Slide 44: Resolutions – Emmanuelle Bely
Emmanuelle Bely – Meeting Secretary 1 2 3 4 5 6 7 R ESOLUTI ONS © Soitec 2023. No copying or distribution permitted. PAGE 44
Slide 45: Resolutions within the competence of the Ordinary General Meeting
Resolutions within the competence of the Ordinary General Meeting 1 2 3 4 5 6 7 R ESOLUTI ONS © Soitec 2023. No copying or distribution permitted. PAGE 45
Slide 46: Resolutions 1 to 3: Financial statements and net profit appropriation
Resolutions n° 1 to 3 Approval of the financial statements and appropriation of net profit FY 2023 statutory financial FY 2023 Consolidated financial Appropriation of net profit: statements: statements: • €87,767.40 to the “Legal reserve” • Revenue of • Revenue of €1,088,730 €1,037,530,957.57 thousa
Slide 47: Resolutions 4 to 6: Related-party agreements
Resolutions n° 4 to 6 Approval of related-party agreements Memorandum of understanding with Multi-year framework R&D partnership Amendment to the agreement on patent STMicroelectronics International N.V. agreement with the CEA licensing and the provision of know-how for the manufacture and sale of s
Slide 48: Resolutions 7 to 10: Compensation policies
Resolutions n° 7 to 10 Approval of the compensation policies for the corporate officers (ex-ante say-on-pay) Compensation policy for the Chair of the Board of Directors, as presented in sections 4.2.1 and 4.2.4.1 of the 2023 URD Compensation policy for the members of the Board of Directors (excludin
Slide 49: Resolutions 11 to 14: FY2023 officer compensation
Resolutions n°11 to 14 Approval of the compensation of the corporate officers for FY2023 (ex-post Say-on- pay) Information relating to the compensation of the Company’s corporate officers referred to in Article L. 22-10-9, I of the French Commercial Code, as presented in section 4.2.2 of the 2023 UR
Slide 50: Resolution 15: Share buyback authorization
Resolution n° 15 Authorization to be granted to the Board of Directors to carry out transactions on the Company’s shares Purposes: • To cover restricted share plans • To enable capital reduction through cancellation of shares • To ensure the liquidity of and making a market for the Company's shares
Slide 51: Resolutions within the competence of the Extraordinary General Meeting
Resolutions within the competence of the Extraordinary General Meeting 1 2 3 4 5 6 7 R ESOLUTI ONS © Soitec 2023. No copying or distribution permitted. PAGE 51
Slide 52: Resolutions 16 to 19: Amendment of by-laws
Resolutions ° 16 to 19 Amendment of Articles 7, 9 and 10 and deletion of Article 25 of the Company’s by-laws to remove references to preferred shares and PS 2 Amendment of Article 7 - FORM OF THE SHARES - of the Company’s by-laws to remove references to preferred shares Amendment of Article 9 - SALE
Slide 53: Resolution 20: Capital increase with preemptive rights
Resolution n° 20 Delegation of authority to be granted to the Board of Directors for the purpose of carrying out a capital increase by way of the issue of shares and/or securities giving access, immediately or in the future, to the Company’s share capital, with shareholders’ preemptive subscription
Slide 54: Resolution 21: Capital increase via public offer
Resolution n° 21 Delegation of authority to be granted to the Board of Directors for the purpose of carrying out a capital increase by way of the issue of shares and/or securities giving access, immediately or in the future, to the Company’s share capital, with a waiver of shareholders’ preemptive s
Slide 55: Resolution 22: Issuance via private placement
Resolution n° 22 Delegation of authority to be granted to the Board of Directors for the purpose of issuing, by way of a public offer referred to in Article L. 411-2, 1° of the French Monetary and Financial Code, shares and/or securities giving access, immediately or in the future, to the Company’s
Slide 56: Resolution 23: Issuance reserved for categories of persons
Resolution n° 23 Delegation of authority to be granted to the Board of Directors for the purpose of issuing shares and/or securities giving access, immediately or in the future, to the Company’s share capital, reserved for categories of persons meeting defined requirements, with a waiver of sharehol
Slide 57: Resolution 24: Increase of issue amount
Resolution n° 24 Delegation of authority to be granted to the Board of Directors for the purpose of increasing the issue amount, with or with a waiver of shareholders’ preemptive subscription rights, within the limit of 15% of the initial issue Ceilings: • 15% of the initial issue, and at the same p
Slide 58: Resolution 25: Setting issue price
Resolution n° 25 Authorization to be granted to the Board of Directors in the event of the issue, with a waiver of shareholders’ preemptive subscription rights, of shares and/or securities giving access, immediately or in the future, to the Company’s share capital, for the purpose of setting the iss
Slide 59: Resolution 26: Contributions in kind
Resolution n° 26 Delegation of powers to be granted to the Board of Directors for the purpose of issuing shares and/or securities giving access, immediately or in the future, to the Company’s share capital as consideration for contributions in kind consisting of shares or securities giving access to
Slide 60: Resolution 27: Capitalization of reserves
Resolution n° 27 Delegation of authority to be granted to the Board of Directors for the purpose of increasing the share capital by capitalizing premiums, reserves, profits, or any other funds that may be capitalized Ceilings: • the amount of the total reserves, premiums, or profits; and • €35 milli
Slide 61: Resolution 28: Public exchange offer
Resolution n° 28 Delegation of authority to be granted to the Board of Directors for the purpose of carrying out a capital increase by way of the issue of shares and/or securities giving access, immediately or in the future, to the Company’s share capital as consideration for securities contributed
Slide 62: Resolution 29: Employee savings plan
Resolution n° 29 Delegation of authority to be granted to the Board of Directors for the purpose of carrying out one or more share capital increases by way of the issue of shares and/or securities giving access to the Company’s share capital reserved for members of a company savings plan, with a wai
Slide 63: Resolution 30: Cancellation of shares
Resolution n° 30 Authorization to be granted to the Board of Directors to reduce the share capital by canceling shares acquired by the Company pursuant to Article L. 22-10-62 of the French Commercial Code, up to a maximum of 10% of the share capital Ceilings: • 10% of the share capital over a period
Slide 64: Resolution within the competence of the Ordinary General Meeting
Resolution within the competence of the Ordinary General Meeting 1 2 3 4 5 6 7 R ESOLUTI ONS © Soitec 2023. No copying or distribution permitted. PAGE 64
Slide 65: Resolution 31: Powers for formalities
Resolution n° 31 Powers for formalities Powers to perform legal formalities 1 2 3 4 5 6 7 R ESOLUTI ONS © Soitec 2023. No copying or distribution permitted. PAGE 65
Slide 66: Thank you
2023 ANNUAL GENERAL MEETING THANK YOU