Slide 1: Siltronic Full Year Results 2017
Siltronic Full Year Results 2017 March 5, 2018 © Siltronic AG 2018
Slide 2: Financial year 2017: Highlights
Financial year 2017: Highlights Sales EUR 1,177.3m (2016: EUR 933.4m) EBITDA EUR 353.1m (2016: EUR 146.0m) EBITDA margin 30.0% (2016: 15.6%) EUR 235.7m (2016: EUR 27.0m) EBIT & EBIT margin 20.0% (2016: 2.9%) CapEx EUR 123.2m (2016: EUR 88.8m) Free Cash Flow EUR 169.6m (2016: EUR 19.0m) Net Financial
Slide 3: Market Update
MARKET UPDATE © Siltronic AG 2018
Slide 4: Market highlights
Market highlights 2017 Review Global economic growth forecasts were continuously revised up since October 2017 Semiconductor revenue surged (+22% YoY, Si based), driven by huge memory price increases and strong unit sales (+14% YoY, Si based) for all non-memory devices (e.g. analog, discretes, l
Slide 5: IHS Markit forecasts 4.5% growth for Silicon area in 2018
IHS Markit forecasts 4.5% growth for Silicon area in 2018, with broad based growth in a wide range of applications. Wafer Demand 2000 / 2017, in bn cm² 2000 2017 Growth 2018 / 2017, in % Total Market 33.6 72.2 4.5% Mobile / Smartphones 2.5 19.2 9% Desktop, Notebook & Server PC 9.4 11.5 0% Industrial
Slide 6: Financials 2017
FINANCIALS 2017 © Siltronic AG 2018
Slide 7: Q4 sales development driven by increased prices
Q4 sales development driven by increased prices Sales, in EUR million +6.5% Comments Positive 328.1 Higher wafer prices for 308.1 300mm and 200mm in Q4 283.1 ASP up y-o-y and q-o-q 258.0 246.3 Further price increases negotiated for 2018 LTAs signed for additional 70k capacity coming online
Slide 8: Positive development of EBITDA and EBITDA margin mainly due to higher ASP
Positive development of EBITDA and EBITDA margin mainly due to higher ASP EBITDA margin in %; EBITDA in EUR million Comments 36.8 Positive 34.6 Higher ASP y-o-y and q-o-q 25.7 Successful cost reduction program continued – 20.5 20.5 COGS per wafer area decreased 120.9 106.5 72.7 50.5 53.0 Q4 20
Slide 9: Increasing FX exposure due to higher margins
Increasing FX exposure due to higher margins FX exposure USD exposure 2018 100% hedging ratio approx. 40% EUR EBITDA excl. profit JPY roughly 1/4 hedging ratio approx. 75% 100% JPY exposure 2018 hedging ratio approx. 30% EUR roughly 2/3 excl. profit USD roughly 2/3 hedging ratio approx. 50%
Slide 10: At current FX rates sales would be negatively impacted by approx. EUR 100m
At current FX rates (1.25/135) sales would be negatively impacted by approx. EUR 100m and EBITDA by approx. EUR 60m Chance USD, in EUR million Change JPY, in EUR million 1 ct ~ EUR 7.5m sales 1 JPY ~ EUR 2m sales ~ EUR 6.5m gross margin ~ EUR 2m gross margin ~ EUR 4.5m EBITDA after hedging ~ EUR 1m
Slide 11: Positive development of net result due to price increases
Positive development of net result due to price increases Result and income tax, in EUR million Comments 35.0 Net profit of EUR 192.2m in 2017 Positive effects of price increases and lower cost of sales per wafer area 227.2 EUR 35.0m effective taxes 192.2 Potential future tax advantages base
Slide 12: Equity ratio of 51%, Net financial assets of EUR 342.1m
Equity ratio of 51% Net financial assets of EUR 342.1m Balance sheet, in EUR million Dec 31, Dec 31, Comments Equity and Dec 31, Dec 31, Comments Assets 2017 2016 Dec 31, 2017 liabilities 2017 2016 Dec 31, 2017 Non-current 546.6 554.1 Equity 637.9 425.3 PP&E 513.3 519.8 Siltronic 637.3 431.9 23 inta
Slide 13: Fluctuations in pension provision due to interest rate movements
Fluctuations in pension provision due to interest rate movements Pension provision, in EUR million 496 473 395 379 371 367 Comments 345 341 Changes in interest rates influence evaluation of pension provision Change in interest rates directly reflected in equity (OCI) Q1 2016 Q2 Q3 Q4 Q1 2017 Q2
Slide 14: Net financial assets nearly doubled since IPO
Net financial assets nearly doubled since IPO Net financial assets, in EUR million Proposed dividend of 2,50 euro for financial year 2017 342 General dividend policy stipulates pay-out 295 ratio of ~40% of net shareholder earnings based on IFRS standards 241 209 Proposed dividend for 2017 175
Slide 15: Increasing free cash flow generation y-o-y
Increasing free cash flow generation y-o-y Capex and FCF, in EUR million Comments Customer prepayments 2017 Repaid EUR ~24m Received EUR ~69m for product mix optimization 61.4 and for additional capacities 58.2 coming online until mid- 41.8 2019 38.2 31.3 Net increase of EUR ~45m 23.9 25.5 1
Slide 16: Net cash flow representing free cash flow excluding customer prepayments
Net cash flow representing free cash flow excluding impacts of customer prepayments Cash flow, in EUR million Comments 2016 2017 High free cash flow despite capex for investments in Cash flow from operating activities 115.6 298.9 state-of-the-art crystal pullers and further automation of thereof o
Slide 17: Outlook
OUTLOOK © Siltronic AG 2017
Slide 18: Positive development in 2017 carries into 2018
Positive development in 2017 carries into 2018 Q4 2017 comments 2018 challenges and opportunities Sales volume basically stable q-o-q due to full Silicon area growth limited by tight supply loading in 200 mm and 300 mm and very high loading in SD Positive price negotiations continue. However,
Slide 19: Semiconductor and silicon markets showed significant growth in 2017
Semiconductor and silicon markets showed significant growth in 2017 leading into 2018 with great momentum 2018 Outlook Solid global economy (+4% YoY) is expected to drive electronic system sales (+4%) and semiconductor growth (+8%) Total smartphones shipments are forecast to grow again to 1.6 bn
Slide 20: Capex will rise to EUR 240m to EUR 260m in 2018
Capex will rise to EUR 240m to EUR 260m in 2018 Comments Investment, in EUR million ~240-260 Capex of EUR ~140m for 70k wafers/month ~50-70 over 2 years Capex in 2018 includes new crystal pulling hall in Singapore to create sufficient crystal pulling capacity to further expand wafer capacity D
Slide 21: Siltronic Outlook 2018
Siltronic Outlook 2018 (as of March 5, 2018) EBITDA margin close to 40% ROCE clearly higher than in 2017 Net cash flow clearly higher than in 2017 Sales clearly above EUR 1.3bn, depending on FX effects R&D approx. 5% of sales Cost position negative effect on savings potential due to tariff increases
Slide 22: Contact and Additional Information
Contact and Additional Information Issuer and Contact Additional Information Siltronic AG ISIN: DE000WAF3001 Hanns-Seidel-Platz 4 WKN: WAF300 D-81737 München Deutsche Börse: WAF Listing: Frankfurt Stock Exchange Investor Relations: Prime Standard Petra Mueller email: petra.mueller@siltronic.com Tel.
Slide 23: Appendix
APPENDIX © Siltronic AG 2018
Slide 24: Increasing demand for electronic devices drives semiconductor growth
Increasing demand for electronic devices and new applications drive semiconductor growth, which in turn fuels silicon demand. Electronics Value Chain 2017 Electronics USD 1,504 bn Semiconductors USD 400 bn Semiconductors silicon wafers USD 8.7 bn Silicon for electronic applications USD 1.1 bn Source
Slide 25: Siltronic is a strong wafer supplier with leading-edge technology
Siltronic is a strong wafer supplier with leading-edge technology Top 5 wafer producers serve more than 90% of market across all diameters 10% 18% 15% 27% 30% SK Siltron Siltronic Shin Etsu Sumco GlobalWafers Sources: reported company revenues Q1-Q3 2017, converted to USD million Siltronic Full Year
Slide 26: Siltronic is focused on growing 300 mm and attractive 200 mm business
Siltronic is focused on growing 300 mm and attractive 200 mm business Development of Total Wafer Demand per Diameter, in mn 300 mm equivalents per month Strong 7 demand 300 mm 200 mm SD & 6 growth 5 4 3 Stable & attractive 2 1 Mid-term decline 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: S
Slide 27: Customer base well diversified across all major wafer consumers
Customer base well diversified across all major semiconductor silicon wafer consumers Siltronic is a supplier to all top 20 Silicon wafer consumers Siltronic well positioned at all Top 10 customers represent ~73% major Silicon consumers of 2017 revenues Source: Company Information, Siltronic Siltron
Slide 28: International manufacturing network supports market leadership
International manufacturing network supports market leadership and business focus Port- Burg- Frei- Singa- land hausen berg pore 300 mm 200 mm SD Crystal R&D Siltronic Full Year Results 2017 28 28 of 37 March 5, 2018
Slide 29: Continuous improvement of key ingot and wafer properties
Continuous improvement of key ingot and wafer properties to meet customers‘ requirements Ingot Wafer doping level mechanical stability edge flatness flatness purity uniformity resistivity surface cleanliness oxygen content shape homogeneity Siltronic Full Year Results 2017 March 5, 2018 29 of 37
Slide 30: Semiconductor vs Silicon Revenue and Silicon Area
Semiconductor Revenue vs Silicon Area and Silicon Revenue. Semiconductor vs Silicon Revenue and Silicon Area 350% Silicon area 300% Semic. revenue As % of Q1 1996 250% Silicon revenue 200% 150% 100% 50% 0% 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 Source: WSTS and SEMI up to
Slide 31: Silicon area demand continues to grow
Silicon area demand continues to grow Silicon wafer demand, in bn in2 +5% +10% 12.3e 11.8 10.7 10.4 10.1 9.4 9.0 9.0 9.1 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: SEMI (Silicon Area until 2017), IHS Markit Technology (Semiconductor Silicon Demand Forecast Tool, Q1‘18 Update, Estimate 2018
Slide 32: Silicon demand for industrial and automotive applications to grow
Silicon demand for industrial and automotive applications is expected to record high growth in the next years. Silicon demand for main wafer consuming applications, bn cm² and CAGR Computing 4% 4% 25 Mobile Phones 5% 22 2% 3% 8% 21 18 19 16% 19 15 10 2011 2014 2017 2020 2011 2014 2017 2020 Industria
Slide 33: Within a car, most silicon is used for powertrain, infotainment and safety
Within a car, most silicon is used for powertrain, infotainment and safety. 300 mm demand in automotive, in % Other Automotive Powertrain Chassis & Safety (incl. ADAS) Infotainment and Connectivity Body & Convenience 300 mm 200 mm SD 1 ADAS = advanced driver assistance system Source: IHS Marki
Slide 34: Silicon demand for NAND driven by solid-state drives
Silicon demand for NAND driven by growing demand for solid- state drives and increasing storage in smartphones NAND silicon area demand by applications, bn cm² p.a. 16 12 8 4 0 2012 2014 2016 2018 2020 Solid-State Drives Smartphones Memory Cards Tablet Computers Others Source: IHS Markit Technology
Slide 35: NAND is the growth engine in the memory sector
NAND is the growth engine in the memory sector while silicon area for DRAM only shows moderate growth Split of memory silicon area market by DRAM and NAND, bn cm² p.a. 30 20 10 0 2012 2014 2016 2018 2020 DRAM NAND Source: IHS Markit Technology (Semiconductor Silicon Demand Forecast Tool, Q1‘18 Updat
Slide 36: Silicon is needed to store, move and process ever more data
Silicon is needed to generate much more data, but even more Silicon is needed to store, move and process ever more data 160 The number of networked devices will grow Annual data creation from ~17 billion in 2016 to ~27 billion in 2021 120 430 kilometers By 2020, data centers are expected to have
Slide 37: Disclaimer
Disclaimer The information contained in this presentation is for background purposes only and is subject to amendment, revision and updating. Certain statements contained in this presentation may be statements of future expectations, future financial performance and other forward-looking statements
Slide 38: Siltronic AG
SILTRONIC AG | Hanns-Seidel-Platz 81737 Munich 4 Germany © Siltronic AG 2018