Asm International N.v. · EURONEXT:ASM
Asm International — Q1 2023 Earnings Presentation
39 slides from Asm International's earnings presentation, Apr 25, 2023
Slide 1: ASM Q1 2023 results
ASM Q1 2023 results April 25, 2023
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 Q1 2023 results 3 Business environment, strategy, and targets 4 Annex: detailed financials April 25, 2023 | ASM proprietary information | 3
Slide 4: Investment highlights
Investment highlights April 25, 2023 | 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 16%-20% from 2020 to 2025 • Expanding our position in the Epi market (CAGR of 13%-18% from 2020 t
Slide 6: Q1 2023 results
Q1 2023 results April 25, 2023 | ASM proprietary information | 6
Slide 7: Financial highlights
Financial highlights €647m €710m 51.1% New orders Revenue Normalized gross margin(1) (-6% yoy at constant currencies) (+40% yoy at constant currencies) (47.8% in Q1 2022) 31.2% €9m €183m Normalized Income from investment Normalized operating margin(1) in associates(2) net earnings(3) (27.7% in Q1 20
Slide 8: Strong Q1 revenue, lower orders reflecting softening market conditions
Strong Q1 revenue, lower orders reflecting softening market conditions Orders and revenue • Q1 new orders came in at €647m, down 6% yoy at constant currencies. • Revenue increased 40% at constant currency to €710m, above previous guidance of €660-700m due to some systems that were delivered in Q1 in
Slide 9: New orders –6% yoy at cc, backlog remains solid
New orders –6% yoy at cc, backlog remains solid Orders and backlog (€m) Q1 2023 new orders decreased to €647m, down by 6% at constant currencies (cc) yoy, and 20% 1,800 1.6 1,669 1,600 1.4 1,584 at cc compared to the previous quarter. 1.4 1,400 1.1 1.2 New orders were led by foundry, followed by 1,2
Slide 10: Revenues +40% yoy at cc, gross margin at 51%
Revenues +40% yoy at cc, gross margin at 51% Revenue Normalized gross profit Revenue (€m) (€m) Q1 2023 revenue increased to €710 million, +40% yoy at cc (37% as reported) and was unchanged qoq (-2% as reported). Revenue was led by foundry 900 900 followed by power/analog, and then logic and 60.0% 80
Slide 11: SG&A down, continued focus on R&D
SG&A down, continued focus on R&D Normalized SG&A Normalized R&D Normalized SG&A (€m) (€m) Normalized SG&A increased 15% yoy. In 2022 SG&A still increased at a higher rate due to extra investments last year in the strengthening of the organization. 140 13.0% 12.0% 11.7% 140 10.4% 10.1% 120 12.0% Nor
Slide 12: Operating margin at 31% thanks to higher gross margin
Operating margin at 31% thanks to higher gross margin Normalized operating result Normalized finance income (€m) (€m) 350 Normalized operating result 35.0% 31.2% 300 Normalized operating result was up 55% yoy, driven by 27.7% Q1 22 Q4 22 Q1 23 higher revenue and the exceptionally strong gross 30.0%
Slide 13: ASMPT impairment was completely reversed in Q1
ASMPT impairment was completely reversed in Q1 Income from investment Impairment of investment Income from investment in associates Amortization of intangible assets resulting from the in associates in associates sale of the 12% stake of ASMPT in 2013 are expected (€m) (€m) to amount to €4 million,
Slide 14: Normalized net earnings increased 26% yoy
Normalized net earnings increased 26% yoy Normalized net earnings (€m) Income taxes in Q1 2023 were €37m compared to €30m in Q1 2022. Q1 22 Q4 22 Q1 23 Net earnings 142.5 236.6 380.4 Normalized net earnings in Q1 2023 increased by €37m to €183m compared to Q1 2022 mainly due to Amortization intangib
Slide 15: Solid cash of €573m, strong increase in free cash flow
Solid cash of €573m, strong increase in free cash flow Cash Free cash flow (€m) (€m) Cash improved to €573m at the end of March 2023, up from €419m at the end of December 2022. 800 700 155 Free cash flow increased significantly to €155m, up from €41m in Q4 2022. The increase is mainly due to 600 550
Slide 16: FY23 CapEx guidance is €150-€200m
FY23 CapEx guidance is €150-€200m CapEx Working capital Net working capital decreased to €478 million (from (€m) €497m at the end of December 2022). (€m) The number of outstanding days of working capital, 45 600 63 measured against quarterly sales, decreased slightly to 61 days on March 31, 2023, co
Slide 17: Financial outlook
Financial outlook As included in the Q1 2023 press release published on April 25, 2023: On a currency-comparable level, we expect revenue of a €650-690 million for Q2. Based on the current visibility, and reflecting aforementioned order push-outs, we project, following expected growth in the first h
Slide 18: Business environment, strategy, and targets
Business environment, strategy, and targets April 25, 2023 | ASM proprietary information | 18
Slide 19: WFE spending
WFE spending WFE spending WFE spending WFE by technology node TechInsights expects WFE to decrease by 14% in (US$ b) (US$b) 2023, following an increase of 9% in 2022. 160 160 WFE by technology node Strongest growth in leading-edge nodes, spending on 140 140 7nm and below expected to grow from ~25% o
Slide 20: Semiconductor CapEx spending and customer concentration
Semiconductor CapEx spending and customer concentration ASM FY22 revenue by WFE sales by application WFE market by segment Logic & foundry is estimated to account for more than (US$b) customer concentration half of total WFE market in 2023. (in %) 120 ASM FY22 revenue by customer concentration 100 T
Slide 21: ASM is focused on deposition equipment
ASM is focused on deposition equipment WFE market segments 2022 (US$ b) ASM’s focus is on deposition We are market leader in ALD (~55% share). ALD accounts for more than half of our total equipment revenue. 27.3 27.1 We have an expanding position in the Epi market. Selective growth in PECVD and vert
Slide 22: Single-wafer ALD and epitaxy market outlook
Single-wafer ALD and epitaxy market outlook Single-wafer ALD market Epi market (US$b) (US$b) ALD and Epi expected to be the fastest growing segments in the deposition market driven by 3.1 - 3.7 increasing device complexity, 3D structures, and new materials CAGR Mid-term targets: maintain ALD market
Slide 23: Logic/foundry the largest segment for ASM
Logic/foundry the largest segment for ASM FY 2022 FY 2021 FY 2022 In 2022, our equipment revenue was led by foundry, followed by logic and then memory. The combination of logic/foundry accounted for more than half of our equipment sales and was driven by solid spending in the most advanced nodes. Me
Slide 24: Our strategy is growth through innovation
Our strategy is growth through innovation 6 strategic objectives Grow ALD business by maintaining leadership in 5 key strategy enablers logic/foundry and expanding in memory Best people Increase Epi market share Leading-edge innovation Selective growth in VF and PECVD niches Early customer engagemen
Slide 25: Accelerating our sustainability commitment
Accelerating our sustainability commitment 2022 achievements include: Our Net Zero target: • Submitted Net Zero measurements Reduce environmental footprint and targets to the SBTi of our operations • +109% in packaging material reuse 100% renewable electricity by 2024 • ASM was a founding member of
Slide 26: Financial targets towards FY 2025
Financial targets towards FY 2025 FY 2021 FY 2022(1) FY 2025 Revenue €1.7 billion €2.4 billion €2.8 to €3.4 billion(1) 16 - 21% CAGR Revenue growth 34% YOY(1) 33% yoy(2) (FY20-FY25) 46 - 50% Gross margin % 47.9% 47.5% (FY21-FY25) High single digit SG&A % revenue 11.0% 11.4% (FY25) High single digit
Slide 27: Capital allocation strategy
Capital allocation strategy Priority 1 Priority 2 Priority 3 Priority 4 Invest to support Maintain a strong Sustainable Return of future growth balance sheet dividend payments excess cash • R&D to shareholders Increase targeted through share • Capex minimum cash position buybacks • M&A towards €600m
Slide 28: Annex: detailed financials
Annex: detailed financials April 25, 2023 | ASM proprietary information | 28
Slide 29: (Estimated) amortization and earn-out expenses
(Estimated) amortization and earn-out expenses € million Q1 2022 Q4 2022 Q1 2023 Full year 2023 2024 2025 Actual Actual Actual Estimate Estimate Estimate Cost of sales – (3.1) (12.3) (27.0) – – Net research and development expenses – (3.6) (3.5) (14.0) (14.0) (14.0) Selling, general and administrati
Slide 30: Normalized and reported P&L reconciliation
Normalized and reported P&L reconciliation € million Q4 2022 Q4 2022 Q1 2023 Q1 2023 Δ Δ normalized reported normalized reported Revenue 725 725 710 710 Gross profit 340 (3) 337 363 (12) 351 Gross margin 46.9% 46.4% 51.1% 49.4% SG&A (75) (1) (76) (70) (1) (71) SG&A as a % of revenue 10.3% 10.5% 9.9%
Slide 31: Income statement (reported)
Income statement (reported) € million Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 New orders 706 943 676 829 647 Backlog 1,000 1,408 1,525 1,669 1,584 Book-to-bill ratio 1.4 1.7 1.1 1.1 0.9 Revenue 517 559 610 725 710 Cost of sales (270) (294) (316) (388) (359) Gross profit 247 266 293 337 351 Other inc
Slide 32: Balance sheet
Balance sheet € million Mar. 22 Jun. 22 Sep. 22 Dec. 22 Mar. 23 Right-of-use assets 28 27 30 32 34 Property, plant and equipment 274 284 297 312 315 Evaluation tools at customers 67 66 79 69 73 Goodwill 52 33 39 318 318 Other intangible assets 294 345 376 646 647 Investments in associates 884 918 63
Slide 33: Cash flow statement
Cash flow statement € million Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Net earnings from operations 142 160 (150) 237 380 Adjustments to reconcile net earnings to net cash from operating activities 6 17 330 (73) (188) Depreciation, amortization and impairments 25 27 32 38 42 Income tax paid (13) (29)
Slide 34: Gross and net R&D expenses (reported)
Gross and net R&D expenses (reported) € million Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Gross R&D expenses 60 70 78 93 94 Capitalization of development expenses (24) (27) (27) (25) (29) Amortization of capitalized development expenses 7 8 9 11 11 Impairment capitalized development expenses 0 (0) - -
Slide 35: Working capital: historical development
Working capital: historical development € million 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 2017 2018 2019 2020 2021 2022 2023 Working capital (lhs) Quarterly sales (lhs) Days of working capital (rhs) Numbers ba
Slide 36: Orders and backlog: historical development
Orders and backlog: historical development € million 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 Q1 2017 2018 2019 2020 2021 2022 2023 Backlog Orders Numbers based on reported financials (1) Q1 and Q4 2019 exclude the impact
Slide 37: Revenue and operating result: historical development
Revenue and operating result: historical development € million 3,000 700 600 2,500 500 2,000 400 1,500 300 1,000 200 500 100 - - 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Revenue (lhs) Operating result (rhs) 2019 numbers exclude settlement gains of €159m 2022 operating margin exclu
Slide 38: Excess cash returned to shareholders
Excess cash returned to shareholders Dividend per share Cumulative cash returned to market (€ paid over) (€m) 2,500 2,000 1,500 3.00 2.50 2.50 1,000 1.50 2.00 1.00 500 0.70 0.70 0.80 0.50 0.50 0.50 0.60 0.40 1.50 (1) 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2012 2013 2014 2
Slide 39: For more information visit asm.com
For more information visit asm.com April 25, 2023 | ASM proprietary information | 39