Asm International N.v. · EURONEXT:ASM
Asm International — Q2 2024 Earnings Presentation
44 slides from Asm International's earnings presentation, Jul 23, 2024
Slide 1: ASM Q2 2024 results
ASM Q2 2024 results July 23, 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-l
Slide 3: Contents
Contents 1 Investment highlights 2 Q2 2024 results 3 Business environment, strategy, and targets 4 Annex: detailed financials July 23, 2024 ASM proprietary information | 3
Slide 4: Investment highlights
Investment highlights July 23, 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 Si Epi market (CAGR of 10%-15% from 202
Slide 6: Q2 2024 results
Q2 2024 results July 23, 2024 ASM proprietary information | 6
Slide 7: Q2 2024 financial highlights
Q2 2024 financial highlights €755m €706m 49.8% New orders Revenue Adjusted gross margin (+56% yoy at constant currencies) (+6% yoy at constant currencies) (49.0% in Q2 2023) €182m 25.8% €165m Adjusted Adjusted Adjusted net earnings operating profit(1) operating margin(1) (€161m in Q2 2023) (€180 in
Slide 8: Q2 2024 highlights
Q2 2024 highlights Orders and revenue • New orders came in at €755 million up 56% yoy at constant currencies mainly driven by demand for gate-all-around (GAA) and HBM. • Revenue of €706 million, up 6% yoy at constant currencies, slightly above the top end of our previous guidance of €660-700 million
Slide 9: Orders +56% yoy at cc thanks to solid GAA & HBM
Orders +56% yoy at cc thanks to solid GAA & HBM Orders and backlog (€m) Q2 2024 new orders came in at €755m, +8% qoq at 1.1 1.1 1,800 0.7 1.5 constant currencies (cc). 1,576 1,600 1,516 1,400 New orders in Q2 2024 were led by memory, followed 1,400 by logic and foundry. 1,200 1,000 755 800 698 486 6
Slide 10: Revenues +6% yoy at cc, solid GM at 49.8%
Revenues +6% yoy at cc, solid GM at 49.8% Revenue Adjusted gross profit Revenue (€m) (€m) Q2 2024 revenue increased to €706 million, +6% yoy at cc (+6% as reported) and 10% qoq (+11% as reported). 900 900 52.9% 58.0% 49.0% 49.8% 800 800 Revenue in the second quarter was mainly driven by 706 foundry,
Slide 11: Continued R&D investments; one-off SG&A expense
Continued R&D investments; one-off SG&A expense Adjusted SG&A Adjusted R&D Adjusted SG&A (€m) (€m) Adjusted SG&A increased 19% yoy and 20% qoq, mainly explained by a one-off item of €8.4 million tax charge due to the accelerated vesting of previously 180 15.0% 14.2% 12.4% 160 11.4% 11.7% granted per
Slide 12: OM at 25.8% due to lower GM and higher OpEx
OM at 25.8% due to lower GM and higher OpEx Adjusted operating result Adjusted finance income (€m) Adjusted operating result (€m) The decrease compared to previous quarter is driven by increased spending in SG&A, mainly Q2 23 Q1 24 Q2 24 40.0% caused by a one-off tax charge, and by increased Adjuste
Slide 13: Adjusted net earnings at €165 m
Adjusted net earnings at €165 m Adjusted net earnings Income taxes Income taxes in the second quarter 2024 amounted to (€m) an expense of €40 million, up from €36 million in the same period of 2023. Q2 23 Q1 24 Q2 24 Net earnings Net earnings 151.2 173.1 159.0 Adjusted net earnings in the second qua
Slide 14: Solid cash at €637m and healthy FCF at €103 m
Solid cash at €637m and healthy FCF at €103 m Cash Free cash flow (€m) (€m) Cash decreased to €637 million at the end of June 2024, down from €712 million at the end of March. 712 In Q2 we used €135 million in cash for the payment of 637 637 dividends and €59 million for share buybacks. Free cash fl
Slide 15: FY24-27 capex guidance is €100-180 m
FY24-27 capex guidance is €100-180 m CapEx decreased to €36 million at the end of June Capital expenditures Working capital 2024, compared to €44 million in Q2 2023. (€m) (€m) Net working capital increased to €502 million, mainly 70 explained by lower levels of current liabilities and offset 64 600
Slide 16: Financial outlook
Financial outlook As included in the Q2 2024 press release published on July 23, 2024: While conditions in end markets continue to be mixed, the recovery of the wafer fab equipment is gradually picking up pace, as AI demand is fueling investments in HBM DRAM and in leading-edge logic/foundry. For 20
Slide 17: Business environment, strategy, and targets
Business environment, strategy, and targets July 23, 2024 ASM proprietary information | 17
Slide 18: Digital transformation drives structural growth
Digital transformation drives structural growth Megatrends driving the semiconductor market 1,400 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 2034 Source: TechInsi
Slide 19: AI to drive increased capacity requirements
AI to drive increased capacity requirements AI semiconductor sales outlook (US$b) What it means for ASM: 200 • Increased capacity • More datacenters with higher content 160 servers GPU, ASIC, communications, HB DRAM • More silicon content edge device (ex. 120 phone GPU, NPU, Auto ADAS systems) → Mor
Slide 20: WFE spending expected to grow in 2024-2027
WFE spending expected to grow in 2024-2027 WFE market forecast WFE growth driven by secular trends of (US$b) AI, 5G, EV, edge computing, etc. • Longer-term trend supported by multi- 140 year investments • Further scaling, 3D transitions and GAA 120 driving investments in advanced CMOS • In recent ye
Slide 21: WFE by application & ASM customer concentration
WFE by application & ASM customer concentration WFE sales by ASM FY23 revenue by WFE market by application application customer Logic/foundry to account for more than half of total (US$b) concentration WFE sales in 2024 in % ASM FY2023 revenue by customer 120 concentration The 5 largest customers ac
Slide 22: ASM is focused on deposition equipment
ASM is focused on deposition equipment WFE market segments in 2023 (US$b) • ASM’s focus is on deposition 9 • We are market leader in ALD (mid 50s% 30 share). ALD accounts for more than half 13 of our total equipment revenue • Expanding our position in the Si Epi market and entered the high-growth Si
Slide 23: 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 24: 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 25: 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 26: 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 27: 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 28: 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 29: Target net zero by 2035
Target net zero by 2035 SBTi verified ASM Net Zero 2035 target, announced in August 2023 ASM launched its Climate Transition Plan (CTP) in March 2024 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 fo
Slide 30: 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 July 23, 2024 ASM proprietary inform
Slide 31: FY25 & FY27 financial targets
FY25 & FY27 financial 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 - 50% (FY25-FY27) SG&A
Slide 32: 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 33: Annex: detailed financials
Annex: detailed financials July 23, 2024 ASM proprietary information | 33
Slide 34: (Estimated) amortization and earn-out expenses
(Estimated) amortization and earn-out expenses € million Q2 23A Q1 24A Q2 24A FY 24E FY 25E FY 26E FY 27E Cost of sales (4.7) - - - - - - Net research and development expenses (3.5) (3.5) (3.5) (14.0) (14.0) (14.0) (14.0) Selling, general and administrative expenses (1.2) (1.2) (1.2) (4.9) (4.9) (4.
Slide 35: Adjusted and reported P&L reconciliation
Adjusted and reported P&L reconciliation € million Q1 2024 reported Δ Q1 2024 adjusted Q2 2024 reported Δ Q2 2024 adjusted Revenue 639 - 639 706 - 706 Gross profit 338 - 338 352 - 352 Gross margin 52.9% 52.9% 49.8% 49.8% SG&A (74) 1 (73) (89) 1 (87) SG&A as a % of revenue 11.6% 11.4% 12.6% 12.4% Net
Slide 36: Income statement (reported)
Income statement (reported) € million Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 New orders 486 627 678 698 755 Backlog 1,400 1,404 1,476 1,516 1,576 Book-to-bill ratio 0.7 1.0 1.1 1.1 1.1 Revenue 669 622 633 639 706 Cost of sales (346) (323) (334) (301) (354) Gross profit 323 299 299 338 352 Selling,
Slide 37: Balance sheet
Balance sheet € million Jun. 23 Sep. 23 Dec. 23 Mar. 24 Jun. 24 PP&E (incl. RoU assets) 372 420 420 435 449 Evaluation tools at customers 71 71 80 89 91 Goodwill 320 321 320 321 321 Other intangible assets 664 696 706 738 770 Investments in associates 873 886 862 879 892 Other non-current assets 19
Slide 38: Cash flow statement
Cash flow statement € million Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Net earnings from operations 151 130 91 173 159 Adjustments to reconcile net earnings to net cash from operating 23 27 16 22 18 activities Depreciation, amortization and impairments 44 44 52 42 44 Income tax paid (38) (28) (23) (2
Slide 39: Gross and net R&D expenses (reported)
Gross and net R&D expenses (reported) € million Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Gross R&D expenses 104 102 111 109 118 Capitalization of development expenses (37) (39) (42) (44) (45) Amortization of capitalized development expenses 11 11 11 12 13 Impairment capitalized development expenses -
Slide 40: 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 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 2019 2020 2021 2022 2023 2024 Working capital (lhs) Quarterly sales (lhs) Days of working capital (rhs) Numbers based on rep
Slide 41: 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 - Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2020 2021 2022 2023 2024 Backlog Orders Numbers based on reported financials Q4 2019 exclude the impact of patent litigation and arbitration
Slide 42: 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 - - 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Revenue (lhs) Operating result (rhs) 2019 numbers exclude settlement gains of €159 m 2022 operating margin exclu
Slide 43: 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 0.70 0.70 0.80 500 0.50 0.60 1.50 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2013 2014 2015 2016 2017 2018 2019 2020 2
Slide 44: For more information visit asm.com
For more information visit asm.com July 23, 2024 ASM proprietary information | 44