Asm International N.v. · EURONEXT:ASM
Asm International — Q1 2024 Earnings Presentation
44 slides from Asm International's earnings presentation, Apr 23, 2024
Slide 1: ASM Q1 2024 results
ASM Q1 2024 results April 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-
Slide 3: Contents
Contents 1 Investment highlights 2 Q1 2024 results 3 Business environment, strategy, and targets 4 Annex: detailed financials April 23, 2024 ASM proprietary information | 3
Slide 4: Investment highlights
Investment highlights April 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: Q1 2024 results
Q1 2024 results April 23, 2024 ASM proprietary information | 6
Slide 7: Q1 2024 Financial highlights
Q1 2024 Financial highlights €698m €639m 52.9% New orders Revenue Adjusted gross margin(1) (10% yoy at constant currencies) (-8% yoy at constant currencies) (51.1% in Q1 2023) €192m 30.0% €173m Adjusted Adjusted Net earnings operating profit(1) operating margin(1) (€380m in Q1 2023) (€221m in Q1 202
Slide 8: Q1 2024 highlights
Q1 2024 highlights Orders and revenue • Q1 new orders came in at €698 million up 10% at constant currencies compared to Q1 2023, supported by healthy GAA 2nm orders, and a strong increase in memory orders, mainly for HBM-related DRAM applications. • Revenue down 8% yoy at constant currencies, but at
Slide 9: New orders supported by GAA and HBM
New orders supported by GAA and HBM Orders and backlog Q1 2024 new orders came in at €698 million, up (€m) 10% yoy at constant currencies. 0.9 1.1 1.1 We booked healthy 2nm GAA orders and a strong 1,800 1,797 1,794 1,790 1,787 1,784 1,781 1,778 1,774 1.0 1,771 1,768 1,765 1,761 1,758 increase in mem
Slide 10: Revenue at high end of guidance, solid GM
Revenue at high end of guidance, solid GM Revenue Adjusted gross profit Revenue (€m) (€m) Q1 2024 revenue came in at €639 million, down 8% yoy and up 2% qoq at cc, and was at the high end 900 of the guidance of €600-640 million. 52.9% 800 51.1% Revenue was mainly driven by foundry, followed by 800 7
Slide 11: SG&A growth moderates, continued R&D investment
SG&A growth moderates, continued R&D investment Adjusted SG&A Adjusted R&D Adjusted SG&A (€m) (€m) Adjusted SG&A increased 4% yoy and decreased 12% qoq, mainly explained by lower variable 13.2% 11.4% 12.5% expense and somewhat lower expenses across the 9.9% 11.4% 10.1% board in most departments. 129
Slide 12: OM at 30.0% thanks to higher gross margin & lower opex
OM at 30.0% thanks to higher gross margin & lower opex Adjusted operating result Adjusted finance income (€m) Adjusted operating result (€m) Adjusted operating result was up qoq but down yoy, mainly explained by the decrease in revenue and Q1 23 Q4 23 Q1 24 31.2% 30.0% 34.0% partly offset by the inc
Slide 13: Adjusted net earnings up €79m qoq
Adjusted net earnings up €79m qoq Adjusted net earnings Adjusted net earnings in the first quarter 2024 (€m) increased by €79 million to €179 million compared to previous quarter mainly due to higher operating results. Q1 23 Q4 23 Q1 24 Net earnings 380 91 173 Amortization intangible assets (17) (9)
Slide 14: Solid cash of €712m, FCF down due to increased working capital
Solid cash of €712m, FCF down due to increased working capital Cash Free cash flow Cash (€m) (€m) Cash increased to €712 million at the end of March 2024, up from €637 million at the end of December 2023. 712 Free cash flow (FCF) 637 FCF decreased to €62 million, down from €94 573 million in Q4 23,
Slide 15: Higher capex and working capital
Higher capex and working capital Capital expenditures Working capital Capex Capex increased to €31 million, up from €25 million (€m) (€m) in Q4 2023. 70 70 70 Annual capex target continues to be €100-180 61 60 million. 60 600 495 50 500 478 Working capital 50 425 Net working capital increased to €49
Slide 16: Financial outlook
Financial outlook As included in the Q1 2024 press release published on April 23, 2024: While market conditions are still mixed in the first part of the year, we expect the recovery in wafer fab equipment (WFE) spending to gradually pick up speed in the remainder of the year. We expect revenue in th
Slide 17: Business environment, strategy, and targets
Business environment, strategy, and targets April 23, 2024 ASM proprietary information | 17
Slide 18: Digital transformation drives structural growth
Digital transformation drives structural growth Megatrends driving the semiconductor market Semiconductor revenue (US$ billion) 1,400 1,200 Doubling to US$ 1 trillion by 2030 1,000 800 600 400 200 - 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Source: TechInsights,
Slide 19: AI to drive increased capacity requirements
AI to drive increased capacity requirements AI semiconductor sales outlook (US$b) What it means for ASM: 120 • Increased capacity • More datacenters with higher content 100 servers GPU, ASIC, communications, HB DRAM 80 • More silicon content edge device (ex. phone GPU, NPU, Auto ADAS systems) 60 → M
Slide 20: WFE spending expected to grow in 2024-2027
WFE spending expected to grow in 2024-2027 WFE market forecast WFE growth driven by secular trends of (US$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 market by ASM FY23 revenue by WFE market by application application customer Logic/foundry to account for more than half of total in US$b concentration WFE sales in 2024 in % ASM FY2023 revenue by customer 120 concentration The 5 largest customers
Slide 22: ASM is focused on deposition equipment
ASM is focused on deposition equipment WFE market segments in 2023 ($b) • ASM’s focus is on deposition 9 • We are market leader in ALD (mid 50s% share). ALD accounts for more than half 13 30 of our total equipment revenue • Expanding our position in the Si Epi market and entered the high-growth SiC
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 April 23, 2024 ASM proprietary infor
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 April 23, 2024 ASM proprietary information | 33
Slide 34: (Estimated) amortization and earn-out expenses
(Estimated) amortization and earn-out expenses € million Q1 2023 Q4 2023 Q1 2024 FY 2024 FY 2025 FY 2026 FY 2027 Actual Actual Actual Estimate Estimate Estimate Estimate Cost of sales (12.3) (4.7) — — — — — Net research and development expenses (3.5) (3.5) (3.5) (14.0) (14.0) (14.0) (14.0) Selling,
Slide 35: Adjusted and reported P&L reconciliation
Adjusted and reported P&L reconciliation € million Q4 2023 reported Δ Q4 2023 adjusted Q1 2024 reported Δ Q1 2024 adjusted Revenue 633 633 639 639 Gross profit 299 5 303 338 - 338 Gross margin 47.2% 47.9% 52.9% 52.9% SG&A (85) 1 (83) (74) 1 (73) SG&A as a % of revenue 13.4% 13.2% 11.6% 11.4% Net R&D
Slide 36: Income statement (reported)
Income statement (reported) € million Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 New orders 647 486 627 678 698 Backlog 1,584 1,400 1,404 1,434 1,516 Book-to-bill ratio 0.9 0.7 1.0 1.1 1.1 Revenue 710 669 622 633 639 Cost of sales (359) (346) (323) (334) (301) Gross profit 351 323 299 299 338 Other inc
Slide 37: Balance sheet
Balance sheet € million Mar. 23 Jun. 23 Sep. 23 Dec. 23 Mar. 24 Right-of-use assets 34 34 36 35 35 Property, plant and equipment 315 338 384 385 400 Evaluation tools at customers 73 71 71 80 89 Goodwill 318 320 321 320 321 Other intangible assets 647 664 696 706 738 Investments in associates 892 873
Slide 38: Cash flow statement
Cash flow statement € million Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Net earnings from operations 380 151 130 91 173 Adjustments to reconcile net earnings to net cash from operating activities (188) 23 27 16 22 Depreciation, amortization and impairments 42 44 44 52 42 Income tax paid (30) (38) (28)
Slide 39: Gross and net R&D expenses (reported)
Gross and net R&D expenses (reported) € million Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Gross R&D expenses 94 104 102 111 109 Capitalization of development expenses (29) (37) (39) (42) (44) Amortization of capitalized development expenses 11 11 11 11 12 Impairment capitalized development expenses -
Slide 40: 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 2018 2019 2020 2021 2022 2023 2024 Working capital (lhs) Quarterly sales (lhs) Days of working capital (rhs) Numbers ba
Slide 41: 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 2018 2019 2020 2021 2022 2023 2024 Backlog Orders Numbers based on reported financials Q1 and Q4 2019 exclude the impact of
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 - - 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 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 0.80 500 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 44: For more information visit asm.com
For more information visit asm.com April 23, 2024 ASM proprietary information | 44