Asm International N.v. · EURONEXT:ASM
Asm International — Q4 2022 Earnings Presentation
41 slides from Asm International's earnings presentation, Feb 28, 2023
Slide 1: ASM Q4 2022 Results
Slide 2: Forward-looking statements
All matters discussed in this presentation, except for any historical data, are forward-looking statements. Forward-looking statements do not guarantee future performance and involve risks and uncertainties. You should be aware that our actual results may differ materially from those contained in th
Slide 3: February 28, 2023 | ASM proprietary information | 3
February 28, 2023 | ASM proprietary information | 3
Slide 4: Investment Highlights
INVESTMENT HIGHLIGHTS ~
Slide 5: Solid cash position of €419m at the end of Q4 2022, no debt
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 silicon Epi market (CAGR of 13%-18% from 2020 to 2025) Selective growth in PECVD and vertical
Slide 6: Q4 and FY 2022 Results
Slide 7: Q4 new orders of €829m increased 28% YoY
Q4 new orders of €829m increased 28% YoY (26% at constant currencies), led by continued strong logic/foundry demand, followed by power/analog (including exceptionally strong orders for LPE in the quarter), and then memory Backlog of €1,669m at the end of 2022 compared to €811m at the end of 2021 Q4
Slide 8: Q4 and FY 2022 key figures
€ million, year-on-year comparisons +28% +39% €419m Orders: €829m Revenue: €2,411m Cash position (+26% at constant currencies) (+33% at constant currencies) 47.5% 26.6% €2.50 Proposed DPS Normalized gross margin(1) Normalized operating margin(1) to be paid over 2022 (47.9% in FY 2021) (28.4% in FY 2
Slide 9: New orders and backlog
€ million € million Book-to-bill ratio • New orders for the Q4 2022 increased to €829m million, +26% at constant currencies and were led by foundry, followed by power/analog (including exceptionally strong orders from LPE) and then logic and memory • Q4 new orders included rebooking of part of previ
Slide 10: Q4 2022 revenue increased 48% YoY
€ million € million Spares & services revenue Equipment revenue Spares & services revenue Equipment revenue • FY22 revenue increased 39% YoY (33% at constant • Q4 2022 revenue increased 48% YoY (42% at constant currencies) currencies), and 19% QoQ (20% at constant • Equipment revenue increased 38% a
Slide 11: 2022 equipment revenue led by foundry, followed by logic and memory
• 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 in 2022 by solid spending in the most advanced nodes • Memory sales grew by a double-digit percentage in 2022,
Slide 12: Gross profit and gross margin
€ million € million Gross profit margin Normalized gross margin(1) Amortization PPA Gross profit margin Normalized gross margin(1) Amortization PPA • Gross profit increased 46% YoY and 15% QoQ. • Gross margin decreased by 0.5% ppt, mainly driven • Excluding amortization of the purchase price by mix
Slide 13: SG&A included €1 million in PPA expense in Q4 2022
€ million € million Normalized SG&A(1) as % of Normalized SG&A(1) as % of SG&A as % of revenue Amortization PPA SG&A as % of revenue Amortization PPA revenue revenue • SG&A expenses increased 38% YoY and 5% QoQ • SG&A increased 46% YoY driven by continued • The YoY increase is mainly due to headcoun
Slide 14: Q4 net R&D included €4 million in PPA expense
€ million € million Normalized net R&D(1) as % Normalized net R&D(1) as % Net R&D as % of revenue Amortization PPA Net R&D as % of revenue Amortization PPA of revenue of revenue • Q422 net R&D increased 61% YoY and 30% QoQ • FY22 gross R&D increased 46% YoY • The YoY increase was mainly due to incre
Slide 15: Operating result and operating margin
€ million € million Operating margin Normalized operating margin(1) Amortization PPA Operating margin Normalized operating margin(1) Amortization PPA • Normalized operating margin is 26.6% in FY22, a • Excluding the impact of PPA expenses in Q422, decrease of 1.8% ppt, as a result of a slightly lowe
Slide 16: Share in income of investments in associates and impairment
€ million € million Amortization intangible assets(1) Share in income of investments in associates Amortization intangible assets(1) Share in income of investments in associates • The impairment of €321m on investments in associates in Q3 IMPAIRMENT, BEGINNING OF 2022, was partly reversed by €106m a
Slide 17: Net earnings bridge
€ million Normalized net Amortization Finance Income taxes Amortization Impairment Net earnings earnings(1) intangibles expense (earn- intangibles reversal Reno and LPE(2) out) ASMPT(3) € million Normalized net Amortization Finance Income taxes Amortization Impairment Net earnings earnings(1) intang
Slide 18: Free cash flow and cash position
€ million € million Cash spent on acquisitions • Excluding cash spent on acquisitions (€314m), FCF in FY2022 amounted to €381 • Cash position in Q4 2022 remained solid at a level of • Including cash spent on acquisitions, FCF was €67m €419m, despite the two acquisitions carried out in 2022 (compared
Slide 19: CapEx and working capital
€ million € million Days of working capital • CapEx increased to €101m in FY22 (R&D labs, fitting out of second manufacturing floor in Singapore) • Net working capital increased to €497m, mainly • This was in line with our earlier indication that CapEx in explained by higher inventory levels 2022 wo
Slide 20: Outlook: record backlog of €1.7 billion
As included in the Q4 2022 earnings press release published on February 28, 2023: ASM started the year with a record-high order backlog of €1.7 billion. On a currency comparable level, we expect revenue for Q1 of €660 - 700 million, with a slight increase in Q2 revenue compared to this level. Based
Slide 21: Business Environment, Strategy, and Targets
Slide 22: TechInsights expects WFE to decrease by 16% in 2023
US$ billion US$ billion ≤7nm 10nm 14nm 22nm 32nm 45nm >65nm Source: TechInsights, December 2022 Source: Gartner, January 2022 • Strongest growth in leading-edge nodes, spending on • TechInsights expects WFE to decrease by 16% in 2023 7nm and below expected to grow from ~25% of WFE in following an in
Slide 23: Logic & foundry share of WFE and customer concentration
US$ billion IN % Logic & foundry Memory Other 3 largest customers From 4th to 10th customer Rest of customers Source: TechInsights, December 2022 • The 10 largest customers accounted for about 78% • Logic & foundry is estimated to account for more of revenue in FY 2022 than half of total WFE sales i
Slide 24: ALD and Epi expected to be fastest growing deposition segments
US$ billion US$ billion CAGR 16-20% CAGR 13-18% • ALD and Epi expected to be the fastest growing segments in the deposition market driven by increasing device complexity, 3D structures, and new materials • Mid-term targets: maintain ALD market share (2025: >55% vs 2020:~55%); increase Epi market sha
Slide 25: Strategic objectives and key strategy enablers
6 STRATEGIC OBJECTIVES 5 KEY STRATEGY ENABLERS Grow ALD business by maintaining leadership in Best people logic/foundry and expanding in memory Increase Epi market share Leading-edge innovation Selective growth in VF and PECVD niches Early customer engagements Grow spares & services business Flawles
Slide 26: Net Zero target and 2022 achievements
Our Net Zero target: 2022 achievements include: Reduce environmental footprint of Submitted Net Zero measurements our operations and targets to the SBTi 100% renewable +109% in packaging material reuse electricity by 2024 ASM was a founding member of the Aim to be net zero by 2035 (scope 1, 2 Semico
Slide 27: 2025 financial targets
FY 2020 FY 2022(1) FY 2025 Revenue €1.3 billion €2.4 billion €2.8 to €3.4 billion(2) 22% CAGR 16-21% CAGR Revenue growth 33% YoY(2) (FY16-FY20) (FY20-FY25) 46-50% Gross margin % 47.0% 47.5% (FY21-FY25) High single digit SG&A % revenue 11.9% 11.4% (FY25) High single digit R&D (net) % revenue 10.5% 9.
Slide 28: Capital allocation priorities
Priority 1 Priority 2 Priority 3 Priority 4 Invest to support Maintain a strong Sustainable dividend Return of excess cash future growth balance sheet payments to shareholders through share • R&D • Increase targeted buybacks • Capex minimum cash position • M&A towards €600m in coming years February
Slide 29: Annex: Detailed Financials
Slide 30: Impact of purchase price allocation
€ million Cost of sales (3.1) (3.1) (26.9) — — Net research and development expenses (3.6) (4.4) (14.2) (14.2) (14.2) Selling, general and administrative expenses (1.2) (1.2) (4.8) (4.8) (4.8) Total impact on operating results (7.9) (8.7) (45.8) (19.0) (19.0) Finance expenses(1) (2.6) (2.6) (9.7) (8
Slide 31: Normalized results reconciliation
€ million Revenue 725 725 2,411 2,411 Gross profit 340 3 337 1,146 3 1,143 Gross margin 46.9% 46.4% 47.5% 47.4% SG&A 75 (1) 76 275 (1) 277 SG&A as a % of revenue 10.3% 10.5% 11.4% 11.5% Net R&D 75 (4) 79 229 (4) 234 Net R&D as a % of revenue 10.4% 10.9% 9.5% 9.7% Operating profit 190 8 182 641 9 632
Slide 32: Consolidated income statement by quarter
€ million New orders 645 706 943 676 829 2,196 3,153 Backlog 811 1,000 1,408 1,525 1,669 811 1,669 Book-to-bill ratio 1.3 1.4 1.7 1.1 1.1 1.3 1.3 Revenue 491 517 559 610 725 1,730 2,411 Cost of sales (260) (270) (294) (316) (388) (902) (1,268) Gross profit 231 247 266 293 337 828 1,143 Other income
Slide 33: Consolidated balance sheet
€ million Cash and cash equivalents 492 550 552 670 419 Accounts receivable 447 502 483 520 581 Inventories 212 256 341 464 538 Other current assets 70 76 80 98 133 Right-of-use assets - net 27 28 27 30 32 Investments in associates incl. other investments 849 884 918 637 692 Property, plant and equi
Slide 34: Cash flow statement
€ million Net earnings 135 142 160 (150) 237 495 389 Depreciation, amortisation and impairments 27 25 27 32 38 96 122 Net loss (gain) from sale of PP&E (4) 0 - 0 (0) (4) (0) Share in income of investments in associates (23) (20) (24) 305 (111) (74) 151 Evaluation tools 12 (7) (1) (15) 2 (8) (21) Oth
Slide 35: Gross and net R&D expenses
€ million Gross R&D expenses 64 78 93 206 302 Capitalization of development expenses (24) (27) (25) (82) (103) Amortization of capitalized development exp. 8 9 11 25 35 Impairment of capitalized development exp. 1 - - 2 0 Net R&D expenses 49 61 79 151 234 Gross R&D expenses as % of revenue 13.0% 12.
Slide 36: ASM's focus is on deposition
US$ billion ASM’s focus is on deposition We are market leader in ALD (mid 50s% share). ALD accounts for more than half of our total equipment revenue Expanding our position in the silicon Epi market and entered the high-growth silicon carbide (SiC) Epi market Selective growth in PECVD and vertical f
Slide 37: € million
€ million (1) (1) (1) (1) Numbers based on reported financials February 28, 2023 | ASM proprietary information | 37 (1) Excluding the impact of patent litigation and arbitration settlements
Slide 38: € million
€ million (1) (1) Numbers based on reported financials February 28, 2023 | ASM proprietary information | 38 (1) Excluding the impact of patent litigation and arbitration settlements
Slide 39: € million (1) Excluding settlement gains of €159m
€ million (1) (1) Excluding settlement gains of €159m February 28, 2023 | ASM proprietary information | 39
Slide 40: Dividends paid
€ paid over € million (1) (1) Proposed February 28, 2023 | ASM proprietary information | 40
Slide 41: For additional information visit asm.com