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ASM INTERNATIONAL N.V. REPORTS FOURTH QUARTER 2022 RESULTS

ASM International NV
ASM International NV

Almere, The Netherlands
February 28, 2023, 6 p.m. CET

ASM International N.V. (Euronext Amsterdam: ASM) today reports its fourth quarter 2022 operating results (unaudited).

ASM finishes the year with strong bookings and new record high revenue

FINANCIAL HIGHLIGHTS

€ million

Q4 2021

Q3 2022

Q4 2022

New orders

644.9

675.5

828.6

YoY change% as reported / at constant currencies

70% / 70%

8% / 1%

28% / 26%

Revenue

491.3

609.8

724.8

YoY change% as reported / at constant currencies

42% / 40%

41% / 33%

48% / 42%

Gross profit margin%

47.0%

48.1%

46.4%

Normalized gross profit margin% -1

47.0%

48.1%

46.9%

Operating result

131.3

159.9

181.9

Operating result margin%

26.7%

26.2%

25.1%

Normalized operating result -1

131.3

160.4

189.8

Normalized operating result margin% -1

26.7%

26.3%

26.2%

Share in income of investments in associates (excluding amortization intangible assets resulting from the sale of ASMPT stake 2013)

25.8

19.6

8.3

Amortization intangible assets (resulting from the sale of ASMPT stake in 2013)

(3.2)

(3.6)

(3.5)

Impairment of investments in associates

(321.4)

106.1

Net earnings (losses)

134.9

(150.5)

236.6

Normalized net earnings -2

138.1

174.9

142.4

  1. - Excluding amortization of fair value adjustments from respective purchase price allocations (before tax)

  2. - Excluding amortization of fair value adjustments from purchase price allocations (net of tax), change in fair value of the contingent consideration (LPE earn-out) and impairment of ASMPT

  • New orders of €829 million for the fourth quarter 2022 increased by 26% at constant currencies compared to the same period last year (28% as reported). The increase in new orders is partly driven by the acquisition of LPE, which experienced exceptionally strong orders in Q4, partially for delivery in the second half of 2023.

  • Year-on-year revenue growth for the fourth quarter 2022 was 42% at constant currencies (48% as reported).

  • Normalized gross profit margin of 46.9%, excluding PPA expenses in the fourth quarter 2022, was similar to 47.0% in the same quarter last year. Including PPA expenses, gross margin was 46.4% in Q4 2022.

  • Normalized operating result for the fourth quarter 2022, excluding PPA expenses, improved from €131 million last year to €190 million this year driven again by strong revenue growth, which was partly offset by an increase in operating expenses.

  • Net earnings included a non-cash reversal of €106 million of the Q3 impairment of ASMPT, to account for the partial recovery market valuation of the stake in ASMPT.

  • Net earnings include a negative impact of €8 million (net of tax) relating to PPA expenses. Normalized net earnings for the fourth quarter 2022 were €142 million, up from €138 million in Q4 last year, and included a translation loss of €36 million compared to a translation gain of €7 million in Q4 2021 and a translation gain of €25 million in Q3 2022.

  • Details of (estimated) amortization and earn-out expenses (PPA expenses) relating to the acquisition of LPE are found in Annex 2.

COMMENT

“ASM delivered a strong performance yet again in 2022. Revenue increased 33% at constant currency, our sixth consecutive year of double-digit growth. Our ASM team went again the extra mile to meet customer requirements despite the challenging supply chain conditions in 2022,” said Benjamin Loh, President and CEO of ASM. “In the fourth quarter, we realized revenue of €725 million, including record-high sales in the logic/foundry segment. As already announced on January 17, 2023, Q4 revenue exceeded earlier expectations. This was driven by a further improvement in supply chain conditions, even though we continue to experience constraints in certain areas.

Q4 bookings amounted to €829 million, driven by steady logic/foundry demand, and also record-high power/analog bookings. The latter included a solid contribution from LPE, which has been consolidated since October 3, 2022. Supported by strong demand in the silicon carbide market, and taking into account persistent supply constraints, we expect LPE to generate revenue in excess of €130 million in 2023, up from our previous forecast of more than €100 million.

For the full year, our revenue increased to a new record high of €2,411 million, led by strong growth in our ALD and Epi product lines. Operating profit increased by 29% to €632 million, even with significantly higher investment in R&D and SG&A. Excluding €314 million in cash spent on acquisitions, we generated free cash flow of €381 million, up 43% from 2021. In 2022, we continued with our focus on sustainability and we took important next steps by submitting our GHG measurements and targets for validation to the Science Based Targets initiative (SBTi) in Q4 2022.

OUTLOOK

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 on the current visibility, we expect revenue in the second half of 2023 to remain at a healthy level, albeit somewhat lower than in the first half of 2023. Looking at the wafer fab equipment (WFE) market in 2023, logic/foundry spending on the most advanced nodes and automotive-related power/analog demand is expected to remain resilient. The reduction in memory spending is expected to continue in 2023, while demand for trailing-edge nodes in logic/foundry, especially consumer related is expected to soften. In total, the WFE market is forecasted to drop by a mid to high teens percentage in 2023, a level that we expect to outperform, supported by our strong positions in the leading-edge logic/foundry market, and also by the momentum of newly introduced product and applications.

Taking into account ASM’s strong growth in the last years, in combination with continued solid growth opportunities, we need to further expand our capacity around the world, including the recently announced expansion of our innovation and manufacturing infrastructure in South Korea. As a result, we have decided to step up CapEx to a level of €150-200 million in 2023.

LPE ACQUISITION

On July 18, 2022, ASM entered into a definitive agreement under which it would at closing acquire all of the outstanding shares of LPE, an Italian based manufacturer of epitaxial reactors for silicon carbide (SiC) and silicon. As announced in our press release of July 18, 2022, the transaction was financed with a combination of cash, a conditional earn out, and 631,154 ASM shares (a combination of 580,000 treasury shares and 51,154 newly issued shares).

The acquisition was completed on October 3, 2022, and LPE is now a fully owned subsidiary and operates as a product unit under ASM’s Global Products organization.

DIVIDEND PROPOSAL

ASM will propose to the forthcoming 2023 Annual General Meeting on May 15,2023, to declare a regular dividend of €2.50 per common share over 2022, maintaining the same level of regular dividend paid over 2021 (€2.50 per common share).

REVOLVING CREDIT FACILITY (RCF)

In 2023, ASM converted its revolving facility into a Sustainability-Linked RCF aligned with the Sustainability-Linked Loan Principles by the Loan Market Association.

Under the terms of the facility, the interest rate is linked to the achievement of long-term sustainability goals targeting gender diversity, net zero and value chain packaging reuse which are in line with ASM’s sustainability strategic focus. Achievement of these targets will impact the interest rate as the lenders will apply a discount on the existing margin or add a penalty to the existing margin depending on the sustainability achievement against the target.

About ASM International

ASM International N.V., headquartered in Almere, the Netherlands, and its subsidiaries design and manufacture equipment and process solutions to produce semiconductor devices for wafer processing, and have facilities in the United States, Europe, and Asia. ASM International's common stock trades on the Euronext Amsterdam Stock Exchange (symbol ASM). For more information, visit ASM's website at www.asm.com.

Cautionary Note Regarding Forward-Looking Statements: All matters discussed in this press release, 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-looking statements. These include, but are not limited to, economic conditions and trends in the semiconductor industry generally and the timing of the industry cycles specifically, currency fluctuations, corporate transactions, financing and liquidity matters, the success of restructurings, the timing of significant orders, market acceptance of new products, competitive factors, litigation involving intellectual property, shareholders or other issues, commercial and economic disruption due to natural disasters, terrorist activity, armed conflict or political instability, changes in import/export regulations, epidemics and other risks indicated in the Company's reports and financial statements. The Company assumes no obligation nor intends to update or revise any forward-looking statements to reflect future developments or circumstances.

This press release contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

ASM will host the quarterly earnings conference call and webcast on Wednesday, March 1, 2023, at 3:00 p.m. CET.

Conference call participants should pre-register using this link to receive the dial-in numbers, passcode and a personal PIN, which are required to access the conference call.

A simultaneous audio webcast, and replay will be accessible at https://www.asm.com/investors/webcasts-presentations/2022/fourth-quarter-earnings.

CONTACT

Investor and media contact:

Victor Bareño
T: +31 88 100 8500
E: investor.relations@asm.com