ASM reports fourth quarter 2023
Almere, The Netherlands February 27, 2024, 6 p.m. CET
ASM International N.V. (Euronext Amsterdam: ASM) today reports its fourth quarter 2023 operating results (unaudited).
Double-digit full-year revenue growth, outperforming softer WFE market in 2023
Financial highlights
€ million | Q4 2022 | Q3 2023 | Q4 2023 |
New orders | 828.6 | 627.4 | 677.5 |
YoY change % at constant currencies | 26% | 0% | (14%) |
Revenue | 724.8 | 622.3 | 632.9 |
YoY change % at constant currencies | 42% | 9% | (7%) |
Normalized gross profit margin 1 | 46.9% | 48.9% | 47.9% |
Normalized operating result 1 | 189.8 | 157.2 | 141.0 |
Normalized operating result margin 1 | 26.2% | 25.3% | 22.3% |
Share in income of investments in associates (excluding amortization intangible assets resulting from the sale of ASMPT stake 2013) |
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Amortization intangible assets (resulting from the sale of ASMPT stake in 2013) |
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Reversal of impairment of investments in associates | 106.1 | 0.0 | 0.0 |
Net earnings | 236.6 | 129.6 | 90.9 |
Normalized net earnings 2 | 142.4 | 139.1 | 100.3 |
1 Excluding amortization of fair value adjustments from 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 reversal of ASMPT
New orders of €678 million for the fourth quarter 2023 representing a decrease of 14% over the same period last year on a constant currency basis (decreased by 18% as reported).
Year-on-year revenue decrease for the fourth quarter 2023 was 7% at constant currencies (decreased by 13% as reported).
Normalized gross profit margin of 47.9%, improved compared to 46.9% in the same quarter last year, mainly explained by mix, including a continued strong contribution from China sales.
Normalized operating result for the fourth quarter 2023, decreased from €190 million last year to €141 million this year, largely explained by lower sales and increased operating expenses (€13 million).
Normalized net earnings for the fourth quarter 2023 were €100 million, down from €142 million in Q4 last year. This decrease was primarily due to a decline in normalized operating result, partially offset by a lower translation loss of €25 million compared to a translation loss of €36 million in Q4 2022 (Q3 translation gain of €3 million).
Net earnings for the fourth quarter 2023 included a negative impact of €9 million (net of tax) relating to PPA expenses (Q4 2022 €8 million). Details of (estimated) amortization and earn-out expenses (PPA expenses) relating to the 2022 acquisitions of LPE and Reno are found in Annex 2.
Comment
“2023 was another successful year for ASM. Sales increased by 13% at constant currencies, despite softening market conditions, and marking the seventh consecutive year of double-digit growth.” said Benjamin Loh, CEO of ASM. “Revenue in Q4 2023 amounted to €633 million, in line with our guidance of €600-640 million and down compared to the level in Q4 2022. Revenue in the quarter was supported by strong sales in the power/analog/ wafer segment. Bookings at €678 million were slightly better than our expectation and were driven by GAA pilot- line orders and continued strength in China demand.
Our full-year revenue increased to a record-high level of €2.6bn, outperforming the WFE market which was slightly down in 2023. Our sales dropped in memory in 2023, reflecting significant cuts in investment in this segment, and despite relatively healthy demand for high-performance DRAM. The leading-edge logic/foundry segment was also lower in 2023, impacted by weak end-market conditions and delays in some new customers’ fab, as already reported earlier in 2023. This was offset by strong growth in the mature node market segments: in power/analog/wafer, and in mature logic/foundry, particularly in China. Our silicon carbide (SiC) Epi business grew strongly in 2023, comfortably meeting the revenue target of more than €130 million in 2023, and with synergies already paying off. In the fourth quarter of 2023, two more customers selected our latest 200mm SiC Epi tool, with multiple tool orders expected in 2024.
Normalized gross margin increased to 49.3% in 2023, supported by mix, including a substantial increase in sales from China with above-average profitability. Free cash flow increased by 17% in 2023 (on an adjusted basis, excluding cash spent on acquisitions in 2022), even with a further increase in capex.
We remain on track towards our strategic targets and continue to invest in our people, in innovation and expansion. In December, we announced to invest in a new state-of-the-art R&D center in Scottsdale, Arizona. It will be twice as big as the current R&D facility, in Phoenix, Arizona, and will enhance our ALD and Epi product- development efforts.
We also made further progress in accelerating sustainability in 2023. A highlight was the verification of our Net Zero by 2035 targets by SBTi in August 2023, a first in the semiconductor industry. In addition, we increased the use of renewable electricity from 73% to 88% in 2023, and we remain on track to achieve 100% by 2024.”
Outlook
While the broader semiconductor market is expected to recover in 2024, the softer WFE market conditions we saw in the second half of 2023 are expected to continue into the first part of 2024. For the first quarter of 2024, we expect revenue of €600-640 million, with a similar level in the second quarter. For the second half of 2024, we expect revenue to be up compared to the level in the first half year, but it is too early to provide more specific guidance for the second half or for the full year. Looking at the expectations for WFE demand, memory and leading-edge logic/foundry demand is expected to gradually recover in the course of 2024. The revenue contribution from the Chinese market is expected to be still relatively high in the first part of the year, but likely to normalize in the rest of the year. For our SiC Epi business, we expect a continued strong performance in 2024. We expect ASM to benefit from an expected rebound of the WFE market in 2025. Based on this, we remain confident ASM revenue will increase to the forecasted range for 2025 (€3.0-3.6 billion). The move of GAA 2nm technology into high-volume manufacturing in 2025 is expected to be a significant driver for ASM.
Benjamin Loh to retire, Hichem M’Saad to succeed him as new CEO
ASM announced on February 12, 2024, that CEO Benjamin Loh will retire and step down as per the AGM on May 13, 2024. He will be succeeded by Hichem M’Saad, currently member of the Management Board and CTO.
ASM announced €300M expansion of U.S. operations in Scottsdale, Arizona
ASM announced on December 5, 2023, its plans for a new North American expansion to accommodate growing demand for research and development in the semiconductor industry.
ASM is investing €300 million over a period of up to five years to design and construct the new state-of-the-art site on more than 20 acres (8.5 hectares) in Scottsdale, Arizona. This total investment is a combination of capital expenditures related to infrastructure and lab equipment, and includes operational expenses such as the additional research and engineering jobs created with the expansion.
Share buyback program
ASM announces today that its Management Board authorized a new repurchase program of up to €150 million of the company's common shares within the 2024/25 timeframe. This buyback program will be executed by intermediaries and will end as soon as the aggregate purchase price of the common shares acquired by ASM has reached €150 million.
Dividend proposal
ASM will propose to the forthcoming 2024 Annual General Meeting on May 13, 2024, to declare a regular dividend of €2.75 per common share over 2023, increased from the regular dividend paid over 2022 (€2.50 per common share).
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, pandemics, 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.
Quarterly earnings conference call details
ASM will host the quarterly earnings conference call and webcast on Wednesday, February 28, 2024, 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 this link.
Contacts
Investor and media relations Investor relations
Victor Bareño Valentina Fantigrossi
T: +31 88 100 8500 T: +31 88 100 8502
E: investor.relations@asm.com E: investor.relations@asm.com
