ASM INTERNATIONAL N.V. REPORTS THIRD QUARTER 2022 RESULTS

Rhea-AI Summary

ASM International N.V. reported record Q3 2022 revenues of €609.8 million, a 41% increase year-on-year. However, new US export control regulations impacted new orders, which totaled €675.5 million, down from €942.7 million in the previous quarter. Operating profit rose to €159.9 million despite a €321 million impairment charge on investments. Normalized net earnings reached €174.6 million. The company anticipates Q4 sales between €600-630 million, factoring in the effects of the export restrictions, and maintains a strong backlog for future growth.

Positive

• Record Q3 2022 revenues of €609.8 million, a 41% YoY increase.
• Normalized net earnings increased to €174.6 million in Q3 2022, up from €132 million YoY.
• Operating result improved from €117 million last year to €159.9 million in Q3 2022.

Negative

• New orders fell to €675.5 million, significantly down from €942.7 million in Q2 2022 due to export restrictions.
• A €321 million impairment charge negatively affected net earnings, showing a net loss of €150.5 million.

Almere, The Netherlands
October 25, 2022, 6 p.m. CET

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

Q3 revenues at a new record high, Q3 orders impacted by new US export control regulations

FINANCIAL HIGHLIGHTS

EUR million	Q3 2021	Q2 2022	Q3 2022
New orders	624.5	942.7	675.5
YoY change % as reported / at constant currencies	206% / 209%	83% / 73%	8% / 1%
Revenue	432.9	559.5	609.8
YoY change % as reported / at constant currencies	38% / 38%	36% / 30%	41% / 33%
Gross profit margin %	47.2%	47.5%	48.1%
Operating result	117.3	147.6	159.9
Operating result margin %	27.1%	26.4%	26.2%
Share in income of investments in associates (excluding amortization intangible assets resulting from the sale of ASMPT stake in 2013)	27.6	26.9	19.6
Amortization intangible assets (resulting from the sale of ASMPT stake in 2013)	(3.1)	(3.4)	(3.6)
Impairment of investments in associates	—	—	(321.4)
Net earnings (losses)	128.9	160.4	(150.5)
Normalized net earnings (excluding amortization intangible assets resulting from the sale of ASMPT stake in 2013 and impairment)	132.0	163.8	174.6

• New orders of €676 million for the third quarter 2022 have been adjusted to reflect the expected negative impact of the recent US export restrictions to China. The new orders increased by 1% at constant currencies compared to the same period last year (8% as reported).
• Year-on-year revenue growth for the third quarter 2022 was 33% at constant currencies (41% as reported).
• Gross profit margin of 48.1% in the third quarter 2022 was slightly higher compared to 47.2% in the same quarter last year caused by a stronger mix.
• Operating result for the third quarter 2022 improved from €117 million last year to €160 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 impairment charge of €321 million to account for the reduced market valuation of the stake in ASMPT.
• Normalized net earnings for the third quarter 2022 were €175 million, up from €132 million in Q3 last year, and included a translation gain of €25 million compared to a translation gain of €13 million in Q3 2021 and a translation gain of €26 million in Q2 2022.

COMMENT

“ASM continued its strong performance in the third quarter with again record-high revenue,” said Benjamin Loh, President and Chief Executive Officer of ASM International. “Revenue increased by 33% at constant currencies to €610 million in Q3 2022, slightly above the guided range of €570-600 million. Supply chain conditions remained challenging in Q3 and are expected to show moderate improvement in Q4. I want to thank the ASM team and our suppliers for their continued commitment and solid execution. Supported by a 36% increase in operating profit, we generated again a strong free cash flow of €122 million.

We expect the new export regulations that were announced by the US government on October 7, 2022, to negatively impact our business in China. Our equipment sales in China, at 16% of our total revenue in the first nine months of 2022, have been a growing part of our business with a strong contribution to group profitability. Based on a conservative scenario, we expect the new export restrictions will affect more than 40% of our sales in China.

Taking a prudent view, we decided to reduce the Q3 bookings and related backlog with the impacted orders from China that were received in Q3 and prior quarters and still to be shipped in the coming quarters. Our total bookings dropped to €676 million in Q3 compared to a record level of €943 million in Q2. Excluding the reduction of impacted orders from China, the decrease in our Q3 orders compared to Q2 would have been much more moderate. The negative impact from new export regulations is also reflected in our guidance for Q4 sales.”

Taking into account the guidance for Q4, ASM is on track for strong growth in 2022, its sixth consecutive year of double-digit growth, and is expected to clearly outperform the wafer fab equipment (WFE) market in 2022. During the third quarter, the semiconductor end-market further slowed down, with significant declines in the PC and smartphone segments. Combined with an expected deceleration in global economic growth WFE spending is forecasted to be down in 2023, in particular the memory segment. While it is too early to provide guidance for 2023, we believe our company is in good shape, on the back of an expected robust backlog by year-end, our strong position in the leading-edge logic/foundry segment, and solid traction with newly introduced products and applications.”

OUTLOOK

For Q4, at constant currencies, we expect sales of €600-630 million, which includes a negative impact from the new US export regulations, as explained above. The revenue guidance for Q4 also includes the revenue contribution from LPE, following the closure of the acquisition on October 3, 2022. Our expectation that we will finish the year with a continued elevated backlog is unchanged. WFE spending is now expected to increase by a high single-digit percentage in 2022.

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 ASMI'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, October 26, 2022, at 3:00 p.m. CET.

Conference call participants should pre-register using this link to receive the dial-in numbers 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/third-quarter-earnings.

CONTACT

Investor and media contact:

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

Attachment

• 20221025 - Financial results Q3 2022

FAQ

What were ASM International's revenues for Q3 2022?

ASM International reported Q3 2022 revenues of €609.8 million.

How did new orders for ASM International change in Q3 2022?

New orders in Q3 2022 were €675.5 million, down from €942.7 million in Q2 2022.

What is the impact of new US export regulations on ASM International?

The new US export regulations are expected to negatively impact over 40% of ASM's sales in China.

What are the expectations for ASM International's Q4 2022 sales?

ASM International expects Q4 2022 sales between €600-630 million, factoring in the negative impact of export restrictions.

What was ASM International's net earnings for Q3 2022?

ASM International reported net earnings of -€150.5 million for Q3 2022 due to an impairment charge.