ASM INTERNATIONAL N.V. REPORTS THIRD QUARTER 2016 RESULTS
Almere, The Netherlands
October 26, 2016
ASM International N.V. (Euronext Amsterdam: ASM) today reports its third quarter 2016 operating results (unaudited) in accordance with IFRS.
With the 2015 Q4 earnings release, published on February 23, 2016, ASMI announced that as of January 1, 2016, it will report its financial results in accordance with IFRS. Up until the last reporting regarding 2015, ASMI's primary external and internal reporting has been based on US GAAP. In addition ASMI issued quarterly reconciliations of net earnings and shareholders' equity and (semi) annual financial statements prepared in accordance with International Financial Reporting Standards (IFRS). Following the voluntary delisting from NASDAQ, August 2015, ASMI migrated to IFRS as its only internal and external reporting standard from January 1, 2016 and discontinued the use of US GAAP as of the same date. During 2016 comparable results based on US GAAP will be presented, as from 2017 results based on IFRS only will be reported.
The main deviations between IFRS and US GAAP are explained in Annex 2.
ASMI results based on IFRS.
| || Quarter |
| EUR million || Q3 2015 || Q2 2016 || Q3 2016 |
| New orders || 148.1 || || 159.1 || || 122.6 || |
| Net sales || 162.0 || || 138.7 || || 144.2 || |
| Gross profit margin % || 43.4 || % || 43.8 || % || 44.2 || % |
| Operating result || 30.6 || || 16.7 || || 16.8 || |
| Result from investments (excl. Amortization intangible assets resulting from the sale of the 12% stake of ASMPT) || 8.6 || || 16.4 || || 26.7 || |
| Amortization intangible assets resulting from the sale of the 12% stake of ASMPT || (6.7 || ) || (6.7 || ) || (6.7 || ) |
| Net earnings || 42.8 || || 35.6 || || 33.1 || |
| Normalized net earnings (excl. Amortization intangible assets resulting from the sale of the 12% stake of ASMPT) || 49.5 || || 42.3 || || 39.8 || |
| || || || || || || || || || || || || || |
Net sales for the third quarter 2016 were €144 million, an increase of 4% compared to the previous quarter. Year-on-year net sales decreased with 11%.
New orders at €123 million were 23% below the Q2 2016 level.
Normalized net earnings for the third quarter 2016 decreased by €2 million compared to the second quarter 2016. Operating result was stable at €17 million. The financing result included €3 million negative effects from currencies compared to €8 million positive effects in the second quarter. The result from investments increased with €8 million.
Commenting on the results, Chuck del Prado, President and Chief Executive Officer of ASM international said: "Both Q3 revenues at €144 million, and order intake at €123 million came in within our guidance of respectively €135-150 million and €100-130 million. Gross margin remained stable at around the 44%. Net result in Q3 was €40 million and decreased slightly, due to unfavorable currency developments on cash held in foreign currencies, partly compensated by the strong performance of ASMPT."
After its strong growth in the previous years, and as also communicated with our Q2-results in July, the single wafer ALD market is expected to show a double-digit decline in 2016, driven by the Memory business:
In Memory, the NAND market is shifting from Planar NAND to 3D NAND. This shift has significantly reduced the demand in NAND for additional multi patterning-related single wafer ALD capacity. Non-patterning related single wafer ALD demand is increasing as next generation 3D NAND gradually ramps into high volume. We expect that this will lead to a double digit increase of the 3D NAND single wafer ALD market in 2017 as compared to 2016.
In Memory, DRAM industry capacity demand was high in 2015 and has declined strongly in 2016. Based on current visibility the demand for new DRAM-related single wafer ALD capacity is believed to recover in 2017 but not before the middle of the year.
In Logic/Foundry the transition to the 10 nm technology node has started in 2016 and fuels substantially higher single wafer ALD-equipment demand than the previous nodes. It is expected that this demand will remain high in 2017.
The above-mentioned market developments will lead to a contraction of the single wafer ALD market in 2016. This market is expected to clearly improve again in 2017.
For Q4 we expect sales between €150 - 170 million, while we expect an order intake of €130-160 million, both on a currency comparable level.
SHARE BUYBACK PROGRAM
October 28, 2015 ASMI announced that its Management Board authorized the repurchase of up to €100 million of the Company's common shares within the 2015-2016 time frame. This buyback program will be executed by intermediaries and will end as soon as the aggregate purchase price of the common shares acquired by ASMI has reached €100 million, but ultimately on November 20, 2016.
On May 25, 2016 the General Meeting of Shareholders authorized ASMI to acquire shares for a period of 18 months. The repurchase program is part of ASMI's commitment to use excess cash for the benefit of its shareholders.
The program started on November 26, 2015. On September 30, 2016, 94% of the program was completed at an average share price of €35.87.
Since we are now approaching the finalization of this program, the Management Board, as part of its commitment to use excess cash for the benefit of its shareholders, has authorized the repurchase of up to €50 million of the Company's common shares within the 2016-2017 time frame under the same conditions as the share buyback program announced at October 28, 2015.
About ASM International
ASM International NV, headquartered in Almere, the Netherlands, its subsidiaries and participations design and manufacture equipment and materials used to produce semiconductor devices. ASM International, its subsidiaries and participations provide production solutions for wafer processing (Front-end segment) as well as for assembly & packaging and surface mount technology (Back-end segment) through facilities in the United States, Europe, Japan 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, 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.
ASM International will host an investor conference call and web cast on Thursday, October 27, 2016 at 15:00 Continental European Time (9:00 a.m. - US Eastern Time).
The teleconference dial-in numbers are as follows:
United States: +1 646 254 3367
International: +44 (0)20 3427 1900
The Netherlands: +31 (0)20 716 8256
Access Code: 2990659
A simultaneous audio webcast and replay will be accessible at www.asm.com.
T: +31 88 100 8500
Ian Bickerton Press Release Third Quarter 2016 Results
T: +31 625 018 512