ASM International N.V. — Earnings Release 2021

Jul 28, 2021

Almere, The Netherlands

July 27, 2021, 6 p.m. CET

ASM INTERNATIONAL N.V. REPORTS SECOND QUARTER 2021 RESULTS

Continued robust market demand fuels strong quarterly performance

ASM International N.V. (Euronext Amsterdam: ASM) today reports its second quarter 2021 operating results (unaudited) in accordance with IFRS.

FINANCIAL HIGHLIGHTS

	Q2 2020	Q1 2021	Q2 2021
EUR million
New orders	298.0	410.6	515.7
Revenue	341.8	394.0	411.7
Gross profit margin %	48.3	49.5	48.1
Operating result	87.6	124.5	118.4
Operating result margin %	25.6	31.6	28.7
Result from investments (excluding amortization intangible assets resulting from the sale of ASMPT stake in 2013)	10.7	13.9	19.3
Amortization intangible assets (resulting from the sale of ASMPT stake in 2013)	(3.3)	(3.0)	(3.0)
Net earnings	74.1	122.5	108.4
Normalized net earnings (excluding amortization intangible assets resulting from the sale of ASMPT stake in 2013 and result from sale of ASMPT shares)	77.4	125.5	111.4

• New orders of €516 million for the second quarter 2021 increased by 73% compared to the same period last year. This is consistent with our announcement on July 1, 2021, that order intake in the second quarter clearly exceeded the previous guidance.
• Year-on-year revenue growth for the second quarter 2021 was 29% at constant currencies (20% as reported).
• Gross profit margin of 48.1% was close to last year's margin of 48.3%.
• Operating result for the second quarter 2021 improved from €88 million last year to €118 million this year mainly driven by strong revenue growth.
• Normalized net earnings for the second quarter 2021 were €111 million, a significant improvement compared to same quarter last year.

COMMENT

"Our company delivered again a strong quarter," said Benjamin Loh, President and Chief Executive Officer of ASM International. "Order intake surged to a new quarterly record of €516 million on the back of continued strong logic/foundry demand and our ALD product leadership. As already announced on 1 July, 2021, the order intake exceeded the previous guidance of €420-440 million, mainly driven by customers pulling in orders into Q2 that were previously expected to be received in Q3. Compared to the same period last year, sales in the second quarter increased by 29% at constant currencies and 20% as reported. Revenue, at €412 million, was slightly above the high end of the guidance of €390-410 million. While we benefited from our expanded manufacturing capacity in Singapore, supply chain conditions further tightened during the quarter, also due to new lockdown measures in parts of Southeast Asia. Thanks to great efforts by ASM's team and our supply chain partners, we were still able to meet customer requirements."

OUTLOOK

For Q3, on a currency comparable level, we expect sales of €400-430 million. Q3 bookings, on a currency comparable level, are expected to be in a range of €510-530 million, and also include orders that are planned to be shipped in 2022. Continued tight supply chain conditions are reflected in our sales guidance for Q3 and, based on the current visibility, are also expected to have some impact in Q4, although we do expect Q4 sales to increase compared to the level in Q3. Based upon the current market developments, the wafer fab equipment (WFE) market is expected to grow by a high twenties to low thirties percentage in 2021.

SHARE BUYBACK PROGRAM

On April 20, 2021, ASMI announced the authorization of a new share buyback program of up to €100 million within the 2021/2022 time frame. ASMI announces today that this program commences on, July 28, 2021, 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 16, 2022. This repurchase program is part of ASMI's commitment to use excess cash for the benefit of its shareholders.

The share buyback program will take place within the limitations of the authority granted by the shareholders during the Annual General Meeting which was held on May 17, 2021. This share buyback program will be executed by a third party. ASMI has the intention to reduce its capital by withdrawing the shares repurchased as part of this new €100 million share buyback program, save for such number of treasury shares as may be necessary to fund ongoing share and option programs for employees and board members.

Progress of the share buyback program will be updated on a weekly base, starting on August 2, 2021. This information will be published on the ASMI website (www.asm.com).

WITHDRAWAL OF TREASURY SHARES

ASMI further announces that the withdrawal of 500,000 treasury shares, as earlier approved by the AGM 2021, has become effective as of July 21, 2021. As of that date, the number of issued shares is 49,297,394.

INVESTOR DAY

We confirm our plan to host our Investor Day on September 28, 2021. In view of the recent rise in COVID-19 cases in parts of Europe and the rest of the world and the resulting uncertainty we will decide on the format of the event in the first half of September. We will host our Investor Day either in the form of an in-person event, or as a fully virtual event if the situation would still not allow to hold an in-person event. Speakers will include our CEO and CFO and other members of ASM's Senior Management Team. The event will be in the afternoon of September 28, 2021, and will be webcasted. Further details will be announced later.

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, 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 International N.V will host an investor conference call and webcast on Wednesday, July 28, 2021, at 3 p.m. Continental European Time (9 a.m. – US Eastern Time).

The teleconference dial-in numbers are as follows:

• United States: +1 631 5107 495
• International: +44 (0) 8445 718 892
• The Netherlands: +31 (0) 20 71 435 45
• Access Code: 3968920

A simultaneous audio webcast and replay will be accessible at www.asm.com.

CONTACT

Investor and media contact:

Victor Bareño

T: +31 88 100 8500

E: victor.bareno@asm.com

OPERATING AND FINANCIAL REVIEW

Bookings

The following table shows the level of new orders for the second quarter of 2021 and the backlog at the end of the second quarter of 2021, compared to the previous quarter and the comparable quarter previous year:

EUR million	Q2 2020	Q1 2021	Q2 2021	YTD 2020	YTD 2021
Backlog at the beginning of the period	365.3	323.6	344.5	351.2	323.6
New orders for the period	298.0	410.6	515.7	631.6	926.3
Revenue for the period	(341.8)	(394.0)	(411.7)	(667.0)	(805.7)
FX-effect for the period	(4.1)	4.3	(3.0)	1.5	1.4
Backlog at the end of the period	317.4	344.5	445.6	317.4	445.6
Book-to-bill ratio (new orders divided by revenue)	0.9	1.0	1.3	0.9	1.1

The backlog increased from €345 million at the end of the first quarter 2021 to €446 million as per June 30, 2021. The book-tobill ratio for Q2 was 1.3. In terms of customer segments, new orders in the second quarter 2021 were led by foundry, followed by logic and then memory.

Revenue

EUR million	Q2 2020	Q1 2021	Q2 2021	YTD 2020	YTD 2021
Equipment revenue	264.4	319.1	334.9	533.7	654.0
Spares & service revenue	77.4	74.9	76.8	133.2	151.7
Revenue	341.8	394.0	411.7	667.0	805.7

Revenue for the second quarter 2021 increased to €412 million, up 29% year-on-year at constant currencies (20% as reported). Compared to the previous quarter, revenue increased 5% at constant currencies (4% as reported). Revenue in the second quarter was led by foundry followed by memory and then logic.

Equipment revenue in the second quarter increased by 36% year-on-year at constant currencies (27% as reported). Compared to the previous quarter, equipment revenue increased 6% at constant currencies (5% as reported).

Spares & service revenue in the second quarter grew marginally by 3% year-on-year at constant currencies (1% decrease as reported). Sales in the second quarter of last year were at a relatively high level, in part because COVID-related uncertainty led to customers ordering additional spares as a safety buffer in that quarter. Compared to the previous quarter, spares & service revenue grew at 2% at constant currencies (2% as reported).

Gross profit margin

EUR million	Q2 2020	Q1 2021	Q2 2021	YTD 2020	YTD 2021
Gross profit	165.1	195.0	197.9	309.9	392.9
Gross profit margin	48.3 %	49.5 %	48.1 %	46.5 %	48.8 %

Gross profit margin of 48.1% in the second quarter 2021 was close to last year's margin of 48.3%. While slightly down from 49.5% in the first quarter, the gross margin in the second quarter was still at a very solid level and again supported by a positive mix. The impact of currency changes on the gross profit for the second quarter was neutral quarter to quarter and a decrease of 6% yearon-year.

Selling, general and administrative expenses

EUR million	Q2 2020	Q1 2021	Q2 2021	YTD 2020	YTD 2021
SG&A expenses	41.0	39.9	45.8	76.8	85.8

Selling, general and administrative (SG&A) expenses increased by 15% compared to the relatively lower level in the first quarter, and increased by 12% year on year. As a percentage of revenue, the SGA expenses decreased from 12% in Q2 last year to 11% in the same period this year. The impact of currency changes for the second quarter was an increase of 1% quarter-on-quarter and a decrease of 3% year-on-year.

Research and development expenses

EUR million	Q2 2020	Q1 2021	Q2 2021	YTD 2020	YTD 2021
Research and development expenses	42.2	42.7	47.3	83.1	90.0
Capitalization of development expenses	(15.8)	(17.4)	(20.3)	(31.4)	(37.7)
Amortization of capitalized development expenses	5.3	5.3	5.7	10.9	11.0
Impairment capitalized development expenses	4.8	—	1.1	4.9	1.1
R&D expenses	36.5	30.6	33.7	67.4	64.3

R&D expenses increased by 10% compared to Q1 and dropped by 8% year-on-year. The decrease compared to Q2 last year was mainly explained by lower impairment charges, which dropped from €5 million to €1 million, and higher capitalization, which increased from €16 million to €20 million. Excluding impairments and IFRS effects, the underlying research and development expenses increased by 12% year-on-year. The impact of currency changes for the second quarter was neutral quarter-onquarter and a decrease of 6% year-on-year.

Operating result

EUR million	Q2 2020	Q1 2021	Q2 2021	YTD 2020	YTD 2021
Operating result	87.6	124.5	118.4	165.7	242.9
Operating result margin	25.6 %	31.6 %	28.7 %	24.8 %	30.1 %

The operating margin in the second quarter 2021 was 28.7%, an improvement of 3.1% points compared to the same period last year but down 2.9% points compared to the first quarter of 2021 due to slightly lower gross margins and higher operating expenses. The impact of currency changes for the second quarter was a decrease of 1% quarter to quarter and a decrease of 8% year-onyear.

Financing costs

Financing costs are mainly related to translation results. The Q2 2021 results included a translation loss of €2 million compared to a gain of €16 million included in the Q1 2021 results and a loss of €6 million included in the Q2 2020 results. The translation results are mainly related to movements in the US dollar in the respective periods. A substantial part of ASMI's cash position is denominated in US dollar.

Result from investments

EUR million	Q2 2020	Q1 2021	Q2 2021	YTD 2020	YTD 2021
Result from investments (excluding amortization intangible assets resulting from the sale of the 12% stake of ASMPT)	10.7	13.9	19.3	11.4	33.3
Amortization intangible assets (resulting from the sale of the 12% stake of ASMPT)	(3.3)	(3.0)	(3.0)	(6.8)	(6.0)
Result from investments	7.4	10.9	16.4	4.6	27.3

Result from investments, which reflects our approximate 25% shareholding in ASMPT, increased by €5 million compared to the previous quarter.

ASMPT's net earnings, on a 100% basis, increased by €22 million to €79 million compared to previous quarter. Q2 last year, also on a 100% basis, showed net earnings of €43 million. For further information on the Q2 results of ASMPT, please visit ASMPT's website www.asmpacific.com.

Amortization intangible assets resulting from the sale of the 12% stake of ASMPT in 2013 amounted to €3 million in Q2. For 2021, on a currency comparable basis, this amortization is expected to amount to €13 million.

Income taxes

Income taxes in the second quarter increased to €23.5 million compared to €15 million in Q2 2020.

Net earnings

EUR million	Q2 2020	Q1 2021	Q2 2021	YTD 2020	YTD 2021
Net earnings	74.1	122.5	108.4	148.2	230.9
Excluding:
Amortization intangible assets (resulting from the sale of the 12% stake of ASMPT)	(3.3)	(3.0)	(3.0)	(6.8)	(6.0)
Normalized net earnings	77.4	125.5	111.4	155.0	236.9

Normalized net earnings increased by €34 million to €111 million compared to Q2 2020.

Cash flows

EUR million	Q2 2020	Q1 2021	Q2 2021	YTD 2020	YTD 2021
Net cash from operating activities	35.5	115.6	80.4	117.0	196.0
Net cash from investing activities	(27.6)	(27.0)	(11.6)	(67.8)	(38.5)
Net cash from financing activities	(107.0)	(39.3)	(99.0)	(113.1)	(138.3)
Total net cash provided / (used)	(99.1)	49.4	(30.2)	(63.9)	19.2

The cash flow from operating activities decreased compared to the level in the previous quarter mainly due to higher working capital needs. Cash used in investing activities during Q2 2021 decreased compared with Q1 2021 as dividend from ASMPT was received. Capital expenditures as part of investing activities were €13 million in Q2 2021. In the second half of 2021, capital expenditures are expected to increase as part of our initiatives to expand and upgrade R&D lab facilities. Cash used by financing activities in Q2 2021 was mainly for dividend payments to ASMI shareholders (€97 million).

Balance sheet

EUR million	December 31, 2020	March 31, 2021	June 30, 2021
	(audited)
Inventories	162.2	170.5	172.8
Accounts receivable	280.1	307.0	324.0
Other current assets	72.9	53.1	77.9
Accounts payable	(124.5)	(151.5)	(148.5)
Provision for warranty	(19.0)	(22.2)	(22.1)
Accrued expenses and other payables	(128.9)	(142.3)	(152.0)
Working capital	242.8	214.6	252.1

Net working capital increased to €252 million compared to €215 million per March 31, 2021 (€243 million per December 31, 2020). This was due to back-end loaded sales in the quarter resulting in higher accounts receivables and other current assets partially offset by higher payables caused by the higher activity levels. The underlying quality of working capital continued to be healthy. The number of outstanding days of working capital, measured against quarterly sales, increased to 55 days on June 30, 2021, compared to 48 days on March 31, 2021, and 63 days on December 31, 2020.

Sources of liquidity

As per June 30, 2021, the Company's principal sources of liquidity consisted of €465 million in cash and cash equivalents and €150 million in undrawn bank lines.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

	Three months ended June 30,		Six months ended June 30,
	2020	2021	2020	2021
EUR thousand, except per share data	(unaudited)	(unaudited)	(unaudited)	(unaudited)
Revenue	341,811	411,691	666,950	805,707
Cost of sales	(176,723)	(213,795)	(357,030)	(412,763)
Gross profit	165,088	197,896	309,920	392,944
Operating expenses:
Selling, general and administrative	(41,023)	(45,830)	(76,773)	(85,755)
Research and development	(36,467)	(33,707)	(67,429)	(64,301)
Total operating expenses	(77,490)	(79,537)	(144,202)	(150,056)
Operating result	87,598	118,359	165,717	242,888
Net interest income (expense)	(367)	(687)	(740)	(1,066)
Foreign currency exchange gains (losses)	(5,946)	(2,084)	6,441	13,945
Result from investments	7,408	16,372	4,582	27,284
Earnings before income taxes	88,692	131,960	176,001	283,051
Income taxes	(14,569)	(23,519)	(27,767)	(52,137)
Net earnings	74,123	108,441	148,233	230,914
Per share data:
Basic net earnings	1.51	2.23	3.03	4.75
Diluted net earnings (1)	1.50	2.22	3.00	4.71
Weighted average number of shares used in
computing per share amounts (in thousand):
Basic	49,033	48,586	48,940	48,650
Diluted (1)	49,552	48,956	49,459	49,018
Outstanding shares:	49,008	48,717	49,008	48,717
Treasury shares:	2,289	1,080	2,289	1,080

(1) The calculation of diluted net earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in earnings of the Company. Only instruments that have a dilutive effect on net earnings are included in the calculation. The calculation is done for each reporting period individually. The possible increase of common shares caused by employee stock options and restricted shares for the three months ended June 30, 2021, is 369,497 common shares, and for the six months ended June 30, 2021, the possible increase is 368,766 common shares. Adjustments have been reflected in the diluted weighted average number of shares and net earnings per share for this period.

Amounts are rounded to the nearest thousand euro; therefore amounts may not equal (sub) totals due to rounding.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

	December 31,	June 30,
	2020	2021
EUR thousand	(audited)	(unaudited)
Assets
Right-of-use assets	23,387	22,823
Property, plant and equipment	213,967	216,307
Goodwill	11,270	11,270
Other intangible assets	209,924	237,408
Investments in associates	742,714	769,036
Deferred tax assets	196	—
Other non-current assets	8,021	8,261
Evaluation tools at customers	69,474	78,317
Total non-current assets	1,278,953	1,343,423
Inventories	162,199	172,804
Accounts receivable	280,061	324,001
Income taxes receivable	553	1,521
Other current assets	72,945	77,943
Cash and cash equivalents	435,228	465,139
Total current assets	950,986	1,041,408
Total Assets	2,229,939	2,384,831
Equity and liabilities
Equity	1,854,724	1,990,649
Accrued expenses and other payables	13,045	12,511
Deferred tax liabilities	21,892	33,722
Total non-current liabilities	34,937	46,233
Accounts payable	124,507	148,527
Provision for warranty	18,987	22,145
Income taxes payable	67,857	25,304
Accrued expenses and other payables	128,927	151,973
Total current liabilities	340,278	347,949
Total Liabilities	375,215	394,182
Total Equity and Liabilities	2,229,939	2,384,831

Amounts are rounded to the nearest thousand euro; therefore amounts may not equal (sub) totals due to rounding.

CONSOLIDATED STATEMENT OF CASH FLOWS

	Three months ended June 30,		Six months ended June 30,
	2020	2021	2020	2021
EUR thousand	(unaudited)	(unaudited)	(unaudited)	(unaudited)
Cash flows from operating activities:
Net earnings	74,123	108,441	148,233	230,914
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation, amortization and impairments	24,103	24,995	43,261	44,883
Income taxes	14,569	23,519	27,767	52,137
Result from investments	(7,408)	(16,372)	(4,582)	(27,284)
Other adjustments	1,446	6,720	7,659	(751)
Changes in other assets and liabilities:
Accounts receivable	(59,585)	(17,703)	(44,271)	(40,439)
Inventories	(14,992)	(4,643)	(6,111)	(8,336)
Evaluation tools	(5,750)	(4,948)	(26,260)	(16,298)
Accounts payable	(1,974)	(1,339)	12,997	22,951
Other assets and liabilities	11,074	(18,910)	(38,523)	21,850
Income taxes paid	(72)	(19,377)	(3,194)	(83,627)
Net cash from operating activities	35,534	80,382	116,977	196,000
Cash flows from investing activities:
Capital expenditures	(18,873)	(13,026)	(42,839)	(22,470)
Capitalized development expenditure	(15,834)	(20,303)	(31,406)	(37,706)
Purchase of intangible assets	(1,275)	(10)	(1,914)	(122)
Dividend received from associates	8,350	21,756	8,350	21,756
Net cash from (used) in investing activities	(27,632)	(11,583)	(67,809)	(38,542)
Cash flows from financing activities:
Payment of lease liabilities	(2,029)	(2,105)	(3,936)	(4,058)
Purchase of treasury shares ASMI	(6,876)	—	(10,812)	(37,321)
Proceeds from issuance of treasury shares	70	—	364	—
Dividends to common shareholders ASMI	(98,122)	(96,893)	(98,688)	(96,893)
Net cash used in financing activities	(106,957)	(98,998)	(113,072)	(138,272)
Exchange rate effects	1,861	(2,532)	(2,436)	10,725
Net increase (decrease) in cash and cash equivalents	(97,194)	(32,731)	(66,340)	29,911
Cash and cash equivalents at beginning of period	528,728	497,870	497,874	435,228
Cash and cash equivalents at end of period	431,534	465,139	431,534	465,139

Amounts are rounded to the nearest thousand euro; therefore amounts may not equal (sub) totals due to rounding.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENT

Basis of presentation

The consolidated financial statement has been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union.

Amounts are rounded to the nearest thousand euro; therefore amounts may not equal (sub) totals due to rounding.

Principles of consolidation

The Consolidated Financial Statement include the accounts of ASMI and its subsidiaries, where ASMI holds a controlling interest. All unrealized intercompany profits, transactions and balances have been eliminated in consolidation. Associates are investments in entities in which ASMI can exert significant influence but which ASMI does not control, generally by ASMI having between 20% and 50% of the voting rights. These entities are accounted for using the equity method.