Siltronic AG — Call Transcript 2021

Mar 9, 2021

Siltronic AG FY 2020 Conference Call Presentation

March 9, 2021

© Siltronic AG

2020 a challenging year

Q4 2020 comments

• Sales in Q4 down q-o-q due to normal seasonality and strong Euro
• ASP stable
• Logic and foundry business strong with 300 mm epi being close to full load
• Memory business slowly improving, however inventories at some customers still somewhat elevated
• Overall loading good to very good

Full year 2020 comments

• Corona accelerated digitization in many areas (home office, home schooling etc.)
• Sales volume up due to higher demand driven by megatrends such as digitization, 5G, electromobility
• Product mix in H2 negatively impacted due to Corona
• Strong Euro in H2 burdened sales and profit
• Investment in
  • additional epi reactors to keep up with strong foundry and logic demand
  • capabilities to enable leading-edge design rules

Highlights 2020: Financial figures FY 2020

Sales	− EUR 1,207.0m (2019: EUR 1,270.4m)
EBITDA	− EUR 332.0m (2019: EUR 408.7m) − EBITDA margin: 27.5% (2019: 32.2%)
EBIT	− EUR 192.2m (2019: EUR 298.3m) − EBIT margin: 15.9% (2019: 23.5%)
CapEx	− EUR 187.6m (2019: EUR 363.0m)
Net cash flow	− EUR 77.4m (2019: EUR 81.3m)
Net financial assets	− EUR 499.2m (December 31, 2019: EUR 588.9m)

Financials 2020

Revenues down q-o-q due to seasonality and some FX headwind

Comments

Positive

Sales, in EUR m

Lower wafer area sold and productivity gains lead to lower COGS q-o-q

High US-Dollar and Japanese Yen exposure

EBITDA burdened by strong Euro and costs relating to tender offer in Q4

Net profit of EUR 187 million in 2020

Tax rate significantly down

Working capital down High trade liabilities related to capex and advisory fees

Strong equity ratio and solid net financial assets

Siltronic AG – FY 2020 Conference Call Presentation March 9, 2021 12

Pension reserves impacted by low IFRS interest rates

• DBO of EUR 1,278 million assets of EUR 711 million = EUR 567 million
• Pension reserves @3% = DBO of EUR ~850 million – assets EURO 711 million = EUR 139 million
• IFRS interest uses bond yields only, assets include bonds, equity, real estate + derivatives
• Wacker pension fund
  • fully funded under German pension fund regulations using 3.23% interest rate
  • asset liability study: probability of return in next 20 years:

≥3.5%	59%
≥3.0%	75%
≥2.5%	87%

Capex 2020 significantly down vs. 2019

Investment, in EUR m

Comment

• Capex 2020 significantly down to EUR 188m
• Epi expansion in H2 to accommodate demand and market growth
• Investment in capabilities to enable leading-edge design rules

Net cash flow in line with expectation

Outlook 2021

2021 off to a good start

2021 challenges and opportunities

• Good start in 2021
• Overall high demand and good to very good loading
• Foundry, logic and image sensors expected to remain strong
• Inventory levels of memory chips still on a somewhat elevated level
• Memory business expected to show positive trend
• Increasing units in smartphones and cars combined with higher content will drive mid- to long-term growth
• Strong Euro headwind on revenues and margins

Positive development of wafer volume in Q1 2021

300 mm	− Strong foundry and logic business − Ongoing uncertainty due to US-China trade tensions and Corona pandemic might lead to elevated inventories across the supply chain − Partial digestion of server components
--------	------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

fears
-------

SD	− Trending up

Estimated market growth of silicon area

Siltronic Outlook 2021 (as of March 1, 2021)

Sales	− mid to high single-digit percent increase
EBITDA margin	− slight increase
Depreciation	− around EUR 155m to EUR 160m
EBIT	− significant increase
Tax rate	− significantly below 10%
CapEx	− around EUR 250 million (mainly in 300 mm epi, capabilities and expansion of crystal pulling hall to replace older equipment)
Net cash flow	− slight improvement
Earnings per share	− slight increase

Contact and Additional Information

Issuer and Contact

Siltronic AG Einsteinstraße 172 D-81677 München

Investor Relations:

Petra Mueller email: investor.relations@siltronic.com Tel. +49 89 8564-3133

Financial Calendar 2021

Annual General Meeting	April 29, 2021
Q1 Quarterly Statement	May 7, 2021
Q2 Interim Report	July 28, 2021
Q3 Quarterly Statement	October 26, 2021

Additional Information

ISIN:	DE000WAF3001
WKN:	WAF300
Deutsche Börse:	WAF
Listing:	Frankfurt Stock Exchange

Listing: Frankfurt Stock Exchange Prime Standard

Disclaimer

The information contained in this presentation is for background purposes only and is subject to amendment, revision and updating. Certain statements contained in this presentation may be statements of future expectations, future financial performance and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties. In addition to statements which are forward-looking by reason of context, including without limitation, statements referring to risk limitations, operational profitability, financial strength, performance targets, profitable growth opportunities and risk adequate pricing, words such as "may", "will", "should", "expects", "plans", "intends", "anticipates", "believes", "estimates", "predicts", "continue", "projects" or "seeks", "potential", "future", or "further" and similar expressions may identify forwardlooking statements. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions which could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These include, among other factors, changing business or other market conditions, currency and interest fluctuations, introduction of competitive products, poor acceptance of new products and services, change of the corporate strategy and the prospects for growth anticipated by the management. These and other factors could adversely affect the outcome and financial effects of the plans and events described herein. Statements contained in this presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Siltronic AG does not undertake and does not intent to undertake any obligation to update or revise any statements contained in this presentation, whether as a result of new information, future events or otherwise. In particular, you should not place any reliance on forwardlooking statements which speak only as of the date of this presentation.

SILTRONIC AG | Einsteinstrasse 172

81677 Munich Germany

© Siltronic AG