Siltronic AG — Earnings Release 2017

Jul 28, 2017

Siltronic AG Q2/2017 Results

July 28, 2017

© Siltronic AG 2017

Highlights Q2/2017: Financials

Sales	Sales of EUR 283.1m (Q1/2017: EUR 258.0m) +9.7% q-o-q
EBITDA	EUR 72.7m (Q1/2017: EUR 53.0m) +37.2% q-o-q
Margin	EBITDA margin of 25.7% (Q1/2017: 20.5%)
EBIT	EUR 43.4m (Q1/2017: EUR 23.4m) +85.5% q-o-q
CapEx	EUR 25.5m (Q1/2017: EUR 19.3m)
Free Cash Flow	EUR 41.8m (Q1/2017: EUR 31.3m)
Financial Assets	EUR 241.2m (December 31, 2016: EUR 175.0m)

Market highlights

Semiconductors

• Semiconductor market continued its strong growth in May
• Units grew +16.8% y-o-y (3MMA)
• IC Insights predicts a new all-time high for semiconductor CapEx in 2017 (~USD 76bn)

Silicon wafer demand

SEMI market in Q2 was ~6.4bn cm²/month, 4.2% up q-o-q and 10.1% up y-o-y

Price increases

• Substantial increase in wafer prices for 300mm
• Price increase for 200mm wafers
• Siltronic negotiated additional price increases for Q3

Competition

Wafer suppliers continue to report strong demand for all diameters, with fully utilized 200mm and 300mm lines

Source: WSTS up to May 2017, IC Insights (May 2017 Update), SEMI up to Jun 2017

Q2 sales development driven by increased prices and slightly higher wafer volumes

Positive development of EBITDA and EBITDA margin mainly due to higher ASP

• Positive
• Higher ASP y-o-y and q-o-q
• Successful cost reduction program continued – cost of sales per wafer area decreased

Positive development of net result due to price increases and lower costs per wafer area

• Net profit of EUR 35.2m in Q2/2017
• Price increases and lower cost of sales per wafer area have positive effect
• EUR 6.0m effective taxes
• Potential future tax advantages based on tax losses carried forward not capitalized (accounting policies)

Equity ratio of 46.9% Net financial assets of EUR 241.2m

Balance sheet, in EUR million

Assets	Jun 30, 2017	Dec 31, 2016	Comments Jul 30, 2017	Equity and liabilities	Jun 30, 2017	Dec 31, 2016	Comments Jul 30, 2017
Non-current	531.4	554.1		Equity	522.1	425.3
PP&E	498.1	519.8		Siltronic	526.9	431.9
Other fixed	33.3	34.3	25 intangibles (related to SSW) 3 hedging	Other shareholders	-4.8	-6.6	Samsung's 22% in SSW
Current	581.1	502.7		Liabilities	590.4	631.5
Inventories	139.9	140.9		Pension	345.1	395.1	Germany and US
Trade receivables	131.0	118.2		provision Other provisions	45.1	51.1	42 personnel related (e.g. early retirement)
Other current	29.2	28.2	12 hedging	Financial debt	39.8	40.4	Samsung
				Trade liabilities	79.2	81.6
Cash and fixed term deposits	281.0	215.4		Other	81.2	63.3	30 prepayments 35 employee-related 1 hedging
Total	1,112.5	1,056.8		Total	1,112.5	1,056.8

Fluctuations in pension provision due to interest rate movements

• Changes in interest rates influence evaluation of pension provision
• Change in interest rates directly reflected in equity (OCI)

Payments for CapEx partly financed by customer prepayments

Cash flow, in EUR million

	Q2/ 2017	Q1/ 2017
Cash flow from operating activities	65.6	48.7
thereof repayment of prepayments	-5.2	-5.1
thereof new customer prepayments	9.3	5.5
Payments for CapEx	-23.8	-17.4
Free cash flow	41.8	31.3

• CapEx for investments in:
• − state-of-the-art crystal pullers and further automation of production sites
• − product mix optimization (leadingedge products)
• CapEx for 2017 will be around EUR 100m; partly financed by USD 20m customer prepayments
• Strong net profit lead to high free cash flow of EUR 41.8m in Q2

Siltronic Outlook 2017 (Update as of July 28, 2017)

EBITDA margin	at least 27%: update
ROCE	substantially higher than in 2016, considerably higher than WACC
Free Cash Flow	clearly positive; by far above 2016
Sales	at least EUR 1.12bn: update
R&D	unchanged at approx. 7% of sales
Cost Position	potential savings of around EUR 15m to EUR 20m
Hedging Expenses	substantially lower around EUR 10m
Depreciation	on the level of 2016
Tax rate	20% or slightly below
Financial Result	roughly EUR 10mn interest expense
Earnings per Share	significantly higher than in 2016
CapEx	around EUR 100m, partly financed by USD 20m customer prepayments

Contact and Additional Information

Issuer and Contact Siltronic AG Hanns-Seidel-Platz 4 D-81737 München Investor Relations: Petra Mueller email: petra.mueller@siltronic.com Tel. +49 89 8564-3133 Additional Information ISIN: DE000WAF3001 WKN: WAF300 Deutsche Börse: WAF Listing: Frankfurt Stock Exchange Prime Standard Financial Calendar Q3 2017 Results October 26, 2017

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 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, as well as the words "may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, or continue", "potential, future, or further", and similar expressions identify forward-looking 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 and the prospects for growth anticipated by Siltronic AG's 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 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 undue reliance on forward-looking statements, which speak only as of the date of this presentation.

SILTRONIC AG | Hanns-Seidel-Platz 4

81737 Munich Germany