Siltronic AG — Earnings Release 2018

Aug 2, 2018

July 25, 2018

© Siltronic AG 2018

MARKET UPDATE

Sales	EUR 361.3m (Q1/2018: EUR 327.4m)
EBITDA	EUR 146.0m (Q1/2018: EUR 122.3m)
EBITDA margin	40.4% (Q1/2018: 37.4%)
EBIT	EUR 124.1m (Q1/2018: EUR 96.6m)
ROCE	64.2% (Q1/2018: 49.3%)
CapEx	EUR 45.2m (Q1/2018: EUR 33.4m)
Net cash flow	EUR 67.1m (Q1/2018: EUR 112.4m)
Net financial assets	EUR 602.7m (March 31, 2018: EUR 490.8m)

Market highlights Q2/2018

Semiconductors

Semi units showed positive development in April (+8.1% YoY) after some volatility in previous months while silicon area continues to be on a high level. Semi revenues also went up significantly (+20.2% YoY), especially due to strong ASP increase

Silicon wafer market

Wafer market in Q2 2018 was ~6.8 bn cm²/month, 2.6% over Q1 2018 average and 6.2% up YoY

Wafer demand

• Demand on sustainable high level
• Low raw wafer inventories at customers

Price increases

Wafer ASP continue to increase in 2018

Competition

Wafer suppliers continue to report strong demand for all diameters

IHS Markit forecasts 5.4% growth for silicon area in 2018 with broad based growth in a wide range of applications.

Siltronic AG – Q2/2018 Results July 25, 2018 5 of 23

Smartphone growth slowing, however silicon content increasing with more memory and other features

Source: Data based on IHS Markit, Technology Group, Semiconductor Silicon Demand Forecast Tool, Q2 2018. Results are not an endorsement of Siltronic. Any reliance on these results is at the third party's own risk. Visit technology.ihs.com for more details

Car shipments growing slowly, silicon content in automotive estimated to grow by 7% (CAGR 2017-2022)

Source: Data based on IHS Markit, Technology Group, Semiconductor Silicon Demand Forecast Tool, Q2 2018. Results are not an endorsement of Siltronic. Any reliance on these results is at the third party's own risk. Visit technology.ihs.com for more details. Other Source: Statista

300 mm demand likely to grow by around 2m wafer/month between 2017 and 2020

Estimated growth in 300 mm wafer starts 2017 - 2020

Siltronic AG – Q2/2018 Results July 25, 2018 8 of 23

200 mm demand growth forecast of 3% CAGR 2017-2020 not attractive enough to consider major investments

200 mm demand by category, in k/w per month

Comment

• 200 mm demand expected to increase by 3% CAGR (2017-2020), according to IHS Markit.
• Less than 1,000k wafer/month capacity expansions until 2020 announced by wafer producers
• Full utilization of additional capacities depend on equipment lead-times and qualification leadtimes of customers

Source: IHS Markit Technology (Semiconductor Silicon Demand Forecast Tool, Q1'18 Update), Companies' reports

FINANCIALS Q2/2018

Q2 sales 10% higher than Q1

Sales, in EUR million

Comment

Positive

• Wafer area sold on very high level slightly up q-o-q
• Significant ASP increase y-o-y
• Solid ASP increase q-o-q
• Further ASP increases expected in 2018
• Tailwind from USD q-o-q

Negative

Headwind from USD y-o-y (but not as much as expected at the beginning of the year)

EBITDA and EBITDA-margin further up

EBITDA margin in %; EBITDA in EUR million

Comment

Positive

• Significantly higher ASP y-o-y
• Further price increases q-o-q
• Cost of sales per wafer area slightly decreased y-o-y
• Tailwind from USD q-o-q

Negative

Headwind from USD y-o-y (but not as much as expected at the beginning of the year)

Strong growth of net profit

Result and income tax, in EUR million

Comment

• Net profit in Q2/2018 20% up vs. Q1/2018
• Higher ASPs and lower depreciation contributed
• EUR 24.5m expenses for effective taxes in Q2/2018

Equity further improved, stable equity ratio of ~47%

Balance sheet, in EUR million

Assets	Jun 30, 2018	Dec 31, 2017	Comments Jun 30, 2018	Equity and liabilities	Jun 30, 2018	Dec 31, 2017	Comments Jun 30, 2018
Non-current	585.1	546.6		Equity	720.1	637.9
PP&E	546.6	513.3		Siltronic	709.3	637.3
Other fixed	38.5	33.3	22 intangibles (related to SSW) 1 hedging	Other shareholders	10.8	0.6	Samsung's 22% in SSW
Current	958.9	705.8		Liabilities	823.9	614.5
Inventories and contract assets	155.0	149.9		Pension provision	389.4	367.2	Germany and US
Trade receivables	175.1	159.9		Other provisions	67.7	59.5	36 personnel related (e.g. early retirement)
				Trade liabilities	85.2	67.1
Other current	26.1	53.9	5 hedging	Customer prepayments	222.8	69.8
Cash and fixed term deposits	602.7	342.1		Other	58.8	50,9	40 employee-related 14 hedging
Total	1,544.0	1,252.4		Total	1,544.0	1,252.4

Pension provision relatively stable q-o-q

Pension provision, in EUR million

Siltronic AG – Q2/2018 Results

Net financial assets substantially increased

Net financial assets, in EUR million

Comment

• Dividend payment of EUR 75m in April 2018
• Prepayments of EUR 116m (net) received in Q2

Capex 2018: slightly up to EUR 260m to EUR 280m

Comments

• Capex of EUR ~140m for 70k wafers/month over 2 years
• Capex in 2018 includes new crystal pulling hall in Singapore to create sufficient crystal pulling capacity to further expand wafer capacity in 2020
• Due to long lead-times additional crystal pullers already ordered
• Prepayments for capacity additions in 2020 already in 2018
• Capex base level to sustain business:
• MOB (maintenance of business)
• Capabilities
• Cost reductions
• Automation

High net cash flow in the first two quarters

Capex and NCF, in EUR million

Comments

• Net cash flow of EUR 67.1m in Q2 201
• Low capex in Q1 and Q2
• Higher tax payments in Q2
• Q1 high due to reversal of Q4 effects

Siltronic Outlook for 2018 (as of July 23, 2018)

EBITDA margin	approximately 40% update
ROCE	clearly higher than in 2017
Net cash flow	clearly higher than in 2017
Sales	close to EUR 1.4bn, depending on FX effects update
R&D	approx. 5% of sales
Cost position	negative effect on savings potential due to tariff increases and inflation
FX effects	assuming an EUR/USD exchange rate of 1.20 and an EUR/JPY exchange rate of 130 negative FX impact of approx. EUR 60m on sales and approx. EUR 40m on EBITDA update
Depreciation	approx. EUR 90m
Tax rate	between 15% and 20%
Financial result	relatively stable
CapEx	approx. between EUR 260m and EUR 280m update
Earnings per share	significantly higher than in 2017

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

Financial Calendar

Q3 2018 Results October 25, 2018

ISIN:	DE000WAF3001
WKN:	WAF300
Deutsche Börse:	WAF
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 | Hanns-Seidel-Platz 4

81737 Munich Germany