Siltronic AG — Investor Presentation 2019

Jul 25, 2019

Siltronic AG Q2 2019 Conference Call Presentation

July 25, 2019

© Siltronic AG

Sales	 EUR 311.8m (Q1 2019: EUR 354.4m)
EBITDA	 EUR 100.0m (Q1 2019: EUR 127.2m)  EBITDA margin: 32.1% (Q1 2019: 35.9%)
EBIT	 EUR 74.6m (Q1 2019: EUR 103.4m)  EBIT margin: 23.9% (Q1 2019: 29.2%)
Capex	 EUR 105.1m (Q1 2019: EUR 72.8m)
Net cash flow	 EUR 0.4m (Q1 2019: EUR 80.8m)
Net financial assets	 EUR 592.1 (March 31, 2019: EUR 691.3m)

MARKET UPDATE

1

ADS

Market developments

End Markets 2019

Most end markets remain to be soft from a unit point of view in 2019, but as of today, content is still expected to grow in most end markets

Silicon wafer market 2019

Q2 SEMI market was ~6.4 bn cm², -2.2% below Q1 19 average and -5.7% YoY

Wafer demand

• Strong decline in demand for 150 mm
• Mixed demand picture in 200 mm with special products still high
• Demand for 300 mm slightly down as customer inventories remain high and customers shift volumes under LTAs

Sources SEMI press release July 23, 2019 /Siltronic

FINANCIALS Q2 2019

Sales development negatively impacted by lower wafer area demand

Sales, in EUR million	Ø FX rates Q2/18		Q3	Q4	Q1/19	Q2
	EUR / USD	1.19	1.16	1.14	1.14	1.12
	EUR / JPY	130	130	129	125	124

Comment

• Sales in Q2 down vs. Q1 as expected due to lower wafer area sold
• ASP H1 2019 up compared to H1 2018

Q2 2019 weak as expected due to lower wafer area demand and higher energy costs

higher depreciation Negative effects from currency hedging substantially lower in Q2 compared to Q1

-10

Q2 2018 Q3 Q4 Q1 2019 Q2

High US-Dollar and Japanese Yen exposure

FX exposure, in %

Sensitivity

1 USD-cent change

• ~ EUR 8.0 million sales
• ~ EUR 6.5 million EBITDA unhedged
• ~ EUR 4.5 million EBITDA after hedging

1 JPY change

• ~ EUR 2.5 million sales
• ~ EUR 2.0 million EBITDA unhedged
• ~ EUR 1.0 million EBITDA after hedging

Profitability affected by lower loading, higher energy costs and slightly increased depreciation

Net profit of EUR 156 million in H1 2019

Working Capital further down

Strong equity ratio and solid net financial assets

Pension reserves impacted by low IFRS interest rates, at 3% reserves would be EUR 200 million lower

809 193 147 DBO June, 2019 USA mostly funded 1,149 Germany unfunded Funded through Wacker Pension Fund 147 107 33 ~560 DBO @3% 506 Assets June, 2019 3.37% 1.29% 1.29% 3.37% 0% 3% ~140 ~850 646 3%

DBO and pension reserves, in EUR million Comment

• DBO of EUR 1,149 million assets of EUR 646 million = EUR 503 million
• Pension reserves @3% = DBO of EUR 850 million – assets EURO 646 million = EUR 204 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 3.85% interest rate
  • asset liability study: probability of return in next 20 years:

≥3.75% 73%

≥3.0% 90%

≥2.5% 96%

Strong net cash flow despite high payments for capex

All investment to be finished as planned in 2019; Capex for capacity will come down in 2020

Siltronic Outlook 2019 (as of July 23, 2019)

EBITDA margin	 between 30% and 35%
EBIT	 significantly below 2018
Net cash flow	 clearly positive, approx. EUR 180m below 2018, with a subsequent significant increase in 2020
Sales	 depending on timing of market recovery and on FX effects around 10% to 15% below 2018
Cost position	 negative effect due to tariff increases and EUR 20m higher electricity costs in Germany
FX effects	 negligible vs. 2018 assuming EUR/USD rate of 1.15 and EUR/JPY rate of 130
Depreciation	 around EUR 110m
Tax rate	 between 10% and 15% (prior: between 15% and 20%)
Capex	 about EUR 350m in capacity, automation and capabilities; significantly lower in 2020
Earnings per share	 significantly below 2018

APPENDIX

ADD

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 Quarterly Statement October 24, 2019

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