ASM International N.V. (Euronext Amsterdam: ASM) today reports its third quarter 2022 operating results (unaudited).

Q3 revenues at a new record high, Q3 orders impacted by new US export control regulations

FINANCIAL HIGHLIGHTS

EUR million Q3 2021 Q2 2022 Q3 2022
New orders 624.5 942.7 675.5
YoY change % as reported / at constant currencies 206% / 209% 83% / 73% 8% / 1%
Revenue 432.9 559.5 609.8
YoY change % as reported / at constant currencies 38% / 38% 36% / 30% 41% / 33%
Gross profit margin % 47.2% 47.5% 48.1%
Operating result 117.3 147.6 159.9
Operating result margin % 27.1% 26.4% 26.2%
Share in income of investments in associates (excluding amortization intangible assets resulting from the sale of ASMPT stake in 2013) 27.6 26.9 19.6
Amortization intangible assets (resulting from the sale of ASMPT stake in 2013) (3.1) (3.4) (3.6)
Impairment of investments in associates — — (321.4)
Net earnings (losses) 128.9 160.4 (150.5)
Normalized net earnings (excluding amortization intangible assets resulting from the sale of ASMPT stake in 2013 and impairment)

132.0 163.8 174.6


New orders of €676 million for the third quarter 2022 have been adjusted to reflect the expected negative impact of the recent US export restrictions to China. The new orders increased by 1% at constant currencies compared to the same period last year (8% as reported).
Year-on-year revenue growth for the third quarter 2022 was 33% at constant currencies (41% as reported).
Gross profit margin of 48.1% in the third quarter 2022 was slightly higher compared to 47.2% in the same quarter last year caused by a stronger mix.
Operating result for the third quarter 2022 improved from €117 million last year to €160 million this year driven again by strong revenue growth, which was partly offset by an increase in operating expenses.
Net earnings included a non-cash impairment charge of €321 million to account for the reduced market valuation of the stake in ASMPT.
Normalized net earnings for the third quarter 2022 were €175 million, up from €132 million in Q3 last year, and included a translation gain of €25 million compared to a translation gain of €13 million in Q3 2021 and a translation gain of €26 million in Q2 2022.

COMMENT

“ASM continued its strong performance in the third quarter with again record-high revenue,” said Benjamin Loh, President and Chief Executive Officer of ASM International. “Revenue increased by 33% at constant currencies to €610 million in Q3 2022, slightly above the guided range of €570-600 million. Supply chain conditions remained challenging in Q3 and are expected to show moderate improvement in Q4. I want to thank the ASM team and our suppliers for their continued commitment and solid execution. Supported by a 36% increase in operating profit, we generated again a strong free cash flow of €122 million.

We expect the new export regulations that were announced by the US government on October 7, 2022, to negatively impact our business in China. Our equipment sales in China, at 16% of our total revenue in the first nine months of 2022, have been a growing part of our business with a strong contribution to group profitability. Based on a conservative scenario, we expect the new export restrictions will affect more than 40% of our sales in China.

Taking a prudent view, we decided to reduce the Q3 bookings and related backlog with the impacted orders from China that were received in Q3 and prior quarters and still to be shipped in the coming quarters. Our total bookings dropped to €676 million in Q3 compared to a record level of €943 million in Q2. Excluding the reduction of impacted orders from China, the decrease in our Q3 orders compared to Q2 would have been much more moderate. The negative impact from new export regulations is also reflected in our guidance for Q4 sales.”

Taking into account the guidance for Q4, ASM is on track for strong growth in 2022, its sixth consecutive year of double-digit growth, and is expected to clearly outperform the wafer fab equipment (WFE) market in 2022. During the third quarter, the semiconductor end-market further slowed down, with significant declines in the PC and smartphone segments. Combined with an expected deceleration in global economic growth WFE spending is forecasted to be down in 2023, in particular the memory segment. While it is too early to provide guidance for 2023, we believe our company is in good shape, on the back of an expected robust backlog by year-end, our strong position in the leading-edge logic/foundry segment, and solid traction with newly introduced products and applications.”

OUTLOOK

For Q4, at constant currencies, we expect sales of €600-630 million, which includes a negative impact from the new US export regulations, as explained above. The revenue guidance for Q4 also includes the revenue contribution from LPE, following the closure of the acquisition on October 3, 2022. Our expectation that we will finish the year with a continued elevated backlog is unchanged. WFE spending is now expected to increase by a high single-digit percentage in 2022.

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