Over the course of 50 years we have grown to become a global company that develops innovative solutions for our customers, and manages the best interests of our investors, our employees, society and other stakeholders. Read on to discover what we achieved in 2018.
The demand for smaller, faster and cheaper semiconductor chips continues to rise, driven by advancements in cloud computing, artificial intelligence, smartphones and the Internet of Things.
Our technology is the first step towards making it all possible, as our R&D investment in new materials, new products and new processes means we can help our customers develop their technology roadmap, and further extend Moore’s Law.
In 2018, this led to the introduction of the Synergis ALD tool, which leverages the core technologies from our Pulsar and EmerALD ALD products for high productivity thermal ALD applications. The new Synergis tool allows us to address more ALD applications and therefore increases our served market. Together with our other products and services, this contributed to our strong financial results, which included:
We operate in a fast-paced industry that continues to reshape the world, and our innovative technology enables the semiconductor industry to achieve advancements in computing, communications, energy, transportation, medicine and beyond.
To ensure that we can continue to make a difference to our customers, employees, and company stakeholders, in 2018 we concentrated on the following three key elements of our strategy.
In addition to our fundamental R&D efforts, we continuously expand and deepen our strategic cooperation with key customers, suppliers, chemical manufacturers, and research institutes. This approach enables us to remain innovative and swiftly meet the changing demands of our customers.
We are a key player in the deposition equipment segments for ALD and epitaxy, and a focused niche player for PECVD and vertical furnaces. As a leader in the segment, ALD has turned into a key growth driver for our business, from which we support virtually all of the leading customers in the semiconductor industry. Our newest ALD tool, Synergis, is designed to address a wide range of existing and new ALD applications, effectively increasing the market we serve.
In addition to our internal optimization programs, we are working with our suppliers to improve fundamental quality through statistical methods and process controls. In addition to addressing the technology needs of our customers, we also focus on further increasing equipment throughput and equipment reliability, thereby lowering the cost per wafer of our wafer processing systems.
In 2018, we achieved revenue growth of 11% reaching a record high revenue of €818 million, with sales increasing mainly in the logic, DRAM and analog segments. By industry segment, our 2018 revenue stream was led by memory, closely followed by the logic and foundry segments.
While our ALD product lines continued to be our key sales driver in 2018, accounting for more than half of total equipment revenue, our other product lines also contributed strongly. In our epitaxy product line we increased sales, following the strong growth we achieved in 2017, and we saw additional sales increases in PECVD and vertical furnaces.
Our industry experienced continued growth in 2018, with worldwide semiconductor industry sales increasing by around 14%. This was driven by high memory prices and broad-based electronics demand for cloud services, mobile devices, automotive and industrial applications. These drivers helped the wafer fab equipment market grow by around 10% in 2018.
Our 2018 sales grew to record levels, reaching €818 million. ALD continued to be the key driver, although the other product lines also made a strong contribution.
We benefited from a further increase in wafer fab equipment spending following the very strong market growth in 2017. Our operating profit increased to €124.3 million from €113.2 million in 2017, while the operating profit margin remained stable.
New bookings increased by 22% in 2018 to €942 million, with equipment bookings for ASMI as a whole led by logic, followed by foundry and then memory. Total research and development (R&D) expenses, excluding impairment charges, decreased by 1% in 2018 compared to 2017, mainly as a result of higher capitalization of development expenses.
Our 2018 sales grew to record levels, reaching €818 million. ALD continued to be the key driver, although the other product lines also made a strong contribution.
We benefited from a further increase in wafer fab equipment spending following the very strong market growth in 2017. Our operating profit increased to €124.3 million from €113.2 million in 2017, while the operating profit margin remained stable.
New bookings increased by 22% in 2018 to €942 million, with equipment bookings for ASMI as a whole led by logic, followed by foundry and then memory. Total research and development (R&D) expenses, excluding impairment charges, decreased by 1% in 2018 compared to 2017, mainly as a result of higher capitalization of development expenses.
During 2018, we returned approximately €607 million to shareholders in the form of dividends, share buybacks and the capital return. This was up from €281 million in 2017 and €140 million in 2016.
Over the 2010-2018 period, we returned more than €1.6 billion to the financial markets through dividends, share buybacks, return of capital, and buyback of convertible bonds.
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In 2018, we paid a dividend of €0.80 per common share and we will propose to the forthcoming AGM to declare a dividend of €1.00 per share for 2019. The proposed 2019 dividend will mark the ninth consecutive year that we have paid a dividend.
The changes in equity are as follows:
Legal reserves | ||||||||||||||||
(EUR thousand) | Common shares | Capital in excess of par value | Treasury shares | Accumulated net earnings | Net earnings current year | Translation reserve | Other legal reserves | Total equity | ||||||||
Balance as of January 1, 2017 | 2,552 | 225,837 | (151,477) | 264,826 | 135,471 | 229,488 | 1,291,445 | 1,998,142 | ||||||||
Appropriation of net earnings: | – | – | – | 135,471 | (135,471) | – | – | – | ||||||||
Components of comprehensive income | ||||||||||||||||
Net earnings | – | – | – | – | 452,402 | – | – | 452,402 | ||||||||
Other comprehensive income | – | – | – | – | – | (175,734) | – | (175,734) | ||||||||
Total comprehensive income (loss) | – | – | – | – | 452,402 | (175,734) | – | 276,668 | ||||||||
Dividend paid to common shareholders | – | – | – | (41,470) | – | – | – | (41,470) | ||||||||
Compensation expense share-based payments | – | 7,801 | – | – | – | – | – | 7,801 | ||||||||
Exercise stock options out of treasury shares | – | (10,612) | 23,904 | – | – | – | – | 13,292 | ||||||||
Vesting restricted shares out of treasury shares | – | (4,501) | 4,501 | – | – | – | – | – | ||||||||
Purchase of common shares | – | – | (243,527) | – | – | – | – | (243,527) | ||||||||
Cancellation of common shares out of treasury shares | (60) | – | 61,945 | (61,885) | – | – | – | – | ||||||||
Change in retained earnings subsidiaries | – | – | – | 121,741 | – | – | (121,741) | – | ||||||||
Fair value accounting investments | – | – | – | 404,092 | – | – | (404,092) | – | ||||||||
Capitalized development expenses subsidiaries | – | – | – | (12,996) | – | – | 12,996 | – | ||||||||
Other movements in investments in associates: | ||||||||||||||||
Dilution | – | – | – | 606 | – | – | – | 606 | ||||||||
Balance as of December 31, 2017 | 2,492 | 218,525 | (304,654) | 810,385 | 452,402 | 53,754 | 778,608 | 2,011,512 | ||||||||
Adjustment on initial application IFRS 15, net of tax | – | – | – | 15,992 | – | – | – | 15,992 | ||||||||
Adjusted balance at January 1, 2018 | 2,492 | 218,525 | (304,654) | 826,377 | 452,402 | 53,754 | 778,608 | 2,027,504 | ||||||||
Appropriation of net earnings | – | – | – | 452,402 | (452,402) | – | – | – | ||||||||
Components of comprehensive income: | ||||||||||||||||
Net earnings | – | – | – | – | 157,133 | – | – | 157,133 | ||||||||
Other comprehensive income | – | – | – | – | – | 45,853 | – | 45,853 | ||||||||
Total comprehensive income (loss) | – | – | – | – | 157,133 | 45,853 | – | 202,986 | ||||||||
Dividend paid to common shareholders | – | – | – | (43,644) | – | – | – | (43,644) | ||||||||
Capital repayment | – | (159,817) | – | (48,957) | – | – | – | (208,774) | ||||||||
Compensation expense share-based payments | – | 8,215 | – | – | – | – | – | 8,215 | ||||||||
Exercise stock options out of treasury shares | – | (7,966) | 12,783 | – | – | – | – | 4,817 | ||||||||
Vesting restricted shares out of treasury shares | – | (8,055) | 8,055 | – | – | – | – | – | ||||||||
Purchase of common shares | – | – | (350,042) | – | – | – | – | (350,042) | ||||||||
Cancellation of common shares out of treasury shares | (240) | – | 305,848 | (305,608) | – | – | – | – | ||||||||
Change in retained earnings subsidiaries | – | – | – | (45,032) | – | – | 45,032 | – | ||||||||
Fair value accounting investments | – | – | – | (21,051) | – | – | 21,051 | – | ||||||||
Capitalized development expenses subsidiaries | – | – | – | (41,460) | – | – | 41,460 | – | ||||||||
Other movements in investments in associates: | ||||||||||||||||
Dilution | – | – | – | 489 | – | – | – | 489 | ||||||||
Balance as of December 31, 2018 | 2,252 | 50,902 | (328,010) | 773,516 | 157,133 | 99,607 | 886,151 | 1,641,551 |
Following the amendment of the articles of association on August 3, 2018, the authorized capital of the Company amounts to 82,500,000 common shares of €0.04 par value, 88,500 preferred shares of €40 par value and 6,000 financing preferred shares of €40 par value.
The AGM of May 28, 2018, approved the cancellation of 6.0 million treasury shares. This became effective as per August 1, 2018.
As per December 31, 2018, 56,297,394 common shares with a nominal value of €0.04 each were issued and fully paid up, of which 6,978,496 common shares are held by us in treasury. All shares have one vote per €0.04 par value. Treasury shares held by the Company cannot be voted on. Of our 49,318,898 outstanding common shares at December 31, 2018, 49,022,494 are registered with our transfer agent in the Netherlands, ABN AMRO Bank N.V., and 296,404 are registered with our transfer agent in the United States, Citibank, NA, New York.
As at December 31, 2018 no preferred shares are issued.
With respect to treasury shares, reference is made to Note 12 to the consolidated financial statements.
Legal reserves include reserves regarding participating interests, capitalized development expenses and the cumulative foreign currency translation effect on translation of foreign operations, and is included in the accumulated other comprehensive income (loss).
The other legal reserve for participating interests regarding retained earnings, which amounts to €745,769 (2017: €679,686), pertains to participating interests that are accounted for according to the equity accounting method. The reserve represents the difference between the participating interest' retained earnings and direct changes in equity, as determined on the basis of the Company's accounting policies, and the share thereof that the Company may distribute. As to the latter share, this takes into account any profits that may not be distributable by participating interests that are Dutch limited companies based on the distribution tests to be performed by the management of those companies. The legal reserve is determined on an individual basis.
In accordance with applicable legal provisions, a legal reserve for the carrying amount of €140,382 (2017: €98,922) has been recognized for capitalized development costs.
Changes in other legal reserves in 2017 and 2018 were as follows:
Reserve for participating interests, regarding retained earnings | Reserve for participating interests, regarding capitalized development expenses | Other legal reserves | ||||
Balance as of January 1, 2017 | 1,205,519 | 85,926 | 1,291,445 | |||
Retained earnings subsidiaries and investments | (121,741) | – | (121,741) | |||
Fair value accounting investments | (404,092) | – | (404,092) | |||
Development expenditures | – | 12,996 | 12,996 | |||
Balance as of December 31, 2017 | 679,686 | 98,922 | 778,608 | |||
Retained earnings subsidiaries and investments | 45,032 | – | 45,032 | |||
Fair value accounting investments | 21,051 | – | 21,051 | |||
Development expenditures | – | 41,460 | 41,460 | |||
Balance as of December 31, 2018 | 745,769 | 140,382 | 886,151 |
For more detailed information, reference is made to Note 12 to the consolidated financial statements.
The Company has adopted various stock option plans and restricted share plans and has entered into related agreements with various employees. For detailed information, reference is made to Note 13 to the consolidated financial statements.
It is proposed that net earnings for the year 2018 are carried to the accumulated deficit/net earnings.