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.

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About

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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.

MEETING DEMAND

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.

CREATING RESULTS

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:

  • net sales of €818 million;
  • bookings of €942 million;
  • operating result of €124 million; and
  • operating cash flow of €137 million.

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Strategy & business

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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.

INNOVATIVE STRENGTH

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.

LEADERSHIP IN DEPOSITION

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.

OPERATIONAL EXCELLENCE

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.

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Performance review

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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.

MULTIPLE PRODUCT LINES

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.

MARKET GROWTH

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.

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Governance

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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.

OTHER DEVELOPMENTS

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.

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Financial statements

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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.

OTHER DEVELOPMENTS

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.

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Other Information

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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.

SHAREHOLDER DIVIDEND

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DELIVERING RESULTS

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.

NOTE 7. EQUITY

The changes in equity are as follows:

Legal reserves
(EUR thousand)Common sharesCapital in excess of par valueTreasury sharesAccumulated net earningsNet earnings current yearTranslation reserveOther legal reservesTotal equity
Balance as of January 1, 20172,552225,837(151,477)264,826135,471229,4881,291,4451,998,142
Appropriation of net earnings:135,471(135,471)
Components of comprehensive income
Net earnings452,402452,402
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 payments7,8017,801
Exercise stock options out of treasury shares(10,612)23,90413,292
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 subsidiaries121,741(121,741)
Fair value accounting investments404,092(404,092)
Capitalized development expenses subsidiaries(12,996)12,996
Other movements in investments in associates:
Dilution606606
Balance as of December 31, 20172,492218,525(304,654)810,385452,40253,754778,6082,011,512
Adjustment on initial application IFRS 15, net of tax15,99215,992
Adjusted balance at January 1, 20182,492218,525(304,654)826,377452,40253,754778,6082,027,504
Appropriation of net earnings452,402(452,402)
Components of comprehensive income:
Net earnings157,133157,133
Other comprehensive income45,85345,853
Total comprehensive income (loss)157,13345,853202,986
Dividend paid to common shareholders(43,644)(43,644)
Capital repayment(159,817)(48,957)(208,774)
Compensation expense share-based payments8,2158,215
Exercise stock options out of treasury shares(7,966)12,7834,817
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:
Dilution489489
Balance as of December 31, 20182,25250,902(328,010)773,516157,13399,607886,1511,641,551

COMMON SHARES, PREFERRED AND FINANCING PREFERRED SHARES

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.

TREASURY SHARES

With respect to treasury shares, reference is made to Note 12 to the consolidated financial statements.

OTHER LEGAL RESERVES

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 earningsReserve for participating interests, regarding capitalized development expensesOther legal reserves
Balance as of January 1, 20171,205,51985,9261,291,445
Retained earnings subsidiaries and investments(121,741)(121,741)
Fair value accounting investments(404,092)(404,092)
Development expenditures12,99612,996
Balance as of December 31, 2017679,68698,922778,608
Retained earnings subsidiaries and investments45,03245,032
Fair value accounting investments21,05121,051
Development expenditures41,46041,460
Balance as of December 31, 2018745,769140,382886,151

For more detailed information, reference is made to Note 12 to the consolidated financial statements.

EMPLOYEE STOCK PLAN, OPTION PLAN AND EMPLOYEE RESTRICTED SHARES PLAN

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.

APPROPRIATION OF RESULT

It is proposed that net earnings for the year 2018 are carried to the accumulated deficit/net earnings.

 

TAKING THE NEXT LEAP FORWARD

Over the past 50 years we have grown to become a leading global supplier
of semiconductor wafer processing equipment. A company that develops
innovative process solutions for our customers, and manages itself in the best
interests of our investors, our employees, society, and other stakeholders.

Yet now is the time to enter a new era of innovation, to embark on the next
phase of growth. We understand that this requires commitment and strength
across many areas. From innovation in R&D, to advancing new technologies
and addressing new applications. From developing our people, to creating
even stronger relationships with key customers.

This is how we will take the next leap forward.

The

Of new materials

R

i

s

e

ROADMAP TO THE FUTURE

Our roadmap to the future will enable us to not only
achieve our next phase of growth, it will ensure we
can continue to help our customers achieve their
technology roadmaps for next-generation devices.

INNOVATION

Our technology helps drive innovation, increasing the number of scientific breakthroughs, many of which are achieved from our advanced process equipment that deposits new materials with precision and productivity, positively benefiting society in sectors from healthcare and education, to transport and energy.

SCALING

For semiconductor manufacturers, scaling chips
to smaller dimensions is an ongoing challenge.
Our innovations and equipment are vital in helping make many of these transitions happen.

EFFICIENCY

Striving for efficiency ensures that our
customers get the products, services,
and results they expect. Intensifying
our focus on efficiency will make us a
stronger company, ready to take the
next leap forward.

The

That
matters

m

i

x

Multinational

We are a multinational company that
embraces diversity in every sense
of the word. With 29 different
nationalities working across the
company, we combine our talents
to drive innovation.

INTELLIGENCE

Achieving our ambitions takes intelligence, knowledge, skill,
determination, and dedication. And it is this combination of
qualities that we nurture in our people.

XTRAORDINARY

Our goal is to impact tomorrow’s generation
as positively as we’ve impacted today’s.
Making this happen takes the xtraordinary
talent of our people, who work together
to drive innovation and deliver excellence.

Expanding the

c

o

r

e

COLLABORATION

Collaboration is fundamental to our
continued success; from working
with our customers to optimize our
equipment and processes to enable
their technology roadmaps, to
creating partnerships on cutting-edge
research and development.

OPERATIONAL EXCELLENCE

Operational excellence is one of the essential
pillars of our strategy, which enables us to provide
our customers with the high-quality, leading-edge
products and services they demand.

R&D

R&D is central to our development,
leading to new device architectures,
new materials, and new processes
that strengthen our competitive
positioning and enable our customers
to deliver the next-generation chips.

Extending

By extending our technological scope with a
more diverse product portfolio, we can help our
customers continue to advance their business
while growing our own in new market segments.

Moore with

l

e

s

s

LONG-TERM VALUE

We create long-term value for our
stakeholders in a variety of ways.
From working with our customers
to develop innovative solutions, to
ensuring value creation growth
and positive investor returns.

ENVIRONMENT

We are committed to positively
contributing to society and
reducing our impact on the
environment. Only then can
we truly say we are helping
create more with less.

SUSTAINABILITY

We believe sustainability takes many forms.
From developing sustainable technology
roadmaps for our customers, to creating
a sustainable living environment for all.

SAFETY

Safety is a front-line requirement,
which is why our ZERO HARM!
policy outlines our vision on product
safety, and our CR policy lays out
our commitment and expectations
towards health and safety.