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.
Our Management Board has the power to issue ordinary shares and (financing) preference shares insofar as the Management Board has been authorized to do so by the Annual General Meeting of Shareholders (AGM). The Management Board requires the approval of the Supervisory Board for such an issue. The authorization by the AGM can only be granted for a certain period. In the case that the AGM has not authorized the Management Board to issue shares, the AGM shall have the power to issue 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.
Financing preferred shares are designed to allow ASMI to finance equity with an instrument paying a preferred dividend, linked to EURIBOR loans and government loans, without the dilutive effects of issuing additional common shares.
Preferred and financing preferred shares are issued in registered form only and are subject to transfer restrictions. Essentially, a preferred or financing preferred shareholder must obtain the approval of the Company's Supervisory Board to transfer shares. If approval is denied, the Supervisory Board will provide a list of acceptable prospective buyers who are willing to purchase the shares at a cash price to be fixed by consent of the Supervisory Board and seller within two months after the approval is denied. If the transfer is approved, the shareholder must complete the transfer within three months, at which time the approval expires.
Preferred shares are entitled to a cumulative preferred dividend based on the amount paid up on such shares. Financing preferred shares are entitled to a cumulative dividend based on the par value and share premium paid on such shares.
As per December 31, 2018 no preferred shares are issued.
On May 28, 2018, the AGM authorized the Company, for an 18-month period, to be calculated from the date of the AGM, to repurchase its own shares up to two times 10% of the issued capital, at a price at least equal to the shares’ nominal value and at most a price equal to 110% of the shares' average closing price according to the listing on the Euronext Amsterdam stock exchange during the five trading days preceding the purchase date. For the years preceding the AGM 2018, a one-time 10% repurchase mandate was provided by the AGM. The exception of the additional 10% repurchase mandate was due to the sales of the ASMPT shares as announced on April 24, 2018, and November 2, 2018 and the subsequent share buy-back programs.
As part of these resolutions the Company noted that it was possible that it would temporarily hold in excess of 10% of its own capital if the full repurchase authority as mentioned above would be utilized by the Company. The Company noted that, at the Annual General Meeting in 2019, it would propose to withdraw any and all treasury shares, including the common shares to be repurchased, save for such number of treasury shares as may be necessary to fund ongoing share and option programs for employees and board members which shall in any case represent less than 10% of the issued capital.
On October 26, 2016, ASMI announced a share buyback program to purchase up to an amount of €50 million of its own shares within the 2016-2017 time frame. On March 2, 2017, ASMI announced an increase in the 2016-2017 share buyback program to €100 million. This program started on December 13, 2016 and was completed on August 31, 2017.
The following table provides a summary of shares repurchased by ASMI under this program:
Period | Total number of shares purchased | Average price paid per share (EUR) | Cumulative number of shares purchased | |||
Share buyback program 2016-2017: | ||||||
December, 2016 | 153,022 | €42.30 | 153,022 | |||
January, 2017 | 143,498 | €43.46 | 296,520 | |||
February, 2017 | 157,326 | €47.56 | 453,846 | |||
March, 2017 | 330,000 | €49.47 | 783,846 | |||
April, 2017 | 260,658 | €51.73 | 1,044,504 | |||
May, 2017 | 258,400 | €55.15 | 1,302,904 | |||
June, 2017 | 254,000 | €53.07 | 1,556,904 | |||
July, 2017 | 182,000 | €52.24 | 1,738,904 | |||
August, 2017 | 258,618 | €49.35 | 1,997,522 | |||
Total | 1,997,522 | €50.06 |
On September 22, 2017, ASMI announced a share buyback program to purchase up to an amount of €250 million of its own shares within the 2017-2018 time frame. The program ended on March 29, 2018.
The following table provides a summary of shares repurchased by ASMI under this program:
Period | Total number of shares purchased | Average price paid per share (EUR) | Cumulative number of shares purchased | |||
Share buyback program 2017-2018: | ||||||
September, 2017 | 240,237 | €52.81 | 240,237 | |||
October, 2017 | 823,362 | €55.69 | 1,063,599 | |||
November, 2017 | 714,716 | €60.75 | 1,778,315 | |||
December, 2017 | 863,338 | €56.83 | 2,641,653 | |||
January, 2018 | 703,383 | €59.23 | 3,345,036 | |||
February, 2018 | 885,173 | €56.21 | 4,230,209 | |||
March, 2018 | 123,083 | €61.43 | 4,353,292 | |||
Total | 4,353,292 | €57.43 |
On June 5, 2018, ASMI announced a share buyback program to purchase up to an amount of €250 million of its own shares within the 2018 time frame. The 2018 program started on June 6, 2018, and ended on October 11, 2018.
The following table provides a summary of shares repurchased by ASMI under this program:
Period | Total number of shares purchased | Average price paid per share (EUR) | Cumulative number of shares purchased | |||
Share buyback program 2018: | ||||||
June, 2018 | 812,515 | €51.77 | 812,515 | |||
July, 2018 | 1,086,008 | €47.59 | 1,898,523 | |||
August, 2018 | 1,234,202 | €46.51 | 3,132,725 | |||
September, 2018 | 1,388,126 | €43.46 | 4,520,851 | |||
October, 2018 | 923,037 | €41.74 | 5,443,888 | |||
Total | 5,443,888 | €45.92 |
The following table provides the change in number of treasury shares and outstanding shares:
Number of shares | treasury shares | outstanding shares | ||
Balance at beginning of year | 6,157,241 | 56,140,153 | ||
Purchase common shares | 7,242,734 | (7,242,734) | ||
Exercise stock options out of treasury shares | (258,688) | 258,688 | ||
Vesting restricted shares out of treasury shares | (162,791) | 162,791 | ||
Cancellation treasury shares | (6,000,000) | – | ||
Balance at end of year | 6,978,496 | 49,318,898 |
ASMI intends to use part of the shares for commitments under the employee share-based compensation schemes and the option program for the management board.
The share buyback programs were executed by intermediaries through on-exchange purchases or through off-exchange trades. ASMI updated the markets on the progress of the share buyback programs on a weekly basis.
The repurchase programs are part of ASMI's commitment to use excess cash for the benefit of its shareholders.
On December 31, 2018, we had 49,318,898 outstanding common shares excluding 6,978,496 treasury shares. This compared to 56,140,153 outstanding common shares and 6,157,241 treasury shares at year-end 2017. Besides the cancellation of 6 million treasury shares in August 2018, the change in the number of treasury shares in 2018 was the result of approximately 7.2 million repurchased shares and approximately 421,000 treasury shares that were used as part of share based payments.
2017 | 2018 | |||
As per January 1: | ||||
Issued shares | 63,797,394 | 62,297,394 | ||
Treasury shares | 3,981,551 | 6,157,241 | ||
Outstanding shares | 59,815,843 | 56,140,153 | ||
Changes during the year: | ||||
Cancellation of treasury shares | 1,500,000 | 6,000,000 | ||
Share buybacks | 4,420,946 | 7,242,734 | ||
Treasury shares used for share based performance programs | 745,256 | 421,479 | ||
As per December 31: | ||||
Issued shares | 62,297,394 | 56,297,394 | ||
Treasury shares | 6,157,241 | 6,978,496 | ||
Outstanding shares | 56,140,153 | 49,318,898 |
Distributions to common shareholders are limited to the extent the total amount of shareholders’ equity exceeds the amounts of nominal paid-in share capital (exclusive any share premium) and any reserves to be formed pursuant to law or the Company’s Articles of Association. The amounts are derived from the Company financial statements of ASMI.
ASMI aims to pay a sustainable annual dividend. The Supervisory Board, upon proposal of the Management Board, will annually assess the amount of dividend that will be proposed to the AGM. The decision that a dividend be proposed to the AGM will be subject to the availability of distributable profits as well as retained earnings and may be affected by our potential future funding requirements. Accordingly, dividend payments may fluctuate and could decline or be omitted in any year.
In 2018, we paid a dividend of €0.80 per common share. We will propose to the forthcoming 2019 AGM to declare a dividend of €1.00 per share.
Results on dilution of investments in associates are accounted for directly in equity. For 2018 and 2017, these dilution results were €489 and €606 respectively.
The changes in the amount of other reserves are as follows:
Proportionate share in other comprehensive income investments in associates 1 | Remeasurement on net defined benefit | Translation reserve | Total other reserves | |||||
Balance January 1, 2017 | (2,476) | – | 231,964 | 229,488 | ||||
Proportionate share in other comprehensive income investments in associates | (2,580) | – | – | (2,580) | ||||
Remeasurement on net defined benefit | – | (264) | 3 | (261) | ||||
Foreign currency translation effect on translation of foreign operations | – | – | (172,893) | (172,893) | ||||
Balance December 31, 2017 | (5,056) | (264) | 59,074 | 53,754 | ||||
Proportionate share other comprehensive income investments in associates | (1,161) | – | – | (1,161) | ||||
Remeasurement on net defined benefit | – | 254 | (12) | 242 | ||||
Foreign currency translation effect on translation of foreign operations | – | – | 46,772 | 46,772 | ||||
Balance December 31, 2018 | (6,217) | (10) | 105,834 | 99,607 |