To: The Shareholders and Supervisory Board of ASM International NV
In our opinion:
We have audited the financial statements 2018 of ASM International N.V. ("ASMI") based in Almere. The financial statements include the consolidated financial statements and ASMI’s financial statements.
The consolidated financial statements comprise:
The ASMI financial statements comprise:
We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under those standards are further described in the ‘Our responsibilities for the audit of the financial statements’ section of our report.
We are independent of ASMI in accordance with the EU Regulation on specific requirements regarding statutory audits of public-interest entities, the ‘Wet toezicht accountantsorganisaties’ (Wta, Audit firms supervision act), the ‘Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten’ (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence regulations in the Netherlands. Furthermore, we have complied with the ‘Verordening gedrags- en beroepsregels accountants’ (VGBA, Dutch Code of Ethics).
We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Based on our professional judgement we determined the materiality for the financial statements as a whole at EUR 6.5 million (2017: EUR 5.5 million). The materiality is determined with reference to result before income taxes, of which it represents 3.8% (2017: 2.7%). Note that in 2017 the result before tax is adjusted for a non-recurring gain on a partial disposal of an associate and the impact of foreign exchange results. For 2018 there were no significant non-recurring items for which result before income taxes had to be normalized for. We consider result before income taxes as the most appropriate benchmark because ASMI is a profit oriented company and the key users of the financial statements are focused on profit. We have also taken into account misstatements and/or possible misstatements that in our opinion are material for the users of the financial statements for qualitative reasons.
We agreed with the Supervisory Board that misstatements in excess of EUR 325,000 which are identified during the audit, would be reported to them, as well as smaller misstatements that in our view must be reported on qualitative grounds.
ASMI is at the head of a group of components. The financial information of this group is included in the financial statements of ASMI.
Our group audit mainly focused on significant components where account balances are of significant size, have significant risks of material misstatement to the group associated with them or are considered significant for other reasons.
By performing the procedures mentioned above at group components, together with additional procedures at group level, we have been able to obtain sufficient and appropriate audit evidence about the group’s financial information to provide an opinion about the financial statements.
Our procedures as described above can be summarized as follows:
In accordance with the Dutch Standards on Auditing we are responsible for obtaining reasonable assurance that the financial statements taken as a whole are free from material misstatement, whether caused by fraud or error. In determining the audit procedures we will make use of the evaluation of management in relation to fraud risk management (prevention, detections and response), including ethical standards to create a culture of honesty.
In our process of identifying fraud risks we assessed fraud risk factors, which we discussed with management and Supervisory Board. Fraud risk factors are events or conditions that indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. In these risk assessments we made use of a forensic specialist.
We also assessed factors related to the risk of non-compliance with laws and regulations which could have a direct or indirect impact on the financial statements. We assessed the extent of compliance with the direct laws and regulations as part of our procedures on the related financial statement items. In relation to non-compliance with laws and regulations we have considered the fraud risk factor ‘Operating in jurisdictions that are perceived as potentially unethical or higher risk (with a CPI score <60). Based on our assessment this fraud risk factor did not result in a risk of non-compliance with laws and regulations which could have a material impact on the financial statements. Auditing standards limit the required audit procedures to identify non-compliance with indirect laws and regulations, which we performed, to inquiry of management and those charged with governance and inspection of regulatory and legal correspondence.
Based on the auditing standards we addressed the following presumed fraud risks that were relevant to our audit:
Our audit procedures included substantive audit procedures, including detailed testing of (administrative) journal entries and documentation in relation to revenue recognition criteria. For details on the fraud risk on revenue recognition we refer to the key audit matter Revenue recognition.
Data analytics, including the identification of high-risk journal entries, are part of our audit approach to address fraud risk in relation to management override of controls which could have a material impact on the financial statements. We identified high risk journal entries based on, amongst others, balances which include significant management estimates, transactions identified based on specific characteristics such as journal entries without a clearly evident business purpose or processed by an unexpected official.
Our audit procedures differ from a specific forensic fraud investigation, which investigation often has a more in-depth character.
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements. We have communicated the key audit matters to the Supervisory Board. The key audit matters are not a comprehensive reflection of all matters discussed.
These matters were addressed in the context of our audit of the financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
In addition to the financial statements and our auditor’s report thereon, the annual report contains other information that consists of:
Based on the following procedures performed, we conclude that the other information:
We have read the other information. Based on our knowledge and understanding obtained through our audit of the financial statements or otherwise, we have considered whether the other information contains material misstatements.
By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is substantially less than the scope of those performed in our audit of the financial statements.
Management of ASMI is responsible for the preparation of the other information, including the information as required by Part 9 of Book 2 of the Dutch Civil Code.
We were engaged by the Annual General Meeting of Shareholders as auditor of ASM International NV on May 21, 2014, as of the audit for year 2015 and have operated as statutory auditor since then.
We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU Regulation on specific requirements regarding statutory audits of public-interest entities.
Management Board is responsible for the preparation and fair presentation of the financial statements in accordance with EU-IFRS and Part 9 of Book 2 of the Dutch Civil Code. Furthermore, Management Board is responsible for such internal control as management determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.
As part of the preparation of the financial statements, Management Board is responsible for assessing ASMI’s ability to continue as a going concern. Based on the financial reporting frameworks mentioned, Management Board should prepare the financial statements using the going concern basis of accounting unless Management Board either intends to liquidate ASMI, or to cease operations, or has no realistic alternative but to do so. Management Board should disclose events and circumstances that may cast significant doubt on the ASMI’s ability to continue as a going concern in the financial statements.
The Supervisory Board is responsible for overseeing ASMI’s financial reporting process.
Our objective is to plan and perform the audit engagement in a manner that allows us to obtain sufficient and appropriate audit evidence for our opinion.
Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all material errors and fraud during our audit.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. The materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified misstatements on our opinion.
A further description of our responsibilities for the audit of the financial statements is included in appendix of this auditor's report. This description forms part of our auditor’s report.
Amsterdam, March 5, 2019
KPMG Accountants N.V.
R.P. Kreukniet RA
We have exercised professional judgment and have maintained professional skepticism throughout the audit, in accordance with Dutch Standards on Auditing, ethical requirements and independence requirements. Our audit included e.g.:
Because we are ultimately responsible for the opinion, we are also responsible for directing, supervising and performing the group audit. In this respect we have determined the nature and extent of the audit procedures to be carried out for group entities. Decisive were the size and/or the risk profile of the group entities or operations. On this basis, we selected group entities for which an audit or review had to be carried out on the complete set of financial information or specific items.
We communicate with the Supervisory Board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant findings in internal control that we identify during our audit.
We provide the Supervisory Board with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safegards.
From the matters communicated with the Supervisory Board, we determine key audit matters: those matters that were of most significance in the audit of the financial statements. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, not communicating the matter is in the public interest.
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.
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.
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.
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.
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.
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.
Achieving our ambitions takes intelligence, knowledge, skill,
determination, and dedication. And it is this combination of
qualities that we nurture in our people.
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.
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 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 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.
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.
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.
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.
We believe sustainability takes many forms.
From developing sustainable technology
roadmaps for our customers, to creating
a sustainable living environment for all.
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.