ASM International N.V. (Euronext Amsterdam: ASM) today reports its third quarter 2017 operating results (unaudited) in accordance with IFRS.
EUR million Q3 2016 Q2 2017 Q3 2017
New orders 122.6 205.9 160.4
Net sales 144.2 202.0 185.3
Gross profit margin % 44.2 % 43.7 % 40.0 %
Operating result 16.8 37.7 25.7
Result from investments (excluding amortization intangible assets resulting from the sale of the 12% stake of ASMPT) 26.7 30.9 32.1
Amortization intangible assets resulting from the sale of the 12% stake of ASMPT
(6.7 ) (7.3 ) (5.4 )
Net earnings 33.1 132.1 42.2
Normalized net earnings (excluding amortization intangible assets resulting from the sale of the 12% stake of ASMPT and result from sale and dilution of ASMPT stake) 39.8 55.6 47.6
· New orders at €160 million were 22% below the Q2 2017 level and 31% above last year's Q3 level.
· Net sales for the third quarter 2017 were €185 million, a decrease of 8% compared to the previous quarter. Year-on-year net sales increased with 28%.
· Operating result decreased to €26 million. This reduction is mainly related to the newly introduced products which are temporarily impacting the gross margin and had an effect of €9 million in Q3.
· Normalized net earnings for the third quarter 2017 decreased by €8 million compared to the second quarter 2017. The financing result included €8 million negative effects from currencies compared to €11 million negative effects in the second quarter. The result from investments increased with €1 million.
Commenting on the results, Chuck del Prado, President and Chief Executive Officer of ASM International said: "In Q3, we realized sales of €185 million and an order intake of €160 million, well in line with our guidance. The sales included several deliveries of Intrepid Epitaxy and new PECVD applications. The initial margin on these newly introduced products is relatively low, as earlier indicated, and impacted our gross margin in the quarter with 5 percentage points. We expect our gross margin to normalize again in the course of 2018."
We continue to expect a clear year-on-year improvement in the single wafer ALD market in 2017, with demand in the Logic/Foundry segment remaining healthy and a strong increase in the 3D-NAND segment.
For Q4, on a currency comparable level, we expect sales of €190-210 million and an order intake of €170-190 million.
In 2017, the company benefits from a very strong wafer fab equipment market. For 2018, market watchers currently expect this market to increase with a low to mid single digit percentage. We aim to outgrow the wafer fab equipment market in 2018.
SHARE BUYBACK PROGRAM
On October 26, 2016, ASMI announced a share buyback program for the repurchase of up to €50 million of the company's common shares within the 2016-2017 time frame. On March 2, 2017, ASMI announced that its Management Board authorized an increase in this program to €100 million. The 2016-2017 program started on December 13, 2016 and was completed on August 31, 2017. Under the 2016-2017 program 1,997,522 shares were repurchased at an average price of €50.06.
On April 24, 2017, ASMI announced a partial sale of its ASMPT stake, whereby ASMI indicated to use the proceeds of approximately €245 million for a new share buyback program. The start of this new program for a total amount of €250 million was announced on September 22, 2017. ASMI has the intention to reduce its capital by withdrawing the repurchased shares after having received the approval from its shareholders. The repurchase program is part of ASMI's commitment to use excess cash for the benefit of its shareholders. On September 30, 2017, 5.0% of the program was completed at an average share price of €52.44.
During the Annual General Meeting of Shareholders of May 22, 2017 the Board was authorized to acquire up to 10% of ASMI shares for a period of 18 months. During the same meeting it was approved to cancel 1.5 million treasury shares.This became effective as of August 1, 2017.