Semiconductor Equipment - Berenberg Bank

Suess Microtec AG
Small/Mid-Cap: Technology Hardware
Figure 8: Profit and loss
2011 2012 2013E 2014E 2015E
Revenues 175.4 163.8 152.9 188.5 215.3
YOY 26.1% -6.6% -6.7% 23.3% 14.2%
Cost of goods sold 109.1 106.4 107.0 119.6 131.8
Gross profit 66.4 57.4 45.9 68.8 83.5
% of revenues 37.8% 35.0% 30.0% 36.5% 38.8%
Research & development 12.9 9.7 9.6 10.3 10.8
% of revenues 7% 6% 6% 5% 5%
SG&A 35.8 37.6 37.8 41.0 44.5
% of revenues 20% 23% 25% 22% 21%
Operating Income 18.6 11.7 -8.4 18.6 29.4
% of revenues 10.6% 7.2% -5.5% 9.9% 13.7%
Operating income (ADJ) 18.6 10.3 -1.6 18.6 29.4
% of revenues 10.6% 6.3% -1.0% 9.9% 13.7%
Lithography 25.5 23.7 11.3 19.2 28.1
Substrate Bonder -11.1 -12.0 -11.6 -8.2 -5.4
Photo mask equipment 5.3 1.1 2.8 4.4 4.2
Operating Margin (Pro forma)
Lithography 23% 21% 12% 16% 19%
Substrate Bonder -54% -52% -48% -29% -18%
Photo mask equipment 15% 5% 11% 12% 12%
EPS - GAAP 0.77 0.49 -0.40 0.67 1.04
EPS - Adj 0.77 0.41 -0.04 0.67 1.04
Common shares (millions) 19 19 19 19 19
Source: Company data, Berenberg estimates
Balance sheet and cash flow
At end-Q1 2013, SUSS had net cash of €18m. We expect the net cash level will be
€13m by end-2014 driven by earnings momentum. It had €85.7m in inventory on
the balance sheet at end-Q1, and inventory days of 343. The inventories are mainly
demo tools, and we expect the amount of demo tools it provides to potential
customers to increase once 3D bonders become attractive.
SUSS generated negative free cash flow in Q1 due to weak earnings and negative
working capital movement. The longer cash conversion cycle resulted from the
decrease in the revenue contribution from the lithography segment, which has a
shorter lead time.
We forecast SUSS to generate €17m free cash flow in 2015, and to benefit from the
increase in profitability and in the top line.
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