BASIS for DIGITAL PROGRESS Siltronic Group Key Figures
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Annual Report 2020 WAFER – BASIS FOR DIGITAL PROGRESS Siltronic Group key figures Statement of profit or loss In EUR million 2020 2019 Sales 1,207.0 1,270.4 Gross profit 339.5 457.6 Gross margin % 28.1 36.0 EBITDA 332.0 408.7 EBITDA margin % 27.5 32.2 EBIT 192.2 298.3 EBIT margin % 15.9 23.5 Financial result – 3.0 4.4 Income taxes – 2.4 – 41.7 Result for the period 186.8 261.0 Earnings per share EUR 5.36 7.52 Capital expenditure and net cash flow In EUR million 2020 2019 Capital expenditure in property, plant and equipment, and intangible assets 187.6 363.0 Net cash flow 77.4 81.3 Statement of financial position In EUR million Dec. 31, 2020 Dec. 31, 2019 Total assets 1,919.4 1,945.0 Equity 871.8 930.2 Equity ratio % 45.4 47.8 Net financial assets 499.2 588.9 Non-financial performance indicators 2020 2019 Efficiency of the use of silicon (100 percent corresponds to the 2015 base) % 99 103 Energy use per wafer area (100 percent corresponds to 2015 base) % 99 104 Waste recycling ratio % 70 69 Water usage for production per wafer area (100 percent corresponds to 2015 base) % 99 105 Occupational accidents at work per million working hours Number 2.1 2.5 Occupational accidents (per working days) with chemicals per year (number of affected employees) – 5 Employees (excluding temporary employees) 3,772 3,669 Siltronic Annual Report 2020 // Page 2 Company profile Success with wafers Siltronic is one of the world’s leading manufacturers of hyperpure silicon wafers with diameters up to 300 mm and partner of many leading semiconductor companies. The Company has a network of state-of-the-art production sites in Asia, Europe and the USA. Silicon wafers are the basis of modern micro- and nanoelectronics and a key component in semiconductor chips in e.g. computers, smartphones, navigation systems and many other applications. Being among the technology leaders and a consistent focus on improving efficiency form the bedrock for increasing the Company’s value going forward. Content Company profile 3 About this report We have optimized our annual report in PDF format for convenient use on Figures and Facts 4 a PC or tablet. The linked tables of contents allow quick and easy naviga- tion through all chapters. Meaningful links and standardized function buttons on each page make it easier for the reader to establish references To our shareholders 6 to the content and enable convenient and transparent absorption of the Letter to Shareholders 7 report content. Supervisory Board report 10 Siltronic on the stock exchange 15 Navigation toolbar Search Combined management report 18 Business and economic conditions 19 Chapter table of contents Business report 24 Last page viewed Financial position and financial performance 28 Previous page Siltronic AG 38 Other non-financial aspects 42 Next page Risk and opportunity report 48 Outlook 58 Further information Compensation report 60 Page reference Disclosures relevant to acquisitions 72 Declaration on corporate governance 76 Reference to external document Mouseover function Non-financial report 2020 issued by Siltronic AG, Munich 86 Contact Consolidated financial statements 114 Consolidated statement of profit or loss 115 Corporate Communications Consolidated statement of financial position 116 Investor Relations Consolidated statement of cash flows 117 Consolidated statement of comprehensive income 118 Consolidated statement of changes in equity 119 Notes to the consolidated financial statements of Siltronic AG and subsidiaries 120 Additional information 166 Siltronic Annual Report 2020 // Page 3 Siltronic Figures and Facts Global player with strong roots in Germany. Siltronic is one of the world‘s leading manufacturers of hyperpure silicon wafers with a diameter of up to 300 mm and a partner of leading chip manufacturers. Our sites End markets for semiconductor applications Germany Munich (Headquarters) Burghausen Freiberg France Italy USA Singapore Taiwan South Korea Japan China Wafer production 1. Polysilicon 2. Crystal pulling 3. Wire sawing The term wafer refers to silicon slices approximately 1 mm thin, which are given an extremely flat surface through technically very demanding processes. The choice of the crystal growing process is determined by the later application. After various production steps, the customer receives the wafer manufactured according to his specifications in special packaging that allows the wafers to be used immediately in his production line. Siltronic Annual Report 2020 // Page 4 Figures and Facts Our way to success 1962 Development of the first silicon wafer 1968 Founding of Wacker-Chemitro- nic-Gesellschaft für Elektro- nik-Grundstoffe mbH Driving wafer development (“Wacker-Chemitronic“) Short innovation cycles, a highly competitive market. Around 1,850 patents and patent applications 1978 Founding of Wacker Siltronic Corporation clearly demonstrate our claim to be among the technology leaders in the global market. in Portland, USA Technology generation 1995 Acquisition of Freiberger in nm Elektronikwerkstoffe Produktions- und Vertriebs- 11/8 8 8/5 5 5/3,5 3,5/3,2 3/2 3/2 3/2 gesellschaft mbH 2006 Foundation of the joint venture Siltronic Silicon Wafer Pte. Ltd. (SSW) in Singapore 2014 Take-over of the majority 8 nm development mass production interest in SSW 2015 Siltronic successfully 5 nm development mass production goes public 2017 Wacker Chemie AG 3 nm development mass production sells majority stake in Siltronic 2 nm development 2018 Siltronic celebrates its 50th anniversary 2016 2017 2018 2019 2020 2021 2022 2023 2024 Future-proof with wafers Wafers made of hyperpure silicon are so versatile in their use that probably almost everyone comes into contact with them. Siltronic‘s technology is to be found in smartphones, PCs and laptops and increasingly in industrial applications and automobiles. And the demand for wafers increases with every technological advancement – good prospects for our business. Since our company was founded over 50 years ago, it has developed just as dynamically as the challenging market environment in which we operate. With our unique combination of innovative strength and precision, we create the conditions for devices and applications to become ever more powerful and faster. Technological innovation and a consistent focus on efficiency gains are our foun- dations for future growth of the company value. ≤ 100 mm 125 mm 150 mm 200 mm 300 mm 4. Cleaning and etching 5. Polishing 6. Silicon wafer Siltronic Annual Report 2020 // Page 5 To our shareholders Siltronic Annual Report 2020 // Page 6 To our shareholders // Letter to Shareholders Letter to Shareholders Dear shareholders, dear customers, business partners and employees The year 2020 was an exceptionally challenging year. The Corona pandemic caused a global crisis. In many countries around the world, both public and economic life almost came to a complete standstill. Factories were shut down, stores were closed and, in the first half of the year, the global economy experienced the largest decline in economic growth since World War II. Countries and central banks used unprecedented fiscal and monetary stimulus to avoid an even deeper recession. This was relatively successful in some countries, for example Germany. With the active support of our employees, we have successfully mastered this crisis. We would like to take this opportunity to thank all Siltronic employees. During the Corona pandemic, the health of our employees and business partners was and remains one of our top priorities. By introducing comprehensive and regularly adjusted hygiene concepts, increased home office activities, continuous information and communication, and the almost complete cancellation of business trips as of March 2020, we responded to the worldwide spread of the virus. Thanks to these measures and the disciplined behavior of our employees, infections have been limited to a few minor cases. Furthermore, we are proud that there have been neither layoffs nor short-time work at Siltronic due to Corona. On the contrary, we actually increased the number of employees by almost three percent to 3,772 during these difficult times. Thanks to the measures taken, we were able to supply our customers with products that were also needed to cope with the effects of the pandemic without any interruptions in production last year. Semiconductor components based on our wafers are used not only in servers, smartphones, PCs, laptops and cars, but also in medical products such as lung ventilators. It was also important for us to make a social contribution towards combating the pandemic. We donated protective masks, protective suits and disinfectants, particularly at the German sites in Burghausen and Freiberg, to support local communities during the first wave of the pandemic. Moreover, we consider it extremely important to continually improve our sustainability performance. Our focus is on optimizing energy consumption and the associated emissions as well as careful use of raw materials and other resources. It was important for us to anchor the achievement of our targets even more firmly as an Executive Board responsibility. Since 2020, four sustain- ability targets have been included in the variable compensation agreement for the Executive Board. And senior executives are also measured by these sustainability targets in order to drive them forward at operational levels as well. In our first forecast in March 2020, we took into account the possible impact of a further spread of the Corona pandemic, which ultimately became a certainty. As expected, we recorded a decline in sales and earnings development in 2020. Average selling prices per wafer area were lower than in 2019 due to moderate price declines in the first half of 2020 and due to the strength of the Euro in the second half of 2020. Unfortunately, the higher than expected demand for wafer area was not able to fully compensate these negative effects. While the sales for smartphones and for the automotive industry in particular came under severe pressure during the first few months of 2020, there was additional demand due to the digitization surge triggered by the Corona pandemic.