we would like to formally start this shareholders' meeting. Welcome to everybody to this meeting. I will start this meeting shortly in English, but then after, we will continue to conduct a meeting in the Dutch language. It's only the presentation of the CEO under Agenda Point two, which will also be done in English.
But you can pose questions both in the English language and in the Dutch language. And please do not feel hampered in doing that. First
of all, some comments, just some practical points. If you wish to speak no, first of all, I have to ask you something else. Please sign the attendance list if you have not done so. And if you wish to take the floor, then please mention your name so that we can register who you are. This meeting was convened in a lawful way in accordance with Article 13 of the Articles of Association.
The meeting was announced on thirteen April twenty sixteen on our website. And the convocation and the agenda with the explanatory notes in Dutch and in English were also posted on the website of the company on the same date. The convocation said that the full agenda with the explanatory notes and the annexes and the statutory annual report 2015, which includes the annual report 2015 and the annual accounts 2015, These documents were available for inspection at the office of the company and at ABN AMRO Bank in Amsterdam. The U. S.
Proxy card was also posted on the website on thirteen April twenty sixteen, and it was forwarded on nineteen April. In accordance with the law, the registration date is twenty seven April of this year. We have some special guests today. One is Mr. Rob Kraugnead, and he is here on behalf of KPMG accountants and the civil law notary.
His name is Rut von Bork, and he will draw up the notarial minutes of this meeting in accordance with Article 26.2 of the articles of the company of the association of the company. And the minutes of the meeting will, in accordance with recommendation 4.3.10 of the Dutch Corporate Governance Code, be posted on the website within three months. That will be a draft as shareholders will have three months to comment on these draft minutes. And as you will have noticed, all members of the Managing Board and all members of the Supervisory Board are present here at this table. And as I just mentioned, this meeting will be conducted in Dutch.
And the presentation by the CEO will be in English, and the slides will also be in English. But there is simultaneous translation. And as I mentioned, you may put your questions in English. There's also a live webcast in English and in Dutch. The whole meeting can be followed by shareholders on the website of the company.
And shareholders who are not here today can listen in to what we discuss here this afternoon. And the outcome of the items that are voting items will be announced after the meeting here at the meeting and will also be posted on the website of the company within fifteen days. It is possible that the number of abstentions, as you will see on the slides in the room, will be different from what you will see on the website. And there may be a slight difference because the nonvoting, the abstentions, because of technical reasons, can not until after the meeting be designated as abstention. And those of you who leave the room during the meeting are requested to report to the registration desk.
And your voting pass will be taken from you and will be handed back to you after you get back. And we do this for the reason of registration of the represented capital. Just some comments regarding casting your votes. Those of you who wish to vote by proxy or personally must have registered with the registration desk prior to this meeting. We will have an electronic voting system, and we will have handheld voting pads.
Prior to the adoption of the annual accounts, we will have a dry run, a test vote. And then finally, I would like to ask you, please be sure to have your phones on mute or switched off completely because we do not wish to be disturbed by ringing telephones. Okay. Let's go to agenda item two, which is the report on the financial year 2015. And this is an item for discussion.
And our CEO, Chuck Valparado, will give a presentation, and this will be followed by questions and by discussion. And Chuck, the floor is yours.
Interpreters do not have sound in the booth.
Let's see how we can improve that. All right. So, is it now better? So, I should get closer to the mic maybe? All right.
Okay. All right. I trust it's now better for people here and on the webcast. So, let's continue now with the content Sorry for the inconvenience to everybody so far.
We would like to provide you with an update on the company in the following way. First of all, how was the semiconductor capital spending in 2015, so that's for the industry as a whole. And to subsequently address ASMI's results in 2015 within that industry environment, initially focused on the financials, including an overview on shareholder return. Then followed by an overview on corporate responsibility in 2015. Subsequently, we will have an overview not necessarily on the financials, but more on the products and the business highlights of 2015.
And then we'll close the presentation with an overview on what's basically a market outlook and conclusions. All right. So let's now start with reviewing the semiconductor capital spending in 2015. So this graph shows it's, by the way, a graph that was made by Gartner in April. It shows the semiconductor capital spending in the time frame 2010 till 2015.
And the capital spending, by the way, this includes wafer fab equipment, packaging and assembly equipment, test equipment and spending on fab buildings, so fab construction. And what you can see is that in 2015, spending stayed approximately at the same level as 2014, a little over USD $64,000,000,000 In terms of industry segments, memory was the strongest segment last year, mostly driven by NAND, which grew by 23%, while logic was down about 15%, and foundry spending was basically about flat. So this slide is basically shows you a subset of the previous slide. It shows spending on wafer fab equipment, so not assembly and packaging, not fab construction, but only wafer fab equipment in the same time frame, 2010 till 2015. And this is the market where ASM operates in.
And it includes litho equipment, for example, the segment that ASML operates in, etch, metrology and deposition equipment. And that's basically the market that ASMI operates in. And what you see in the different if you look at the different colors of the chart, orange is the foundry segment, gray is logic segment and blue is memory segment and then there's a red other segment. What it then shows is that the market increased strongly in 2014 by about 16% year on year and then growth basically stalled in 2015. The market basically dropped by 1.3%.
And also in terms of industry segments, memory again was the strongest segment in 2015 after also strong growth already in 2014. DRAM spending was up 9% last year, while spending in NAND grew 23%. And NAND growing by 23%, As a result, it also outpaced DRAM spending not only percentage wise but also in total dollar spend in the industry. Logic was down 31% in 2015 and foundry spending was flat year on year. Finally, this slide, spending in the 2015 was stronger than in the second half of the year.
So now let's review ASMI's 2015 results within the just discussed industry environment. Okay. So let's review ASMI's key highlights in an overall industry that, as we reviewed a minute ago, was almost flat in 2015. ASMI's revenues, 2015 was another good year, another strong year for ASMI. We achieved our highest ever sales, EBIT and free cash flow levels in the history of the company.
Revenue was up 23% to EUR $670,000,000. Excluding positive currency impact, mainly because of the stronger U. S. Dollar, the increase was 14%. Following strong improvements in 2013 and 2014, gross margin also further increased to 44% in 2015 due to positive mix effects and efficiency improvements.
EBIT margin slightly decreased. Excluding impairment of around EUR 16,000,000, mainly for four fifty millimeter write down, margin improved to 19%. The four fifty millimeter impairment was has been taken since we believe that these efficiency related investments will not reach the market in the foreseeable future. The increase in free cash flow was driven by strong profitability and working capital was well under control. This strong cash flow led to, first of all, a new share buyback program.
And, as you all know, a proposal to increase dividend, in line with our commitment to use excess cash to the benefit of our shareholders. Let's now look at ASMI's P and L in a little bit more detail. So the left columns show the full year results for 2015 versus 2014. And the right hand column show results on a quarterly basis up to including Q1 of this year. And as a reminder, the table shows front end results.
Back end results were, as most of you know, deconsolidated as of March 2013. Also, the 2015 results in this presentation are based on IFRS 16, which has replaced U. S. GAAP as our primary reporting standards following the voluntary delisting from Nasdaq last year. The quarterly sales hit new record highs in Q1 and Q2.
And similar to the trend in it's a little bit of an eye chart, but I trust that you still can read it here in the room here in Amsterdam. But similar to the trend in 2014, sales in the second half of the year slowed down. For the full year, ASMI with 14% currency comparable growth outpaced the WFE, so the wafer fab equipment market, which showed a slight drop as we saw in the earlier slide. Gross margin showed a healthy improvement of 100 basis points to 44%. It also was very stable in 2014, whereby quarterly variations within the year were mainly explained by mix differences.
OpEx, in terms of R and D and SG and A, increased with EUR41 million. Besides the EUR16 million impairment that we talked about a minute ago, OpEx was strongly impacted by EUR50 million currency movements. The remaining increase was mainly related to R and D and was driven by increased requests from customers for work on new applications and new engagements. EBIT margin, excluding impairments, increased from 17% to 19%. The net result of PT attributable to ASMI decreased.
The reporting net result ASMI remained the reported net result ASMI remained impacted by PPA. PPA related to the sale of PT shares in 2013, as many of you may recall. Tax was EUR 5,000,000 positive in 2015, partly due to the tax incentives in Singapore and South Korea for investments done in the past, but for the biggest part related to the big tax losses from the past in The Netherlands, which were then a days not recognized as deferred tax assets. In 2015, ASMI was generating a taxable result in The Netherlands, enabling it to use and to recognize a part of those losses. 2016 is expected to show a different sales distribution as compared to 2015 and 2014, which were far more front loaded.
Our current view is that 2016 will be more strongly back loaded. Q1 twenty sixteen showed a relatively stable level compared to Q4 twenty fifteen for sales and underlying EBIT. Net result was impacted by negative translation effect in financial result since as a dollar company, ASMI keeps a big part of its cash in U. S. Dollars.
In Q1 twenty sixteen, the translation effect was EUR12 million negative compared to EUR28 million positive in Q1 of last year. Looking at our this was a detailed explanation on our P and L, so let's now look at our balance sheet. ASMI remains debt free. The balance sheet continues to be very solid. After having completed the previous share buyback program, net cash further increased in the course of the year to again more than €400,000,000 due to the strong cash generation.
This has led to the announcement of a new share buyback program in October, of which 9% has been realized by the 2015. And by May 23, so two days ago, nearly 57% of the program has been realized. Other intangible assets for the largest part reflect capitalized development expenses. Investments and associates reflect the approximately 40% share we hold in PT. The fluctuations in the value of PT is mainly related to currency movements.
Finally, the shareholders' equity position further strengthened, as you can see in last year. So this graph shows our working capital, both in euros and in days. After major reductions in 2013 and 'fourteen, we have been able to maintain working capital at a relatively low level, reflecting a continued focus on capital efficiency. In absolute terms, working capital remains, of course, dependent on overall activity and sales levels, as shown by the corresponding peak in both sales and working capital in the second quarter of last year. Nevertheless, we have been able to reduce working capital in 2015 with EUR 12,000,000 on a currency comparable level.
At the end of 2015, days of working capital accounted to sixty nine days from coming from seventy eight days at the 2014. The final remark on this slide is that at the end of Q1 twenty sixteen, days of working capital remained relatively stable at seventy one days. So, on the cash flow of the company, net cash from operating activities increased from €125,000,000 to €175,000,000 mainly due to the improved profitability of our front end activities. Net cash from investing activities was EUR29 million negative, minus EUR29 million in 2015 compared to minus EUR26 million in 2014. Under IFRS, certain development costs are capitalized.
That amount increased with EUR 16,000,000 in 2015, compensated by higher dividends received from ASMPT, which are under IFRS also reported as cash from investing activities. Free cash flow, defined as operating cash flow minus CapEx and minus capitalized development expenditures, increased by 33% to €104,000,000 During 2015, we spent a total of 116,000,000 on dividends and share buybacks together, up from approximately EUR60 million in 2014. Q1 twenty sixteen showed continued positive free cash flow of EUR7 million. This graph was the historic performance of net sales. Net sales is shown in the gray bars and EBIT.
So, it shows net sales, gray bars, and EBIT is the red line. And what it then shows is that the last five years have been a very successful period, reflecting a strong financial performance. Over this period, we increased the EBIT margin from 8% in 2010 to 17% in 2015. Since 2010, ASM front end has grown sales by an average of 18% per annum. As such, ASM has strongly outperformed the WFE market, so the wafer fab equipment market, which didn't show any growth over the same period.
Please note that the dip in EBIT in Q4 of last year is in part explained by the one off write off. Excluding impairment that we discussed earlier, EBIT in Q4 twenty fifteen would have been EUR 20,000,000 positive. So looking at the historic bookings and backlog for ASMI. And as you can see, bookings are the orange bars and backlog are the dark blue line. The sales performance in 2015 was driven by the strong backlog at the start of the year and continued strong bookings in the first half of the year.
Both sales and bookings were front loaded in last year. Memory customers were, as we shared before for the industry as a whole, but also for ASMI, were the key driver behind bookings and billings in 2015. Memory demand was particularly strong in the first half, but started to weaken somewhat from the first half to the second. However, memory represented the number one customer segment for the full year and for all of the quarters of 2015. The logicfoundry segment showed an uptick in the first half related to fourteen sixty nanometer, but also slowed in the second half as customers digested investments while preparing for the next 10 nanometer transition, which we will talk about later.
Due to the phasing of orders and the front loaded nature of 2015, bookings for the full year decreased by 12%. The backlog dropped by 27% for the full year. In Q1 twenty sixteen, so the first quarter of this year, bookings showed a healthy rebound, increasing again by 21%. We also started to increase the backlog again from €128,000,000 to €147,000,000 And based on our guidance on sales and bookings in the current quarter, so the guidance for Q2, our backlog should further increase in Q2, providing further evidence for, as we believe, a more backloaded nature of 2016. In Q1, the increase in bookings was led by Logic, which showed a strong increase compared to Q4 of last year.
The memory sector represented the second largest segment in the first quarter, roughly on par with the foundry segment. Memory bookings dropped compared to Q4 of last year. So let's now, in the next few slides, provide you some color on ASMI's performance in terms of three items: first of all, shareholder remuneration secondly, total shareholder return and thirdly, implied value of Frontend. The long term sustainable shareholder value creation is and stays a key priority for ASMI as we shared with you before. With regard to shareholder remuneration, ASMI is committed to pay a dividend at a sustainable level.
This means that we aim for a dividend that we can sustain over time and through the cycle. This means that we the dividend of €0.70 per share, an increase of 17%, 17% compared to last year and for your approval at today's AGM is a reflection of our continued confidence in the sustainability of our profits. ASMI also remains committed to use excess cash one way or another for the benefit of our shareholders. Related to this, we would like to make the following remarks. First of all, the share buyback program of €100,000,000 buyback that we announced in October 2014 was completed in May.
Under that program, a total of nearly 2,600,000.0 shares were bought for an average price of €85
per point
share. Following a continued strong cash performance, a new €100,000,000 share buyback program was announced on October. As of last week, 57% of this program has been completed. Since November 2014, as a result, we bought back a total of more than 4,000,000 shares or nearly 7% of the total issued share capital. Part of these shares are used for employee stock options and share programs.
Since 2010, we calculated we have and this slide shows it also, we have returned more than €700,000,000 in cash in different forms to the financial markets. Looking at ASMI's total shareholder return in twenty fourteen, 'fifteen versus three well respected peers in the industry, Applied Materials, Lam and ASML, measured by looking at the historic performance of the share price, dividend payouts and redistribution of capital shows that the ASMI share price delivered a healthy total return in excess of 50%. Over this period, the ASMI share return compares favorable with our peers. The key driver behind this positive return was a strong increase in the implied value for the front end from around €400,000,000 per the 2013 to approximately €1,000,000,000 currently, taking into account a cash threshold. Taking a longer term view since 2011, the total share return is in excess of 100%.
During this period, the ASMI outperformed its direct competitors, Applied Materials and LAM. Only ASML did better over that timeframe. The implied sort of third element that I announced we would talk about is the implied value of Frontend. So, the implied value of our consolidated business, consolidated business being the difference between the ASMI market cap minus the market cap of ASMPT stake corrected for excess cash. So, implied value improved to €1,000,000,000 relatively stable compared to the level last year, but substantially up from the 400,000,000 to €500,000,000 negative in the months before the announcement of the study at the AGM of twenty twelve and also compared to the €400,000,000 positive at the 2013.
And management is very, very committed to further to improve this further, of course. So, let's now briefly address the return on our 40% shareholding in ASMPT. Following a strong improvement in 2014, the contribution of ASMPT fell in 2015 as the company was impacted by the slowdown of the overall assembly and packaging equipment market during that year. ASMPT's revenue dropped by 9% in 2015 in Hong Kong dollar. And after a strong start of the year, momentum slowed in the second quarter.
In the third quarter, the assembly and packaging equipment market weakened substantially, followed by some recovery in demand conditions in the fourth quarter. Despite the revenue decrease, SMPT slightly increased its gross margin during the year, driven by strong improvements in SMT, the Surface Mount Technology Solutions, and reduced volatility in the assembly and packaging equipment margin as such. In SMT Solutions, so in the service mount technology area, revenue decreased by sorry, sorry, sorry. Yes, yes, in SMT Solutions, revenue decreased slightly by 2%. At the same time, ASMPT overtook the position as a global top supplier in this market, so in this SMT market.
In the assembly and packaging equipment, revenue dropped by 15% in 2015, even though ASMPT achieved positive growth in a number of products, such as flip chip bonders and CMOS image sensor equipment. The 2016, summarizing and finalizing, showed a mixed start for ASAMPT. From a seasonality point of view, Q1 is normally weak. Hence, sales at billion, only percent below only 2.5 below the Q4 level of last year, were not bad. Order intake increased 7.5% compared to Q4 last year.
The weak spot was the gross margin, down from 37.1% in Q4 last year to 33.1% in Q1 of this year, impacted by relatively low sales in SMT in combination with unfavorable SMT product mixes. So that was the financial overview of 2015. So let's now look at corporate responsibility. As you all know, the company has been significantly increasing its focus on corporate responsibility over the last couple of years. And the next few slides present again a summary of the current status and the progress that we made in that respect last year.
So, with our 2015 annual report, financial annual report, in April, we also released our second annual corporate responsibility report in reference to the GRI G4 standard. Regarding compliance to the it's maybe a purchase order, but so we should definitely take that phone call, Jan. Okay. For the people on the webcast, there was a phone call here in the room and we'll now continue the presentation. So we addressed it.
We released our second annual corporate responsibility report. And secondly, regarding compliance to the Electronic Industry Citizen Coalition Code or EICC, our self assessment again resulted in a low risk rating in 2015. We made compliance to EICC code a company objective also. So, employee is aware of our focus on EICC. In 2015, we voluntarily conducted third party EICC audits based at three of our key sites around the world.
The result of the audits validated our self assessment findings, confirmed our code compliance progress and identified further opportunities for improvement consistent with our own self assessments. Regarding accountability in our supply chain, in 2015, 84% of our Tier one suppliers participated in the EICC self assessment process. 77% are low or medium risk per EICC standard. For EICC requirements, a little over 25% of our high risk Tier one suppliers were audited in 2015 for their 2014 responses that they provided to us at that time. So looking ahead, within the next two years, we will complete the third party EICC audit of our two remaining key sites.
That's what we are working on. So, looking at health and safety, safety results continue to be positive. Our benchmarking shows that we are among the best in our industry. Our injury rate declined for the fifth straight year and recordable injuries, so our RCR recordable rate have remained consistent at a low level. Our twenty sixteen key focus areas are, first of all, strengthening our safety culture through leadership engagement sessions delivered to all managers.
Secondly, further focus on high risk areas of our business, namely our service and engineering labs. And subsequently also learnings, use those learnings from the service and engineering labs to develop the manufacturing safety, the safety improvement plans in our manufacturing area. With regard to our environmental initiatives, at the 2015, we concluded a three year environmental improvement targets cycle, as you also can read in our corporate responsibility report. Our environmental improvement targets continue to align well with the industry standards, including the SASB technology sector. We achieved two out of four of our targets for the twenty thirteen to twenty fifteen cycle.
We achieved 248% of water conservation target due to the scrubber efficiency improvements that we made in Phoenix, USA. We experienced zero discharge violations or unplannednon permitted environmental emissions or releases globally. And we achieved 94% of our greenhouse gas target. And we fell short of our 85% solid waste recycling diversion targets. We achieved only 65% diversion.
Looking at our 2016 to 2020 targets, we continue to align with industry standards. We are normalizing data by euro R and D spend in line with industry standards for our greenhouse gas emission reduction and for our water reduction targets. And even though we did not achieve our recycling target in 2015, we continue to stretch ourselves and are targeting less than 10% of all waste sent to landfill by 2020. Finally, we want to exceed the energy efficiency standards required for us for all new construction projects. So, let's now look at ASM's products and business highlights.
This slide shows and part of it may be familiar to you, but this slide shows an overview of ASMI's current products. Within wafer fab equipment, ASM focuses as we discussed earlier on deposition equipment, depositing layers on the wafer of silicon. And this deposition market is an $8,300,000,000 market in 2015. Many deposition steps are critical for the extension of technology nodes, especially ALD steps. And just to refresh your memory on that, ALD stands for atomic layer deposition.
And that term will come back in a few more slides, atomic layer deposition. It's the most advanced deposition technology out there in the industry and we are perceived a leader in that single wafer mini batch ALD segment in the industry. ASM's Pulsar XP ALD product for Hi K gates is qualified by nearly all logic and foundry manufacturers. ASM's Emerald XP is used in the logic foundry market for metal gate related applications. ASM's XP8, which is shown here, the XP8 tool is used by memory, logic and foundry customers for high volume manufacturing for so called spacer defined double patterning and several other applications.
Many new layers are emerging for our ALD tools, which we will address a bit more in the upcoming slides. In epitaxy, you can show that you see that here on the upper left side of the product pictures. In epitaxy, we are focused on epitaxial films for analog devices, which is growing due to power management devices. Power management devices for mobile products and also for instance for automotive. We also have done extensive R and D over the last couple of years beyond analog power, which with the aim to expand our presence in the overall epi markets beyond this segment in the coming years.
In PCVD, we are a leader in extreme low K films, an advanced but relatively small part of the PCVD market. We are also working on new PCVD opportunities based on our high productivity XP8 platform. So, our vertical furnace, which is shown here on the lower right hand side, our vertical furnace is known as a low cost of ownership workhorse tool in selected markets and applications. Most recently, vertical furnace growth has come from more than more applications, such as for sensors in the automotive sector. So, with those products, what has really changed and was established by the company in last year.
Now, in 2015, of all, we further broadened the base of our ALD, our Atomic Layer Deposition applications, both in terms of applications that went into high volume manufacturing at our customers and already contributed to revenue in 2015, as well as in terms of new applications for which we have been selected during the year, during last year and that are going to contribute to revenue in 2016 and beyond. In combination with an expanded client base, we have also achieved a more robust and balanced customer mix over the years. Apart from expanding our presence in the logicfoundry segment, we have built a much stronger exposure and customer relationships in the memory sector. Our ALD revenue accelerated as memory investments increased in 2015 year on year, driven by multiple patterning in both DRAM and planar NAND. And in logic and foundry, our ALD business was impacted by industry wide weakness as 14 nanometer node technology node phase down and 10 nanometer investments got delayed into 2016.
In terms of tool selections for the next generation devices that are expected to start contributing in 2016 and beyond, traction with logic and foundry customers was being built in 2015. Looking at the upcoming 10 nanometer node, we project a significant increase in the number of new ALD layers. We believe we maintained the number one leading position in single wafer ALD market in 2015, thanks to the continued strong growth in our ALD business. We again gained wafer fab equipment share. So, we gained share, so WLV share in last year.
So, additional slide shows our revenue, how our revenue is divided among the top three and the top four to top 10 customers, let's say top three and top four as they are ranked in the industry by capital expenditure. And the top three is the orange part and and the top four to top 10 is shown in the gray part and then everything beyond the top 10 is red. And it shows that the top 10 share was about 80% over the last three years. Spending by the top three further moderated somewhat and fell below the 50% range in 2015. And by the way, this is in line with the industry since the top three CapEx spending share in 2015 indeed also declined.
So the industry as a whole, it also declined to around 45% in last year. So this was more than offset by very strong traction and share gains among the top four to top 10 customers, very important to ASM. This includes a substantial high volume manufacturing revenue contribution from customers that we newly secured in the last few years. In 2015, we had all of the top 10 playerscustomers in our industry as ranked by capital spending as our high volume manufacturing customers for our ALD products. ALD has become an important segment of the deposition equipment market, that $8,300,000,000 market.
And is now ALD is now a mainstream category in logic, foundry and memory industry segments. Device scaling and integration complexity, new materials and the use of three d structures such as FinFETs are all our drivers to increase estimated demand for ALD. As a result of these growth drivers, the compound annual growth rate, so that's the CAGR that you see that C A G R, compound annual growth rate in the twenty fifteen-twenty nineteen timeframe is estimated to be the highest within the deposition market, so for ALD, leading to the ALD market representing between an estimated 20% to 25% of the deposition equipment market by 2019. And if you compare that with the message last year, this is up from an expected share of approximately 20% by 2018 that we shared with you in the AGM presentation last year. The strengths of ALD is the ability to deposit smooth and conformal ultra thin films and the ability to deposit new materials with precise composition control.
That's what ALD does. So, this slide shows and many investors asked us about can you provide us a little bit more color on the potential of this market in time. So, that's what this slide is trying to provide, a little bit more color on that question. This slide shows the estimates for the market for single wafer mini batch ALD in 2015 and 2019. Momentum in the ALD market for the single wafer mini batch tools remained strong in 2015, mainly driven by memory.
It increased by close to 20% to about US750 million dollars As shown by the chart, we believe growth in the ALD market to remain strong. Compared to the baseline of $750,000,000 in 2015, we expect a doubling over the next three to four years. That means reaching an expected level of approximately $1,500,000,000 to $1,500,000,000 by 2018 or 2019. This compares to our previous forecast of the ALD market to reach a size of $1,200,000,000 by twenty seventeen-eighteen timeframe. The long term ALD market growth is driven by advanced nodes in both logic ten and seven nanometer and memory 1x DRAM nodes and continued increases in three d NAND stack levels.
Those three markets, logic, foundry, DRAM and NAND. In logic, foundry going from sixteen, fourteen nanometer node to 10 nanometer, we expect a significant increase in ALD layers, more than a handful new ALD layers. More complex three d FinFET devices require ALD for additional layers such as liners, barriers and doped oxides. At the ten and seven nanometer node, ALD based multiple patterning will also be a key enabling technology for logic and foundry customers. And this is a technology in which we already achieved a strong record in the memory market on the multiple patterning.
In general, advanced patterning applications is expected to be an important driver for the ALD market, both in logicfoundry and in memory. In DRAM ALD based patterning remains an important technology enabler, next to new non patterning films that will be required in the next generation DRAM devices. In NAND flash, increasing investments in three d NAND will be a key driver for the industry and will also create new growth opportunities for the ALD market. So let's now close this presentation by addressing the market outlook and conclusions. With regards to the key drivers or applications that should keep fueling growth of semiconductors and semiconductor equipment, this slide shows part of the semiconductor sales broken down by key end product segment and forecasted up to 2020.
It is clear that traditional PCs and tablets declined in 2015. The key driver for growth according to Gartner is mobility, represented by smartphones and ultrabooks, in particular in emerging markets where basic smartphones are major drivers. While volume growth is moderating, the semiconductor content per smartphone is still on the rise. The growth of users of mobile devices will also serve to drive the growth of communication, cloud and server infrastructure. Another significant growth application is solid state drives, which drives flash memory growth.
SSD was up 12% in 2015 and long term compound annual growth rate for the next five years is 15%. Some traditional categories are now key growth drivers, such as automotive, industrial transportation, automation and security. Another emerging major category for semiconductor devices is the Internet of Things, so called IoT. Gartner estimates that by 2020, the IoT will encompass between 25,000,000,030 devices. An exploding number of connected devices will also create a massive increase in data, data which will need a support infrastructure to process and store it.
These end market trends are likely to create a growing demand for more advanced semiconductor devices. Manufacturing of these advanced devices is expected to require leading edge processing tools, including ALD, which bodes well for our company. Looking at the outlook for the wafer fab equipment market according to Gartner, this slide shows wafer the fab equipment market broken down by technology nodes. And as you go up higher in the bar chart, the nodes are more advanced. So you get to the more advanced, the more current technology nodes.
And what it shows is that for 2016, market watchers such as Gartner expect a slight low to single digit decline in the WFE market. Looking at the different segments, is expected that spending in the logicfoundry segment is healthy in 2016. Key driver in this segment will be the transition to the 10 nanometer node. As far as the DRAM sector is concerned, Market Watchers still expect a significant double digit drop in spending for 2016 compared to the strong level of 2015. Compared to a weak first half, we, ASM, assume customers to start initial 1x DRAM investments in the later part of the year, although visibility for overall DRAM spending in the second half is still limited.
So NAND flash spending is forecasted to be up in 2016 with the majority of spending focused on three d NAND. It is important to keep in mind that the impact of this NAND transition from planar NAND to three d NAND on the ALD market is initially mixed. ALD based patterning requirements are substantially less in three d NAND compared to plain on end. At the same time, demands for non patterning single wafer ALD applications in three d NAND. So, demands for non patterning single wafer ALD applications in three d NAND are believed to gradually emerge and to grow in the course of 2016 and going into 2017.
So that's on 2016. So taking a longer term view as this slide also shows, term view into 2017, 2018, the relative and absolute contribution of advanced nodes is going to increase, driving growth for the WAFE market as a whole according to these estimates of Gartner. That exactly is the sweet spot for ALD. So, the relative to growth of the relative and absolute contribution of the advanced nodes. This is why we believe ASM is strongly positioned for these advanced nodes.
So overall, strong growth in spending on the most advanced nodes combined with a growing number of ALD steps at the new technology nodes is expected combined to drive continued healthy growth for the ALD market in the coming years. So, our short term company financial outlook for Q2 as included in our Q1 press release of last month is that based upon the current backlog and our current visibility that we expect sales between 130,000,000 and €140,000,000 while we expect an order intake somewhere between 145,000,000 and €165,000,000 both on a currency comparable level. Based upon the current visibility, we expect a much stronger second half as compared to the 2016. So, all brings me to some concluding and summarizing remarks on behalf of the company. First of all, revenue increased by 23% in 2014 and fourteen percent at constant currency, again, outperforming the overall wafer fab equipment market.
Further continued solid traction in ALD. We had a strong improvement in our free cash flow. And the company finally final remark is that the company believes to be well positioned for an increased number of ALD applications in the next technology nodes for logic, foundry and memory in a single wafer mini batch ALD market that is believed to grow to a size of approximately US1.5 billion dollars by the twenty eighteen-twenty nineteen timeframe. That's all we wanted to share with you from an introduction point of view. Thank you for your attention here in Amsterdam and on the webcast.
And let's continue now with the agenda.
Chuck. Thanks for the clear presentation. I would now like to open the floor for discussion and questions on the presentation Chuck just gave. Are there any questions? REPRESENTATIVE:] Sorry, now I'll let in from the
course, I apologize. I remained speaking English after the presentation, we will continue in Dutch.
My name is Martin Sanchez, and I'm here representing Eminence Capital. We are a shareholder. We've been a shareholder for about three years, and we currently own a little over 4,000,000 shares. So we're obviously a substantial shareholder. I'm going to just sort of reiterate our views and I think a lot of your shareholders' views.
And our strong view is that the company is substantially undervalued and we think that just
yes? Could
I ask you the discussion and questions now is with regards to the presentation Chuck just gave. Of course, we are willing to answer your questions, but possibly you could pose that question better either under the discussion on the annual accounts or under any other business later in the meeting.
Okay. This is related to the front end valuation. So I feel like it's relevant now. But if you want me to hold off, I'm happy to do that. You tell me.
[SPEAKER I think
I would prefer if we can deal with that question a bit later. Any UNIDENTIFIED
other questions? Mr. Burghers.
That's probably useful. Wittenberg is representing Add Value Funds. First, my congratulations on the 2015 results and also the outlook which was presented today. I have the following questions.
The CEO mentioned at one stage of his presentation the excess cash level. I know this is a question which comes back probably every year, but I would love to know what your definition is today of excess cash. And on top of that question, probably it's also useful to ask the investment in R and D, which is scheduled for this year. We've seen from the annual report that there was an increase from €64,700,000 2014 on to €93,000,000 last year. And I wonder whether that uptrend will continue into 2016.
Furthermore, a very positive thing about last year was that ASMI succeeded in gaining further market share. And in particular, in the letter to shareholders, it was mentioned that since 2010, there was an annual growth rate of 18%, whereas the market average was close to zero. And from the presentation by Mr. Del Prado, well, it was, in my view, more convincing than previous year, but it also, well, gave a clear view on the conviction of the company that ASMI should be able to maintain its lead in the ALD deposition market. And I wonder if that view is shared by the management that looking at the projected growth, which calls for US1.5 billion market in twenty eighteen-twenty nineteen, looking at the percentage market share ASMI holds today, what will be roughly the annual turnover increase we might expect from the company REPRESENTATIVE:] going forward in the next three years?
Mr. Chairman, that will be
my questions at this stage. Thank you. If I take drink, Raghu.
Right. Okay. Three questions. So what's the definition of excess cash? R and D.
And market share. Starting with your first question, Peter, would you like to address that? Well, very short or brief answer. Well, excess cash levels is the levels as we have maintained them last year, above €300,000,000 Second question well, R and D investment levels, right? 64 was based on CAPP, BX.
Well, there are three reasons for the increase in investment levels. So and of course, what this means for the coming time. Well, the increase up to €93,000,000 has three important reasons. First of all, some appreciation on the four fifty millimeters. Under IFRS, this was a higher amount than it was under U.
S. GAAP Because under U. S. GAAP, as you might know, you cannot evaluate the R and D efforts that you make. So that was only CapEx, capital expenditure that we did in the past.
So equipment that we depreciated, which was about €3,000,000 So it was a one off item. And on top of that, one important influence was the dollar exchange rate. So it had an impact on revenue, as Chuck already said, with about 12% of the total value. And that, in principle, of course, relates to R and D and investments as well. So €10,000,000 increase in R and D.
So €10,000,000 is a consequence of the high value of the dollar compared to the year before. And the rest of this amount was an increase that relate to, a, more applications that we are now executing with several customers and customers that have come back to us and asked us, hey, we have worked with your technology for a couple of years. It's very interesting. It's an interesting technology. We believe that it could be applied to those and those things.
Could you look into that for us and create a pilot to see whether this is indeed the case. So these are the three important factors for the increase. So from 64,000,000 to 93,000,000 so €29,000,000 so one off items, 10,000,000 in currency effects and the other things I've mentioned last. So other things that we've said to shareholders is that we expect that our R and D investment as a percentage of turnover will be somewhere around the low well, 10% to 15%. Doesn't mean that on a quarterly basis, 10% to 15% will be actually the realistic ratios.
Of course, it depends on other things. You know how the revenue develops or is corrected from quarter to quarter. So of course, with your R and D spending, you can't really relate to that very quickly. But we always plan to maintain it between the 1050% related to turnover or as part of turnover.
Yes,
market share projection. How much are we going to get of the €1,500,000,000 That is a question, of course, that we ask ourselves. What we can say, look, we try without actually giving a guidance for the company beyond 2016, but we try to give a sense of the potential by showing you how this market will grow in the coming years. So this is why we felt that we needed to adjust that particular slide to color the future for the potential market. So where we are going with our ALD tools.
So if you look at the dynamics of the market, then you see that the competitors are very active as well in this particular market, and we've said this. We expect this as soon as competitors also see that this is going to be a big part of the deposition market, then you can only expect, of course, that Lam and all the others go into that as well. And of course, this has already happened. And as a consequence, we have said that we expect that our relative market share over time will probably decrease slightly, so looking at the percentages. Nevertheless, we think it's a realistic view.
But in a market that will grow from €750,000,000 to €1,500,000,000 you can have a relatively lower market share and still have great growth as a company and also create the value for your shareholders. And this is, of course, our focus. And based on the potential growth in the market and the strength of our company, we are very confident. I mean, we have outgrown the market altogether that we will be able to realize the potential on average, maybe not every twelve months, but again, on average, for the coming four or five years, we will outgrow the market or outperform the market because we did that in 2015. Flat market, and we had growth ratios.
So again, market share. Some publications have been posted. Of course, as you all know, we do not publish these things ourselves. But if you look at the data from Gartner, then the share of certain competitors is well, they built some market share. But I think in this particular overview, we're still 5x bigger compared to the number two in that particular overview.
So So again, I do feel that the market share will slightly decrease. And already, this might start in 2016 because most CapEx around ALD, possibly for single wafer mini batch, will be spent in logic and foundry. So it might well be that for '16, our market share will not drop but actually might increase. So but again, this has to do with the dynamics of the different industry segments as well throughout the years. But I am confident that this is enough of an answer to your question.
Thank you, Chuck. Any other questions? My name is Fer, and I am here on behalf of the VEB, the Shareholders Association. We represent 37,800 shares. So you have indicated that you have a very strong position when it comes to chips and what you produce for these customers.
So bipolar transistors,
does
it also apply to those customers? Second question is about the depreciation of the 40 to 50 nanometer technology. You have completely depreciated that. And the question is that the investments that you have made in this particular technology, have they become worthless as well? I was referring to four fifty millimeters, I'm sorry.
So when you will start using the new technology in relatively short term, is it true that you could use these investments that you made in the other technology? Then the distribution of the revenue. I think that I can conclude from the figures that the revenue comes completely from Europe, U. S. And Asia and not the rest of America and also not the Pacific parts or Australia and New Zealand?
Or am I missing something? And a question about ALD technology. It's quite a prominent part of the annual report, of course, and also of your presentation, Mr. Al Prado. And it is doing really well, so that's very positive.
But I do see a potential downside that you might become too dependent on the ALD technology. So how do you perceive that possible risk? And finally, a remark with this item on the agenda, which is that we find it very positive that you have ended your position at NASDAQ. And I asked a question about that last year, and we believe that this is an excellent way of saving costs. So thank you.
The last is a remark and the rest is questions, right? Thank you. Basically, you have four questions. Regarding turnover, distributions and depreciation, I think it should be paid there. Yes, four fifty millimeter depreciations, yes?
Well, it is a very conservative approach of looking at the risks as we see it. At this moment, we do not see an economic use for that four fifty millimeter because we depreciated that completely. It doesn't mean, however, that if there is a concrete business question from customers that everything we did is worthless, of course, no, it's the reverse. It is a sound and solid basis for further collaboration. So at this moment, we do not see any reason whatsoever to keep on appreciating that particular activity right now.
Okay. Then the distribution of turnover. Yes, it has to do with the kind of customers we have. Of course, we are at the very high end in general of supplying to these high end customers in this particular industry. And yes, there is a concentration of that business.
So the structure is relatively small number of customers and a small number of suppliers. All these customers are indeed concentrated in Asia, Europe and The U. S. So top three, as Chuck has mentioned, yes, Samsung, TSMC and Intel, yes, so they represent 50% or almost 50% of the total demand in the industry. So yes, this is why in the annual report, you wouldn't find a lot about the rest of world because there is hardly any industry in this particular field in the rest of the world.
Thank you very much, Peter. By the way, your remark about this 300 millimeter investment. If you look at what the industry publishes itself, then the subject to continue that particular technology, there's
not a
lot of momentum and not a lot of interest because there are many, many other technologies out there that are much more interesting and have much more potential for the coming years. So we don't believe that anyone will pick up on that older technology. Then I would like to ask Chuck to address the other two remaining questions. Well, Jan meant, of course, $4.50 millimeters, not three yes, I also made that mistake. So okay, so it's not $3.50, it's €450,000,000 So two questions.
First answer about bipolar transistors, the answer is yes. Second question, yes, ALD. A lot of focus on ALD. Maybe we are becoming too dependent, right? That was your question.
Of course, we look at it from two different angles. One, it is very important to not lose your focus in the different fields, the other products. I'll get back to that. But again, being focused, having a focus on that particular thing that you're good at has its advantages. And this is what really stands out for our customers because we have a lot of experience in the ALD business, so we know what we're talking about.
We have a lot of learnings. Also, things that did not go really well, we learned from all of that. So we are very experienced and a healthy track record. So focus has that particular advantage. Next to that, we clearly want to indicate, and we try to do that in the presentation as well, that, of course, in the field of PECVD, that we have beyond okay that we do have some opportunities and a stronger platform, right, the XP8, to use it in different applications in the PCVD market, so to make us grow in that particular segment.
And also in Epi, I also addressed that issue in the presentation. We also said that we've been very active and have been active for a while within our R and D in that particular field. So we are very committed to really translate all these things into top line results, of course, in the coming years. So a couple of examples for you there. Okay.
Thank you very much for your answers. Any other questions? If there are no further questions.
Thank you. So again, I'm here representing Eminence Capital. We hold over 4,000,000 shares outstanding. We've been a long term shareholder. We've been involved for over three years, and we plan to be involved as long as a substantial discount on the front end business still exists.
It's our very strong view that the only reason the front end trades at still a substantial discount to fair value is because of this convoluted corporate structure. I'm here again to request that you guys divest of the noncore stake in ASMPT. It still doesn't make any sense to us. We have not gotten a good explanation over a three year period as to why you still hold this stake and the value that's accruing to shareholders or the benefits to shareholders from holding a stake. You've given very vague answers in the past about corporate stability and certain muscle.
That doesn't give us any real answer. And so if there's a reason that customers buy more from you because of the stake. If there's a reason we've actually never heard of any synergies that have accrued to shareholders because of the stake. There's nothing in the supply chain in our sense and all of our work that we've done that suggests that there's any benefits from holding the stake. So I ask you, I think the majority of your shareholders would be in favor of you divesting this non core stake.
And I think in the absence of a very good answer as to why you continue to hold the stake, the only answer is to divest this business. So I ask you again to give us better answers, frankly, for why you continue to hold the stake.
Of course, you have asked, as you said yourself, the question before, We have given you at various occasions some answers. At this stage, I don't think we will be able to give you another answer, but I would like to ask Chuck to elaborate a bit on it as well.
Does it work? No, I don't think so. No? No. Bertie?
Mike, yes, thank you for sharing your talk to all of where I work off with Nagel. So I have to answer in English. All those rules, I sometimes get confused. Sorry then for surely for the Dutch attendees. I would like to answer this question in English.
Yes, okay, I'm very sorry. We are very sorry on behalf of the company that you perceive our position the way you just described it because we have had just for the rest of the audience, we've had more dialogues on this. And throughout the year, we also meet we met at the AGM last year. We also met in October face to face in New York. We met in March again or early April in New York again.
So, meet each other to make sure that you, on many aspects, stay up to speed on the status of the company. And yes, we're just sorry to say that our position has not changed over the last twelve months. And as stated before, again, I would like to repeat that for the remainder we would like to repeat that for the remainder of the audience. We do see strategic value from a corporate stability perspective in maintaining a significant stake in PT. And I'm sorry to hear that in your view that this the terminology is vague, but in our view, it's not vague at all.
We see a strategic value from a corporate stability perspective, in particular, by providing our business with scale and a strong balance sheet in this phase of the development of the front end activities. And as we shared before, in our opinion, and that is just our business assessment, and I think we can best judge that because we are in this business day in, day out, day in, day out talking to our customers and dealing with competition and driving our performance to become a better and stronger company. In our opinion, this is particularly important for a number of our largest customers as they do business with us. And we believe that the stability and the financial strength by our holding in ASMPT has been a supportive factor in the successful expansion of the market position in recent years. And currently, our position today is that it continues to be a supportive factor going forward in this phase of the development of ASM front end.
Will that be still the case five years from now? That's or in a few years from now, that's still to be defined. And among our key customers, we know and have confirmed there is support for the company position in this respect. That's something I think also need to emphasize here. We the same also would like to emphasize that management, of course, continues to monitor and evaluate ASMI's stake in ASMPT carefully on a regular basis because our aim also is, like yours, to create sustainable value for shareholders in the long term while safeguarding stakeholder interest like our customer interest.
So that is basically our position. But of course, we also want to drive long term shareholder value. So in that respect, we have the same we just said, we disagree maybe on the past at this moment in time to get there. But I'm looking forward to continue the dialogue with you. And I also, on behalf of the company, very much appreciate the fact that you have been a shareholder for such a long time.
The one thing I would also just add and for you guys to think about, you gave a very nice presentation, very helpful. We spent four to five minutes on the ASMPT stake, which is 50% of the value of the company nearly. That's also a stake, a stock price that has fallen almost 50% in the last five years. That's part of the reason why the stock has not done as well as the front end business has done effectively. So I'm just saying half of the value of the company is in a business that is noncore, where the value is down 50%, and it's hurting all of your shareholders.
So that's the last thing. I want you guys to consider that because if the stock goes from 56 to 40 to 30, that's destroyed shareholder value. So something to please be mindful of.
Yes, clear. It's a fair point. And I can guarantee you that we, as shareholders, also very carefully review continuously the performance of SMPT from an operational point of view. Okay.
If not, I would like to continue with agenda item three, which is the remuneration policy on 2015. And we always have this on the agenda. Okay. You were able to read in the annual report on Pages 150 to 152 an extensive paragraph on the remuneration policy for 2015.
It was agreed on before. You were able to read this. There is no presentation on this. But should you have any questions on what we wrote in the annual report, then I would like to give you the opportunity to do so now. And Martin van Ponnis will answer your questions because he is the chair of the remuneration committee.
And based on what we have said in the annual report on this, you may put your questions if anyone wishes to put a question. Would anyone like to take the floor? REPRESENTATIVE:] Good afternoon, Mr. Chairman. My name is Stephanie Clase, and I think that I missed the item on the annual report.
Yes, that is the next item on the agenda, madam. But I expected a question regarding the presentation of Mr. Del Prado, yeah, or the annual report. Okay. That is the next item on the agenda.
This lady represents the group of investors for sustainable development or they are in favor of sustainable development. If there are no questions on Item three on the agenda, we may continue to Item four of the agenda, the adoption of the annual accounts 2015. I understand that there is a question, at least one question that is. So please put your question, madam. Good afternoon, Mr.
Chairman. My name is Stephanie Clarksons, and I'm here on behalf of the VBDO, the investors who are interested in sustainable development. And I want to give you my compliments because you worked really hard. All items I mentioned last year are reflected in the annual report. It looks excellent.
It's really good. You followed the G4 guideline and all other items, so my compliments, sir. But questions that we wish to put to you this year. Question one. ASI scores very low on the transparency benchmark of the government.
Can you say which items are those that are not so good? And what are you going to do to improve this? Then the natural capital. This is a new term that we see in corporate social responsibility. And this is to emphasize the dependence on nature because you, ASMI, also uses nature.
You use a lot of water. You use a lot of energy. You have emissions and you use minerals that were mined in African countries. And if one of your clients decides not to buy from you anymore, then that is a risk. But not enough energy, not enough mineral resources, not enough water is not a good thing either.
That is a risk, too, but you do not incorporate that in your report. You do not mention any specific risks that are to do with natural capital. Do you have did you have a definition of such risks? Then please advise us what they are. And then the next question is on your five year plan.
You've already mentioned quite clearly in your presentation that you have four pillars: the reduction of greenhouse gases, energy, water consumption reduction and the other two that you mentioned in your presentation, the recycling and the and you said that you did not achieve two of the four targets. But what did you actually do for the recycling targets and the greenhouse gases targets to be achieved actually? You do not have a specific energy target. You say you wish to do better than the standards, but you say we cannot find any specific information in the documentation. Can you give us your targets, please?
And we did not find any information either on the website regarding the absolute numbers of consumption of energy. No cubic meters of waste, no cubic meters of this, no cubic of that. So please let us know this because other companies also advise us on this. And then employment plan. You have a worldwide program to reduce discrimination or abolish discrimination.
And this is something that the VBO would like to know about whether you give any work guarantees or whether you have an employment plan. And could you please inform us about these two items? Next, the final two questions. A as in I, pays less tax. Sorry, ma'am.
Sorry, ma'am. I'd like to answer. Okay, no, hold on. The transparency benchmark, second question first question. Second one is natural capital.
The third question, what was that again? Or the five year plan and the targets regarding recycling and the greenhouse gases that you were not able to meet and then specific numbers? And for was about whether you can give us info on the kilowatt hours, the cubic meters in waste, the actual water consumption, all those actual figures. Okay. And the employment plan, is that the Dutch employment plan?
Do you mean that? Well, yes. And then taxes. ASMI uses the innovation box, and this is much discussed these days. And it is possible that based on EU regulation, some of the taxes will have to be paid back.
Do you feel that there is a risk? Do you think you'll have to pay back some money? And the final question is about the supply chain. ASMPT is a minority plan now. And does that mean that the labor conditions at PT is less interesting now to ASM?
And please tell us what is being done at the suppliers' side regarding this. Right. Most questions, I think, will be answered by Chuck. And the first question will be answered by Peter van Bommel. No, that's not the first question.
I want to ask him first to answer the tax question, which is an easy one, Mr. Says Mr. Von Bommel. We do not use the innovation box in The Netherlands, so there are no risks. Well, that was a very easy one, says the Chairman.
And then, Chuck, I saw you write down the questions, and I ask you to answer all the questions. Yes, says Chuck. I'd like to answer the questions, and I'll try and do it as best as possible. The first one, the transparency benchmark. I think that you mainly try to ask because I didn't I don't know whether I understood it completely.
You asked about the improvements. I think that with regard to the benchmark, we made great strides. We had a score of 37 in twenty fourteen, and now it is 58 or that was the score in 2015. And we committed to a large number of improvements. And my estimation is that, well, the improvements in the materiality, the assessment process, the matrix, we've included that for the first time in the CR report, stakeholder engagement.
And yes, we will also work on the business model some further. This will have to contribute to a better score by the end of this year. And this is what we've discussed in house, and this is in answer to your first question regarding transparency, benchmark and then the natural capital that you asked a question about, at this stage, we have not integrated natural capital in the supply chain processes or in our strategy. And in the short term, it is not a priority of the company. But what we have done,
for
instance, we have invested in packaging engineering expertise in the world in the past year. So we employed people with packaging expertise in order to look into the sustainability of packaging because, of course, a lot of packaging is used. And we also looked into how this can contribute to the quality of the products that we supply. Packaging has an influence on that, too. So both quality and sustainability are being assessed.
That is with regards to packaging. And you also put a question, question three, right? I think that, that was about the fact that we only achieved two of the four targets over the twenty thirteen to twenty fifteen period. And you asked how we think we can do better regarding the targets that we set for the years 2016 to 2020. As explained in the CR report, well, I can tell you that there are a number of things that we really wish to pay attention to.
One is that there are sufficiently there's a sufficient number of projects that we define. So if one or two of the projects don't meet the target, we have sufficient projects to make the target. And secondly, we want to make sure that we learn lessons, that we learn from the various sites so that we have better communication throughout the world so that we can have lessons learned. And I would thirdly like to have more frequent management reviews. Progress furthers target, so to have a look at the progress so that we can have a more regular review system so that it will be easier to drive the improvements.
These are the things that we have defined. And then your next question was about, as far as I understood, whether we are willing to set absolute targets vis a vis greenhouse gas emissions. That's how I understood your question. We are not intending to set absolute targets regarding energy consumption, the reason being that our industry is very R and D intensive, and R and D requires a lot of consumption. So we feel that it is better, and this is consistent with various practices to normalize the R and D spending.
So this is how we wish to do it, and that is why we defined it as such in 2016 to 2020 targets. And you also asked something about and I'll just look at my notes. All right, employment. And I think your question was whether we have any special employment programs. Yes?
Yes? Okay. Yes. So it's not about the reporting on employment programs, but whether we do have any special employment programs. Did I understand your question correctly, madam?
Yes? Okay. That's fine. We do not have those right now. But the answer that I can give you is that we are willing to consider this, and we will follow the employers' organizations in the area that we have our company in?
UNIDENTIFIED
Okay. This is, of course, mainly COMPANY related to The Netherlands. And there are some candidates that are a part of the Participation Act, the Dutch Participation Act. And we will, in the future, offer something, but we are not offering a special plan at the moment. There was another question, Chuck, yes, says Chuck.
Of course, there was another question, the relationship. And actually to Peyton, you know what? I think well, I think that what you were asking us was something about the rights in the supply chain as a whole. And you gave PT as an example. Is that right?
Yes. Okay. Well, what I can say in answer to what you put to us, we are fully committed to the EICC code of conduct, and we've stated this quite clearly in our corporate responsibility report, our CR report, which means that we find it important in the proliferation of the organization's principles. And we are bound by the ICCR code of conduct. And where do we stand at this stage?
We support the principle. The code of conduct of the ICCR is our example. But so far, in our supply chain risk assessment, we have well, our critical Tier one suppliers, critical Tier one suppliers. Those are the suppliers that we have concerned ourselves about so far with regards to supply chain assessment. And I'll put it clearly to you that we focused on those, and we didn't do anything with the other ones.
And that is the status of the company at this stage, Ms. Clasons. So I hope that will answer your questions. And Mr. Lobbizzo also checks whether this has answered her question.
No, there's one answer missing. The specific kilowatt hours, oh, yes, those numbers. Okay. Well, are those available? No, no, not here, not today.
No, but other companies do put these on their websites or they mention them in their annual reports. What about you? Well, we do not focus on the absolute consumption volumes. We do not focus on the absolute level because our R and D as we grow, the R and D will possibly grow. So we mainly look at efficiency.
The efficiency of the consumption of electricity versus dollar spent on R and D, but we do not have an absolute target. I understand you've mentioned that, but it's a little bit hard for outsiders to see how your consumption relates to previous years. We'd like to know a little bit more about that. Okay. I'll look into that and see if we can give you any information related to this.
No guarantees, mind you, but I will look into it. And we'll see and let you know in the coming months. So thank you for your questions. Are there any further questions, which are to do with the annual report, the annual accounts? Yes.
Mr. Failure has a question. Okay. First of all, I'd like to put a question on the credit risks, especially the concentration risk because you indicate that you try to reduce that risk by limiting the other parties to one. And I think that results in a bigger risk.
So maybe you can explain this to me because I'm not quite sure. I also have a question on Levantech, and I hope I pronounced that correctly. Okay. Yes. And you increased the interest, then you reduced it or even did without it.
So apparently, it wasn't a very good investment. Tell me more about that. And the third question is about the outstanding tax years, 2019, in The U. S, which is a lot compared with the other countries in which you'll have to pay taxes. What is the reason for this?
Pray tell me. And then I have a question regarding your stake in ASMPT. You say that there is a quantitative analysis, and you decided not to amortize on this stake. So can you tell me more about the analysis? What are the considerations?
And my final question is for the accountant or the auditor. It is a question that I put to every company that has changed auditors. And every company has given me the same answer, for the record. Okay. Question to the auditor.
Please leave that for a little while because Mr. Kuyknead of KPMG will be given the opportunity to give a presentation on what kind of work was done. And possibly, your question will be answered by him. If not, you can put your question at that time after his presentation. Certainly, sir, I will do that.
And I think that you had four questions: the credit risk, the outstanding tax years, the appreciation of PT. What was number four? Oh, the Levitec investment. Right. Yes.
Okay. You depreciated on this. And I think that our CFO, Peter van Bommel or Peter van Bommel, will be able to give you an answer. Okay. Let me try to understand the question properly.
You said something about wanting to limit the credit risk to one party. Well, there are concentration risk. On Page 62 of the annual report, you say that you're trying to reduce the risk by only working with one other party. And in my opinion, then you have a bigger risk because you depend on the one party, hence concentration risk. But maybe I just do not understand what it says.
Okay. Yes, read it in the context, the concentration of the credit risk or the risk based. Okay. I'm now quoting economic characteristics that would cause the possibility, etcetera, to be impacted by we will never try to limit our credit risk to one party. We'll have to find another party that has similar opposed risks so that the risk for the company as a whole will be reduced.
Well, maybe we should answer the questions first. I have to get back anyway, and I will read the exact lines in the annual report. Okay. Levitec. Levitec is interesting for us because of the certain technology that it has in which we are interested.
As a part of last year, our share, our stake was increased. And if you follow IFRS, you see that Leathertech, of course, is in the initial stages. So it is a company that is that has losses. So if you invest in such a company, you have to also look at the losses. And this has resulted in the appreciation of Levitec to be as it is.
UNIDENTIFIED
Then the question about tax years still to be paid, nineteen years. But looking at your tax positions, we don't worry about that too much because these are not big issues. It's just formal matters. So it's not about any disputes, ongoing disputes with the tax administration, for example. And then finally, yes, PT.
The stake in PT is valued at the value of the share at the moment as if we sold against 12. So there is a periodical review of that. So the moment the share price of substantially lower for a longer period over time, being defined as more than six months, and then there are no prospects of things to improve, then you depreciate that particular share to avoid any fluctuations in share price on a day to day basis. So this led to the fact in 2013, when we bought for HKD90 and the share price developed in a negative way, we decided at that moment for the BT share that we would appreciate it for somewhere in the lower 60s of HKD dollars. So what we have seen what you have seen is the test we do.
How does the share price develop of the PT share? So if you look at the share price as per the September 31, it was just below the average course. But if you look at the development over the last six months in 2015, it was constantly above that particular lever. So based on that discussions and analyses that we have made that we came to the conclusion that there is no further depreciation necessary. So there are no signals for us that the share price would be at such a level that it would structurally remain there.
Is that a sufficient answer? Yes. Yes. Then I would like to invite Mr. Krochnied from KPMG to inform us about the auditing activities and the statement or unqualified opinion, if you will.
He did this last year. So Rob, the floor is yours. I actually did not do it last year, but I regularly do it in other meetings. I would like to briefly inform you on the audit. The goal of our activities, of course, is to establish that the annual accounts give a fair view and are in accordance with Title IX of the civil code.
And of course, we also assess whether or not annual account is in compliance with the balance sheet. So it's not only the consolidated annual accounts, but the full annual accounts. And this ends with an unqualified auditor's opinion that you can read from Pages 64 to 107. So I would like to start by enlightening you about our approach. So the materiality was EUR 5,000,000, which is about 3.3% of the profit before taxes.
Some group segments had a lower materiality of about 2,700,000.0 to €4,000,000 In certain items, we have qualitative criteria that are applied that result in an even lower materiality. In the end, we report all corrections above €250,000 to the management. So for the company, we have an extensive risk analysis to determine what our activities should be, and I'll get back to that later. So not only looking at the risk, we also look at the volume of activities because this has an influence on the audit. As you know, SMI is an international company, and this is why we have activities in several countries: Japan, Korea, The Netherlands, Singapore and U.
S. We visited Singapore and Hong Kong as well for ASMPT purposes. We also use specialists in the field of tax, IT and corporate finance. We frequently have meetings with the organization, so we talk to the CFO and the audit committee and all the AC meetings. It is good to state here that we've had free access to all levels of the organization all the time.
Then the focus points that we report, and you can find them in our auditors report on qualified opinion, and we determined those items of focus based on risk analysis and stake. For us, these items well, it was the first year audit, of course. Maybe this is an answer to your question. Giving justification of the revenues, the income tax positions and, of course, the capitalized development costs. So development costs, of course, as well.
And what we exactly did, I would like to refer to the auditors report, and I'm very willing to give more comments if you wish me to do so. So this is my general comment. Again, questions are welcome, and I would like to thank you for your attention. And I think that maybe your question has been answered. Mr.
Ferrer, is your question answered? Yes. That's oh, no. Okay. So you now have the opportunity to ask your question.
Thank you. Yes, I would like to ask the question again to the auditor and which sentence I refer to in the annual report. My question to the auditor is, well, this was the first time for you. It was a transition. You audited for the first time.
So in 2016, will this still be a subject? Or are you now fully equipped to go ahead and function for the full 100% as an auditor? Well, I do hope that in 2015, we have functioned as an auditor for the 400%. But I do believe that we will be even better equipped, of course, and better informed on the organization and processes to again do our part of the deal in 2016. There's no doubt about it.
Thank you very much. And that is, of course, the answer that I expect because I get it all the time, but it's good to have it on the record. Then the question I asked before about the annual report. Again, concentration risks. It has been mentioned in Page 62, as said, then the heading Small Number of Large Clients, three paragraphs, and it's about the last sentence in the middle paragraph.
Concentration risk mitigated by limiting the exposure to a single counterparty. So this is the sentence I was referring to. Well, basically, answer. What we mean is that the concentration risk is decreased by limiting our exposure to only one single party. So we can have more counterparties than one because well, to limit the concentration risk.
So it's basically where you put emphasis on. But apparently, this has led to misunderstandings. So next year, we should adjust the sentence so that it doesn't lead to a misunderstanding because this is exactly well, this is why I, of course, asked you to explain because it's absolutely our intention to look at the concentration risk and limit ourselves to one financial counterparty because that's what we're talking about in mitigating these risks. So basically, what it comes down to when it comes to our cash means, we don't want to place it all with one bank, of course. Okay.
Then this is clear. Then this was indeed a misunderstanding. Thank you very much. We will emphasize things differently last year next year. I assume that there are no further questions, and this means that we are ready to vote.
First of all, I would like to inform you that at this moment, ASMI has 61.1 outstanding shares that have a voting right. In total, 40,900,000.0, which is 69.9% of the share capital is present. And we'll vote it. So again, present 40,000,008 and 94,393 shares, which is 66.926% of the share capital. To make sure that the voting procedure is dealt with correctly, we use voting pads, as we always do, and we will have a trial run first to make sure that everything is in order.
And of course, for this trial run, we have a question, and you can vote for this question. And if all goes well, we assume that the system works, that the voting procedure is all right and that it will work for the rest of the meeting. The question that you need to answer is the following: Will Max Verstappen win another Grand Prix race this year? Peter will now switch on the system. Well, so again, I would like to emphasize another Grand Prix, of course.
I would like to ask you to activate your voting pad according to the instructions on the slides. If you have any problem, you can raise your hand, and someone will come up to you and help you. If you are in favor, then you press 1. If you're against, then you press 2. And if you wish to abstain, you press 3.
You can change your vote up until we close the vote by pressing c and then pressing the number you wish to choose. Well, you can now vote. Okay. The voting is voting closed. In favor, we see 81% against, we see almost nineteen percent and one thousand shares have abstained from voting.
So we can look forward to a next victory for Max Verstappen. So this was a trial run. I assume that there are no problems, and this means that we can proceed with a formal vote on Item four of the agenda, the adoption of the annual accounts. So again, the adoption of the annual accounts 2015. Vote is now open.
So two seconds left. Voting closed. So in favor, 100%, well, average, against 50 shares and abstained fourteen oh four. As said before, these results will be posted on the website as well. This brings us to item five on the agenda, adoption of dividend proposal.
So this item will be voted on. So the proposal is a dividend in cash of EUR $0.07 0. Any questions before we put this item to the vote? Mr. Berghers.
On behalf of ADD Value Fund, a question about the proposed dividend in the light of the question that M and S Capital has posed earlier this meeting and the answer of Mr. Von Bommel to a previous question in relation to the definition of excess capital. So the proposal is €0.7 per share, and we can conclude that the profit per share was €2.53 which is a payout of 27.7%, which seems low in the light of the financial position of the company and the position net cash. Also end of Q1, euros $460,000,000, and especially in the light of the net cash position last year of €747,000,000 Of course, there is a share buyback program ongoing. But especially in that particular view, referring to the remarks of the representative of M and S Capital, it really stands out, and we've seen this in the presentation of Mr.
Del Plano, that the front end implied valuation as the which is €1,000,000,000 and I think this morning, it was slightly higher, of 1,270,000,000.00 that it remains stable, and it has remained stable over the past twelve years. Knowing that there is a share buyback program going on, you can imagine that if this had not been the case, that the value would have been slightly lower. In other words, shareholders do not see the same value reflected as in the front end. And this is, of course, the argumentation of the representative of the MNS capable. So there is a global discount to ASMI.
And that is not in the interest of stakeholders in the widest sense possible. So Mr. Chairman, in this particular light, I wonder whether it wouldn't be better to increase the payout ratio. There is enough flexibility to do that. In the first term, I could imagine that there are no other issues that are ongoing that would disable a higher payout ratio.
And could you consider this? Okay. As you might be aware of, we have a policy that we discussed in previous meetings as well, but I would like to ask Peter to respond as well. So there are two options for dividend policy. One is basically that you say we always have a percentage of the share value and or you define the policy.
I would like to go back to 2012, and we based on profitability, we couldn't pay dividend as such or lower dividends. So we said no. As a part of our solid dividend policy, we would like to pay out a dividend that is higher and higher every time but will never be lower unless there are special circumstances. And this can lead, like last year, to excess cash. And at that moment, we will pay back or use that excess cash for the benefits of shareholders.
So this has led to, in 2014 and 2015, that we have a share buyback program of EUR 100,000,000, and we are right in the middle of it. So if we look at that and if we compare that, at this moment, we are currently at €416,000,000 At the end of Q1, I think it was 43% of the program that we have bought back. It means that we still need to buy back 57%. So if today, the proposal is adopted of €0.70 that's €43,000,000 So this means that we already reached the almost the €100,000,000 So this brings us back just above the €300,000,000 level. So our promise towards the shareholders will remain as it is.
So the moment we have a substantial amount, we will proceed again to look at how we can best use that cash for the benefit of our shareholders. So the other thing that I have mentioned already, year after year, we look and assess whether or not we can increase dividend, but it has to be on a sustainable basis. And it should not lead, and that would be even worse for shareholders, that we have one year with €2 per share and then the next year, only €1 So that's the policy. Thank you for your information again. I think Mr.
Werber had a question as well. That's correct. My question was addressed when we looked at the previous question, but I think it would be good to make it clear again that you explicitly state the intention. And of course, it's never a guarantee that when there is nothing specific going on, that it will always be a minimum of €0.70 Could you say that? Well, I can't add anything more to that what I've already said and everything we have given you in the presentation and all the information that we have on the website.
This is our dividend policy. Well, but if you can't give me a full yes, I'm still afraid that I don't understand your policy. Well, you did hear the word sustainable, didn't you? Sustainable dividend. But I can't predict what we have in five years' time.
If you say to me, do you have the intention or does the company have the intention not to decrease dividend? Then yes, this is the intention. If you ask me whether I can guarantee, I can't. No, of course, intention is not a guarantee, but yes, you say you have the intention, so that's enough for me for now. Any other questions with regards to the dividend proposed?
If not, I would like to put this item to the vote formally. So again, a dividend cash a dividend in cash of €0.70 per share is proposed. You can now vote. Four seconds remaining. You can no longer vote.
Voting is closed. The results. The proposal has been adopted for dividend in cash of €0.7 per share, so 99.9% in favor, ten fifty shares against and $13.00 6 shares of upstaked from voting. So we have adopted the dividend proposal. You have adopted the dividend proposal.
So this will be available within fourteen days. Thank you very much regarding this item. And this means that we are now with Item six, discharge of the members of the management board. Anyone wishing to take the floor for Item six before we vote on this item? If not, then I would like to ask you again to take your voting pad and vote on Item six.
Four seconds remaining. Voting closed. The result, point five five million of the voters have voted in favor, which is 98.9%, 1.005 have voted against and 4,187 shares have abstained from voting. I can therefore conclude that you have voted in favor formally discharge the members of the supervisor the management board, I apologize, for its management in the financial year 2015. And this means that this brings us to Item seven on the agenda, which is discharge of the members of the Supervisory Board.
Again, I would like to ask you to take your vote, voting pad, unless there are any questions relating to Item seven.
If not,
you can vote now. Five seconds remaining. Voting is closed. And the result is that 40,205,479 shares have voted in favor. So this is 98.9%, 0.016 voted against.
And there were 4,185 shares that have abstained from voting, which means that you have adopted this item on the agenda. So in conformity with Article 13.4 of the Articles of Association, you formally discharged the Supervisory Board from liability in relation to the exercise of their duties in the financial year 2015. Item eight on the agenda, which is the reappointment of Mr. Schumacher, Uri Schumacher as a member of the Supervisory Board. Mr.
Schumacher has been a member of the Supervisory Board for eight years. And in accordance with the applicable rotation scheme, the term of Mr. Schumacher's mandate expires on the date of this Annual General Meeting. Mr. Schumacher has said that he will be eligible for a last term.
You know that there is a maximum of twelve years, and the proposal in this particular item on the agenda is to reappoint Mr. Schumacher as a member of the Supervisory Board for a term of four years, which means that his term will end if you adopt the proposal. This term will end in 2020. You know Mr. Schumacher, obviously.
You were able to read in the documents what his CV looks like, what his expertise is and in which field he is active. And unless there are any specific questions on this particular item, I would like to proceed to formally vote on the reappointment of Mr. Schumacher as a member of the Supervisory Board. You can now vote.
Okay. You
may no longer vote. And the result is that 99.766% of the votes were cast in favor and 0.234% of the votes were cast against and 61.837 votes abstained from voting, which means that I may conclude that Mr. Schumacher has been formally reappointed as a member of the Supervisory Board. Congratulations, and thank you to the meeting. Olli?
Olli, you've been reappointed. Okay. I'd like to say something under this item of the agenda, and this is what I wish to say. We just voted on the reappointment of Mr. Schumacher.
But there is another member of the Supervisory Board, Mr. Johan Danils, and his rotation period also ends today. And this means that we will have to say farewell to him because he's not available for reappointment. Many of you will remember that four years ago, we made an exception for Mr. Danils for an additional four year period.
And as I mentioned to you before, we formally have a maximum period of twelve years. And four years ago, Mr. Danils had already served for that amount of years. But because of his contribution, of his knowledge, his expertise, it was decided to ask him to stay on for an additional four year period. And as shareholders, you approved the proposal.
And now the moment has come that
years of membership of the Supervisory Board of this company of ASMI, we now would like to farewell Mr. Danils. Proposal.
And as I mentioned to you before, Mr. Danils has had a very significant role in our Board, and he knows the industry as the like the back of his hand. And he knew the products of ASMI well, the products that we sell, that we develop. And especially his strategic contribution has always been very much appreciated. And we want to thank him.
We are very grateful for his contribution. In the past sixteen years, he was a member of the Supervisory Board in good times and in less good times. I recall that in his first rotation period, things were not as calm as they Things were a little bit more turbulent, and he was able to give his contribution also in those turbulent times. And we owe him a great debt of gratitude.
And that is why I'd like to give him this bouquet of flowers. And tonight, we will have an opportunity to thank him. But for now, I wish to thank him and give him this bouquet of flowers. Thank you, Mr. Daniels.
Thank you so much for what you've done for this company in the long period of time that you served as a member of the Supervisory Board. Chairman. Can you hear me? Yes, okay. Thank you for your kind words for these beautiful flowers.
And I'll give them to my wife later tonight or tomorrow morning. And you, shareholders, I wish to thank you for your continued trust by reappointing me three times. And that is extraordinary because it is not in the articles of association. And more specifically, I'm very honored by the opportunities that you gave me, the honor to represent you in the past sixteen year. And this was an era in which there were some difficult times that we had to overcome.
So I think it is quite apt to thank and congratulate Mr. Chuck and his father on the way in which they kept the company safe through turbulent waters. It is a difficult world of the world of semiconductors. And finally, and notwithstanding my continued enthusiasm as a member of this Supervisory Board, I am very pleased to make room for a female member of the Supervisory Board. And I hope and believe that this will give a new dimension to this excellent team.
And ASMI and its stakeholders will be supported by her in its developments towards the future. And as of tomorrow or the day after tomorrow, I will no longer be barred from buying shares, so I think it will be among you. I will be a shareholder soon of AS and I. UNIDENTIFIED Thank you for these kind and lovely words, Johan. And I was going to say something that you already said.
That is today, well, Mr. Daniel says, I just had to I wanted to say, says the Chairman, something about the composition of the Supervisory Board. And you know that we aim to have a minimum of five members of the Supervisory Board. And because Mr. Daniil steps down, there's now only four members left.
And we very seriously looked into who could succeed Mr. Daniel's, a male or female successor, because we are of the opinion that it can be significant for this company, this Supervisory Board to have some more diversity. Some more diversity would be welcome. Diversity, of course, means a lot of things, many things, but you also know about the intended target or the intended objective to have female members of the Supervisory Board, so gender diversity. And at the moment, we are not able to introduce to you the male or female successor of Mr.
Danils. We hope to be able to do this in the near future, but I can tell you that it is a little bit difficult. Difficult because of the pool of suitable candidates. Because of the profile that we require for members of the Supervisory Board here in The Netherlands and also in some other European countries, this pool of suitable candidates is not a big one. It's not a big group to choose from, which has resulted in the fact that we've not been able to introduce to you a new member of the Supervisory Board, but we do expect that we will be able to do this in the near future.
Okay. That was it for agenda item eight, and that was the reappointment of the member of the Supervisory Board, which brings us to agenda item nine, which is the appointment of the company's auditors for the financial year 2016. And as you know, our policy is to reappoint the external auditor every year. And this means that, again, this year, we ask you to adopt our proposal to appoint KPMG as the company's external auditor for the financial year 2016. And I would like to put this to the vote unless you have any questions or comments on this item on the agenda.
You have only two more seconds to vote, and you can no longer vote as of now. And you see the result on the screen, 99.933% of the votes were cast in favor, 0.067% of the votes were cast against and 2,074 votes abstained. And this means that the proposal to appoint KPMG as the company's external auditor for the financial year 2016 has been formally adopted. And we may continue with Agenda Item 10, the designation of the Management Board as the competent body to issue common shares and rights to acquire common shares and to set aside any preemptive rights. And you know that this is an item that is on the agenda every single year.
This agenda item is subdivided into 10A and 10B, and 10B will be voted on separately. So 10A is the designation of the management board as a competent body to issue common shares and to have the right to acquire common shares. That is 10A. And I'd like to put this to the vote unless anyone has any questions regarding 10A. And as I said before, this is quite a standard item on the agenda.
We've had it on the agendas of the previous years. So please cast your votes. Three more seconds to vote. You may no longer cast your votes. And you see that 92.327% of the votes were cast in favor, 7.673 votes were cast against this proposal and 3,037 shares votes were abstained.
So 10A was adopted, and we can continue with the vote on agenda item 10B. And in accordance with Article seven-five of the Articles of Association, the general meeting of shareholders may appoint the management board for an eighty year period as of today, may appoint them as the body of the company, which is subject to the Supervisory Board's approval, is authorized to limit or exclude any preemptive rights of existing shareholders when common shares or rights to subscribe for common shares are issued. And as I mentioned before, this is quite a standard item that we voted on in previous years as well. Would anyone like to take the floor on this before we vote on this item, on Item 10b on the agenda? No?
Okay. Please cast your votes. You may do so now. The operator has activated the system. You may no longer cast your votes.
No. No. Actually, you've got another five seconds. And now you may no longer cast your votes. The vote is closed, and the results are on the screen.
91.631% of the votes were cast in favor, 8.369% of the votes were cast against and 1,188,052 abstentions. This means that Item 10A has been adopted, and we may continue with Agenda Item 11, the authorization of the Management Board to repurchase common shares in the company. And this item has also been on the agenda for the past few years. And you know that we have such a program. We wish to continue this program.
And I ask you, unless you have any specific questions, to cast your votes, but a hand was raised, so apparently, there is a specific question. Mr. Burghos? Yes, Chair. I have a number of questions.
And in the annual report, I read that you repurchased shares, but you also hold shares in treasury. And are the repurchased shares also going to be canceled? That is my first question. And you have the information on the repurchase program on the website, but the implementation on the share back program, I studied it, but I do not really see any structure. And by that, I mean that you would expect that when the share prices are low and you can know that, in our opinion, then you would have to buy more shares compared with what you buy when the share price is high.
So that could be limited, buying at high prices. And I wonder whether you, as the Board, can influence this at all. And my final question, Chairman, that is with this agenda item. The company has a substantial minority stake in ASMPT. There's also a possibility there for a buyback.
And do you have any influence on the Board of PT and to influence them to also have a share buyback or increased distribution of dividend. Whether there is such a possibility for you, those are my questions, sir. Thank you. UNIDENTIFIED Right. I think that Mr.
Von Bommel is the perfect person to answer these questions. Of course, it's a little bit tricky to know when a share price is low. If we knew this beforehand, we would have lots more money than we actually have. However, Pisa will answer your question. Treasury shares.
What we indicated in previous sessions is that we want to use part of the treasury shares for the outstanding options and for the outstanding restricted shares. And what is extra will be canceled. And of course, we want to have a structural reduction of the share capital. And you know that these shares can do not have voting rights and are not part of the dividend. Okay.
The share buyback program. Well, there are various possibilities. Our Chairman already said, What is low what is high? The definition is a bit tricky. But what we defined for this program is that we want to look at an average over a certain period rather than saying we determine when it is low, when it is high because then, as a company, you'll give an opinion on the share price at that point in time.
And that is a policy that we have. We buy back slowly, regularly, and we have agreements with the bank that implements this. We have agreements regarding of VWAP prices. And the incentive for the bank is in lies in the fact that it buys lower than what the share price is for that particular day. Okay.
Yes, I have a follow-up question. I was expecting this answer, but the specific question, what is low, what is high, I think the yardstick is the intrinsic value of the share. So the share price depends on something that cannot be checked by anyone, But it is it seems that as a stakeholder, there should be an incentive for you and the investment bank that advises you to really go for it. And that is not so much to do with the more academic question that could be put as common sense, which is consistent with your and our aim to optimize the capital, the equity. So it might be a good idea to look at that.
Oh, we will do that indeed. Something
I would like to say is, of course, there is a difference between the time in which you want to buy the shares and the course over the time with the share price. And you need to take into account a certain term, a certain period in time to actually be able to influence share price. And that is what we can do. But again, we will we assess each program separately. First, 100,000,000, we followed a different cycle than what we're doing now.
And again, there are several options to optimize within that particular range. Well, the substantial stake in ASMPT and the do a buyback in ASMPT. That, of course, closely relates to the policy that you have. Basically, we have said as being ASMI, we want to use excess cash in the shape of or, let's say, in a different way than paying dividend, and ASMPT doesn't do that. And they, in principle, announced this on the website that they expect that they have 50% to 60% of their net income and pay out that as dividend.
So that doesn't give the flexibility to introduce a share buyback program there. So the stability of the business of PT, the phase in which ASMPT is currently in, justifies nothing more than what it is. So it's all about assessments, evaluation and discussions that we have and will have in the future as a management board. Thank you, Peter. I hope that your question has been adequately The voting is closed.
The result is that 99.542% has voted in favor, 0.458% has voted against and that we have $14.00 3 shares have abstained. So again, we can conclude that this item on the agenda has been adopted. This means that we are now at item 12 on the agenda, which is any other business. Is there any other business pressing matters that need to be asked? Mr.
Werrer? UNIDENTIFIED Just one question. The stake in ASMPT has been addressed several times and in the past as well. But what I would like to know is what the view of ASMPT itself is and how they regard ASMI as a majority shareholder. Would they like to keep it that way?
Or would they like to change this? So that's your question. Yes, it is. It is, of course, very difficult to speak on behalf of ASMPT. So possibly, you would have to address them personally.
Our perception is something we can convey, and our perception is that for a while now, they have been working with a majority shareholder or major shareholder, I should say, and that it is a very healthy collaboration. And I think this is their perception as well, and it provides stability in the shareholder base. But this is our perception. We absolutely cannot speak on their behalf. So if you want to know for sure, you'd have to address them personally.
Any further questions under this particular item? If not,
I would like
to finalize this meeting, Item 13. I would like to formally close this meeting of shareholders. I would like to thank all of you for your presence and your contributions. And I would like to invite you for some snacks and a drink right next to the room here. Thank you very much.