Slide 1: ASML 2008 Annual and Fourth Quarter Results
ASML 2008 Annual and Fourth Quarter Results ASML drives key technology developments and implements a more effective cost structure during downturn January 15, 2009
Slide 2: Safe Harbor
Safe Harbor "Safe Harbor" Statement under the US Private Securities Litigation Reform Act of 1995: the matters discussed in this document may include forward-looking statements, including statements made about our outlook, realization of backlog, IC unit demand, financial results, average sales pric
Slide 3: Agenda
Agenda Market Driving technology priorities and a more effective cost structure Business summary Outlook and summary / Slide 3
Slide 4: Market
L SM A ¥ Y 4 Slide: 1
Slide 5: Dramatic year-end decline, year-on-year IC unit growth falls to lowest level since 2001
Dramatic year-end decline, year-on-year IC unit growth falls to lowest level since 2001 Source: WSTS, ASML, Last data point: November 2008 IC unit sales comparison 0 20 40 60 80 100 120 140 160 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Units [B] - -6% - -4% - -2% 0% 2% 4% 6% 8% 10% 12% 14% 16%
Slide 6: IC inventories are high but swift production cut backs result in acceptable inventory levels
IC inventories are high but swift production cut backs result in acceptable inventory levels Source: VLSI Research, ASML, December 2008 IC unit sales and inventory 0 5 10 15 20 25 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 J
Slide 7: Macro and sector trends
Macro and sector trends NAND Investments stop with 20% capacity reductions expected in Q1 First signs of chip price recovery Continued ramp of 4x nm and slow 3x nm ramp DRAM Capacity reductions will result in a 30% cut since Q1 '08 matching falling demand First signs of chip price recovery Investmen
Slide 8: Driving technology priorities and a more effective cost structure
Driving technology priorities and a more effective cost structure / Slide 8
Slide 9: Downturn strategy
Downturn strategy Keep strategic R&D programs intact and in line with customer roadmaps with focus on high level of product differentiation Maintain a level of production capacity which allows us to meet changing customer needs without lengthy lead times Manage for positive cash generation at very l
Slide 10: Product roadmap strengthening and holistic litho introduction supports customers low cost manufacturing drive
Product roadmap strengthening and holistic litho introduction supports customers low cost manufacturing drive Developments continue to support customer road maps TWINSCAN XTIV lower cost platform transition by end of 2009 Double patterning supported by TWINSCAN NXT multipurpose platform with substan
Slide 11: Product pipeline
Product pipeline Resolution: 32 nm Productivity to 200 wph Shipping 2009 Double patterning TWINSCAN NXT:1950 EUV TWINSCAN NXE:3100 Resolution: 22 nm and beyond Productivity to 140 wh Shipping 2010 TWINSCAN XT:1950Hi (body IV) Resolution: 38 nm Productivity to 148 wph Shipping 2009 / Slide 11
Slide 12: ASML Holistic litho
ASML Holistic litho ASML Holistic litho Holistic lithography is the integration of wafer lithography, computational lithography and metrology, aimed at optimal imaging through the tuning of the process window, productivity, overlay and critical dimension uniformity (CDU) / Slide 12
Slide 13: Reduced cost structure
Reduced cost structure As announced in December, ASML will have reduced expenses by € 50 million per quarter Q1 '09 vs Q2 '08 Workforce reduction by about 1000 heads (12% total workforce) mainly using our Flex Model Partial relocation of Customer Support activities from US to Asia Production facilit
Slide 14: Maximized cash at low revenues
Maximized cash at low revenues Q4 net cash outflow € 204 million mainly due to sudden revenue drop Supplier payments made on inventory not shipped in Q4 due to customer delivery push-outs Back-end loaded shipments for which receivables are due in Q1 Income tax paid for prior years Investment in the
Slide 15: Solid financial position
Solid financial position Strong liquidity Cash & cash equivalents € 1.1 billion Standby facility € 500 million due 2012 Conservatively financed Debt € 600 million 5.75% Notes due 2017 / Slide 15
Slide 16: Business summary
Business summary / Slide 16
Slide 17: Q4 results
Q4 results Net sales of € 494 million, 25 systems shipped valued at € 381 million Average selling price for new shipped systems is € 20.4 million Gross Margin of 35.5% before restructuring, 7.9% after charges Operating margin of 0.5% before restructuring, - 27.4 % after charges Shipped 11 immersion
Slide 18: Total net sales
Total net sales M€ 1,543 2,465 2,529 3,597 3,768 * 2007 numbers are adjusted retrospectively with respect to the change in accounting policy. Numbers have been rounded for readers' convenience. 2,954 318 453 685 629 949 919 329 616 763 942 930 844 370 611 533 958 934 697 526 785 548 1068 955 494 0 5
Slide 19: Net system sales breakdown in value: Q4 2008
Net system sales breakdown in value: Q4 2008 Memory Foundry IDM R&D East 21 26 53 West North End-use Foundry 26% Memory 21% IDM 53% Numbers have been rounded for readers' convenience Technology KrF ArF dry ArF immersion I line East 6 19 73 2 West North KrF 6% i-Line 2% ArF immersion 73% ArF dry 19%
Slide 20: Consolidated statement of operations
Numbers have been rounded for readers' convenience. Consolidated statement of operations M€ including € 138 million restructuring charges in Q4 Q3 08 Q4 08 Q4 08 without restructuring 2007 20 08 Net sales 696 494 494 3,768 2,954 Gross profit Gross margin % 265 38.1% 39 7.9 % 175 35.5% 1,550 41.1 % 1
Slide 21: Key financial trends 2007 - 2008
Key financial trends 2007 - 2008 Consolidated statement of operations M€ * 2007 numbers are adjusted retrospectively with respect to the change in accounting policy. Numbers have been rounded for readers' convenience. Q4 07 * Q1 0 8 Q2 08 Q3 08 Q4 08 Net Sales 955 919 844 696 494 Gross profit Gross
Slide 22: Cash flow
Cash flow M€ Numbers have been rounded for readers' convenience. Q3 08 Q4 08 2007 20 08 Net income (loss) 73 (88) 671 322 Adjustments to reconcile net income to net cash flows from operating activities; I mpairment charges 21 107 89 162 Depreciation and amortization 29 36 126 120 Other non - - cash
Slide 23: Balance sheet as of Dec 31th, 2008
Balance sheet as of Dec 31th, 2008 M€ Numbers have been rounded for readers' convenience. A ssets Dec 2007 Dec 2008 Cash and cash equivalents 1, 272 31 % 1, 109 28 % Accounts receivable, net 638 16 % 469 12 % Inventories, net 1,1 02 27 % 999 25 % Other assets 2 95 7 % 3 55 9 % Tax assets 2 19 5 % 30
Slide 24: Backlog as of Dec 31th, 2008
New systems Backlog Used systems Backlog Total systems Backlog Units 3 3 8 41 Value M€ 7 19 M€ 36 M€ 755 ASP M€ 21. 8 M€ 4.5 M€ 18 ..4 41% of backlog or € 313 million system sales carry H1 '09 shipment dates Q4 net bookings of 13 systems with a value of € 127 million including 5 new tools with an AS
Slide 25: Backlog: value and litho units
Backlog: value and litho units Backlog units 0 500 1000 1500 2000 2500 Jan 03 Jul 03 Jan 04 Jul 04 Jan 05 Jul 05 Jan 06 Jul 06 Jan 07 Jul 07 Jan 08 Jul 08 Jan 09 Backlog value M€ 0 50 100 150 200 250 300 Backlog value Systems / Slide 25
Slide 26: Backlog lithography in value per Dec 31th, 2008
Taiwan Europe USA Korea Other Japan China 11 7 38 11 3 20 10 memory IDM Foundry 42 43 15 0 0 0 immersion KrF 1-line ArF dry 73 8 3 16 Backlog lithography in value per Dec 31th, 2008 Total value M€ 755 Technology i-Line 3% ArF immersion 73% KrF 8% ArF dry 16% Region USA 38% Taiwan 11% Korea 11% Other
Slide 27: Dividend
Dividend ASML will submit a proposal to the 2009 General Meeting of Shareholders to declare a dividend of € 0.20 per share, compared to € 0.25 per share paid in 2008 Balanced decision given Economic and industry environment Cost measures Interests of all stakeholders / Slide 27
Slide 28: Outlook and summary
Outlook and summary / Slide 28
Slide 29: Q1 2009 outlook
Q1 2009 outlook ASML expects net sales between € 180 - 200 million Gross margin expected at about 8% reflecting very low coverage of fixed costs R&D is expected at € 117 million net of credit SG&A is expected to decrease to € 44 million Breakeven point after restructuring is approx. € 450 million /
Slide 30: Summary
Summary No IC production capacity added due to virtual capex freeze Semiconductor equipment market pickup currently impossible to predict ASML can ramp production fast with short lead times when market recovers ASML continues to invest in strategic product development programs Working capital releas
Slide 31: Outlook
Outlook The severity of the global economic downturn has caused semiconductor manufacturers to delay their investment plans. The uncertainty as to the timing of a semiconductor end-product demand pick up and the time needed to complete the current consolidation and restructuring activities in the me
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