Asml Holding Nv · EURONEXT:ASML
Asml Holding Nv — Morgan Stanley TMT Conference Barcelona 2008
21 slides from Asml Holding Nv's conference presentation, Nov 25, 2008
Slide 1: Morgan Stanley TMT Conference Barcelona
Morgan Stanley TMT Conference Barcelona Peter Wennink Executive Vice President and Chief Financial Officer Friday November 21, 2008
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: ASML - the world's largest supplier of lithography equipment
ASML - the world's largest supplier of lithography equipment Source: Semi & ASML Leadership in immersion for volume chip manufacturing ASML Canon Nikon East 65 11 24 West North Canon 11% ASML 65% Nikon 24% ASML AMAT TELL KLA East 22 32 25 11 10 West North KLA Tencor ASML Tokyo Electron Lam Research
Slide 4: Agenda
Agenda Market ASML's robustness Outlook
Slide 5: Market
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Slide 6: Macro and sector trends
Macro and sector trends Challenging customer environment Product overcapacity Low DRAM and FLASH memory prices Access to capital M&A negotiations Demand for capacity expansion remains extremely weak Significant weakening in the last 2 to 3 months Virtually no 300 mm lithography capacity growth betwe
Slide 7: DRAM manufacturers with most aggressive shrink post highest operating margins
DRAM manufacturers with most aggressive shrink post highest operating margins Operating margins vs. technology nodes of main DRAM manufacturers Source: DRAMeXchange (8/08), ASML Marketing (Fab dBase) - -120% - -100% - -80% - -60% - -40% - -20% 0% 20% 40% 60% Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06
Slide 8: Robustness
Robustness
Slide 9: Sound gross margin performance
Sound gross margin performance 0 200 400 600 800 1000 1200 Revenue [Millions] 10% 15% 20% 25% 30% 35% 40% 45% Revenue Gross margin Q4 guidance Q1 03 Q3 03 Q1 04 Q3 04 Q1 05 Q3 05 Q1 06 Q3 06 Q1 07 Q3 07 Q1 08 Q3 08 Gross margin
Slide 10: Gross margin dynamics
Gross margin dynamics Cost of goods reduction program Litho tool sales mix Euro / Yen / Dollar exchange rate ASML factory loading Product maturity Sales discount Due to cost improvements and management of the above, gross margin is expected to be approximately 36% at revenue levels of € 550 million
Slide 11: Near term operating expense dynamics
Near term operating expense dynamics R&D "Spend on strategic programs and save on efficiency" High level of strategic investment to meet customer requirements for shrink Efficiency produces € 6 million savings in Q4 SG&A Improved efficiency provided 19% cost reduction from Q2 to Q4
Slide 12: Robust operating margin performance with R&D expenditures increased >50%
Robust operating margin performance with R&D expenditures increased >50% in the last 3 years 370 329 0 200 400 600 800 1000 1200 Revenue [Millions] - -30% - -20% - -10% 0% 10% 20% 30% Revenue Operating margin Q1 03 Q3 03 Q1 04 Q3 04 Q1 05 Q3 05 Q1 06 Q3 06 Q1 07 Q3 07 Q1 08 Q3 08 Operating margin
Slide 13: Profitability stress test
Profitability Supported by continued immersion technology investments necessary even during this downturn, we expect to see quarterly sales at levels that will secure a positive operating profit margin Stress test Operating Profit R&D + SG&A € 170 million per quarter 2,500 2008 estimate Q1-Q3 actual
Slide 14: Solid financial position
Solid financial position Conservatively financed Cash & cash equivalents € 1.3 billion Debt € 600 million 5.75% Notes due 2017 Standby facility € 500 million due 2012 Cash generative
Slide 15: Tough times call for product roadmap strengthening
Tough times call for product roadmap strengthening Driving higher product value through performance enhancement and cost reductions Strengthening leadership in immersion, the TWINSCAN XT:1950 with highest NA available today allows 38 nm resolution and offers 25% overall performance improvement Intro
Slide 16: Immersion on track
Immersion on track Shipped 46 immersion systems YTD Booked 16 immersion systems in Q3 Backlog contains 27 immersion systems with a value of € 745 million - ASP of € 27.6 million
Slide 17: Backlog lithography in value
Taiwan Europe USA Korea Other Japan China 14 11 30 14 6 25 memory IDM Foundry 42 43 15 0 0 0 immersion KrF 1-line ArF dry 73 6 2 19 Backlog lithography in value per Sep 28th, 2008 Total value M€ 1,028 Technology i-Line 2% ArF immersion 73% KrF 6% ArF dry 19% Region USA 30% Taiwan 14% Korea 14% Other
Slide 18: Outlook
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Slide 19: Q4 2008 outlook
Q4 2008 outlook ASML expects to ship 26 systems ASP for new + used systems expected to be € 16.5 million Gross margin approximately 36% R&D is expected at € 124 million net of credit SG&A is expected to decrease to € 47 million
Slide 20: Outlook
Outlook The current economic turmoil and the reassessment by some of our customers of their investments and strategic alliances make it difficult for us to guide on short term bookings or give a mid term sales forecast Even during this downturn, continued immersion technology investments remain nece
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