Slide 1: 2004 Q4 and Annual Results
2004 Q4 and Annual Results Presented by Eric Meurice, President and CEO Peter Wennink, Executive Vice President and CFO Veldhoven, January 19, 2005
Slide 2: Safe Harbor
Safe Harbor "Safe Harbor" Statement under the U.S. Private Securities Litigation Reform Act of 1995: the matters discussed in this document may include forward-looking statements that are subject to risks and uncertainties including, but not limited to, economic conditions, product demand and semico
Slide 3: Agenda
Agenda Financial summary ASML accomplishments 2004 Market environment and ASML outlook Business strategy Summary
Slide 4: Financial summary
Financial summary
Slide 5: Total revenues M€
759 609 1493 329 616 Total revenues M€ 2673 1589 1959 1180 1000 1500 2000 2500 3000 2000 2001 2002 2003 H2 H1 Q1 Q2 Q3 Q4 1543 2004 1070 2465 Q4 2002 includes M€138 SAB 101 revenues
Slide 6: Sales per model
2003 1H 2003 2H 2004 1H 2004 2H New scanners 200 mm i - line Krf (248 nm) Arf (193 nm) Total 200 mm scanners 300 mm i - line Krf (248 nm) Arf (193 nm) Total 300 mm scanners Total scanners New steppers i - line Krf (248 nm) Total steppers Used systems TOTAL Sales per model
Slide 7: Revenue breakdown: H2 2004
Revenue breakdown: H2 2004 Value per type Value per technology Scanners 300 mm 70% Scanners 200 mm 25% 248 nm 64% 193 nm 21% Value per region Value per end-use U.S. 16% Foundry 49% Memory 26% Taiwan 35% IDM 25% Korea 14% 365 nm 15% China 10% Singapore 12% Europe 11% Steppers 5% Japan 2% Numbers have
Slide 8: Overview historical financials consolidated M€
3 months ended Dec 31 12 months ended Dec 31 ASML 2003 2004 2003 2004 Net sales Gross profit R&D costs SG&A costs Operating income from continuing operations Net income from continued ops. Net income from discont. ops. Total n et income Overview historical financials consolidated M€ 100.0% 100.0% 15
Slide 9: Key financial trends 2004
Profit & Loss Statement M€ Q1 04 Q2 04 Q3 04 Q4 04 2004 Units Sales Gross margin Gross margin % Recurring R&D SG&A Recurring ope rating income Operating income % License cost Net income Net income % Key financial trends 2004 2465 32.2% 35.6% 38.1% 39.2% 36.7% 7.6% 16.3% 18.4% .0 % 17.3 % 4.55 % 10.6
Slide 10: Cash flow M€
3 months ended Dec 31 12 months ended Dec 31 2003 2004 2003 2004 Net income from cont. operations Depreciation and amortization Effects of changes in assets and liabilities Cash flow from recurring operations License cost Cash flow from investing activities Cash flow from financing activities Cash f
Slide 11: Cash cycle improvement
Cash cycle improvement DSO, DPO and Inventory days 2000 - 2004 (calculated based on quarterly earnings releases) - DSO Inv days DPO Cash Conversion 2000 2001 2002 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 Q4 04
Slide 12: Balance sheet as of December 31, 2004 M€
ASSETS Dec 2003 Dec 200 4 Cash and cash equivalents Accounts receivable, net Inventories, net Other assets Tax assets Fixed assets TOTAL ASSETS LIABILITIES and SHAREHOLDERS’ EQUITY Current liabilities Tax liability Long term debts Shareholders’ equity Balance sheet as of December 31, 2004 M€ 1028 35
Slide 13: Financial accomplishments 2004
Financial accomplishments 2004 Growth Record quarterly revenues of €785 million Shipments increased 68% year-on-year from 168 to 282 systems Sales revenue increased 60% year-on-year New system ASP grew from M€8.4 in Q1 to M€10.7 in Q4 Profitability Achieved targets for TWINSCAN TM cost of goods redu
Slide 14: ASML accomplishments 2004
ASML accomplishments 2004
Slide 15: Market momentum
Market momentum Source: ASML MCC 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% Europe USA Korea Taiwan RoA ASML revenue share (%) Excludes the impact of SVG acquisition in years prior to 2001
Slide 16: Market accomplishments 2004
Market accomplishments 2004 Gained market share momentum Reinforced market position with top semiconductor manufacturers Supplied to 80% of the top 20 semiconductor company spenders Made further inroads in Japan, gaining our fourth customer - Matsushita Achieved top rating in VLSI Research’s annual
Slide 17: Technology accomplishments 2004
Technology accomplishments 2004 Ramp up of 0.85-NA, high throughput 193-nm/ArF technology: 18 shipments since Q2 2004 Rapid transition of advanced ArF systems to smaller footprint and cost effective XT platform Introduced immersion for early customer process development: 3 shipments in Q4 – 8 tools
Slide 18: Immersion working on the fab floor
Immersion working on the fab floor Shipped volume capable production tools to U.S., Europe, Asia First SCANNING image on Oct 7, 2003 First yield IMMERSION Microprocessor Dec 2004
Slide 19: Market environment and ASML outlook
Market environment and ASML outlook
Slide 20: Semiconductor units continue to slide
Semiconductor units continue to slide Source: WSTS Semiconductors WW Dollars Semiconductors WW Dollars 3MMA Semiconductors WW Units Semiconductors WW Units 3MMA
Slide 21: Utilization drops in Q3 with indications of further reduction in Q4
Utilization drops in Q3 with indications of further reduction in Q4 Source: SICAS Capacity utilization by technology 40% 50% 60% 70% 80% 90% 100% MOS>=0.7µm MOS<0.7µm to >=0.4µm MOS<0.4µm to >=0.3µm MOS<0.3µm MOS<0.3µm to >=0.2um MOS<0.2 um MOS<0.2 um >=0.16um MOS<0.16um
Slide 22: Strong demand leading to decreasing inventory
Strong demand leading to decreasing inventory Source: WSTS, VLSI Research, MCC End user demand stronger than anticipated IC unit sales and inventory - 2.0 4.0 6.0 8.0 10.0 12.0 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0 IC Inventory (VLSI Research, #) 3MMA IC Sales corrected for inventory
Slide 23: 2005 semiconductor revenue growth forecasts
2005 semiconductor revenue growth forecasts Industry analyst expectations for 2005 9% 5% 5% 5% 1% 0% -6% -6% -15% -10% -5% 0% 5% 10% 15% VLSI Research Semico Dataquest iSupply WSTS SIA In-Stat IC Insights Average analyst estimate 1.5 % Source: ASML MCC, industry analysts data
Slide 24: Litho system requirements as function of forecasted semiconductor sales revenue growth
-10 -5 Litho system requirements as function of forecasted semiconductor sales revenue growth Source: ASML MCC, industry analysts data Analyst semiconductor sales revenue growth (%) Theoretical WW litho systems requirements calculated by ASML based upon analyst semiconductor revenue growth forecast
Slide 25: Backlog: litho units and value
Backlog: litho units and value Used systems New and used systems New systems
Slide 26: Backlog as of December 31, 2004
New Systems Used Systems Total Backlog Units Value ASP Backlog Backlog Backlog as of December 31, 2004 M€ 1664 M€ 27 M€ 1691 M€ 14.0 M€ 2.2 M€ 12.9 Numbers have been rounded for readers’ convenience. 80% of unit backlog carry H1 customer request dates Note: Indicative forecast as customer order push
Slide 27: Backlog lithography per December 31, 2004
Backlog lithography per December 31, 2004 Total value M€ 1691 Value per type Value per technology Scanners 300 mm 90% Scanners 200 mm 9% 248 nm 31% 193 nm 63% Value per region Value per end-use U.S. 29% R&D 3% Foundry 23% Memory 49% Taiwan 16% IDM 25% Korea 32% 365 nm 6% China 4% Singapore 8% Europe
Slide 28: Outlook summary
Outlook summary Semiconductor sales correction ongoing, reducing inventory to standard levels ASML backlog supports solid H1 2005; plan to ship 60 systems in Q1 05, with an ASP of approx. M€ 10.7 However, limited H2 visibility leads to a focus on managing flexibility for short-term up or down demand
Slide 29: Business strategy
Business strategy
Slide 30: 2005 priorities to maximize growth, profitability and liquidity
2005 priorities to maximize growth, profitability and liquidity Two short-term strategic initiatives Drive up litho market share Further reinforce position with top customers Focus on the Japanese market Take decision on FPD Three execution focuses Technological leadership Lead-time differentiation
Slide 31: Company focus 2005
Company focus 2005 Maintain technology leadership Continued leadership in throughput, overlay and imaging with TWINSCAN XT platform Immersion ramp Highest NA ArF tool XT:1400 on the market Large backlog for “dry” XT:1400s Immersion version deliveries to start in Q3 2005 4th generation immersion tool
Slide 32: Company focus 2005 continued
Company focus 2005 continued Create significant lead-time differentiation Cycle time reduction Critical inventory management: internal/external Hi-flex work-force Customer program: “lead-time for value” Strengthen cost competitiveness Continued Cost of Goods reduction Introduction of highly competit
Slide 33: Summary
Summary A strong backlog A low visibility A strategy for Growth, Liquidity and Profitability, around execution on Technology, Lead-time and Cost
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