Asml Holding Nv · EURONEXT:ASML
Asml Holding Nv — Q3 2008 Earnings Presentation
31 slides from Asml Holding Nv's earnings presentation, Oct 15, 2008
Slide 1: ASML 2008 Third Quarter Results
ASML 2008 Third Quarter Results ASML addresses weak market with lower costs and strong product line-up October 15, 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 Robustness Business summary Outlook
Slide 5: Market
Market
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 300mm lithography capacity growth betwee
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 & ASML
Slide 9: Sound gross margin performance
Sound gross margin performance 0 200 400 600 800 1000 1200 Revenue [Thousands] 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 High level of strategic investment to meet customer requirements for shrink Efficiency produces € 6 million savings in Q4 SG&A Improved efficiency provided 8% cost reduction in Q3 vs. Q2 IT and other services contract negotiations will result in additional €
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 [Thousands] - -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
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: Product roadmap strengthening for continued market share growth
Product roadmap strengthening for continued market share growth 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 impr
Slide 16: Immersion on track
Immersion on track Shipped 46 immersion systems YTD Booked 16 immersion systems in Q3 Backlog contains 27 immersion systems
Slide 17: Business summary
Business summary so & ASML
Slide 18: Q3 results
Q3 results Net sales of € 696 million Gross Margin of 38.1%, Operating margin of 12.0% Cash generation from Operations € 21 million Shipped 16 immersion systems Booked 31 systems, valued at € 498 million Backlog at € 1,028 million, 53 systems Average selling price for new shipped systems of € 21.6 m
Slide 19: 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. 318 453 685 629 949 919 329 616 763 942 930 844 370 611 533 958 934 696 526 785 548 1068 955 0 500 1000 15
Slide 20: Net system sales breakdown in value: Q3 2008
Net system sales breakdown in value: Q3 2008 Memory Foundry IDM R&D East 63 7 30 West North End-use Foundry 7% Memory 63% IDM 30% Numbers have been rounded for readers' convenience Technology KrF ArF dry ArF immersion I line East 8 10 77 5 West North KrF 8% i-Line 5% ArF immersion 77% ArF dry 10% RO
Slide 21: Consolidated statement of operations
Numbers have been rounded for readers' convenience. Consolidated statement of operations M€ Q2 08 Q3 08 Net sales 844 696 Gross profit Gross margin % 337 40.0% 265 38.1 % R&D costs 130 130 SG&A costs 56 5 2 I ncome from operations Income from operations % 151 17.9% 83 12.0 % Net income Net income %
Slide 22: 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. Q3 07 * Q4 07 * Q1 0 8 Q2 08 Q3 08 Net Sales 934 955 919 844 696 Gross profit Gros
Slide 23: Cash flow
Cash flow M€ Numbers have been rounded for readers' convenience. Q2 08 Q3 08 Net income 192 73 Depreciation and amortization 27 2 9 Disposal s of property, plant and equipment 1 2 Share - - based payments 3 4 Change in tax assets and liabilities (114) ( 6) C hange in other assets and liabilities 21
Slide 24: Balance sheet as of Sep 28th, 2008
Balance sheet as of Sep 28th, 2008 M€ Numbers have been rounded for readers' convenience. A ssets Jun 2008 Sep 2008 Cash and cash equivalents 1,361 33 % 1,3 13 31 % Accounts receivable, net 517 13 % 5 74 14 % Inventories, net 1,130 27 % 1,13 4 27 % Other assets 302 7 % 312 7 % Tax assets 227 5 % 2 2
Slide 25: Backlog carries Q4 '08 + Q1 '09 shipment dates
62% of backlog or € 642 million system sales carry Q4 '08 + Q1 '09 shipment dates Q3 net bookings of 31 systems with a value of € 498 million including 18 new tools with an ASP of € 22.1 million Note: Due to possible customer changes in delivery schedules and to cancellation of orders, our backlog a
Slide 26: 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 Backlog value M€ 0 50 100 150 200 250 300 Backlog value Systems
Slide 27: Backlog lithography in value per Sep 28th, 2008
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 28: Outlook
Outlook
Slide 29: 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 30: 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
Slide 31: ASN
Mo ty ASN Commitment N Uy wy S