ASML Holding NV · EURONEXT:ASML
ASML Holding NV — Morgan Stanley TMT Conference Barcelona 2008
21 slides from ASML Holding NV's conference presentation, Nov 21, 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 1
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 Revenue evolution Leadership in immersion for 3,597 3,768 volume chip 2,465 2,529 manufacturing 1,543 2003 2004 2005 2006 2007 Nikon ASML 24% 65% Lam Research ASML Market share 2007 Canon 11% KLA Tencor Applied Materials Tokyo Top 5 semico
Slide 4: Agenda
Agenda z Market z ASML’s robustness z Outlook / Slide 4
Slide 5: Market
L vs ASM > 5 / Slide
Slide 6: Macro and sector trends
Macro and sector trends z Challenging customer environment z Product overcapacity z Low DRAM and FLASH memory prices z Access to capital z M&A negotiations z Demand for capacity expansion remains extremely weak z Significant weakening in the last 2 to 3 months z Virtually no 300 mm lithography capac
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 60% Most 40% advanced node in 20% Q2/08: Operating Margin 0% 5x nm 5x nm -20% 6x nm -40% 6x nm 6x nm -60% 7x nm -80% 7x nm 7x nm -100% -120% 05 05 05 05 06
Slide 8: Robustness
Robustness / Slide 8
Slide 9: Sound gross margin performance
Sound gross margin performance Revenue Gross margin 1200 45% 1000 40% [Millions] 35% 800 Q4 guidance 30% 600 Revenue Gross margin 25% 400 20% 200 15% 0 10% 03 03 04 04 05 05 06 06 07 07 08 08 1 3 1 3 1 3 1 3 1 3 1 3 Q Q Q Q Q Q Q Q Q Q Q / Slide 9 Q
Slide 10: Gross margin dynamics
Gross margin dynamics z Cost of goods reduction program z Litho tool sales mix z Euro / Yen / Dollar exchange rate z ASML factory loading z Product maturity z Sales discount Due to cost improvements and management of the above, gross margin is expected to be approximately 36% at revenue levels of €
Slide 11: Near term operating expense dynamics
Near term operating expense dynamics z R&D z “Spend on strategic programs and save on efficiency” z High level of strategic investment to meet customer requirements for shrink z Efficiency produces € 6 million savings in Q4 z SG&A z Improved efficiency provided 19% cost reduction from Q2 to Q4 / Sli
Slide 12: Robust operating margin performance with R&D expenditures increased >50% in the last 3 years
Robust operating margin performance with R&D expenditures increased >50% in the last 3 years Revenue Operating margin 1200 30% [Millions] 20% Operating margin 1000 370 800 329 10% Revenue 600 0% 400 -10% 200 -20% 0 -30% 03 03 04 04 05 05 06 06 07 07 08 08 1 3 1 3 1 3 1 3 1 3 1 3 Q Q Q Q Q Q Q Q Q Q
Slide 13: Profitability
Profitability z 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 Net Sales 3,250 4,000 2,750 3,
Slide 14: Solid financial position
Solid financial position z Conservatively financed z Cash & cash equivalents € 1.3 billion z Debt € 600 million 5.75% Notes due 2017 z Standby facility € 500 million due 2012 z Cash generative / Slide 14
Slide 15: Tough times call for product roadmap strengthening
Tough times call for product roadmap strengthening z Driving higher product value through performance enhancement and cost reductions z Strengthening leadership in immersion, the TWINSCAN XT:1950 with highest NA available today allows 38 nm resolution and offers 25% overall performance improvement z
Slide 16: Immersion on track
Immersion on track z Shipped 46 immersion systems YTD z Booked 16 immersion systems in Q3 z Backlog contains 27 immersion systems with a value of € 745 million – ASP of € 27.6 million / Slide 16
Slide 17: Backlog lithography in value per Sep 28th, 2008
Backlog lithography in value per Sep 28th, 2008 Total value M€ 1,028 i-Line 2% Technology KrF 6% ArF dry 19% Region ArF Other 6% End-use immersion 73% Korea 14% Japan IDM USA 25% Memory 43% 30% 42% Taiwan 14% Foundry Europe 11% 15% Numbers have been rounded for readers’ convenience / Slide 17
Slide 18: Outlook
Outlook / Slide 18
Slide 19: Q4 2008 outlook
Q4 2008 outlook z ASML expects to ship 26 systems z ASP for new + used systems expected to be € 16.5 million z Gross margin approximately 36% z R&D is expected at € 124 million net of credit z SG&A is expected to decrease to € 47 million / Slide 19
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
Slide 21: Slide 21