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 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 Robustness z Business summary z Outlook / Slide 4
Slide 5: Market
Market / Slide 5
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 300mm lithography capaci
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 Q / Slide 9
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 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 8% cost reduction in Q3 vs. Q2 z IT and other services contract negotiations will result in a
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 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: Product roadmap strengthening for continued market share growth
Product roadmap strengthening for continued market share growth 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
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 / Slide 16
Slide 17: Business summary
Business summary / Slide 17
Slide 18: Q3 results
Q3 results z Net sales of € 696 million z Gross Margin of 38.1%, Operating margin of 12.0% z Cash generation from Operations € 21 million z Shipped 16 immersion systems z Booked 31 systems, valued at € 498 million z Backlog at € 1,028 million, 53 systems z Average selling price for new shipped syste
Slide 19: Net sales
Total net sales M€ 4500 4000 3,768 3,597 3500 955 3000 1068 2,529 Q4 Net sales 2,465 2500 Q3 548 934 785 696 2000 958 Q2 1,543 533 1500 Q1 611 930 844 526 763 942 1000 370 616 500 329 949 919 685 629 318 453 0 2003 2004 2005 2006 2007* 2008 * 2007 numbers are adjusted retrospectively with respect to
Slide 20: Net system sales breakdown in value: Q3 2008
Net system sales breakdown in value: Q3 2008 Technology Sales in Units ArF immersion i-Line 5% 16 77% 12 KrF 8% 4 5 ArF dry 10% ArF ArF dry KrF i-Line immersion Region End-use Foundry 7% China 7% Korea 39% Memory IDM Japan 63% 30% 20% Taiwan 2% Europe USA 15% Other 3% 14% Numbers have been rounded f
Slide 21: Consolidated statement of operations M€
Consolidated statement of operations M€ Q2 08 Q3 08 Net sales 844 696 Gross profit 337 265 Gross margin % 40.0% 38.1% R&D costs 130 130 SG&A costs 56 52 Income from operations 151 83 Income from operations % 17.9% 12.0% Net income 192 73 Net income % 22.7% 10.5% Numbers have been rounded for readers
Slide 22: Key financial trends 2007 – 2008
Key financial trends 2007 – 2008 Consolidated statement of operations M€ Q3 07* Q4 07* Q1 08 Q2 08 Q3 08 Net Sales 934 955 919 844 696 Gross profit 385 390 374 337 265 Gross margin % 41.2% 40.8% 40.6% 40.0% 38.1% R&D 120 129 128 130 130 SG&A 56 57 57 56 52 Income from operations 209 203 188 151 83 I
Slide 23: Cash flow M€
Cash flow M€ Q2 08 Q3 08 Net income 192 73 Depreciation and amortization 27 29 Disposals of property, plant and equipment 1 2 Share-based payments 3 4 Change in tax assets and liabilities (114) (6) Change in other assets and liabilities 21 (81) Cash flows from operating activities 130 21 Cash flows
Slide 24: Balance sheet as of Sep 28th, 2008 M€
Balance sheet as of Sep 28th, 2008 M€ Assets Jun 2008 Sep 2008 Cash and cash equivalents 1,361 33% 1,313 31% Accounts receivable, net 517 13% 574 14% Inventories, net 1,130 27% 1,134 27% Other assets 302 7% 312 7% Tax assets 227 5% 222 5% Fixed assets 608 15% 661 16% Total assets 4,145 100% 4,216 10
Slide 25: Backlog as of Sep 28th, 2008
Backlog as of Sep 28th, 2008 New systems Used systems Total systems Backlog Backlog Backlog Units 43 10 53 Value M€ 922 M€ 106 M€ 1,028 ASP M€ 21.4 M€ 10.6 M€ 19.4 • 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 € 49
Slide 26: Backlog: value and litho units
Backlog value M€ 0 500 1000 1500 2000 2500 Jan 03 / Slide 26 Jul 03 Jan 04 Jul 04 Jan 05 Jul 05 Backlog value Jan 06 Jul 06 Backlog: value and litho units Jan 07 Systems Jul 07 Jan 08 Jul 08 0 50 100 150 200 250 300 Backlog units
Slide 27: 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 27
Slide 28: Outlook
Outlook / Slide 28
Slide 29: 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 29
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: Slide 31