Annual General Meeting 2015

Transcription

1 Annual General Meeting 2015 Veldhoven, the Netherlands, 22 April 2015

2 Forward looking statements (1) This document contains statements relating to certain projections and business trends that are forward-looking, including statements with respect to our outlook, expected customer demand in specified market segments including DRAM and logic, expected trends, systems backlog, IC unit demand, expected or indicative financial results, opportunities or targets (including ASML's financial model), including expected or potential sales, other income, gross margin, gross margin percentage, R&D and SG&A expense, effective tax rate, cash conversion cycle, capex as a percentage of sales, earnings per share, expected sales by end use and expected shipment of tools, productivity of our tools and systems performance, the continuation and affordability of Moore s law, industry adoption of EUV, benefits of EUV, EUV system performance, targets and priorities(such as endurance tests, availability and demonstrated power source), expected industry trends, expected service sales and expected demand for holistic lithography products, system node enhancement packages and service maintenance revenues, the development of EUV and DUV technology and holistic lithography, expected and target shipments of EUV systems and the timing of shipments, our intention to return excess cash to shareholders through dividends and share buybacks, including our proposed dividend for Slide 2 You can generally identify these statements by the use of words like may, will, could, should, project, believe, anticipate, expect, plan, estimate, forecast, potential, intend, continue and variations of these words or comparable words. These statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about the business and our future financial results and readers should not place undue reliance on them.

3 Forward looking statements (2) Forward-looking statements do not guarantee future performance and involve risks and uncertainties. These risks and uncertainties include, without limitation, economic conditions, product demand and semiconductor equipment industry capacity, worldwide demand and manufacturing capacity utilization for semiconductors (the principal product of our customer base), including the impact of general economic conditions on consumer confidence and demand for our customers products, competitive products and pricing, affordability of shrink, the continuation of Moore s Law, the impact of manufacturing efficiencies and capacity constraints, performance of our systems, the continuing success of technology advances and the related pace of new product development and customer acceptance of new products, market demand for our existing products and for new products, our ability to meet overlay and patterning requirements, the number and timing of EUV systems expected to be shipped, our ability to enforce patents and protect intellectual property rights, the risk of intellectual property litigation, EUV system performance and customer adoption, availability of raw materials and critical manufacturing equipment, trade environment, changes in exchange rates, changes in tax rates, available cash, distributable reserves for dividend payments and share repurchases, the risk that key assumptions underlying financial targets and opportunities prove inaccurate, and other risks indicated in the risk factors included in ASML s Annual Report on Form 20-F and other filings with the US Securities and Exchange Commission. These forward-looking statements are made only as of the date of this document. We do not undertake to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. Slide 3

4 Agenda van de Jaarlijkse Algemene Vergadering van Aandeelhouders van ASML Holding N.V. (de Vennootschap ), te houden op woensdag 22 april 2015, om uur in het Auditorium, ASML Gebouw 7, De Run 6665, Veldhoven. Slide 4 1. Opening. 2. Overzicht van de activiteiten, inclusief de activiteiten op het gebied van maatschappelijk verantwoord ondernemen, en de financiële situatie van de Vennootschap. (Discussiepunt)

5 Slide 5 Agenda ASML at a glance Technology highlights Business highlights Business environment and outlook Capital allocation

6 ASML at a glance Slide 6

7 ASML at a glance Slide 7

8 Serving our stakeholders Slide 8

9 Investor key messages Shrink is the key industry driver supporting innovation and providing long term industry growth Moore s Law will continue and be affordable Lithography enables affordable shrink and therefore delivers compelling value for our customers ASML s strategy of large R&D investments in lithography product roadmaps supports future industry needs DUV product improvement roadmaps and Holistic Litho enable multi-pass immersion patterning today, with Holistic Litho supporting EUV in future. These highly differentiated products provide unique value drivers for us and our customers EUV faces normal new technology introduction challenges but its adoption is now a matter of WHEN not IF. EUV will continue to enable Moore s Law and will drive long term value for ASML ASML models an annual revenue opportunity of 10 billion by 2020 and given the significant leverage in our financial model this will allow a potential tripling of EPS by the end of this decade thereby creating significant value for all stakeholders We expect to continue to return excess cash to our shareholders through dividends that are stable or growing and regularly timed share buybacks in line with our policy Slide 9

10 Slide 10 Technology highlights

11 Q1 Product highlights EUV On an NXE:3300B, customer exposed more than 1000 wafers in a 24-hour period EUV source power upgrade is being rolled out to multiple customer sites Slide 11 DUV and Holistic litho Our Overlay and Focus Package for the TWINSCAN NXT:1970Ci, which improves focus uniformity by up to 30% and matched machine overlay by more than 30%, saw good adoption by logic customers First orders received for next-generation TWINSCAN NXT:1980Ci immersion tool, aimed at production of critical layers for the next advanced logic nodes

12 EUV program: priorities for 2015 Slide 12 In 2015, we will focus on: Improving stability and availability Continuing progress on productivity Shipping the NXE:3350B, our 4 th generation EUV tool

13 EUV 2015 targets and status at a glance Productivity Target: 1000 wafers per day Slide wafers exposed in 24 hours at customer site (80 Watt source configuration) 80 Watt upgrades in progress at multiple customer sites Up to 110 Watt source power demonstrated at ASML Availability Target: 70% 55% average availability for NXE:3300B achieved at multiple sites NXE:3350B shipments Target: 6 Integration of multiple NXE:3350B systems ongoing at ASML 2 systems on order, intended for use in production Additional volume purchase agreement for minimum of 15 EUV systems, 2 of which will be delivered in 2015 In-depth negotiation on orders progressing with multiple customers

14 NXE:3350B mechanical integration complete To ship mid-2015 with new high-power drive laser and in-situ collector cleaning Slide 14

15 EUV production insertion: current expectation Slide 15 Customer benefits: Reduction of process complexity Increased design flexibility can lead to additional shrink Shorter cycle times Faster time to market Higher yield Logic pilot production starting end-2016 DRAM follows 1-2 years later ASML opportunity 10 billion total sales by wafer per day target for 2016 on track Cost cross-over point could be lower than 1500 wafers per day (customer/application dependent) Imaging and overlay performance meets customer requirements for 10 and 7nm logic nodes EUV infrastructure is making significant progress (removable pellicle concept enables clean mask usage and mask pattern inspection using existing equipment)

16 Frankly, I didn t expect it to be so precise Dr. Gordon Moore #MooresLaw50 Slide 16

17 EUV to enable the next decade of Moore s Law Moore s Law is the observation that the number of transistors on a chip doubles roughly every two years. The observation was made by Dr. Gordon Moore in an article in Electronics Magazine (1965). Slide April 2015 marks the 50 th anniversary of the original publication of Moore s Law. Dr. Gordon Moore (age 86) is the co-founder of Fairchild Semiconductor (est 1957) and Intel Corporation (est 1968)

18 From forklifting 5 Megabyte into a plane, To carrying 1 Terabyte in your pocket Slide 18 Slide

19 Business highlights Slide 19

20 2014 Highlights Record net sales of 5,856 million, up 12% vs 2013 Gross margin 44.3% vs 41.5% in 2013 Net income 1,197 million, up 18% vs 2013 Basic EPS 2.74, up 16% versus 2013 We achieved our target of 500 wafer per day productivity for EUV NXE:3300B at multiple customer sites First order for 2 NXE:3350B EUV systems received from TSMC Maintained our strong cash balance Slide 20 Numbers have been rounded for readers convenience

21 Consolidated statements of operations by year M Slide Net sales 5,245 5,856 Gross profit 2,177 2,596 Gross margin % 41.5% 44.3% Other income* R&D costs (882) (1,074) SG&A costs (312) (321) Income from operations 1,048 1,282 Operating income % 20.0% 21.9% Net income 1,016 1,197 Net income as a % of net sales 19.4% 20.4% Earnings per share (basic) Numbers have been rounded for readers convenience * Customer Co-Investment Program (CCIP)

22 2014 Net system sales breakdown in value Technology Region (ship to location) Slide 22 KrF 9% ArF dry 1% i-line 1% China 8% China 8% Taiwan 18% EUV 7% Korea 29% Japan 8% Europe 2% Rest of Asia 1% ArF Immersion 82% Sales in Units 76 USA 34% EUV ArF i ArFdry KrF I-Line Numbers have been rounded for readers convenience

23 Net Sales Total net sales million by End-use Slide ,651 5,856 5,245 4, ,732 1,252 1,614 3, , ,186 2, , , , ,585 2,294 2, ,225 1, , Memory IDM Foundry Service & Options Numbers have been rounded for readers convenience

24 Q1 results Net sales of 1,650 million, 47 litho systems sold, valued at 1,247 million, net service and field option sales at 403 million Average selling price of 26.5 million per system Gross margin of 47.2% Operating margin of 27.6% Net bookings of 1,028 million Slide 24 Backlog at 2,602 million, (including orders for EUV NXE:3350B) Numbers have been rounded for readers convenience

25 Q1 net system sales breakdown in value Q1 15 total value 1,247 million Technology ArF Immersion 83% KrF 12% ArF dry 3% i-line 2% Memory 55% End-Use IDM 12% Foundry 33% Region (ship to location) Korea 37% China 11% Taiwan 19% USA 17% Japan 11% Europe 3% Rest of Asia 2% Sales in Units Slide 25 EUV ArF i ArFdry KrF I-Line 6 Q4 14 total value 1,085 Numbers have been rounded for readers convenience Memory 65% Foundry 25% IDM 10% Korea 41% EUV 6% Japan million 13% EUV ArF i ArFdry KrF I-Line ArF Immersion 83% KrF ArF dry 1% 9% i-line 1% Taiwan 20% USA 24% 20 Rest of Asia 2% 10

26 Backlog in value by end of Q1 Technology End-use Region (ship to location) Slide 26 Q1 15 total value 2,602 million ArF immersion 76% KrF 14% EUV 7% ArF dry 2% i-line 1% Foundry 35% Memory 42% IDM 23% Taiwan 25% USA 26% Korea 38% Europe 2% China 1% Japan 8% New systems Used systems Units Value M 2, Q4 14 total value 2,772 million ArF immersion 78% KrF 11% EUV 7% ArF dry 3% i-line 1% Foundry 37% Memory 43% IDM 20% Taiwan 29% USA 23% Korea 34% Rest of Asia 1% Europe 3% China 5% Japan 5% New systems Used systems Units Value M 2, Numbers have been rounded for readers convenience

27 Balance sheets M Assets Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Slide 27 Cash & cash equivalents and short-term investments 2,998 2,711 2,685 2,754 2,838 Net accounts receivable and finance receivables 1,177 1,429 1,336 1,304 1,510 Inventories, net 2,548 2,616 2,677 2,550 2,607 Other assets Tax assets Goodwill 2,093 2,116 2,265 2,358 2,611 Other intangible assets Property, plant and equipment 1,231 1,275 1,372 1,447 1,523 Total assets 11,758 11,889 12,097 12,204 13,091 Liabilities and shareholders equity Current liabilities 2,958 3,065 2,926 2,889 3,194 Non-current liabilities 1,744 1,743 1,847 1,802 1,820 Shareholders equity 7,057 7,081 7,324 7,513 8,077 Total liabilities and shareholders equity 11,758 11,889 12,097 12,204 13,091 Numbers have been rounded for readers convenience

28 Slide 28 Business Environment and Outlook

29 Business environment Memory DRAM segment remains healthy in 2015 with litho sales weighted to the first half of 2015 Limited NAND litho tool shipments driven by planar NAND shrink and 3D process development programs Slide 29 Logic Stable business throughout 2015 Modest tool shipments at 28nm node continue 20/16/14nm foundry nodes shipments ongoing Next node process development accelerating Service & field options Growing demand for Holistic Litho products from all sectors System node enhancement packages increasing in support of customer capital efficiency Service maintenance revenues growing with installed base

30 Outlook Q2 net sales around 1.6 billion, including 1 EUV system Slide 30 Gross margin around 45% R&D costs of about 265 million SG&A costs of about 85 million Other income (Customer Co-Investment Program) of about 21 million Effective tax rate approx. 11%

31 ASML Financial Model Slide (Actual) By 2020 (Model) Driver Net sales 5.9B ~10B Growing share of Litho; enabling cost affordable shrink in a growing industry Gross margin % ~44% ~50% EUV to corporate average Contributions from Service and Holistic Lithography R&D* % sales ~18% ~13% R&D growing much slower than sales SG&A % sales ~5% ~4% SG&A growing much slower than sales Effective Tax Rate <10% ~10% Innovation box in the Netherlands Cash Conversion Cycle ~300 days <200 days Inventory turnover back to historical levels Capex % sales ~6% ~5% Continued infrastructure investments * R&D excluding Customer Co-Investment funding

32 Impact of Innovation Box on our effective tax rate ASML benefits from a favorable tax environment for innovative companies ASML expects an effective tax rate of around 10 percent: ~75 percent of ASML s income is taxed in the Netherlands (NL), as most of the value creation takes place in NL Innovation Box applies to foster R&D in NL ~80% of ASML s R&D is in NL; triggering > 30,000 high wage jobs in the Netherlands Innovation Box is most significant factor impacting ASML s effective tax rate ASML applies other tax instruments with minor impact ASML complies with letter and spirit of tax laws and regulations and is fully transparent Slide 32

33 Capital Returns Slide 33

34 Dividend (euro) millions Capital return to shareholders ASML proposal to again increase dividend by 15% to 0.70 per ordinary share to today s Annual General Meeting of shareholders Slide 34 In 2014 ASML returned 968 million to shareholders through combined dividend and share buybacks Dividend history Cumulative capital return Dividend Share buyback

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36 Agenda Proefstemming. Slide 36 Het is een mooie dag vandaag.

37 Agenda 3. Bespreking van de uitvoering van het Beloningsbeleid voor de Directie (het Beloningsbeleid ) over het boekjaar (Discussiepunt) Slide 37

38 Execution of the Remuneration Policy Slide 38 The 2014 Remuneration Policy for the Board of Management was adopted by the Annual General Meeting of Shareholders of April 24, 2013 and became effective per January 1, Some highlights of the execution of the 2014 Remuneration Policy are: 1. Base salaries of the members of the BoM have been have been set according to the 2014 Remuneration Policy. Part of this policy is the change in the pay mix at ASML: a shift to less variable pay and more fixed pay, which is reflected in the 2014 base salaries. The base salaries for the Presidents is set in the middle of the CEO benchmark and the CTO/CFO benchmark. 2. Short Term Incentive (STI) payout over 2014 has been % of target (60%), i.e % of base salary 3. Long Term Incentive (LTI) payout over performance period has been 97.7% of max 1. ASML ranked 2 nd in the ROAIC rank in the Peer Group (leading to a payout of 100% of max) 2. The qualitative target was evaluated at 88.5% of max 4. Per the General Meeting of Shareholders of April 23, 2014, Mr. Nickl was appointed as member of the Board of Management 1. Mr. Nickl s remuneration over 2014 has been fully in line with the 2014 Remuneration Policy 2. Mr. Nickl received performance related shares to partly compensate for waived LTI rights in his former Company

39 Agenda 3. Bespreking van de uitvoering van het Beloningsbeleid voor de Directie (het Beloningsbeleid ) over het boekjaar (Discussiepunt) Slide 39

40 Agenda 4. Bespreking van het jaarverslag 2014, inclusief het corporate governance hoofdstuk, en vaststelling van de overeenkomstig de Nederlandse wet opgestelde jaarrekening over het boekjaar (Stempunt) Slide 40

41 Agenda 5. Voorstel tot verlening van decharge aan de leden van de Directie voor de uitoefening van hun functie in het boekjaar (Stempunt) Slide 41

42 Agenda 6. Voorstel tot verlening van decharge aan de leden van de Raad van Commissarissen voor de uitoefening van hun functie in het boekjaar (Stempunt) Slide 42

43 Agenda 7. Toelichting op het reserverings- en dividendbeleid van de Vennootschap. (Discussiepunt) Slide 43

44 Agenda 8. Voorstel tot vaststelling van een dividend van 0,70 Euro per gewoon aandeel van 0,09 Euro. (Stempunt) Slide 44

45 Agenda 9. Voorstel tot vaststelling van enige aanpassingen op het Beloningsbeleid. (Stempunt) Slide 45

46 Changes to the Remuneration Policy (1/2) The Supervisory Board, upon recommendation of the Remuneration Committee, has made certain adjustments to the current Remuneration Policy. If adopted, these adjustments will be effective as per 1 January The most relevant changes are: Slide 46 Short term incentive (STI) Change cash-related STI target from Net Operating Cash Flow to combination of Free Cash Flow (FCF) and Cash Conversion Cycle (CCC) FCF represents operating cash generated after capital expenditures CCC is a good indicator of extent of demands made on working capital of the Company by the operating cycle. CCC provides a summary of how long money is held in a company s procurement, production and sales processes. CCC = Days inventory outstanding + Days Sales outstanding - Days payables outstanding Reasoning behind adjustment of STI cash target: 1. Using FCF in combination with CCC is more in line with long-term goals of the Company 2. These combined targets provide a balanced picture of ASML s cash position: FCF is determined by final balance sheet position, while CCC is determined by the effective management of working capital throughout the year 3. The Company applies the above combination of targets already since 2013 within the existing policy, as was also indicated in the 2013 Remuneration Report. However, to formalize this and to create maximum transparency, the Supervisory Board has made this now explicit in the wording of the Remuneration Policy

47 Changes to the Remuneration Policy (2/2) Slide 47 Long term incentive (LTI) In the current Remuneration Policy, Net Operating Profit (NOP) is defined as the basis for calculating ASML s Return on Average Invested Capital (ROAIC) used in the Long Term Incentive Plan (LTI) However, in the past, and therefore also for the determination of the LTI remuneration in 2014, this calculation was always based on Net Operating Profit After Tax (NOPAT) The Supervisory Board has made the wording of the Remuneration Policy for this component consistent with the practical application thereof. The policy now mentions NOPAT instead of NOP, which is in line with past practice.

48 Agenda 9. Voorstel tot vaststelling van enige aanpassingen op het Beloningsbeleid. (Stempunt) Slide 48

49 Agenda 10. Voorstel tot goedkeuring van het aantal aandelen toe te kennen aan de Directie. (Stempunt) Slide 49

50 Agenda 11. Voorstel tot goedkeuring van het aantal opties en/of aandelen, toe te kennen aan werknemers. (Stempunt) Slide 50

51 Agenda 12. Bespreking van de gewijzigde profielschets van de Raad van Commissarissen. (Discussiepunt) Slide 51

52 Agenda 13. Samenstelling van de Raad van Commissarissen in (Drie stempunten) Slide 52

53 Agenda 13a. Voorstel tot benoeming van mevrouw A. (Annet) Aris tot lid van de Raad van Commissarissen met ingang van 22 april (Stempunt) Slide 53

54 Agenda 13b. Voorstel tot benoeming van de heer G.J. (Gerard) Kleisterlee tot lid van de Raad van Commissarissen met ingang van 22 april (Stempunt) Slide 54

55 Agenda 13c. Voorstel tot benoeming van de heer R.D. (Rolf-Dieter) Schwalb tot lid van de Raad van Commissarissen met ingang van 22 april (Stempunt) Slide 55

56 Agenda 14. Samenstelling van de Raad van Commissarissen in (Discussiepunt) Slide 56

57 Agenda 15. Voorstel tot benoeming van KPMG Accountants N.V. als externe accountant voor het rapportagejaar (Stempunt) Slide 57

58 Agenda 16. Voorstellen om de Directie aan te wijzen als het orgaan dat bevoegd is tot uitgifte van gewone aandelen of tot toekenning van rechten tot het verwerven van gewone aandelen in het kapitaal van de Vennootschap, binnen de grenzen van de statuten van de Vennootschap, alsmede tot het beperken of uitsluiten van het aan de aandeelhouders toekomende voorkeursrecht. (Stempunten) Slide 58

59 Agenda 16a. Aanwijzing tot uitgifte van aandelen of tot toekenning van rechten tot het verwerven van gewone aandelen (5%). (Stempunt) Slide 59

60 Agenda 16b. Aanwijzing tot het beperken of uitsluiten van voorkeursrechten i.v.m. agendapunt 16a. (Stempunt) Slide 60

61 Agenda 16c. Aanwijzing tot uitgifte van aandelen of tot toekenning van rechten tot het verwerven van aandelen in verband met of ter gelegenheid van fusies, acquisities en/of (strategische) allianties (5%). (Stempunt) Slide 61

62 Agenda 16d. Aanwijzing tot het beperken of uitsluiten van voorkeursrechten i.v.m. agendapunt 16c. (Stempunt) Slide 62

63 Agenda 17. Voorstellen om de Directie te machtigen om gewone aandelen in de Vennootschap te verwerven. (Stempunten) Slide 63

64 Agenda 17a. Machtiging om gewone aandelen in te kopen tot een maximum van 10% van het geplaatste kapitaal. (Stempunt) Slide 64

65 Agenda 17b. Machtiging om additioneel gewone aandelen in te kopen tot een maximum van 10% van het geplaatste kapitaal. (Stempunt) Slide 65

66 Agenda 18. Voorstel tot intrekking van gewone aandelen. (Stempunt) Slide 66

67 Agenda 19. Rondvraag. Slide Sluiting

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