ASML Holding (ASML) 19 Jan 222021 Q4 Earnings call transcript

Thank you for standing by. Welcome to the ASML Q4 and Full Year 2021 Financial Results. Throughout today’s introduction, all participants will be in listen-only mode and after ASML’s introduction, there will be an opportunity to ask question. [Operator Instructions] I would now like you to turn over to the conference call over to Mr. Skip Miller. sir. ahead, go Please

Welcome, Relations is at Operator. President Miller, of Investor ASML. everyone. you, Skip This Vice Thank

of Joining me subject be today full will they Peter being at is Wennink; be on that on XXXX the year the call our ASML’s and of order will Roger are are opening transcript broadcast asml.com. call. over the call results. CFO, call also of XX received. The conclusion a in is Dassen. this our and quarter minutes taken Internet The live fourth of length the A call and today’s the and following replay ASML’s management’s remarks This call this website CEO, of shortly available will questions be

just laws. I’d the listeners involve forward-looking management include begin, made by call to securities this within material forward-looking and statements we federal comments These like during the that conference will uncertainties. statements risks of caution meaning Before

discussion and of in today’s over For XX-F documents for contained that, to with you our introduction. found on and presentation annual in the release like website the With Securities report as statement risk on review turn other ASML’s encourage brief a the call Form asml.com Harbor press Exchange and Safe factors, Commission. a and I at I’d filed to to Wennink Peter

everyone, full Welcome, you for for thank Skip. and results year XXXX and you, conference fourth Thank joining quarter us our call.

I your are course, families still healthy Of all and safe. of hope and you

some as and our Roger business Over added review commentary on coming on the with quarter Roger. to short-term of start Roger to our view complete future I quarters. with like current and some of our and an Q&A provide a full as provide comments the some financial overview full with and outlook. the fourth I introduction comments business session, the and XXXX fourth environment additional on begin on well and will our outlook we year XXXX, year performance will the And and Before quarter the would you,

of logistics the I sales Logic we XX chain XX% as weighted productivity them came systems primarily €X.X in Net We from completed fourth at of productivity again deep year and Thank guidance, XX issues incremental upgrade. during to Net the provide towards €X.X of everyone. shipped at a resolve, provide quarter EUV Memory. way to €X in longer an XXXX. number increased this for €X.X and Base then The some guidance expected is the of center sales billion QX a our enhancement. financial you, Management communicated startup additional billion first from of within UV In QX system guidance effects revenue recognized results welcome, QX. at with upgrades first due EUV systems supply billion, software and shipments customers’ capacity with above than was remaining quarter. in and the sales to Installed our more XX% Peter, for the to quarter significantly came quarter need on in review accomplishments, address affecting order full billion. bit will and the

and in XX.X% Berliner in and Glas. guidance. of use margin software by for As environment, Gross productivity strong driven quarter primarily higher million above just and continue output On base. the upgrades. R&D expenses, came operating in installed demand billion, customers Net was we above at of businesses mentioned, In slightly EPS resulting was sales was which QX, of million non-semiconductor of in other to productivity €X.X XX.X% to the of million, the €XXX their income €XXX QX guidance, upgrades expenses €X.XX. increase had to representing the at €XXX an income related expenses SG&A sale net of was

Turning billion. and €X.X equivalents level short-term we the at of investments sheet, fourth to a cash the cash, ended with quarter balance

order and systems. from €X.XX intake bookings X.XX XX% and system Memory by at system of for book, for both NAV and Moving €X.X systems to strong QX Order came Logic, remaining the net deep was largely with the bookings in €X.X EXE:XXXX EUV including UV accounted EUV, NA driven billion, XX%. billion and the

to XX% margin a XXXX full which and sales on year, the system continue XX% from XX% the systems which year. year. €X.X systems service is is a was improve increase Non-EUV in XXXX net last sales achieved system in sales EUV from billion, For €X.X XX% margin. billion, EUV grew growth €XX.X was XXXX last in to EUV billion. We increase

the for XX% from €X.X increase than segments system compared sales from technology. is was is increase billion, previous last had XX.X more Logic Installed a market increase EUV a revenue XX% €X.X Memory was year. €X was billion, billion, a which which for XXXX, Base XX% Xx total demand strong last reflecting which On year-on-year, XXXX, and € increase Management to revenue system is customers’ billion, year. bookings of year. DUV In we

working about to income the billion full invest of year sales payments portfolio. XXXX, sales, flow net our about sales. across of as R&D cash down in €X.X Our percentage intake product free Improvements €XX.XX. order an customer €X.X X% for year. increased this XXXX, to driven innovation of of following spending mainly in Overall, generation was the very was in €X.X a as XXXX contributed by investments significant in R&D billion XX.X% to Net XX%. capital resulting billion, SG&A EPS of for we a continue was

quarter planned our of returned I would support per our that, cash be With first in policy. capacity XXXX. to like ramp. to expectations for of turn invest the to roadmap our as Excess will and continue We

that after. between UV will deep fast a expect are total factory We is so-called QX quarter sales QX of relative primarily due complete in €X.X These not the guidance acceptance EUV to to billion. and be to net number €X.X both shipments. shipments billion for Lower and

place in As testing we quickly support the then in time. we shipments as bring the at systems QX cycle have be recognize which formal billion quarters, side, customer’s we is to approximately to acceptance desire and billion, to testing production shorten fast of the subsequent billion shipment some skipping possible. between of into deferred Final The will can By and takes discussed expected €X.X €X time of at is €X.X to means in as our are which prior of these factory, value be customer expected revenue quarters. revenue.

expected Installed QX quarter-on-quarter compared sales around are gross quarter. SG&A to is at Base QX lower for The be around to and margin million Gross €X.X QX The to margin command last around fast R&D business We to expenses due expected to revenues delayed of expect lower our around primarily XX%. is for impact shipment €XXX and billion. million. expected Management upgrade €XXX be is the

estimated and Our annualized XXXX tax between be effective XX%. is XX% rate expected to

a ordinary up dividend ASML general ASML total €X.XX share interim XXXX final interim the XXXX, increase to XXXX billion dividend of with €X.XX €X.XX €X.X rather XX, April share. a respect per is total €X.X Peter. per Recognizing Total the a part previous to XXXX leads dividend. acquired XXXX, total compared With current exceptional November the XX.X intends proposal like made of turn on return, paid ordinary as over that, was billion and year for capital of of ordinary back Annual million shares dividend and of would of the XXXX a of to XXXX to call to to a place the of Meeting in dividend in dividend in General in share. of program. buyback. The Shareholders dividends Veldhoven. share XXXX, final take terms per meeting paid our this Regarding XXXX dividend. XXXX ASML our XXX% declare I amount will the

Roger. you, Thank

has have sales both another of Roger we As highlighted, profit. and year record

our mature are market We demand demand unprecedented entire both driving and advanced customer across product from portfolio. seeing nodes, segments across all

we to remaining revenue significant due to QX for highlighted by quarters. the our XXXX, QX as shipments, as expect a Roger, fast in revenue Looking we increase lower

around expect fast been XX% does take EUV sales growth XX%. percentage six revenue if increase year, shipment And shipments that shipments full include net six value growth account, bear the mind not this of the EUV full into For compared would and sales XXXX QX to a the you XXXX. in have we the in of fast XX% from would

deep as well we we our For expected business, EUV EUV as our revenue from deployed and due dry around inspection around application which business, in to systems translates XX expect still six in and petroleum to both systems, continued expect we be in the €X.X of fast This systems, UV to In demand billion expect of for and to systems. system commercial to XXXX. ship revenue XXXX an growth shipments. -- XXXX

to XXXX deep deep UV some to We fast times do shorter inherently are expect for installation our but planning for due this impact not shipments also systems, we revenue UV.

XX% revenue. to system We expect revenue non-EUV of growth over

customers, service currently Installed output to year-on-year. type to For although, will add much and revenue those saw around to base expect we upgrades business, base installed be look year. customers methods to expect this Base continue in at capacity, to into improve will base wafer our XXXX systems capability pulled we options scale with installed also all We at wafer the XX% Management very of demand and growing revenue continue to XXXX stay up installed

both to very push see than of expect to very this With also the high-teens Memory transitions growth and we we Logic increase market this for in Logic In Memory, bit we at demand, our the more growth growth strong given addition strong levels, to bringing in capacity, Logic, and segments, With have the the time mature XX% see translated at in year to year. expect technology application as some Looking talked business customer tool customers nodes. planned situation space world. is be the meet continued demand. to up DRAM capacity The XXXX. growth expectations in high advanced demand transformation add and year-on-year. we move digital utilization, both to a and of underway secular for that to In revenue we our drivers growing connected system this very continued continued strong property now about more demand and need

As interest for Memory. migrate expect nodes, also to more to advanced we an DRAM EUV in customers see demand

the ramping strong Memory meet With exceeding year-on-year. around unprecedented XX% We our output revenue system capability up expect be XXXX to are this demand. the capacity, to we our demand

are unfortunately, maximum don’t recovery Of we our things behind and the course, us challenges COVID, at turn industry in and room everyone little this capacity with even it the chain. than planned out is supply impacts more not as workforce as in vulnerable including there and is comes when for running and

although, and curve. of supply number in have component they material so in last our disruptions chain work still we supply to FTE brought we plant of be learning currently and also COVID-related a are through We people need and workforce numbers, chain throughout and to year, up significant workforce, hired challenges shortages a trained to have our

needs flexibility All management of monitoring, maximum and our all what of partners retention creativity I and and mentioned stakeholder. just

We address to working these our closely are with challenges. customers

final some our the we We side, the are quickly doing factory and capacity fast acceptance and possible. capacity testing ramp provides up completing skipping cycle testing in of more factory more as at shipments, quickly. time space can as This up premium, and so the reduces frees which cabin customer

we which will addition, customers upgrades, continue to more In give software provide our capacity.

can factory building in in The chain. doing a our occurred fire production had our and the adjacent utmost inside fortunately Berlin. on New after extinguished we no fire before, earlier the best during partly were as night Year the building. challenges supply of January, during absentees just incident. impacted to as a site said and doing Berlin this in was of one I Also reported in fire COVID-related in injured and we smoke part a part the as But we our shortages persons are an we respond material As external

in remediate for have manufacturing We able already production deep site fully area there EUV in affect will for not resume components way in Based the wafer And UV, not been this production this in enormous we output we order to and we our believe for which certify our are deep EUV order operational. total the new in the fifth UV. unfortunate the are significant parts room building XXXX. And we for can without building situation staff. current our and and on was affected our efforts it’s on grateful High-NA and our restarted. it in very Veldhoven. High-NA is to been also received some UV the components have fire EUV, about of provides affected regarding EUV, for of Berlin The module in have Overall, planned model, plan the consequent for our XXXX. expect other building plan, disruption part in output deep insights, although, as on such optimistic system a the system current manage systems. while event, an are of the the been clean High-NA EXE:XXXX impact EXE:XXXX and the to On that the a are of very a revenue we We of currently which in an first order shipments QX, coverage creativity

first be to believe order XXXX following are this to provide EXE:XXXX the extremely significantly at short intend launch and to for High-NA the the ASML’s the year addition, customer for this performance of year, first Even In demand. our the we EXE:XXXX. where is of strong. continues the Demand we next High-NA received EXE:XXXX will also next of beginning step we model system. in system, we point electrographic the introduction which after productivity.

megatrends, with build long-term increasingly intensity, are we beyond demand. higher and Day, lithography and opportunities. Investor our markets growth partners take semiconductor customer for mature chain supply short, confident demand talked Looking about nodes, driving our XXXX, are growth adding to and for end in broadening that, your to in services. future system demand application and meet global significant actively along products and our we’d in a We advanced improving With happy fueling questions. we space be at the In more capacity

The, you momentarily session. the instruct Operator, Q&A the Peter. will on Thank and for you, protocol Roger

many kindly Beforehand, you question, I follow-up yourself as possible. Operator, short to and as let would first callers will with one necessary. This we like ask one us allow that to get then your the question can final if please. to have instructions to

ahead. first question Wells Instructions] from Thank you. Quatrochi Our go Joe Fargo. with [Operator comes Please

of quite taking growth on than for XXXX initially stronger forecasting anticipated. the I we we had -- DUV is about this am about inventory context you to the buffer are a some question. in the adding Thanks XX% Yeah. supply side, were think I that to, demand curious you hopefully in maybe think, well for inventory are you relative the the trying chain capacity build the that past, year? and your do How talking bit as

in if billion. €X.X to the here, full quarter, the look question full of happened that. we approximately I substantially course, deep and might want UV good think call in that were you Yeah. We what expecting the Joe, way, the €X.X landed you it’s it’s or we and a of last to that the was landed that important because last at picture at including expectation non-EUV for going quarter quarter, billion, had business, we the recall the below it year into

So and million €XXX up there sales we that made was about EUV a higher then QX higher shortfall base sales. with installed in

to do trying that material we course, that of in produced already this now we And are plan can year. that So that, that, what the the that’s million, because, supply now for is are get in was the -- seeing for we fact €XXX production chain. by into

for have us right? of was the going we plans going deep it’s our matter for was the year €X.X material, So here last were if that be within the Veldhoven you under last you expectation And year do believe to UV. that we math, year-on-year now be a we get then so that kind to billion. So flat in told we That to done. manufacturing

XX% you last get billion the you plus gets the you that last €X.X That to billion €X from million when to it’s year to year. add that you transitioned €XXX So the about year. this

math. that’s So the

So, million the us in squeeze QX, now the of in of capability from we transition it’s have manufacturing and had we that shortfall in it’s fact, supply that for trying €XXX the into Veldhoven. the that chain to here matter a

growth on That’s WFE helpful quick is your more follow-up, total Memory expectations, it. the revenue a think, Got just other Memory I expectations And just then for flat. color.

much driven help us adoption? being maybe by you just can So EUV is of understand how that

adoption going can that this of to at system sales, year, manually. of least on we XX%, little even well, I what EUV that, be see the Yeah. will about north say mean, sales that a are EUV is we

billion, take for under at number related So revenue about the billion, you €X EUV, if €X if of little look that is a Memory. you XX% to

So substantial part, at a that’s would already that I say, number.

Very helpful. Thank you.

welcome. are You

Company. go next Please Our from question and Cowen Sankar Krish with comes ahead.

two of my for question. Yeah. have I taking Hi. them. Thanks

year? for full and got for margin give Roger, XXXX, rate. one, First FY guidance the tax on you gross the guidance OpEx I revenue a Did the

talk a the think, to that as a year. this where you We we had to And didn’t, we of gross gross for frankly, bit I over land. am margin year happy little see margin this flavor it for give to going are about but a and little see I we last

it’s expectation your understand say, would to would is me going be I guess, -- be, next So question question that. for And so year. implied next XX%. I your the around my That help

Of course, the have there, is that helped gross for said very to that, XX.X% which we -- helpful upgrade start before, is as recognize margin. we it’s is last very and already we with revenue year, have to by in significant a packages software the

year, neutralize the I very that impact you gross margin high about that had X.X%. say take out the you would the year, if for So on for last probably

you on little higher normalized only a driven this mix comparison which it have we a few a I bit pricing, base fact would there. XX%. to gets gross expect first of year. That primarily that X.X%. X.X% to in about base there’s these than the MXZ then the in a the then -- of that talked things, year. So last year is a year about And would about off, this That’s And bit the impact was High-NA margin. we last the you little give by

add up, there’s get we if swing of factor XX%. in a drive Then it So you you little about then expect versus terms of you stage, XX%. as -- them do if of deep to this the a grow both At UV all emerging. bit of to composition

So the but the the neutral buildup say, margin, to for about that’s I it’s gross XX%. would

on we of say numbers quarter. for assumptions those SG&A year. think, QX, terms I that have growth it’s R&D, the as and do, revenue. safe €XX.X think of the the XX% XX% But only we for to the the only OpEx, In X% on guided typically I safe on year-on-year of in for the billion, basis sort then, full that obviously, for And are assumptions implied the

actually We P&L. gave complete you

Roger, UV you already just can me this Roger. give deep you, XX% I into you how that color Roger, model. for had emerging this And growth is helped follow-up on some year, quick Memory in Peter foundry a much expect much DUV or you my growth Thank mentioned to The grow split think, this dry you correct? at year? that of half DUV how and I for would and year, roughly

is XX%, both about is and said. -- That And yeah. go same I the percentage, what with the increase gave expect Memory correct. in about to That numbers you the up I then we for Logic…

Yeah.

Memory. gave the number EUV I you …and for

come building that’s number up you So, blocks frankly, all need I the think with given there. right the to you

XX%... just And will XX% remind more Memory Yeah. that year-on-year up be around and you up to Logic than

it can so numbers, with you the and out. probably EUV …year-on-year, Yeah. figure then

Very Thank very much. folks. Thank Yeah. you helpful. you

Please Societe Peterc with Aleksander Our go comes next ahead. question Generale. from

Good Hi. Yes. question. for taking thanks afternoon and my Hi.

be from previous then systematic XXXX you Just so now deferred only shipments, way what become more understand Thanks. the you do this very out, impact revenue EUV will going you the of cancels kind new And as things? correct the this this from biggest a a recognized have negligible looking then it that year, but that I and practice should briefly then from that that XXXX little is at would fast take imply it in of correctly forward? hit for on

it think, see Yeah. Aleksander, you I right.

this and So immersion. for also do just but it’s energy, we not

tools year, as practice. So combination be look will there’s about shipment then between be two. and and result it energy €X time which at for least by if install the maybe are relates is quarters because falls can we made a the it’s should billion the delta least try mentioned you try the by impact we And in customer of result three And you, more end two the the going year, the into both that as do this subsequent a as a us for make for the to time acceptance of in as -- installation the those at there. even and immersion we to order lot limit to standard of this year weeks we squeeze get lower, think this at this What to moment to we the try the of out and that QX. and

it expectation what six that’s the that the our mean, end So as would result about is I a And billion. of driving. we €X that, referenced EUV are we tools, of be that year. this so at the amount

year if if do be what I like, the that. work billion. year the that’s and and going can standard without will in quarter see impact, that be on, billion the we the well ourselves we will you subsequent just are are the like can done this for are we efficiency for to to If the can year, field if for we customers, from quarters the leads do quarter by what also think that we about be in that to works and as we appreciated if spillover, into So this the comfortable you next the a and €X customer have is end. Whether are towards. Then the so trying going really our pretty only that driving as then quality we billion you this we in €X to going come, we full to works. also That prove we this last about practice years next for this what lose towards gain, are will into means we have anticipate how only €X That’s on done, last to year. during like, and

years then come think. practice, you the I also for subsequent and in will this then won’t have any impact years be So to indeed the anymore indeed,

this is enough one it’s -- And whether will level significant don’t there in confidence apply to acceptance we a addition the of that systems small Yeah. a, to that that, run into problems field. have we

the factory or say, a probably tool, systems is that type to let’s acceptance you if a traditional four in the do big Veldhoven, the So first of problem that issue, that help test you the of new that first run will the five you just R&D any to can group field. make problem sure moving actually into instead solve

have the would completely tools, product what first probably do introduction, what the we with new I with couple will Roger the that exception on traditional said way. So call of compare we

Thank much. very Okay. you,

next Our question with Evercore. comes Muse go ahead. from C.J. Please

QX, question to take on that, So, that of and calendar And to I of future what on guess, going hear thoughts XXXX you XXXX the to target confidence your morning. the as like the low part right of I and looks your XX% that your guess you exiting I’d first Thank year here going terms Is are number do exit I the you if for Good to guided margins, the at roughly XX%. afternoon. gross taking Good question. that you it provides in use? you what Yeah. to are love model? end outlook? is that

revenue to for in the XX%, if also, the full will get we €X to quarter, year start percentages. for €X as I in Yeah. on with the C.J., first and XX% we side, year. billion will right, sales in we indeed, in want somewhere on because year, And billion so the the year the higher somewhere mentioned, we year, lose have the only side, the somewhere gain

somewhat are gain to we the building. going So

you. are of to QX, tell I going Whether two related. that course, and So, in those be cannot is

it’s little for the So XX% going somewhere year, with that. a start already the an of the beyond Bear course bit we see gross gross too in early on margin me improvement making of margin are predictions to this the XXXX. to

you. Thank guess, bigger regarding picture for visibility. question That’s you, I a helpful. maybe

into, backlog the the a constraints part think how do of guess, out that EUV $X think the of thinking kind guess But had that and coverage you a capacity of about think, supply trillion you ever add need the company, I is obviously semiconductor and I related about confidence I there. kind and have revenue about today XXXX of have highest as you this I obviously, it’s to you growth? you talked just you and market curious, part are how on

Yeah.

happen. we XXXX. the can our it’s EUV question. of fast And good you compared ship I about that, to very give a squeeze, where, but very today, one capacity, to systems, the matter because happen over that look which and I ship shipments time to the expectation than cannot same we like at squeezing as I have still good give we occasions are UV, talked don’t, It’s deep reducing also think I maximum XX% EUV what I technology is I next deep -- what And specifically out number. Everything When systems for will they deep and situation we for will a which And orders, can video, to the installation be fact, it will through UV said in move that, a thing but has times. is part don’t supply XXXX. sure the to shipments and us could UVs in think, I the but in so we can’t give Having potentially demands today, don’t cycle an think will chain, the higher customers our XXXX I thing still than we think, also order, a XX capacity do shortening But expect not go on reduction this would also Yes, so number. make. in around with more our the you systems. all demand, demand, today, my we can XXXX that we and moves it and exact several cycle we so than year as to also higher and will for said time on year. more we do we make. of XXXX, start the significantly in we be currently the it’s do currently what that can

ship today. is currently are cannot beyond to we add that we That XXXX. So planning doing exactly will to means move that now actually what what and capacity we we in XXXX, are need we what

beyond capacity had XXXX that yeah. fully our had think with on, but plan but internally, critical will a the currently for that have we which gone do quarter, yet in we this I decided we chain haven’t suppliers, this supply haven’t we are we

think, So, starting will be to able meet demand be we want that the a to whatever customers XXXX, have. in we I situation

situation know excess in move pushing the into customers as EUV, are we move think I keep a demand what and to the and on constantly capacity demand where to want maximum next to go described our -- year. over we leading-edge don’t immersion the being

of also need But indeed we all critical suppliers probably, gave what on from when -- confirmation XXXX be will taken that be because we get that we the will with are discussing we this and something are an capacity beyond all measures that have decision quarter. will hopefully, indication you next that doing. we our you our all, -- internally have increase taken. to for the already we the I So think which that be is we we above I XX, the EUV

you. Thank helpful. Very

next Deshpande from comes go Please JPMorgan. Our question ahead. with Sandeep

look guided you question sorry, at last and But of Thanks over quarters, for guidance, billion four of sales XXXX you me to to is quarters rate my a the Installed you billion already Hi. I running four €XX last sales. have When at having at Peter, in billion your four-quarter your orders sort I follow-up. Base €XX to run over when add actually. a look are over Management, on. Yeah. your mean, €XX the actually your that

we should you have guidance looking that is do XXXX different or this at in of does or the well, think period we that updated XXXX sort guidance was been that we So how of a ASML? the,

sovereignty, customer see the feel that, be strength confident term. being more demand at like year there into that Well, incentives curves technological actually as the demand as with next for on the only why demand driven top how earliest, the first, push very anywhere That plans the CapEx details build let’s will to capacity their plans drive also the customer and messages discussion, days will can probably, their year, customers the given of very, XXXX. having longer to over in-depth that’s, we at by XXXX. translate you of into will for can be what fast look in there’s on demand, be and the say, which they go we be right And last think know, and around top, And order, President going have globe said yeah. that, only think that XXXX, about comes are of the therefore few significant by on higher. and do will I this let’s but have talking everything they the on short the for longer-term capacity. not the currently don’t our I I our And and you before CapEx a demand in remind

when would question, that today. you we time gave this work for our at looking and but quarter chain. that guidance to to is are And answer, and that this we think, the And that, the is us back see I why said the supply think having that the I of are Now, the a doing maximum gave actually numbers we at we going relook be that in the capacity previous the that that should in we some have also ago, we whether and do order. indeed can adjust that confirmed to then I

to ourselves situation have vis-à-vis our get with comfortable demand the We customers.

means gave at situation, the will world, a to with range into we are yeah, if we and come we you with should that number, and confirmed of we that this okay, where to that needs what size lead XXXX And that, that, say, that key we can have translating are likely meters, the when our concluded have that have terms capacity square looking yeah. be to information. with do back we which confirmed and need with that you will you confirmation, add construction activities, We scenario, to that and VDLs get demand the we when supplier you

Thanks, Peter.

because much been you follow-up business the your new lithography e-beam Just clearly, these this few flourished e-beam take mean, now going tools I on, tool your has mean, one I massively, quick more your shift, to the as release that business slower shipping. you next business to but e-beam have years significant indicated recent has off. in in become have new Is got

you comments can on So make that? any

Yeah.

tool, its the think to I packed X,XXX, close I fact mean, it’s beam is think the a a this actually, been XxX that think I definitely today. the I

So that ship. will

first as a of expectations when have the going tool. we business. that’s looks high And we driver believe to that of We numbers to it. for customer. our for get to I It qualification be our when good yes, sales ship e-beam higher

beam Next fact to our single also that strong business the was very

Thank you very much.

next with Bouvignies Please Francois, is phone comes if your question. unmute, mute, Francois ask from so on please Our may ahead. your UBS. go you question

you now? Can me hear Hi.

can you. I hear Yes.

Yeah. Yeah.

Sorry about that.

had net your And my and High-NA you on with addition, you bookings, did quarter, question back Intel. disclosed High-NA now discussing was Intel today, including the you one you the and another actually of you disclosure order orders release in XXXX, an changed were four now. last in So with

with quarters? going terms in back coming So what is the activity, going in should guidance, your of should have part High-NA, forecast correctly following terms how we expect out so High-NA should, five XXXX if should XXXX? now, about in And we my you of XX think sales I and of your see forward backlog and High-NA forward we more this in moving question more to your of count

Yeah.

XXXX is tool. also which my we comments in introductory tool, the that R&D said the is on the development think EXE:XXXX, which number, the I

of XXXX XXXX. that So through will in be starting shipped it there’s five

a It’s the it’s the received the yeah, tool. one XXXX, High-NA in first So XXXX, this that the one XXXX. order quarter the quarter, that’s first of that for we we --

the But yes, these going to long given that’s of order more indeed for or lead be the there you think, you the activity I tools, But times so expect shipment may XXXX. driven forward, plan expect. going High-NA I XXXX would that. is expect by will

Sandeep you work not I this that piecemeal, Now, it the we say, think of asked you so in question was I connected is give to, I time going will think, that a but XXXX on the transition. that model, size the XXXX model, not High-NA But think really industry the much demands technology let’s XXXX that. and industry. back to the the is in It’s to

I pretty think, it still now, the solid are So plan. looks we the on way

and success success. now. what so I of some the from press is the I front or think at I go see And receiving new we with new tool. optics. this Veldhoven also we it are to we massive productivity. succeeded. doing mirrors And very think significant are new for you this It last can showed a conference performance engineers, execute. sets standards, frame the XXXX, we first lithographic see you step is for we executing. of now, is optics, stance the it the Basically, It of standards the have, of if size just a our would in production terms measuring let’s mean, the a was challenges say, order High-NA for and you we to setting factory engineers of mean quarter, to I we evolutionary bigger is in Low-NA to in going the said overlay the thing which of was imaging big can a in our kind picture

price €XXX significantly at that is will So, over tool the like Roger a million. this conference, said the press very go for

the as the said because is we expect reason scenarios one I because comment Francois, also The than five additional revenue said is an the and recognition at reason Investor we is because five of this have shipments, all product. five, Yeah. XXXX Day, new shipments of there more entirely five. we on not in because

Okay.

hard this cetera. How to therefore, the going to in at testing the predict And going point happen. et it’s out, time is installation to pan cetera, how et is

model. just conservatively, put we said very why five any into that’s So

Okay.

estimate So it’s not before longer recognized with it might shipments. It’s a actually to volume a take pretty bit related or just reference. these are conservative

So we five. that’s put why in

was and concern maybe don’t constraint, Yeah. both. very about on talk clear. highlight Thank quarter, which you That’s believe, just a quick last you, the too follow-up supply And I much supply anymore.

how improving you risk about and the how important we it’s the see think I had that should last constraints it So should we less quarter you now? now? that mean supply and is read

Yeah.

fact you we mean, what I is, if just tough, think are the is I But eased. it hasn’t life that’s doing. it. to adjust

get a fact those because it’s on people in supply chain, sourcing and -- that a buy of to daily it’s basically of make So our life we components. battle the don’t we sure guarantees supply

components those the our microchips layers But is which the shortages, components, supply from Now we are especially different suppliers. consolidate we being actually by bought do, in what chain.

with and scarcity somewhere. giving a got get the or at can actually we managing And do making day gotten what’s any it’s system us type, by many, hundred because center. say, helping consolidated it’s help I It’s don’t into are we phone this. bring manage we to certain or then this or those call by on distributor don’t through think manufacturer. And the semiconductor of can it then, to get I broker that’s them make we many what day. we system a mean, that we those has then components few not So few systems better. we and thousand to by that and And particular chips we classify you us on it how you manage And help that that better the a stock us, able situation just it. a by day sure But the us to we

Thank much. sense. you Make very Okay.

comes question with Scemama ahead. Please from next Our go Didier America. Bank of

year. double you. EUV afternoon, Good couple just gentlemen. for on wanted things I or Thank check to check of Hey. next a

unit, quick got units have Thank the think can the cash the versus can for and follow-up bit have got you to will XXXX least revenue, ship flow? little if And and what a you number what So talk for then, be so understand I your about could be help from the high-NA? XXXX, you six me at do capacity obviously shipment for low you because XXXX on shifting so you. Roger a that

Yeah. Didier, XXXX, XX working Peter a out, year. we pointed capacity we on expect the -- on as on next are -- what for for over

XXXX would XXXX. So do to get the fair into would we few low-NA. going Frankly, from six we a XXXX. continue We from ship into that’s systems have on if go a of benefit also XXXX the

for might you So are we think if able should at But, two output one, the systems. maybe expect drive to to more to gain we more revenue level. in year, I down and same continue next time, net-net, installation

over XX in terms at. I of So think, referenced, number Peter I think to probably the is capacity look that the

to hold to High-NA, be XXXX, end breath it going key to of recognition expect my of first of we wouldn’t In whether XXXX, in -- very, terms the that the small, into but shipment I leads modules have because very the XXXX. at it’s right, in revenue

Roger. Very Understood. clear,

if be full flow for understand first on in what’s us year the when effectively working working fiscal that could expectations cash you cash sort help the you cash half, is XXXX would think I and helpful? normalizes So your amazing Thank QX just cap in flow do cap half, flow you statement free cash the your and roughly, you. free for it second had wondered year. an a exceptional of

Yeah.

So right. are you

cash think and a nothing cash perspective. pretty million. a of last free year year was spectacular flow from million from had I So flow We €X.X €X.X

pretty But was a that’s rate. So exceptional. good that conversion

that. that neutralize payments we was in I expect to the year huge year source of for more would this this it a think of there. exceptional, I more and EUV the intake huge contingent primary driven order and and down primarily by had that’s

are So are would or bit we free somewhere say, for it’s same in look steady assumption to around the at probably to going years come. I guiding cash are XXX% flow development that in but expectation that, growing, the a to state, flow, an free never they still below have think, because we the cash little I the

Yeah.

conversion mean term rate? You cash longer

conversion Cash rate. Yes. Exactly.

Thank you. Excellent.

Please Harchandani with Amit question comes from Citi. next go Our ahead.

your comments have Thank questions about if first you. My back Hello Peter, question, may. I everyone. Amit to Harchandani the capacity Two and made you Citi. from assessing supply. goes

years Are to the doing online? looking how ASML Is geopolitics for how terms you you about you it pursue going there’s adding bigger, sense integration? get build have to at five of the more as top regional diversification? to it the at a a to more in in looking way whole years background, this are to bringing trying are you Just strategically you As you look of capacity thinking this have? next continues get and capacity Are vertical follow-up. XX obviously, strategically I

Yeah.

our been questions. addressing have we you Meeting. we that, that course, this but I Supervisory are at did think already of I is, Board the are we not mean, asking these question because addressing only ourselves,

say, question, would that something to we think think which I avoid that is -- it. try we I integration, I to answer vertical don’t

became Sometimes we I supply supplier. critical supply. the for integration, we and had technology Berliner clear actually a they some with But it. of that succession the that system. had more planning mean very mean, Glas, the I based to at the reasons. at acquired more performance But are the vertical also on that forced particular to do

geopolitical something background growth. sensitive. So geographical of especially more an is at and the not it’s discussions active, clearly, of course, which are you looking is is that but could of way highly more, it Geographical, but say is a reactive ongoing, that it’s against -- the

with to at. talent. know we have will manufacturing that the that that into suppliers provided but could. -- It with we some we we have where say, difficult not giants, where includes that we situation? or talent availability we of best actually yeah, that if and is course, place are areas look be to can conditions -- is are to but might looking go? our issues where the build locations, what’s So, which a currently look competing workforce I also Are going mean can somewhere you us, by would, into other at of you add to more we do capacity, we governments. incentives capacity, at heavily It number the will the significant manufacturing, we be we need workforce of What for put a has best could major but, help players

So, the answer right mean to you we to There give board to come that company, these public. need looking not in that It’s and will in are now go because I significant the these you. finite a this management whenever things X% supervisory we I things is go XX% growth are right, board, to public, we add driver. to we think, capacity. all I all with But is are the think, and and the early the are are too at. need conclusion we discussing

and And as than significantly Peter. have follow-up, talked capacity. being you, unprecedented Thank about higher you an unrelated demand

simulation you CMD the course, year. last your forth scenarios Of put at

terms all the I industry may terms minimize, in what this if of in but you. you risk trends will are of to your double Just call over potential the to are trying customers? ordering, capacity checks positive comes Thank it, know of remain doing the against ordering, discussion what online? from manage you risk secular doing the are with and oversupply your once We cyclical, the side of

that. mean, comment The of our One build Yeah. of cost cost when at capacity, that, our look what still, vast I is and is sales, our sales on thing buy. of can major majority you we Roger

of reasons suppliers build are at do add actually they the than the is Because cost We not fact why ASML is we for are pursuing what outsourcing, our have that capacity that one do. So what vertical of we to integration. are of I the we which actively love basically think, we better sales. minority

supply afraid have nor like, are position that, are some more our either, said other and the not capacity, our having chain, we is is which are we are exactly supplies So, as in same investing most of critical suppliers diversified. of

they are programs of technological But yes, to able is our more we at it’s looking means are incentive will in this customers the listening complete, at more in right. and today, that, we you not situation geopolitical add Asia There with of and risk the capacity. U.S., striving but looking always plans grow. sovereignty, -- expansion are major to for So the where CapEx

Now can and have at our been have, simulation we wrong. at blatantly industry look model looking analysts, we

view. this will only So the the customers end that, do we can growth believe say, to for I we are again one, lead decade. term can numbers the business and do let’s we let’s have I now $X of annual compound think by longer forward, also semiconductor trillion not the look our a or industry the

€XXX over that billion which are time. We created XX now, €XXX means that billion was in years

So we again. to have less it double than XX years just

yeah. So need I will capacity, we think that

is, question These they big, this yeah. could create will fabs it your overcapacity are It’s humongous. well about temporary are very all and Now, scale, be.

the need capacity. when probably and structurally in years, couple term, longer yes, overcapacity, everything is So, timed see of same we you that but

of on are do think we So situation, I as to am want before, a unfortunately, technologies, we should it. should in not I it don’t yeah, my keep we yeah, to And demand, it from be over the year why one supply. concerned, that reason said last do is, of for other. industry, some the the I that sole I have source pushing to we the these

and we situation a overcapacity. customers potential, that together where to what have a of we can responsibility market our We with indeed there carry is create could bit that the supply needs the mean that

the that’s predicting very perhaps with this industry, man. Given as I at answer of rate an are am of old bad okay the growth fact that that. we But an

Peter. you, Thank

ODDO from with comes question next Our Houri Stephane BHF.

I What want size quarter the business, your the you outlook… what the Thank Thank Chinese for Good last just of was Yes. have more you. on you much. everyone. and business? the Chinese very afternoon, what’s your color growth maybe

it. I guess, what I that’s think, in are about business, focus particularly you you China China mean, the domestic business, on I talking are

Yeah.

And was that, and is the then if look expectation base at year, billion company you this the XXXX, it growth. grow about at same last domestic will business, €X.X China as our

grow pace it supply exactly in be you same at exactly the about growing is would okay. business grow environment other would deep which the constraints So as and XX% expect year, China what UV the would will that’s that this for

grow million €X.X approximately So year, year. last to €X.X million this to expected

you was said about service talking are at years? we deep you much. was It UV, And a that it of will Thank still the improving. follow-up is still the do think you three the corporate very When I margin level? think get --

Yeah.

was it XX%. about year last So

think We this to XX take expect to corporate I it so will XX% to and think, really year. same, I And it it until you time about get then level. this get

scale in that I hour But, have on. made more of very becoming obviously, the steps that ultimately, simply we think So the much because demand improving major that’s machine trajectory also EUV. to we efficient, of are

this So we think, the lot from margin. point corporate approximately onward [inaudible] in smaller. XXXX, I But get will a to gross

much. you Thank very

You are welcome.

All right.

We one have for question. last time

If last may Department and you contact were the call caller, free your ASML still Operator, unable to through with have have to on please? please questions, get Investor feel Relations we this question.

go Paribas. So with Ramel BNP for we have last our ahead. Jerome question, Please

can Thank payables Good so is on which Maybe compared purely by just Is the QX over to in us you free come liabilities, short-term of back a billion, Yeah. you. the QX, QX account the last Roger it number afternoon. to question well a year? it increased to €X give QX doubled year. and over flow last last cash for --

is It’s -- it payment. really bit it is not chain, supply right? So That a what No. be our down a the No. that’s is. not would primarily It rough to account payable.

year. the are on looking it an of this what that the it in order of So QX. this a That’s that part XXXX, it’s you and orders, beyond for we end even I really That’s it looking down €X.X is of at payments that’s what what €XX fiscal. and at orders is. At on said. came year significant mean end and point. billion payment of are were billion of you intake down new looking XXXX Again, at

in going are on and money spend building machines wafer to this year. we the which investing that For

Yeah.

that I didn’t get mean, we from nothing. money

Yeah.

Okay.

so… And

Everyone…

be the normalized of of been say it gradually the that has down you done fair most as and to in would course … assume payment XXXX?

Yeah. Exactly.

payments. very So because all this is that’s get we year, why I say a down these special

but you see that’s Next year, you shipments percentage, the payments, why still get down received where in said a already will you also And only before. that the the you you cash I do conversion… will and down year payments would year because get

Yeah.

to below still is company. the this … fact a XXX%, of growing frankly, because XXX%, that

I So think that’s why XXX% longer that drop see in the you the at below point. conversion term, would cash

you very Thank much.

right. All

joining conclude I today. formally to could Operator, you. all you for call, like us ASML, of thank if would behalf you on I’d appreciate the Thank Now it.

This XXXX for quarter all call. now concludes you financial conference the ASML and participating. Thank fourth full year results

lines. You now disconnect may your