ASML exceeds €9 billion net sales and €2 billion net income in 2017

CEO statement

"ASML generated record sales and net income in 2017, helped by a strong fourth quarter. Due to industry strength, some customers requested earlier shipments of their lithography systems, which we were able to accommodate. Earlier-than-expected revenue recognition of two Extreme Ultraviolet (EUV) systems contributed to the strong performance in the fourth quarter as well. With EUV sales crossing the 1.1 billion euro mark, 2017 was the year in which preparations for inserting EUV into high-volume chip manufacturing shifted into a higher gear. This is underlined by orders for 10 more EUV systems in the fourth quarter. Sales of our Holistic Lithography and Installed Base Management products also showed significant growth in 2017," ASML President and Chief Executive Officer Peter Wennink said.

 

"These results reflect our technology leadership and the success of our comprehensive product portfolio as well as the strong growth fundamentals in our industry, which enable the continued innovation in personal electronics, artificial intelligence, cloud computing and mobility. For 2018 we expect continued solid growth of sales and profitability."

 

2017 product and business highlights

• With a total of 161 new DUV systems shipped in 2017, a 21% increase from 2016, ASML's supply chain and factories were capable of significantly boosting output in reaction to increased customer demand, supporting fast ramps of advanced nodes in memory and logic. We also provided three customers with early-access versions of the TWINSCAN NXT:2000i, our most advanced immersion lithography system, for process development of next node devices. As a sign of the continuously increasing maturity of the NXT platform, the NXT:2000i system meets or exceeds all of its performance targets. For 3D NAND customers, we expanded our options portfolio to improve focus performance on high-topography wafers and handle strongly-warped wafers, both of which are typical for this application.
• Our Holistic Lithography product portfolio showed growth in all product categories: computational lithography software products, metrology and inspection systems and process window control software products. ASML also broadened its product offering with the creation of an e-beam-based pattern fidelity metrology system, ePfm5, and shipped the first HMI eXplore 6000 EUV reticle defect inspection system.
• ASML shipped 10 EUV systems to multiple customers in support of their plans to use the technology in high-volume manufacturing starting in 2018 and 2019, up from 4 shipments in 2016. ASML also demonstrated a number of technology milestones, achieving a throughput of 125 wafers per hour, demonstrating a full-size, defect-free EUV pellicle, and achieving EUV-to-DUV immersion overlay of 2 nanometers, which is in line with the requirement for the 5 nanometer logic node.
• Installed Base Management sales surpassed EUR 2.6 billion in 2017, an increase of more than 25% over the prior year.
• ASML continued to support China's expanding semiconductor industry. Our system sales to China grew by more than 20 percent in 2017. Alongside shipments to mainland fabs operated by non-Chinese customers, we are planning to ship to five domestic Chinese customers in 2018.

Outlook

For the first-quarter of 2018, ASML expects net sales around EUR 2.2 billion, a gross margin between 47% and 48%, R&D costs of about EUR 350 million, SG&A costs of about EUR 115 million. Our target effective annualized tax rate is around 14%.

 

Dividend proposal

ASML will submit a proposal to the 2018 Annual General Meeting of Shareholders to declare a dividend in respect of 2017 of EUR 1.40 per ordinary share (for a total amount of approximately EUR 600 million), compared with a dividend of EUR 1.20 per ordinary share paid in respect of 2016.

 

New share buyback program

As part of ASML's financial policy to return excess cash to shareholders through dividends and regularly timed share buybacks, ASML announces a new share buyback program, to be executed within the 2018–2019 time frame. As part of this program, ASML intends to purchase shares up to EUR 2.5 billion. ASML intends to cancel these shares after repurchase, with the exception of up to 2.4 million shares which will be used to cover employee share plans. This buyback program will start on January 18, 2018. The share buyback program will be executed within the limitations of the existing authority granted by the Annual General Meeting of shareholders (AGM) on April 26, 2017 and of the authority granted by future AGMs. The share buyback program may be suspended, modified or discontinued at any time. All transactions under this program will be published on ASML's website on a weekly basis.

 

The total amount repurchased under the 2016–2017 program, which was concluded in December 2017, was EUR 900 million, for which ASML purchased 8.2 million of its shares at an average price of EUR 109.33 per share.

 

Press conference and investor conference call

CEO Peter Wennink and CFO Wolfgang Nickl will host a press conference at 11:00 AM Central European Time, which will be webcast live on www.asml.com.

 

A conference call for investors and media will be hosted by CEO Peter Wennink and CFO Wolfgang Nickl at 15:00 Central European Time / 09:00 AM U.S. Eastern time. To register for the call and receive dial-in information, go to the Investors section of the website. Listen-only access is also available via www.asml.com.

 

2017 annual reports

ASML will publish its 2017 Integrated Report based on US GAAP and its 2017 Integrated Report based on IFRS on February 7, 2018. The reports will be published on our website at www.asml.com.

 

_{1) As of January 1, 2017, ASML presents net sales with respect to metrology and inspection systems as part of net system sales instead of Installed Base Management sales. The comparative numbers have been adjusted to reflect this change in accounting policy.}

_{2) Installed Base Management sales equals our net service and field option sales.}

_{3) Net bookings and Systems backlog are calculated without giving effect to the impact of adopting the new Revenue Recognition Standard (ASC 606) and Lease Standard (ASC 842) which ASML will adopt as of January 1, 2018.}

_{A complete summary of US GAAP Consolidated Statements of Operations is published on www.asml.com.}