ASML reports EUR 2.6 billion sales at 43.0% gross margin in Q2

¹Installed Base Management sales equals our net service and field option sales.

Numbers have been rounded for readers' convenience. A complete summary of US GAAP Consolidated Statements of Operations is published on www.asml.com.

CEO statement

"Our second-quarter sales came in within guidance and the gross margin came in above guidance, helped by improved EUV manufacturing results and higher field upgrade sales, which more than compensates the negative mix effect in comparison with Q1.

"For the remainder of the year we see further weakness in Memory, while Logic looks stronger. We expect that the increased demand in Logic will compensate for the decreased demand in Memory. The additional growth in Logic is driven by accelerated investments in 7 nm nodes and beyond.

"We received ten orders for EUV systems during the second quarter, some of which are slated for use in the production of DRAM devices.

"Our 2019 total sales view remains unchanged and we continue to see 2019 as a growth year," said ASML President and Chief Executive Officer Peter Wennink.

Q2 2019 product and business highlights

• For EUV, on the NXE:3400C, we recently demonstrated >170 wafers per hour at ASML as well as >2,000 wafers per day under customer memory production conditions.

• ASML and Mitsui Chemicals have agreed that ASML will license the EUV pellicle assembly technology to Mitsui Chemicals. Mitsui Chemicals is able to assemble and sell pellicles in high volume to our lithography customers. In parallel, ASML will continue to develop next generations of pellicle membranes with its partners, which is expected to enable improved performance of EUV pellicles.

Outlook

For the third quarter of 2019, ASML expects net sales around EUR 3.0 billion, and a gross margin of between 43 percent and 44 percent. ASML also expects R&D costs of around EUR 495 million, and SG&A costs of around EUR 125 million. Our estimated annualized effective tax rate is around 9 percent for 2019.

Update share buyback program

As part of ASML’s financial policy to return excess cash to shareholders through dividends and regularly timed share buybacks, in January 2018 ASML announced its intention to purchase up to EUR 2.5 billion of shares, to be executed within the 2018–2019 time frame. 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.

Through June 30, 2019, ASML has acquired 7.5 million shares under this program for a total consideration of EUR 1.2 billion.

The current program may be suspended, modified or discontinued at any time. All transactions under this program are published on ASML’s website (www.asml.com/en/investors) on a weekly basis.

Quarterly video interview and investor and media conference call

With this press release, ASML has published a video interview in which CEO Peter Wennink discusses the Q2 2019 results, which can be viewed on www.asml.com.

A conference call for investors and media will be hosted by CEO Peter Wennink and CFO Roger Dassen on July 17, 2019 at 15:00 Central European Time / 09:00 US Eastern Time. To register for the call and to receive dial-in information, go to https://www.asml.com/en/investors/financial-results/q2-2019. Listen-only access is also available via www.asml.com.