ASML reports €3.3 billion net sales at 48.2% gross margin in Q2 2020

CEO statement and outlook

"Our second-quarter sales came in at €3.3 billion, a strong growth of over 35% compared to Q1. The gross margin came in at 48.2%, a significant improvement compared to Q1, primarily due to an improvement of the EUV installed base gross margin and the DUV mix. We shipped nine EUV systems and were able to recognize revenue for seven systems in the second quarter. The deferred revenue of four EUV systems that shipped in the first half of the year will be recognized after site acceptance, expected in the second half of the year. Our Q2 net bookings came in at €1.1 billion, including €461 million from EUV systems (three units).

"Thanks to the commitment and engagement of our people, we were able to continue our business and serve our customers during the second quarter. Our operational capabilities are largely back to normal now, but we will remain vigilant as COVID-19 is not yet behind us.

"We expect Q3 revenue between €3.6 billion and €3.8 billion with a gross margin between 47% and 48%, R&D costs of around €545 million and SG&A costs of around €140 million. Estimated annualized effective tax rate is expected to be around 14% for 2020. Our 2020 growth expectations are largely unchanged relative to our view at the start of the year," said ASML President and Chief Executive Officer Peter Wennink.

ASML to acquire Berliner Glas

ASML has agreed to acquire all shares of Berliner Glas, a privately held manufacturer of ceramic and optical modules, which are important to support the future roadmap for our EUV and DUV products. The acquisition will be completed once all the necessary regulatory approvals have been obtained, which is expected before the end of 2020. Financial details of the transaction will not be disclosed.

Products and business highlights

• In our DUV lithography business, we shipped the first NXT:1470 to a customer. This is the first dry NXT system, building on the immersion platform, with improvements in matched machine overlay (< 4.0 nm), productivity (> 300 wafers per hour) and footprint.

 

• Our Applications business shipped the first-generation multibeam inspection system ‘eScan 1000’, targeted for 5 nm nodes and beyond. The HMI eScan 1000 demonstrated successful multibeam operation, simultaneously scanning with nine beams. The eScan 1000 will increase throughput up to 600% compared to single e-beam inspection tools for targeted in-line defect inspection applications.

 

• In our EUV business, multiple NXE:3400C systems were upgraded at customers with the modular vessel, within the planned install time. We achieved a successful introduction of in-line tin refill on those systems in support of our availability improvement roadmap.

Dividend and share buyback program update

In Q2, ASML paid a final dividend of €1.35 per ordinary share, or €565 million. Together with the interim dividend paid in 2019, this results in a total dividend for 2019 of €2.40 per ordinary share.

As part of its financial policy to return excess cash to its shareholders through growing annualized dividends and regularly timed share buybacks, ASML announced a new three-year share buyback program in January 2020, to be executed within the 2020–2022 time frame. As part of this program ASML intends to purchase shares up to €6 billion, which includes a total of up to 0.4 million shares to cover employee share plans. ASML intends to cancel the remainder of the shares repurchased. To date, €507 million worth of shares has been repurchased under the current program.

Quarterly video interview, investor and media conference call

With this press release, ASML has published a video interview in which CEO Peter Wennink discusses the Q2 2020 results. A conference call for investors and media will be hosted by CEO Peter Wennink and CFO Roger Dassen on July 15, 2020 at 15:00 Central European Time / 09:00 US Eastern Time. All details can be found on the ASML Q2 2020 results page.