ASML Holding(ASML)2020-04-15 18:58Financial Data and Key Metrics Changes - Net sales for Q1 2020 were €2.4 billion, below the original guidance of €3.1 billion to €3.3 billion, primarily due to COVID-19 impact [13] - Net system sales were €1.6 billion, with 73% from Logic and 27% from Memory, indicating continued strength in the Logic business [13] - Gross margin for the quarter was 45.1%, also below original guidance, due to delayed field upgrades and DPV systems revenue related to COVID-19 [18] - Net income in Q1 was €391 million, representing 16% of net sales, resulting in an EPS of €0.93 [18] Business Line Data and Key Metrics Changes - Installed base management sales for the quarter were €857 million, around €100 million lower than guided due to lack of access to machine time and delays in upgrades [14] - System bookings for Q1 were strong at €3.1 billion, including €1.5 billion from 11 EUV systems, with Logic order intake at 66% and Memory at 34% [18] Market Data and Key Metrics Changes - Customer demand has not seen a reduction, with strong order intake continuing, up around 28% from Q4 2019 [19] - Logic customers are ramping their seven and five nanometer nodes, supporting end-market applications like 5G, AI, and high-performance computing [24] - Memory bookings have increased, driven by DPV, while Logic shows a transition from DPV to EUV as customer confidence in EUV technology increases [25] Company Strategy and Development Direction - The company aims to achieve EUV revenue of around €4.5 billion on 35 systems this year, assuming no significant supply-demand risks [27] - Continued investment in future technology roadmaps, including High-NA, is planned to ensure customer support once the situation normalizes [21] - The company is managing cash prudently and has decided not to execute any share buybacks in Q2 2020, while still maintaining a three-year share buyback program of up to €6 billion [20] Management's Comments on Operating Environment and Future Outlook - The management acknowledges the unprecedented challenges posed by the COVID-19 pandemic but remains optimistic about the company's ability to navigate through it [29] - There is significant uncertainty regarding the impact of COVID-19 on global GDP and the company's operations, leading to a decision to refrain from providing formal guidance for Q2 and the full year 2020 [28] - The management emphasizes the importance of flexibility in the supply chain and the ongoing strong demand for leading-edge technology [64] Other Important Information - The company has implemented measures to limit workforce growth and is postponing non-business critical OpEx and CapEx while continuing to hire for critical positions [21] - A total dividend of €2.40 per ordinary share for 2019 has been proposed, with a final dividend payment of €1.35 to be paid in Q2, representing a 14% increase compared to the 2018 dividend [22] Q&A Session Summary Question: Order strength in Q1 - The order strength was primarily driven by Logic, with no significant pull-ins or accelerations noted, confirming the technology roadmap [34] Question: Impact of social distancing on gross margin - The company has managed absenteeism and adjusted shift patterns to maintain productivity, indicating no expected impact on the 40% gross margin target [35] Question: Support for suppliers - The company is managing suppliers on a day-to-day basis and is prepared to provide support if necessary, including potential prepayments [39] Question: R&D operations during COVID-19 - R&D facilities remain operational with strict regulations, and productivity has been maintained with a significant portion of engineers working from home [42] Question: Memory bookings driven by NAND or DRAM - The strong memory bookings are primarily driven by DRAM, with a cautious trend of increased utilization noted [46] Question: Services revenue outlook - The company expects to recover lost revenue from Q1 in Q2, with no significant anomalies anticipated in the services business [48] Question: EUV installation plans - The company is assessing the ability to continue EUV installations at customer sites, with teams in place to ensure progress [82]