ASML Holding(ASML)2020-01-22 20:15Financial Data and Key Metrics Changes - Q4 2019 net sales were EUR4 billion, with net system sales of EUR3.1 billion, primarily driven by Logic at 83% and Memory at 17% [8][9] - Gross margin for Q4 was 48.1%, while net income was EUR1.134 billion, representing 28.1% of net sales, resulting in an EPS of EUR2.70 [9][10] - For the full year 2019, net sales grew 8% to EUR11.8 billion, with net income of EUR2.6 billion and an EPS of EUR6.16 [10][11] - The company expects Q1 2020 net sales between EUR3.1 billion and EUR3.3 billion, with a gross margin of 46% to 47% [11] Business Line Data and Key Metrics Changes - EUV system sales in Q4 were EUR922 million from 8 shipments, with Installed Base Management sales at EUR906 million [8][9] - Full year 2019 saw EUV orders of EUR6.2 billion, over 50% of total bookings, reflecting strong demand for EUV technology [10] - Installed Base Management sales for 2019 were EUR2.8 billion, showing a small increase compared to the previous year [10] Market Data and Key Metrics Changes - Q4 system bookings totaled EUR2.4 billion, with Logic order intake at 79% and Memory at 21% [9] - Management noted signs of demand recovery in the Memory market, with expectations for stronger litho equipment demand in the second half of 2020 [15][18] Company Strategy and Development Direction - The company anticipates double-digit growth in both sales and profitability for 2020, driven by EUV and installed base business [14] - Major innovation drivers include AI, 5G, high-performance computing, and big data, which are expected to fuel demand for leading-edge Logic [14][19] - A three-year share buyback program of up to EUR6 billion is planned for 2020 through 2022 [13] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of the Memory market and expects stronger demand for lithography equipment in the second half of 2020 [15][18] - The company is focused on reducing cycle times to meet expected strong demand for EUV systems, with plans for 35 systems in 2020 [17][46] - Management highlighted that the backlog for EUV systems is healthy, indicating strong customer commitment [23] Other Important Information - The company plans to declare a dividend of EUR2.40 per ordinary share for 2019, with a final dividend of EUR1.35 to be paid in Q2 2020 [12] - R&D expenses for Q1 2020 are expected to be around EUR550 million, with SG&A at EUR140 million [11][50] Q&A Session Summary Question: EUV manufacturing capacity and backlog - Management confirmed that the backlog will reflect the expected EUV capacity for 2021, with healthy order intake [23] Question: Memory market recovery and order timing - Management indicated that orders for Memory equipment are expected to come in Q2, with a return to normal supply-demand balance anticipated in the first half of 2020 [26][27] Question: Installed Base Management business outlook - Management expects a 20% increase over last year, estimating approximately EUR3.4 billion for the full year [29] Question: Gross margins and EUV shipments - Management projected EUV gross margins to improve to about 40% in 2020, with expectations for overall gross margins to reach 50% in the future [32][39] Question: Demand drivers for EUV - Management noted that increased layer counts and customer confidence in EUV technology are driving demand [67] Question: Demand from indigenous customers in China - Management stated that demand from China is on target, especially in the memory space, with no downside observed [69]