ASML_Deep dive into 2024 annual report

ASML Annual Report 2024 Summary Company Overview - Company: ASML - Industry: Semiconductors - Market Cap: €255 billion / US$276 billion - 12-month Rating: Neutral - 12-month Price Target: €740.00 - Current Price (as of March 10, 2025): €639.00 Key Financial Metrics - 2024 Revenues: €28.263 billion, up from €27.559 billion in 2023 [6] - 2024 EBIT: €9.063 billion, slightly down from €9.082 billion in 2023 [6] - 2024 Net Earnings: €7.395 billion, down from €7.681 billion in 2023 [6] - 2024 EPS: €18.79, down from €19.49 in 2023 [8] - 2024 R&D Expenditure: €4.3 billion, up from €4 billion in 2023 [5] - 2024 Dividend per Share: €6.40, up from €6.10 in 2023 [6] Performance Obligations - 2024 Performance Obligations: €43 billion, down from €45 billion in 2023 [2] - Percentage of Revenue Recognized in Next 12 Months: 59%, covering 79% of 2025 guidance [2][18] - Decline in Coverage of Year-Ahead Guidance: From below 93% in 2023 to 79% in 2024 [2][19] Revenue Growth and Market Dynamics - China Revenue: Increased to 36% of group revenues in 2024 from 26% in 2023, with a 48% year-over-year growth in service revenue [3][12] - Product Sales in China: Rose to €9 billion in 2024 from €6.4 billion in 2023 [12] - Service Revenue in China: Increased to €1.2 billion in 2024 from €0.8 billion in 2023 [12] Inventory and Supply Chain - Inventory Levels: Increased to €10.9 billion in 2024 from €8.9 billion in 2023, with inventory days rising from 251 to 289 [4][44] - Hiring Trends: Slowed down with 2,400 new payroll employees in 2024, down from higher growth rates in previous years [28] R&D and Innovation - R&D Employees: Increased to 16,000 in 2024 from 15,600 in 2023 [5] - R&D Spend per Employee: Increased from €255,000 in 2023 to €269,000 in 2024 [5] - Patents Held: Grew by approximately 2% year-over-year to over 17,400 [25] Energy Efficiency and ESG Metrics - EUV Systems Energy Consumption: Reduced by approximately 50% per wafer pass since 2018, with plans for further reductions by 2027 [46] - ESG Considerations: Improvements in energy efficiency are expected to enhance cost of ownership and support EUV adoption [46] Geopolitical and Regulatory Environment - Export Control Restrictions: Increased list of Chinese entities impacted by export controls, affecting sales and operations [16][17] - Compliance Commitment: ASML remains committed to adhering to all applicable laws and regulations regarding exports [16] Market Outlook - Semiconductor Market Forecast: Expected to reach $679 billion in 2025, down from previous estimates of $721 billion [10] - Long-term Growth: Projected to reach $1,051 billion by 2030 [10] Conclusion - ASML continues to demonstrate strong operational quality and financial performance despite short-term challenges and geopolitical risks. The company's focus on R&D and energy efficiency positions it well for future growth in the semiconductor industry.