ASML reports 2000 annual results
Press release - Veldhoven, the Netherlands, January 18, 2001
ASM Lithography Holding NV (ASML) today reported its annual results for the year 2000.
In the year 2000, ASML produced growth records for sales, earnings and order intake, gained significant new customers and launched its first 300 mm product TWINSCAN.
ASML realized net sales of €2,184 million for the year ended December 31, 2000, compared to net sales of €1,197 million in 1999. Unit shipments of ASML's systems were 368 in 2000, of which 264 were Step & Scan systems (or scanners ) and 104 were Step & Repeat systems (or wafer steppers ). Of the 368 units, 38 were used and refurbished. This compares to 217 units shipped in the same period last year, consisting of 152 scanners and 65 wafer steppers, of which 22 were used and refurbished.
In addition to the increased number of unit shipments in 2000 versus 1999, net sales were strengthened due to an increase in the average selling price (by approximately 7%) for ASML's new systems. In the second half of 2000, ASML shipped its first TWINSCAN 300 mm systems.
Net income and gross margin
Net income for the year ended December 31, 2000, amounted to €347 million or €0.83 per share (fully diluted income per share €0.80), compared to € 81 million or €0.19 basic and fully diluted income per share in 1999. As expected, net income for 2000 reflects the strong demand ASML experienced during the year. In addition to the increased business volume, the increase in net profit was caused by significantly improved gross margins on product sales.
Overall gross margin in 2000 was 41.1% compared to 33.4% in 1999. Adjusted for the gross margin on used system sales, which can fluctuate significantly, and the margin on service sales, the gross margin of new systems increased from 33.1% in 1999 to 42.9% in 2000. Cost control measures, as well as learning curve benefits at ASML's production site and in its supply chain, together with the improved utilization rates that accompanied ASML's higher sales volumes, led to lower cost of sales in 2000. By comparison, gross margin in 1999 had been negatively affected by significantly higher costs for production and the introduction of newly developed products. Sales and cost of sales are primarily denominated in euros, thus mitigating the effect of exchange rate fluctuations on the gross margin. Operating Expenses Research and development expenses amounted to €236 million (1999: €174 million) reflecting the company's continuing development efforts focused on the introduction of its new 300 mm TWINSCAN family and next optical and post optical lithography solutions. Research and development credits decreased by €17 million to €19 million. This decrease is a direct result of a realignment of subsidy priorities within the European technology subsidy agencies. Selling, general and administrative expenses increased by €48 million to €188 million for the period to December 31, 2000. Customer support costs, primarily increased training and buildup of support not directly related to service sales, accounted for approximately 20% of this increase. The remainder of the increase represents the infrastructure costs (IT, facilities, human resources) in support of higher business volumes.
To cope with its growth, ASML was able to attract almost 1,400 people, increasing its number of employees from 2,983 at year-end 1999 to 4,377 at December 31, 2000. This increase occurred mainly in the areas of customer support, manufacturing, and research and development.
Order intake and backlog
In the year 2000, orders for 464 systems were received, compared to orders for 325 systems in 1999. This order intake and shipments of systems in 2000 resulted in a backlog of 255 systems at December 31, 2000 (159 units at December 31, 1999). This backlog includes 23 TWINSCAN systems. The value of the order book amounted to €1,751 million, compared to €968 million at the end of 1999. At the end of June 30, 2000 the backlog was 207 units with a value of €1,248 million.
Commenting on the results Doug Dunn, ASML's CEO said: "The first year of this millennium was a year in which ASML delivered on many fronts. Our results produced several growth records, notably sales, earnings and orders. We have launched our first 300 mm product, TWINSCAN. This product heralds the beginning of a new chapter in the growth of the company, incorporating many new concepts and features. This will take us well into this decade. We received our first ever order from Japan and shipped our first system to this important market. As reported, we have signed a strategically important agreement to merge with the Silicon Valley Group (SVG) to further strengthen our business and provide the investment necessary to develop the next generation of technologies. Consummation of the merger remains subject to approval by SVG's stockholders, other US regulatory approvals and other customary closing conditions. Subject to the aforementioned, the merger is expected to close in early 2001."
Doug Dunn further commented, "In 2000, we saw customer demand accelerate beyond previous expectations, creating pressure on our production capacity and increasingly, on the capacity of our supply chain. We have seen customer demand soften over the last two months, a trend that will be closely monitored. However, the current situation is that customer demand still exceeds ASML's capacity for 2001, which is higher than the output for the year 2000. In the coming months the development of our customer's business may give a clearer indication on the direction of this trend and on the expectations for the full year 2001. Despite the current softening in the IC industry, we see unchanged strong demand for leading edge products, such as our 300 mm TWINSCAN platform, 193 nm and advanced 248 nm DUV tools. The semiconductor industry will continue to be a high-growth industry in the medium and long term. We are well positioned to play a leading role in serving the needs of this dynamic industry."
ASML, founded in 1984, is a world leader in advanced lithography systems that are essential in the fabrication of integrated circuits. The company is publicly traded on both the Amsterdam Exchange and on the Nasdaq Stock Market under the symbol 'ASML'. Visit the company's website at www.asml.com for more information.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Except for historical information, the matters discussed in this news release that may be considered forward-looking statements may be subject to certain risks and uncertainties that could cause the actual results to differ materially from those projected, including uncertainties in the market, pricing competition, procurement and manufacturing efficiencies, and other risks detailed from time to time in reports filed by the Company with the Securities and Exchange Commission. The Company assumes no obligation to update the information in this release.
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