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Press release - Veldhoven, the Netherlands, July 5, 2001
ASML Holding NV (Euronext Amsterdam NV and NASDAQ: ASML) announced today that it expects to report a net loss for its combined business of between €95 and €105 million for the first six months ending June 30, 2001. The reported results will consist of the results of ASML's historical operations ('ASML Europe') and those of the former Silicon Valley Group Inc. (now, 'ASML USA') presented on a pooled basis.
ASML completed its acquisition of Silicon Valley Group Inc. on May 21, 2001. ASML confirmed its earlier comments that it expects at least a break-even result for ASML Europe for the first half, before one-time SVG merger and acquisition costs. These costs, incurred by both companies, will be approximately €50 million, which is higher than the previously announced €40 million due to unforeseen additional costs, including those relating to delays in completing the transaction. Prior to the acquisition, SVG had indicated revenues for the quarter ending June 30 would decline by a range of minus 30% to -40% quarter-on-quarter. Currently, ASML expects that the revenue decline for the second quarter for ASML USA will exceed the 40% range, resulting in a net loss for ASML USA for the first half of 2001.
Furthermore, order push-outs and cancellations resulted in a sudden and sharp decline in the order backlog and shipments in the second quarter. These had a specific impact on the backlog for mature lithography tools, leading to substantial excess inventory balances. Based on its sales and market forecast for these tools, ASML USA will incur obsolescence costs on the order of approximately $50 million. Over the past month, ASML's customers have indicated that their need for further capacity additions in 2001 has diminished on the back of a continued weakening of semiconductor demand. In light of this trend, the outlook for this year is still very uncertain and could bring the total output for ASML Europe below 230 systems. The outlook for ASML USA is still under review.
Doug Dunn, ASML's president and CEO, said: "As a result of the merger, we will present the figures of ASML and the former SVG group for the first time on a pooled basis, using comparable reporting periods. This means the report on our new company will incorporate results from before May 21 , the date we completed the transaction. During our operational reviews, it has become clear that our new ASML USA operation was hard hit by the downturn in the industry during the second quarter. Especially in the lithography operation in Wilton, we have experienced a decline in orders for more mature technology. Combined with our market forecast for such systems this has created excess inventory and considerable obsolescence risks that will impact our first half year results. On the market situation, recent comments from our customers about their Q2 and Q3 outlook lead us to believe that a market recovery in Q4 is more and more unlikely. As a consequence, our customers are hesitant to commit to capital expenditure not necessary for their current business. This means that this year's demand for our mainstream products could be lower than previously anticipated. However, we want to confirm the ongoing strong market demand for all of our newest leading-edge products: PAS 5500/800 DUV (248 nm), PAS 5500/1100 (193 nm), Micrascan V (193 nm) and TWINSCAN® (300 mm), demonstrating that investments in technology remain a priority for our customers.
"To adjust our business to the current status of the industry, we have implemented additional programs across all divisions to reduce costs and save cash. This includes measures relating to discretionary spending, staffing levels and capital expenditure plans", Doug Dunn added.
ASML will report its first half year results on July 18, 2001, and will then organize a conference call to answer further questions and give further detailed clarifications.
ASML, founded in 1984, is a leading provider of advanced lithography, track and thermal systems that are essential in the fabrication of integrated circuits. The company is publicly traded on both the Euronext Amsterdam NV and on the Nasdaq Stock Market under the symbol 'ASML'.
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 are be subject to risks and uncertainties that could cause the actual results to differ materially from those projected These include uncertainties in market demand, pricing competition, our ability to realize 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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