ASML Holding N.V. (ASML)

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ASML Holding N.V. (ASML)

Credit Suisse 2012 Technology Conference Call

November 27, 2012 5:30 pm ET


Craig DeYoung – Vice President, Investor Relations


Satya Kumar – Credit Suisse


Satya Kumar – Credit Suisse

Our next presentation is from ASML. From ASML, we have Craig DeYoung, VP of Investor Relations, and also Pete Convertito from Investor Relations. Craig’s going to make a presentation. We’re going to save the bulk of the questions to a breakout. There will be a breakout. The breakout will be in Room G, but there will be a few minutes at the end that Craig’s promised for folks in this room who are not going to attend the breakout.

With that, let me turn it over to Craig.

Craig DeYoung

Yeah, thank you, Satya. Thanks, everybody, for your interest and coming this afternoon. I’m going to try to kind of go through this quickly, but this does anticipate hopefully a lot of your questions. So I thought we’d get through this, and then, as Satya said, leave a few minutes at the end for any other questions.

Got a big, long Safe Harbor now, given the fact that we’re involved in an acquisition, so I won’t read it all to you, but there, it is what it is. Just a quick business summary, talk a little bit about the merger agreement with Cymer, a business update, and then our environment that we’re in, little bit of technology status, and then an outlook. So this is, again, you’re used to this, this is our normal template for the quarterly results, but we’ve indicated here total revenue at about €4.7 billion for the year given our €1 billion, roughly €1 billion guidance in the fourth quarter sorry.

So I think it’s interesting to note for the moment that this will be our second highest revenue year in our history, so it’s not a bad year for us at all. Just by way of where our business is going to come from at least over the next six months 75% or 76% of our backlog is deliverable in the next six months. You see that down in the lower left-hand corner. We always give you that as a measure of the level of certainty that we have in the backlog.

An interesting breakdown. We still have, I think it’s kind of curious 20% of our backlog are almost €0.25 in backlog in both NAND and DRAM, so we are, even in this environment, delivering small quantities across at least three customers in this particular space. We expect that, a maintenance level of business in memory, going forward. Foundry is at foundry in idea, meaning logic total obviously is dominating the end used pie charts here in terms of the backlog, and we expect that to continue.

Just to remind you that we’re involved here in a reverse bid capital payout as it relates to our co-investment program, but we’re also in the background doing €160 million worth of share buyback. This shows the value of the buyback to date. So we announced a year ago in January a €1.13 billion buyback, and we’re still executing on the final portion of that. And again, this quarter it will be €160 million, and that buyback program will be complete at that point in time.

Our cash return policy remains the same. Everything over gross cash of €2 billion will return to investors through a combination of dividends and share buybacks. This is a wordy document, but I wanted this here for the record. We get a lot of questions about the status of the co-investment program. So just to remind you, we have three new investors, Intel, Samsung, and TSMC, and we’ve received about €3.9 billion in share purchases from them. Along with that, we’ve gotten a commitment for €1.83 billion in R&D investment over a five year period.

Actually, as we speak, we’re determining what the incremental spend will be based on their contribution for next year. We’ll be announcing the details of that probably we will with our fourth quarter results, again what the incremental spend will be and what particular projects it will be against in order to meet the needs and requirements, desires of these three co-investors.

We’re proceeding now, as I mentioned, with the capital repayment reverse split, so we will be paying for every €9.18 per share. Translated today, the rate was set – I don’t remember, Pete, I don’t know if you remember what it is, but the DR Group from JPMorgan put out an announcement today. So those of you that hold New York shares will be paid in dollars at the conversion rate that was announced today. So if you have trouble finding that, contact myself or Pete, and we’d be happy to send that to you.

And again all the record dates and ex-dates have been announced, but we’re in the midst of it. It is a little bit complicated in that the ex-date for the ordinary shares was Monday, and the ex-date for the New York shares, based on the way that the two exchanges operate and operate differently is a different date, and it’s actually midnight the 28 of this month, just for your information.

Again all of that is available also through JPMorgan, who is our depository receipt manager. So we’re on our way doing that. I think by December 3, it will be done. The share count going into the co-investment program and coming out will be the same at about 410 million shares.

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