Q1 2024 ASML Holding NV Earnings Call - Pre-Recorded

April 17, 2024

Roger Dassen: Order came in at EUR 5.3 billion, included in there EUR 1.3 billion for installed base business. That EUR 5.3 billion was, you know, smack in the middle of the guidance that we provided last quarter. As to gross margin, that came in at 51%. 51% was better than what we guided. A couple of reasons. First, that there was some mix effects. There was a bit more immersion in EUV in there in comparison to the dry business. There were also some one-off effects in there that drove up the gross margin to 51%. Net income for the quarter at EUR 1.2 billion.

Billion included in there $1 3 billion for installed base business that five point prebuilt. He was you know smack in the middle of the guidance that we provided last set last quarter.

As to gross margin that came in at 51%, 51% was better than what we are what we guide at a couple of reasons first of there were some mix effects there was a bit more immersion and UV in there in comparison to the two dry business.

Unknown Executive: There were also some one-off effects in there that drove up the gross margin to 51%, and net income for the quarter was 1.2 billion.

So there were also some one off effects in there that drove up the gross margin to 251% and net income for the quarter at 1.2 billion.

Roger Dassen: In terms of order intake, the order intake came in at EUR 3.6 billion, included in there EUR 656 million for EUV. There's been quite some speculation, I have to say, around, you know, around the order intake for ASML. It may be good to make a few comments on the order intake and also how, you know, how people might wanna look at that on a go-forward basis. First off, I think it's important to recognize that the order intake over the past six months, so if you take the Q4 and the Q1 order intake together, you're looking at nearly EUR 13 billion, which I think is a pretty significant number.

In terms of in terms of order intake. The order intake came in at 3.6 billion included in their 656 million for a for EV.

Unknown Executive: In terms of order intake, the order intake came in at $3.6 billion, including $656 million for EUV. There's been quite some speculation, I have to say, around the order intake for ASML. So it's maybe good to make a few comments on the order intake and also how people might want to look at that on a go-forward basis. So first of all, I think it's important to recognize that the order intake over the past six months, so if you take the Q4 and the Q1 order intake together, you're looking at nearly 13 billion, which I think is a pretty significant number. I think people have recognized by now that the order intake process is typically quite lumpy.

Speaker Change: That's been quite some speculation I have to say or onto you know around the the the order intake for four for ASML. So they would be good to make a few comments on the on the order intake and also how you know how how people might want to look at that on a go forward basis. So.

Speaker Change: First of all I think it's important to recognize that the order intake over the past six months. So if you take the Q4 and Q1 order intake together youre looking at nearly 13 billion, which I think is there.

Speaker Change: Pretty significant a pretty significant number I think people are recognized by now that the order intake process typically are quite lumpy.

Roger Dassen: I think people have recognized by now that the order intake process typically quite lumpy. I think it's good to also look a little bit at what we need in order to get to the different scenarios that have been articulated for 2025. Maybe bring back to people's mind in the Investor Day for 2022, we were looking at different scenarios for revenue for 2025. There was a bandwidth between EUR 30 and 40 billion for the 2025 net sales.

Speaker Change: But I think it's good to also look a little bit at what do we need in order to get to the the different scenarios that have been articulated for 2020 five.

Unknown Executive: But I think it's good to also look a little bit at what we need in order to get to the different scenarios that have been articulated for 2025. So maybe bring back to people's mind that, at the investor day for 2022, we were looking at different scenarios for revenue for 2025, and there was a bandwidth between 30 and 40 billion for 2025 net sales. And then if you try to look at it from that vantage point, if you try to look at the backlog that we have today, the question then is, if you want to get, let's say, to the midpoint of that bandwidth that we provided, so the 35 billion, what do you still need?

Speaker Change: So maybe bring back to People's mind in the Investor day for 'twenty 'twenty. Two we were looking at different scenarios for the for our revenue for 2025.

Speaker Change: And it was bandwidth between 30 and $40 billion.

Speaker Change: For the 2025, our net to net sales.

Roger Dassen: If you try to look at it from that vantage point, if you try to look at the backlog that we have today, the question then is, if you wanna get, let's say, to the midpoint of that bandwidth that we provided, EUR 35 billion, what do you still need? If you look at what's in the backlog today for 2024, for 2025, beyond 2025, you know, in the next three quarters, we would need a little bit over EUR 4 billion for the three quarters to come in order to, at the beginning of 2025, you know, be fully booked for that midpoint.

Speaker Change: And then if you try to look at it from that vantage point and if you try to look at the backlog that we have today. The question. Then is if you want to get let's say to the midpoint of that of debts that bandwidth that we provided so to 35 billion. What are you still need. So if you look at what's in the backlog today for 'twenty four for twenty-five beyond 'twenty.

Unknown Executive: So if you look at what's in the backlog today for 2024, for 2025, beyond 2025, in the next three quarters, we would need a little bit over 4 billion for the three quarters to come in order to, at the beginning of 2025, be fully booked for that midpoint. And what's your guidance for the second quarter? For the second quarter, we guide a net sales level of 5.7 billion to 6.2 billion, and included in that would be 1.4 billion of installed-based business.

Speaker Change: Five.

Speaker Change: And then you know in the next three quarters, we would need a little bit over 4 billion 43 quarters two to come in order to at the beginning of 2025, you know be fully booked for the midpoint.

Speaker Change: And what's your guidance for the second quarter for the second quarter. We guide a net sales level of $5 7 billion to $6 2 billion included in there would be $1 4 billion of installed base business and we're looking at a gross margin of between 50 and 51% has there been any.

[Company Representative] (ASML): What's your guidance for Q2?

Skip Miller: What's your guidance for Q2?

Roger Dassen: For Q2, we guide a net sales level of EUR 5.7 to 6.2 billion. Included in there would be EUR 1.4 billion of installed base business. We're looking at a gross margin of between 50% and 51%.

Unknown Executive: And we're looking at a growth margin of between 50 and 51 percent. Have there been any changes to your outlook for the full year, 2024? Essentially, the way we look at 2024 has not changed.

[Company Representative] (ASML): Have there been any changes to your outlook for the full year, 2024?

Skip Miller: Have there been any changes to your outlook for the full year, 2024?

Speaker Change: Any changes to your outlook for the full year 2020 for essentially the way we look at 'twenty 'twenty four has not changed so as we said last time, we look at 'twenty 'twenty four very much as a transition year.

Roger Dassen: Essentially, the way we look at 2024 has not changed. As we said last time, we look at 2024 very much as a transition year. In terms of revenue, that means that we would be looking at a revenue for 2024 which is similar to the revenue that we had for 2023. We're really looking at it as a transition year in which the momentum is building up, you know, during the year. That means, you know, stronger H2 than H1. Also really gearing up towards what we think is gonna be a strong year of 2025.

Unknown Executive: So, as we said last time, we look at 2024 very much as a transition year. In terms of revenue, that means that we would be looking at revenue for 2024 that is similar to the revenue that we had for 2020-2023. But we're really looking at a transition year in which the momentum is building up during the year. So that means a stronger second half than the first half.

Speaker Change: In terms of revenue that means that said that we would be looking at our revenue for 24, which is similar to the revenue that we had for 'twenty 'twenty 2023.

Speaker Change: But we're really looking at it as a transition year in which the momentum is building up.

Speaker Change: During the year, so that means a stronger second.

Speaker Change: Second half done and done our first half and also really gearing up towards what we think is going to be a strong year of 2000 22025.

Unknown Executive: And also really gearing up towards what we think is going to be a strong year of 2020-2025. And that is really backed up, I think, by some of the industry trends as we see them today. So we do see the utilization of our tools, both for memory customers and for logic customers, further improving. We do see that the inventory, particularly downstream inventory, is being navigated quite nicely and is being driven down to what we would see as normal levels.

Roger Dassen: You know, that is really backed up, I think, by some of the industry trends as we see them today. We do see the utilization of our tools, both for memory customers and for logic customers, further improving. We do see that the inventory, particularly downstream inventory, is being navigated quite nicely and is being driven down to, you know, what we would see as normal levels. All of that, I think, is very much in sync with our expectation that we will see recovery for the industry in 2024. That, as I mentioned, we are building up for a stronger year in 2025. That means for us, you know, building a capacity and preparing for that ramp. Yep.

Speaker Change: And you know that has really backed up I think by some of the industry trends as we see them as we see them today. So we do see the utilization of our tools both for memory customers and for luxury customers further at further improving are.

Speaker Change: We do see see that the inventory, particularly downstream inventory is being navigated quite nicely and is being driven down to you know what we would see as normal levels. So all of that all of that I think is very much in sync with our expectation that we will see recovery for the industry in 2024, and that's as I.

Unknown Executive: So all of that, I think, is very much in sync with our expectation that we will see recovery for the industry in 2024 and, as I mentioned, we are building up for a stronger year in 2025. And that means for us, you know, building capacity and preparing for that ramp. And are there any changes to your view on margins for the year? Yeah, I think for 2024, I would say margin. We said it was a little bit lower than the gross margin that we had in 2023. But I would still be looking at that.

Speaker Change: And we are building up for a stronger year in 2025 and that means for US you know building a capacity in preparing for that ramp are there any changes to your view of margins for the year I think for 'twenty four I would say margin you, we said a little bit lower than the gross margin that we are that we had in 2023 I would still be looking at.

[Company Representative] (ASML): Are there any changes to your view on margins for the year?

Skip Miller: Are there any changes to your view on margins for the year?

Roger Dassen: Yeah, I think for 2024, I would say margin, you know, we said a little bit lower than the gross margin that we had in 2023. I would still look at that similarly. You know, we gave the different puts and takes to the gross margin for this year on the last quarter. I would still look at that in a similar vein.

Unknown Executive: I would still look at that similarly. You know, we gave the different puts and takes to the gross margin for this year in the last quarter. I would still look at that in a similar vein.

Speaker Change: That would still look at that are similarly.

Speaker Change: We gave the different puts and takes to the gross margin for this year on the on the last quarter I would still look at it in a similar vein.

Roger Dassen: I think it's important to recognize still that, you know, that the gross margin for 2025, which would mean a pretty significant step up from, you know, from the gross margin this year, that we still think about that the way we've mentioned that during the Capital Markets Day in 2022, which is somewhere between 54% and 56%. Big step up. Why is that? Just reiterating the key points there. First off, the lion's share of our EUV tools, low-NA EUV tools by 2025 will be 3800s, and that will come with a you know better ASP and also a better gross margin. Also, on the installed base business, we believe 2025 is gonna be a stronger year.

Unknown Executive: I think it's important to recognize still that, you know, the gross margin for 2025, which would mean a pretty significant step up from, you know, from the gross margin this year, that we still think about that the way we've mentioned it during the capital markets day in 2020 and 2022, which is somewhere between 54 and 56%. So, big step up. Why is that?

Speaker Change: I think important to recognize still that's a you know that's the gross margin for 2025, which would mean a pretty significant step up from you know from the gross margin. This year that we still think about that the way. We've we've mentioned that during the capital market today in the 'twenty to 2020 'twenty two.

Speaker Change: Which is somewhere between 54 and 56% so a big step up.

Speaker Change: Why is that I'm, just reiterating the key points there first off the.

Speaker Change: The lion's share of our UV tools alone a easy tools by 2025 will be 38, hundreds and that will will come with a.

Unknown Executive: Just reiterating the key points there. First off, the lion's share of our EUV tools, loan a EUV tool by 2025 will be 3800. And that will come with a, You know, better ASP and also a better, better growth margin. Also, on the installed base business, we believe 2025 is going to be a stronger year. First off, because we continue to improve the growth margin that we have in service for UV.

Speaker Change: You know better ESP and also a better a better gross margin also on the installed base business. We believe 2025 is going to be a stronger year first off because we continue to improve the gross margin that we have on service for EV, but also because we believe that you know with the recovery in the market as we see it we believe that the the update the upgrade.

Roger Dassen: First off, because we continue to improve the gross margin that we have on service for EUV, but also because we believe that, you know, with the recovery in the market as we see it, we believe that the upgrade business in 2025 will be better than what we've seen so far. High-NA, we'll be looking at higher volumes for High-NA, so that will give us better fixed cost coverage for High-NA. We'll also look at the introduction in terms of revenue for the 5200, which also will come with a better gross margin profile. Very importantly, as you know, we're very much investing this year in the ramp, right?

Unknown Executive: But also because we believe that, you know, with the recovery in the market, as we see it, we believe that the update, the upgrade business in 2025 will be better than what we've seen so far. For HiNA, we'll be looking at higher volumes for HiNA, so that will give us better fixed cost coverage for HiNA. We'll also look at the introduction in terms of revenue for the 5200, which will also come with a better gross margin profile.

Speaker Change: Business in 2025 will be better than what we've what we've seen so far.

Speaker Change: Hi in a we'll be looking at higher volumes for four hany, So that will give us better fixed cost coverage for Heinie. We'll also look at the introduction in terms of revenue 44 to 5200, which also will come with it with better with a better gross margin profile.

Unknown Executive: And very importantly, as you know, we're investing very much this year in the ramp, right, the ramp for the second half, but definitely also for the ramp in 2025. And that means that we're already hiring people, training people in the factory and on the field.

Speaker Change: And very importantly.

Speaker Change: As you know we're very much investing this year in the ramp right the ramp for the second half, but definitely also flowed a ramp in <unk> and 'twenty 'twenty five and that means that we're already hiring people training people in the in the factory in the field.

Roger Dassen: The ramp for H2, but definitely also for the ramp in 2025. That means that we're, you know, already hiring people, training people in the factory, in the field. The revenue of that and the benefit of that we will yield particularly in 2025. In 2025, you know, we will really utilize the higher capacity that we've been building over the past couple of quarters. All of those factors combined will lead to this step up in gross margin to 54% to 56% that we've been indicating in 2022.

Unknown Executive: The revenue of that and the benefit of that will be realized, particularly in 2025. So in 2025, we will really utilize the higher capacity that we've been building over the past couple of quarters. And all of those factors combined will lead to this step up in gross margin to the 54-56% that we've been indicating for 2025. Now, let's have a look at EUV.

Speaker Change: The revenue of that and the benefit of that we will will yield, particularly in 2025. So in 'twenty twenty-five you know really we will really utilize the higher capacity that we've been that we've been building over the past couple of past couple of quarters and all of those factors combined will lead to.

Speaker Change: This step up in gross margin two to 54% to 56% that we've been indicating in 2022.

Speaker Change: Let's have a look at our E V can you update us on the progress you make with your EV technology, Yeah. So I would say pretty exciting both for low any and for four high and if we look at LOE in a first off you know in a in a in a in Q1, we shipped the first 38.

[Company Representative] (ASML): Let's have a look at EUV. Can you update us on the progress you make with your EUV technology?

Skip Miller: Let's have a look at EUV. Can you update us on the progress you make with your EUV technology?

Unknown Executive: Can you update us on the progress you are making with your EUV technology? Yeah, so I would say pretty exciting, both for low-in-a and for high-in-a. If we look at low-in-a first off, you know, in Q1 we shipped the first 3800 low-in-a machine to a customer for qualification purposes.

Roger Dassen: Yeah. I would say pretty exciting, both for Low-NA and for High-NA. If we look at Low-NA first off, you know, in Q1, we shipped the first TWINSCAN NXE:3800E Low-NA machine to a customer for qualification purposes. As we mentioned before, it's a tool that comes with significant improvements in its specification. You know, most notably I would say on the throughput side that we will see an increase in throughput from 160 wafers per hour to 220 wafers per hour in final configuration. That's a 37.5% increase in productivity. That's a big deal. It also comes with better overlay. It comes with better imaging.

Speaker Change: <unk> low named machine.

E V: To a customer for qualification purposes, as we mentioned before it's a tool that comes with the significant improvements in its specification. So you know most notably I would say on the on the throughput side that we will see.

Unknown Executive: As we mentioned before, it's a tool that comes with significant improvements in its specifications. So, you know, most notably, I would say on the throughput side that we will see an increase in throughput from 160 wafers per hour to 220 wafers per hour in the final configuration, so that's a 37.5% increase in productivity, so that's a big deal. It also comes with better overlay, it comes with better imaging, so all in all, clearly a tool that will drive value for the customer in a big way, so it will drive down the cost of ownership for the customers, and that also means that there is quite some customer interest in the tool, so you will also gradually see in the second half of the report in Q4, because that's where we started shipping the first modules of the high NA tool ship to its initial customer

EV: An increase in throughput from 160 wafers per hour to 220 wafers per hour and in final configuration. So that's a 37, 5% increase in productivity. So that's a big deal.

EV: But it also comes with better overlay it comes with better imaging. So all know clearly a tool that will that will drive value for the customer in a bigger in a big way. So it will drive down the cost of ownership for the customers.

Roger Dassen: All in all, clearly a tool that will, you know, drive value for the customer in a big way. You know, it will drive down the cost of ownership for the customers. That also means that there is quite some customer interest in the tool. You will also gradually see there that, you know, H2 this year, also as I mentioned in next year, the TWINSCAN NXE:3800E will, you know, become a more and more significant part of the EUV sales. With the value that obviously this tool is driving for the customer, also comes a better ASP for us and also a better gross margin for us.

EV: And that also means that there is quite some customer interest in the tool. So you will also gradually see there that's the second half of <unk>.

EV: Of this year, but also as I mentioned in our in next year.

EV: The 38, hundreds will become a more a more significant part of the year of the EV sales. So.

EV: And with the value that obviously this tool is driving for the customer also comes a better ASP for us and also a better gross margin for our for us. So that's.

Roger Dassen: That's the story I would say on Low-NA. On High-NA, big moment obviously that we could report in Q4 'cause that's where we started shipping the first modules of the, you know, the High-NA tool shipped to its initial customer. That system we're now in the process of installing. We actually just very recently also started shipping the second High-NA tool to a customer. I think really good progress on that front. At the SPIE conference in February, we could actually report first light, which was a big moment for everyone engaged that we were able to report that.

EV: That's the story I would say on the on LOE in a on high and a.

EV: Big moment, obviously that we could report in Q4, because that's where we started shipping the first module of the <unk> of the you know.

EV: Of the high na tool shipped to two to its initial customer.

EV: So that system, we're now in the process of installing and we actually just very recently also started shipping the second the second tool to work the second tiny tool to a customer. So I think really good progress on that on that front.

Unknown Executive: So that system, we're now in the process of installing, and we actually just recently started shipping the second high NA tool to a customer. So I think really good progress on that front. At the SBIE conference in February, we could actually report first light, which was a big moment for everyone engaged that we were able to report that.

EV: And ESP Ie conference are in a in February we could actually report first light, which was a big moment for everyone engaged it we were able to report that.

Unknown Executive: And we also see the first images coming from the high NA tool. So, all in all, I think we are very much on track and making good progress. You know, the industry is really excited about HiNA and for very good reasons, because if you look at the specifications of the HiNA tool, it will provide a transistor density that is actually 3x the transistor density that you will have with a low NA tool.

Roger Dassen: We now also see the first images coming from the High-NA tool. All in all, I think very much on track and good progress. You know, the industry is really excited around High-NA and for very good reasons because if you look at the specifications of the High-NA tool, it will provide a transistor density that, you know, that actually is 3x of the transistor density that you will have with the Low-NA tool. It's a really big step up. If you combine that as we do with, you know, similar productivity on the High-NA tool as you have it for a Low-NA tool, it's very clear, you know, the value that it brings to customers.

EV: And we can also see the first images coming from coming from the high <unk> from the high na tool. So all in all I think very much on track and and good progress.

EV: The industry has really excited around the around tiny and for very good reasons, because if you look at the specifications of the heinie tool.

EV: It will provide eight transistor density that you know that actually is a three acts of the transistor density and that you will have with the low any tools. So two really big step up and if you combine that as we do with similar productivity on the highway too.

Unknown Executive: So it's a really big step up, and if you combine that, as we do, with, you know, similar productivity on the HiNA tool, as you have it for a loan aid tool, it's very clear, you know, the value that it brings to customers. So for customers, there's a lot of interest in HiNA. As you probably know, we have this joint ASML iMAG lab here in Veldhoven, and HiNA lab here in Veldhoven, where customers are, you know, working with the tool.

EV: As you have it for a loan a tool is very clear that.

EV: The value that it brings to our two customers.

Roger Dassen: For customers, there's a lot of interest in High-NA. As you probably know, we have this joint ASML imec lab here in Veldhoven, High-NA lab here in Veldhoven where customers are, you know, working with the tool. Next couple of weeks, we hope to really see the first wafers being exposed with that tool, and that's again a big moment for us because that means that our customers can re-experience the tool, you know, can understand how they are going to insert that tool into their roadmap.

EV: So for customers, there's a lot of interest in that in high and a and as you probably know we have this joint ASML imac lap here and volatile often are high in a lab here in <unk>, where our customers are you know.

EV: Our working with the tool.

Unknown Executive: In the next couple of weeks, we hope to really see the first wafers being exposed with that tool. And that's, again, a big moment for us because that means that our customers can really experience the tool, you know, can understand how they are going to insert that tool into their roadmap. So there is a great interest from customers in working with this tool in the lab and, you know, obviously something that is further going to drive up the adoption of HiNA in the production roadmap for our customers. Then your capital allocation plans. Can you update us on that chapter?

EV: The next couple of weeks, we hope to really see the first wafers being exposed with that tool and that's again, a big moment for us because that means that our customers can we experienced the tool.

EV: Can I can understand how they are going to insert that tool into their into their roadmap. So big interest from from customers.

Roger Dassen: Big interest from customers in working with this tool in the lab and, you know, obviously something that is further going to drive up the adoption of High-NA in the production roadmap for our customers.

EV: In working with this with this tool in the lab and you know obviously something that is further going to drive up the the adoption of our hiney into production a roadmap for our customers.

EV: Then your capital allocation plans can you update us on the chapter apps.

[Company Representative] (ASML): Your capital allocation plans. Can you update us on that chapter?

Skip Miller: Your capital allocation plans. Can you update us on that chapter?

Roger Dassen: Absolutely. So policy hasn't changed and, you know, start sounding like a broken record here but, you know, we first use the cash that is generated, you know, to support the business and then whatever is left will be distributed back to shareholders. When you talk about what is needed in the business, you know, in the current circumstances that we're looking at for customers, you know, you really see customers working their way back to profitability, working their way back to higher cash levels. That circumstance, you know, we still support customers just as we did last year. That is still going on.

Unknown Executive: Absolutely. So policy hasn't changed. And, you know, I'm starting to sound like a broken record here.

Speaker Change: Absolutely. So so policy hasn't changed and you know start sounding like a broken record here, but you know we first we first use the cash that is generated.

Speaker Change: To support the business and then whatever is left will be it will be distributed back to shareholders and when you talk about what is needed in the business.

Speaker Change: In the current circumstances that we're looking at for customers. You know you really see customers working their way back to profitability work their way back to a higher cash cash levels.

Unknown Executive: But, you know, we first use the cash that is generated, you know, to support the business, and then whatever is left will be distributed back to shareholders. And when you talk about what is needed in the business, you know, in the current circumstances that we're looking at for customers, you really see customers working their way back to profitability, working their way back to higher cash levels.

Speaker Change: And in that circumstance, we still we still support customers just as we did as we did last last last year. So that is still going on.

Unknown Executive: At that circumstance, you know, we still we still support customers, just as we did, as we did last, last last year. So that is still going on. And on the other hand, you know, as I mentioned, we're looking at momentum really being increased over the quarters to come, leading up to what we think is going to be a very strong 2025, and that momentum being built up obviously also means that we're you know currently taking in quite a bit of inventory quite a bit of material in order to be able to to accommodate that that ramp going forward so that obviously puts you know pressure on the on the free cash flow it has you know clearly put pressure on the free cash flow in in the first in the first quarter pretty sure that that will uh you know that that will uh yield and that that investment will will yield in the in the end period to uh to to come, On the dividend side, we paid 1.45 Euros per share in interim dividend in the last quarter.

Roger Dassen: On the other hand, you know, as I mentioned, we're looking at momentum really being increased over the quarters to come leading up to what we think is gonna be a very strong 2025. That momentum being built up obviously also means that we're, you know, currently taking in quite a bit of inventory, quite a bit of material in order to be able to accommodate that ramp going forward. That obviously puts, you know, pressure on the free cash flow. It has, you know, clearly put pressure on the free cash flow in Q1.

Speaker Change: And on the other hand, you know as I mentioned, we're looking at momentum really being being increased over over over the quarters to come.

Speaker Change: Leading up to what we think is going to be a very strong at 2025.

Speaker Change: And that momentum being built up obviously also means that we're currently taking quite a bit of inventory quite a bit of material in order to be able to accommodate that Ted that ramp going forward. So that obviously puts pressure on the on the free cash flow. It has clearly put pressure on the free cash flow in the first set in the first quarter British.

Roger Dassen: Pretty sure that will, you know, that will yield and that investment will yield in the period to come. On the dividend side, we paid 1.45 EUR per share in interim dividend in the last quarter. We will propose a final dividend of 1.75 EUR to the AGM. If you add it all up, three times 1.45 plus the 1.75 final means a total dividend for 2023 of 6.10 EUR per ordinary share.

Speaker Change: Sure that will you know that that will.

Speaker Change: Yield and that that investment will it will yield in the in the into period, two or two to come.

Unknown Executive: So we have proposed a final dividend of 1.75 euros to the AGM. And if you add it all up, so 3 times 1.45 plus the 1.75 final dividend means a total dividend for 2023 of 6.10 euros per ordinary share.

Speaker Change: On the dividend side, and we paid one point 45 euros for a per share an interim dividend in the in the last in the last quarter. So we.

Speaker Change: We have proposed a final dividend, we will propose a final dividend of $1 75 to two the AGM.

Speaker Change: If you add it all up so three times to 145, plus the $1 75, a final means a total dividend.

Speaker Change: For 2023 of our six point 10 euros per ordinary share.

Speaker Change: And finally in terms of share buyback, we've executed share buybacks in the past quarter of around $400 million.

Roger Dassen: Finally, in terms of share buyback, we've executed share buybacks in the past quarter of around EUR 400 million.

Unknown Executive: And finally, in terms of share buybacks, we've executed share buybacks in the past quarter of around 400 million. To close off, what are your expectations for demand and your business beyond 2024? So yeah, I mean, there are still some uncertainties, I would say primarily macro uncertainties, that's still clearly, clearly, clearly there. But, you know, as I mentioned before, if you look at the trends in the industry, if you look at, and I'm talking about the cyclicality of the trends in the industry. So like the utilization going up, and inventory downstream being, you know, managed to more normal levels.

Speaker Change: To close off what are your expectations on demand and your business beyond 2024. So yeah. I mean, there are still some uncertainties I would say primarily macro uncertainties that that's still clearly clearly clearly there.

[Company Representative] (ASML): To close off, what are your expectations on demand and your business beyond 2024?

Skip Miller: To close off, what are your expectations on demand and your business beyond 2024?

Roger Dassen: Yeah, I mean, there are still some uncertainties, I would say, primarily macro uncertainties that's still clearly there. You know, as I mentioned before, if you look at the trends in the industry, and I'm talking about the cyclicality trends in the industry. Like the utilization going up, inventory downstream being, you know, managed to more normal levels. I think it's pretty clear that, you know, that the industry is in its upturn, and therefore, we do believe that by 2024, we're gonna see, you know, a recovery, clearly a recovery of the industry. If I then fast-forward to 2025, then, you know, what do we find ourselves in?

Speaker Change: You know as I mentioned before if you look at the trends in the industry. If you look at them.

Speaker Change: And then I'm talking about the cyclicality trends in the industry. So it like the utilization going up inventory downstream being managed due to more normal levels I think it's pretty clear that you know.

The industry is in its upturn in and therefore, we do believe that by 2024, we're going to see a.

Speaker Change: Recovery clearly a recovery of the of the industry.

Unknown Executive: I think it's pretty clear that the industry is in its upturn. And therefore, we do believe that by 2024, we're going to see a recovery, clearly a recovery of the industry. So if I then fast forward to 2025, then, you know, what do we find ourselves in? Well, first off, I think we will find ourselves in 2025 in the midst of an upturn. So that's a positive thing.

Speaker Change: So if I done fast forward through 'twenty twenty-five then you know what do we find ourselves well first off I think we will find ourselves in 2025 in the midst of the upturn. So that's a positive second and we've talked about that many many times, but as secular trends are really strong and I mean, if you look at you know if you look at AI. If you look at electrification.

Roger Dassen: Well, first off, I think we will find ourselves in 2025 in the midst of the upturn. That, that's a positive. Second, and we've talked about that many, many times, but the secular trends are really strong. I mean, if you look at, you know, if you look at AI, if you look at electrification, if you look at the energy transition, it's all very strong, very positive momentum behind it. The secular trends are very, very strong. That's, you know, that is also something that I think will yield in 2025. Then finally, if you just look at, you know, all the fab openings that have been indicated by our customers. You know, the recent news on positive outcomes of CHIPS Act money allocation.

Unknown Executive: Second, and we've talked about that many, many times, but the secular trends are really strong. I mean, if you look at, you know, AI, if you look at electrification, if you look at the energy transition, it all has very strong, very positive momentum behind it. So the secular trends are very, very strong. And that, you know, that is also something that I think will come to fruition in 2025. And then finally, if you just look at all the FAB openings that have been indicated by our customers, you know, the recent news on positive outcomes of Chipsack money allocation.

Speaker Change: If you look at the energy transition, it's all very strong very positive momentum behind that sort of secular trends are very very strong.

Speaker Change: And that's you know that that is also something that I think will yield in the in 2025 and then finally.

Speaker Change: And if you just look at all the all the fab openings that have been indicated by our customers. Our unit recent news on positive outcomes of chips Act money allocation I mean, all of that is very strong very supportive I think for.

Roger Dassen: I mean, all of that is very strong, very supportive, I think, for, you know, new fab openings across the globe. I think by 2025, you will see all three of those coming together. New fab openings, strong secular trends, and the industry in the midst of its upturn. That's why we're doing what we're doing, which is really preparing for that ramp, for that momentum that we see being built up. That's also the reason why, you know, also not just for 2025, but also beyond that, we are, you know, we are having all these building plans. We are expanding our capacity to the 90 EUV tools of Low-NA to the 600 DUV tools and to the, you know, 20 mid-term, 20 High-NA tools.

Unknown Executive: I mean, all of that is very strong, very supportive, I think, for new FAB openings across the globe. And I think by 2025, you will see all three of those coming together. New FAB openings, strong secular trends, and the industry in the midst of its upturn. So that's why we're doing what we're doing, which is really preparing for that ramp, for that momentum that we see being built up. And that's also the reason why, you know, not just for 2025 but also beyond that, we have all these building plans.

Speaker Change: New fab openings across the globe and I think by 2025, you will see all three of those coming together, new fab openings strong secular trends and the industry in the midst of it's a of its upturn so.

Speaker Change: That's why we're doing what we're doing which is really preparing for that ramp for that momentum that we see being being built a buildup and that's also the reason why you know also not just for 2025, but also beyond that we are you know we.

Speaker Change: We are having all these building plans we are expanding our capacity.

Unknown Executive: We are expanding our capacity to the 90 EV tools, low NA, to the 600 DPV tools and to the, you know, 20 midterm, 20 high NA tools. So we're building that capacity because we believe it's needed, and we believe it's needed for what we think is going to be a very bright future for this industry altogether, and for ASML in particular. And, you know, just comparing notes on that is something that I very much look forward to.

Speaker Change: Two the 90 easy tools of loan aid to the 600 deep UV tools annuity 'twenty midterm 'twenty heinie tools. So we're building that capacity because we believe it's needed and we believe it's it's needed for what we think is going to be a very bright future for this industry altogether and for ASML in particular and.

Roger Dassen: We're building that capacity because we believe it's needed, and we believe it's needed for what we think is gonna be a very bright future for this industry altogether, and for ASML in particular. You know, just comparing notes on that is something that I very much look forward to that. As you know, we have a Capital Markets Day planned by 14 November 2024. We look forward to sharing our view on how the market is going to develop there, and really look forward to seeing all of you there.

Speaker Change: Just comparing notes and that is something that I very much look forward to that as you know we have a capital markets day planned by by November of 'twenty 'twenty four the 14th of November. So we look forward to sharing our view on how the market is going to develop there and really look forward to seeing all of you there.

Unknown Executive: As you know, we have a capital markets day planned for November of 2024, the 14th of November. So we look forward to sharing our view on how the market is going to develop there, and we look forward to seeing all of you there.

Speaker Change: Yes.

Speaker Change: With respect.

Speaker Change: Yes.

Yes.

Speaker Change: With regard.

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