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VBF – Dag van de tips - ASML

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Sam van der Zalm

28 September 2019 | Gent

Manager Investor Relations - Europe

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28 September

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Who is Sam van der Zalm

• 45 years old, married, 2 daughters and 1 son

• Studied Mechanical Engineering and Technical Business

Administrations

• First job at Cap Gemini as BaaN ERP consultant

• Joined ASML on 15th March 2000

• Started in a commercial Logistics role for Asian customers

• Moved to internal sales role supporting US customers

• Then moved to Manufacturing project lead but

• Missed the business side and joined HQ Account

Management for Japanese account

• Since December 2015, Manager Investor Relations - Europe

Excuses voor mijn Denglish

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Insert Video

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Our story begins in the Philips labs of the 1980sHumble beginnings make for a strong can-do culture

Started as a

joint venture

by Philips

and ASMI

Just 31

employees—

with a can-do

attitude

It took a

decade of

perseverance

to break into

the market

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Innovation and perseverance have brought us to here

All major

chipmakers

use ASML’s

technology

Europe’s 2nd

biggest tech

company by

market cap

(~90B€)

Annual R&D

budget of

1.9B€(estimated 2019)

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5,994

0

25

50

75

100

For 30+ years, ASML has delivered superior patterning

capabilities…

AS

ML

Lit

ho

mark

et

sh

are

%85%

’10‘00’951984

TWINSCAN

EUVStepper

Scanner

Source: Gartner, S&P Capital IQ, ASML

Immersion

‘05’90

31828

2018

9,245

Employees (ww FTE)

>23,000Net sales (M€) 1,1416

2,529

4,508

10,944

E-beam inspection

Optical

metrology

Joined

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San Diego

San Francisco

Our local knowledge hubs are connected for global impact

Wilton

Light sources

Computational

Lithography

Taipei

Shenzhen, China

Eindhoven

Ditzingen

Oberkochen

Lithography &

Metrology Applications

Computational

Lithography

Optics

Lasers

System integration

Key suppliers

Optics

Mask handling/positioning

Clamps

Berlin

Major Supplier Network (including R&D)

Major ASML sites (including R&D)

5,150 employeesSource: ASML FY 2018

12,700 employees 5,400 employees

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The IC industry broke records last year

Source: World Semiconductor Trade Statistics (WSTS), February 2019

1 trillion units shipped

The industry shipped 130 chips for every

man, woman and child on this planet.

2018

From 300B (2007) to a new

record 468.8B in 2018

$468.8B in sales

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Hardware

Semi Equipment

Semi

Manufacturers

Semi

Design

Software

& Service

ASML

Peers

Semi

Non-Semi

ASML operates in an industry value chain that has considerable means

with strong incentives to compete and drive innovation

Top technology companies in our ecosystem (EBIT CY2018, B$)

Source: Bloomberg (GICS 45 classification)

Total EBIT, B$

In our ecosystem, EBIT

has grown at low-teen

levels

~410

152014 16 2018

~~290

17

~~275 ~280~~348

+11%

1.73.1

53.6

3.0

4.0

2.2

3.1 12

4.5

8.6

2.8

15.612.7

68.0

2.4

18.9

6.7

6.7

ASML

21.3

13.715.6

13.5

24.9

2.2

2.8

3.8

38.9

KLA-TencorTELLAMAMAT

1.4

3.5

1.2

26.3

®

AD

PC

og

niz

an

t

Baid

ueB

ay

PayP

al Yah

oo

!N

etE

ase

10.9

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Slide 10

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Immersive

worlds

Lightning-fast

connectivity

Self-driving

cars

Big data & AI

New trends are propelling our industry

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We collaborate in a vast network of fundamental research

and supplier partners

Supplier and technology network:

~ 50,000 people

> 23,000 employees

R&D:

~ 8,500 engineers

>800

PhD/Dr.

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Delivering the roadmap requires extensive collaboration

Academia

Customers

Technology

partners

Co-solution partners

Suppliers

Advanced Research Center

for Nanolithography

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Technological progress all starts with the chip

Our state-of-the-art ‘EUV’ machine

We make machines that make chips

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TWINSCAN familyA solution for any resolution at the right price

ArF immersion(l=193 nm)

ArF dry(l=193 nm)

KrF(l=248 nm)

EUV(l=13.5 nm)

i-line(l=365 nm)

High NA EUV

• Resolution: 350 nm – 8nm

• Average sales price: ~€ 5 million – ~€ 270 million

Half pitch = k1 NAx

l

Improved NA with Water

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Faster stages are crucial to deliver on the promise

Acceleration of wafer stage ~2x..Acceleration of mask stage ~4x..

NXE:3400B reticle stage High NA reticle stage prototype

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EUV system transport to customer takes 3 Boeing 747s

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Our industry pushes on to create the world of tomorrow

5G connectivity

Artificial Intelligence

RoboticsSmart homes

Internet of Things

The 4th Industrial Revolution

Self-driving cars

Machine learning

Big Data

Virtual Reality

New chip architectures

Augmented Reality

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ASML total revenues grew at a CAGR of 12% since 2010

• Systems revenue grew at a 10%

CAGR since 2010

• Installed base management

• 20% CAGR since 2010 driven

by holistic lithography,

upgrades and growing

installed base

• Now approximately one

quarter of our total revenue

• Gross Margin trend reflecting

the strength of our DUV and

Applications business and

progress in EUV profitability

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ASML’s capital allocation policy

Maintain a strong and flexible balance sheet

Focused investment in our

business through R&D, Capex

and strategic M&A

0,5 0,6 0,60,9

1,1 1,1 1,11,3

1,6

0,10,3 0,2

0,2

0,4 0,4 0,3

0,4

0,6

0,7

0,90,8

1,1

1,4 1,4 1,4

1,6

2,2

2010 2011 2012 2013 2014 2015 2016 2017 2018

In B

€

Capex

R&D

Distribute excess cash to

shareholders through a

combination of share buybacks

and growing dividends

HMI acquisition

(2.8B€)

Carl Zeiss SMT Holding

acquisition 24.9% interest

(1.0B€)

Cymer acquisition

(3.0B€)

Up to

2,12,8

3,4 3,74,4

4,9 5,35,8

7,0

0,3

0,5

0,60,9

1,1

1,4

1,9

2,4

3,0

2,4

3,3

4,04,5

5,5

6,4

7,2

8,2

10,0

2010 2011 2012 2013 2014 2015 2016 2017 2018

In B

€

Cumulativedividend

Cumulativesharebuybacks

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2018

(Actual)

2020 2020 2025

Total Sales 10.9B€ ~11B€ ~13B€ ~15 - 24B€

Gross margin % 46.0% >50% >50% >>50%

R&D % sales 14% ~13% ~14% ~13%

SG&A % sales 4% ~4% ~4% ~4%

Capex % sales 5% ~4% ~4% ~3%

(Scenarios) (CMD 2016) (CMD 2018)(Moderate market)

ASML updated Financial Model (Investor-day 2018)

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Executive summary

• Healthy semiconductor end market growth driven by major innovation in semiconductor

enabled computing provides long term growth opportunity

• Shrink is a key industry driver supporting innovation and providing long term industry growth

• Holistic Lithography enables affordable shrink and therefore delivers compelling value for our

customers

• DUV, EUV and Application products are highly differentiated solutions that combined provide

unique value drivers for our customers and ASML

• EUV will enable continuation of Moore’s Law and will drive long term value for ASML well into

the next decade

• ASML models an annual revenue opportunity of € 13 billion in 2020 and between € 15 - 24

billion through 2025

• ASML expects to continue to return significant amounts of cash to shareholders through a

combination of share buybacks and growing dividends while holding on to its long-held

conservative financial policy

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