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ASML Holding's (ASML) CEO Peter Wennink on Q1 2016 Results - Earnings Call Transcript

Q1 2016 Earnings Conference Call

April 20, 2016 09:00 am ET

Executives

Craig DeYoung - Vice President, Investor Relations Worldwide

Peter Wennink - President and Chief Executive Officer

Wolfgang Nickl - Executive Vice President and Chief Financial Officer

Analysts

Francois Meunier - Morgan Stanley

Farhan Ahmad - Credit Suisse

Mehdi Hosseini - Susquehanna

Timothy Arcuri - Cowen and Company

Sandeep Deshpande - JPMorgan

C.J. Muse - Evercore ISI

Kai Korschelt - Merrill Lynch

Andrew Gardiner - Barclays

Gareth Jenkins - UBS

Douglas Smith - Agency Partners

Amit Harchandani - Citigroup

Operator

Ladies and gentlemen, thank you for standing by. Welcome to ASML 2016 First Quarter Financial Results Conference Call on April 20, 2016. [Operator Instructions] I would now like to open the Q&A queue. [Operator Instructions]

I would now like to turn conference call to Mr. Craig DeYoung. Please go ahead.

Craig DeYoung

Thank you, operator. Good afternoon and good morning, ladies and gentlemen. This is Craig DeYoung, Vice President of Investor Relations at ASML. Joining me today from our headquarters here in Veldhoven in Netherlands is ASML's CEO, Peter Wennink and our CFO, Wolfgang Nickl. The subject of today's call is ASML's first quarter 2016 results.

Just as a reminder for this call and for subsequent calls. The Q&A queue starts with the operator’s instructions at the opening call and not before and just FYI. And as mentioned, questions will be taken in the order that they're received.

As another reminder, the length of the call will be 60 minutes. This call is also being broadcast live over the internet at www.asml.com. And a replay of the call will be available on our website.

Before we begin, I'd like to caution listeners that comments made by management during this conference call will include forward-looking statements within the meanings of the Federal Securities Laws. These forward-looking statements involve material risks and uncertainties. For a discussion of risk factors, I encourage you to review the Safe Harbor statement contained in today's press release and presentation found on our website at asml.com, and in ASML's Annual Report on Form 20-F and other documents as filed with the Securities and Exchange Commission.

With that, I'd like to turn the call over to Peter Wennink for a brief introduction. Peter?

Peter Wennink

Thank you, Craig. Good morning. Good afternoon, ladies and gentlemen. And thank you for joining us for our first quarter 2016 results conference call. Before we begin the question-and-answer session, Wolfgang and I would like to provide an overview and some commentary on the recent quarter and provide you our view of the coming quarters.

Wolfgang will start with a review of the first quarter financial performance with added comments on our short-term outlook. And I will complete the introduction with some further comments on the current general business environment and on our future business outlook. Wolfgang?

Wolfgang Nickl

Thank you, Peter, and welcome everyone. For Q1 our net sales came in at €1.33 billion. This included system sales of €856 million, of which memory represented 42% with logic representing 58%.

Service and field options sales came in at €477 million. Our gross margin for the quarter came in that 42.6% slightly above our guidance. R&D expenses came in €275 million and SG&A expenses came in €89 million, essentially as guided.

Regarding the order book. Q1 system bookings came in €835 million. At this level, it's 30% below our prior quarter bookings. I would guess that, some listeners might find this confusing relative to our guidance, which includes 30% increase in Q2 revenues.

I would like to remind you that we're not an old [ph] driven company and that the order patterning varies from customer-to-customer. Therefore, our bookings are not always a real indication of our near term business opportunities.