ASML N : 2022 Annual Report

ASML ANNUAL REPORT 2022

STRATEGIC REPORT

GOVERNANCE

FINANCIALS

2

Smaller size, bigger capability is a well-established trend in the chip industry.

And thanks to the joint efforts of our 39,000 people working together with suppliers,

customers and innovation partners, we are taking that ever further.

Every day we push the boundaries of physics and shrink patterns to help shape the

future of life, work and play across the planet. Strongly embedded in a global

innovation ecosystem, we enable ground-breaking technology that can help humanity manage challenges and seize opportunities by facilitating smart living and mobility, accessible healthcare, food security and the transition to renewable energy.

Creating small patterns that enable a big impact.

Tackling	Global	Food	Energy	Smart	Virtual and	Wearable
augmented
pollution	well-being	security	transition	mobility	technology
reality

See page 8 >

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ASML ANNUAL REPORT 2022

CONTENTS

STRATEGIC REPORT

GOVERNANCE

FINANCIALS

3

Contents

Message from the CEO on page 5 >

Q&A with the CTO on page 20 >

Q&A with the CFO on page 41 >

STRATEGIC REPORT

4	Forward-looking statements		Environmental
5	Message from the CEO	76	Energy efficiency and climate action
9	Our company	85	Circular economy
20	Q&A with the CTO		Social
23	Marketplace	97	Attractive workplace for all
31	Our business and ESG strategy	109	Our supply chain
33	Our business model	118	Innovation ecosystem
41	Q&A with the CFO	124	Valued partner in our communities
	Financial performance		Governance
44	Performance KPIs	134	Managing ESG Sustainability
49	Long-term growth opportunities	135	Responsible business
	Risk	147	Our approach to tax

52 How we manage risk

56	Risk factors		Our stories
	Environmental, Social and	8	Tackling pollution
	Governance	22	Global well-being
70	ESG at a glance	30	Food security
71	Our material ESG sustainability topics	40	Energy transition
		51	Smart mobility
		69	Virtual and augmented reality
		149	Wearable technology

CORPORATE GOVERNANCE

Corporate Governance

1. Board of Management

1. Supervisory Board

1. Other Board-related matters

1. AGM and share capital

1. Financial reporting and audit

1. Compliance with Corporate Governance requirements
   Supervisory Board report
2. Message from the Chair of the Supervisory Board

1. Supervisory Board focus in 2022

1. Meetings and attendance

1. Supervisory Board committees

1. Financial Statements and Profit Allocation
   Remuneration Report
2. Message from the Chair of the Remuneration Committee

1. Remuneration at a glance

1. Remuneration Committee

1. Board of Management remuneration

1. Supervisory Board remuneration

FINANCIALS & NON FINANCIALS

Consolidated Financial Statements

214 Report of Independent Registered Public Accounting Firm

1. Consolidated Statements of Operations
2. Consolidated Statements of Comprehensive Income
3. Consolidated Balance Sheets
4. Consolidated Statements of Shareholders' Equity

1. Consolidated Statements of Cash Flows
2. Notes to the Consolidated Financial Statements

Non-financial statements

264 Assurance Report of the Independent Auditor

1. About the non-financial information

1. Non-financialindicators

1. Other appendices

309 Definitions

317 Exhibit index

View our Highlights online >

A definition or explanation of abbreviations, technical terms and other terms used throughout this Annual Report can be found in the chapter Definitions. In some cases, numbers have been rounded for readers' convenience.

This report comprises regulated information within the meaning of articles 1:1 and 5:25c of the Dutch Financial Markets Supervision Act (Wet op het Financieel Toezicht).

In this report the name 'ASML' is sometimes used for convenience in contexts where reference is made to ASML Holding N.V. and/or any of its subsidiaries, as the context may require.

References to our website and/or video presentations in this Annual Report are for reference only and none nor any portion thereof are incorporated by reference in this report.

© 2023, ASML Holding N.V. All Rights Reserved.

ASML ANNUAL REPORT 2022

FORWARD-LOOKING STATEMENTS

STRATEGIC REPORT

GOVERNANCE

FINANCIALS

4

Special note regarding forward-looking statements

This Annual Report contains statements relating to our expected business, results projections, business trends and other matters that are "forward-looking" within the meaning of the Private Securities Litigation Reform Act of 1995. You can generally identify these statements by the use of words like "may", "will", "could", "should", "project", "believe", "anticipate", "expect", "plan", "estimate", "forecast", "potential", "intend", "continue" and variations of these words or comparable words. They appear in a number of places throughout this Annual Report and include statements with respect to our expected trends and outlook, strategies, corporate priorities and goals, expected semiconductor industry trends, expected trends in markets served by our customers, including expected growth in semiconductor demand, manufacturing

capacity, expected semiconductor market trends and market growth and drivers of such trends and growth, expected financial results, including expected sales, service revenue, gross margin, expected capital expenditures, R&D and SG&A expenses, effective annualized tax rate, annual revenue growth rate and outlook for 2023 and other statements under "Trend Information", annual sales and gross margin opportunity and potential and growth outlook and for 2025 and 2030, sales model for 2025 and other statements under the section entitled "Long-term growth opportunities", statements under the section entitled "Risk factors", expected trends in customer demand and demand for semiconductors including expected trends in end markets, including Memory and Logic, expected development of High-NA and expected timing to start shipment of High-NA systems

and high-volume production of High-NA systems, for semiconductor industry market opportunities, expected EUV and DUV and installed based management sales and the expectation about continuing role of DUV systems, EUV product roadmap, our supply chain strategies and goals, customer, partner and industry roadmaps, expected productivity and benefits of our tools, potential future innovations and system performance, expected shipments of our tools, including demand for and timing of shipments, statements with respect to DUV and EUV competitiveness, the development of EUV technology, revenue recognition, expected demand for wafers, expected impact of inflation, ESG strategy including our sustainability targets, goals and strategies, environmental, diversity and sustainability strategy, ambitions, goals and

targets, including circular procurement goals, targeted greenhouse gas emissions and waste reduction, recycling and refurbishment initiatives, investments and goals and energy-saving strategies and targets, including statements on targeting zero carbon emissions and indirect emissions from energy use across operations and reducing intensity of all other emissions in the value chain and the goals for timing thereof, statements with respect to Moore's Law, cash return and dividend policy, our expectation to continue to return cash to our shareholders through share buybacks and dividends including our proposed dividend for 2022 and statements relating to our share buyback program, statements with respect to the expected impact of accounting standards and other non-historical statements. These forward-looking

statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about business and future financial results and readers should not place undue reliance on them. Forward-looking statements do not guarantee future performance, and actual results may differ materially from projected results as a result of certain risks, and uncertainties. These risks and uncertainties include, without limitation, those described under How we manage risk - Risk factors. These forward-looking statements are made only as of the date of this Annual Report. We do not undertake to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

ASML ANNUAL REPORT 2022

MESSAGE FROM THE CEO

STRATEGIC REPORT

GOVERNANCE

FINANCIALS

5

Record performance in a challenging year

With record net bookings for 2022, an innovation pipeline filled with new products and services and our talented, energized and engaged people, we face the future with great confidence.

Dear Stakeholder,

The figures speak for themselves: record sales of €21.2 billion, up by 13.8% compared with 2021, a gross margin of 50.5% and a dividend per share of €5.80 add up to another outstanding year for ASML. Our net bookings stand at an unparalleled €30.7 billion for the year 2022, our pipeline is flowing freely, with a number of new products launched, set to launch or in development, and our people are talented, energized and engaged. Not surprisingly, we are looking forward to a very bright future with strong growth. I would like to thank all our stakeholders for their support during the year - and in particular I wish to pay tribute to our people, who have again displayed outstanding commitment and expertise, and without whom none of our achievements would have been possible.

Yet despite the positive numbers, the reality is that 2022 could actually have been even better. Our ability to meet customer demand continued to be impacted by a set of circumstances that were not fully in our control. The aftermath of COVID-19, the ongoing war in Ukraine and struggles among

Ultimately, we have seen the global chip shortage that first appeared in 2020 continue through 2022. We have all encountered this in one way or another in our personal lives, whether through delays in taking ownership of a new vehicle or reduced availability of technology such as solar panels.

Delivering on our business strategy…

Although we have at times struggled operationally, from a strategic standpoint we have continued to deliver. Our comprehensive product portfolio is aligned to our customers' roadmaps, delivering cost- effective solutions in support of all applications, from leading-edge to mature nodes. Among many highlights of the year, we shipped the first TWINSCAN NXT:2100i, received new orders for the TWINSCAN EXE:5200 and saw several customers adopt Alignment Optimization 12 Color.

While we had more unhappy customers than I would have liked, we have also experienced empathy and support. We have always kept customers fully informed of any delays to shipments, and they can see for themselves how our investments are set to increase capacity. Cranes stand across the skylines of our sites as our investment to increase our manufacturing capacity to 90 EUV 0.33 NA and 600 DUV systems by 2025-2026 begins to take shape, while we are also ramping our EUV 0.55 NA (High-NA) capacity to 20 systems by 2027-2028. And key partners such as Carl Zeiss are also busy adding capacity, doing everything they can to free the logjam in the supply chain.

some of our supply chain partners to deliver according to our agreed plans due to material shortages have combined to cause significant turbulence and meant that we were unable to give our customers what they needed all of the time.

Our investments are set to increase capacity."

Peter Wennink

President, Chief Executive Officer and Chair of the Board of Management