Pfeiffer Vacuum posts very successful FY 2016 and expects positive development to continue.
Total sales for FY 2016, which had been preliminarily announced and have meanwhile been audited, amounted to EUR 474.2 million. This represents an increase of 5.0 % (previous year: EUR 451.5 million). Operating profit (EBIT) came to EUR 68.0 million, marking a significant y-o-y increase of 11.9 %. The operating profit margin (EBIT margin) for FY 2016 amounted to 14.3 % and was thus 0.8 %age points higher than previous year s 13.5 %.
The Management and Supervisory Boards propose a dividend of EUR 3.60 per share (previous year: EUR 3.20). As in the previous year, the payout ratio would thus amount to around 76 % of consolidated net income.
Pfeiffer Vacuum s order intake for FY 2016 amounted to EUR 481.9 million (previous year: EUR 456.9 million). The book-to-bill ratio – the ratio of order intake to sales – was 1.02 in 2016 (previous year: 1.01). Year-end order backlog amounted to EUR 72.3 million (previous year: EUR 64.7 million).
Manfred Bender, CEO of Pfeiffer Vacuum Technology AG, comments: "The fiscal year 2016 was very successful for Pfeiffer Vacuum. We were able to yet again increase our sales and further improve our already good profitability. We did more business with more customers and benefited significantly from the strong, dynamic growth of the Semiconductor and Coating division. In addition, we have improved our structures and processes with the help of GAP. To enable shareholders to participate in this positive development, the Management Board and Supervisory Board will propose a dividend of EUR 3.60 per share at the Annual General Meeting in May."
In terms of sales broken down by regions, Europe posted an increase of 1.0 % to EUR 188.9 million (previous year: EUR 187.0 million). Sales in Asia rose significantly by 15.2 % to EUR 174.6 million (previous year: EUR 151.5 million). In North and South America, sales dipped slightly by 1.7 % to EUR 110.5 million (previous year: EUR 112.4 million).
Sales of turbo pumps remained virtually unchanged at 144.5 million EUR (previous year: 144.8 million EUR). Sales of backing pumps increased by 12.3 % to EUR 115.0 million (previous year: EUR 102.4 million). Business with instruments and components grew by 6.8 % to EUR 105.5 million (previous year: EUR 98.8 million). Service revenues rose by 3.1 % to EUR 99.7 million (previous year: EUR 96.7 million). Systems sales amounted to EUR 9.5 million after EUR 8.8 million in the previous year.
All market segments exhibited growth in the past fiscal year: The Semiconductor market generated sales of EUR 154.7 million (previous year: EUR 139.9 million). This represents a substantial increase of 10.7 %. In the heterogeneous market segment Industry, sales climbed slightly by 0.7 % to EUR 115.9 million (previous year: EUR 115.0 million). Sales in the Analytics market segment were up 0.4 %, increasing to EUR 92.1 million (previous year: EUR 91.7 million). In the Research & Development market, sales rose to EUR 56.1 million (previous year: EUR 55.6 million). With a strong 12.3 % growth rate, Coating sales come to EUR 55.4 million (previous year: EUR 49.3 million).
Gross profit for the reporting period amounted to EUR 180.5 million (previous year: EUR 175.5 million). The gross profit margin in the past year decreased by 0.8 %age points to 38.1 % (previous year: 38.9 %). Operating profit (EBIT) amounted to EUR 68.0 million. This was 11.9 % above the previous year s figure of EUR 60.8 million. This corresponds to an operating margin (EBIT margin) of 14.3 % (previous year: 13.5 %).
The financial result amounted to EUR -0.4 million (previous year: EUR -0.3 million) and the tax rate amounted to 30.4 % (previous year: 30.7 %). Net income therefore totaled 47.0 million EUR. This represents an increase of 12.2 % (previous year: 41.9 million EUR). Earnings per share amounted to a record EUR 4.77, representing an increase of 12.2 % (previous year: EUR 4.25).
Despite paying out a high dividend for FY 2015, Pfeiffer Vacuum was able to increase its net cash position to EUR 109.8 million as at December 31, 2016 (previous year: EUR 94.7 million). The equity ratio rose to 68.7 % (previous year: 67.3 %).
On top of that, Pfeiffer Vacuum has attractive growth prospects:
The past fiscal year s outstanding results clearly demonstrate that Pfeiffer Vacuum is already very well positioned today. With its very attractive, high-margin portfolio mix, the company also offers sustainable long-term prospects to its shareholders. In addition, the two business units are at excellent vantage points to realize the potential for growth in the vacuum industry and benefit from global growth trends. The company will concentrate on putting the 2020 strategy into practice to continue developing Pfeiffer Vacuum successfully and in its shareholders best interests. This strategy prioritizes profitability and growth, of which the GAP program is a key driver.
GAP program continues
Since 2015, Pfeiffer Vacuum has been creating the prerequisites for increased profitable growth with GAP. Its key measures will be implemented by the end of 2017. The following GAP measures contributed to the very good result in the past fiscal year:
- stronger focus on key accounts, especially in Asia,
- in-depth analysis and optimization of the entire supply chain, and
- the creation of competence centers for individual products at specific locations.
The contribution to earnings resulting from GAP for FY 2016 amounted to EUR 2.5 million, which represents an improvement of the EBIT margin of around 0.5 %age points. This means that more than half of the margin increase was attributable to GAP. The contribution to earnings in the current financial year is expected to increase to EUR 3 to 4 million.
In the course of putting GAP into practice, the company identified a number of other key measures to be implemented in the course of the next few years. GAP Reloaded will take advantage of the internal structures and processes established by the original GAP program to tap further potential within the company. Pfeiffer
Vacuum expects GAP Reloaded to contribute between EUR 5 and 7 million, respectively, to earnings in 2018 and 2019.
Further use of financial strength for acquisitions
Another key element of the 2020 Strategy is growth through selected acquisitions. Pfeiffer Vacuum will therefore continue to actively leverage its financial strength for attractive acquisitions and play a key role in the vacuum industry s consolidation. Pfeiffer Vacuum had already taken over two exciting enterprises, the service company Dreebit and ATC for the leak detection division, at the beginning of this fiscal year. Dreebit is to be an integral component of Pfeiffer Vacuum s future service strategy which aims to meet customers needs for excellent and comprehensive service. This constitutes a clear and attractive growth market. Together with ATC and its alternative technologies and new applications, Pfeiffer Vacuum will also establish itself as a market leader in non-destructive testing. Dreebit and ATC are to be rapidly integrated in the course of the current fiscal year.
Failed takeover bid by Busch Group, further options under review
Pfeiffer Vacuum expressly welcomes the termination of the takeover bid. This is good news for Pfeiffer Vacuum and its shareholders. The estimation of Pfeiffer Vacuum s management from the outset was that the Busch Group aimed to gain active control over Pfeiffer Vacuum with the takeover offer, albeit without being prepared to pay a customary and appropriate takeover premium. What is more, Busch failed to present a plan outlining the scope for a potential collaboration with Pfeiffer Vacuum.
In addition to further developing Pfeiffer Vacuum as an autonomous and independent company through major acquisitions and implementing the 2020 Strategy, the company will also examine further options in order to enable shareholders to participate accordingly in Pfeiffer Vacuum s value potential and decide for themselves what the future of their company should be.
Manfred Bender, CEO of Pfeiffer Vacuum Technology AG, comments: "The termination of the takeover offer has markedly improved our scope for action. However, there is still the concern that Busch will bring about resolutions at our Annual General Meeting on May 23 that are clearly directed against the interests of the company and its shareholders. In the weeks and months ahead, we will therefore be calling on our shareholders to determine the further course of their company with a high attendance at the Annual General Meeting and prevent a minority shareholder from depriving them of options to achieve the returns befitting the company."
Pfeiffer Vacuum is very satisfied with the first months of the new year. The company has been able to carry 2016 s successful developments over to this fiscal year. Year-to-date order intake is around 20 % higher than it was last year. Pfeiffer Vacuum expects this positive trend to continue at least until the middle of the year and FY 2017 sales to increase significantly compared to FY 2016. The operating result (EBIT) should rise accordingly. As it stands today, Pfeiffer Vacuum has every reason to believe these positive developments will also continue into 2018.
Source: Pfeiffer Vacuum GmbH