Pfeiffer Vacuum Benefits from Strong Semiconductor Business during H1 2020

Pfeiffer Vacuum Technology AG announced consolidated results for the first half of 2020.
Pfeiffer Vacuum Benefits from Strong Semiconductor Business during H1 2020

Overview of key figures (Image source: Pfeiffer Vacuum Technology AG)

Pfeiffer Vacuum sales for the first six months 2020 declined slightly by 3.0% to EUR 301.9 million compared to the previous year (H1 2019: EUR 311.1 million), primarily driven by lower sales in the coating, analytics, industry and R&D markets, offset by a strong performance in the semiconductor market. Sales in the semiconductor and coating market combined increased by 7.6% to EUR 158.5 million (H1 2019: 147.3 million) whereas sales in the industry, analytics and R&D market segments decreased by 12.5% to EUR 143.4 million (H1 2019: 163.8 million).

The operating result (EBIT) of EUR 19.5 million represents a decrease by 40.5% compared to the previous year (H1 2019: EUR 32.8 million). The EBIT margin reached 6.5% (H1 2019: 10.6%). The year-over-year decline in EBIT was primarily a result of the decrease in sales, productivity losses through COVID-19 and due to changes in sales mix. In addition, increased expenses to drive market share growth and to improve the EBIT margin to 20% by 2025 as outlined in the Company’s growth strategy had a negative effect on the operating performance.

The book-to-bill ratio, the ratio of order intake to sales, was at 1.05 for the first half of the year 2020. The order intake was strong despite COVID-19 and reached EUR 316.6 million, up 7.8% compared to first half of 2019. At the end of the second quarter 2020, Pfeiffer Vacuum had an order backlog of EUR 125.4 million, roughly stable compared to the previous year (June 30, 2019: EUR 127.5 million).

“Our results for the first half of 2020 were particularly impacted by COVID-19 and the global recession in the second quarter 2020,” says Dr. Eric Taberlet, CEO of Pfeiffer Vacuum Technology AG. “However, we are operating in the very attractive growth market of high-vacuum applications, have leading technology, a broad customer base and committed employees. This positions us well in an overall challenging market environment.”

Nathalie Benedikt, CFO comments: “Pfeiffer Vacuum is in a strong financial position. This provides the foundation for our commitment to execute our strategy to drive market share gains and operational efficiencies. However, it is essential that we remain agile and make adjustments where needed, particularly in the current market environment.”

In sales by region, which describes sales according to the location of the customers in their corresponding region, Pfeiffer Vacuum in the Americas achieved a year-over-year increase in sales by 2.2% to EUR 84.5 million for the first half 2020 (H1 2019: EUR 82.7 million) driven by sales to semiconductor customers. Europe showed a decrease of 5.4% to EUR 108.7 million (H1 2019: EUR 114.9 million). Sales in Asia declined by 4.3% to EUR 108.6 million (H1 2019: EUR 113.4 million), mainly related to market conditions in the coating market.

The gross profit for the first half of 2020 was EUR 102.6 million (H1 2019: EUR 109.0 million). The year-over-year decline is due to negative economies of scale related to sales declines, sales mix and productivity impact related to COVID-19 measures.

Net income declined to EUR 13.5 million (H1 2019: EUR 23.3 million) representing earnings per share of EUR 1.37 (H1 2019: EUR 2.36).

Balance sheet and cash-flow
As of June 30, 2020, Pfeiffer Vacuum maintained its solid financial position. Total assets at the end of second quarter 2020 were EUR 657.2 million down slightly from year-end 2019 (December 31, 2019: EUR 659.6 million). Cash and cash equivalent were EUR 106.4 million (December 31, 2019: EUR 112.0 million) and the Company is net debt free from a financial liability perspective. The equity ratio was at 59.6%, unchanged from the year-end 2019 (December 31, 2019: 59.6%).

Due to the impact of COVID-19 on the global economy, Pfeiffer Vacuum remains unable to make a reliable forecast. Critical semiconductor customers currently remain committed to their expansion. However, economic activity in other markets served has declined. Therefore, the Company does not expect improvements in sales or operating results in the second half of 2020 compared to the first half of 2020.

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