Pfeiffer Vacuum reports sound performance in fiscal year 2019

Pfeiffer Vacuum Technology AG announces audited results for the fiscal year 2019. They correspond to the preliminary results announced on February 20, 2020.

Compared to the previous year, when Pfeiffer Vacuum reached sales at a record level, sales decreased by 4.1 percent in 2019 (2018: EUR 659.7 million), primarily driven by challenging market conditions in the coating market and a weaker demand from semiconductor customers. This was partly offset by a strong performance in the industry market segment and the growth in the R&D and analytics markets. The operating result (EBIT) decreased by 31.5 percent (previous year: EUR 95.1 million) and the EBIT margin was 10.3 percent (previous year: 14.4). The decrease in sales put pressure on operating results. In addition, increased expenses to drive market share growth and to improve the EBIT margin to over 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 0.95 for the full year. At the end of the fourth quarter, Pfeiffer Vacuum had an order backlog of EUR 110.7 million, representing a decrease of 23.6 percent compared to the previous year (EUR 144.9 million).

The Management and Supervisory Boards will propose to pay out a dividend of EUR 1.25 per share (previous year: EUR 2.30) at the Annual General Meeting. This takes into consideration the increased expenses related to the implementation of the growth strategy, which were especially significant in 2019, the expected investments in 2020, as well as the Coronavirus situation. The payout ratio would thus represent 25.5 percent of the Group result.

"2019 was a year of preparing for the transformation of the company to an even stronger market position in the high-vacuum market and to drive operational efficiencies,” says Dr. Eric Taberlet, CEO of Pfeiffer Vacuum Technology AG. “Our focus for 2020 is first and foremost on managing through the Coronavirus related business challenges and protecting the health and safety of our employees as well as meeting our customers’ needs.”

Nathalie Benedikt, CFO comments: “In 2020 we will continue the execution of our growth strategy. However, we will take into consideration the new economic realities that the Coronavirus presents to balance expenses.”

The gross profit in the reporting period was EUR 215.9 million (previous year: EUR 235.2 million). The year-over-year decline is due to reduced sales and negative economies of scale.

Net income declined to EUR 48.4 million (previous year: EUR 68.9 million) representing earnings per share of EUR 4.90 (previous year: EUR 6.98).

Sales growth in the Americas
Sales by region, which describes sales according to the location of the customers in their corresponding region, Americas contributed to an increase in sales of 2.2 percent to EUR 169.7 million (previous year: EUR 165.9 million). Europe showed a decrease of 6.0 percent to EUR 232.0 million (previous year: EUR 247.0 million). Sales in Asia declined by 6.3 percent to EUR 231.1 million (previous year: EUR 246.6 million) due to an adverse environment in the semiconductor and coating markets.

Sales by product: Year-over-year increase in systems and service
With EUR 191.6 million sales of turbopumps were flat compared to the previous year (previous year: EUR 192.1 million). Instruments and components sales reached EUR 184.6 million (previous year: EUR 193.7 million). With a sales volume of EUR 124.2 million (previous year: EUR 143.4 million), backing pump sales were the most impacted by challenging semiconductor and coating market conditions compared to the previous year. Sales from services increased by 1.1 percent to EUR 112.8 million (previous year: EUR 111.6 million). Systems, a predominantly project-oriented area, increased sales by 4.5 percent over the previous year to EUR 19.7 million (previous year: EUR 18.9 million).

Industry market reports record sales
The industry market sector grew by 10.5 percent in a challenging market, to a record total sales volume of EUR 149.5 million (previous year: EUR 135.3 million). This is partly due to the increased use of new high-vacuum technology applications. Sales in the semiconductor market, the Company’s largest market, declined by 8.7 percent to EUR 222.6 million compared to EUR 243.9 million in the previous year. This development is attributable to the adverse market environment. The coating market dropped by 24.1 percent to EUR 75.6 million (previous year: EUR 99.6 million) due to a weaker solar market. On the other hand, Analytics with sales of EUR 118.5 million (previous year: EUR 116.7 million) and R&D with sales of EUR 66.7 million (previous year: EUR 64.2 million), both grew year-over-year.

Innovation leadership and strengthening of production capabilities
During 2019 production facilities at the sites in France and Romania were modernized and capacity expanded. Furthermore, Pfeiffer Vacuum established production capabilities in China. In addition, the HiLobe product line, which has exceptional short pump-down times, and the ASM 306 S, a new leak detector with break-through technology, were introduced.

Outlook for the 2020 fiscal year
Sales and order intake in the semiconductor market were strong entering 2020. However, the Company expects an impact on the business related to the Coronavirus, which cannot be predicted at this point-in-time. Expectations for 2020, outlined in February 2020 and in the Annual Report, of revenue growth, EBIT margins flat to 2019 and expected capital investments in the range of EUR 40 to 60 million are therefore invalid.

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