Pfeiffer Vacuum reports strong first quarter 2020 order intake and stable sales in COVID-19 environment
The company reported sales of EUR 153.3 million, an operating result (EBIT) of EUR 12.8 million and an EBIT margin of 8.4 percent. The order intake increased significantly to EUR 172.9 million.
Pfeiffer Vacuum sales for the first quarter 2020 were about flat with the previous year (Q1 2019: EUR 153.7 million), primarily driven by a strong performance in the semiconductor market and also a growth in the R&D market segment. This was offset by sales declines in the coating, industry and analytics markets. Sales in the semiconductor and coating market increased by 4.7 percent to EUR 78.6 million (Q1 2019: 75.1 million) and sales in the industry, analytics and R&D market segments decreased by 5.0 percent to EUR 74.7 million (Q1 2019: 78.6 million).
The operating result (EBIT) decreased by 29.4 percent (Q1 2019: EUR 18.1 million) and the EBIT margin was 8.4 percent (Q1 2019: 11.8 percent). The year-over-year decline in EBIT was primary a result of productivity loss through COVID-19 and due to changes in the product and market mix. In addition, increased expenses to drive market share growth and to improve the EBIT margin to 20 percent 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 very strong at 1.13 for the first quarter. At the end of the first quarter, Pfeiffer Vacuum had an order backlog of EUR 130.3 million, representing a decrease of 6.9 percent compared to the previous year (March 31, 2019: EUR 140.0 million) and an increase of 17.7 percent compared to year-end 2019 (December 31, 2019: EUR 110.7 million).
"Our top priorities in the COVID-19 environment remain the health and safety of our employees and communities and to meet our customers' needs," says Dr. Eric Taberlet, CEO of Pfeiffer Vacuum Technology AG. "The high-vacuum industry is robust, and we are supplying growth markets. We must remain vigilant and agile to navigate through this challenging, quickly evolving environment that is impacting already some of the markets we serve. I am proud that so far there has been no major disruption in meeting our customers' deliveries."
Nathalie Benedikt, CFO comments: "Pfeiffer Vacuum is affected by COVID-19, but less so than many other industries, and is in a strong financial position. In the current environment we are acting with caution and remain agile to make adjustments where needed. We are firmly on the path to execute our strategy to gain market share and improve the EBIT margin."
The gross profit in the reporting period was EUR 53.3 million (Q1 2019: EUR 55.7 million). The year-over-year decline is due to negative economies of scale related to product and market mix and productivity impact related to COVID-19 measures.
Net income declined to EUR 8.9 million (Q1 2019: EUR 12.9 million) representing earnings per share of EUR 0.90 (Q1 2019: EUR 1.31).
In sales by region, which describes sales according to the location of the customers in their corresponding region, the Americas contributed to an increase in sales of 10.5 percent to EUR 44.4 million (Q1 2019: EUR 40.2 million) driven by sales to semiconductor customers. Europe showed a decrease of 1.1 percent to EUR 58.0 million (Q1 2019: EUR 58.6 million). Sales in Asia declined by 7.2 percent to EUR 50.9 million (Q1 2019: EUR 54.9 million) related to market conditions in the coating market.
Balance sheet and cash-flow
Total assets at the end of first quarter 2020 were EUR 667.0 million up slightly from year-end 2019 (December 31, 2019: EUR 660.0 million). Cash and cash equivalent were EUR 104.7 million and the company is net debt free from a financial liability perspective. The equity ratio was at 60.3 percent, slightly up from the year-end 2019 (December 31, 2019: 59.6 percent).
Pfeiffer Vacuum is not able to make a reliable forecast due to the impact of COVID-19 on the world economy and thus on some of our markets. Critical semiconductor customers currently remain committed to their expansion and orders in the analytics market supporting the fight against COVID-19 are strong. Economic activity in other markets served declined. The company expects market conditions and world economic activity to put pressure on the financial performance.
Source: Pfeiffer Vacuum GmbH