Slide 1: VAT 2016 Half-Year Results
VAT HALF- YEA R 2016 VAT 2016 HALF-YEAR RESULTS Global leader in high-end vacuum valve technology Heinz Kundert, CEO and Andreas Leutenegger, CFO 1 August 25, 2016
Slide 2: Agenda
PASSION. PRECISION. PURITY. Agenda VAT HALF- YEA R 2016 1 VAT Group AG at a glance and half-year 2016 highlights Heinz Kundert, CEO 2 Half-year 2016 financial review Andreas Leutenegger, CFO 3 Strategic drivers and outlook for full-year 2016 Heinz Kundert, CEO 2
Slide 3: Half-year 2016 highlights
PASSION. PRECISION. PURITY. Half-year 2016 highlights – Mega trends like Big Data, Internet of Things, Industry 4.0 etc. fuel growth VAT HALF- YEA R 2016 High – Technology advances such as 3D NAND and OLED demand for – Continued high demand for WFE fab equipment technology – Large players such as In
Slide 4: Enabling innovation in your daily life and facilitating the digitalization of the world
PASSION. PRECISION. PURITY. Enabling innovation in your daily life and facilitating the digitalization of the world VAT HALF- YEA R 2016 – Global leader in high-end vacuum valves; brand recognition for technology and innovation – Mission-critical products enabling high vacuum process technology – Hi
Slide 5: Pure play in high-end vacuum valve technology with best-in-class profitability
PASSION. PRECISION. PURITY. Pure play in high-end vacuum valve technology with best-in-class profitability VAT HALF- YEA R 2016 VAT Group AG Valves Global Service Industry (76%) (17%) (7%) Segment (% of total net sales) 1 Segment net sales 2 CHF 236m CHF 196m CHF 41m CHF 22m Adj. EBITDA 3 % margin C
Slide 6: Global footprint – flexible set-up close to customers
PASSION. PRECISION. PURITY. Global footprint – flexible set-up close to customers VAT HALF- YEA R 2016 – Global presence ensuring highest customer proximity – 99% of production is exported – 70% of our products have their final destination in Asia – Global key account management 6
Slide 7: VAT – a success story over years
PASSION. PRECISION. PURITY. VAT – a success story over 50 years VAT HALF- YEA R 2016 – Pure play business model focused on mission-critical high-end vacuum valves – Technology leadership and long term, trust-based partnerships Passion – Undisputed no. 1 market position and high barriers to VAT entry
Slide 8: Agenda
PASSION. PRECISION. PURITY. Agenda VAT HALF- YEA R 2016 1 VAT Group AG at a glance and half-year 2016 highlights Heinz Kundert, CEO 2 Half-year 2016 financial review Andreas Leutenegger, CFO 3 Strategic drivers and outlook for full-year 2016 Heinz Kundert, CEO 8
Slide 9: Half-year 2016 – Group key figures
PASSION. PRECISION. PURITY. Half-year 2016 – Group key figures VAT HALF- YEA R 2016 Third party net sales Adj. EBITDA Adj. EBITDA margin CHF 236 m CHF 74 m 31.4% +16% +17% +20pbs Free cash flow margin Net debt/EBITDA Free cash flow 23% 1.4x CHF 54m Free cash flow Dividend 20161 -11% conversion of CH
Slide 10: Order intake steady increasing, backlog stable
PASSION. PRECISION. PURITY. Order intake steady increasing, backlog stable in CHF million VAT HALF- YEA R 2016 +10.2% 256.9 233.1 92.7 91.7 January - June January - June 2015 2016 Order intake Order Backlog 10
Slide 11: Half-Year 2016 net sales
PASSION. PRECISION. PURITY. Half-Year 2016 net sales CHF 236 million VAT HALF- YEA R 2016 Net sales by market segment Net sales by region 76% Valves 45% Asia 35% North America 17% Global Service 7% Industry 20% EMEA 11
Slide 12: Valves – 76% of Group Net Sales
PASSION. PRECISION. PURITY. Valves – 76% of Group Net Sales Jan - June Jan - June Change VAT HALF- YEA R 2016 in CHF million 2016 2015 – High demand for new technology in the Segment net sales 196.5 167.0 17.7% semiconductor industry, particularly from the high- EBITDA 62.9 end wafer manufacturing E
Slide 13: Global Service – 17% of Group Net Sales
PASSION. PRECISION. PURITY. Global Service – 17% of Group Net Sales Jan - June Jan - June Change VAT HALF- YEA R 2016 in CHF million 2016 2015 – Global Service includes a range of services Segment net sales 40.9 36.8 11.1% provided by specialized teams based in the US, EBITDA 17.8 Japan, Korea, Taiw
Slide 14: Industry – 7% of Group Net Sales
PASSION. PRECISION. PURITY. Industry – 7% of Group Net Sales Jan - June Jan - June Change VAT HALF- YEA R 2016 in CHF million 2016 2015 – The segment Industry engages mostly in Segment net sales 21.8 21.5 1.2% innovative and technologically advanced edge- EBITDA 4.6 welded bellows EBITDA margin 21.0
Slide 15: Increase in sales, adj. EBITDA and profitability
PASSION. PRECISION. PURITY. Increase in sales, adj. EBITDA and profitability in CHF million VAT HALF- YEA R 2016 31.4% adj. EBITDA margin 31.2% 235.5 202.8 73.9 63.2 January - June January - June 2015 2016 Third party net sales Adj. EBITDA 15
Slide 16: Substantial benefits below the EBIT line
PASSION. PRECISION. PURITY. Substantial benefits below the EBIT line in CHF million VAT HALF- YEA R 2016 January - June 2016 January - June 2015 Variance EBIT 52.7 45.2 16.7% Finance net -19.9 -37.1 -46.2% EBT 32.8 8.1 303.3% Income tax expenses -8.6 -7.1 21.6% Effective Tax Rate 26% 87% Net income
Slide 17: Free cash flow and conversion margin impacted by growth in the topline
PASSION. PRECISION. PURITY. Free cash flow and conversion margin impacted by growth in the topline VAT HALF- YEA R 2016 Free cash flow Free cash flow conversion 65.6 (5.3) 60.3 59.5 (5.8) 100.2% 53.7 79.2% 2015 2016 2015 2016 Cash flow from operating activities Cash flow from investing activities Fr
Slide 18: Initiatives to mitigate the foreign exchange exposure
PASSION. PRECISION. PURITY. Initiatives to mitigate the foreign exchange exposure VAT HALF- YEA R 2016 FX Status on FX exposure initiatives – Ramp-up of manufacturing site in Malaysia (USD cost base) – Ongoing initiative to increase global sourcing USD – Nomination of debt in USD – FX hedging of up
Slide 19: Net debt reduction on track
PASSION. PRECISION. PURITY. Net debt1 reduction on track VAT HALF- YEA R 2016 Gross Debt Net Debt 1.8x Net debt/EBITDA 1.4x 405 224 183 304 263 December 31, 2015 June 30, 2016 December 31, 2015 June 30, 2016 Senior Secured Credit Facility Shareholder Loan – Conversion of shareholder loan into shares
Slide 20: Agenda
PASSION. PRECISION. PURITY. Agenda VAT HALF- YEA R 2016 1 VAT Group AG at a glance and half-year 2016 highlights Heinz Kundert, CEO 2 Half-year 2016 financial review Andreas Leutenegger, CFO 3 Strategic drivers and outlook for full-year 2016 Heinz Kundert, CEO 20
Slide 21: Market trends in the electronic market
PASSION. PRECISION. PURITY. Market trends in the electronic market - Entire supply chain is growing with CAGR >3% 2016-19 CAGR 15-20 Market Size 2016E VAT HALF- YEA R 2016 2-3% Worldwide GDP ~USD 80t** 5-6% Electronics Devices ~USD 2.2t* (includes devices with IC+FDP+HDD+LED+PV) 4-5% IC+FDP+HDD+LED+
Slide 22: Market segments driving WFE demand
PASSION. PRECISION. PURITY. Market segments driving WFE demand (billion units) +5% CAGR +3% CAGR VAT HALF- YEA R 2016 Smartphones 1.8 Flat TV 1.6 1.7 1.8 1.4 1.5 0.23 0.23 0.23 0.24 0.25 0.26 2015 2016 2017 2018 2019 2020 2015 2016 2017 2018 2019 2020 Tablets +0.1% CAGR Wearables +22% CAGR 0.22 0.20
Slide 23: Undisputed no. 1 market position with high barriers to entry
PASSION. PRECISION. PURITY. Undisputed no. 1 market position with high barriers to entry Vacuum valves market: top players by market share (2015) VAT market share evolution 2012 - 2015 VAT HALF- YEA R 2016 – VAT has a share of 41% of the vacuum valves market – VAT’s leading market position has expan
Slide 24: Multi-dimensional growth - vacuum as key enabler of proliferating technologies
PASSION. PRECISION. PURITY. Multi-dimensional growth - vacuum as key enabler of proliferating technologies VAT HALF- YEA R 2016 1st Dimension 2nd Dimension 3rd Dimension End market growth Manufacturing equipment growth Vacuum valve growth – VAT is exposed to a broad range of well – Advanced and comp
Slide 25: VATmotion – focus on agility, cost, quality and cash optimization
PASSION. PRECISION. PURITY. VATmotion – focus on agility, cost, quality and cash optimization VAT HALF- YEA R 2016 Growth Product Supply Chain (incl. operational Management/ Production Procurement Cross-functional Management implications) Engineering Value Manufacturing Material Key Account Asia Gro
Slide 26: Proven management team and a highly skilled workforce
PASSION. PRECISION. PURITY. Proven management team and a highly skilled workforce VAT HALF- YEA R 2016 Group Executive Committee Group Management Board Highly skilled workforce – 1’278 dedicated employees – Over 130 top qualified development engineers, Heinz Kundert Urs Gantner Gebhard Lutz Jürgen Z
Slide 27: Continued profitable growth expected
PASSION. PRECISION. PURITY. Continued profitable growth expected – Key growth drivers: Attractive growth markets for semiconductors, displays and related mainly VAT HALF- YEA R 2016 in the US, Japan, South Korea and China – Technology advances such as 3D NAND and OLED displays require substantial in
Slide 28: Q&A Session
VAT HALF- YEA R 2016 VAT 2016 HALF-YEAR RESULTS Q&A Session Heinz Kundert, CEO and Andreas Leutenegger, CFO 28 August 25, 2016
Slide 29: Information
PASSION. PRECISION. PURITY. Information VAT HALF- YEA R 2016 Investor information Contact information Listing: SIX Swiss Exchange Michel Gerber Currency: CHF Head of Investor Relations & Ticker symbol: VACN Corporate Communications ISIN: CH 031 186490 1 Phone: +41 81 772 42 55 Listing date: April 14
Slide 30: Forward looking statements
PASSION. PRECISION. PURITY. Forward looking statements VAT HALF- YEA R 2016 Forward-looking statements contained herein are qualified in their entirety as there are certain factors that could cause results to differ materially from those anticipated. Any statements contained herein that are not stat