Slide 1: Second quarter and half-year results 2020
Second quarter and half-year results 2020 PASSION.PRECISION.PURITY. 2020 second-quarter and half-year results August 6, 2020 1
Slide 2: Agenda
PASSION. PRECISION. PURITY. Agenda Second quarter and half-year results 2020 1 Highlights Mike Allison, CEO 2 Second-quarter and half-year 2020 financial review Stephan Bergamin, CFO 3 Conclusion, priorities and outlook for remainder of 2020 Mike Allison, CEO 2
Slide 3: Q2 and H1 growth driven by ongoing recovery in semiconductors; EBITDA margin near 30%
PASSION. PRECISION. PURITY. Q2 and H1 growth driven by ongoing recovery in semiconductors; EBITDA margin near 30% as operational improvements continue Second quarter and half-year results 2020 COVID-19 pandemic Sequential quarterly successfully mitigated so sales up in all business H1 results reflec
Slide 4: EBITDA margin recovery continues in H1 2020
PASSION. PRECISION. PURITY. EBITDA margin recovery continues in H1 2020 Second quarter and half-year results 2020 Segment VAT Group AG Valves Global Service Industry (% of total (17%) (3%) net sales) (100%) (80%) H1 net sales CHF 319m CHF 256m CHF 55m CHF 7m H1 EBITDA margin1 29.7% 31.2% 40.7% 15.3%
Slide 5: Market trends remain mixed across our major business units in 2020
PASSION. PRECISION. PURITY. Market trends remain mixed across our major business units in 2020 Semiconductors Second quarter and half-year results 2020 WFE investments continue to recover, driven by memory; foundry and advanced logic Technology advances continues; industry preparing for next nod
Slide 6: Innovation, business continuity and customer focus – No. 1 market position further strengthened
PASSION. PRECISION. PURITY. Innovation, business continuity and customer focus – No. 1 market position further strengthened Market share All Industries 1 Market share Semi & Related 2 Market share Semi 3 Total vacuum valve market size Total vacuum valve market size Total vacuum valve market size Sec
Slide 7: Agenda
PASSION. PRECISION. PURITY. Agenda Second quarter and half-year results 2020 1 Highlights Mike Allison, CEO 2 Second-quarter and half-year 2020 financial review Stephan Bergamin, CFO 3 Remainder of 2020 priorities, conclusion and outlook Mike Allison, CEO 7
Slide 8: Half-year 2020 – Group key figures
PASSION. PRECISION. PURITY. Half-year 2020 – Group key figures Second quarter and half-year results 2020 EBITDA margin Third party net sales EBITDA 29.7% (+4.6pp) CHF 319 m CHF 95 m EBIT margin +21% +44% 23.3% (+7.0pp) Free cash flow margin Free cash flow 12.5% (-4.7pp) LTM1 Net debt/EBITDA CHF 40 m
Slide 9: H1 2020 order intake up 37% as market recovery and share gains continue
PASSION. PRECISION. PURITY. H1 2020 order intake up 37% as market recovery and share gains continue in CHF million Half-year Second quarter and half-year results 2020 2020 order intake +37% 358 262 Q2 2020 Half-year order intake 2020 order +32% backlog +38% 177 154 134 112 2019 2020 Q2 order intake
Slide 10: Recovery continues with strong order and sales development
PASSION. PRECISION. PURITY. Recovery continues with strong order and sales development 250 1.40 Second quarter and half-year results 2020 1.20 200 1.00 150 0.80 0.60 100 0.40 50 0.20 0 0.00 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Order intake Net sales Book to
Slide 11: VAT's business model generates consistently high economic profit on invested capital
PASSION. PRECISION. PURITY. VAT’s business model generates consistently high economic profit on invested capital 400 60.0% Second quarter and half-year results 2020 350 50.0% 300 40.0% 250 200 30.0% 150 20.0% 100 10.0% 50 0 0.0% 2015 2016 2017 2018 2019 6M 2020 Invested Capital LTM NOPAT LTM Free Ca
Slide 12: EBITDA margin growth from higher volumes and continued operational improvements
PASSION. PRECISION. PURITY. EBITDA margin growth from higher volumes and continued operational improvements in CHF million 319 Second quarter and half-year results 2020 Sales +21% 263 173 135 29.7% 25.1% EBITDA margin* 95 66 2019 2020 Q2 net sales Half-year net sales Half-year EBITDA Higher toplin
Slide 13: Margin recovery continues despite COVID-19 pandemic
PASSION. PRECISION. PURITY. Margin recovery continues despite COVID-19 pandemic in CHF million 450 35% Second quarter and half-year results 2020 400 31.6% 350 29.9% 29.7% 300 28.7% 30% 250 200 150 25% 25.1% 100 50 0 20% H1 2018 H2 2018 H1 2019 H2 2019 H1 2020 Net Sales EBITDA EBITDA-Margin Semicon
Slide 14: Net income increases on higher EBITDA, lower depreciation and reduced taxes
PASSION. PRECISION. PURITY. Net income increases on higher EBITDA, lower depreciation and reduced taxes in CHF million 6M 2020 6M 2019 Change Second quarter and half-year results 2020 EBITDA 94.8 65.9 43.8% Depreciaton and amortization -20.4 -23.0 -11.3% EBIT 74.4 43.0 73.2% Finance net -9.9 -4.6 11
Slide 15: Growth-driven NWC requirements impacted free cash flow generation in H1 2020
PASSION. PRECISION. PURITY. Growth-driven NWC requirements impacted free cash flow generation in H1 2020 Free cash flow Free cash flow conversion Second quarter and half-year results 2020 100% (7) 52 91% 52 (12) 88% 86% 45 40 79% 69% 57% 51% 58% 42% 39% 6M 2019 6M 2020 Cash flow from operating activ
Slide 16: Net debt largely unchanged vs 2019; seasonally higher due to May dividend payment
PASSION. PRECISION. PURITY. Net debt largely unchanged vs 2019; seasonally higher due to May dividend payment Net debt development Second quarter and half-year results 2020 1.9 1.5 (104) 1.4 (94) 334 1.3 330 1.1 1.0 0.9 0.9 236 230 0.7 0.7 Target level of 1.0x Net Debt/EBITDA Dec June Dec June Dec J
Slide 17: Summary of H1 2020 financial results and priorities for rest of 2020
PASSION. PRECISION. PURITY. Summary of H1 2020 financial results and priorities for rest of 2020 Second quarter and half-year results 2020 Achievements H1 2020 Continued EBITDA margin recovery, successful mitigation of COVID-19 impacts, and further improvements in cost and productivity (e.g., ERP
Slide 18: Agenda
PASSION. PRECISION. PURITY. Agenda Second quarter and half-year results 2020 1 Highlights Mike Allison, CEO 2 Second-quarter and half-year 2020 financial review Stephan Bergamin, CFO 3 Remainder of 2020 priorities, conclusion and outlook Mike Allison, CEO 19
Slide 19: Our three medium-term growth dimensions remain in place
PASSION. PRECISION. PURITY. Our three medium-term growth dimensions remain in place 1st dimension: End market growth Second quarter and half-year results 2020 Medium-term digitalization growth trends such as IoT, AI, AR remain in place Hyperscale applications, cloud storage support memory recove
Slide 20: Macro uncertainties remain, but semiconductor equipment visibility is improving
PASSION. PRECISION. PURITY. Macro uncertainties remain, but semiconductor equipment visibility is improving with high single-digit growth expected in 2020 Market 2019 2020 Semiconductor Second quarter and half-year results 2020 Equipment order visibility improving but Semiconductor IC1 -13% +6% CO
Slide 21: Investment in innovation remains VAT's key to future growth and market share gains
PASSION. PRECISION. PURITY. Investment in innovation remains VAT’s key to future growth and market share gains Second quarter and half-year results 2020 Spec win development VAT continues to invest in innovation and the development of leading-edge technologies Further increase in R&D personnel,
Slide 22: Our market summary and focus for H2 2020
PASSION. PRECISION. PURITY. Our market summary and focus for H2 2020 Second quarter and half-year results 2020 General investment sentiment in semiconductor market expected to remain positive in 2020, first indications suggest growth continuing into 2021 Service business returning to growth with
Slide 23: Full-year 2020 outlook and net sales guidance for Q3
PASSION. PRECISION. PURITY. Full-year 2020 outlook and net sales guidance for Q3 Second quarter and half-year results 2020 Semiconductor outlook remains positive; strength of recovery depends on macro impact of pandemic Assuming no substantial demand deterioration vs. H1, VAT expects FY Full-yea
Slide 24: Q&A Session
Second quarter and half-year results 2020 Q&A Session PASSION.PRECISION.PURITY. 25
Slide 25: Information
PASSION. PRECISION. PURITY. Information Second quarter and half-year results 2020 Investor information Contact information Listing: SIX Swiss Exchange Michel Gerber Currency: CHF Head of Communications & Ticker symbol VACN Investor Relations ISIN CH 031 186490 1 Phone: +41 81 772 42 55 E-mail: m.ger
Slide 26: Forward looking statements
PASSION. PRECISION. PURITY. Forward looking statements Second quarter and half-year results 2020 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 her