Slide 1: Half-year 2017 results
Hal f -year 2017 resul t s H ALF Y EAR 2017 R ESULTS Global leader in high-end vacuum valve technology Heinz Kundert, CEO, Andreas Leutenegger, CFO and Jürgen Krebs, COO August 24, 2017 1
Slide 2: Agenda
PASSION. PRECISION. PURITY. Agenda Hal f -year 2017 resul t s 1 Highlights Heinz Kundert, CEO 2 Second quarter and half-year 2017 financial review Andreas Leutenegger, CFO 3 Strategic drivers Heinz Kundert, CEO 4 Investing into the future Jürgen Krebs, COO 5 Conclusion and outlook for the rest of 20
Slide 3: VAT captured present business opportunities in ongoing favorable market conditions
PASSION. PRECISION. PURITY. VAT captured present business opportunities in ongoing favorable market conditions Hal f -year 2017 resul t s § Record results driven Growth drivers of our Further market share by unprecedented business firmly gains in H1 17 according growth of our key established to VLSI
Slide 4: Existing key growth trends for VAT continue to drive business development
PASSION. PRECISION. PURITY. Existing key growth trends for VAT continue to drive business development Semiconductors Displays Solar Industry & Research Hal f -year 2017 resul t s Picture Picture Picture End-market growth trend 2016 vs. 2015 – Continued high – High investments due – Increasing demand
Slide 5: All market segments contribute to strong Group performance
PASSION. PRECISION. PURITY. All market segments contribute to strong Group performance Hal f -year 2017 resul t s VAT Group AG Valves Global Service Industry (81%) (13%) (6%) Segment (% of total net sales) Net sales CHF 326m / +39% CHF 264m / +48% CHF 44m / +6% CHF 19m / +17% Adj. EBITDA1 / margin2
Slide 6: Agenda
PASSION. PRECISION. PURITY. Agenda Hal f -year 2017 resul t s 1 Highlights Heinz Kundert, CEO 2 Second quarter and half-year 2017 financial review Andreas Leutenegger, CFO 3 Strategic drivers Heinz Kundert, CEO 4 Investing into the future Jürgen Krebs, COO 5 Conclusion and outlook for the rest of 20
Slide 7: Half-year 2017 – Group key figures
PASSION. PRECISION. PURITY. Half-year 2017 – Group key figures Hal f -year 2017 resul t s Third party net sales Adj. EBITDA1 Adj. EBITDA margin CHF 326m CHF 98m 30.1% +39% +33% -130 bps Free cash flow margin Free cash flow 17% Net debt/EBITDA CHF 54m Free cash flow 1.1x LTM +1% conversion 57% 1 adju
Slide 8: Order intake and backlog increasing
PASSION. PRECISION. PURITY. Order intake and backlog increasing in CHF million Hal f -year 2017 resul t s 372 +45% 257 190 168 +55% +38% 122 1221 2016 2017 Q2 order intake 6M order intake Order backlog 1 as of December 31, 2017 8
Slide 9: Increase in sales, adj. EBITDA
PASSION. PRECISION. PURITY. Increase in sales, adj. EBITDA in CHF million Hal f -year 2017 resul t s 326 +39% 236 162 +35% 98 120 +33% 74 2016 2017 1 Q2 net sales 6M net sales 6M adj. EBITDA 1 adjusted EBITDA excludes one-off items 9
Slide 10: Half-year 2017 net sales
PASSION. PRECISION. PURITY. Half-year 2017 net sales CHF 326 million Hal f -year 2017 resul t s Net sales by market segment Net sales by region 81% Valves 50% Asia 35% North America 13% Global Service 6% Industry 15% EMEA 10
Slide 11: Valves – 81% of net sales
PASSION. PRECISION. PURITY. Valves – 81% of net sales in CHF million Q2 2017 Q2 2016 Change Semiconductors: Hal f -year 2017 resul t s Order intake 153.6 91.0 68.8% – Ongoing high demand for memory devices such Net sales 131.1 89.9 45.8% as DRAM and NAND solid-state flash memory in CHF million 6M 20
Slide 12: Global Service – 13% of net sales
PASSION. PRECISION. PURITY. Global Service – 13% of net sales in CHF million Q2 2017 Q2 2016 Change Semi and display related equipment investments Hal f -year 2017 resul t s Order intake 26.2 22.8 14.9% stimulate sales growth Net sales 21.7 21.4 1.4% – Increasing sales of spare parts on the back of
Slide 13: Industry – 6% of net sales
PASSION. PRECISION. PURITY. Industry – 6% of net sales in CHF million Q2 2017 Q2 2016 Change Investments and business model adjustments Hal f -year 2017 resul t s Order intake 10.3 8.6 19.8% made for future growth Net sales 9.1 8.3 9.6% – Net sales flat year-on-year due to higher internal in CHF mil
Slide 14: Positive impact of deleveraging and refinancing on finance net result
PASSION. PRECISION. PURITY. Positive impact of deleveraging and refinancing on finance net result in CHF million 6M 2017 6M 2016 Change Hal f -year 2017 resul t s EBIT 78.2 52.7 48.4% Finance net -6.8 -19.9 -66.0% EBT 71.4 32.8 117.9% Income tax expenses -11.9 -8.6 Effective Tax Rate -16.7% -26.3% N
Slide 15: Stable free cash flow despite substantially higher CAPEX requirements
PASSION. PRECISION. PURITY. Stable free cash flow despite substantially higher CAPEX requirements Free cash flow Free cash flow conversion Hal f -year 2017 resul t s 72 (18) 79% 60 (6) 54 54 57% 6M 2016 6M 2017 6M 2016 6M 2017 Cash flow from operating activities Cash flow from investing activities F
Slide 16: Net debt at 1.1x LTM EBITDA
PASSION. PRECISION. PURITY. Net debt at 1.1x LTM EBITDA Gross debt Net debt Hal f -year 2017 resul t s 257 194 197 134 December 31, 2016 June 30, 2017 December 31, 2016 June 30, 2017 – Increase in gross-debt the result of net working capital – Net-debt increase due to payment of dividend requirement
Slide 17: Initiatives to mitigate the foreign exchange exposure
PASSION. PRECISION. PURITY. Initiatives to mitigate the foreign exchange exposure Hal f -year 2017 resul t s FX Status on FX exposure initiatives – Global sourcing initiatives (mainly Asia and Eastern Europe) USD – Nomination of debt in USD – FX hedging of up to 100% of net cash flows on a 18-month
Slide 18: VAT's financial mid term guidance remains in place
PASSION. PRECISION. PURITY. VAT’s financial mid term guidance remains in place Mid term guidance (unchanged from the time of the IPO) Hal f -year 2017 resul t s – Net sales growth: high single digit at constant FX rates – EBITDA margin target: 33% of sales – Effective tax rate: 18% to 20% of earning
Slide 19: Corporate restructuring in the second half year of 2017
PASSION. PRECISION. PURITY. Corporate restructuring in the second half year of 2017 – VAT intends to unwind financing structure set up by the former private equity owners Hal f -year 2017 resul t s – VAT LUX III S.à r.l. had its functional currency in US dollars – A recycling of translation reserves
Slide 20: Agenda
PASSION. PRECISION. PURITY. Agenda Hal f -year 2017 resul t s 1 Highlights Heinz Kundert, CEO 2 Second quarter and half-year 2017 financial review Andreas Leutenegger, CFO 3 Strategic drivers Heinz Kundert, CEO 4 Investing in the future Jürgen Krebs, COO 5 Conclusion and outlook for the rest of 2017
Slide 21: Megatrends which drive growth
PASSION. PRECISION. PURITY. Megatrends which drive growth Hal f -year 2017 resul t s Digitalization, Cloud-Computing, Technological inflections, Big Data, IoT, Industry 4.0 and E- 3D NAND, <10 nm features, mobility etc. capacity expansions Investments in OLED displays for China investing heavily to
Slide 22: VAT's addressable market – the growth continues
PASSION. PRECISION. PURITY. VATs addressable market – the growth continues 2016: USD 1.9bn 2017E: USD 2.3bn Hal f -year 2017 resul t s 10% 9% 22% 25% 49% 52% 17% 16% Semiconductor Display & Solar Industry & Research Service Semiconductor Display & Solar Industry & Research Service Source: VLSI Augus
Slide 23: VAT market share all industries
PASSION. PRECISION. PURITY. VAT Market share all industries 1 Hal f -year 2017 resul t s 60% Market share all Industries1 Total Vacuum Valves market size 50% 2016: USD 977m 40.9% 41% 2015: USD 804m 40% 37.7% 38% 2014: USD 766m 2013: USD 705m 31.9% 32% 29.9% 30% 30% 20% 10% 5.2% 5% 5.4% 5% 4.7% 5% 4.
Slide 24: VAT expands its market share
PASSION. PRECISION. PURITY. VAT expands its market share 1 Market share all segments1 Market share Semi & related2 Hal f -year 2017 resul t s Total vacuum valve market size Total vacuum valve market size 1H 2016: USD 464m 1H 2016: USD 325m FY 2016: USD 977m FY 2016: USD 695m 1H 2017: USD 558m 1H 201
Slide 25: VAT's three growth dimensions – stronger than ever
PASSION. PRECISION. PURITY. VAT’s three growth dimensions – stronger than ever Hal f -year 2017 resul t s 2nd Dimension 1st Dimension 3rd Dimension Manufacturing equipment End market growth Vacuum valve growth growth 25
Slide 26: Three growth dimensions – End market growth
PASSION. PRECISION. PURITY. VAT’s three growth dimensions – End market growth Hal f -year 2017 resul t s 1st Dimension End market growth – VAT’s related end markets are growing at unprecedented speed – Secular market drivers - digitalization everywhere – Lower cyclicality due to ubiquitous applicati
Slide 27: Three growth dimensions – Manufacturing equipment growth
PASSION. PRECISION. PURITY. VAT’s three growth dimensions – Manufacturing equipment growth Hal f -year 2017 resul t s 2nd Dimension Manufacturing equipment growth – Volume – Technology inflections – Higher requirements for subcomponents due to increased complexity – 3D NAND, DRAM, Logic and Foundry
Slide 28: Three growth dimensions – Vacuum valve growth
PASSION. PRECISION. PURITY. VAT’s three growth dimensions – Vacuum valve growth Hal f -year 2017 resul t s 3rd Dimension Vacuum valve growth Shift from non-vacuum into vacuum – Lithography from Immersion to EUV – Thin film coatings for industrial applications (tribology) – Medical applications, aero
Slide 29: Vacuum subsystems account for over one third of critical subsystems expenditure
PASSION. PRECISION. PURITY. Vacuum subsystems account for over one third of expenditure on critical subsystems Critical subsystems revenues - Semiconductor Hal f -year 2017 resul t s 2016 vs. 2022E (USD m) Vacuum Integrated subsystems Power Fluid Handling Other Thermal IPD 0 1'000 2'000 3'000 4'000
Slide 30: Agenda
PASSION. PRECISION. PURITY. Agenda Hal f -year 2017 resul t s 1 Highlights Heinz Kundert, CEO 2 Second quarter and half-year 2017 financial review Andreas Leutenegger, CFO 3 Strategic drivers Heinz Kundert, CEO 4 Investing into the future Jürgen Krebs, COO 5 Conclusion and outlook for the rest of 20
Slide 31: Investing into the future - Switzerland
PASSION. PRECISION. PURITY. Investing into the future - Switzerland Hal f -year 2017 resul t s – Optimizing the existing production footprint – Outsourcing to external partners – 7 additional milling machines installed in 2017 – 3 shift model across entire plant by end of 2017 – 180 new employees si
Slide 32: Investing into the future - Malaysia
PASSION. PRECISION. PURITY. Investing into the future - Malaysia Hal f -year 2017 resul t s – Target production output of CHF 400 – Addition of around 17’000 m2 production floor – Full value chain incl. machining, assembly, clean room – Development of qualified supplier base in Asia – 50 new employe
Slide 33: Investing into the future – Operational excellence
PASSION. PRECISION. PURITY. Investing into the future – Operational excellence Hal f -year 2017 resul t s Development of operational excellence program for all VAT production sites – Lean management, shop floor management, uniform KPI Cockpits – Introduce uniform Quality Management System – Apply In
Slide 34: Agenda
PASSION. PRECISION. PURITY. Agenda Hal f -year 2017 resul t s 1 Highlights Heinz Kundert, CEO 2 Second quarter and half-year 2017 financial review Andreas Leutenegger, CFO 3 Strategic drivers Heinz Kundert, CEO 4 Investing into the future Jürgen Krebs, COO 5 Conclusion and outlook for the rest of 20
Slide 35: Our priorities for the rest of 2017 and beyond
PASSION. PRECISION. PURITY. Our priorities for the rest of 2017 and beyond Hal f -year 2017 resul t s Investment in Continued trusted Development of innovation and time to partnership with people & talents market customers & suppliers Adapt global sourcing Capacity ramp-up Capture Asian growth & sup
Slide 36: VAT – IPO assumptions confirmed and continuing
PASSION. PRECISION. PURITY. VAT – IPO assumptions confirmed and continuing Hal f -year 2017 resul t s – Pure play business model focused on mission-critical high-end vacuum valves – Technology leadership and long term, trusted Passion partnerships – Leading market position and high barriers to entry
Slide 37: Closing remarks
PASSION. PRECISION. PURITY. Closing remarks Hal f -year 2017 resul t s – Market growth continues – Technology inflections – Market share gains continue Key topics – Capacity expansions – Innovation – Globalization – People and talents – Net sales expected to grow at around 30% at constant FX rates O
Slide 38: Q&A Session
Hal f -year 2017 resul t s H ALF Y EAR 2017 R ESULTS Q&A Session Heinz Kundert, CEO, Andreas Leutenegger, CFO and Jürgen Krebs, COO 38
Slide 39: Information
PASSION. PRECISION. PURITY. Information Hal f -year 2017 resul t s 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 E-mail: m.gerber
Slide 40: Forward looking statements
PASSION. PRECISION. PURITY. Forward looking statements Hal f -year 2017 resul t s 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 no