Slide 1: Fourth quarter and full-year results 2019
Fourth quarter and full-year results 2019 PASSION.PRECISION.PURITY. Fourth-quarter and full-year results 2019 March 3, 2020 1
Slide 2: Agenda
PASSION. PRECISION. PURITY. Agenda Fourth quarter and full-year results 2019 1 Highlights Mike Allison, CEO 2 Fourth-quarter and full-year 2019 financial review Stephan Bergamin, CFO 3 2020 priorities, conclusion and outlook Mike Allison, CEO 2
Slide 3: Improving market conditions in Q4 as bottom of down-cycle has been passed
PASSION. PRECISION. PURITY. Improving market conditions in Q4 as bottom of market down-cycle has been passed Fourth quarter and full-year results 2019 Sequential quarterly Continued focus on cost, Market share gains sales up in Semi and technology and continue in 2019; record Display; flat in Genera
Slide 4: Low-cycle full-year EBITDA margin well above previous troughs
PASSION. PRECISION. PURITY. Low-cycle full-year EBITDA margin well above previous troughs Fourth quarter and full-year results 2019 Segment VAT Group AG Valves Global Service Industry (% of total (20%) (3%) net sales) (100%) (77%) Net sales CHF 570m CHF 441m CHF 112m CHF 18m EBITDA margin1 27.0% 27.
Slide 5: Market trends remained mixed across all major business segments in 2019
PASSION. PRECISION. PURITY. Market trends remained mixed across all our major business segments in 2019 Fourth quarter and full-year results 2019 Semiconductors WFE investments down 10%, driven by memory; foundry and advanced logic strong Technology advances continue, industry preparing for next
Slide 6: No 1 market position further strengthened – specification wins remain high
PASSION. PRECISION. PURITY. No 1 market position further strengthened – specification wins remain on high level Market share All Industries 1 Market share Semi & Related 2 Market share Semi 3 Fourth quarter and full-year results 2019 Total vacuum valve market size Total vacuum valve market size Tota
Slide 7: Agenda
PASSION. PRECISION. PURITY. Agenda Fourth quarter and full-year results 2019 1 Highlights Mike Allison, CEO 2 Fourth-quarter and full-year 2019 financial review Stephan Bergamin, CFO 3 2020 priorities, conclusion and outlook Mike Allison, CEO 7
Slide 8: Full-year 2019 – Group key figures
PASSION. PRECISION. PURITY. Full-year 2019 – Group key figures Fourth quarter and full-year results 2019 EBITDA margin Third party net sales EBITDA 27.0% (-3.8pp) CHF 570 m CHF 154 m EBIT margin -18% -28% 18.9% (-6.8pp) Free cash flow margin Free cash flow 24.5% (+6.8pp) Net debt/EBITDA CHF 140 m Fr
Slide 9: Q4 order intake 31% above Q4 18; full-year orders down as expected
PASSION. PRECISION. PURITY. Q4 19 order intake 31% above Q4 18, confirms business improvement during 2019; full-year orders down as expected in CHF million Full-year Fourth quarter and full-year results 2019 2019 order intake -10% 648 585 Q4 2019 order intake +31%%1 Full-Year 2019 order backlog -5%1
Slide 10: Product mix partly offsets lower volumes
PASSION. PRECISION. PURITY. Product mix partly offsets lower volumes Fourth quarter and full-year results 2019 (192) 698 63 (2) 3 570 2018 Volume Product mix Price FX 2019 Volume declines driven mainly by Semi and Display and to a smaller extent General Vacuum, offsetting improvements in Global Se
Slide 11: Gradual recovery following the sharp decline in business activities
PASSION. PRECISION. PURITY. Gradual recovery following the sharp decline in business activities after two years of record sales in 2016/17 250 1.15 Fourth quarter and full-year results 2019 1.10 200 1.05 150 1.00 0.95 100 0.90 0.85 50 0.80 0 0.75 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 20
Slide 12: 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% Fourth quarter and full-year results 2019 350 50% 300 40% 250 200 30% 150 20% 100 10% 50 0 0% 2015 2016 2017 2018 2019 Invested Capital NOPAT Free Cash Flow ROIC CROIC WACC1 The
Slide 13: EBITDA margin above previous trough; flexible operating structure
PASSION. PRECISION. PURITY. EBITDA margin above previous trough; demonstrates VAT’s flexible operating structure and strong cost management in CHF million Fourth quarter and full-year results 2019 698 Sales -18% 570 30.8% EBITDA margin* 215 27.0% 149 170 154 2018 2019 Q4 net sales Full-year net sale
Slide 14: Cyclical business decline turned corner in H2 2019
PASSION. PRECISION. PURITY. Cyclical business decline turned corner in H2 2019, EBITDA margin well above previous trough levels 450 in CHF million 35% Fourth quarter and full-year results 2019 400 31.6% 350 29.9% 300 30% 250 28.7% 200 25.1% 150 25% 100 50 0 20% H1 2018 H2 2018 H1 2019 H2 2019 Net Sa
Slide 15: Full-year 2019 net sales by segment and region
PASSION. PRECISION. PURITY. Full-year 2019 net sales CHF 570 million Fourth quarter and full-year results 2019 Net sales by segment Net sales by region 77% (74% 1 ) Valves 49% (50% 1 ) Asia 34% (33% 1 ) Americas 20% (15% 1 ) Global Service 3% (6% 1 ) Industry 17% (17% 1 ) EMEA 1 2018 15
Slide 16: Valves: 77% of net sales
PASSION. PRECISION. PURITY. Valves: 77% of net sales Q4 2018 in CHF million Q4 2019 Change Semiconductors & Modules Fourth quarter and full-year results 2019 adjusted Order intake 146.6 99.8 46.9% Sales reduction bottomed out in H1 2019, recovery began in H2 Net Sales 139.9 116.2 20.4% Record nu
Slide 17: Global Service: 20% of net sales
PASSION. PRECISION. PURITY. Global Service: 20% of net sales in CHF million Q4 2019 Q4 2018 Change Successful portfolio expansion Fourth quarter and full-year results 2019 Order intake 25.3 28.7 -11.9% Record year for Global Service segment, sales growth Net Sales 26.9 27.6 -2.4% driven by retrofi
Slide 18: Industry: 3% of net sales
PASSION. PRECISION. PURITY. Industry: 3% of net sales Q4 2019 Q4 2018 Change in CHF million Business model adjustments continue Fourth quarter and full-year results 2019 adjusted Order intake 4.2 6.0 -30.0% New scope of Industry segment since Net Sales 3.6 5.0 -28.0% January 1, 2019 2018 Bellows
Slide 19: Lower EBITDA, higher depreciation and timing of tax feed through to net income
PASSION. PRECISION. PURITY. Lower EBITDA, higher depreciation and timing of tax recognition feed through to net income in CHF million 2019 2018 Change Fourth quarter and full-year results 2019 EBIT 107.7 179.7 -40.0% Finance net -8.7 -13.2 -33.8% EBT 99.0 166.5 -40.5% Income tax expenses -24.2 -30.8
Slide 20: Record free cash flow and strong cash conversion
PASSION. PRECISION. PURITY. Record free cash flow and strong cash conversion Free cash flow Free cash flow conversion Fourth quarter and full-year results 2019 172 (48) (18) 100% 158 91% 140 88% 124 86% 79% 69% 57% 58% 51% 39% 2018 2019 6M 2015 6M 2016 6M 2017 6M 2018 6M 2019 2015 2016 2017 2018 201
Slide 21: Slightly reduced year-end net debt; leverage in line with target
PASSION. PRECISION. PURITY. Slightly reduced year-end net debt; leverage in line with target Net debt development 2.0 Fourth quarter and full-year results 2019 1.5 254 (110) 227 (79) 1.0 148 144 Target level of 0.5 1.0x Net Debt/EBITDA 2018 2019 0.0 Dec 31, June 30, Dec 31, June 30, Dec 31, June 30,
Slide 22: Summary of financial results 2019 and priorities for 2020
PASSION. PRECISION. PURITY. Summary of financial results 2019 and priorities for 2020 Achievements 2019 Fourth quarter and full-year results 2019 Overall lower results compared to 2018, market recovery began in H2 as expected Full-year EBITDA margin of 27% substantially above previous down-cycle
Slide 23: Agenda
PASSION. PRECISION. PURITY. Agenda Fourth quarter and full-year results 2019 1 Highlights Mike Allison, CEO 2 Fourth-quarter and full-year 2019 financial review Stephan Bergamin, CFO 3 2020 priorities, conclusion and outlook Mike Allison, CEO 23
Slide 24: Our three medium-term growth dimensions remain in place
PASSION. PRECISION. PURITY. Our three medium-term growth dimensions remain in place Fourth quarter and full-year results 2019 1st dimension: End market growth Medium-term digitalization growth trends such as IoT, AI, AR, etc. remain in place Hyperscale applications, cloud storage driving memory
Slide 25: External market factors remain uncertain; bottom of semiconductor down-cycle reached
PASSION. PRECISION. PURITY. External market factors remain uncertain, bottom of semiconductor down-cycle reached with single-digit growth expected in 2020 Market 2019 2020 Semiconductor Fourth quarter and full-year results 2019 Equipment order visibility improving but Semiconductor IC1 -13% +9% un
Slide 26: Investments in innovation key to future growth – the spec win cycle
PASSION. PRECISION. PURITY. Investments in innovation is key to future growth and market share gains – the spec win cycle Fourth quarter and full-year results 2019 Spec win development VAT’s strong investment in R&D during the down cycle (6% sales in R&D) continues to Semi Display & Global General
Slide 27: Conclusion
PASSION. PRECISION. PURITY. Conclusion Fourth quarter and full-year results 2019 Improving market conditions seen in H2 of 2019 are expected to continue in 2020 Strong restocking of inventories at our customers in Q4 will result in lower sales in Q1 2020 but we should see positive momentum into
Slide 28: Qualitative outlook for full-year 2020; top line guidance for Q1 2020
PASSION. PRECISION. PURITY. Qualitative outlook for full-year 2020; top line guidance for Q1 2020 Fourth quarter and full-year results 2019 Return to growth driven mainly by semiconductor-related activities; impact of coronavirus remains unclear Group net sales1, EBITDA, EBITDA margin and net in
Slide 29: Q&A Session
Fourth quarter and full-year results 2019 Q&A Session PASSION.PRECISION.PURITY. 29
Slide 30: Information
PASSION. PRECISION. PURITY. Information Fourth quarter and full-year results 2019 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.g
Slide 31: Forward looking statements
PASSION. PRECISION. PURITY. Forward looking statements Fourth quarter and full-year results 2019 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