EQS Group-Ad-hoc: VAT Group AG / Key word(s): Quarter Results Media Release 15-Oct-2021 / 07:01 CET/CEST Release of an ad hoc announcement pursuant to Art. 53 LR The issuer is solely responsible for the content of this announcement.

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Record Q3 order intake and net sales driven by market growth and Excellence in operational execution; Q4 sales guidance indicates full-year 2021 record net sales of between CHF 885 - 895 million

Q3 2021 results . Record order intake of CHF 299 million, up 91% year-on-year (up 18% sequentially) . Net sales up 23% vs Q3 2020 to a record CHF 229 million (up 2% sequentially) on continuing strength inSemiconductors, Global Service and Advanced Industrials . Book-to-Bill ratio of 1.3x; order book of CHF 284 million

Nine months 2021 results . Investments in semiconductor manufacturing equipment remain at unprecedented levels; service demandreaches record levels while advanced industrial markets continue strong recovery from pandemic-induced slowdown,with sales supported by new market initiatives . Nine-month orders and sales at record levels of CHF 793 million and CHF 646 million, respectively . Specification wins continue to be at a very high level . Strong mitigation of supply chain challenges and solid factory ramp in Malaysia led to record Groupfactory output

Guidance for Q4 and outlook for full-year 2021 . Semiconductor market outlook remains positive for Q4 and well into 2022 . Order activity expected to remain at high level . Q4 net sales^1 expected at CHF 240 - 250 million . Full-year net sales^1 forecast at CHF 885 - 895 million . Full-year EBITDA margin expected to be above half-year level of 33.9% . Net income substantially above 2020 level . Full-year capital expenditure expected to be around CHF 40 million . Record full-year free cash flow as EBITDA growth more than offsets working capital requirements

VAT Group 


in CHF million Q3 2021 Q2 2021 Change^2 Q3 2020 Change^3 9M 2021 9M 2020 Change^3 
Order intake   298.7   253.5   +17.8%   156.4   +91.0%   792.9   514.5   +54.1% 
Net sales      229.4   224.2   +2.3%    185.9   +23.4%   645.7   504.9   +27.9% 
Order Backlog  283.7   218.3   +30.0%   124.1   +128.6%

^1 At constant foreign exchange rates

^2 Quarter-on-Quarter

^3 Year-on-Year

Third-quarter and nine-month 2021 summary

Q3 sales growth driven by Semiconductor, Global Service and Advanced Industrials

In Q3 2021, VAT experienced continued strong markets driven by the long-term global growth in semiconductor demand, which has been accentuated by the recent chip shortage. Ongoing semiconductor technology innovations also fueled demand for advanced vacuum valves. Investments in the semiconductor industry are focused on both new chip generations and legacy platforms, yielding record sales in VAT's Semiconductor and Global Service business units. VAT continued to gain market share based on its leading technology position and strong business execution across all its markets. In addition, the Advanced Industrials business unit captured the growth opportunities resulting from the recovery in its markets, supported by recent strategic growth initiatives in a number of key areas. Demand in the Display & Solar business remained muted, but recent order activity indicates that the bottom of this phase may have been reached.

A key lever of VAT's third quarter sales performance was the strong mitigation of supply chain challenges in the semiconductor and many other industries. To focus on these issues remains at the center of management's attention also in the coming quarters as the company continues to ramp up operations to satisfy customer demand. VAT's operations team also continued to increase the global production footprint and VAT expects to reach production output of around CHF 180 million in Malaysia for the full year 2021 (representing a year-end run rate of CHF 220 million) while at the same time further optimizing our production capabilities in Switzerland.

Group orders in the third quarter were 91% higher than in the same quarter a year ago, at CHF 299 million, and up 18% sequentially, yielding a third-quarter book-to-bill ratio of 1.3x. This high order intake was driven by the generally high level of investment in the semiconductor businesses for both valves and service offerings and was further accelerated by global supply chain constraints which may have triggered some additional orders. VAT believes that the order patterns seen during the third quarter and the first nine months of the year show that it is successfully capturing existing business opportunities and further building out its market share across the industry. Both the Advanced Industrials and the Display & Solar business units also posted higher orders in Q3. The company's order backlog at the end of the third quarter was CHF 284 million, up 129% compared with the end of September 2020.

VAT's Q3 net sales grew to CHF 229 million, an increase of 23% compared with the same period in 2020 and at the top end of the company's guidance issued with the second-quarter results in August. Foreign exchange movements did not have any material impact on VAT's Q3 net sales.

For the first nine months of 2021, Group orders and sales are up 54% and 28% respectively compared with the same period a year earlier. Foreign exchange movements had a negative impact on net sales of about 3 percentage points.

Segment review

Valves reported Q3 orders of CHF 250 million, up 101% year-on-year, and net sales of CHF 185 million, an increase of 22% compared with the same period in 2020.

The Q3 order growth was mainly driven by the Semiconductor business unit, where orders increased 117% to CHF 187 million year-on-year, a new all-time record. Net sales posted a new record level as well and amounted to CHF 137 million, up 31% compared with the third quarter of 2020. End-users continued to invest in new technologies to manufacture the next generation of chips, while at the same time increasing capacity for existing chip designs in order to satisfy the fast-growing demand for both logic/foundry and memory chips.

Semiconductors recorded eight specification wins in the third quarter, bringing the total to 18 for the first nine months, with three of them resulting from the company's growth initiative to develop new adjacent products that complement its core valves business.

Orders in the Display & Solar business unit increased to CHF 21 million, up 59% year-on-year, representing the best quarter in 2021 so far. The main contributor to this order growth came from the display business, where the company received orders for both LCD and OLED fab expansions. In the solar business, the main business driver continued to be in the PERC technology sector.

The Advanced Industrials business unit continued its strong recovery with Q3 orders up 69% year-on-year, reaching a new record of CHF 42 million. Sales were 17% higher at CHF 33 million. The recovery was broad-based and resulted from generally improving market conditions coupled with positive results from growth initiatives implemented during 2020 to focus on Asian markets. VAT saw continued strong demand in coatings, especially related to high-end applications such as mobile phones and optical coatings, especially in Japan and China. Scientific instruments, material and life science also showed continued strong demand, partly the result of research institutes in the US and Asia returning to normal activity levels after a prolonged standstill due to the COVID pandemic. VAT shipped several prototypes to large scientific instrument OEMs, which is a key initiative to increase VAT's engineered content within these important customers.

Segment Valves 


in CHF million        Q3 2021 Q2 2021 Change^1 Q3 2020  Change^2 
                                               restated 
Order intake          249.5   202.6   +23.1%   124.2    +100.9% 
Semiconductors        186.6   148.0   +26.1%   86.1     +116.6% 
Display & Solar       20.7    17.3    +19.5%   13.0     +58.8% 
Advanced Industrials  42.2    37.4    +13.0%   25.0     +68.8% 
Net sales             185.4   182.8   +1.4%    151.5    +22.4% 
Semiconductors        136.7   133.5   +2.4%    104.1    +31.3% 
Display & Solar       15.6    16.9    -7.6%    18.9     -17.3% 
Advanced Industrials  33.1    32.3    +2.3%    28.4     +16.5% 
Inter-segment sales   18.9    18.0    +5.2%    15.3     +23.6% 
Segment net sales     204.3   200.8   +1.8%    166.8    +22.5% 
in CHF million            9M 2021 9M 2020  Change^2 
                                  restated 
Order intake              652.8   419.5    +55.6% 
Semiconductors            475.3   289.3    +64.3% 
Display & Solar           58.5    50.4     +16.0% 
Advanced Industrials      119.0   79.7     +49.3% 
Net sales                 524.8   415.1    +26.3% 
Semiconductors            382.2   280.0    +36.5% 
Display & Solar           47.1    61.6     -23.5% 
Advanced Industrials      94.9    73.5     +29.2% 
Inter-segment sales       53.1    40.1     +32.3% 
Segment net sales         577.3   455.2    +26.8%

^1 Quarter-on-Quarter

^2 Year-on-Year

Starting January 1, 2021, VAT integrated the former segment Industry into the Valves segment and in particular into the business unit Advanced Industrials (formerly General Vacuum) as the type of this business organizationally fits better into this business unit. The Group now reports in two segments: Valves, which encompasses the development, production, sales of vacuum valves and components and the Service segment, which comprises spare parts, upgrades and retrofits and the maintenance business of the Group. The Valves segment consists of the three business units Semiconductors, Display & Solar, and Advanced Industrials. Starting 2021, VAT will separately disclose orders and net sales of these three business units in an effort to further increase the transparency of its reporting. As a consequence, the reported segment figures have been restated accordingly.

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October 15, 2021 01:01 ET (05:01 GMT)