VAT Group (VACN) Investor Presentation summary

Business performance and financial highlights

• Orders in H1 2024 rose 74% year-on-year to CHF 507 million, while sales remained flat at CHF 450 million; EBITDA margin improved to 30.1% and free cash flow declined 29%.

• Q3 2024 orders increased 58% year-on-year to CHF 259 million; net sales were CHF 209 million, flat year-on-year but down 17% sequentially due to ERP implementation impacts.

• Book-to-bill ratio stayed above 1.0x since Q3 2023, indicating sustained order momentum.

• Leverage increased to 0.8x from 0.6x, and 48 spec-wins were achieved in H1 2024, up 17% year-on-year.

• EBITDA margin remains at the lower end of the 32–37% guidance band, with improvement expected as operating leverage increases.

Market trends and growth drivers

• Semiconductor end-markets account for about 80% of sales, with strong demand from Asia and 28% of sales from China.

• Market recovery is underway in semiconductors, especially memory (DRAM, HBM) and logic, with AI driving technology inflection; solar and scientific instruments remain soft.

• Megatrends such as digitalization, energy transition, and population growth drive demand in core and adjacent markets.

• Increasing vacuum intensity and node size progression in chip manufacturing are boosting demand for advanced vacuum solutions.

• Around 100 new semiconductor fabs are expected to come online globally in the next 2–3 years, supporting long-term growth.

Strategic focus and operational initiatives

• Focus remains on semiconductor market leadership, expanding into advanced industrial and adjacent applications.

• Investments in capacity and R&D continue, with over CHF 130 million invested since 2020 and output capacity set to double by 2027.

• Flexible operating model with up to 25% flexible workforce and increased best-cost country sourcing to over 55% by 2027.

• ERP system implementation in Switzerland is scheduled for August 2024, aiming for seamless customer experience.

• Service business is expected to grow in line with the semi market, driven by installed base, retrofits, and ESG-related upgrades.