VAT Media Release on Full-Year 2023 Results
Source: EQS
Q4 2023 results
Full-year 2023 results
Outlook for 2024
Guidance for Q1 2024
Q4 2023
Full-year 2023
Q4 2023 summary As previously reported, demand for VAT products continued to show the gradual improvement already observed. Sequentially improving order intake across all geographies over the past three quarters indicates that the market is slowly recovering after reaching its trough at the beginning of 2023. Strong order flow was observed from Asian semi clients in Q4, as well as significant project wins in the Advanced Industrials business unit related to energy transition customers. In the Valves segment, fourth quarter orders were slightly higher compared with the same quarter in 2022, and sharply higher than the third quarter of 2023. Sales decreased by 23% to As a result, total Group orders in the fourth quarter amounted to Full-year 2023 results In 2023, the global semiconductor industry – VAT’s largest market – experienced the anticipated slowdown in investment activities, which had already started during the fourth quarter of 2022. While VAT’s long-term demand drivers, such as the Internet of Things, cloud computing, wireless communications and artificial intelligence remained firmly in place, capital investments into additional manufacturing capacity took a breather after three years of unprecedented growth. The main reasons for this were the short-term market demand slowdown in the consumer sector, coupled with inflationary trends and geopolitical uncertainties. Starting in late 2022, and for most of 2023, VAT customers adjusted their inventory to reflect the underlying demand. This translated directly into lower orders and sales for VAT. While the bottom of this downturn was reached in the first half of 2023, momentum was slow to return, and slightly accelerated demand only fed through during the fourth quarter. During the year, the most pronounced slowdown in the investment activity in the semiconductor sector was witnessed in the memory space and in the flash memory (NAND) sector where investments were a third lower than in 2022. In DRAM, the decline was 16% and the logic sector held its investment volume relatively stable which was only depressed by 2% compared to 2022. Technology progress continued with node sizes shrinking further with sub 7nm becoming more and more mainstream technologies, fueling additional investments in lithography tools. While the overall wafer fab equipment (WFE) investments for the non-lithography space declined by some 7% in 2023, lithography investments increased by more than 25% compared to a year earlier largely driven by demand for immersion tools from In the Global Service business segment, which is also predominantly exposed to the semiconductor market, business declined in 2023 as fabs reduced their inventories, especially in spare parts and consumables, as their capacity utilizations declined significantly. This development is common in phases of declining market demand for semiconductors; however, the inventory levels of spares and consumables were at an elevated level after the supply chain challenges witnessed in 2021 and 2022, coupled with record levels of capacity utilization. The lower number of new fab constructions also negatively impacted the sub-fab business, and upgrades and retrofit of existing tools were also weak. In the Technology investments, ramping-up production capabilities and operational excellence remain key focus areas As the global technology leader in valves and focusing on the development of additional adjacent products, VAT continued to make significant investments in innovation and product development, which are both major drivers of future growth and profitability. In 2023, R&D investments increased by about 7% compared to 2022 and amounted to As a result of the ongoing innovation efforts and the close collaboration with its customers, VAT won 120 specifications for future manufacturing platforms, 7% higher than the specification wins recorded in 2022. These specification wins are proof of VAT’s superior innovation and technology position, especially in all the leading-edge applications currently under development. These wins are also the foundation of VAT’s future growth and expected market share gains. VAT also continued its large investment program by executing the build-up of both its second manufacturing site in Penang, Work on the Innovation Center in Lower overall results after three years of unprecedented growth Against the background of weaker markets especially in the semiconductor related businesses, VAT sales in 2023 declined from the record levels posted in 2022. In line with this drop in sales, EBITDA, EBITDA margin, free cash flow and net income also decreased. However, the absolute overall performance remained at a very reasonable level, especially when considering the strong foreign exchange headwind triggered by the ongoing strength of the Swiss franc against all of VAT’s trading currencies. Total orders amounted to Group net sales in 2023 fell below the Gross profit[1] declined 26% compared with 2022 to Personnel costs as a percentage of net sales increased from 20% in 2022 to 24% in 2023, reflecting VAT’s commitment to carry an appropriate number of its highly qualified permanent employees through any temporary market softness to be ready to satisfy any customer demand in the next market upswing. In absolute terms, personnel costs declined by 7%, mainly the result of fewer temporary employees. The total number of employees (measured as full-time equivalents, FTEs) declined from 2,991 to 2,666, or 11% compared to a year earlier. Despite another year of strong operational execution and cost discipline, EBITDA for the year decreased by 32% to Compared to 2022, VAT’s 2023 EBIT amounted to Below the EBIT line, VAT incurred substantially higher net finance costs compared to the previous year. While the finance income remained relatively stable, finance costs increased by 361% to Earnings before taxes (EBT) decreased to As a result of these factors – and as indicated by company management during the year – realized net income attributable to shareholders decreased in 2023, amounting to On Substantial free cash flow despite lower EBITDA and higher capex support proposal of an unchanged dividend One of VAT’s key performance indicators and the basis for its dividend consideration is free cash flow, which in 2023 declined from its record level of Capex amounted to approximately 8% of net sales in 2022, above the company’s guidance of 4–5% of sales on average. This is due to investments in production capacity in At year-end 2023, net trade working capital amounted to Free cash flow as a percentage of net sales increased from 20% to 21% in 2023 and the free cash flow conversion rate was at 70% of EBITDA. Free cash flow to equity amounted to At its Annual General Meeting on Outlook: Improving market conditions through 2024 expected to lead to better annual results VAT expects investments in semiconductor manufacturing equipment to gradually improve over the course of 2024 as investments – especially in the memory sector – are expected to recover from the lower levels seen in 2023. However, short-term market factors such as slower progress on reducing inflation, concerns about the overall strength of the global economy, or ongoing geopolitical tensions represent uncertainty factors influencing the timing and magnitude of the expected recovery. Another factor of uncertainty is the speed of investment in China’s domestic semiconductor manufacturing capabilities. Massive additions to China’s domestic manufacturing capabilities, mainly in the memory space but also in certain logic types, occurred during 2022 and 2023. While these investments happened in the so-called lagging edge nodes, it nevertheless made up a large portion of the 2023 global WFE spend. Estimates by SEMI.org indicate that about 34% of global semiconductor investments in 2023 were carried out in This uncertainty is also displayed in the rather wide range of WFE growth expectations by the semiconductor market research firms. On average, these firms look at WFE spend in 2024 between This development is expected to benefit the semiconductor exposure in the Valves business and the Global Service business at VAT. Being the undisputed technology and market leader, VAT is expected to benefit from the anticipated recovery, especially as a large part of the spend will be geared towards the leading-edge technologies in both the logic and the memory area. In addition, VAT expects further growth in adjacent products such as advanced modules or motion components. Increasing factory capacity utilizations in the existing fabs will on the other hand increase the requirement for spare parts and consumables for our service business. Together with the growing installed base of serviceable VAT products, On this basis, VAT expects full-year sales and EBITDA in 2024 to be higher compared to 2023. The EBITDA margin is also expected to increase, however the expected continuing strength of the Swiss franc against VAT’s trading currencies will continue to present headwinds to the company’s margin recovery. In 2024, VAT will complete construction of the new production facility in Net income and free cash flow are also expected to be higher; capex is forecast at Guidance for Q1 2024 VAT expects sales[2] of At VAT’s upcoming Annual General Meeting on With Commenting on the appointment, chairman of the VAT board, “We regret Ms. Heriz’ decision to not stand for re-election, but we fully understand that the new role at Tektronix, and the fact that this job is in Segment results Q4 and full year 2023 Valves
1 Quarter-on-Quarter 2 Year-on-Year, 3 Segment EBITDA margin as a percentage of Segment net sales
Global Service
1 Quarter-on-Quarter 2 Year-on-Year, 3 Segment EBITDA margin as a percentage of Segment net sales Additional information The analyst presentation of the results and the 2023 annual report are available on VAT’s investor relations website under this LINK. VAT will host a media and investor event today in For the conference call, please dial one of the following numbers: +41 58 310 50 00 ( +44 207 107 0613 ( +1 631 570 5613 ( A replay of the webcast will be available on the VAT website approximately 24 hours after the event. [1] Gross profit = net sales minus cost of materials plus/minus changes in inventories of finished goods and work in progress [2] At constant foreign exchange rates
Financial calendar 2024
ABOUT VAT
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 not statements of historical fact (including statements containing the words “believes,” “plans,” “anticipates,” “expects,” “estimates” and similar expressions) should be considered to be forward-looking statements. Forward-looking statements involve inherent known and unknown risks, uncertainties, and contingencies because they relate to events and depend on circumstances that may or may not occur in the future and may cause the actual results, performance, or achievements of the company to be materially different from those expressed or implied by such forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond the company’s ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behavior of other market participants, the performance, security and reliability of the company’s information technology systems, political, economic, and regulatory changes in the countries in which the company operates or in economic or technological trends or conditions. As a result, investors are cautioned not to place undue reliance on such forward-looking statements. Except as otherwise required by law, VAT disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this report. End of Inside Information |
Language: | English |
Company: | |
Seelistrasse 1 | |
9469 Haag | |
Phone: | +41 81 771 61 61 |
Fax: | +41 81 771 48 30 |
E-mail: | reception@vat.ch |
Internet: | www.vatvalve.com |
ISIN: | CH0311864901 |
Listed: | |
EQS News ID: | 1851151 |
End of Announcement |
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1851151 05-March-