Pfeiffer Vacuum presents growth strategy and investment plan at Capital Markets Day – EBIT margin to rise above 20% in the mid term
- Pfeiffer Vacuum strives to improve the market position as technology leader and become strong number two in the vacuum industry with a market share of more than 20%
- Extensive investments in capacity expansion, R&D and IT
- Positive mid-term outlook: Average sales growth in the high single-digit percentage range and an EBIT margin above 20%
Pfeiffer Vacuum Technology AG, a leading global manufacturer of vacuum solutions, provided an insight into the Company’s growth strategy, the 3-year investment program and the corresponding mid-term outlook at today's Capital Markets Day.
Aiming to be strong number two with a market share of over 20%
Pfeiffer Vacuum has set the target to become a strong number two in the vacuum industry with a market share of over 20%. The market position shall be strengthened by leveraging the innovation leadership and achieving growth with new products, new solutions and a broader range of services. In both business units ‘Semiconductor and Coating’ and ‘Analytics, Industry and R&D’ the company expects to strongly benefit from megatrends such as big data, e-mobility, renewable energy and nanotechnology – above all in the electronics sector and the life science industry. Regarding operations, the management intends to further strengthen the global footprint in the areas of sourcing, production and sales as part of the growth strategy. In particular, this includes the expansion of the business in China where the market for vacuum technology is growing very dynamically.
Pfeiffer Vacuum has recently announced a strategic cooperation with the Busch Group. The planned cooperation focuses on the areas of purchasing, sales and services, R&D as well as IT. This would add momentum to growth plans of Pfeiffer Vacuum and increase the operational efficiency.
Dr. Eric Taberlet, CEO of Pfeiffer Vacuum Technology AG, said during the Capital Markets Day: “Vacuum technology is a key enabler for shaping the future of many industries. As technology leader we are aiming to significantly expand our market share and to be the strong number two in our industry. In order to achieve this we will invest extensively and undergo a transformation phase in the coming years to become an even more agile and more global company.”
Investments in capacity expansion, R&D and IT
In the first quarter 2018, a three-year investment program with a volume of EUR 150 million was initiated. First and foremost, this involves the expansion and modernization of the production capacities, leading to higher productivity, flexibility and quality. In addition, Pfeiffer Vacuum plans to increase the operational expenses for new R&D and IT projects significantly over the next three to five years.
Nathalie Benedikt, CFO of Pfeiffer Vacuum Technology AG commented: "Our investment program will significantly contribute to the future growth of Pfeiffer Vacuum. Next to capacity expansion and R&D, the implementation of a global IT-system is key to achieving the digital transformation and increasing operational efficiency. On the basis of the programs initiated, we are convinced that we can reach EBIT margins of more than 20% in the mid term.”
Outlook: Significant sales growth and improved profit margins
For full-year 2018 Pfeiffer Vacuum expects sales and EBIT margin at the lower end of the guidance of EUR 640 to 660 million and 14 to 16, respectively. Over the next 3 to 5 years, the Management Board expects average annual sales growth in the high single-digit percentage range and aims to reach a global market share in the vacuum industry of over 20. In the transformation phase of the coming years the profit margins are not expected to improve significantly since they will be burdened by investments and higher operating expenses (e.g. R&D and IT). Having successfully implemented the growth strategy, the Management Board anticipates EBIT margins above 20% in the mid-term. This guidance is based on the assumption that there will be neither a significant downturn in global economic growth nor a significant reduction in demand in any relevant customer industry.
The presentation materials of the Capital Markets Day 2018 are available for download on the Company’s website after the event at: https://group.pfeiffer-vacuum.com/events