Business development weaker in the first quarter 2019 as planned
- Sales of € 153.7 million 9.8% lower than in the previous year
- EBIT amounts to € 18.1 million
- EBIT margin reaches 11.8%
- Incoming orders of € 148.8 million in the first quarter 2019
Pfeiffer Vacuum, a leading global manufacturer of vacuum solutions, was not able to reach the previous year’s record sales in the first quarter of 2019. As expected sales decreased by 9.8% to € 153.7 million (previous year: € 170.4 million). This was mainly due to a slowdown of investments in the semiconductor and coatings markets. The geopolitical uncertainties in Europe, Asia and the US increased the reluctance of customers in the affected regions.
EBIT in the first quarter of 2019 came to € 18.1 million, which was a decrease of 33.9% over the previous year (€ 27.5 million) and resulted in an EBIT margin of 11.8% (previous year: 16.1%). In addition to the decline in sales, the cost base, which is geared to further growth, had a negative impact on earnings and margin development.
At € 148.8 million, incoming orders were down 23.3% compared to the first quarter of the previous year (€ 194.0 million). The book-to-bill ratio remained stable at 0.97 and was thus in line with the figure for the fourth quarter of 2018.
Overview of key figures:
|Sales||€ 153.7 million||€ 170.4 million||-9.8%|
|EBIT||€ 18.1 million||€ 27.5 million||-33.9%|
|Net income||€ 12.9 million||€ 19.8 million||-34.7%|
|Earnings per share||€ 1.31||€ 2.00||-34.5%|
|Order income||€ 148.8 million||€ 194.0 million||-23.3%|
|Order backlog||€ 140.0 million||€ 151.0 million||-7.3%|
Nathalie Benedikt, CFO of Pfeiffer Vacuum Technology AG, comments on the results of the first quarter of 2019: “As forecasted, incoming orders and sales were weaker in the first quarter. At the same time, we have geared the Group towards further growth. Increased costs initially have a negative impact on profitability. In the long term, we see sales and EBIT margins intact and confirm our long-term targets.”
Decline in sales especially in Asia
In the breakdown of sales by region, which allocates sales according to the headquarters of customers in the corresponding regions, Europe showed a decline of 6.1% to € 58.6 million (previous year: € 62.4 million). Sales in Asia decreased by 17.8% to € 54.9 million (previous year: € 66.8 million). In relative terms, North and South America showed the smallest decline in sales of 2.5% to € 40.2 million (previous year: € 41.3 million).
Diversified product portfolio with growth in service and systems
Sales of turbopumps remained more or less at the previous year’s level and amounted to € 47.0 million (previous year: € 47.2 million). Turbopumps were once again a key product, representing a share of 30.6% of total sales (previous year: 27.7). Sales of instruments and components decreased by 17.2 to € 42.2 million (previous year: € 51.0 million). The product group’s share of total sales fell to 27.5% (previous year: 29.9). With a sales volume of € 31.5 million, backing pumps recorded a decline of 22.5 compared to the previous year (€ 40.7 million). Backing pumps contributed to the total balanced sales distribution of the Pfeiffer Vacuum Group with a share of total sales of 20.5% (previous year: 23.9). Sales from services rose by 4.2 to € 28.3 million (previous year: € 27.1 million), thereby increasing the share of total sales to 18.4% (previous year: 15.9). Systems, a predominantly project-oriented area, increased sales by 4.9 over the previous year to € 4.7 million (previous year: € 4.5 million). The total share of systems in sales was 3.1% (previous year: 2.6%).
Semiconductor market weaker, industry and analytics pleasing
Pfeiffer Vacuum’s market segments developed very differently in the first quarter. The semiconductor market recorded a volume of € 53.5 million (previous year: € 70.1 million), which is a decline of 23.7. With 34.8 (previous year: 41.4), the semiconductor market represented the largest share of total sales. Sales in the coatings market fell by 13.7 to € 21.6 million (previous year: € 25.1 million). At 14.1% (previous year: 14.7), the coatings market almost maintained its share of total sales. In the analytics market, sales increased by 5.1 to € 30.2 million (previous year: € 28.7 million). With a share of 19.6% of total sales (previous year: 16.8 ), business in analytics has once again grown in importance compared to the previous year. The heterogeneous industry market segment, with customers from sectors ranging from the automotive to the pharmaceutical industry, recorded an increase in sales of 10.8 to € 33.9 million (previous year: € 30.6 million). With a share of 22.1, industry is the second strongest customer market after the semiconductor market (previous year: 18.0). Sales in the research and development market segment fell by 8.6% to € 14.5 million (previous year: € 15.9 million). The share of total sales remained almost constant at 9.4% (previous year: 9.3%).
Gross profit in the reporting period decreased by 13.6% to € 55.7 million (previous year: € 64.4 million), which corresponds to a decline of € 8.7 million. The gross margin fell by 1.6 percentage points to 36.2% (previous year: 37.8%). Despite the decline in sales, the gross margin was disproportionately impacted. This was mainly due to an advantageous product and customer mix.
The financial result of € -0.2 million roughly matched the previous year’s figure of € -0.1 million due to the unchanged low interest rate in the Eurozone. The tax rate increased by 0.5 percentage points to 28.2% (previous year: 27.7%).
Net income decreased by 34.7% to € 12.9 million (previous year: € 19.8 million). Return on sales after tax – the ratio of net income to net sales – was at 8.4% (previous year: 11.6%). Parallel to net income, earnings per share decreased to € 1.31 (previous year: € 2.00).
Dr. Eric Taberlet, CEO of Pfeiffer Vacuum Technology AG, sees the previous assessment of the market as confirmed: “The first weeks of the second quarter show that sales and the order situation continue to be impacted by weak demand in the semiconductor market. A more detailed outlook on the expected business development and a forecast for the year as a whole will be provided in connection with the Annual General Meeting on May 23, 2019.”