VAT posts record full-year 2022 results for sales, EBITDA, EBITDA margin and Free cash FLOW

Based on preliminary and unaudited figures, VAT’s full-year 2022 results will be substantially above the previous year’s level, confirming the outlook given earlier in the year.

In the Valves segment, the business unit Semiconductor reported record results in 2022, as high capital investments in the semiconductor industry continued. In the Display & Solar business unit, sales were higher based on larger orders received during late 2021, while sales in the Advanced Industrials business unit benefited from the execution of strategic growth initiatives started back in 2021. The Global Service segment posted record results driven by the execution of its strategic priorities, coupled with the very high utilization levels in the semiconductor fabs that drove increased demand for spares and repairs as well as consumables.

Q4 2022 results

VAT recorded preliminary Q4 orders of around CHF 249 million, down 43% compared with the exceptionally strong result posted a year earlier and down 20% compared to the third quarter of 2022. The order pattern seen in the fourth quarter confirms the softening of the semiconductor investment cycle going into 2023 after three years of unprecedented growth and is expected to prevail during 2023. Preliminary Q4 net sales amounted to approximately CHF 290 million and came in at the lower end of the guidance of CHF 285 to 315 million provided in October 2022, an increase of 14% compared with the same quarter a year earlier, but down 5% compared with the third quarter of 2022. In addition to the global moderation of investments by the semiconductor industry, US restrictions for the delivery of chips and chip manufacturing equipment to China, introduced at the beginning of October, slowed down deliveries of equipment to China by our major OEM customers, negatively affecting VAT’s business with these OEMs. As a result, VAT posted a preliminary Q4 book-to-bill ratio of 0.86. At the end of December, the order book amounted to approximately CHF 518 million, 8% lower than at the end of the third quarter of 2022 but 12% higher than at the end of 2021.

Full-year 2022 results

For the full-year 2022, preliminary orders amounted to approximately CHF 1,210 million, down 1% compared to a year earlier while net sales increased by 27% to approximately CHF 1,144 million. Preliminary figures indicate that VAT achieved a full-year EBITDA margin of approximately 35%, a strong increase compared to prior year period. This strong performance reflects higher sales volume and operational leverage as well as VAT’s ongoing productivity improvements. Despite working capital investments to support the continued growth in 2022, preliminary free cash flow reached a full-year record level of approximately CHF 225 million.

The softening market environment and the US-China trade restrictions are expected to continue into 2023, coupled with persisting challenges on the supply chain. As a result of this cyclical customer spend reduction, VAT expects softer financial performance in 2023. A more detailed outlook will be provided with the release of the company’s final full-year 2022 results on March 2, 2023.

¹ Quarter-on-Quarter; ² Year-on-Year