PVA TePla with strong annual results: Sales and earnings in fiscal year 2023 again above forecast

PVA TePla with strong annual results: Sales and earnings in fiscal year 2023 again above forecast 

• Group sales grow from EUR 205.2 million to EUR 263.4 million, an increase of 28 %
• Group EBITDA increases by an over-proportional 38 % to EUR 41.5 million. EBITDA margin at 15.8 %
• Solid demand: order intake remains at a very high level of EUR 221.8 million
• Diversified technology portfolio and new PVA Technology Hub strengthen leading position
• Addressing new growth markets begins to take effect – customer base broadened
• Outlook for FY 2024: sales increase to EUR 270 to 290 million, further improvement in earnings with EBITDA of EUR 47–51 million
• New medium-term target: doubling sales to around EUR 500 million by 2028

PVA TePla AG (ISIN DE0007461006) completed the fiscal year 2023 with a significant increase in sales and improved profitability. The technology provider for high-tech equipment and processes increased its sales by 28 % to EUR 263.4 million in the reporting period (previous year: EUR 205.2 million) and thus even slightly exceeded the original forecast of EUR 240 to 260 million. The operating result before depreciation and amortization (EBITDA) grew by 38 % to EUR 41.5 million in the same period (previous year: EUR 30.0 million) and thus also exceeded the forecast corridor of EUR 36 to 40 million. PVA TePla expects moderate growth for the current and coming fiscal years. At the same time, PVA TePla is working intensively on the opportunities presented by the growing markets associated with the megatrends of decarbonization and mobility. Within the next five years, the sales volume is expected to almost double to around EUR 500 million. To this end, the Group is also planning acquisitions to supplement the existing technology portfolio in a targeted manner and increasingly leverage synergies.

 “Our technologies have enormous business potential and offer the opportunity to actively contribute to overcoming global challenges. Our goal is to increase our sales volume to half a billion euros by 2028, while continuing to focus on high earnings quality,” explains Jalin Ketter, CEO of PVA TePla. “In the coming years, we will be working to build up the company, but we expect slight growth again this year and next. With the increasing implementation of our strategy, we will benefit significantly from our strategic orientation from 2026 and record stronger growth.”

Diversified technology portfolio and new PVA Technology Hub strengthen leading position

PVA TePla's broad product portfolio with high-tech solutions in the areas of materials and precision measurement technology forms the basis for the company's sustainable economic success. In addition to the semiconductor industry, the systems developed by PVA TePla are already being used in growth sectors such as energy generation, distribution and storage as well as mobility. The “PVA Technology Hub” initiated in the reporting period is intended to further advance the company's development from a pure systems manufacturer to a solutions provider and strengthen its leading position in the area of research and development. The PVA Technology Hub focuses on the development of processes and systems for the production, processing and application of high-tech materials and components, with an initial focus on silicon carbide.

Both business segments with growth and improved margins

The dynamic growth in the past fiscal year was driven equally by the Semiconductor Systems and Industrial segments. As in the previous year, 71 % of Group sales were attributable to the Semiconductor Systems segment and 29 % to the Industrial Systems segment.

Sales in the Semiconductor Systems segment increased by 28 % to EUR 186.1 million in the 2023 fiscal year (previous year: EUR 145.7 million), while earnings before interest, taxes, depreciation and amortization (EBITDA) improved by 34 % to EUR 34.0 million (previous year: EUR 25.4 million). This results in an EBITDA margin of 18.3 % after 17.4 % in the previous year.

With a growth of 30.1 %, the Industrial Systems segment recorded an increase in sales from EUR 59.5 million in the previous year to EUR 77.4 million. As in the previous year, high-temperature vacuum systems were the main growth driver in this segment. EBITDA rose significantly by 44.7 % from EUR 9.1 million to EUR 13.1 million. In relation to sales, this results in an EBITDA margin of 17.0 % after 15.2 % in the previous year.

Quality of earnings improved at all levels

PVA TePla Group's gross profit increased by 31.1 % to EUR 77.5 million (previous year: EUR 59.1 million) despite higher material and production costs. Accordingly, the gross margin improved to 29.4 %, up 0.6 percentage points on the previous year's figure of 28.8 %. This positive development is partly due to the absence of effects from customer-related development costs, which were still included in the same period of the previous year.

EBITDA reached EUR 41.5 million at Group level, an increase of more than 38 % compared to the previous year's figure of EUR 30.0 million. At 15.8 %, the EBITDA margin was also significantly higher than the already high level of the same period in the previous year (14.6 %).

Order situation remains robust

At EUR 278.3 million (previous year: EUR 324.3 million), PVA TePla Group's order backlog remained at a high level. EUR 174.3 million of this was attributable to the Semiconductor Systems segment (previous year: EUR 219.9 million), while the order situation in the Industrial Systems segment remained at the previous year's level at EUR 103.9 million (previous year: EUR 104.4 million).

Incoming orders also continued to develop strongly and, at EUR 221.8 million, were only slightly below the previous year's outstanding figure of EUR 235.0 million. This corresponds to a book-to-bill ratio (ratio of incoming orders to sales) of 0.84. In the Semiconductor Systems segment, incoming orders amounted to EUR 142.4 million (previous year: EUR 152.6 million) and primarily include orders from the semiconductor industry for metrology and crystal growing systems. In the Industrial Systems segment, incoming orders amounted to EUR 79.4 million (previous year: EUR 82.4 million), with orders comprising technologies used in the aerospace, medical technology, and optical industries, among others.

The further development of the corporate strategy, which aims to reduce dependence on individual market cycles and customers, is leading to a changed order mix with shorter lead times in some cases. This has already impacted the order backlog and incoming orders in the 2023 fiscal year.

Forecast for 2024 and outlook for 2025

Based on the continued high level of order backlog and order intake, the Executive Board expects Group sales in the range of EUR 270 to 290 million and earnings before interest, taxes, depreciation, and amortization (EBITDA) between EUR 47 and 51 million for the 2024 fiscal year. From today's perspective, growth of a similar magnitude is also expected for the following year 2025.

Medium-term planning projects further growth

The updated medium-term planning takes into account opportunities from the newly addressed markets as well as additional growth through company acquisitions. The aim is to meaningfully supplement PVA TePla Group's existing technology portfolio. Over a period of five years, i.e. until the end of fiscal year 2028, the Management Board is aiming to roughly double the sales volume to around EUR 500 million.

Note for analysts and investors: The company is holding a Capital Markets Day in Wettenberg on 16 May 2024.