- Quarterly sales of USD 92 million represent a slight decrease of -1.3% compared with the same quarter of the previous year and -4.4% versus the strong second quarter of 2020
- Currently stronger price pressure in China and a different market/product mix push gross margin to 45%, operating income to USD 10.5 million, operating margin to 11.4%
- Order intake and operating cash flow show increase over previous year and preceding quarter
- Guidance for fiscal 2020: Expected sales unchanged at USD 370-390 million; operating profit margin at 15%-16%
Bad Ragaz/Switzerland, October 21, 2020
INFICON Holding AG (SIX Swiss Exchange: IFCN) reports sales of USD 92 million for the third quarter of 2020. This represents a slight decrease of 1.3% compared with the same period last year. Excluding currency effects (+2.2 percentage points), quarterly sales decreased organically by 3.4% year over year. In the first nine months, INFICON achieved sales of USD 280.9 million, roughly on par with the previous year.
Development in the target markets and regions
In its largest target market Semi & Vacuum Coating, INFICON achieved sales of USD 42.4 million in the third quarter 2020, compared with USD 40.1 million a year ago. In comparison with the exceptionally strong second quarter, which was characterized by certain catch-up effects, sales were down 20.9%. Compared with the second quarter of 2020, INFICON was able to increase sales in all other target markets but did not reach the previous year's figures. In its target market General Vacuum, INFICON’s sales of USD 25.9 million in the three months to the end of September 2020 were 11.6% higher than in the previous three months and 3% lower than in the same quarter of the previous year. The Refrigeration, Air Conditioning & Automotive market showed a similar development, where sales increased by 13.8% to USD 19.0 million compared with the second quarter but remained 5.5% below the previous year in the third quarter. Here, too, the trend is cautiously optimistic; only the traditional automotive business is lagging behind, while demand for quality testing equipment from the e-mobility battery segment continues to rise and the traditional refrigeration and air conditioning business is showing a stable development. Sales to customers in the target market Security & Energy, which are heavily dependent on large orders, increased by 74.1% to USD 4.7 million compared with the second quarter of 2020. However, sales in this market were still 25.4% below the strong prior-year figure. INFICON expects a noticeable revival in this market next year.
The sharp decline in business in Asia of 12.9% compared with the previous quarter is related to the above-mentioned, particularly strong second quarter in the Semi & Vacuum market. In contrast, sales generated in the third quarter increased in Europe (+2.7%) and America (+3.6%) compared with the second quarter. In the first nine months of the year, Asia showed a net increase of 3.4%, Europe was stable (+0.5%) and America showed a decline (-9.7%).
Margins and balance sheet
INFICON achieved a gross profit of USD 41.4 million in the third quarter of 2020 compared with USD 46.2 million a year ago. The gross profit margin decreased to 45.0% year on year from 49.6%. The COVID-19 pandemic resulted in additional operational expenses in the areas of materials, production and logistics. In addition, margins were affected by a different market/product mix and the currently stronger price pressure from Chinese chip manufacturers. INFICON is working intensively on product innovations, which will be presented in the coming quarters. This explains the 10% increase in research and development expenses to USD 9.7 million. Selling, general and administrative costs remained unchanged at USD 21.2 million. Operating income for the period was USD 10.1 million compared with USD 16.2 million a year ago. The operating profit margin decreased from 17.4% to 11.4%. Net income was USD 7.9 million compared with USD 12.4 million in the same period last year, representing a margin of 8.6% compared with 13.3%. Earnings per share for the third quarter were USD 3.24 compared with USD 5.10 a year ago.
INFICON’s balance sheet shows net cash of USD 25.7 million at the end of September. The equity ratio at the end of September was around 65.2%, compared with 65.6% a year ago and 75.9% at the end of last year. INFICON increased its operating cash flow to USD 15.5 million in the third quarter, compared with USD 11.0 million in the second quarter and USD 14.7 million a year ago. Working capital increased from USD 115.4 million to USD 119.9 million due to higher raw material and finished product inventories.
In view of the good and broad-based order situation, INFICON expects an unchanged sales volume of around USD 370-390 million and an operating profit margin of 15%-16% for the full fiscal year 2020. INFICON expects to achieve stronger margins again in the future when the various extraordinary impacts and charges will have disappeared. In addition, measures to strengthen the margins were introduced at all major production sites. In general, the mid-term targets including a stronger income margin are intact.
Conference call, Webcast and Half-Year Report
INFICON discusses its third quarter results today on an English-language conference call at 09:30 a.m. CEST. Participants are invited to dial-in using any of the following numbers:
Europe: +41 (0)58 310 5000
UK: +44 (0)207 1070613
USA (Toll free): +1 (1)866 291 4166
USA (local): +1 (1)631 570 5613
Please dial-in some minutes before the call begins. There is no PIN requested. The presentation covering the third quarter results is available online in the investor section of the INFICON website www.inficon.com where the conference call is simultaneously webcast and later on archived. You can access the webcast directly using the following link http://bit.ly/IFCN_IR_home.
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Corporate communication calendar 2020/21
INFICON’s corporate communication calendar is continuously updated and available online at http://bit.ly/IFCN_calendar.
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INFICON is a leading provider of innovative instrumentation, critical sensor technologies, and advanced process control software that enhance productivity and quality in sophisticated industrial vacuum processes. These analysis, measurement and control products are essential for gas leak detection in air conditioning/refrigeration, and automotive manufacturing. They are vital to equipment manufacturers and end-users in the complex fabrication of semiconductors and thin film coatings for optics, flat panel displays, solar cells and industrial vacuum coating applications. Other users of vacuum based processes include the life sciences, research, aerospace, packaging, heat treatment, laser cutting and many other industrial processes. We also leverage our expertise in vacuum technology to provide unique, toxic chemical analysis products for emergency response, security, and environmental monitoring. INFICON is headquartered in Switzerland and has world-class manufacturing facilities in Europe, the United States and China, as well as subsidiaries in China, Denmark, Finland, France, Germany, India, Italy, Japan, Korea, Liechtenstein, Singapore, Sweden, Switzerland, Taiwan, the United Kingdom and the United States. INFICON registered shares (IFCN) are listed on SIX Swiss Exchange. For more information about INFICON and its products, please visit www.inficon.com.
This press release and oral statements or other written statements made, or to be made by us contain forward-looking statements that do not relate solely to historical or current facts. These forward-looking statements are based on the current plans and expectations of our management and are subject to a number of uncertainties and risks that could significantly affect our current plans and expectations, as well as future results of operations and financial condition. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.