technology Bond investor presentation May 7 & 8, 2018 1 - - PowerPoint PPT Presentation

Bond investor presentation

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• PASSION. PRECISION. PURITY.

May 7 & 8, 2018

• PASSION. PRECISION. PURITY.
• No. 1 global market position in high-end vacuum valve

technology

Bond investor presentation

Bond investor presentation

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• PASSION. PRECISION. PURITY.

Today’s presenters

Michael Allison, Chief Executive Officer

• CEO of VAT since 2018, previously served in various leadership roles at Edwards/Atlas Copco,

most recently as President of the Semiconductor Division, as well as at KLA-Tencor Corp.

• More than 30 years of industry experience ranging from process engineering to business

development, service & marketing, turnarounds and M&A Andreas Leutenegger, Chief Financial Officer

• CFO of VAT since 2015, previously served as Head of Group Controlling at Holcim and CFO at

Siam City Cement Public Company Limited

• Significant global experience in finance and treasury, controlling and accounting, capital

investment and strategy and business development

Bond investor presentation

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• PASSION. PRECISION. PURITY.

Agenda

VAT overview

1

Key credit highlights

2

Financial performance

3

Bond offering

4

Bond investor presentation

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• PASSION. PRECISION. PURITY.
• We are the global leader in high-end

vacuum valves with a strong brand reflecting our reputation for technology, know-how and innovation

• High vacuum processes are key

enablers of the technological evolution

• VAT valves are mission-critical

components in the high vacuum process technology

• We drive innovation with R&D spending

that is unmatched in our industry

• We transform our success into

best-in-class financial performance Without VAT we wouldn’t have any of these…

VAT – enabling innovation in your daily life and facilitating the digitalization of the world

Smartphones Flatscreens and displays Electric cars Solar panels Healthcare Microchips

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1 Adjustment on Group level only 2 Segment margin based on segment net sales

Segment

(% of total net sales)

Net sales

CHF 99 / +21% Global Service (14%) Industry (6%) Valves (80%) CHF 554m / +40% CHF 692m / +36%

• Adj. EBITDA1

/ margin2

CHF 48m / 48.2% CHF 13m / 21.5% CHF 189m / 31.7% CHF 215m / 31.1% VAT Group AG CHF 40m / +26%

VAT at a glance (FY 2017) – The global leader in high-end vacuum valve technology

51% Asia 33% North America 16% EMEA

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VAT offers valves, modules and services for three key markets

General Vacuum Semiconductors Display & Solar Modules Services Bellows

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VAT has an unparalleled portfolio of high-end vacuum valves

• PASSION. PRECISION. PURITY.

Isolation valves Transfer valves Control valves

Angle valves Gate valves All-metal valves Pendulum valves MONOVAT L-Motion XL-VAT Butterfly valves Combo valves Controlled angle valves Large gate valves ATM Doors TwinVAT Controlled pendulum valves Symmetrical flow systems

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• VAT’s product portfolio

encompasses more than 150 valve series with more than 8,000 customized and 2,500 standard products

• Lifetime of up to 5

million cycles

• Allow for lowest

particle contamination

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• PASSION. PRECISION. PURITY.

Vacuum valves are mission-critical components in high-tech production processes

• VAT high-end vacuum valves, standing for close to zero

particles, highest purity and reliability, control and regulate flows and pressures in advanced production processes

• Closest component to the process
• Leak tightness over specified lifetime
• Zero particle generation in order to enable zero defect

production of micro-electronics

• Highest cleanliness level in order to prevent any organic

and / or inorganic impurities coming into the process environment

• Reliable and reproducible open / close sequence over total

lifetime of valve to match control sequences of complete process tool

• Shortest open / close times in order to maximize throughput
• f total system

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• PASSION. PRECISION. PURITY.

VAT is attractively positioned in the value chain of the vacuum / process industry

Material suppliers Vacuum system component manufacturers Equipment manufacturers (OEMs) Device manufacturers Valves

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Agenda

VAT overview

1

Key credit highlights

2

Financial performance

3

Bond offering

4

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VAT – Key credit highlights

Pure play business model as the technology leader in mission-critical vacuum valves Digitalization of the world drives growth and stability for VAT Undisputed no. 1 market position protected by high entry barriers Attractive financial profile with strong resilience supported by flexible cost structure Long-term strategic partner for a diversified blue-chip customer base

1 5 3 4 2

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Pure play on mission-critical vacuum valves Technology leadership

• Over a three year cycle 2/3rd of the

revenues are generated with products developed or revised within this period

• 10% of VAT staff engaged in the R&D

process

• Low operational complexity and high

flexibility

• Broadest product portfolio of valves for a

huge range of applications

• Mission-critical nature of high-end vacuum

valves makes innovation, quality, reliability and performance the key drivers of customers’ buying decision, well ahead of price

Pure play business model as the technology leader in mission-critical vacuum valves 1

c.540 c.72 c.60 c.60 c.48 c.48 c.36 c.36 6% 48% 58% 58% 72% 72% 96% 96% Vacuum valve sales (USD million) VAT 2017A R&D expenses in % of

• wn/competitors’ vacuum valve sales

Source: VLSI Research March 2018, 2017 full year preliminary data

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Leveraging our core competencies to exceed industry requirements

VAT core competencies

Semi Display Solar R&D

Technology enablers Sealing technology

   

Contamination management (zero defects)

   

Material & coating competence

   

High speed control technology

   

Module solutions

   

Precision motion components

   

Vacuum design (total cost of ownership)

   

IP management

   

Manufacturing, assembling and machining expertise

   

Relevance to industry segments

1

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Long-term strategic partner for a diversified blue-chip customer base 2

Semiconductors Display & Solar General Vacuum Modules

Equipment manufacturers (OEMs)

SEZ AG

Lintott Engineering Implant Opal / Orbot Metrology PV division

Mask making

Plating Emcor

+

Consolidation

• f OEMs driven

by end-user consolidation

Device manufacturers

90nm 65/55nm 45/40nm 32/28nm 22/20nm 14nm

Ever increasing technological requirements resulted in consolidation and symbiotic partnerships

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Digitalization of the world drives growth and stability for VAT 3

Source: VLSI Research March 2018

1 Includes Other IT, Other Personal Devices, Other Electronics

Source: VLSI Research April 2018

Ubiquitous presence of electronic devices … … fosters future growth while reducing the cyclicality of the industry

Cellular Handsets 16% PCs 14% Industrial 11% Automotive 6% Servers & Mainframes 6% Audio/Vide

• 5%

Storage 5% Wireless IT 5% Wired IT 4% Peripherals 4% Tablets 3% Other1 21%

WW Electronics Production 2017 2’066B$

200 400 600 800 1'000 1'200 1'400 1'600

1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

IC unit shipments (billion) IC Sales (USD billion)

• 40%
• 20%

0% 20% 40% 60% % change of IC unit shipments % change of IC sales (USD)

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Source: VLSI Research March 2018, 2017 full year preliminary data

1 All Industries includes semi & related, General Vacuum.

Market share all industries1

Total vacuum valve market size 2017: USD 1’200m

Undisputed no. 1 market position protected by high entry barriers 4

High barriers to entry Undisputed market leadership

45% 6% 5% 5% 4% 4% 3% 3%

• VAT’s market share is c.8x the no. 2
• Providing for significant scale effects
• Market share increased from 39% in 2014

High-end vacuum valves are mission-critical and require leading edge technology and manufacturing competencies Sufficient resources to innovate Key customers require global supplier proximity Global key accounts require long- term and trusted partnerships Relative size versus competitors provides scale advantages

Large variety of proprietary technologies and a deep pool of

highly experienced vacuum valve technology professionals

Undisputed technology leader

based on unparalleled R&D capabilities and resources

Complete portfolio

• f high-end vacuum valves and

related global competence centers

Long-term partnerships with its key accounts with an average

customer relationship of 14 years Almost 8x the size of the #2 by

market share, with more than one

million valves in operation

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1 Adj. EBITDA 2014 – 2017, 2005 – 2013 reported EBITDA 2 FCF data only available from 2007

264 332 333 300 202 389 367 313 335 364 411 508 692

41% 43% 38% 32% 23% 35% 31% 31% 23% 28% 31% 31% 31% 24% 26% 12% 21% 20% 17% 12% 18% 26% 25% 16%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Reported net sales

• Adj. EBITDA margin

FCF margin

1 2

Attractive financial profile with strong resilience supported by flexible cost structure

Note: Adjusted EBITDA, Free cash flow and related metrics are non-IFRS measures used by management to monitor the underlying performance of the company's business and operations. Non-IFRS measures have limitations as analytical tools and should not be viewed as indicators of, or alternatives to, its results or any performance or liquidity measures under IFRS. Not all companies compute non-IFRS measures in the same way and the manner in which management has chosen to compute this non-IFRS measure may not be comparable with similarly defined terms used by other companies

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Swiss best-in- class industrials2

1 Defined as free cash flow as a percentage of EBITDA 2 Includes Belimo, dormakaba, Geberit, LEM Holding, SFS Group (source: company reports) 3 Includes Autoneum, Daetwyler, Georg Fischer, Oerlikon, Sulzer (source: company reports)

Comparison of key financials with Swiss best-in-class and other industrial companies

Best-in-class profitability

• Adj. EBITDA

margin 2017

A

31.1% 20.2% 11.8%

High resilience across cycles

D

Average EBITDA margin 2008 - 2017

29.7% 20.3% 12.3%

Strong cash flow generation

B

FCF conversion rate1 2017

51.1% 47.9% 41.5%

Sound capital structure

C

Net debt/EBITDA year end 2017

0.7x (0.1x) 0.4x

Other Swiss industrials3

Strong downturn resilience

E

EBITDA margin 2009

23.1% 19.4% 3.6%

5

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Rating considerations 5

Key factors underlying historical rating Mitigants

• Volatility / cyclicality of end-markets
• Broad spectrum of applications, technology inflections,

consolidation of OEMs and device manufacturers reduced cyclicality

• Customer and end-market concentration
• Dividend policy
• Limited size
• Long-term partnerships with customers and suppliers
• Return up to 100% of free cash flow to equity1 to shareholders

as long as the Group’s net debt does not significantly exceed 1x EBITDA

• VAT’s sales more than doubled since initial rating coverage

and increased by 36% in 2017

1 Free cash flow to equity is calculated as cash flow from operation activities less cash flow from investing activities less interest paid and the current portion of loan and borrowings due at the end of the period

Standard & Poor’s Moody’s

2014 2016

B1 stable Ba3 stable B+ stable BB- stable

+1 +1

Sale to Capvis and Partners Group Initial Public Offering

2018

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Agenda

VAT overview

1

Key credit highlights

2

Financial performance

3

Bond offering

4

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Full-year 2017 – Group key figures

Third party net sales CHF 692 m +36%

• Adj. EBITDA

CHF 215 m +36%

• Adj. EBITDA margin

31.1% (unchanged) EBIT margin 25.8% (+2.5pp) Free cash flow CHF 109m

• 15%

Free cash flow margin 16% FCF conversion 51% Net debt/EBITDA 0.7x Dividend 2017 of CHF 4.00 per share1

1 For the financial year 2017; proposal of the VAT Board of Directors to its shareholders at the AGM on May 17, 2018

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508 692 97 100 (12) (1)

Net sales bridge

• Volume and product mix increases both drive top line growth
• Negative price impact only due to volume rebates to large customers

2016 Volume Product mix Price FX 2017

in CHF million

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Substantially reduced finance cost negatively impacted by non-cash cost of unwinding finance structure

• Full impact of 300-million syndicated five-year revolving credit facility established in September 2016
• Reduced overall interest cost offset by unwinding finance structure by recycling of non-cash translation

reserves in the amount of CHF 38.3 million

• Effective tax rate of 14.1% positively impacted by US tax reform and accessibility of loss carry forwards in

Malaysia and Romania

in CHF million

2017 2016 Change EBIT 178.7 118.3 51.1% Finance net

• 44.1
• 30.4

45.0% EBT 134.7 87.9 53.2% Income tax expenses

• 19.0
• 20.7
• 8.0%

Effective Tax Rate

• 14.1%
• 23.5%

Net income 115.7 67.2

72.1%

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Investments in growth impacted free cash flow

• Improvement in cash flow from operations slowed down by substantial increase in working capital, however

working capital as a percentage of sales remained unchanged at 20.1% compared to 2016

• Investments in additional capacity led to substantial higher CAPEX

146 156 +6% (18) (47) +158% 128 109

• 15%

Free cash flow

Cash flow from operating activities Cash flow from investing activities Free Cash Flow

2016 2017 88% 86% 51% 2015 2016 2017

Free cash flow conversion

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Year-end leverage further reduced

• Slightly higher net debt level
• Higher draw-down from RCF reflecting higher capital

expenditures and working capital

2 Net debt 2015 is calculated excl. shareholder loan as of December 31, 2015

• Leverage further reduced as the result of stable net debt

coupled with higher EBITDA

• Year-end net debt/EBITDA decreased to 0.7x from 0.9x
• No further de-leveraging expected

1 Five year revolving credit facility (RCF) over USD 300m extended to maturity in 2023 (in Q1 2018)

1971 2161 +10% (63) (72) +15% 134 144 +7%

Net debt development

Gross debt Cash and cash equivalents Net debt

1.8x2 0.9x 0.7x December 31, 2015 December 31, 2016 December 31, 2017

Year-end leverage development

2016 2017

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Q1 2018 trading update – full-year 2018 guidance confirmed

• Order backlog up 11%

versus year-end 2017 Group order intake up 18% to CHF 215 million Group net sales up 20% to CHF 198 million despite 3 percentage points FX headwind All three segments growing y-o-y in orders and net sales Eight consecutive quarters of growth on a year-on-year basis since listing in April 2016 Capacity expansion in Malaysia on track

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Conclusion & Outlook 2018

• The era of Big Data, augmented by rapid advances in artificial intelligence

(AI), is gaining momentum, leading the company into a new phase of sustainable growth

• Leading market position in vacuum-valves enables VAT to fully capture the

growth potential presented by investments in semi and adjacent markets

• Service opportunities to be actively pursued
• Revenue growth of 15% to 20% expected at constant FX rates
• EBITDA margin to progress towards target of 33% by 2020
• Substantial increase of net income and EPS expected
• CAPEX to remain around 7% of net sales

Outlook 2018

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VAT’s financial mid-term guidance

Mid-term guidance (amended versus former guidance at time of IPO)

• Net sales growth:

high single digit over the cycle at constant FX rates

• EBITDA margin target:

33% of sales by 2020

• Effective tax rate:

18% to 20% of earnings before tax

• CAPEX:

4% of sales over the cycle

• TWC target:

less than 20% of sales

• Leverage :

1x Net debt / EBITDA

• Cost of debt:

LIBOR plus margin depending on leverage ratio

• Dividend policy:

return up to 100% of free cash flow to equity1 to shareholders as long as the Group’s net debt does not significantly exceed 1x EBITDA

1 Free cash flow to equity is calculated as cash flow from operation activities less cash flow from investing activities less interest paid and

the current portion of loan and borrowings due at the end of the period.

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Agenda

VAT overview

1

Key credit highlights

2

Financial performance

3

Bond offering

4

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Overview of Bond Terms

Issuer VAT Group AG Type Senior unsecured Bond Currency CHF Denomination CHF 5,000 Issuer Rating Moody’s: Ba3; S&P: BB- Assurance Change of control clause, pari passu clause, negative pledge clause and cross default clause Selling Restrictions Not for distribution in the United States of America or to U.S. Persons. Further restrictions apply, in particular, in the European Economic Area, in the United Kingdom and in Italy Governing Law, Jurisdiction Swiss law, Zurich, Switzerland Listing Application for SIX Swiss Exchange Amount [TBD] Maturity Intermediate Use of Proceeds General corporate purposes Lead Manager Credit Suisse AG

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Q&A Session

BOND INVESTOR PRESENTATION

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Appendix

BOND INVESTOR PRESENTATION

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Michael Allison CEO Andreas Leutenegger CFO Jürgen Krebs COO

• Over 2,000 dedicated employees

world-wide

• Approx. 180 top qualified development

engineers, product designers and staff working in Corporate Research and Product Management & Development

• Nearly 115 trained quality managers

ensuring VAT’s certified quality standards worldwide

• Customized in-house training programs

for production workers and standardized

• n-work education
• Average employee tenure with VAT in

Haag: 7.3 years

Proven leadership with a strong track record supported by highly skilled workforce

Group Management Board Highly skilled workforce Group Executive Committee

Jürgen Zoller Display & Solar Arno Zindel General Vacuum & Belllows Urs Gantner Semiconductors Michael Zickar R&D Gebhard Lutz Modules & Motion Components Michael Allison Global Sales & Marketing Ronald Pscheni- tschnigg Global Service

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VAT benefits from multi-dimensional growth dynamics

VAT is exposed to a broad range of well established structural growth themes …

1st Dimension

End market growth Multi-pronged growth opportunity driven by expanding end markets ... which rely on advanced and complex production technology in nano-scale

2nd Dimension

Process manufacturing equipment growth Miniaturization and demand for ever increasing computing capability at lower power consumption drives advanced manufacturing build-up Manufacturing processes under vacuum (deposition, etch and clean, ion-implantation) Advanced technologies require fundamental shifts of manufacturing processes towards more high vacuum, for which VAT is a key enabler

3rd Dimension

Vacuum valve growth Vacuum valve growth driven by favourable secular technology evolution

Increasing growth

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2nd Dimension Equipment growth 3rd Dimension Vacuum valve growth 1st Dimension End market growth

• End markets growing at

unprecedented speed

• Secular market drivers -

digitalization everywhere (Big Data, IoT, Industry 4.0, E-mobility etc.)

• Lower cyclicality - ubiquitous

applications and functionalities

• Volume
• Technology inflections
• 3D NAND, DRAM, Logic and

Foundry

• <10 nm features and multi

layers

• ALD/ALE/EUV
• Capacity expansions
• China
• Shift into vacuum
• Lithography - EUV
• Thin film coatings for industrial

applications (tribology)

• Medical applications, aerospace

and automotive (engine parts, batteries etc.)

VAT’s three growth dimensions delivered results

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VAT’s success story over 50 years

1965 1983 1988 2009 2015

VAT founded in Flawil (CH) Acquisition of VAT by Partners Group and Capvis. Ramp-up of manufacturing center in Malaysia

2012

Acquisition of vacuum valves product line from Inficon Manufacturing center establ. in Malaysia Gate manufacturing

• est. in Taiwan

Acquisition of Sysmec (ROM) Entry into the semiconductor industry Establishment

• f Comvat

2016

IPO at SIX Swiss Exchange

2017

Substantial capacity expansions

2008 2014

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• No. 1 market position further expanded

39% 39% 41% 45% 2014 2015 2016 2017

Source: VLSI Research March 2018, 2017 full year preliminary data

1 All Industries includes semi & related, General Vacuum. 2 Semi & related includes Semiconductors, Displays, Solar, LED Lighting, Hard Disk Drive. 3 Semi includes Semiconductors, LED and HDD

Market share all industries 1

44% 45% 47% 51% 2014 2015 2016 2017

Market share semi & related 2

Total vacuum valve market size 2015: USD 531m 2016: USD 695m 2017: USD 875m Total vacuum valve market size 2015: USD 804m 2016: USD 977m 2017: USD 1’200m

53% 54% 57% 64% 2014 2015 2016 2017

Market share semi 3

Total vacuum valve market size 2015: USD 350m 2016: USD 393m 2017: USD 518m

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Investing into the future - Switzerland

– Optimizing the existing production footprint – Outsourcing to external partners – 7 additional milling machines installed in 2017 – 3 shift model across entire plant by end of 2017 – 272 new employees since end of 2016 – Broader supplier base contribution – Around 2/3 of total 2017 CAPEX

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Investing into the future - Malaysia

– Target production output of CHF 400m – Addition of around 17’000 m2 production floor – Full value chain incl. machining, assembly, clean room – Development of qualified supplier base in Asia – 112 new employees since end of 2016 – Around 1/3 of total 2017 CAPEX

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Balance sheet structure

in CHF million

Assets Liabilities and Equity

991m 991m

Total borrowings Equity Payables 93 216 558 Cash Receivables Other LT assets Other current assets PPE Inventories 72 123 111 4 CHF 361m 16 148 Goodwill and

• ther intangibles

517 Other liabilities 124

• Almost all goodwill and other intangible assets

resulted from the acquisition of VAT by Capvis and Partners Group on 29 January 2014

• Other intangible assets mainly consist of

acquired technology and customer relationships as well as brand and trademarks

• In 2016, VAT entered into a syndicated revolving

credit facility of USD 300m (in Q1 2018 the maturity was extended from 2021 to 2023)

Note: Balance sheet as per December 31, 2017

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87 59 8 (14) (159) 207 93 8 (56) (247) USD JPY GBP EUR CHF 2016 2017

Status on FX exposure initiatives FX

EUR USD

• Ongoing initiative to increase global sourcing (mainly Asia and Eastern Europe)
• Nomination of debt in USD
• FX hedging of up to 100% of net cash flows contracts on a 18-month rolling basis

JPY

• EUR exposure increased due to sourcing and CAPEX in EUR
• FX hedging of up to 100% of net cash flows contracts on a 18-month rolling basis

1 Net cash flow after financing activity incl. CAPEX and loan interest expense

Initiatives to mitigate the foreign exchange exposure

Net cash flow exposure to main currencies1

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Lean and flexible cost structure and supplier base

Lean and flexible cost structure Flexible supply chain setup

• Operational improvement measures in value engineering,

lean manufacturing, global sourcing and relocation of production to Malaysia aimed at achieving standard cost reduction

• Ability to quickly adapt production capacities (both, ramp-

up and ramp-down capability)

• Qualification of our workforce is key to flexibility – multi-

trained assembly and manufacturing resources allocated to the point of need according to customer demand

• Advanced assembly control system and work instructions

support fast on-boarding of new employees

• Workforce flexibility is supported by

− Overtime (flex-time account) and extra shifts − Up to 20% temporary workers (blue collar)

• Automated machining centers able to run men-less extra

shifts if needed

• Continuous review of make-and-buy decisions

2017 cost structure, in CHF million

~33% fixed 261 ~67% variable 157 68 Split 2017

Other expenses Personnel expenses Material expenses

100% variable ~30% variable1

1 Management estimate

1

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Valves – 80% of net sales

Semiconductors

• Record results driven by demand for etch and

deposition wafer fabrication equipment

• Memory and logic chip demand remains at a very

high level Display & Solar

• Investments in OLED continues; investments in

G10.5 fabrication equipment for LCD screens Modules

• Strong growth as OEMs value the tailor made

multi valve solutions that offer lowest possible process contamination General Vacuum

• Growth in existing businesses; qualification for

additional market segments

in CHF million

Q4 2017 Q4 2016 Change Order intake 152.7 139.7 9.3% Net Sales 159.7 116.4 37.2%

in CHF million

2017 2016 Change Order intake 590.6 443.3 33.2% Net sales 554.2 394.6 40.4% Inter-segment sales 41.1 32.2 27.6% Segment net sales 595.3 426.8 39.5% Segment EBITDA 188.6 129.3 45.9% EBITDA margin 31.7% 30.3%

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Global Service – 14% of net sales

Growing installed base spurs substantial growth

• Ongoing investments in manufacturing capacity

for semiconductors and displays yield in fast expanding installed base

• Demand for spare parts and specialty

consumables such as spare gates growing

• Proximity to customers is a key success factor;

expansion of service network in 2017 especially in Korea and China

• Retrofit and upgrade business opportunities at the

heart of the Global Service strategy

• Investment in dedicated service infrastructure on

the premises of key customers

in CHF million

Q4 2017 Q4 2016 Change Order intake 21.5 20.9 2.9% Net Sales 28.6 20.4 40.2% in CHF million 2017 2016 Change Order intake 103.6 85.0 21.9% Net sales 98.7 81.9 20.5% Inter-segment sales

• Segment net sales

98.7 81.9 20.5% Segment EBITDA 47.6 40.5 17.7% EBITDA margin 48.2% 49.4%

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Industry – 6% of net sales

Investments in future growth

• Accelerated growth in net sales to third parties,

combined with rising internal demand for bellows

• Introduction of new line of bellows with more

corrosion-resistant materials

• Fuel injection dampers with moderate growth in

2017, investment in additional production capacity to accommodate expected future growth

• Slightly lower EBITDA margin as a result of

strong growth in intersegment sales

in CHF million

Q4 2017 Q4 2016 Change Order intake 11.6 7.5 54.7% Net Sales 10.8 5.9 83.1% in CHF million 2017 2016 Change Order intake 42.0 33.6 25.0% Net sales 39.5 31.4 25.7% Inter-segment sales 22.6 15.4 46.8% Segment net sales 62.1 46.8 32.8% Segment EBITDA 13.4 10.3 29.2% EBITDA margin 21.5% 22.1%

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164.5

197.8

2017 2018 Q1 net sales

181.8

215.3

165.6

183.5

2017 2018 Q1 order intake Mar 31 order backlog

Net sales growth Strong order dynamics

in CHF million

+20%

Q1 2018 – Trading update

• Significant increase in orders and net sales as demand remained near historically high levels for digital

products, such as solid state memory devices, logic chips and displays, the production of which depends on VAT’s advanced high-vacuum valves

• Proven ability to continue to increase production capacity to meet customers’ requirements while

maintaining product quality and cost discipline

in CHF million

+18% +11%

Bond investor presentation

47

• PASSION. PRECISION. PURITY.

Q1 2018 – Trading update by segment

Strong performance across segments

• In the Valves segment, all business units

reported higher net sales, driven by both favorable market conditions and revenues generated from previous specification wins

• Global Service grew net sales in all units with

the retrofit business growing fastest as customers continued to upgrade the large installed base of VAT valves

• In the Industry segment, growth in orders and

net sales was driven by the bellows business with the automotive industry as well as positive developments in other markets

in CHF million

Q1 2018 Q1 2017 Change

VALVES

Order intake 175.2 144.3 21.4% Net sales 159.3 132.7 20.1% Inter-segment sales 11.3 8.4 34.5% Segment net sales 170.6 141.1 20.9%

GLOBAL SERVICE

Order intake 27.8 27.4 1.5% Net sales 26.7 21.8 22.4% Inter-segment sales

• Segment net sales

26.7 21.8 22.4%

INDUSTRY

Order intake 12.4 10.2 22.8% Net sales 11.8 10.0 17.6% Inter-segment sales 6.8 6.0 13.3% Segment net sales 18.6 16.0 16.0%

Bond investor presentation

48

• PASSION. PRECISION. PURITY.

Information

Investor information Contact information Listing: SIX Swiss Exchange Michel Gerber Currency: CHF Head of Corporate Communications & Ticker symbol: VACN Investor Relations ISIN: CH 031 186490 1 Phone: +41 81 772 42 55 Legal Entity Identifier: 529900MVFK7NVALR7Y83 E-mail: m.gerber@vat.ch Financial calendar Annual General Meeting Thursday, May 17, 2018 Ex-date Tuesday, May 22, 2018 Dividend payment Thursday, May 24, 2018 Half-year 2018 results Friday, August 24, 2018 Q3 20187 trading update Thursday, October 25, 2018 Full-year 2018 results Friday, March 8, 2019 Annual General Meeting Thursday, May 16, 2019

Bond investor presentation

49

• PASSION. PRECISION. PURITY.

Forward looking statements

Forward-looking statements contained herein are qualified in their entirety as there are certain factors that could cause results to differ materially from those anticipated. Any statements contained herein that are not statements of historical fact (including statements containing the words “believes,” “plans,” “anticipates,” “expects,” “estimates” and similar expressions) should be considered to be forward-looking statements. Forward-looking statements involve inherent known and unknown risks, uncertainties and contingencies because they relate to events and depend on circumstances that may or may not occur in the future and may cause the actual results, performance or achievements of the company to be materially different from those expressed or implied by such forward looking

• statements. Many of these risks and uncertainties relate to factors that are beyond the company’s ability to control
• r estimate precisely, such as future market conditions, currency fluctuations, the behavior of other market

participants, the performance, security and reliability of the company’s information technology systems, political, economic and regulatory changes in the countries in which the company operates or in economic or technological trends or conditions. As a result, investors are cautioned not to place undue reliance on such forward-looking statements. Except as otherwise required by law, VAT disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after this presentation was made.