Quarterly Financial Report

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Quarterly financial report

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Summary

Quarterly
Financial Report
Third Quarter 2020
Quarterly Financial Report / Third Quarter 2020
Contents
Page
Key Figures ............................................................................................................................................................................ 3
The Company ........................................................................................................................................................................ 4
Share Performance ....................................................................................................................................................... 5
Interim Management Report ............................................................................................................................... 6
Consolidated Interim Financial Statements ...................................................................................... 16
Consolidated Statements of Income ...................................................................................................... 16
Consolidated Statements of Comprehensive Income .......................................................... 17
2
Consolidated Balance Sheets ...................................................................................................................... 18
Consolidated Statements of Shareholders’ Equity .................................................................. 19
Consolidated Statements of Cash Flows ........................................................................................ 20
Notes to the Consolidated Interim Financial Statements .................................................. 21
Additional Information .............................................................................................................................................. 29
Key Figures
Q1-Q3 Q1-Q3
Q3 2020 Q3 2019 Change 2020 2019 Change
Sales and profit
Total sales K€ 152,007 156,225 -2.7% 453,861 467,330 -2.9%
Germany K€ 24,196 25,056 -3.4% 70,565 72,664 -2.9%
Other countries K€ 127,811 131,169 -2.6% 383,296 394,669 -2.9%
Operating profit K€ 16,138 16,059 0.5% 35,686 48,904 -27.0%
EBIT margin % 10.6 10.3 0.3 Pp 7.9 10.5 -2.6 Pp
Net income K€ 11,279 11,427 -1.3% 24,810 34,736 -28.6%
Return on sales % 7.4 7.3 0.1 Pp 5.5 7.4 -1.9 Pp
Operating cash flow K€ 14,070 12,471 12.8% 36,957 35,513 4.1%
Capital expenditures K€ 6,403 6,273 2.1% 19,675 19,307 1.9%
Earnings per share € 1.14 1.16 -1.7% 2.51 3.52 -28.4%
Workforce
Workforce (average) 3,334 3,243 2.8% 3,317 3,244 2.3%
Germany 1,124 1,092 2.9% 1,119 1,072 4.4%
Other countries 2,210 2,152 2.7% 2,198 2,172 1.2%
Sales per employee K€ 46 48 -4.8% 137 144 -5.5% 3
Sept. 30, 2020 December 31, 2019 Change
Balance sheet
Balance sheet total K€ 659,111 659,575 -0.1%
Cash and cash equivalents K€ 112,217 111,980 0.2%
Number of shares issued 9,867,659 9,867,659 -
Shareholders’ equity K€ 396,377 393,445 -0.9%
Equity ratio % 60.1 59.6 0.5 Pp
This quarterly financial report has been prepared in accordance with International
Financial Reporting Standards (IFRS). Throughout this report, all percentages are
calculated based on amounts in thousands €

The Quarterly Financial Report as of September 30, 2020, is unaudited

The Company
Pfeiffer Vacuum – a name that stands for innovative solutions, high technology and
dependable products, along with first class service. For more than 125 years, we
have been setting standards in vacuum technology with these attributes. One very
special milestone was the invention of the turbopump at our Company more than 50
years ago. Thanks to our know-how, we continue to be the technology and world
market leader in this field. To no small degree, this also manifests itself in our strong
profitability

Our extensive line of solutions, products and services ranges from vacuum pumps,
measurement and analysis equipment right through to complex vacuum systems. And
quality always plays a key role in this connection: Products from Pfeiffer Vacuum are
being constantly optimized through close collaboration with customers from a wide
variety of industries, through ongoing development work and through the enormous
enthusiasm and commitment of our people. These are virtues that we will continue to
embrace!
Pfeiffer Vacuum
Headquarters Asslar
4
Established 1890
Purpose of the Company To develop, manufacture and market components
and systems for vacuum generation, measurement
and analysis
Manufacturing sites Asslar, Germany; Göttingen, Germany;
Dresden, Germany, Annecy, France; Asan, Republic
of Korea; Cluj, Romania; Indianapolis, USA; Yreka,
USA; Ho-Chi-Minh-City, Vietnam, Wuxi, China
Workforce (September 30, 2019) 3,333
Sales and service 31 subsidiaries and a multitude
of agencies worldwide
Quality management Certified under ISO 9001
Environmental management Certified under ISO 14001
Stock exchange listing Deutsche Börse, Prime Standard/TecDAX
Accounting IFRS
For more information please visit www.group.pfeiffer-vacuum.com

Share Performance
Pfeiffer Vacuum shares have been traded on the Deutsche Börse Stock Exchange in
Frankfurt since April 15, 1998. Pfeiffer Vacuum satisfies the high transparency
requirements of the Prime Standard and has been included without interruption in the
TecDAX, the index of the 30 most important technology issues traded on the stock
exchange in Frankfurt, since its inception

Basic information about Pfeiffer Vacuum shares
Deutsche Börse Symbol PFV
ISIN DE0006916604
Bloomberg Symbol PFV.GY
Reuters Symbol PV.DE
Number of shares issued 9,867,659
Freefloat as at September 30, 2020 39.78 %
Market capitalization as at
September 30, 2020 € 1,746.6 million
In the first three quarters 2020 the share price performance of Pfeiffer Vacuum was 5
slightly stronger than the performance of the TecDax index in the same period. On
January 2, 2020, the opening price of Pfeiffer Vacuum shares was € 160.00 and the
closing price was € 177.00 on September 30, 2020. This represents an increase by
10.6 %. On July 22, 2020 the high for the first nine months of 2020 was reached with
€ 180.60. The low for the first nine months in 2020 was € 104.40 on March 16, 2020

In the same period the TecDAX, starting at 3,023 points on January 2, 2020 and
closing at 3,070 points on September 30, 2020, increased by 1.6 %

Also in 2020 Pfeiffer Vacuum distributed a dividend to its shareholders for a repeated
time. At the Annual General Meeting on May 20, 2020, a vast majority of
shareholders followed the common proposal of Management and Supervisory Boards
and resolved a dividend of € 1.25 per share for the fiscal year 2019. Thus, the payout
ratio amounted to around 25.5 % of consolidated net income 2019. A total of € 12.3
million was paid to the shareholders

Unchanged compared to December 31, 2019, the freefloat according to our
knowledge is 39.78 % as of September 30, 2020

Interim Management Report
Sales in the first three quarters of 2020 totaled € 453.9 million. Following € 467.3
million in the first nine months of 2019, this represents a decrease by € 13.5 million,
or 2.9 %, respectively. Based on a somewhat weaker overall demand situation sales
in the third quarter of the current fiscal year totaled € 152.0 million and were thus
slightly below the level of Q3/2019 (€ 156.2 million). The strongest sales development
in the first three quarters 2020 was recorded in the market segment semiconductors,
which was able to almost fully compensate the downtrend in the other segments. In
total, the gross profit decreased by € 3.4 million, or 2.1 %, respectively, to € 158.0
million (2019: € 161.4 million). Particularly changes in product mix improved the gross
margin slightly from 34.5% to 34.8 %. Due to the Group’s focus on further growth
general and administrative expenses recorded an increase by € 2.5 million to € 43.5
compared to the first three quarters of 2019 (€ 40.9 million). The R & D expenses
increased by € 4.3 million to € 25.5 million for the first three quarters of 2020
compared to € 21.2 million for the first three quarters of 2019. Selling and marketing
expenses on the contrary only showed slight increases in the first nine months of
2020 compared to the previous year. The balance of other operating income and
expenses declined by € 4.8 million to € 0.6 million compared to previous year. In total,
an operating profit of € 35.7 million was generated in the first three quarters of the
current fiscal year, down by € 13.2 million, or 27.5 %, compared to previous year’s
value of € 48.9 million. As a consequence the EBIT margin, the ratio between 6
operating profit and sales, decreased from 10.5 % in 2019 to 7.9 %. With virtually
constant net financial expenses and a slightly increased tax rate, net income
decreased from € 34.7 million to € 24.8 million. This led to earnings per share of
€ 2.51 (2019: € 3.52)

COVID-19, overall economic environment and situation at Pfeiffer Vacuum
The impacts of COVID-19 are now and will remain a global challenge. Worldwide
economic development is severely affected by the consequences of restrictions in
public life. The final effects of this recession cannot yet be estimated, as the
economic downturn is not regionally limited and hit virtually all economic sectors at
the same time. In addition, against the background of actually strongly increasing
infection numbers shows that many countries and regions impose new restraints to
public life, which currently make a valid prognosis of future trends highly unreliable

Accordingly the impact for the vacuum industry is unpredictable as well

Pfeiffer Vacuum’s top priorities in this environment remain the health and safety of the
employees and to meet the customers’ needs. Our goals are to assure that none of
our employees will be infected by COVID-19 because of their work at Pfeiffer Vacuum
and that we meet the commitments to our customers, particularly in these challenging
times. Our customers tell us that Pfeiffer Vacuum stands for quality and reliability of
products, and services. This is a reputation that we are proud of and that we protect

We are tirelessly working on meeting and exceeding the expectations of our
customers. This is essential as we are pursuing our goal to increase market share

Despite challenges in the first nine months of the year, we managed to fulfil our
customers’ requirements

What further helps the Company in this challenging situation is the very solid financial
position. For many years the Group has shown strong balance sheet structures with a
Interim Management Report
high equity ratio and has adopted conservative financing approaches for daily
business and necessary investments. Together with the solid earnings development -
in comparison to the global economic development - in the first nine month of the year
we therefore still do not see any liquidity risks from the COVID-19 situation

Business
Our business operations include the development, manufacture, sale and service of
vacuum pumps, vacuum measurement, components and analysis equipment and
instruments, as well as vacuum systems and leak detection systems

Sales
Presented below are net sales by segment, by region, by product and by market for
the periods ended September 30, 2020 and 2019

Sales by Segment (Companies)
The subsidiaries in the individual countries are independent legal entities with their 7
own management, which distribute products and provide services. The Company
identifies its primary operating segments by legal entity. Due to the similarity of their
economic environment, the same product portfolio sold, same sales markets, same
cost structures and same sales channels, the Company basically aggregates its
European and Asian subsidiaries into one reporting segment, “Rest of Europe” and
“Rest of Asia”. In contrast, the production companies in Germany, France, the USA
and the Republic of Korea were presented separately each as an individual segment

This was caused by the different functions of these entities, predominantly resulting
from the existing production function

Sales by Segment
Three months ended Nine months ended
September 30, September 30,
2020 2019 2020 2019
in K€ in K€ in K€ in K€
USA 32,719 31,873 91,558 91,183
Rest of Asia 29,850 24,761 84,475 74,781
Rest of Europe 24,447 26,257 75,791 80,130
Germany 24,196 26,809 70,565 81,807
Republic of Korea 15,597 16,780 56,946 46,418
USA (Production) 9,283 9,519 29,837 28,407
France 11,353 12,706 29,816 44,685
All Others 4,562 7,520 14,873 19,922
Total 152,007 156,225 453,861 467,333
Interim Management Report
Analysis of sales by Segment in the first nine months 2020 show a heterogeneous
development. Increases were achieved in the segments Republic of Korea and rest of
Asia, while sales in the further USA and USA (Production) showed similar sales
results as in 2019. Sales in the other segments declined versus previous year. The
biggest drop was recorded in France

The following graphic shows the still balanced split of consolidated sales by
segments

Sales by Segment 9M/2020 (9M/2019)
France Rest of Europe
6.6 % (9.5 %) 16.7 % (17.1 %)
Germany USA
15.6 % (17.6 %) 20.1 % (19.5 %)
453.9 mill. €
(467.3 mill. €) USA (Production)
All Others
3.3 % (4,3 %). 6.6 % (6.1 %)
Rest of Asia Republic of Korea
18.6 % (16.0 %) 12.5 % (9.9 %)
8
Sales by Region
In the following table we are also summarizing sales by region. The table includes all
sales in a given region, regardless of which company in the Pfeiffer Vacuum Group
actually generated these sales

Sales by Region
Three months ended Nine months ended
September 30, September 30,
2020 2019 2020 2019
in K€ in K€ in K€ in K€
Asia 61,957 54,225 170,532 167,626
Europe 53,593 58,852 162,285 173,791
The Americas 36,175 43,107 120,702 125,810
Rest of the world 282 41 342 106
Total 152,007 156,225 453,861 467,333
From a regional point of view the sales in Q3 2020 showed that only region Asia
recorded sales growth with 1.7% compared to the same quarter in the year before,
which is largely due to the development of the semiconductor-customers. On the
other hand Europe recorded a sales decrease of 6.6 % mainly because the
semiconductor business couldn’t countervail the impact of COVID-19

Interim Management Report
The following graphic shows the still balanced split of sales by region

Sales by Region 9M/2020 (9M/2019)
The Americas
Europe
26.5 % (26.9 %)
35.9 % (37.2 %)
453,9 mill. €
(467.3 mill. €)
Asia
37.6 % (35.9 %)
Sales by Market
Sales by Market
Three months ended Nine months ended
9
September 30, September 30,
2020 2019 2020 2019
in K€ in K€ in K€ in K€
Semiconductors + Coating 75,022 70,729 233,500 218,047
Industry + Analytics + R & D 76,985 85,496 220,361 249,286
Total 152,007 156,225 453,861 467,333
As mentioned before sales in the market semiconductors showed a positive trend and
therefore influenced the development in the category semiconductors and coating. In
contrast the demand in the coating market stayed quite challenging. Due to the
COVID-19 situation the sales with customers from analytics, industry and R&D
declined compared to previous year

For competitive reasons we decided to carry out our sales analysis by market on a
more consolidated level from financial year 2020 on. The previous year’s figures have
been adjusted accordingly. For the same reason, we refrain from disclosing sales by
product

Interim Management Report
The sales split by markets was as follows:
Sales by Market 9M/2020 (9M/2019)
Semiconductors and 453.9 mill. € Analytics, Industry and R & D
Coating (467.3 mill. €) 48.4 % (53.3 %)
51.6 % (46.7 %)
Order Intake and Order Backlog
Following an order intake of € 450.0 million in the first nine months of 2019 this
number was € 461.3 million in the first three quarters of 2020. This represents an
increase by € 11.3 million, or 2.5 %, which was mainly caused by the development in
the semiconductor markets. In the third quarter order intake of € 144.7 million saw a
somewhat stronger trend compared to the immediately preceding second quarter 10
(€ 143.7 million). The book-to-bill-ratio, the ratio between order intake and sales, was
1.02 for the year 2020 to date (2019: 0.96) and 0.95 for Q3/2020 (Q3/2019: 1.00)

Order backlog increased from € 110.7 million as at December 31, 2019 to € 118.2
million as at September 30, 2020. Resulting from the book-to-bill ratio of 0.95 in the
third quarter, the order backlog was just below the value of € 125.4 million as per
June 30, 2020

Orders are only recorded in order backlog when they are based upon binding
contracts. The value of order backlog should not be used to predict future sales and
order volumes

Cost of Sales and Gross Profit
In the first nine months of 2020 cost of sales totaled € 295.9 million and thus
decreased compared to the prior year period (€ 306.0 million). Accounting for € 158.0
million, gross profit was € 3.4 million below previous year’s number (€ 161.4 million)

Accordingly, gross margin improved slightly from 34.5 % to 34.8 %.This development
was predominantly caused by a more favourable product and customer mix

Interim Management Report
Selling and Marketing Expenses
Selling and marketing expenses totaled € 54.1 million of the first nine months of the
current fiscal year and thus were € 0.8 million higher compared to the number in the
previous fiscal year (€ 53.3 million). Due to the decreased sales the selling and
marketing expenses relative to sales increased by 0.5 percentage points to 11.9 %
(2019: 11.4 %)

General and Administrative Expenses
With € 43.5 million in the year 2020 to date, general and administrative expenses
increased compared to the first three quarters in 2019 (€ 40.9 million). Relative to
sales, this ratio increased from 8.8 % to 9.6 %

Research and Development Expenses
Research and development expenses totaled € 25.5 million in current period and thus
increased by € 4.3 million, or 20.1 %, compared to the first three quarters of 2019
(€ 21.2 million). The R&D ratio, the ratio between R&D expenses and sales,
increased from 4.5 % to 5.6 % due to the decrease in sales. 11
We will maintain the expenses allocated for research and development at a high level
and continue to invest in order to be able to sustain our position in the world market,
to expand market shares and to open up new markets. All expenditures for research
and development are expensed as they are incurred

Other Operating Income/Other Operating Expenses
Balance of other operating income and expenses totaled € +0.7 million in the first
three quarters of 2020 after a net gain of € 2.9 million was recorded in the prior year
period. The amounts in 2020 included predominantly net foreign exchange losses of
€ 1.5 million (2019: net foreign exchange gains € 0.6 million) and expense subsidies
affecting net income of € 2.4 million (2019: € 2.3 million)

Operating Profit
Following € 48.9 million in 2019, operating profit in the first nine months of 2020
decreased by € 13.2 million, or 27.0 %, to € 35.7 million. The EBIT margin, the ratio
between operating profit and sales, declined from 10.5 % in the first nine months of
2019 to 7.9 % in 2020. The expanded cost basis due to additional investments to
implement the Group’s growth strategy burdened the earnings development

Interim Management Report
Financial Results
With € -0.6 million the net financial result in 2020 was virtually on the prior year’s
level. Thus, there were no material changes

Income Taxes
With 29.0 % in the first nine months 2020 the tax rate was 0.8 percentage points
above the prior year level (28.2 %). There were no structural changes

Net income / Earnings per share
Totaling € 24.8 million net income for the first three quarters of 2020 was down by
€ 9.9 million from the prior year results of € 34.7 million. This represented a decrease
by 28.6 %. Return on sales (after taxes) stood – after 7.4 % in 2019 – at 5.5 % in
2020. Earnings per share developed parallel to the net income. After € 3.52 in the first
nine months of 2019 an amount of € 2.51 was recorded for the current fiscal year – a
decline by € 1.01, or 28.4 %

12
Financial Position
Pfeiffer Vacuum’s balance sheet total decreased by € 0.5 million, or 0.1 %, from
€ 659.6 million as at December 31, 2019, to € 659.1 million, as at September 30,
2020. On the assets side of the balance sheet, the movement results from various
and to some extend opposing trends, whereas the increase of inventories by 6.5
million and the decrease of income tax receivables by 3.9 million as well as the other
financial assets by 2.2 million are the main drivers

As at September 30, 2020, shareholders’ equity totaled € 396.4 million. This
represents an increase of € 2.9 million from the level on December 31, 2019 (€ 393.4
million). This development was mainly due to the dividend payment of € 12.3 million
and contrary to the net income recorded for the first nine months of 2020 (€ 24.8
million). Beyond that the other equity positions decreased in total by 9.5 million. This
was mainly caused by the valuation of pension liability not effecting net income and
the exchange-differences. The equity ratio was 60.1 % after 59.7 % at the end of
fiscal 2019. Other main drivers which have impacted the liabilities are the reduction of
trade payables by 4.7 million and the income tax liabilities by 3.7 million along with
the increase of other provisions by 3.0 million

This quarterly financial report has been prepared in accordance with International Financial Reporting Standards (IFRS). Throughout this report, all percentages are calculated based on …

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