VAT Achieves Strong Top-Line Growth in First Half of 2025 Despite Persistent Global Challenges
VAT Group has delivered a solid performance in the first half of 2025, reporting strong top-line growth, expanding profitability, and robust free cash flow generation despite an increasingly uncertain global business environment. With continued geopolitical tensions, trade uncertainties, and foreign exchange headwinds affecting the broader market, VAT’s strategic positioning, strong order execution, and resilience in its core segments have enabled it to post solid operational and financial results.
Q2 2025 Performance: Resilience Amid Market Volatility
During the second quarter of 2025, VAT reported sequential growth across key metrics, signaling the company’s ability to navigate external challenges effectively. Total orders reached CHF 248 million, reflecting a quarter-on-quarter increase of 3% (or 10% when adjusted for currency effects). Although the book-to-bill ratio remained below the 1.0x threshold at 0.9x, this still reflects healthy demand in core segments, particularly in the Global Service division. Compared to Q2 2024, however, orders declined by 9% in actual terms (1% lower at constant FX), indicating ongoing market hesitations.
Net sales for Q2 2025 totaled CHF 283 million, rising 3% quarter-over-quarter and 13% year-over-year (22% at constant FX), surpassing the midpoint of the company’s guidance range. Despite the foreign exchange impact, this growth was primarily driven by strong backlog execution and sustained customer demand.
By segment, the Valves business experienced a modest sales increase of 1% compared to Q1 2025, although orders fell 2%. In Semiconductors, orders declined 11% year-on-year, but sales surged by 23%, underscoring strong order fulfillment despite broader uncertainty in the semiconductor equipment supply chain.
In contrast, the Advanced Industrials segment faced headwinds, with both orders and sales declining sequentially and year-on-year. Lower activity in the power generation sector, budget cuts at U.S. academic institutions, and subdued coating business activity were key factors behind this decline.
Global Service, however, emerged as a bright spot, with sequential orders increasing by 23%, fueled by fabs ramping up for future capacity needs. Sales in this segment rose 12% from the previous quarter, although they declined 3% year-on-year. The company saw increased activity in spares and repairs, driven by strong fab utilization rates, especially in China. VAT also reported promising retrofit and upgrade projects in its pipeline, expected to materialize in the second half of the year.
H1 2025: Strong Growth and Operational Efficiency
Over the first six months of 2025, VAT posted net sales of CHF 558 million, representing a 24% increase year-on-year (28% at constant FX). Total orders came in at CHF 489 million, down 3% from the previous year (flat at constant FX), reflecting broader market caution. Despite this, VAT’s strategic focus on execution allowed it to leverage its backlog and maintain momentum across core business units.
In the Valves segment, orders dropped 3% year-on-year to CHF 400 million, while net sales rose an impressive 29% to CHF 467 million. Semiconductor sales were especially strong, up 35%, even as orders slipped. Advanced Industrials saw a modest 1% increase in sales to CHF 73 million despite a 3% order decline. Global Service also showed sales growth of 5% to CHF 91 million, with orders down slightly at CHF 90 million.
The company’s profitability metrics remain robust. Gross profit rose 22% year-on-year to CHF 365 million, although the gross margin edged slightly lower to 65%, mainly due to FX headwinds and increased inventory-driven sales. EBITDA increased 22% to CHF 165 million, translating into an EBITDA margin of 29.6% (31.2% at constant FX). EBIT for H1 reached CHF 142 million, marking a 25% increase, with the EBIT margin holding steady at 25.4%.
VAT’s R&D investment totaled CHF 36 million, equivalent to 7% of sales, reflecting its continued focus on innovation and competitiveness. A total of 61 spec wins were recorded in H1 2025—an increase of 27% over the previous year—primarily in the Semiconductors and Global Service segments.
Net income climbed 12% year-on-year to CHF 106 million, with earnings per share (EPS) at CHF 3.52. The rise in net income was achieved despite increased financial expenses of CHF 12 million (compared to a gain of CHF 1 million in H1 2024), largely due to FX revaluations and intercompany loan losses. The effective tax rate increased slightly to 19% from 18% in the prior-year period.
Free Cash Flow and Financial Position
Free cash flow for H1 2025 was a standout metric, reaching CHF 51 million—an increase of 93% year-on-year—thanks to higher EBITDA and improved trade working capital management. The free cash flow conversion rate rose to 31% from 20% a year earlier. Capital expenditures were CHF 42 million, representing 7.6% of sales, down from 8.9% in H1 2024.
Net debt stood at CHF 262 million at the end of June 2025, with a leverage ratio of 0.81x LTM EBITDA—slightly lower than a year earlier. The equity ratio declined marginally to 51% from 53% a year ago. VAT’s global workforce grew to 3,406 full-time equivalents, a 14.2% increase year-on-year.
Outlook for Full-Year 2025: Poised for Outperformance
VAT remains optimistic about its full-year 2025 prospects. The company expects growth across all key financial metrics—orders, sales, EBITDA, margin, net income, and free cash flow—despite lingering uncertainty in the global macroeconomic and geopolitical landscape.
Technological transitions in the semiconductor industry—such as the move to 2nm node production and gate-all-around (GAA) architectures—are expected to fuel sustained investment in chipmaking equipment. Additional momentum is anticipated from Chinese OEMs’ push for self-reliance and major hyperscalers’ AI infrastructure investments.
Advanced Industrials is expected to rebound in the second half, while Global Service is likely to benefit from ongoing fab upgrades and retrofits. Despite recent global tariff announcements, VAT expects no material financial impact.
Capex for the full year is now projected between CHF 75 million and CHF 85 million.
