Pfeiffer Vacuum Technology: Structural Growth Case Intact

Sebastien Lemonnier of INOCAP Gestion presented his thesis on Pfeiffer Vacuum Technology (Germany: PFV) at European Investing Summit 2019.

Thesis summary by Sebastien:

Pfeiffer Vacuum Technology is the world’s second largest vacuum pump producer that held leadership position in high-end product segments. In 2018, its turnover reached €660 million with its products being essential in numerous business areas such as semi-conductor, analytics and coatings. Since Karl Busch investment in its capital by 2016 followed by the hiring of a new CEO, Dr Eric Taberlet, the strategy focuses on implementing an ambitious investment program that should deliver significant improvement in the group fundamentals both in term of competitivity and production efficiency. Thus, driven by self-help initiatives, its medium targets look ambitious aiming to increase its market share up to above 20%, to strengthen its technology differentiation and to increase its EBIT margin above 20% (versus 14.3% in 2018). As of today, we consider PFV strategy reaches an inflexion point with first benefits to be harvested whereas capex should start to normalize. Lastly, PFV recently received the cartel approval to set-up cooperation initiatives with the industrial Busch company to leverage additional synergies that would be added to its ongoing business plan. The last 3 years sacrifices to build the future group success together with a limited sell-side coverage same as the current temporary macro clouds, explained why the stock valuation is overlooked whereas the structural growth case and self-help drivers remain in our opinion intact.

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About the instructor:

Sebastien Lemonnier started his carreer in 2003 as financial analyst at Tocqueville Finance. He was promoted as european fund manager in 2006 running the UCIT fund Tocqueville Value Europe and pursued his carreer for Mansartis, a Paris based multi family-office in 2012. He joined INOCAP Gestion in 2017, managing Quadrige Europe Midcaps. Sebastien holds a Masters Degree in Financial Management from Panthéon-Sorbonne Paris. As a hobby, he played tennis in competition, but now enjoys playing rugby and english boxing.