Sparks - PVA TePla

During its capital markets day (in London on 2 September), PVA TePla provided a further justification of its mid-term revenue target (€500m by 2028) and added margin targets (gross margin 38–43% and 20–25% EBITDA). High-margin acoustic measurement systems, especially those used in cutting-edge semiconductors, are the most important growth driver in the Metrology division, with an expected CAGR of 18–22% to 2028. Metrology sales already totalled €98m in 2024, which was more than we anticipated. Material Solution sales were higher at €172m and are expected to increase at a much slower pace, led by the synthesis activities (crystal growing), with an anticipated CAGR of 5–11%.

By next year, PVA expects to have eight-inch silicon carbide technology available, while the market for silicon crystal pullers is anticipated to catch up again by end-2026 or end-2027. R&D costs are expected to rise to 10% of sales in the medium term (from 4.3% in 2024), and distribution and administrative costs should to decrease to c 11% (from 14.4% in 2024) of sales. Capex in production expansion and R&D will decrease to €14m from €25m in 2024. On current consensus, PVA is trading on a P/E of 25.1x FY26e and 18.6x FY27e.