• VAT expects its Q3 2024 sales figures to fall short of the low point of Q3 guidance of CHF 235 to 255 million communicated when releasing its Q2 and H1 results mid-July 2024.
  • This shortfall is due to technical issues from the new ERP solution implementation in Switzerland that started in August 2024.
  • The root causes of this have been identified and major ones have been resolved; the remaining ones are expected to be resolved during Q4 2024 with all missing Q3 revenues being recognized by the end of the year.
  • The pre-build of products was sufficient and aligned with customers and thus the impact of the implementation issues limited.
  • VAT estimates this one-off, negative impact in Q3 to be in the range of CHF 20 to 25 million.
  • The overall market environment for Q4 2024 and 2025 remains positive and order backlog for Q4 execution has developed in line with forecasts.

ERP introduction remains on track as planned for the production and logistics functions in Haag

At the beginning of August 2024, VAT’s Haag factory shut down as planned for two weeks for a new ERP solution implementation, resulting in output shortfall for Q3, as anticipated and communicated in the sales guidance provided at Q2 results. Within the second week of August, VAT production commenced again, resulting in factory output reaching approximately 80% of pre-ERP shutdown levels by the end of September. While the factory output has developed according to plan, IT problems have arisen in the interfaces to other systems, which have mainly slowed down order loading and shipping documents and therefore deliveries to customers, resulting in a lower sales recognition than anticipated.

Production, shipment and sales backlog expected to be resolved during Q4

After identifying and thoroughly analyzing the technical issues, VAT is confident that they can be resolved during the fourth quarter and that the shortfall in third quarter sales of between CHF 20 to 25 million can be booked during the fourth quarter. Production, shipment and invoicing are expected to be getting back to the normal operating mode as before the ERP switch. The pre-build of products was sufficient and aligned with customers and thus the impact of the implementation issues limited. VAT sales and account teams are in close alignment with their customers to schedule the required goods and shipments.

VAT will be providing more details on Q3 business development, orders and detailed sales including the customary Q4 sales guidance with the trading update release and conference call scheduled for October 17, 2024.