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Memscap
Earnings Release • Sep 2, 2024
1516_iss_2024-09-02_929353f1-1671-4d92-b753-5e1f5978e9a3.pdf
Earnings Release
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MEMSCAP – FIRST HALF 2024 EARNINGS:
CONSOLIDATED REVENUE GROWTH DRIVEN BY THE STRONG DYNAMISM OF THE AEROSPACE BUSINESS
HALF-YEAR ADJUSTED1 EBITDA OF 19% OF REVENUE AND CONSOLIDATED HALF-YEAR NET PROFIT OF 14% OF REVENUE
MEMSCAP CONFIRMS ITS TRAJECTORY AND DRIVERS FOR PROFITABLE GROWTH
- Growth of more than 8% in aerospace business leading to a 3% increase in consolidated half-year revenue
- Slight decline in medical activities (-3%) due to the sharp drop in half-year sales relating to implantable solutions (-69%)
- Half-year adjusted1 EBITDA of EUR 1,410 thousand (19% of revenue)
- Half-year operating profit of EUR 899 thousand (12% of revenue)
- Consolidated half-year net profit of EUR 992 thousand euros (14% of revenue)
- Consolidated available cash at EUR 6,017 thousand as of June 30, 2024
- Intensification of efforts related to the "Engine Control" development and industrialization program
- Increase in sales and marketing resources dedicated to medical activities to expand the number of applications and clients, reducing the volatility of this segment
- Planned emphasis on the Group's sales and technical programs reflected in operating expenses expected to decrease over the coming quarter
Grenoble (France) – September 2, 2024 – 07:30 a.m.
MEMSCAP (Euronext Paris: MEMS), leading provider of high-accuracy, high-stability pressure sensor solutions for the aerospace and medical markets using MEMS technology (Micro Electro Mechanical Systems), today announced its earnings for the first half of 2024 ending June 30, 2024.
Analysis of consolidated revenue
In accordance with the previous quarterly press releases, consolidated revenue from continuing operations for the first half of 2024 amounted to EUR 7,275 thousand compared to EUR 7,089 thousand for the first half of 2023.
Over the first half of 2024, the distribution of consolidated revenue from continuing operations by market segment is as follows:
| Market segments / Revenue (In thousands of euros) |
H1 2023 | H1 2023 (%) | H1 2024 | H1 2024 (%) |
|---|---|---|---|---|
| Aerospace | 4,515 | 64% | 4,899 | 67% |
| Medical | 1,709 | 24% | 1,664 | 23% |
| Optical communications | 798 | 11% | 667 | 9% |
| Others (Royalties from licensed trademarks) | 67 | 1% | 45 | 1% |
| Total revenue from continuing operations | 7,089 | 100% | 7,275 | 100% |
(Any apparent discrepancies in totals are due to rounding.)
Consolidated revenue from continuing operations for the first half of 2024 increased by 3% compared to the first half of 2023.
The aerospace segment, the Group's largest market, recorded revenue of EUR 4,899 thousand for the first half of 2024 (first half of 2023: EUR 4,515 thousand euros), representing an increase of more than 8% compared to the first half of 2023. This segment represents 67% of the Group's consolidated revenue in the first half of 2024 (first half of 2023: 64%).
Revenue from the medical sector amounted to EUR 1,664 thousand for the first half of 2024 (first half of 2023: EUR 1,709 thousand), reflecting a 3% decreased compared to the first half of 2023. This evolution is due to the sharp drop in half-year sales relating to implantable solutions (-69% compared to the first half of 2023). The medical segment represents 23% of the Group's consolidated revenue in the first half of 2024 (first half of 2023: 24%).
The optical communications business, which includes the design and commercialization of variable optical attenuators (VOA) under a fabless organization, reported consolidated revenue of EUR 667 thousand for the first half of 2024 (first half of 2023: EUR 798 thousand), accounting for 9% of the Group's consolidated revenue (first half of 2023: 11%).
Royalties from licensed trademarks amounted to EUR 45 thousand for the first half of 2024, a similar level to the first half of 2023 at EUR 67 thousand.
Analysis of consolidated income statement
MEMSCAP's consolidated earnings for the first half of 2024 are given within the following table:
| In thousands of euros | H1 2023 | H1 2024 |
|---|---|---|
| Revenue from continuing operations | 7,089 | 7,275 |
| Cost of revenue | (4,030) | (4,339) |
| Gross margin | 3,059 | 2 936 |
| % of revenue | 43.2% | 40.4% |
| Operating expenses* | (1,901) | (2,037) |
| Operating profit / (loss) | 1,158 | 899 |
| Financial profit / (loss) | 23 | 110 |
| Income tax expense | (47) | (17) |
| Net profit / (loss) | 1,134 | 992 |
(Financial data were subject to a limited review by the Group's statutory auditors. On August 30, 2024, MEMSCAP's board of directors authorized the release of the interim condensed consolidated financial statements on June 30, 2024. Any apparent discrepancies in totals are due to rounding.)
* Net of research & development grants.
For the first half of 2024, the gross margin rate stood at 40.4% of consolidated revenue compared to 43.2% in the first half of 2023. It should be noted that the gross margin rate for the first half of 2023 benefited from a particularly favourable product mix. Thus, the gross margin amounts to EUR 2,936 thousand for the first half of 2024 compared to EUR 3,059 thousand for the first half of 2023.
Operating expenses, net of research and development grants, amounted to EUR 2,037 thousand for the first half of 2024 compared to EUR 1,901 thousand for the first half of 2023. In the first half of 2024, these expenses reflected the emphasis on the Group's sales and technical programs. The Group anticipates a decrease in operating costs over the coming quarter following the non-recurrence of some of these expenses linked to this significant effort during the first half.
The average full-time equivalent workforce of the Group increased from 51.7 employees in the first half of 2023 to 61.8 employees in the first half of 2024.
For the first half of 2024, the operating profit from continuing operations amounted to EUR 899 thousand (12% of consolidated revenue) compared to an operating profit of EUR 1,158 thousand (16% of consolidated revenue) for the first half of 2023.
The financial income posted a gain of EUR 110 thousand for the first half of 2024, primarily due to the exchange rate fluctuations of the US dollar and the Norwegian krone, compared to a break-even result for the first half of 2023.
The tax expense recorded for the first half of 2024 and 2023 corresponded to the variation in deferred tax assets. This charge has no impact on the Group's cash flow.
The Group therefore posted a consolidated net profit of EUR 992 thousand for the first half of 2024 (14.0% of consolidated revenue) compared to a net profit of EUR 1,134 thousand for the first half of 2023 (16% of consolidated revenue).
Evolution of the Group's cash / Consolidated shareholders' equity
Adjusted EBITDA1 from continuing operations for the first half of 2024 amounted to EUR 1,410 thousand (19% of consolidated revenue) compared to EUR 1 677 thousand for the first half of 2023 (24% of consolidated revenue).
As of June 30, 2024, the Group posted available cash of EUR 6,017 thousand (December 31, 2023: EUR 6,237 thousand) including cash investments (Corporate bonds / investment securities) recorded under non-current financial assets. It should be noted that the inventory amount increased by EUR 943 thousand compared to December 31, 2023.
As of June 30, 2024, MEMSCAP shareholders' equity totalled EUR 18,631 thousand (December 31, 2023: EUR 17,676 thousand).
1 Adjusted EBITDA means operating profit before depreciation, amortisation, share-based payment charge (IFRS 2) and including foreign exchange gains/losses related to ordinary activities.
Perspectives
With a recognized expertise and driven by promising and high-visibility markets, MEMSCAP reaffirms its trajectory through 2026, focused on achieving an average annual hyper-growth rate of 20% (4G plan stands for consistent growth, competitive growth, profitable growth, and responsible growth). The Company is now concentrating on finalizing its "Engine Control" development and industrialization program, which is expected to accelerate growth in the coming years and propel MEMSCAP beyond 2026.
Individual shareholder webinar: Monday, September 02, 2024 – 11:00 a.m.
Thank you for registering and sending your questions in advance using the following link: https://memscap.com/fr/visio/
Q3 2024 earnings: October 28, 2024
MEMSCAP is a leading provider MEMS based pressure sensors, best-in-class in term of precision and stability (very low drift) for two market segments: aerospace and medical.
MEMSCAP also provides variable optical attenuators (VOA) for the optical communications market.
Yann Cousinet Chief Financial Officer Ph.: +33 (0) 4 76 92 85 00 [email protected] For more information, visit our website at: www.memscap.com
MEMSCAP is listed on Euronext Paris (Euronext Paris - Memscap - ISIN code: FR0010298620 - Ticker symbol: MEMS)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
| 30 June | 31 December | ||
|---|---|---|---|
| 2024 | 2023 | ||
| €000 | €000 | ||
| Assets | |||
| Non-current assets | |||
| Property, plant and equipment | 1 165 | 937 | |
| Goodwill and intangible assets | 6 644 | 6 682 | |
| Right-of-use assets | 5 099 | 5 354 | |
| Other non-current financial assets | 1 513 | 1 436 | |
| Employee benefit net asset | 1 | 1 | |
| Deferred tax asset | 88 14 510 |
106 14 516 |
|
| Current assets | |||
| Inventories | 4 997 | 4 054 | |
| Trade and other receivables | 3 237 | 2 714 | |
| Prepayments | 283 | 197 | |
| Cash and short-term deposits | 4 504 | 4 801 | |
| 13 021 | 11 766 | ||
| Total assets | 27 531 | 26 282 | |
| Equity and liabilities Equity |
|||
| Issued capital | 1 927 | 1 869 | |
| Share premium | 17 972 | 17 972 | |
| Treasury shares | (124) | (134) | |
| Retained earnings | 2 093 | 1 095 | |
| Foreign currency translation | (3 237) | (3 126) | |
| 18 631 | 17 676 | ||
| Non-current liabilities | |||
| Lease liabilities | 4 614 | 4 646 | |
| Interest-bearing loans and borrowings | -- | 26 | |
| Employee benefit liability | 86 | 80 | |
| 4 700 | 4 752 | ||
| Current liabilities | |||
| Trade and other payables | 3 215 | 2 780 | |
| Lease liabilities | 891 | 937 | |
| Interest-bearing loans and borrowings | 77 | 102 | |
| Provisions | 17 | 35 | |
| 4 200 | 3 854 | ||
| Total liabilities | 8 900 | 8 606 | |
| Total equity and liabilities | 27 531 | 26 282 |
CONSOLIDATED STATEMENT OF INCOME
| For the six months ended 30 June | |||
|---|---|---|---|
| 2024 | 2023 | ||
| Continuing operations | €000 | €000 | |
| Sales of goods and services | 7 275 | 7 089 | |
| Revenue | 7 275 | 7 089 | |
| Cost of sales | (4 339) | (4 030) | |
| Gross profit | 2 936 | 3 059 | |
| Other income | 147 | 157 | |
| Research and development expenses | (903) | (938) | |
| Selling and distribution costs | (520) | (415) | |
| Administrative expenses | (761) | (705) | |
| Operating profit / (loss) | 899 | 1 158 | |
| Finance costs | (83) | (97) | |
| Finance income | 193 | 120 | |
| Profit / (loss) for the period from continuing operations before tax | 1 009 | 1 181 | |
| Income tax expense | (17) | (47) | |
| Profit / (loss) for the period from continuing operations | 992 | 1 134 | |
| Profit / (loss) for the period | 992 | 1 134 | |
| Earnings per share: | |||
| - Basic, for profit / (loss) for the period attributable to ordinary equity |
|||
| holders of the parent (in euros) | € 0.129 | € 0.152 | |
| - Diluted, for profit / (loss) for the period attributable to ordinary equity |
|||
| holders of the parent (in euros) | € 0.129 | € 0.147 | |
| - Basic, profit / (loss) for the period from continuing operations |
|||
| attributable to ordinary equity holders of the parent (in euros) - Diluted, profit / (loss) for the period from continuing operations |
€ 0.129 | € 0.152 | |
| attributable to ordinary equity holders of the parent (in euros) | € 0.129 | € 0.147 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| For the six months ended 30 June | |||
|---|---|---|---|
| 2024 | 2023 | ||
| €000 | €000 | ||
| Profit / (loss) for the period | 992 | 1 134 | |
| Items that will not be reclassified subsequently to profit or loss | |||
| Actuarial gains / (losses) | -- | -- | |
| Income tax on items that will not be reclassified to profit or loss | -- | -- | |
| Total items that will not be reclassified to profit or loss | -- | -- | |
| Items that may be reclassified subsequently to profit or loss | |||
| Net gain / (loss) on available-for-sale financial assets | 42 | (34) | |
| Exchange differences on translation of foreign operations | (111) | (778) | |
| Income tax on items that may be reclassified to profit or loss | -- | -- | |
| Total items that may be reclassified to profit or loss | (69) | (812) | |
| Other comprehensive income for the period, net of tax | (69) | (812) | |
| Total comprehensive income for the period, net of tax | 923 | 322 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
| (In thousands of euros, except for number of shares) |
Number of shares |
Issued capital |
Share premium |
Treasury shares |
Retained earnings |
Foreign currency translation |
Total shareholders' equity |
|---|---|---|---|---|---|---|---|
| €000 | €000 | €000 | €000 | €000 | €000 | ||
| At 1 January 2023 | 7 476 902 |
1 869 |
17 972 |
(144) | (242) | (3 868) |
15 587 |
| Profit for the period Other comprehensive income for the period, net of tax |
-- -- |
-- -- |
-- -- |
-- -- |
1 134 (34) |
-- (778) |
1 134 (812) |
| Total comprehensive income |
-- | -- | -- | -- | 1 100 |
(778) | 322 |
| Treasury shares Share-based payment |
-- -- |
-- -- |
-- -- |
26 -- |
-- 144 |
-- -- |
26 144 |
| At 30 June 2023 |
7 476 902 |
1 869 |
17 972 |
(118) | 1 002 |
(4 646) |
16 079 |
| At 1 January 2024 | 7 476 902 |
1 869 |
17 972 |
(134) | 1 095 |
(3 126) |
17 676 |
| Profit for the period |
-- | -- | -- | -- | 992 | -- | 992 |
| Other comprehensive income for the period, net of tax |
-- | -- | -- | -- | 42 | (111) | (69) |
| Total comprehensive income |
-- | -- | -- | -- | 1 034 |
(111) | 923 |
| Capital increase |
230 000 |
58 | -- | -- | (58) | -- | -- |
| Treasury shares | -- | -- | -- | 10 | -- | -- | 10 |
| Share-based payment |
-- | -- | -- | -- | 22 | -- | 22 |
| At 30 June 2024 |
7 706 902 |
1 927 |
17 972 |
(124) | 2 093 |
(3 237) |
18 631 |
CONSOLIDATED CASH FLOW STATEMENT
| For the six months ended 30 June | ||
|---|---|---|
| 2024 | 2023 | |
| €000 | €000 | |
| Operating activities: | ||
| Net profit / (loss) for the period | 992 | 1 134 |
| Non-cash items written back: | ||
| Amortization and depreciation | 401 | 356 |
| Loss / (capital gain) on disposal of fixed assets | 8 | (3) |
| Other non-financial activities | 34 | 182 |
| Accounts receivable | (439) | (1 367) |
| Inventories | (991) | (597) |
| Other debtors | (251) | (44) |
| Accounts payable | 480 | (67) |
| Other liabilities | (1) | 296 |
| Net cash flows from / (used in) operating activities - continuing operations | 233 | (110) |
| Investing activities: | ||
| Purchase of fixed assets | (144) | (190) |
| Proceeds from sale / (purchase) of other non-current financial assets | (31) | 19 |
| Net cash flows used in investing activities - continuing operations | (175) | (171) |
| Financing activities: | ||
| Repayment of borrowings | (51) | (50) |
| Payment of principal portion of lease liabilities | (317) | (242) |
| Sale / (purchase) of treasury shares | 10 | 26 |
| Net cash flows used in financing activities - continuing operations | (358) | (266) |
| Net foreign exchange difference | 3 | (40) |
| Increase / (decrease) in net cash and cash equivalents | (297) | (587) |
| Opening cash and cash equivalents balance | 4 801 | 4 180 |
| Closing cash and cash equivalents balance | 4 504 | 3 593 |