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Mycronic Interim / Quarterly Report 2020
2946_10-q_2020-04-23_74e4fbb5-7fff-4b52-a930-344315f9cb85.pdf
Interim / Quarterly Report
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MYCRONIC
When passion meets innovation
Q1
Interim Report January-March 2020
First quarter
- Order intake increased 99 percent to SEK 1,432 (721) million
- Net sales decreased 33 percent to SEK 736 (1,105) million and 35 percent based on constant exchange rates. As planned, no mask writers were delivered during the period, which in its entirety accounts for the decline in the Group's net sales
- EBIT was SEK 55 (406) million, a decline of 86 percent. As planned, no mask writers were delivered during the period, which in its entirety accounts for the lower EBIT. The EBIT margin was 8 (37) percent
- The underlying EBIT was SEK 65 (420) million, a decline of 85 percent. The underlying EBIT margin was 9 (38) percent
- Earnings per share were SEK 0.40 (3.20)
"We delivered a stable first quarter, with strong order intake. In a time marked by uncertainty and turbulence, I feel confident in Mycronic's solid financial position and healthy liquidity. In recent years, we have strengthened our aftermarket sales, which accounted for 28 percent of the Group's sales in 2019. Our Pattern Generators business is characterized by long lead times, together with customer relationships that extend over decades. Deliveries of mask writers, from a well-filled order book for the year, are continuing as planned. This feels secure," says Anders Lindqvist, President and CEO
Outlook 2020
The Board's assessment is that consolidated net sales for 2020 will be at a level of SEK 4.1 billion, excluding any acquisitions made in 2020. This outlook remains, but the increased uncertainty in the global economy due to COVID-19 should be noted.
| Group summary | Q1 | Rolling 12 month | Jan-Dec 2019 | |
|---|---|---|---|---|
| 2020 | 2019 | |||
| Order intake, SEK million | 1,432 | 721 | 5,278 | 4,567 |
| Net Sales, SEK million | 736 | 1,105 | 3,937 | 4,307 |
| Book-to-bill | 1.9 | 0.7 | 1.3 | 1.1 |
| Order backlog, SEK million | 2,860 | 1,525 | 2,860 | 2,164 |
| Gross margin, % | 45.4% | 62.6% | 51.8% | 55.7% |
| EBIT, SEK million | 55 | 406 | 774 | 1,124 |
| EBIT margin, % | 7.5% | 36.7% | 19.7% | 26.1% |
| Underlying EBIT margin, % | 8.8% | 38.0% | 20.7% | 27.1% |
| Earnings per share before/after dilution, SEK | 0.40 | 3.20 | 5.95 | 8.74 |
| Cash Flow, SEK million | 228 | 32 | 16 | -180 |
| Changes in net sales | ||||
| Total growth, % | -33% | 47% | -5% | 14% |
| Organic growth, % | -35% | 33% | -9% | 7% |
| Growth from acquisitions, % | - | 5% | 1% | 2% |
| Currency effects, % | 2% | 9% | 3% | 5% |
Interim Report January-March 2020
MYCRONIC
CEO comments
In a time marked by uncertainty and turbulence, I feel confident in Mycronic's strong financial position and healthy liquidity. In recent years, we have strengthened our aftermarket sales, which accounted for 28 percent of the Group sales in 2019. Our Pattern Generator business is characterized by long lead times, together with customer relationships that extend over decades. Deliveries of mask writers, from a well-filled order book for the year, are progressing as planned. This feels secure.
We have changed our way of working. As of the beginning of April, our daily operations comprise four divisions with the Assembly Solutions business area being divided between the three divisions; High Flex, High Volume and Global Technologies, while Pattern Generators forms the fourth division. The work in our divisions is characterized by clear accountability and leadership, with a decentralized mandate and responsibility to ensure that we always support and enhance our customers' operations in the best possible way. We are continuing to prioritize and invest in innovation, at the same time as there is good potential for the divisions to pursue continuous improvement efforts.
Order intake during the quarter was strong and nearly doubled, from a favourable comparison, to SEK 1,432 million, fueled mainly by the five orders for mask writers secured by Pattern Generators: one Prevision 800 Evo, together with four orders for the recently launched SLX, which produces masks for the semiconductor industry. This is very satisfying and it is confirmation from semiconductor manufacturers that we now offer attractive and effective production solutions also in this segment. Assembly Solutions reported strong performance in the High Volume division driven by strong demand for dispensing equipment in China, which contributed to an order intake of SEK 707 million, corresponding to growth of 25 percent. In total, this yields a robust order book of nearly SEK 2.9 billion, compared with SEK 1.5 billion a year ago.
Assembly Solutions displayed healthy net sales growth of 8 percent during the quarter, generated by strong performance by the High Volume division in the Chinese market. The operations in Pattern Generators are characterized by natural variations between the quarters and, as planned, no system deliveries were made during the period, which in its entirety, accounts for the Group's year-on-year sales decline of 33 percent.
COVID-19 is spreading throughout the world and is having a major impact on communities and businesses. We are monitoring developments closely and taking a structured approach to reduce the risks for personnel and operations, while we are implementing measures that will also secure scope for manoeuvre in the future. The safety and health of our personnel are our priority, while we are following the official instructions. We are also working to support society wherever we see that we can make a difference. For example, we have put production-ready SMT lines from our demo centers at the disposal of the medical devices industry.
We have a strong financial position combined with the fact that we have delivered a stable first quarter with marginal impact from COVID-19. On this basis, the Board of Directors repeats its outlook issued earlier for net sales at a level of SEK 4.1 billion, while adding that the increased uncertainty in the global economy due to COVID-19 should be noted. Also the long term goal of achieving net sales of SEK 5 billion not later than 2023 remains.
Anders Lindqvist, President and CEO
Interim Report January-March 2020
MYCRONIC
Financial performance, Group
| Q1 | Rolling 12 month | Jan-Dec 2019 | ||
|---|---|---|---|---|
| 2020 | 2019 | |||
| Order intake, SEK million | 1,432 | 721 | 5,278 | 4,567 |
| Order backlog, SEK million | 2,860 | 1,525 | 2,860 | 2,164 |
| Net Sales, SEK million | 736 | 1,105 | 3,937 | 4,307 |
| Gross profit, SEK million | 334 | 692 | 2,041 | 2,399 |
| Gross margin, % | 45.4% | 62.6% | 51.8% | 55.7% |
| EBIT, SEK million | 55 | 406 | 774 | 1,124 |
| EBIT margin, % | 7.5% | 36.7% | 19.7% | 26.1% |
| Underlying EBIT, SEK million | 65 | 420 | 813 | 1,169 |
| Underlying EBIT margin, % | 8.8% | 38.0% | 20.7% | 27.1% |
| EBITDA, SEK million | 98 | 440 | 965 | 1,307 |
Group
As of the beginning of April, the company's daily operations comprise four divisions, with the Assembly Solutions business area being divided between the High Flex, the High Volume and the Global Technologies divisions, while Pattern Generators forms the fourth division.
Order intake during the quarter was strong and nearly doubled, from a favorable comparison, to SEK 1,432 (721) million, driven mainly by the five orders for mask writers secured by Pattern Generators, but also by the strong demand experienced by Assembly Solutions in dispensing applications in China. In total, this resulted in a robust order backlog of SEK 2,860 (1,525) million, corresponding to an increase of 88 percent.
Assembly Solutions displayed healthy net sales growth of 8 percent during the quarter, generated by strong performance by the High Volume division in the Chinese market. The operations in Pattern Generators are characterized by natural variations between the quarters and, as planned, no system deliveries were made during the period, which in its entirety accounts for the Group's year-on-year decline in net sales of 33 percent to SEK 736 (1,105) million. Currency effects made a positive contribution of SEK 22 million. The gross margin was 45 (63) percent.
The lower EBIT of SEK 55 (406) million, corresponding to an EBIT margin of 8 (37) percent, is also attributable in its entirety due to that no mask writers were delivered during the quarter. Acquisition-related costs impacted earnings in an amount of SEK 9 (15) million, primarily attributable to amortization of acquired intangible assets, resulting in an underlying EBIT of SEK 65 (420) million, corresponding to a margin of 9 (38) percent.
Cash flow and financial position
Consolidated cash and cash equivalents at the end of March amounted to SEK 911 (873) million. Cash flow amounted to SEK 228 (32) million during the period. Cash flow from operating activities amounted to SEK 285 (68) million. Working capital tied-up declined during the quarter by SEK 326 (-300) million, mainly due to advances received from customers.
Investments amounted to SEK 43 (24) million, of which capitalization of product development accounted for SEK 29 million. Investments in tangible assets totaled SEK 10 million and mainly related to IT infrastructure.
Financing activities utilized SEK 14 (12) million.
COVID-19
Mycronic is closely monitoring developments relating to COVID-19 and taking a structured approach to reduce the risks to personnel and operations, while the company is implementing measures that will also secure scope for manoeuvre in the future. The personnel's health and safety is being prioritized, while Mycronic is also following the official instructions. Mycronic is also working to support society wherever the company sees that it can make a difference.
Mycronic has a strong financial position combined with the fact that the company delivered a stable first quarter with marginal impact from COVID-19. As of March 31, the virus outbreak had not had any significant impact on the company's balance sheet. The businesses are diversified and operate in various segments, product areas and geographies. However, the virus has had an impact on the electronics industry and is creating uncertainty in the market, making forecasts and long-term effects difficult to assess.
Interim Report January-March 2020
MYCRONIC
Financial performance per business area
| Assembly Solutions | Q1 | Rolling 12 month | Jan-Dec 2019 | |
|---|---|---|---|---|
| 2020 | 2019 | |||
| Order intake, SEK million | 707 | 566 | 2,903 | 2,762 |
| Order backlog, SEK million | 945 | 553 | 945 | 805 |
| Net Sales, SEK million | 567 | 524 | 2,506 | 2,463 |
| Gross profit, SEK million | 225 | 214 | 1,022 | 1,011 |
| Gross margin, % | 39.7% | 40.8% | 40.8% | 41.0% |
| EBIT, SEK million | 20 | 5 | 125 | 110 |
| EBIT margin, % | 3.6% | 1.0% | 5.0% | 4.5% |
| Underlying EBIT, SEK million | 30 | 20 | 164 | 155 |
| Underlying EBIT margin, % | 5.2% | 3.8% | 6.6% | 6.3% |
| R&D expenditures, SEK million | -93 | -78 | -355 | -340 |
| R&D costs, SEK million | -91 | -77 | -357 | -344 |
Assembly Solutions
As of the beginning of April, Assembly Solutions is organized into three divisions comprising High Flex, High Volume and Global Technologies.
Order intake was strong and increased 25 percent to SEK 707 million. The High Volume division, in particular, contributed significant orders in dispensing in the Chinese market. The healthy order intake contributed to an increase in the order backlog by 71 percent to SEK 945 (553) million.
During the quarter, net sales increased 8 percent to SEK 567 (524) million, mainly generated by strong performance by the High Volume division, which strengthened its leading position in dispensing in the Chinese market. Currency effects made a positive contribution of SEK 18 million.
Gross margin amounted to 40 percent, which is in line with the preceding year.
EBIT for the first three months of the year was SEK 20 (5) million, corresponding to an EBIT margin of 4 (1) percent. Acquisition-related costs impacted earnings in an amount of SEK 9 (15) million, primarily attributable to amortization of acquired intangible assets, resulting in an underlying EBIT of SEK 30 (20) million, corresponding to a margin of 5 (4) percent.
Development costs amounted to SEK 91 (77) million and pertain to existing product development, as well as investments in future growth. Capitalization of R&D costs amounted to SEK 7 (6) million.
Interim Report January–March 2020
MYCRONIC
| Pattern Generators | Q1 | Rolling | ||
|---|---|---|---|---|
| 2020 | 2019 | 12 month | 2019 | |
| Order intake, SEK million | 725 | 156 | 2,375 | 1,805 |
| Order backlog, SEK million | 1,915 | 972 | 1,915 | 1,359 |
| Net Sales, SEK million | 169 | 581 | 1,432 | 1,844 |
| Gross profit, SEK million | 109 | 478 | 1,020 | 1,389 |
| Gross margin, % | 64.6% | 82.3% | 71.2% | 75.3% |
| EBIT, SEK million | 36 | 401 | 654 | 1,019 |
| EBIT margin, % | 21.5% | 69.1% | 45.7% | 55.3% |
| R&D expenditures, SEK million | -60 | -51 | -237 | -227 |
| R&D costs, SEK million | -39 | -51 | -203 | -215 |
Pattern Generators
Pattern Generators had a strong start to the year, securing five orders for mask writers, which yielded an order intake of SEK 725 (156) million, corresponding to an increase of 366 percent, compared with the first quarter of the preceding year when no system orders were secured. The orders secured comprised Mycronic's most advanced mask writer, the Prevision 800 Evo, together with four orders for the recently launched SLX, which produces masks for the semiconductor industry.
The strong order intake contributed to the order backlog – which contains 15 systems and a major upgrade – increasing by 97 percent to SEK 1,915 (972) million. Of this order backlog, 8 systems and a major upgrade are scheduled for delivery during the remainder of the year.
The division is characterized by natural variations between the quarters and, as planned, no system deliveries were made during the period, which explains the decline in net sales to SEK 169 (581) million during the quarter. Currency effects had a positive impact on net sales of SEK 5 million.
Gross margin amounted to 65 (82) percent.
The lower EBIT of SEK 36 (401) million, corresponding to an EBIT margin of 22 (69) percent, is also attributable in its entirety to that no systems being delivered during the quarter.
Development costs amounted to SEK 39 (51) million and pertain mainly to the SLX mask writer, together with the development of the next generation of mask writer.
Capitalization of R&D costs amounted to SEK 21 (0) million.
Interim Report January–March 2020
MYCRONIC
The electronics industry
It should be noted that the spread of COVID-19 and the global economic slowdown mean that there is currently heightened uncertainty relating to market forecasts in general.
The global electronics industry is assessed to have grown 0.5 percent in 2019 to USD 2,142 billion¹. For 2019, the semiconductor market noted a slowdown of 12.1 percent to the equivalent of USD 412 billion¹. This decrease is attributable to the smaller number of semiconductor circuits manufactured and lower prices for memory circuits in 2019.
Outlook
Annual growth for the electronics industry is forecast at 3.5 percent for the period 2019–2024¹. Segments with the strongest expected growth during this five-year period are electronics for wireless communication infrastructure, the automotive industry, data storage, consumer electronics and industrial applications. For 2020, growth in the electronics industry is forecast at 0.7 percent. The semiconductor market is expected to decline 1.0 percent in full-year 2020 compared with 2019 and is forecast to be positive during the 2019–2024 period as a whole, with average annual growth of 5.6 percent¹.
| Size/growth | 2020F | 2019 | 2018 |
|---|---|---|---|
| Electronics industry, percentual change¹ | +0.7% | +0.5% | +5.9% |
| Semiconductor industry, percentual change¹ | -1.0% | +12.1% | +13.7% |
| SMT, percentual change² | Not available | -10% | +17% |
| Dispensing, USD million³ | Not available | 800 | 780 |
| Camera modules, units, million³ | Not available | 190 | 165 |
| Displays, USD, billion⁴ | 108 | 108 | 113 |
| Photomasks, percentual change in value⁵ | +10% | +9% | +12% |
| Photomask area, thousand sq. meters⁵ | 17.1 | 16.3 | 15.9 |
Assembly Solutions
SMT and dispensing market area
The global market for SMT equipment has annual sales of approximately USD 5,300 million⁶. The segment SMT robots for component mounting declined 10 percent in 2019 compared with 2018 to USD 2,750 million⁷, a generally negative performance. Parts of Southeast and East Asia went against the tide and reported growth. The dispensing equipment market had sales of USD 800 million³ in 2019. Mycronic’s product portfolio comprises production systems for component mounting, non-contact high-speed dispensing of solder paste, inspection equipment, automated storage solutions, and equipment for dispensing, including coating of circuit boards.
Assembly automation market area
AEi offers automated production solutions for assembly and testing of camera modules. A growing segment within the electronics industry is electronics for the automotive industry, which includes camera modules for advanced driver support, or Advanced Driver Assistance Systems (ADAS). Manufacture of camera modules in 2018 amounted to 165 million units and the forecast for 2023 is for production of 315 million units, corresponding to annual growth of 14 percent³.
MRSI Systems is operating in a fast-growing sub-segment and offers die bonding equipment with extremely high precision.
Pattern Generators
The display market decreased 5 percent in 2019 to USD 108 billion, corresponding to 3.6 billion units⁴. The negative growth is primarily a result of the continued negative price development due to the surplus offering of displays produced. The initial assessment for 2020 was stabilized prices and positive growth of 3 percent to USD 112 billion. This assessment has now been revised downward to negative growth of 1 percent to USD 107 billion as an effect of the ongoing COVID-19 outbreak. The assessment is that the trend toward a larger share of advanced displays will continue. During 2020, AMOLED is expected to grow 20 percent to USD 30 billion⁴, driven by an increased share of AMOLED displays and that more display manufacturers are starting to produce displays based on this technology. Meanwhile, the total display area is also increasing, driven by larger screens and more screens in new products.
Photomasks for displays market area
According to the annual market report from May last year, the market was forecast to grow 9 percent to USD 886 million in 2019 and the forecast for 2020 is for growth of 10 percent to USD 972 million⁵,⁷. Growth is driven by a higher proportion of advanced photomasks for AMOLED and an increased need for G10 photomasks in China⁵. The forecast for total area growth is an average of 2.3 percent per year for 2019–2023⁵. Strong growth for AMOLED photomasks is expected, with an annual area growth of 15 percent for 2019–2023⁵, which drives the need for photomasks produced by Prevision 80 and Prevision 800 systems.
1) Prismark, latest forecast March 2020
2) Protec MDC, January 2020
3) Prismark, April 2020
4) Omdia (formerly IHS Markit), latest forecast April 2020
5) Omdia (formerly IHS Markit), June 2019 (annual update)
6) Prismark April 2019, Protec MDC January 2019, Mycronic analysis
7) 110 YEN/USD used by Mycronic for conversion
Interim Report January–March 2020
MYCRONIC
Other
The Parent Company
Mycronic AB is the Group's Parent Company.
The Parent Company's net sales amounted to SEK 375 (805) million during the quarter. EBIT was SEK 78 (425) million.
Cash and cash equivalents at the end of the quarter amounted to SEK 415 million, compared with SEK 246 million at the end of 2019.
Nomination Committee
The Nomination Committee for Mycronic's 2020 AGM comprises: Henrik Blomquist, Bure Equity, Thomas Ehlin, Fourth AP Fund, Hans Ek, SEB Investment Management AB and Patrik Tigerschiöld, Chairman of Mycronic. The Nomination Committee represented 43.1 percent of votes and shares as of August 31, 2019.
Annual General Meeting 2020
Due to the prevailing uncertainty resulting from the spread of COVID-19, the Board of Directors of Mycronic AB (publ) has decided to postpone the Annual General Meeting to a later date.
The Annual General Meeting was scheduled to be held on May 7, 2020 at Vasateatern, Vasagatan 19 in Stockholm, Sweden. Mycronic AB (publ) will issue notification of the Annual General Meeting not later than four weeks before the new date. The Meeting will be held not later than June 30, 2020, in accordance with applicable legislation.
Täby, April 23, 2020
Mycronic AB (publ)
Anders Lindqvist
President and CEO
Dividend proposal
In accordance with the dividend policy, the Board of Directors is proposing to the Annual General Meeting a dividend of SEK 2.00 (3.00) per share, totaling SEK 195.8 (293.7) million. The dividend proposal has been changed from the 3.25 SEK per share communicated earlier due to the uncertainty created by COVID-19.
Financial information
Mycronic AB (publ) is listed on NASDAQ Stockholm, Large Cap. The information in this report is published in accordance with the EU Market Abuse Regulation and the Swedish Securities Act. The information was submitted for publication, through the contact persons stated below (page 8) on April 23, 2020, at 8:00 a.m.
Financial reports and press releases are published in Swedish and English and are available on www.mycronic.com.
This report was not reviewed by the company's auditor.
Financial calendar
| Annual General Meeting | No later than June 30, 2020 |
|---|---|
| Interim Report January-June 2020 | July 16, 2020 |
| Interim Report January-September 2020 | October 22, 2020 |
| Year-end Report 2020 | February 10, 2021 |
Interim Report January-March 2020
MYCRONIC
Mycronic's vision
The business partner of choice, enabling the future of electronics.
Mycronic's mission
- We aim to be the market leader within our key segments across the globe
- We continuously improve and develop innovative solutions, products and services to meet the changing needs of our customers
- We do not compromise with our goal to deliver sustainable growth, profitability and shareholder value
- We meet our challenging goals by engaging the passion and talent of people dedicated to deliver
Mycronic's long-term financial goals announced in February 2017
Growth
Net sales including acquisitions shall reach SEK 5 billion at the end of the business plan period, 4 to 7 years.
Profitability
EBIT shall exceed 15 percent of net sales over a business cycle.
Capital structure
Net debt shall be less than 3 times average EBITDA (operating profit before interest, tax, depreciation and amortization). The average is calculated over 3 years.
Mycronic's dividend policy
The objective of the company is to provide both good returns and value growth. Between 30 and 50 percent of net profit will be distributed to the shareholders, provided the company has a net debt lower than 3 times EBITDA after stipulated dividend. In each case, account shall be taken of the Company's financial position, profitability trends, growth potential and future investment needs.
About Mycronic
Mycronic AB is a Swedish high-tech company engaged in the development, manufacture and marketing of production equipment with high precision and flexibility requirements for the electronics industry. Mycronic's headquarters are located in Täby, north of Stockholm and the Group has subsidiaries in France, Japan, China, the Netherlands, Singapore, the United Kingdom, South Korea, Germany and the USA. Mycronic (MYCR) is listed on Nasdaq Stockholm. www.mycronic.com
For additional information, please contact
Anders Lindqvist
President and CEO
+46 8 638 52 00
[email protected]
Torbjörn Wingårdh
CFO
+46 8 638 52 00
[email protected]
Tobias Bülow
Director Investor Relations
+46 734 018 216
[email protected]
Interim Report January–March 2020
MYCRONIC
Group
| Consolidated profit and loss accounts in summary, SEK million | Note | Q1 | Rolling 12 month | Jan-Dec 2019 | |
|---|---|---|---|---|---|
| 2020 | 2019 | ||||
| Net sales | 5, 6 | 736 | 1,105 | 3,937 | 4,307 |
| Cost of goods sold | -402 | -413 | -1,897 | -1,908 | |
| Gross profit | 334 | 692 | 2,041 | 2,399 | |
| Research and development | 7 | -130 | -128 | -561 | -559 |
| Selling expenses | -140 | -113 | -568 | -541 | |
| Administrative expenses | -57 | -56 | -238 | -237 | |
| Other income and expenses | 49 | 10 | 101 | 62 | |
| EBIT | 55 | 406 | 774 | 1,124 | |
| Financial income and expenses | -1 | -1 | -2 | -2 | |
| Profit/loss before tax | 54 | 404 | 771 | 1,122 | |
| Tax | -13 | -91 | -184 | -263 | |
| Net Profit/loss | 41 | 313 | 587 | 859 | |
| Earnings per share before/after dilution, SEK | 0.40 | 3.20 | 5.95 | 8.74 | |
| Average number of shares, thousand | 97,775 | 97,917 | 97,858 | 97,893 | |
| Results attributable to owners of the Parent Company | 39 | 313 | 582 | 855 | |
| Results attributable to non-controlling interests | 2 | 0 | 5 | 4 | |
| 41 | 313 | 587 | 859 | ||
| Consolidated statement of comprehensive income in summary, SEK million | Q1 | Rolling 12 month | Jan-Dec 2019 | ||
| --- | --- | --- | --- | --- | |
| 2020 | 2019 | ||||
| Net Profit/loss | 41 | 313 | 587 | 859 | |
| Other comprehensive income | |||||
| Items not to be reclassified to profit/loss, after tax | |||||
| Actuarial profit/loss from defined benefits to employees | - | - | -2 | -2 | |
| Items to be reclassified to profit/loss, after tax | |||||
| Translation differences at translating foreign entities | 125 | 72 | 109 | 56 | |
| Hedging of net investment in foreign entities | - | -13 | 1 | -13 | |
| Changes in cash flow hedges | -64 | -7 | -38 | 19 | |
| Total comprehensive income | 103 | 364 | 658 | 919 | |
| Total comprehensive income attributable to owners of the Parent Company | 101 | 364 | 653 | 915 | |
| Total comprehensive income attributable to non-controlling interests | 2 | 0 | 5 | 4 | |
| 103 | 364 | 658 | 919 |
Interim Report January–March 2020
MYCRONIC
| Consolidated statements of financial position in summary, SEK million | 31 Mar 20 | 31 Mar 19 | 31 Dec 19 |
|---|---|---|---|
| ASSETS | |||
| Fixed assets | |||
| Intangible assets | 1,471 | 1,429 | 1,366 |
| Tangible assets | 478 | 284 | 447 |
| Non-current receivables | 55 | 22 | 50 |
| Deferred tax assets | 118 | 94 | 97 |
| Total fixed assets | 2,122 | 1,828 | 1,960 |
| Current assets | |||
| Inventories | 1,231 | 917 | 1,109 |
| Trade receivables | 768 | 751 | 826 |
| Other current receivables | 226 | 179 | 250 |
| Cash and cash equivalents | 911 | 873 | 655 |
| Total current assets | 3,135 | 2,718 | 2,839 |
| Total assets | 5,257 | 4,547 | 4,800 |
| EQUITY AND LIABILITIES | |||
| Equity | 3,082 | 2,743 | 2,978 |
| Long-term liabilities | |||
| Long-term interest-bearing liabilities | 266 | 116 | 252 |
| Deferred tax liabilities | 219 | 162 | 226 |
| Other non-current liabilities | 61 | 102 | 54 |
| Total long-term liabilities | 546 | 380 | 532 |
| Short-term liabilities | |||
| Short-term interest-bearing liabilities | 77 | 50 | 66 |
| Trade payables | 272 | 216 | 288 |
| Other current liabilities | 1,280 | 1,157 | 936 |
| Total current liabilities | 1,629 | 1,423 | 1,289 |
| Total liabilities | 2,175 | 1,803 | 1,822 |
| Total equity and liabilities | 5,257 | 4,547 | 4,800 |
Interim Report January–March 2020
MYCRONIC
| Q1 | Rolling | Jan-Dec | ||
|---|---|---|---|---|
| Consolidated cash flow statements in summary, SEK million | 2020 | 2019 | 12 month | 2019 |
| Profit/loss before tax | 54 | 404 | 771 | 1,122 |
| Adjustments for non-cash items and paid income tax | -95 | -36 | -137 | -79 |
| Change in working capital | 326 | -300 | 129 | -498 |
| Cash flow from operating activities | 285 | 68 | 763 | 545 |
| Cash flow from investing activities | -43 | -24 | -418 | -399 |
| Cash flow from financing activities | -14 | -12 | -328 | -326 |
| Cash flow for the period | 228 | 32 | 16 | -180 |
| Cash and cash equivalents, opening balance | 655 | 829 | 873 | 829 |
| Exchange difference for cash and cash equivalents | 28 | 12 | 22 | 6 |
| Cash and cash equivalents, closing balance | 911 | 873 | 911 | 655 |
| Jan-Mar | Jan-Dec | |||
| --- | --- | --- | --- | |
| Consolidated statement of changes in equity in summary, SEK million | 2020 | 2019 | 2019 | |
| Opening balance | 2,978 | 2,379 | 2,379 | |
| Dividend to owners | - | - | -294 | |
| Dividend to non-controlling interests | - | - | -6 | |
| Swap agreement related to own shares | - | - | -21 | |
| Equity-settled share based payments | 1 | - | 1 | |
| Total comprehensive income | 103 | 364 | 919 | |
| Closing balance | 3,082 | 2,743 | 2,978 | |
| Of which holdings of non-controlling interests | 8 | 3 | 6 | |
| Jan-Mar | Jan-Dec | |||
| --- | --- | --- | --- | |
| Other key figures * | 2020 | 2019 | 2019 | |
| Equity per share, SEK | 31.52 | 28.01 | 30.46 | |
| Return on equity (rolling 12 months), % | 20.2% | 41.1% | 32.1% | |
| Return on capital employed (rolling 12 months), % | 24.8% | 50.5% | 39.9% | |
| Net cash, SEK million | 568 | 706 | 337 | |
| Average number of employees | 1,458 | 1,276 | 1,349 |
*In addition to key figures presented on page 1
Interim Report January–March 2020
MYCRONIC
Parent Company
| Q1 | Rolling | Jan-Dec | ||
|---|---|---|---|---|
| Profit/loss accounts in summary, Parent Company, SEK million | 2020 | 2019 | 12 month | 2019 |
| Net sales | 375 | 805 | 2,404 | 2,833 |
| Cost of goods sold | -206 | -250 | -1,053 | -1,097 |
| Gross profit | 169 | 554 | 1,351 | 1,736 |
| Other operating expenses | -91 | -129 | -670 | -708 |
| EBIT | 78 | 425 | 681 | 1,028 |
| Result from financial items | 6 | 5 | 52 | 51 |
| Profit/loss after financial items | 84 | 430 | 733 | 1,079 |
| Appropriations | - | - | -273 | -273 |
| Profit/loss before tax | 84 | 430 | 460 | 806 |
| Tax | -18 | -92 | -94 | -169 |
| Net Profit/loss | 66 | 338 | 366 | 637 |
| Total comprehensive income | 66 | 338 | 366 | 637 |
| Balance sheets in summary, Parent Company, SEK million | 31 Mar 20 | 31 Mar 19 | 31 Dec 19 | |
| --- | --- | --- | --- | |
| ASSETS | ||||
| Fixed assets | ||||
| Intangible and tangible assets | 104 | 67 | 92 | |
| Financial assets | 1,972 | 1,821 | 1,893 | |
| Total fixed assets | 2,076 | 1,888 | 1,985 | |
| Current assets | ||||
| Inventories | 541 | 468 | 463 | |
| Current receivables | 883 | 760 | 871 | |
| Cash and cash equivalents | 415 | 464 | 246 | |
| Total current assets | 1,840 | 1,692 | 1,580 | |
| TOTAL ASSETS | 3,916 | 3,580 | 3,565 | |
| EQUITY AND LIABILITIES | ||||
| Equity | 2,027 | 1,974 | 1,960 | |
| Untaxed reserves | 919 | 646 | 919 | |
| Long-term interest-bearing liabilities | 30 | - | 28 | |
| Other non-current liabilities | 5 | 8 | 4 | |
| Total long-term liabilities | 35 | 8 | 32 | |
| Short-term interest bearing liabilities | 20 | - | 19 | |
| Other current liabilities | 915 | 953 | 636 | |
| Total current liabilities | 935 | 953 | 654 | |
| TOTAL EQUITY AND LIABILITIES | 3,916 | 3,580 | 3,565 |
Interim Report January-March 2020
MYCRONIC
Notes
Note 1 Accounting policies
This interim report for the Group has been prepared in accordance with IAS 34 Interim Financial Reporting together with applicable provisions in the Swedish Annual Accounts Act. The report for the Parent Company has been prepared in accordance with Chapter 9 of the Swedish Annual Accounts Act. For the Group and Parent Company, accounting policies, valuation policies and assumptions were applied in accordance with the latest annual report. The accounting principles of the segments are the same as for the Group with the exception of IFRS 16 Leases. The segments and the parent company recognize lease payments as a cost on a straight-line basis over the period of the lease. The right-of-use asset and the lease liability are thus not reported in the balance sheet.
The nature of financial assets and liabilities is in all material respects the same as on December 31, 2019. As was the case at the end of 2019, the carrying amounts and fair values are deemed to essentially correspond with one another.
Note 2 Transactions with related parties
Transactions with related parties are described in Note 8 of the 2019 Annual Report. The scope and focus of these transactions did not change significantly during the period.
Note 3 Risks and uncertainty factors
There are a number of risks and uncertainty factors of an operational and financial character to which the Group is exposed through its operations, these are described in the 2019 Annual Report. Mycronic is for example exposed to country-specific risks such as political decisions or overarching changes to the regulatory framework, both geographically and product-wise. Mycronic is also exposed to effects from the COVID-19 outbreak.
Note 4 Events after the end of the period
There have been no events after the end of the period which have any significant effects on the Group's results or financial position.
Note 5 Revenue from Contracts with Customers
| Revenue by geographical market, SEK million | Q1 | Rolling 12 month | Jan-Dec 2019 | |
|---|---|---|---|---|
| 2020 | 2019 | |||
| EMEA | 155 | 168 | 729 | 743 |
| North and South America | 110 | 400 | 716 | 1,005 |
| Asia | 471 | 537 | 2,493 | 2,559 |
| 736 | 1,105 | 3,937 | 4,307 | |
| Revenue by type of good/service, SEK million | ||||
| System | 444 | 827 | 2,716 | 3,099 |
| Aftermarket | 292 | 278 | 1,222 | 1,208 |
| 736 | 1,105 | 3,937 | 4,307 | |
| Timing of revenue recognition, SEK million | ||||
| Goods transferred at a point in time | 546 | 925 | 3,154 | 3,533 |
| Services transferred over time | 189 | 180 | 783 | 774 |
| 736 | 1,105 | 3,937 | 4,307 |
Interim Report January–March 2020
MYCRONIC
Note 6 Segment reporting
| SEK million | Q1 | Rolling 12 month | Jan-Dec 2019 | |
|---|---|---|---|---|
| 2020 | 2019 | |||
| Net sales | ||||
| Assembly Solutions | 567 | 524 | 2,506 | 2,463 |
| Pattern Generators | 169 | 581 | 1,432 | 1,844 |
| 736 | 1,105 | 3,937 | 4,307 | |
| EBIT | ||||
| Assembly Solutions | 20 | 5 | 125 | 110 |
| Pattern Generators | 36 | 401 | 654 | 1,019 |
| Amortization of previously acquired intangible assets | -1 | -1 | -4 | -4 |
| Effects from IFRS 16 | 0 | 0 | -1 | -1 |
| Group | 55 | 406 | 774 | 1,124 |
Note 7 Research and development expenses
| Research and development costs, SEK million | Q1 | Rolling 12 month | Jan-Dec 2019 | |
|---|---|---|---|---|
| 2020 | 2019 | |||
| R&D expenditures | ||||
| Assembly Solutions | -93 | -78 | -355 | -340 |
| Pattern Generators | -60 | -51 | -237 | -227 |
| -153 | -129 | -591 | -567 | |
| Capitalization of development costs | ||||
| Assembly Solutions | 7 | 6 | 18 | 17 |
| Pattern Generators | 21 | - | 34 | 12 |
| 29 | 6 | 51 | 29 | |
| Amortization of acquired technology | ||||
| Assembly Solutions | -5 | -5 | -21 | -20 |
| Reported cost | -130 | -128 | -561 | -559 |
Interim Report January-March 2020
MYCRONIC
Note 8 Definitions and reconciliation alternative performance measures, etc.
The European Securities and Markets Authority (ESMA) has issued guidelines regarding alternative performance measures for listed companies.
These relate to financial key figures used by management, to control and evaluate the Group's business, which cannot be directly inferred from the financial statements. Alternative performance measures are also considered to be of interest to external investors and analysts who monitor the company. For definitions of other key ratios, please refer to the Annual Report.
Acquisition-related costs
Acquisition-related costs include expensing of acquired inventories at fair value, amortization and impairment of acquired intangible assets, changes in value and revaluation of contingent considerations and transaction expenses.
Book-to-bill
Order intake in relation to net sales. Indicates future development of net sales.
Capital employed
Balance sheet total less non-interest bearing liabilities. Used to show a company's ability to meet capital needs from operations.
Earnings per share
Net result attributable to the owners of the Parent Company divided by the average number of outstanding shares before and after dilution. Used to show a company's results per share.
EBITDA
Operating result (EBIT) before depreciation and amortization, interest and tax. EBITDA is a component used in expressing the company's financial goals and dividend policy.
Equity per share
Equity on balance day divided by the number of outstanding shares at the end of the period. Used to measure the value of the company per share.
Net cash
Cash and cash equivalents less interest-bearing liabilities.
Order backlog
Remaining orders for goods, valued at the closing date exchange rate. Used to show secured future net sales of goods.
Order intake
Received orders for goods and aftermarket, valued at average exchange rates. The order intake also includes revaluation of the order backlog at closing date exchange rates. Used to show orders received.
Organic growth
Change in net sales excluding increase related to acquisitions, recalculated to the previous year's currency rates, as a percentage of the previous year's net sales. Net sales from acquired companies are included in the calculation of organic growth as of the first day of the first month which falls 12 months after the date of acquisition.
Return on capital employed
Earnings before financial expenses as a percentage of average capital employed. Used to show return on capital needed for operations.
Return on equity
Net profit/loss as a percentage of average equity. Used to demonstrate return on shareholder capital over time.
Underlying EBIT and underlying EBIT margin
Underlying EBIT consists of operating profit/loss excluding acquisition-related costs. The underlying EBIT margin is underlying EBIT as a percentage of net sales. Used to describe how operations are developing and performing excluding acquisition-related costs.
Interim Report January-March 2020
MYCRONIC
| Jan-Mar | Rolling | Jan-Dec | ||
|---|---|---|---|---|
| Return on equity | 2020 | 2019 | 12 month | 2019 |
| Net profit/loss (rolling 12 months) | 587 | 964 | 587 | 859 |
| Average shareholders’ equity | 2,912 | 2,348 | 2,912 | 2,679 |
| 20.2% | 41.1% | 20.2% | 32.1% | |
| Return on capital employed | ||||
| Profit/loss before tax (rolling 12 months) | 771 | 1,221 | 771 | 1,122 |
| Financial expenses | 13 | 10 | 13 | 11 |
| Profit/loss before financial expenses | 784 | 1,231 | 784 | 1,133 |
| Average balance sheet total | 4,902 | 3,974 | 4,902 | 4,500 |
| Average non-interest-bearing liabilities | 1,734 | 1,536 | 1,734 | 1,661 |
| Average capital employed | 3,167 | 2,438 | 3,167 | 2,838 |
| 24.8% | 50.5% | 24.8% | 39.9% | |
| Book-to-bill | ||||
| Order intake | 1,432 | 721 | 5,278 | 4,567 |
| Net sales | 736 | 1,105 | 3,937 | 4,307 |
| 1.9 | 0.7 | 1.3 | 1.1 | |
| EBITDA | ||||
| EBIT | 55 | 406 | 774 | 1,124 |
| Depreciation/Amortization | 43 | 34 | 191 | 182 |
| 98 | 440 | 965 | 1,307 | |
| Underlying EBIT | ||||
| EBIT | 55 | 406 | 774 | 1,124 |
| Acquisition-related costs included in: | ||||
| Cost of goods sold | - | - | - | - |
| Operating expenses | 9 | 15 | 39 | 45 |
| 65 | 420 | 813 | 1,169 | |
| Equity per share | ||||
| Equity at balance day | 3,082 | 2,743 | 3,082 | 2,978 |
| No. of shares at end of period, thousand | 97,775 | 97,917 | 97,775 | 97,775 |
| 31.52 | 28.01 | 31.52 | 30.46 | |
| Earnings per share before/after dilution, SEK | ||||
| Net Profit/loss attributable to owners of the Parent Company | 39 | 313 | 582 | 855 |
| Average no. of shares before dilution, thousand | 97,775 | 97,917 | 97,858 | 97,893 |
| Average no. of shares after dilution, thousand | 97,775 | 97,917 | 97,860 | 97,895 |
| 0.40 | 3.20 | 5.95 | 8.74 | |
| Net cash, SEK million | ||||
| Cash and cash equivalents | 911 | 873 | 911 | 655 |
| Interest-bearing liabilities | -343 | -166 | -343 | -318 |
| 568 | 706 | 568 | 337 |
Interim Report January-March 2020
MYCRONIC
| Quarterly data | Q1 20 | Q4 19 | Q3 19 | Q2 19 | Q1 19 | Q4 18 | Q3 18 | Q2 18 |
|---|---|---|---|---|---|---|---|---|
| Order Intake Assembly Solutions | 707 | 703 | 809 | 685 | 566 | 608 | 508 | 554 |
| Order Intake Pattern Generators | 725 | 1,004 | 430 | 216 | 156 | 695 | 304 | 317 |
| 1,432 | 1,706 | 1,238 | 901 | 721 | 1,303 | 813 | 870 | |
| Order Backlog Assembly Solutions | 945 | 805 | 879 | 654 | 553 | 507 | 520 | 545 |
| Order Backlog Pattern Generators | 1,915 | 1,359 | 760 | 647 | 972 | 1,397 | 1,131 | 1,390 |
| 2,860 | 2,164 | 1,639 | 1,301 | 1,525 | 1,904 | 1,651 | 1,935 | |
| Net Sales Assembly Solutions | 567 | 776 | 584 | 579 | 524 | 621 | 533 | 478 |
| Net Sales Pattern Generators | 169 | 405 | 317 | 541 | 581 | 430 | 563 | 404 |
| 736 | 1,181 | 900 | 1,120 | 1,105 | 1,052 | 1,096 | 882 | |
| Gross Profit Assembly Solutions | 225 | 308 | 239 | 250 | 214 | 268 | 216 | 195 |
| Gross Profit Pattern Generators | 109 | 277 | 227 | 407 | 478 | 231 | 445 | 304 |
| 334 | 584 | 465 | 657 | 692 | 498 | 662 | 499 | |
| Gross Margin Assembly Solutions | 39.7% | 39.6% | 40.9% | 43.2% | 40.8% | 43.1% | 40.6% | 40.7% |
| Gross Margin Pattern Generators | 64.6% | 68.3% | 71.7% | 75.3% | 82.3% | 53.6% | 79.1% | 75.4% |
| 45.4% | 49.4% | 51.7% | 58.7% | 62.6% | 47.4% | 60.3% | 56.6% | |
| R&D expenses Assembly Solutions | -91 | -99 | -81 | -86 | -77 | -85 | -74 | -86 |
| R&D expenses Pattern Generators | -39 | -59 | -46 | -59 | -51 | -57 | -36 | -36 |
| Total R&D expenses | -130 | -159 | -127 | -145 | -128 | -142 | -110 | -122 |
| Selling expenses | -140 | -148 | -153 | -128 | -113 | -133 | -110 | -97 |
| Administrative expenses | -57 | -66 | -55 | -61 | -56 | -62 | -55 | -53 |
| Other income/expenses | 49 | -8 | 67 | -8 | 10 | -11 | 49 | 11 |
| EBIT | 55 | 204 | 198 | 317 | 406 | 151 | 436 | 238 |
| Of which EBIT Assembly Solutions | 20 | 42 | 46 | 17 | 5 | 18 | 79 | -3 |
| Of which EBIT Pattern Generators | 36 | 163 | 153 | 302 | 401 | 134 | 357 | 242 |
| EBIT margin | 7.5% | 17.2% | 21.9% | 28.3% | 36.7% | 14.3% | 39.7% | 26.9% |
| Equity per share after tax | 31.52 | 30.46 | 29.44 | 27.49 | 28.01 | 24.30 | 22.76 | 19.41 |
| Earnings per share before/after dilution | 0.40 | 1.57 | 1.52 | 2.50 | 3.20 | 1.33 | 3.55 | 1.77 |
| Closing share price | 121.10 | 185.10 | 121.90 | 112.80 | 132.50 | 118.10 | 93.05 | 100.20 |
Interim Report January–March 2020