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Mycronic Interim / Quarterly Report 2018
2946_10-q_2020-07-23_c99f2d15-458c-400c-b0bd-6c444753d594.pdf
Interim / Quarterly Report
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MYCRONIC
When passion meets innovation
Q1
PRESS RELEASE 431E
Interim report January-March 2018
Good growth for net sales and EBIT continues
"I'm pleased with the way this year has started. Net sales continued to increase mainly through organic growth, while EBIT increased 25 percent to SEK 196 million. Growth for the quarter reflects Mycronic's capacity to understand and follow technology trends to develop efficient production solutions for our customers," says Lena Olving, President and CEO.
First quarter January-March 2018
- The order intake was on par with the previous year and amounted to SEK 656 (653) million
- Net sales increased 11 percent to SEK 750 (678) million and 17 percent when calculated using constant exchange rates
- EBIT increased 25 percent to SEK 196 (157) million, with an EBIT margin of 26 percent
- The underlying EBIT increased 4 percent to SEK 216 (207) million, with an underlying EBIT margin of 29 percent
- Earnings per share amounted to SEK 1.44 (1.14)
Outlook 2018
The Board's assessment remains that consolidated net sales will be at a level of SEK 3,500 million in 2018.
Events after the end of the quarter
On 18 April, 2018, business area Pattern Generators launched the FPS8100 for the multi-purpose segment, with improved performance, stability and write speeds, all of which allow for efficient production of photomasks for the manufacture of Fine Metal Masks. On 24 April 2018, an order for a replacement system based on Prevision-8 was received.
| Group summary | Jan-March 18 | Jan-March 17* | Rolling 12* | Jan-Dec 17* |
|---|---|---|---|---|
| Order intake, SEK million | 656 | 653 | 3,570 | 3,567 |
| Net Sales, SEK million | 750 | 678 | 3,072 | 3,000 |
| Book-to-bill | 0.9 | 1.0 | 1.2 | 1.2 |
| Order backlog, SEK million | 1,868 | 1,353 | 1,868 | 1,963 |
| Gross margin, % | 58.4% | 53.4% | 58.3% | 57.2% |
| EBIT margin, % | 26.1% | 23.2% | 28.7% | 28.1% |
| Underlying EBIT margin, % | 28.7% | 30.6% | 31.2% | 31.7% |
| Earnings per share before/after dilution, SEK | 1.44 | 1.14 | 6.67 | 6.37 |
| Cash Flow, SEK million | -13 | 159 | 437 | 609 |
| Changes in net sales | ||||
| Total growth, % | 11% | 97% | 16% | 29% |
| Organic growth, % | 13% | 59% | 8% | 14% |
| Growth from acquisitions,% | 4% | 32% | 11% | 16% |
| Currency effects, % | -6% | 6% | -3% | -1% |
*In this report, comparative figures are restated to account for the effects of the new accounting standard for revenue recognition, IFRS 15 Revenue from Contracts with Customers. See Note 1 for details regarding these effects.
Interim report January-March 2018, Page 1 of 16
MYCRONIC
CEO comments
After a record-breaking 2017, it is gratifying that 2018 has started so well for Mycronic, with growth of 17 percent excluding currency effects, of which acquisitions accounted for 4 percent.
During the quarter, we continued investing in product development, with an increase in investments within Pattern Generators (PG). In February, Assembly Solutions (AS) launched the SMD Tower 8000 – a new, ultra-compact storage tower with enhanced capacity – at the APEX show in San Diego. On April 18, PG launched the FPS8100 for the multi-purpose segment, which allows for efficient production of photomasks for the manufacture of Fine Metal Masks.
The year began strong for AS, which is reflected in an increase of 41 percent in the order intake compared with the first quarter of 2017. The business area has been positively affected by continued strong demand within surface mounting, as well as from the additional contribution that the last two years of strategic acquisitions are now generating. Net sales increased at a slower pace than the order intake and have been adversely affected by temporary supply disruptions from sub-contractors. Vi TECHNOLOGY's products are now being marketed through all of Mycronic's sales channels. During the quarter, a multiple order in the MYPro product series was received and delivered to Asia, which represents a breakthrough in a new market segment.
PG did not receive any new orders for mask writers in the first quarter, which explains the lower order intake compared to the corresponding period of 2017. Net sales increased 16 percent excluding currency effects. At the end of the quarter, the first Prevision-800 was delivered, which means that our customer Photonics is now first to have the world's most advanced mask writer for production of the most complex photomasks for the display industry.
The CES exhibition took place in Las Vegas in early January. It is the world's largest trade show for new products and future innovations within consumer electronics. My impression is that our efforts within product development, together with our acquisition strategy, places us in a strong position. There was a great deal of focus on displays at the show, where improved quality, larger size, and the fact that they are being used in more products was emphasized. New display technologies are also being developed which could complement AMOLED and LCD in the long-term. Additionally, more and more electronics can be found in demanding, rugged environments that expose products to, for example, moisture, vibration and large temperature variations, which drives the need for better and more sophisticated dispensing solutions to protect the electronics. The amount and complexity of electronics for the automotive industry is also growing rapidly, including more cameras per vehicle. These are all examples of trends that affirm our investments in product development and acquisitions. Understanding and keeping up with new technology trends is an important part of Mycronic's work to develop efficient production solutions for our customers - now and in the future.
Lena Olving, CEO and President
Order intake and net sales, SEK million, rolling 4 quarters
Profitability trend EBIT %, rolling 4 quarters
Interim report January-March 2018, Page 2 of 16
MYCRONIC
Financial performance, Group
| Jan-March 18 | Jan-March 17* | Rolling 12* | Jan-Dec 17* | |
|---|---|---|---|---|
| Order intake, SEK million | 656 | 653 | 3,570 | 3,567 |
| Order backlog, SEK million | 1,868 | 1,353 | 1,868 | 1,963 |
| Net Sales, SEK million | 750 | 678 | 3,072 | 3,000 |
| Gross profit, SEK million | 438 | 362 | 1,793 | 1,716 |
| Gross margin, % | 58.4% | 53.4% | 58.3% | 57.2% |
| EBIT, SEK million | 196 | 157 | 883 | 844 |
| EBIT margin, % | 26.1% | 23.2% | 28.7% | 28.1% |
| Underlying EBIT, SEK million | 216 | 207 | 960 | 951 |
| Underlying EBIT margin, % | 28.7% | 30.6% | 31.2% | 31.7% |
| EBITDA, SEK million | 212 | 172 | 959 | 919 |
Vi TECHNOLOGY included as of 30 October, 2017
*Restated for comparability, see Note 1.
First quarter January-March 2018
The order intake for the first quarter was in line with the corresponding period of 2017 and included a multiple order for AS in Asia within the MYPro product series, representing a breakthrough for Mycronic in a new market segment. PG received no orders for mask writers during the quarter. In the first quarter of 2017, orders for a mask writer and a mask writer upgrade were received.
Net sales for the quarter increased 11 percent to SEK 750 (678) million, corresponding to 17 percent based on constant exchange rates and included one (two) mask writer. Net sales were adversely impacted by negative currency effects in the amount of SEK 41 (22) million. Recalculated to the same exchange rates that prevailed during the first quarter of 2017, net sales amounted to SEK 792 million.
Consolidated EBIT increased 25 percent and has been affected by acquisition-related costs in the amount of SEK 20 (50) million relating to acquisitions completed in 2016 and 2017. Acquisition-related costs do not relate to operating activities. Rather, they comprise changes in value to earn-outs, amortization of acquired intangible assets, and expensing of acquired inventories at fair value for Vi TECHNOLOGY. The underlying EBIT, which shows the operational activity trend, amounted to SEK 216 (207) million, corresponding to an underlying EBIT margin of 29 (31) percent.
Of the acquisition-related costs, SEK 1 (38) million was charged against gross profit, and the gross margin adjusted for these costs was 59 percent.
The Group increased its development expenditures by SEK 15 million to SEK 98 million. Efforts were related to the development of the next generation of mask writers
and further development of existing PG products. Investments within AS remained at the same level as for the first quarter of last year.
Selling and administrative expenses increased SEK 30 million, mainly due to operating expenses in Vi TECHNOLOGY, investments in the sales organization and integration expenses of acquired companies.
Cash flow and financial position
Consolidated cash and cash equivalents at the end of the first quarter were SEK 808 million, compared to SEK 813 million on 31 December, 2017. Cash flow was SEK -13 (159) million. Cash flow from operating activities was SEK 2 million, attributable to positive results, which were partly offset by an increase in the amount of working capital tied up.
Investments claimed SEK 15 (41) million and related primarily to tangible fixed assets.
Interim report January-March 2018, Page 3 of 16
MYCRONIC
Financial performance per business area
| Assembly Solutions | Jan-March 18 | Jan-March 17 | Rolling 12 | Jan-Dec 17 |
|---|---|---|---|---|
| Order intake, SEK million | 480 | 340 | 1,564 | 1,424 |
| Order backlog, SEK million | 391 | 276 | 391 | 290 |
| Net Sales, SEK million | 379 | 330 | 1,468 | 1,419 |
| Gross profit, SEK million | 160 | 100 | 618 | 557 |
| Gross margin, % | 42.3% | 30.3% | 42.1% | 39.3% |
| EBIT, SEK million | -24 | -55 | -57 | -88 |
| EBIT margin, % | -6.4% | -16.7% | -3.9% | -6.2% |
| Underlying EBIT, SEK million | -5 | -5 | 20 | 19 |
| Underlying EBIT margin, % | -1.2% | -1.6% | 1.4% | 1.3% |
| R&D expenditures, SEK million | -73 | -73 | -267 | -267 |
| R&D costs, SEK million | -77 | -72 | -285 | -280 |
Vi TECHNOLOGY ncluded as of 30 October, 2017
During the first quarter, the order intake for AS increased 41 percent compared with the corresponding period in 2017. Organic growth was 25 percent. This contributed to the order backlog increasing to a new record level of SEK 391 million.
Net sales increased during the quarter by 15 percent to SEK 379 (330) million. Organic growth was 10 percent, excluding currency effects. Net sales were affected by delivery challenges experienced by subcontractors and negative currency effects in the amount of SEK 10 million. Recalculated to the same exchange rates that prevailed during the first quarter of 2017, net sales amounted to SEK 389 million.
The underlying gross margin was 42.6 (41.7) percent. Acquisition-related expenses in the amount of SEK 1 (38) million were charged to the gross profit.
The underlying EBIT margin was -1.2 (-1.6) percent. EBIT for AS now includes costs for Vi TECHNOLOGY and was burdened by increased expenses for selling, administration and development.
Acquisition-related expenses amounted to SEK 20 (50) million and consisted of revaluation of earn-outs, amortization of acquired intangible assets, as well as expensing of acquired inventories at fair value in Vi TECHNOLOGY.
Development expenditures, including Vi TECHNOLOGY, remained at the same level as for the corresponding period of 2017 and included product development of existing products and investments for future growth.
The inspection equipment product portfolio acquired through Vi TECHNOLOGY in October 2017 is now being marketed through all of Mycronic's sales channels. During the quarter, Mycronic announced their participation in a new industrial cooperation led by Nokia focusing on flexible production concepts for the future within the electronics industry, where we contribute with our jet printing technology. Mycronic also participates actively in standardization initiatives within the electronics industry for Industry 4.0.
Interim report January-March 2018, Page 4 of 16
MYCRONIC
| Pattern Generators | Jan-March 18 | Jan-March 17* | Rolling 12* | Jan-Dec 17* |
|---|---|---|---|---|
| Order intake, SEK million | 176 | 313 | 2,006 | 2,143 |
| Order backlog, SEK million | 1,477 | 1,077 | 1,477 | 1,672 |
| Net Sales, SEK million | 371 | 348 | 1,604 | 1,581 |
| Gross profit, SEK million | 278 | 262 | 1,175 | 1,158 |
| Gross margin, % | 75.0% | 75.3% | 73.2% | 73.3% |
| EBIT, SEK million | 221 | 214 | 944 | 936 |
| EBIT margin, % | 59.6% | 61.3% | 58.8% | 59.2% |
| R&D costs, SEK million | -25 | -10 | -83 | -68 |
*Restated for comparability, see Note 1.
During the first quarter of 2018, no new orders for mask writers were received, which led to a decrease in the order intake of 44 percent compared with the corresponding period in 2017, when PG received orders for a mask writer and a mask writer upgrade.
The closing order backlog comprised nine systems, of which seven systems for delivery in 2018 and two systems for delivery in 2019, as well as two major upgrades of previously delivered mask writers.
During the first quarter, one (two) mask writer was delivered – the first Prevision-800. With this delivery, Mycronic's customer Photronics became the first to acquire the world's most advanced mask writer for display manufacturing.
Net sales increased 7 percent to SEK 371 (348) million, representing an increase of 16 percent, based on constant exchange rates. Net sales were adversely impacted by negative currency effects in the amount of SEK 31 million. Recalculated to the same exchange rates that prevailed during the first quarter of 2017, net sales amounted to SEK 402 million.
Gross profit and EBIT, which are affected by volumes and the product mix, amounted to SEK 278 (262) million and SEK 221 (214) million respectively.
Development expenditures increased during the quarter to SEK 25 (10) million and related to the development of the next generation of mask writers and further development of existing products.
In April 2018, the FPS8100 for the multi-purpose segment was launched with improved performance, stability, and writing speeds. This allows for efficient production of photomasks for the manufacture of Fine Metal Masks, which are used for deposition of organic material in the production of OLED displays.
On 24 April 2018, an order for a replacement system based on Prevision-8 was received.
Interim report January-March 2018, Page 5 of 16
MYCRONIC
The electronics industry
The global electronics industry grew by 6.2 percent in 2017 to USD 2,003 billion. For 2017, the semiconductor market demonstrated growth of 21.7 percent, corresponding to USD 412 billion. This rise can be attributed to an increase in the number of semiconductor circuits manufactured and higher prices for memory circuits.
Outlook
Growth for the electronics industry is forecast at 3.0 percent annually for the period 2017-2022¹. Industry segments with the strongest expected growth during this five-year period are electronics for the automotive industry, the aviation industry, consumer electronics, industrial applications and wireless infrastructure. For 2018-2022, the semiconductor market is expected to grow on average 1.4 percent¹ annually.
| Size/growth | 2018F | 2017 | 2016 |
|---|---|---|---|
| Electronics Industry, percentual change ¹ | +4.5% | +6.2% | +0.2% |
| Semiconductor industry, percentual change ¹ | +7.7% | +21.7% | +1.1% |
| SMT, percentual change ² | not available | +32% | +5% |
| Dispensing, USD million³ | not available | 710 | 600 |
| Camera modules, units, million ¹ | 200 | 161 | 107 |
| Displays, USD, billion ⁴ | 122 | 124 | 105 |
| Photomasks, percentual change in value ⁵ | +16% | +16% | -6% |
| Photomasks, units, thousands ⁵ | 19.3 | 18.6 | 16.6 |
Assembly Solutions
SMT & dispensing market area
The global market for SMT equipment has annual sales of approximately USD 4,800 million. The segment SMT robots for component mounting grew 32 percent in 2017 to USD 2,615 million², where markets in China and Japan demonstrated the strongest growth. Dispensing equipment can be found in the production of surface-mounted electronics and in the manufacturing and packaging of electronics components. Turnover on the dispensing equipment market was USD 710 million in 2017.
Mycronic's product portfolio comprises production systems for component mounting, non-contact application of solder paste, inspection equipment, automated storage solutions, equipment for dispensing and coating of circuit boards and high-speed dispensing of solder paste. During the first quarter of 2018, Mycronic introduced a new storage tower for electronics components, in the product series SMD Tower, with increased storage capacity.
Assembly automation market area
A growing segment within the electronics industry is electronics for the automotive industry. One segment of automotive electronics is camera modules for advanced driver support, or Advanced Driver Assistance Systems (ADAS). In 2017, manufacturing of camera modules is estimated to have reached 161 million units, and by 2022 the forecast is for more than 333 million units to be produced globally, corresponding to annual growth of 16 percent on average. Mycronic offers automated production solutions for assembly and testing of camera modules.
Pattern Generators
In 2017, the display market is estimated to have grown by 19 percent to USD 124 billion, which corresponds to 3.7 billion units⁴. This growth is attributable to a stable price trend for existing displays, and a shift towards more advanced AMOLED and high-resolution displays. In 2018, a weaker trend is expected on the display market, and the assessment is for a decline of two percent. This is somewhat lower than forecast in the assessment at year-end 2017, and one of the reasons is a weaker than expected demand for AMOLED displays. Growth of AMOLED displays remains, however, strong and in 2018 the AMOLED market is expected to grow 15 percent to USD 26 billion⁴. The total display area continues to increase as displays get larger and are increasingly being used in new products, for example, cars. One new idea discussed during the quarter was microLED displays, a technology similar to AMOLED, but with another type of light source. Like LCD and AMOLED displays, a driver circuit (TFT backplane) is required to control each pixel and producing a TFT backplane requires photomasks. This display technology is in an early phase of development and any possible manufacturing in larger volumes is still several years in the future. If the technology is successful, it is expected to complement AMOLED and LCD displays⁶.
Photomask market area
The photomask market entered 2017 tentatively, but gradually developed in a more positive direction during the year. The assessment is that the market rebounded in 2017 because of the increased requirement for photomasks for AMOLED, and that it grew by 16 percent to USD 730 million⁵. The forecast from April/May 2017 for 2018 is also positive with growth of 16 percent to USD 850 million. Growth is driven by the greater proportion of advanced photomasks for AMOLED as well as an increasing number of G10 photomasks to meet increasing needs in China. Mycronic is the only supplier of production equipment for the manufacture of advanced photomasks for the display industry. During the first quarter of 2018, the degree of utilization on Mycronic's mask writers was at high levels.
1) Market data from Prismark, latest forecast March 2018. The calculation model for camera modules has been updated in this report to include more sensor applications. The calculation model for the electronics industry has been updated in this report to include new applications within the computer segment. The changes affect both historical and forecasted data.
2) Market data from Protec MDC, January 2018.
3) Market data from Prismark, March 2018 and Mycronic.
4) Market data from IHS, latest forecast April 2018.
5) IHS, April/May 2017.
6) Vole Development, 2017
Interim report January-March 2018, Page 6 of 16
MYCRONIC
Other
The Parent Company
Mycronic AB is the Group's Parent Company.
The Parent Company's net sales during the first quarter amounted to SEK 554 (547) million. EBIT amounted to SEK 209 (186) million. Research and development expenditures are expensed as incurred.
Cash and cash equivalents at the end of the first quarter amounted to SEK 608 million, compared with SEK 596 million at year-end 2017.
The Nomination Committee
The composition of the Nomination Committee for the 2018 Annual General Meeting (AGM) is:
Henrik Blomquist, Bure Equity
Thomas Ehlin, Fjärde AP-fonden
Joachim Spetz, Swedbank Robur Fonder
Patrik Tigerschiöld, Chairman of the Board
The Nomination Committee represents 47 percent of shares and votes, and is tasked with putting forth proposals for Board members and Board chairman, and for remuneration of Board members and auditors.
AGM 2018
Mycronic AB's AGM will be held on 8 May, 2018 at 17:00 in Industrisalen at Näringslivets Hus, Storgatan 19, Stockholm.
Financial information
Mycronic AB (publ) is listed on NASDAQ Stockholm, Mid Cap, MYCR. The information in this report is published in accordance with the EU Market Abuse Regulation. The information was submitted for publication through the contact persons listed below on 26 April, 2018 at 8 am.
Financial reports and press releases are published in Swedish and English. These are available on the website www.mycronic.com.
This report has not been reviewed by the Company's auditors.
Financial calendar
| AGM 2018 | 8 May, 2018 |
|---|---|
| Interim report January-June 2018 | 13 July, 2018 |
| Interim report January-September 2018 | 24 October, 2018 |
Täby, 26 April 2018
Lena Olving,
President and CEO
Contact persons at Mycronic:
Lena Olving,
President and CEO
+46 8 638 5200
[email protected]
Torbjörn Wingårdh
CFO
+46 8 638 5200
[email protected]
Interim report January-March 2018, Page 7 of 16
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
Consolidated net sales including acquisitions will reach SEK 5 billion at the end of the business plan period, four to seven years.
Profitability
EBIT will exceed 15 percent of net sales over a business cycle.
Capital structure
Net debt should be less than 3 times the average EBITDA (earnings before interest, tax, depreciation, and amortization, interest and tax). The average is calculated over three 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 in Täby, north of Stockholm and the Group has subsidiaries in China, France, Germany, Japan, Singapore, South Korea, the Netherlands, Taiwan, United Kingdom and the United States. For more information, visit our website www.mycronic.com.
Mycronic AB (publ) is listed on NASDAQ Stockholm, Mid Cap: MYCR.
- The Company's vision and mission are expressed in the Group's corporate language English.
Mycronic AB (publ)
Mycronic AB (publ)
PO Box 3141
SE-183 03 Täby
Sweden
Tel: +46 8 638 52 00
Fax: +46 8 638 52 90
www.mycronic.com
Reg office: Stockholm
Reg no: 556351-2374
Vat no: SE556351237401
Interim report January-March 2018, Page 8 of 16
MYCRONIC
| Consolidated profit and loss accounts, SEK million | Jan-March 18 | Jan-March 17* | Rolling 12* | Jan-Dec 17* |
|---|---|---|---|---|
| Net sales, Note 1,5 | 750.2 | 678.1 | 3,072.2 | 3,000.1 |
| Cost of goods sold, Note 1 | -311.8 | -316.2 | -1,279.7 | -1,284.1 |
| Gross profit | 438.4 | 361.9 | 1,792.5 | 1,716.0 |
| Research and development, Note 6 | -102.8 | -82.2 | -368.6 | -348.0 |
| Selling expenses | -81.1 | -69.9 | -321.0 | -309.8 |
| Administrative expenses | -58.1 | -39.8 | -199.7 | -181.4 |
| Other income and expenses, Note 1 | -0.3 | -12.5 | -20.3 | -32.5 |
| EBIT | 196.1 | 157.4 | 882.9 | 844.2 |
| Financial income and expenses | -1.7 | -2.7 | -7.6 | -8.6 |
| Profit/loss before tax | 194.4 | 154.7 | 875.3 | 835.6 |
| Tax, Note 1 | -53.1 | -43.4 | -222.0 | -212.3 |
| Net Profit/loss | 141.3 | 111.3 | 653.3 | 623.4 |
| Earnings per share before/after dilution, SEK | 1.44 | 1.14 | 6.67 | 6.37 |
| Average number of shares, thousand | 97,917 | 97,917 | 97,917 | 97,917 |
| Results attributable to owners of the Parent Company | 141.2 | 111.3 | 653.7 | 623.8 |
| Results attributable to non-controlling interests | 0.1 | 0.0 | -0.3 | -0.4 |
| 141.3 | 111.3 | 653.4 | 623.4 | |
| SEK, million | Jan-March 18 | Jan-March 17* | Rolling 12* | Jan-Dec 17* |
| --- | --- | --- | --- | --- |
| Net Profit/loss | 141.3 | 111.3 | 653.3 | 623.4 |
| Other comprehensive income | ||||
| Items not to be reclassified to profit/loss, after tax | ||||
| Actuarial loss from defined benefits to employees | - | - | -3.2 | -3.2 |
| Items to be reclassified to profit/loss, after tax | ||||
| Translation differences at translating foreign entities | 43.4 | -2.9 | -2.0 | -48.3 |
| Changes in cash flow hedges | -11.7 | 4.2 | -6.5 | 9.4 |
| Total comprehensive income | 173.0 | 112.6 | 641.6 | 581.3 |
| Total comprehensive income attributable to owners of the Parent Company | 172.9 | 112.6 | 641.9 | 581.7 |
| Total comprehensive income attributable to non-controlling interests | 0.1 | 0.0 | -0.3 | -0.4 |
| 173.0 | 112.6 | 641.6 | 581.3 |
*Restated for comparability, see Note 1.
| Consolidated cash flow statements, SEK million | Jan-March 18 | Jan-March 17 | Rolling 12 | Jan-Dec 17 |
|---|---|---|---|---|
| Cash flow from operating activities | ||||
| before changes in working capital | 160.8 | 130.5 | 843.1 | 812.8 |
| Change in working capital | -158.7 | 70.9 | -58.6 | 171.0 |
| Cash flow from operating activities | 2.2 | 201.4 | 784.5 | 983.8 |
| Cash flow from investing activities | -14.9 | -40.8 | -155.2 | -181.1 |
| Cash flow from financing activities | 0.0 | -1.2 | -192.4 | -193.6 |
| Cash flow for the period | -12.7 | 159.4 | 436.9 | 609.1 |
| Cash and cash equivalents, opening balance | 812.7 | 208.6 | 368.7 | 208.6 |
| Exchange difference for cash and cash equivalents | 8.5 | 0.7 | 2.8 | -5.0 |
| Cash and cash equivalents, closing balance | 808.4 | 368.7 | 808.4 | 812.7 |
Interim report January-March 2018, Page 9 of 16
MYCRONIC
Consolidated statements of financial position
| SEK, million | 31 March 18 | 31 March 17* | 31 Dec 17* |
|---|---|---|---|
| ASSETS | |||
| Fixed assets | |||
| Intangible assets | 1,067.8 | 1,070.5 | 1,037.0 |
| Tangible assets | 75.7 | 59.4 | 69.5 |
| Non-current receivables | 20.6 | 21.6 | 17.1 |
| Deferred tax assets, Note 1 | 72.0 | 62.4 | 68.8 |
| Total fixed assets | 1,236.1 | 1,213.9 | 1,192.4 |
| Current assets | |||
| Inventories | 715.1 | 551.7 | 588.6 |
| Trade receivables | 518.1 | 397.4 | 512.4 |
| Other current receivables | 123.3 | 104.2 | 138.4 |
| Cash and cash equivalents | 808.4 | 368.7 | 812.7 |
| Total current assets | 2,165.0 | 1,422.0 | 2,052.0 |
| Total assets | 3,401.1 | 2,635.9 | 3,244.4 |
| EQUITY AND LIABILITIES | |||
| Equity, Note 1 | 1,953.2 | 1,506.9 | 1,780.2 |
| Liabilities | |||
| Other non-current liabilities | 234.6 | 264.5 | 269.3 |
| Deferred tax liabilities | 114.3 | 75.7 | 118.8 |
| Total long-term liabilities | 349.0 | 340.2 | 388.1 |
| Short-term interest-bearing liabilities | 13.3 | 9.5 | 12.6 |
| Trade payables | 200.7 | 130.4 | 154.7 |
| Other current liabilities, Note 1 | 885.0 | 648.9 | 908.8 |
| Total current liabilities | 1,098.9 | 788.8 | 1,076.1 |
| Total liabilities | 1,447.9 | 1,129.0 | 1,464.2 |
| Total equity and liabilities | 3,401.1 | 2,635.9 | 3,244.4 |
Consolidated statement of changes in equity
| SEK, million | Jan-March 18 | Jan-March 17* | Jan-Dec 17* |
|---|---|---|---|
| Opening balance, Note 1 | 1,780.2 | 1,394.3 | 1,394.3 |
| Dividend | - | - | -195.8 |
| Transactions with non-controlling interests | - | - | 0.4 |
| Total comprehensive income | 173.0 | 112.6 | 581.3 |
| Closing balance | 1,953.2 | 1,506.9 | 1,780.2 |
| Of which holdings of non-controlling interests | 0.1 | 0.0 | 0.0 |
| Other key figures | Jan-March 18 | Jan-March 17* | Jan-Dec 17* |
| --- | --- | --- | --- |
| Equity per share, SEK | 19.95 | 15.39 | 18.18 |
| Return on equity (rolling 4Q), % | 37.8% | 43.7% | 39.1% |
| Return on capital employed (rolling 4Q), % | 50.7% | 59.0% | 52.6% |
| Net cash, SEK million | 795.1 | 359.2 | 800.0 |
| Average number of employees | 1030 | 919 | 962 |
Other than key figures presented on page 1.
*Restated for comparability, see Note 1.
Interim report January-March 2018, Page 10 of 16
MYCRONIC
| Profit/loss accounts in summary, Parent Company, SEK million | Jan-March 18 | Jan-March 17* | Rolling 12* | Jan-Dec 17* |
|---|---|---|---|---|
| Net sales, Note 1 | 553.5 | 547.2 | 2,341.2 | 2,334.9 |
| Cost of goods sold, Note 1 | -217.5 | -214.7 | -939.7 | -936.9 |
| Gross profit | 336.0 | 332.5 | 1,401.5 | 1,398.0 |
| Other operating expenses, Note 1 | -127.3 | -146.9 | -574.9 | -594.5 |
| EBIT | 208.8 | 185.6 | 826.6 | 803.5 |
| Result from financial items | 1.3 | 0.2 | 5.9 | 4.8 |
| Profit/loss after financial items | 210.0 | 185.8 | 832.5 | 808.3 |
| Appropriations | - | - | -204.0 | -204.0 |
| Profit/loss before tax | 210.0 | 185.8 | 628.5 | 604.3 |
| Tax, Note 1 | -49.1 | -40.9 | -143.1 | -134.9 |
| Net Profit/loss | 161.0 | 144.9 | 485.4 | 469.4 |
| Total comprehensive income | 161.0 | 144.9 | 485.4 | 469.4 |
| Balance sheets in summary, Parent Company, SEK million | 31 March 18 | 31 March 17* | 31 Dec 17* | |
| --- | --- | --- | --- | |
| ASSETS | ||||
| Fixed assets | ||||
| Intangible and tangible assets | 40.7 | 37.9 | 37.4 | |
| Financial assets, Note 1 | 1,318.0 | 1,203.2 | 1,281.2 | |
| Total fixed assets | 1,358.7 | 1,241.2 | 1,318.6 | |
| Current assets | ||||
| Inventories | 434.3 | 315.1 | 346.6 | |
| Current receivables | 418.6 | 332.1 | 426.6 | |
| Cash and cash equivalents | 608.3 | 208.5 | 595.8 | |
| Total current assets | 1,461.1 | 855.6 | 1,369.0 | |
| TOTAL ASSETS | 2,819.8 | 2,096.8 | 2,687.6 | |
| EQUITY AND LIABILITIES | ||||
| Equity, Note 1 | 1,469.4 | 1,179.8 | 1,308.4 | |
| Untaxed reserves | 410.8 | 206.8 | 410.8 | |
| Other non-current liabilities | 199.7 | 167.2 | 184.6 | |
| Current liabilities, Note 1 | 740.0 | 543.0 | 783.8 | |
| TOTAL EQUITY AND LIABILITIES | 2,819.8 | 2,096.8 | 2,687.6 |
*Restated for comparability, see Note 1.
Note 1 - Accounting principles
This interim report for the Group has been prepared in accordance with IAS 34, Interim Financial Reporting, as well as applicable parts of the Annual Accounts Act. The report for the Parent Company has been prepared in accordance with Chapter 9 of the Annual Accounts Act. For the Group and the Parent Company, the accounting principles, estimates and assumptions used in this report are in accordance with the most recent annual report.
The character of financial assets and liabilities are essentially the same as they were on 31 December, 2017. As was the case at the end of 2017, reported values are the same as fair values.
IFRS 9, Financial Instruments, enters into force for the financial year beginning 1 January, 2018 or later. The standard has not had any material effect on the Group's financial statements.
IFRS 15, Revenue from Contracts with Customers, replaces all previously published standards and interpretations for managing revenues with a single model for revenue recognition. The standard is being applied by the Mycronic Group and the Parent Company as of 1 January, 2018 with full retrospective. When applying the new standard, system sales within Pattern Generators are divided into separate performance obligations, with the result that a minor portion of system revenue
Interim report January-March 2018, Page 11 of 16
MYCRONIC
will be reported over time and later than for the previous standard. The new standard's effects on the comparative figures in this report are shown below. All adjustments relate to business area PG.
| Effect on Group and Parent Company income statements, SEK million | Jan-March 17 | Rolling 12 | Jan-Dec 17 |
|---|---|---|---|
| Net sales | 1.8 | -2.9 | -1.1 |
| Cost of goods sold | -1.8 | -1.7 | -3.5 |
| Other income and expenses | -1.1 | 2.0 | 0.9 |
| EBIT | -1.1 | -2.6 | -3.7 |
| Tax | 0.2 | 0.6 | 0.8 |
| Net Profit/loss | -0.9 | -2.0 | -2.9 |
| Effect on earnings per share | -0.01 | -0.02 | -0.03 |
| Entire effect is attributable to owners of the Parent Company | |||
| Effect on Group statements of financial position and Parent Company's balance sheets, SEK million | 31 March 17 | 31 Dec 17 | |
| --- | --- | --- | |
| ASSETS | |||
| Deferred tax assets | 5.1 | 5.7 | |
| Total assets | 5.1 | 5.7 | |
| EQUITY AND LIABILITIES | |||
| Other current liabilities | 23.3 | 25.9 | |
| Total liabilities | 23.3 | 25.9 | |
| Accumulated profit/loss | -17.3 | -17.3 | |
| Net profit for the year | -0.9 | -2.9 | |
| EQUITY | -18.2 | -20.2 | |
| Total equity and liabilities | 5.1 | 5.7 | |
| Effect on Group and business area PG order backlog, SEK million | 34.9 | 35.8 |
Note 2 - Transactions with related parties
Transactions with related parties are described in Note 12 of the 2017 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, and these are described in the 2017 Annual Report. Mycronic is exposed to country-specific risks such as political decisions or overarching changes to the regulatory framework on partially new markets, both geographically and product-wise.
Note 4 - Events after the end of the quarter
On 18 April, 2018, business area Pattern Generators launched the FPS8100 for the multi-purpose segment, with improved performance, stability, and write speeds, allowing for efficient production of photomasks for the manufacture of Fine Metal Masks. On 24 April 2018, an order for a replacement system based on Prevision-8 was received.
Interim report January-March 2018, Page 12 of 16
MYCRONIC
Note 5 – Income and segment reporting
Revenue by geographical market,
| SEK, million | Jan-March 18 | Jan-March 17* | Rolling 12* | Jan-Dec 17* |
|---|---|---|---|---|
| EMEA | 170.2 | 115.1 | 622.1 | 566.9 |
| North and South America | 94.8 | 112.6 | 347.7 | 365.5 |
| Asia | 485.2 | 450.4 | 2,102.4 | 2,067.6 |
| 750.2 | 678.1 | 3,072.2 | 3,000.1 | |
| SEK, million | Jan-March 18 | Jan-March 17* | Rolling 12* | Jan-Dec 17* |
| Net sales | ||||
| Assembly Solutions | 379.0 | 330.1 | 1,468.0 | 1,419.1 |
| Pattern Generators | 371.2 | 348.0 | 1,604.2 | 1,581.0 |
| 750.2 | 678.1 | 3,072.2 | 3,000.1 | |
| EBIT | ||||
| Assembly Solutions | -24.2 | -55.1 | -56.7 | -87.6 |
| Pattern Generators | 221.3 | 213.5 | 943.6 | 935.9 |
| Amortization of previously acquired intangible assets | -1.0 | -1.0 | -4.0 | -4.0 |
| Group | 196.1 | 157.4 | 882.9 | 844.2 |
*Restated for comparability, see Note 1.
Note 6 – Research and development expenses
Research and development costs
| SEK, million | Jan-March 18 | Jan-March 17 | Rolling 12 | Jan-Dec 17 |
|---|---|---|---|---|
| R&D expenditures | ||||
| Assembly Solutions | -72.5 | -72.8 | -266.7 | -267.0 |
| Pattern Generators | -25.4 | -10.2 | -83.5 | -68.3 |
| -97.9 | -83.0 | -350.2 | -335.3 | |
| Capitalization of development costs | ||||
| Assembly Solutions | 0.0 | 6.0 | 15.0 | 21.0 |
| Amortization of capitalized development | ||||
| Assembly Solutions | -1.8 | -2.9 | -23.0 | -24.1 |
| -1.8 | 3.1 | -8.0 | -3.1 | |
| Amortization of acquired technology | ||||
| Assembly Solutions | -3.1 | -2.4 | -10.3 | -9.6 |
| Reported cost | -102.8 | -82.2 | -368.6 | -348.0 |
Interim report January-March 2018, Page 13 of 16
MYCRONIC
Note 7 – Definitions and reconciliation alternative performance measures, etc.
The European Securities and Markets Authority (ESMA) has published guidelines regarding alternative performance measures for publicly traded companies. Alternative performance measures relate to financial key figures used by management to control and evaluate the Group's business, and which cannot be directly inferred from the financial statements. These ratios are also considered to be of interest to external analysts and investors who monitor the Company. For definitions of other key ratios please refer to the Annual Report.
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 divided by the number of shares at the end of the period. 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 shares at the end of the period. Used to measure the value of the Company per share.
Net cash and cash equivalents
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
Increase of 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 the return on capital needed for operations
Return on equity
Net profit/loss as a percentage of average equity. Used to demonstrate the return on shareholder capital over time.
Underlying EBIT and underlying EBIT margin
EBIT excluding acquisition-related costs. These costs include expensing of acquired inventories at fair value, amortization of acquired intangible assets, revaluation of earn-outs and transaction expenses. The underlying EBIT margin is underlying EBIT as a percentage of net sales.
Interim report January-March 2018, Page 14 of 16
MYCRONIC
| Return on equity | Jan-March 18 | Jan-March 17* | Rolling 12* | Jan-Dec 17* |
|---|---|---|---|---|
| Net profit/loss (rolling 4Q) | 653.3 | 613.7 | 653.3 | 623.4 |
| Average shareholders' equity | 1,730.0 | 1,403.0 | 1,730.0 | 1,595.9 |
| 37.8% | 43.7% | 37.8% | 39.1% | |
| Return on capital employed | ||||
| Profit/loss before tax (rolling 4Q) | 875.3 | 812.6 | 875.3 | 835.6 |
| Financial expenses | 8.2 | 4.7 | 8.2 | 9.4 |
| Profit/loss before financial expenses | 883.5 | 817.3 | 883.5 | 845.0 |
| Average balance sheet total | 3,018.5 | 2,356.5 | 3,018.5 | 2,999.9 |
| Average non-interest-bearing liabilities | 1,277.1 | 971.3 | 1,277.1 | 1,392.3 |
| Average capital employed | 1,741.5 | 1,385.2 | 1,741.5 | 1,607.6 |
| 50.7% | 59.0% | 50.7% | 52.6% | |
| Book-to-bill | ||||
| Order intake | 655.9 | 652.7 | 3,570.4 | 3,567.3 |
| Net sales | 750.2 | 678.1 | 3,072.2 | 3,000.1 |
| 0.9 | 1.0 | 1.2 | 1.2 | |
| EBITDA | ||||
| EBIT | 196.1 | 157.4 | 882.9 | 844.2 |
| Depreciation/Amortization | 15.4 | 14.3 | 75.8 | 74.7 |
| 211.5 | 171.7 | 958.8 | 919.0 | |
| Underlying EBIT | ||||
| EBIT | 196.1 | 157.4 | 882.9 | 844.2 |
| Acquisition-related costs | ||||
| Cost of goods sold | 1.1 | 37.9 | 5.6 | 42.3 |
| Operating expenses | 18.4 | 11.9 | 71.0 | 64.5 |
| 215.6 | 207.2 | 959.5 | 951.0 | |
| Equity per share | ||||
| Equity at balance day | 1,953.2 | 1,506.9 | 1,953.2 | 1,780.2 |
| No. of shares at end of period, thousand | 97,917 | 97,917 | 97,917 | 97,917 |
| 19.95 | 15.39 | 19.95 | 18.18 | |
| Earnings per share | ||||
| Net Profit/loss | 141.3 | 111.3 | 653.3 | 623.4 |
| No. of shares at end of period, thousand | 97,917 | 97,917 | 97,917 | 97,917 |
| 1.44 | 1.14 | 6.67 | 6.37 | |
| Net cash, SEK million | ||||
| Cash and cash equivalents | 808.4 | 368.7 | 808.4 | 812.7 |
| Interest-bearing liabilities | -13.3 | -9.5 | -13.3 | -12.6 |
| 795.1 | 359.2 | 795.1 | 800.0 |
*Restated for comparability, see Note 1.
Interim report January-March 2018, Page 15 of 16
MYCRONIC
| Quarterly data | Q1-18 | Q4-17* | Q3-17* | Q2-17* | Q1-17* | Q4-16 | Q3-16 | Q2-16 |
|---|---|---|---|---|---|---|---|---|
| Order Intake Assembly Solutions | 479.9 | 374.4 | 351.4 | 358.6 | 339.9 | 389.2 | 219.0 | 199.3 |
| Order Intake Pattern Generators | 176.0 | 197.6 | 1,522.6 | 109.9 | 312.8 | 128.9 | 148.4 | 575.4 |
| 655.9 | 571.9 | 1,874.0 | 468.5 | 652.7 | 518.1 | 367.5 | 774.7 | |
| Order Backlog Assembly Solutions | 391.1 | 290.3 | 371.5 | 280.4 | 276.2 | 266.4 | 65.4 | 57.0 |
| Order Backlog Pattern Generators | 1,477.1 | 1,672.3 | 1,926.2 | 633.8 | 1,077.2 | 1,075.6 | 1,633.5 | 1,771.3 |
| 1,868.2 | 1,962.6 | 2,297.7 | 914.2 | 1,353.4 | 1,342.0 | 1,698.9 | 1,828.3 | |
| Net Sales Assembly Solutions | 379.0 | 472.9 | 261.7 | 354.4 | 330.1 | 329.1 | 210.6 | 193.6 |
| Net Sales Pattern Generators | 371.2 | 452.7 | 229.4 | 550.8 | 348.1 | 686.8 | 286.2 | 269.0 |
| 750.2 | 925.6 | 491.1 | 905.2 | 678.1 | 1,015.9 | 496.8 | 462.5 | |
| Gross Profit Assembly Solutions | 160.2 | 207.3 | 102.0 | 148.3 | 99.9 | 118.3 | 98.2 | 91.4 |
| Gross Profit Pattern Generators | 278.2 | 364.0 | 159.1 | 373.3 | 262.0 | 546.9 | 197.3 | 169.7 |
| 438.4 | 571.3 | 261.1 | 521.6 | 361.9 | 665.2 | 295.5 | 261.2 | |
| Gross Margin Assembly Solutions | 42.3% | 43.8% | 39.0% | 41.8% | 30.3% | 35.9% | 46.6% | 47.2% |
| Gross Margin Pattern Generators | 75.0% | 80.4% | 69.4% | 67.8% | 75.3% | 79.6% | 68.9% | 63.1% |
| 58.4% | 61.7% | 53.2% | 57.6% | 53.4% | 65.5% | 59.5% | 56.5% | |
| R&D expenses Assembly Solutions | -77.4 | -79.6 | -64.5 | -63.6 | -72.0 | -91.2 | -62.0 | -73.4 |
| R&D expenses Pattern Generators | -25.4 | -25.9 | -15.1 | -17.1 | -10.2 | -20.4 | -5.7 | -17.5 |
| Total R&D expenses | -102.8 | -105.4 | -79.7 | -80.6 | -82.2 | -111.7 | -67.7 | -90.9 |
| Selling expenses | -81.1 | -92.9 | -66.8 | -80.1 | -69.9 | -85.2 | -53.4 | -49.2 |
| Administrative expenses | -58.1 | -60.8 | -39.8 | -41.1 | -39.8 | -58.2 | -31.7 | -23.3 |
| Other income/expenses | -0.3 | -6.2 | -8.9 | -4.9 | -12.5 | -4.9 | 5.7 | 8.1 |
| EBIT | 196.1 | 306.0 | 65.9 | 314.9 | 157.4 | 405.2 | 148.4 | 105.9 |
| Of which EBIT Assembly Solutions | -24.2 | 8.5 | -44.6 | 3.6 | -55.1 | -71.5 | -11.4 | -21.5 |
| Of which EBIT Pattern Generators | 221.3 | 298.5 | 111.6 | 312.3 | 213.5 | 477.7 | 160.8 | 127.8 |
| EBIT margin | 26.1% | 33.1% | 13.4% | 34.8% | 23.2% | 39.9% | 29.9% | 22.9% |
| Equity per share after tax | 19.95 | 18.18 | 15.62 | 15.55 | 15.39 | 14.42 | 11.35 | 10.07 |
| Net earnings per share | 1.44 | 2.32 | 0.45 | 2.46 | 1.14 | 3.12 | 1.17 | 0.83 |
| Closing share price | 106.80 | 85.00 | 111.75 | 76.75 | 91.75 | 98.00 | 107.00 | 62.75 |
*Restated for comparability, see Note 1.
Interim report January-March 2018, Page 16 of 16