Mycronic — Interim / Quarterly Report 2016

Jul 23, 2020

MYCRONIC
When passion meets innovation
Q4
PRESS RELEASE 390E

Mycronic, fourth quarter and full-year 2016

2016 – a record year and decision on new financial goals

Mycronic reports a record year in 2016 with acquired companies Axxon and AEi included from the fourth quarter. Order intake and net sales rose 13 and 28 percent respectively. The EBIT margin reached 30 percent. Demand for the Group's products is favorable thanks to product launches, several of which broaden the addressable market. Major investments were made in product development for future growth. The acquisitions complement and broaden the offering on several segments within the electronics industry.

Fourth quarter October-December 2016

• Order intake reached SEK 518 (838) million
• Net sales reached till SEK 1,016 (621) million
• EBIT was SEK 405 (251) million
• Profit per share was SEK 3.12 (1.99)

Full-year January-December 2016

• Order intake reached SEK 2,455 (2,179) million
• Net sales reached SEK 2,319 (1 815) million
• EBIT was SEK 691 (540) million
• Profit per share was SEK 5.38 (4.52)
• Dividend proposal to AGM of SEK 2.00 (1.50) per share, according to dividend policy.

Outlook 2017

It is the Board's assessment that net sales in 2017 will be at the level SEK 2,800 million.

CEO comments

In 2016, we lived up to high expectations. We can now report record high order intake, net sales and EBIT for the Mycronic Group, which include contributions from acquisitions as of respective acquisition dates.

We continued to deliver production solutions to our customers to make their production efficient. The global market for surface mount equipment did not develop as we had hoped this past year, but it strengthened during the latter part of the year. It was a strong year for mask writers with orders for nine systems and sales of eight systems. At the same time, we made major initiatives within product development to further strengthen our competitive edge. Expenses for these investments are substantial, SEK 342 million, but absolutely crucial for future growth.

EBIT for 2016 was SEK 691 million, and the EBIT margin was 30 percent - fantastic year.

In three years, we more than doubled net sales and the EBIT margin has been far above 10 percent. So I am proud to say that we reached our financial goals faster than we thought possible when we established them in 2014. Thus the Board and the corporate management team present new financial goals; we intend to double net sales once again while maintaining a good profitability.

During 2016, we made three important acquisitions:

The German company RoyoTech ensures our access to a strategically important product, the SMD Tower, a storage solution for electronic components and a cornerstone in the Mycronic 4.0 concept for managing complex production environments in modern electronics manufacturing.

Through the Chinese company Axxon, we complement our unique jet printing business with a leading actor on the significantly larger dispensing market. Together we are now one of the five largest actors in the world.

Finally, through American AEi, we broaden our operations. AEi offers equipment for mounting of camera modules for the advanced driver support systems which are becoming increasingly common in modern cars. This is an adjacent market segment that is demonstrating rapid growth and where there is good potential for profitability.

These acquisitions broaden our product offering and we can address a greater part of the electronics industry, creating good opportunities for future growth. To demonstrate the connection to a significantly larger part of the electronics industry we are now renaming business area SMT to Assembly Solutions.

Lena Olving, CEO and President

Q4 and Full Year, page 1 of 17

---

MYCRONIC

Financial performance, Group

SEK million	Oct-Dec 16	Oct-Dec 15	Jan-Dec 16	Jan-Dec 15
Order intake	518.1	837.9	2,454.5	2,178.8
Order backlog	1,342.0	1,065.9	1,342.0	1,065.9
Net sales	1,015.9	621.3	2,319.3	1,815.0
Gross profit	665.2	404.7	1,410.2	1,075.6
Gross margin	65%	65%	61%	59%
EBIT	405.2	251.4	691.0	540.3
EBIT margin	40%	40%	30%	30%
Earnings per share, SEK	3.12	1.99	5.38	4.52
Cash flow	-576.5	199.6	-698.6	232.6

The fourth quarter and full-year 2016 include Axxon and AEi from the respective acquisition day.

Fourth quarter October-December 2016

During the fourth quarter, the operations of acquired companies Axxon and AEi were added. The order intake as well as all revenues and costs are affected as of the respective acquisition dates.

The order intake comprises equipment from the new Assembly Solutions and consolidated aftermarket. No orders for mask writers were received in the fourth quarter, compared with two in the fourth quarter last year.

Net sales included three (one) mask writers and positive currency effects of SEK 25 (70) million. Recalculated to the same exchange rates which prevailed during the fourth quarter 2015, net sales reached SEK 991 million.

Gross profit corresponded to a gross margin of 65 (65) percent.

The EBIT margin was 40 (40) percent. EBIT was positively affected by the number of mask writers delivered and at the same time burdened by higher operating costs. Development costs increased SEK 31 million, and related to continued efforts in product development within SMT as well as product development in acquired operations. Sales and administrative expenses increased SEK 76 million, primarily because of acquisition activities, build-up of the sales organization and operating expenses in acquired operations. Overall, the operating profit was burdened with costs related to acquisitions of SEK 43 million. These primarily include the expensing of acquired inventories at fair value, amortization of acquired intangible assets and transaction costs.

The Group reports positive cashflow from operations. Investment activities claimed SEK 714 million, of which SEK 698 million related to acquisitions.

Full-year January-December 2016

The order intake as well as all revenues and costs are affected as of respective acquisition dates.

The order intake included nine (nine) mask writers, SMT equipment, aftermarket and the order intake in the acquired companies. The order backlog, SEK 1,342 million, included ten mask writers.

Net sales comprised delivery of eight (three) mask writers and positive currency effects in the amount of SEK 50 (199) million. Recalculated to the same exchange rates which prevailed in 2015, sales reached SEK 2,269 million.

Gross profit corresponded to a gross margin of 61 (59) percent. This improvement over the previous year is primarily due to deliveries of mask writers.

The EBIT margin was 30 (30) percent. Higher mask writer sales compared to 2015 contributed to an increase in EBIT. At the same time, operating expenses rose SEK 187 million. Development expenses increased SEK 82 million due to the high pace in SMT product development. Sales and administration expenses rose SEK 105 million because of acquisition activities, build-up of the sales organization both geographically and product-wise as well as operating expenses in acquired operations. Overall, the operating profit was burdened with costs related to acquisitions of SEK 44 million. These primarily include the expensing of acquired inventories at fair value, amortization of acquired intangible assets and transaction costs.

Taxes amounted to SEK 163 (98) million, the major part related to current tax in the Parent company.

Cashflow and financial position

Consolidated cash and cash equivalents at the end of 2016 amounted to SEK 209 (898) million. Cash flow was SEK -699 (233) million. Cash flow from operations generated SEK 462 million and related to positive earnings, while working capital claimed SEK 193 million, primarily due to an increase in capital tied up in inventory and trade receivables. Investments, primarily acquisitions, claimed SEK 768 million and dividends paid out totalled SEK 392 million.

Q4 and Full Year, page 2 of 17

---

MYCRONIC

Assembly Solutions

SEK million	Oct-Dec 16	Oct-Dec 15	Jan-Dec 16	Jan-Dec 15
Order intake and net sales
Order intake	389.2	202.4	959.7	829.4
Order backlog	266.4	51.8	266.4	51.8
Net sales	329.1	220.5	886.0	843.6
Financial performance
Gross profit	118.3	96.2	369.6	383.7
Gross margin	36%	44%	42%	45%
EBIT	-71.5	-18.3	-157.3	-16.4
EBIT margin	-22%	-8%	-18%	-2%
Development costs	-91.2	-69.1	-291.3	-224.8

The fourth quarter and full-year 2016 include Axxon and AEi from the respective acquisition day.

Financial performance full-year 2016

The operations of Axxon and AEi were added during the fourth quarter. The acquisitions impacted the order intake, revenues and expenses as of each respective date of acquisition.

During the first half-year, the global market for surface mount equipment declined 7 percent, followed by a recovery which resulted in growth of 5 percent for full-year. Mycronic reports a reduction in the order intake and net sales of 4 and 6 percent respectively for full-year within the corresponding market segment. Acquisitions contributed SEK 90 million in net sales. Mounting robots for components, MY200, accounted for 60 (80) percent of system sales while dispensing equipment accounted for 40 (20) percent. Axxon contributed to the increase in the percentage of sales attributable to dispensing equipment.

Net sales were impacted positively by currency effects in the amount of SEK 4 (93) million. Recalculated to the same exchange rates which prevailed in 2015, sales reached SEK 882 million.

Gross profit corresponded to a gross margin of 42 (45) percent. Gross profit is charged by costs related to valuation of acquired inventories at fair value and a negative gross margin in AEi due to low sales from acquisition date. The gross margin for SMT equipment remained the same as in 2015 - 45 percent. The gross margin in Axxon's underlying business reached the same level.

EBIT, corresponding to an operating margin of -18 (-2) percent, was affected by lower sales volumes and increased investments in product development. Development expenditures increased SEK 64 million and related to investments in growth and product development in the acquired operations. Development was capitalized in the amount of SEK 8 (8) million while amortization of previously capitalized development amounted to SEK 12 (12) million.

Sales and administration expenses increased due to an increase in marketing activities, acquisition activities and the build-up of the sales organization.

Market overview

The assessment for the global electronics industry in 2016 is for a decline of 0.7 percent to a turnover of just over USD 1,850 billion (Prismark, December 2016). There are areas where positive growth is expected, such as automotive and consumer electronics, and electronics for applications within servers and data storage. The semiconductor market, which is a part of the electronics industry, showed a weak start in 2016. After a strong second half-year, the assessment for growth for full-year 2016 is 1.5 percent (Prismark, December 2016).

The global market for SMT equipment experienced a negative trend during the first half of 2016. A strong second half-year reversed this trend, resulting in growth of 5 percent for full-year 2016. China and the rest of Asia, excluding Japan, are primarily showing this positive trend. (PROTEC MDC, January 2017).

In 2016, Mycronic introduced software solutions as part of its Mycronic 4.0 production concept, a complete solution for the intelligent factory. The launch of Mycronic's MY600, with increased functionality for dispensing of a broad spectrum of mounting fluids, has continued globally, creating opportunities within several markets which are new for Mycronic, including applications for consumer electronics. During the second half-year, Mycronic received a multiple systems order from an Asian high-volume customer.

In 2016, Mycronic acquired three companies with production solutions for the global electronics industry. Together with previously existing operations, a new business area has been created - Assembly Solutions. Through these acquisitions, the company broadens its operations within existing segments as well as within adjacent market segments.

Q4 and Full Year, page 3 of 17

---

MYCRONIC

The German company RoyoTech develops and manufactures the SMD Tower, an intelligent storage solution for electronics components. Today, there are approximately 1,200 SMD Towers installed at customer sites around the world.

Axxon offers dispensing equipment and is a leading player on the Chinese market, a market which accounts for around 40 percent of the global dispensing market. Mycronic's addressable market is currently valued at USD 400 million (Prismark and Mycronic). Through this acquisition, Mycronic complements its product offering, and creates a complete and competitive offering within dispensing. Together with Mycronic's existing product offering within jet printing technology, Mycronic and Axxon become one of the five largest actors in the world.

AEi offers market-leading solutions for mounting of camera modules. The largest segment for AEI's systems is the automotive industry where camera systems are used in Advanced Driver Assistance Systems (ADAS) for advanced driver support in today's modern vehicles. The market for camera modules for ADAS is expected to grow approximately 30 percent annually in the period 2015-2020 (Prismark, June 2016).

The electronics industry is estimated to grow over time at the same pace as global GDP growth. A positive trend on the global market for surface mount systems during the latter part of 2016, together with the broadening that the year's acquisitions have meant for Mycronic, creates good opportunities for growth within the new, larger business area Assembly Solutions.

Q4 and Full Year, page 4 of 17

---

MYCRONIC

Pattern Generators

SEK million	Oct-Dec 16	Oct-Dec 15	Jan-Dec 16	Jan-Dec 15
Order intake and net sales
Order intake	128.9	635.5	1,494.9	1,349.4
Order backlog	1,075.6	1,014.0	1,075.6	1,014.0
Net sales	686.8	400.9	1,433.3	971.4
Financial performance
Gross profit	546.9	308.4	1,040.6	691.9
Gross margin	80%	77%	73%	71%
EBIT	477.7	270.2	851.2	558.6
EBIT margin	70%	67%	59%	58%
Development costs	-20.4	-11.1	-57.1	-41.9

Financial performance full-year 2016

The order intake comprised nine (nine) mask writers and aftermarket. The order backlog amounted to SEK 1,076 million at the end of 2016 and comprised a total of ten systems, of which nine are scheduled for delivery in 2017.

Eight mask writers were delivered in 2016, of which five were for display applications. In 2015, three systems were delivered, with two for display applications. Net sales in 2016 were impacted positively by currency effects in the amount of SEK 46 (105) million. Recalculated to the same exchange rates which prevailed during the corresponding period last year, sales reached SEK 1,387 million.

Gross profit corresponded to a gross margin of 73 (71) percent. The growing aftermarket business included several major upgrades in 2016.

The operating margin of 59 (58) percent was impacted by the product-mix of mask writers delivered. Development expenditures amounted to SEK 57 (42) million and included development of the next generation mask writer for advanced display applications, development of the FPS which was launched in 2016, as well as sustained product development.

Market overview

The total display market is estimated to have fallen 10 percent in 2016 to USD 102 billion. This is a significantly greater decline than the original estimate of minus 6 percent from the beginning of 2016. Some reasons behind the weak development and the downward revision are lower prices for TV and mobile displays, and weak demand for LCD displays and tablets. The market remains positive for several of the more advanced segments such as AMOLED and high-resolution displays. The number of displays produced is estimated to have fallen somewhat in 2016 from around 3.7 billion to around 3.6 billion units. (IHS, January 2017).

The trend on the market for photomasks for displays continues in a positive direction. Sales in 2015 reached approximately 17,000 units at a value of USD 610 million. During 2016-2019, the number of photomasks for display manufacturing is estimated to grow 3 percent annually. Turnover for the period is expected to show annual growth of 5 percent to approximately USD 750 million in 2019 (IHS, April 2016). Several factors impact the market positively. High-resolution displays and the shift toward AMOLED is driving technology development and demand for complex photomasks. Additional reasons behind the increase in demand for photomasks is the growing number of different types of displays, and that several new factories for display production are brought into operation, primarily in China.

The degree of utilization on Mycronic's mask writers has been lower during the second half of 2016 compared with the extremely high level of utilization during the first half-year. During the first half-year, Japan suffered an earthquake in an area where photomask production takes place. This led to a reduction in manufacturing capacity for a time. The shift toward AMOLED also affects the degree of utilization temporarily. During the reconstruction phase of factories from LCD to AMOLED, capacity is reduced. The assessment is that the new AMOLED factories will start consuming photomasks in greater volumes during the second quarter of 2017.

The trend toward more complex photomasks for high-resolution displays is driving demand for Prevision capacity. High-resolution mobile displays in combination with AMOLED is driving demand for capacity from the Prevision-80 (P-80). Producing the most high-resolution displays in the future will require a new generation of mask writers. During the second quarter of 2016, Mycronic launched the P-800 mask writer which offers higher optical resolution while writing approximately 25 percent smaller structures compared with the P-80.

Q4 and Full Year, page 5 of 17

---

MYCRONIC

Other

Parent company

Mycronic AB is the Group's Parent Company. Product development and sales of mask writers are conducted in the Parent Company. In June, 2016 Mycronic Technologies AB merged into the Parent Company. As a result of the merger, all Swedish employees are now employed in the Parent Company, which means that all operations which occurred previously in the subsidiary, are now conducted in the Parent Company. See note 7.

The Parent Company's net sales in 2016 were SEK 2,021 (1,004) million and comprised eight mask writers. Net sales include sales from Mycronic Technologies AB from 1 January until the merger in June.

EBIT was SEK 730 (552) million. Research and development expenditures are expensed as they occur.

Cash and cash equivalents at year-end were SEK 60 million, compared to SEK 759 million at the end of 2015.

Agreement on long-term bank financing

Mycronic AB has signed an agreement with Nordea for long-term financing of up to SEK 700 million. The funding strengthens the Group's ability to act in relation to further growth.

Financial goals

After the last years' favorable development, the Board and the corporate management team has decided on new financial goals:

Growth – Consolidated net sales including acquisitions will reach SEK 5 billion, at the end of the period covered by the business plan, 4 to 7 years.

Profitability – EBIT will exceed 15 percent of net sales over a business cycle.

Capital structure – Net debt will be less than 3 times the average EBITDA (EBIT before depreciation, amortization, interest and tax). Average is calculated over three years. This goal remains unchanged.

Nomination committee

The composition of the nomination committee for the 2017 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 40 percent of shares and votes. The nomination committee is tasked with putting forth proposals for Board members and Board chairman, and for remuneration of Board members and auditor. The 2017 AGM will be held on 4 May, 2017.

Dividend proposal

According to the dividend policy the Board proposes to the AGM a dividend of SEK 2.00 (1.50) per share, a total of SEK 195.8 (146.9) million.

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 and the Swedish Securities Act. The information was submitted for publication, through the contact persons stated below, on 10 February, 2017, at 8 am.

Financial reports and press releases are published in Swedish and English and are available on the website www.mycronic.com.

This interim report has not been reviewed by the auditor.

Annual report

Mycronic distributes a printed version of the Annual Report to those who have stated they wish so. A pdf version can be found on the website. The annual report will be published on the website on 13 April at the latest. Shortly after, Mycronic publish a web based Annual Report for those who prefer a digital version.

Financial calendar

Interim report January-March 2017 20 April, 2017

Annual General Meeting 2017 4 May, 2017

Interim report January-June 2017 14 July, 2017

Interim report January-September 2017 19 October, 2017

Täby, 10 February, 2017

The Board

Contacts at Mycronic:

Lena Olving

CEO

+46 8 - 638 52 00

lena.olving@mycronic.com

Torbjörn Wingårdh

CFO

+46 8 - 638 52 00

torbjorn.wingardh@mycronic.com

Q4 and Full Year, page 6 of 17

---

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

Growth

Consolidated net sales including acquisitions will reach SEK 5 billion at the end of the period covered by the business plan, 4 to 7 years.

Profitability

EBIT (earnings before interest and tax) will exceed 15 percent of net sales over a business cycle.

Capital structure

Net debt will be less than 3 times the average EBITDA (earnings before depreciation, amortization, interest and tax). 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. On each occasion the financial position, profitability trend, growth potential and future investment requirements of the company shall be taken into account.

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 headquarters are located in Täby, north of Stockholm and the Group has subsidiaries in China, France, Germany, Japan, Singapore, South Korea, the Netherlands, United Kingdom and the United States. For more information see our web site at: www.mycronic.com

Mycronic AB (publ) is listed on NASDAQ Stockholm, Mid Cap: MYCR.

This report is a translation of the Swedish version. In the event of any differences between this translation and the Swedish original version, the Swedish version shall have precedence.

Mycronic AB (publ)

Mycronic AB (publ)	Tel: +46 8 638 52 00	www.mycronic.com	Reg office: Stockholm
PO Box 3141	Fax: +46 8 638 52 90		Reg no: 556351-2374
SE-183 03 Täby			Vat no: SES56351237401
Sweden

Q4 and Full Year, page 7 of 17

---

MYCRONIC

Consolidated profit and loss accounts, SEK million	Oct-Dec 16	Oct-Dec 15	Jan-Dec 16	Jan-Dec 15
Net sales, note 4	1,015.9	621.3	2,319.3	1,815.0
Cost of goods sold	-350.7	-216.6	-909.0	-739.4
Gross profit	665.2	404.7	1,410.2	1,075.6
Research and development expenses, note 5	-111.7	-80.2	-348.4	-266.7
Selling expenses	-85.2	-42.4	-238.7	-180.0
Administrative expenses	-58.2	-25.1	-137.8	-91.1
Other income and expenses	-4.9	-5.5	5.8	2.6
EBIT	405.2	251.4	691.0	540.3
Financial income and expenses	-0.8	0.1	-1.6	0.2
Profit/loss before tax	404.4	251.5	689.4	540.5
Tax	-98.5	-56.2	-163.1	-98.0
Net profit/loss	305.9	195.3	526.3	442.5
Earnings/share, SEK, before and after dilution	3.12	1.99	5.38	4.52
Average number of shares, thousand	97,917	97,917	97,917	97,917
Consolidated comprehensive income, SEK million	Oct-Dec 16	Oct-Dec 15	Jan-Dec 16	Jan-Dec 15
---	---	---	---	---
Net profit	305.9	195.3	526.3	442.5
Other comprehensive income
Items not to be reclassified to profit/loss, after tax
Aktuarial loss from defined benefits to employees	-1.7	-5.2	-1.7	-5.2
Items to be reclassified to profit/loss, after tax
Translation differences at translating foreign entities	-6.4	-1.4	19.9	15.7
Changes in cash flow hedges	2.2	4.9	-9.5	-0.1
Total comprehensive income	300.0	193.6	535.0	452.8

The entire result are attributable to owners of the Parent Company.

Consolidated cash flow statements, SEK million	Oct-Dec 16	Oct-Dec 15	Jan-Dec 16	Jan-Dec 15
Cash flow from operations before changes in working capital	411.7	261.6	654.7	550.5
Changes in working capital	-273.5	-44.9	-192.8	110.9
Cash flow from operations	138.2	216.7	461.9	661.4
Cash flow from investing activities	-713.9	-17.1	-768.0	-37.2
Cash flow from financing activities	-0.8	0.0	-392.4	-391.7
Cash flow	-576.5	199.6	-698.5	232.6
Cash and cash equivalents, opening balance	786.3	699.9	897.7	661.0
Exchange differences	-1.2	-1.8	9.4	4.2
Cash and cash equivalents, closing balance	208.6	897.7	208.6	897.7

Q4 and Full Year, page 8 of 17

---

MYCRONIC

Consolidated statements of financial position, SEK million	31 Dec 16	31 Dec 15
ASSETS
Fixed assets
Intangible assets	1,085.2	122.9
Tangible assets	60.1	38.1
Long-term receivables	22.9	40.1
Deferred tax assets	56.5	40.9
Total fixed assets	1,224.6	242.0
Current assets
Inventories	574.8	275.9
Trade receivables	596.8	271.1
Other current receivables	150.5	55.4
Cash and cash equivalents	208.6	897.7
Total current assets	1,530.6	1,500.2
Total assets	2,755.3	1,742.2
EQUITY AND LIABILITIES
Equity	1,411.6	1,268.2
Liabilities
Other long-term liabilities	258.8	21.0
Deferred tax liabilities	76.1	15.3
Total long-term liabilities	334.9	36.3
Trade payables	185.8	90.9
Other current liabilities	822.9	346.8
Total current liabilities	1,008.7	437.7
Total liabilities	1,343.6	474.0
Total equity and liabilities	2,755.3	1,742.2
Consolidated statements of changes in equity, SEK million	Jan-Dec 16	Jan-Dec 15
---	---	---
Opening balance	1,268.2	1,207.1
Dividend	-391.7	-391.7
Total comprehensive income	535.0	452.8
Closing balance	1,411.6	1,268.2

Q4 and Full Year, page 9 of 17

---

MYCRONIC

Profit and loss accounts, Parent Company, SEK million	Oct-Dec 16	Oct-Dec 15	Jan-Dec 16	Jan-Dec 15
Net sales	839.0	404.9	2,020.6	1,003.7
Cost of goods sold	-229.6	-120.1	-756.1	-339.8
Gross profit	609.4	284.8	1,264.5	663.9
Other operating expenses	-156.3	-29.5	-534.1	-111.7
EBIT	453.1	255.3	730.4	552.2
Result from financial investments	0.3	0.0	-0.5	0.2
Profit/loss after financial items	453.4	255.3	729.9	552.4
Appropriations	-181.8	-114.0	-181.8	-114.0
Result before tax	271.6	141.3	548.1	438.4
Tax	-60.6	-29.4	-121.4	-71.6
Net profit/loss	211.0	111.9	426.7	366.8
Total comprehensive income	211.0	111.9	426.7	367.3
Balance sheets in summary, Parent Company, SEK million	31 Dec 16	31 Dec 15
---	---	---
ASSETS
Fixed assets
Intangible and tangible assets	37.6	30.5
Financial assets	1,202.0	392.7
Total fixed assets	1,239.6	423.2
Current assets
Inventories	281.0	13.2
Other current receivables	519.0	154.9
Cash and cash equivalents	60.0	759.0
Total current assets	860.0	927.1
Total assets	2,099.6	1,350.3
EQUITY AND LIABILITIES
Equity	1,052.1	1,051.7
Untaxed reserves	206.8	25.0
Other non-current liabilities	164.3	0.2
Current liabilities	676.4	273.4
Total equity and liabilities	2,099.6	1,350.3

In June, 2016 Mycronic merged Mycronic Technologies AB (corp id number 556238-6739) into the Parent Company through absorption of wholly-owned subsidiary.

The profit and loss accounts of Mycronic Technologies AB from 1 January, 2016 until the merger is included in the profit and loss accounts of the Parent Company for the second quarter.

At the time of the merger the Parent Company took over all assets and liabilities in Mycronic Technologies AB. See note 7.

Q4 and Full Year, page 10 of 17

---

MYCRONIC

Note 1 - Accounting policies

This interim report for the Group has been prepared in accordance with IAS 34, Interim Financial Reporting, and 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 same accounting principles, estimates and assumptions have been used in this report as were used in the most recent annual report.

The character of financial assets and liabilities are essentially the same as they were on 31 December, 2015, with the exception for earn-outs related to acquisitions in 2016. These are managed according to level 3 in the valuation hierarchy in IFRS13. As was the case at the end of 2015, reported values are the same as fair values.

Note 2 - Risks and uncertainties

There are a number of risks and uncertainty factors of an operational and financial character to which the group is exposed. These are described in the 2015 annual report. Through acquisitions during 2016, operations in China have expanded. Mycronic is exposed to country specific risks, such as political decisions or overall changes in rules and regulations on markets which are partly new for the company, geographically and product-wise.

Those risks which are most prominent in the short-term relate to the results of efforts within product development and launches within new product areas.

Note 3 - Events after year-end

There are no events after year-end which have had a significant impact on the results or financial positions of the company.

Note 4 - Segment reporting

SEK million	Oct-Dec 16	Oct-Dec 15	Jan-Dec 16	Jan-Dec 15
Net sales
Assembly Solutions	329.1	220.5	886.0	843.6
Pattern Generators	686.8	400.9	1,433.3	971.4
	1,015.9	621.3	2,319.3	1,815.0
EBIT
Assembly Solutions	-71.5	-18.3	-157.3	-16.4
Pattern Generators	477.7	270.2	851.2	558.6
Amortization of acquired assets	-1.0	-0.5	-2.9	-1.9
Group	405.2	251.4	691.0	540.3
Revenue geographical markets, SEK million	Oct-Dec 16	Oct-Dec 15	Jan-Dec 16	Jan-Dec 15
---	---	---	---	---
EMEA	113.0	115.7	383.2	423.8
Americas	95.2	73.0	343.2	310.5
Asia	807.7	432.5	1,592.9	1,080.6
	1,015.9	621.3	2,319.3	1,815.0

Q4 and Full Year, page 11 of 17

---

MYCRONIC

Note 5 – Research and development costs

SEK million	Oct-Dec 16	Oct-Dec 15	Jan-Dec 16	Jan-Dec 15
R&D expenditure
Assembly Solutions	-86.8	-71.0	-284,7	-220.5
Pattern Generators	-20.4	-11.1	-57.1	-41.9
	-107.2	-82.1	-341.8	-262.4
Capitalization of development
Assembly Solutions	-	4.9	7.6	8.0
Amortization of capitalized development
Assembly Solutions	-3.2	-3.1	-12.5	-12.3
	-3.2	1.9	-4.9	-4.3
Amortization of acquired technology	-1.3	-	-1.8	-
R&D costs	-111.7	-80.2	-348.4	-266.7

Note 6 – Acquisitions

Acquisition of RoyoTech and Kognitec

In January 2016, 100 percent of Kognitec Vertrieb and Service GmbH was acquired, and 75 percent of RoyoTech Digitalelektronik GmbH, with an option to acquire the remaining 25 percent approximately two years from the acquisition date. The seller also has an option to sell the remaining 25 percent at the same point in time. Mycronic's intention is to exercise this option. Mycronic's assessment is that the terms of the options are designed so that the remaining 25 percent of RoyoTech be regarded as acquired and that the estimated price consists of an earn-out.

Mycronic has made acquisition analyses. The acquisition price for the two businesses is SEK 73 million. The acquisition analyses resulted in goodwill amounting to SEK 54 million. The acquisition price is adjusted for earn-out of SEK 17 million, estimated at fair value. The companies are consolidated into the Mycronic Group as of 1 January, 2016.

RoyoTech and Kognitec, SEK million
Acquisition price
Cash paid for acquisitions	55.6
Holdbacks and deferred considerations for acquisitions	17.1
	72.7
Acquired assets and liabilities at fair value
Intangible assets	9.5
Tangible assets	0.6
Inventories	9.1
Short-term receivables	6.8
Cash and cash equivalents	7.2
Long-term liabilities	-2.9
Short-term liabilities	-11.7
Total	18.6
Goodwill	54.1
Changes in cash and cash equivalents from acquisitions
Cash paid for acquisitions	55.6
Cash and cash equivalents in acquired subsidiaries	-7.2
	48.5

RoyoTech develops and manufactures the SMD Tower, an intelligent storage solution of electronic components. Kognitec is distributing the SMD Tower. Both companies are based in Hohenkirchen, Germany and have 15 employees. Mycronic has marketed the SMD Tower worldwide since 2008. The acquisition secures the rights to a strategic product already part of Mycronic's product portfolio.

The major part of SMD Tower net sales relates to intra-group sales. Sales to external customers have had an impact on consolidated net sales in the amount of SEK 11 million. The contribution to consolidated EBIT was SEK 9 million.

Q4 and Full Year, page 12 of 17

---

MYCRONIC

Acquisition of Shenzhen Axxon Automation Co., Ltd, Axxon

During the fourth quarter, Mycronic acquired 75 percent of Shenzhen Axxon Automation Co., Ltd (Axxon). The acquisition price amounted to RMB 343 million (SEK 452 million) and a possible earn-out of 33 million (SEK 43 million). The earn-out will depend on financial results for 2016.

Mycronic gained control over another 5 percent of Axxon in the end of 2016. Payment were made on 11 January, 2017. The acquisition price amounted to SEK 31 million. Mycronic now holds 80 percent of the Axxon shares.

Mycronic has an option to acquire the remaining 20 percent in three years and the seller has an option to sell the remaining 20 percent at the same point in time. Mycronic's intention is to exercise this option. Mycronic's assessment is that the terms of the options are designed so that the remaining 20 percent be regarded as acquired and that the estimated price consists of an earn-out. The purchase price will be valued on the basis of such parameters as growth and earnings. The price will be in the range of RMB 80-180 million.

Mycronic has made a preliminary acquisition analysis. The total acquisition price for Axxon amounts to SEK 670 million. According to the preliminary acquisition analysis, goodwill amounts to SEK 457 million. Goodwill is largely related to synergies such as market position in China and sales channels as well as the value of competence held by employees. The acquisition price is adjusted for earn-outs estimated at fair value. The company was consolidated into the Mycronic Group as of 25 October, 2016.

Axxon, SEK million
Acquisition price
Cash paid for acquisitions	451.7
Non paid for acquisitions	31.3
Deferred considerations for acquisitions (estimated fair value)	187.3
	670.3
Acquired assets and liabilities at fair value
Intangible assets	138.6
Tangible assets	1.4
Inventories	143.1
Short-term receivables	32.5
Cash and cash equivalents	38.5
Long-term liabilities	-28.9
Short-term liabilities	-111.8
Total	213.3
Goodwill	457.1
Changes in cash and cash equivalents from acquisitions
Cash paid for acquisitions	451.7
Cash and cash equivalents in acquired subsidiary	-38.5
	413.2

Axxon offers dispensing equipment for the electronics industry and is a leading actor on the Chinese market. China accounts for approximately 40 percent of the global dispensing market, the total value of which has been assessed at USD 400-500 million. The company is headquartered in Shenzhen in China and has 297 employees.

Axxon has in just a short time established a strong position on the market through developing a broad product portfolio. This has made possible strong growth and good margins. During 2015, net sales increased over 100 percent to approximately SEK 150 million, with an operating margin exceeding 20 percent. Axxon's market position and technological capabilities complement Mycronic's unique position, which builds on innovation and global market presence. Together, these two businesses make a leading global actor in dispensing equipment.

Axxon's operations has impacted consolidated net sales with SEK 86 million and contributed to consolidated EBIT with SEK 12 million from the acquisition day. Had the acquisition been carried out at the beginning of 2016, consolidated net sales would have been impacted by SEK 220 million and consolidated EBIT by SEK 27 million.

Q4 and Full Year, page 13 of 17

---

MYCRONIC

Acquisition of Automation Engineering, Inc., AEi

During the fourth quarter Mycronic acquired 100 percent of the American company Automation Engineering, Inc. (AEi). The acquisition price amounts to USD 34 million (SEK 313 million) on a debt free basis. Under certain circumstances, based on parameters such as growth and profitability, a possible maximum earn-out of USD 27 million (SEK 248 million), will be paid-out during two years.

Mycronic has made a preliminary acquisition analysis. The total acquisition price for AEi amounts to SEK 382 million. According to the preliminary acquisition analysis goodwill amounts to SEK 176 million. Goodwill is largely related to the company's strong position as external provider in a growth market and the value of competence held by employees as well as synergies such as global presence in relevant market segments. The acquisition price is adjusted for earn-outs estimated at fair value. The company was consolidated into the Mycronic Group as of 18 November, 2016.

AEi, SEK million
Acquisition price
Cash paid for acquisitions	313.0
Deferred considerations for acquisitions (estimated fair value)	68.7
	381.7
Acquired assets and liabilities at fair value
Intangible assets	145.2
Tangible assets	4.5
Financial assets	0.6
Inventories	65.7
Short-term receivables	26.3
Cash and cash equivalents	28.3
Short-term liabilities	-65.0
Total	205.7
Goodwill	176.0
Changes in cash and cash equivalents from acquisitions
Cash paid for acquisitions	313.0
Cash and cash equivalents in acquired subsidiary	-28.3
	284.6

AEi develops, manufactures, and sells innovative and market-leading solutions for high precision mounting and testing of camera modules used in electronics products. The largest customer segment is the automotive industry with significant growth for cameras in ADAS (Advanced Driver Assistance Systems). AEi provides the most comprehensive product portfolio of fully-automated solutions, used to assemble camera modules and to measure and verify quality during volume production. The equipment is modular and adapted to customer requirements. The market for ADAS camera modules has an estimated average yearly growth of approximately 30 percent for the period 2015-2020 (Prismark, June 2016). The company's head office is located in Wilmington, MA, in the US and has 76 employees. In 2015 net sales reached approximately USD 19 million.

Acquisitions play an important part in Mycronic's ambition for future growth. The strategic goal is to be a global supplier of high precision/high flexibility equipment built on advanced software. AEi represents these characteristics and Mycronic now broadens the product offering further.

AEi's operations have impacted consolidated net sales with SEK 4 million and consolidated EBIT in the amount of SEK -12 million from the acquisition day. Had the acquisition been carried out at the beginning of 2016, consolidated net sales would have been impacted by SEK 122 million and consolidated EBIT by SEK -44 million.

Q4 and Full Year, page 14 of 17

---

MYCRONIC

Note 7 – Merger

In June 2016, Mycronic merged Mycronic Technologies AB (corp id number 556238-6739) into the Parent Company through absorption of wholly-owned subsidiary. The profit and loss accounts of Mycronic Technologies AB from 1 January, 2016 until the merger, is included in the profit and loss accounts of the Parent Company for the second quarter. At the merger, the Parent Company took over all assets and liabilities from Mycronic Technologies AB. The merger resulted in a negative merger difference of SEK 35 million, which is accounted for in non-restricted equity.

Profit and loss accounts Mycronic Technologies AB,
1 January 2016 until merger

Net sales 1)	213.5
Cost of goods sold	-141.0
Gross profit	72.5
Research and development expenses	-112.8
Selling expenses	-28.1
Administrative expenses	-14.8
Other income and expenses	-1.3
EBIT	-84.5
Result from financial investments	0.0
Profit/loss before tax	-84.5

1) Of which SEK 43.7 million refer to internal sales to the Parent Company and is not recorded after the merger.

Balance sheet för Mycronic Technologies AB at merger

ASSETS
Fixed assets
Financial assets	19.4
Current assets
Inventories	278.0
Current receivables	121.4
Total current assets	399.3
Total assets	418.7
EQUITY AND LIABILITIES
Equity	145.6
Current liabilities 2)	273.2
Total liabilities	273.2
Total equity and liabilities	418.7

2) Of which SEK 182.5 million refer to liabilities to the Parent Company and is not recorded after the merger.

Q4 and Full Year, page 15 of 17

---

MYCRONIC

Group quarterly figures	Q4-16	Q3-16	Q2-16	Q1-16	Q4-15	Q3-15	Q2-15	Q1-15
Order intake Assembly Solutions	389.2	219.0	199.3	152.1	202.4	202.3	191.4	233.3
Order intake Pattern Generators	128.9	148.4	575.4	642.1	635.5	356.3	119.8	237.7
	518.1	367.5	774.7	794.3	837.9	558.6	311.2	471.0
Net sales Assembly Solutions	329.1	210.6	193.6	152.7	220.5	207.3	193.9	222.0
Net sales Pattern Generators	686.8	286.2	269.0	191.3	400.9	397.6	90.7	82.2
	1,015.9	496.8	462.5	344.0	621.3	604.9	284.6	304.1
Gross profit Assembly Solutions	118.3	98.2	91.4	61.7	96.2	99.0	88.8	99.6
Gross profit Pattern Generators	546.9	197.3	169.7	126.8	308.4	293.8	45.8	43.9
	665.2	295.5	261.2	188.4	404.7	392.8	134.6	143.5
Gross margin Assembly Solutions	36%	47%	47%	40%	44%	48%	46%	45%
Gross margin Pattern Generators	80%	69%	63%	66%	77%	74%	50%	53%
	65%	59%	56%	55%	65%	65%	47%	47%
Research and development expenses	-111.7	-67.7	-90.9	-78.2	-80.2	-61.8	-62.2	-62.6
Selling expenses	-85.2	-53.4	-49.2	-51.0	-42.4	-44.5	-48.1	-45.0
Administrative expenses	-58.2	-31.7	-23.3	-24.7	-25.1	-22.1	-19.2	-24.6
Other income and expenses	-4.9	5.7	8.1	-3.1	-5.5	-2.4	-4.0	14.5
EBIT	405.2	148.4	105.9	31.5	251.4	261.9	1.1	25.8
EBIT margin	39.9%	29.9%	22.9%	9.2%	40.5%	43.3%	0.4%	8.5%
Return on equity (rolling 4 quarters)	39%	38%	58%	35%	36%	47%	28%	24%
Equity per share, SEK	14.4	11.4	10.1	13.3	13.0	11.0	8.6	12.6
Earnings per share, SEK	3.12	1.17	0.83	0.24	1.99	2.33	0.01	0.19
Closing share price, SEK	98.00	107.00	62.75	73.25	82.25	46.00	60.25	53.50

Group financial key figures

Financial key figures are used by Group management and the Board of directors to manage and evaluate operations. These key figures are also seen as being of interest for external analysts and investors monitoring the company. For key figure definitions, see the 2015 annual report and page 17.

	Jan-Dec 16	Jan-Dec 15
Order intake, SEK million	2,454.5	2,178.8
Net sales, SEK million	2,319.3	1,815.0
Book-to-bill	1.1	1.2
Order backlog, SEK million	1,342.0	1,065.9
Gross margin	60.8%	59.3%
EBIT margin	29.8%	29.8%
EBITDA, SEK million	724.1	565.5
Return on equity	39.3%	35.8%
Net debt, SEK million	-197.9	-897.7
Equity/total assets	51.2%	72.8%
Equity per share, SEK	14.42	12.95
Avergare number of employees	577	501
The Mycronic share
Closing share price, SEK	98.00	82.25
Market cap, SEK million	9,595.8	8,053.6

Q4 and Full Year, page 16 of 17

---

MYCRONIC

Definitions and reconciliation

ESMA (The European Securities and Markets Authority) has issued guidelines regarding alternate ratios for listed companies.

Alternative ratios relate to financial key figures used by management, to control and evaluate the Group's business, which can not be directly inferred from the financial statements. These ratios are also considered to be of interest to external investors and analysts who monitor the company. For definitions of other key figures see the annual report.

Return on equity

Net result as a percentage of average equity. Used to show return on shareholders capital over time.

Book-to-bill

Order intake in relation to net sales. Shows future expected net sales development.

EBITDA

Operating result (EBIT) before depreciation and amortization, interest and tax. EBITDA is a component in expressing the financial goals and in the dividend policy.

Equity per share

Equity at balance day divided by the number of shares at the end of the period. Used to set the value of the company per share.

Net debt

Interest-bearing liabilities minus cash and cash equivalents.

Order intake

Orders received for goods and aftermarket, valued at average exchange rates. The order intake also includes revaluation of the order backlog at closing exchange rate. Used to show orders received.

Order backlog

Remaining orders for goods, valued at the balance date exchange rate. Used to show secured future net sales of goods.

Earnings per share

Net results divided by the number of shares at the end of the period. Used to show the value of the company per share.

Return on equity	Jan-Dec 16	Jan-Dec 15
Net result (rolling 4 quarters)	526.3	442.5
Average equity	1,339.9	1,237.7
	39%	36%
Book-to-bill	Jan-Dec 16	jan-dec 15
---	---	---
Order intake	2,454.5	2,178.8
Net sales	2,319.3	1,815.0
	1.1	1.2
EBITDA	Jan-Dec 16	jan-dec 15
---	---	---
EBIT	691.0	540.3
Depreciation/Amortization	32.6	25.2
	723.7	565.5
Equity per share	Jan-Dec 16	jan-dec 15
---	---	---
Equity at balance day	1,411.6	1,268.2
No of shares at end of period	97,917	97,917
	14.42	12.95
Earnings per share	Jan-Dec 16	jan-dec 15
---	---	---
Net result	526.3	442.5
No of shares at end of period	97,917	97,917
	5.38	4.52
Net debt	Jan-Dec 16	jan-dec 15
---	---	---
Interest-bearing liabilities	10.7	-
Cash and cash equivalents	208.6	897.7
	-197.9	-897.7

Q4 and Full Year, page 17 of 17