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Mycronic Interim / Quarterly Report 2021
2946_rns_2021-10-21_088b3bc7-3185-4ff6-a3ad-5dae6840c533.pdf
Interim / Quarterly Report
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MYCRONIC
Q3
Interim Report January–September 2021
Third quarter
- Order intake amounted to SEK 1,242 (739) million, up 68 percent
- Net sales decreased 8 percent to SEK 986 (1,068) million. Based on constant exchange rates, net sales decreased 9 percent
- EBIT declined to SEK 106 (348) million and EBIT margin was 11 (33) percent
- Earnings per share were SEK 0.82 (2.71)
January–September
- Order intake amounted to SEK 3,272 (2,822) million, up 16 percent
- Net sales increased 16 percent to SEK 3,341 (2,889) million. Based on constant exchange rates, the increase was 21 percent
- EBIT rose to SEK 845 (684) million and EBIT margin was 25 (24) percent
- Earnings per share were SEK 6.66 (5.29)
"During the third quarter, order intake showed a positive trend, with an increase of 68 percent, while a significantly less advantageous product mix for Pattern Generators led to reduced sales and EBIT. We announced an acquisition within High Volume, which strengthens and broadens the division's product portfolio and enables it to offer its customers more complete and attractive solutions. We also announced a divestment within Global Technologies, which will enable the division to focus on and invest in markets that are strategically more relevant. Both transactions are expected to be completed during the fourth quarter of 2021 or the first quarter of 2022," says Anders Lindqvist, President and CEO.
Outlook 2021
It is the Board of Directors' opinion that consolidated net sales for 2021 will be at a level of SEK 4.5 billion, based on prevailing exchange rates, including the completed acquisition.
| Group summary | Q3 | Jan-Sep | Rolling 12 month | Jan-Dec 2020 | ||
|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||
| Order intake, SEK million | 1,242 | 739 | 3,272 | 2,822 | 4,137 | 3,687 |
| Net Sales, SEK million | 986 | 1,068 | 3,341 | 2,889 | 4,333 | 3,882 |
| Book-to-bill | 1.3 | 0.7 | 1.0 | 1.0 | 1.0 | 0.9 |
| Order backlog, SEK million | 2,030 | 2,096 | 2,030 | 2,096 | 2,030 | 1,969 |
| Gross margin, % | 41.0% | 58.3% | 51.8% | 54.0% | 51.9% | 53.6% |
| EBIT, SEK million | 106 | 348 | 845 | 684 | 1,058 | 898 |
| EBIT margin, % | 10.7% | 32.6% | 25.3% | 23.7% | 24.4% | 23.1% |
| Earnings per share before/after dilution, SEK | 0.82 | 2.71 | 6.66 | 5.29 | 8.46 | 7.10 |
| Cash Flow, SEK million | -138 | 109 | -444 | 442 | -197 | 689 |
| Changes in Net Sales | ||||||
| Total growth, % | -8% | 19% | 16% | -8% | 6% | -10% |
| Organic growth, % | -22% | 25% | 16% | -6% | 8% | -8% |
| Growth from acquisitions, % | 13% | - | 5% | - | 3% | - |
| Currency effects, % | 1% | -6% | -6% | -1% | -5% | -2% |
Interim Report January–September 2021
MYCRONIC
CEO comments
During the third quarter, order intake showed a positive trend, with an increase of 68 percent, while a significantly less advantageous product mix for Pattern Generators led to reduced sales and EBIT. We announced one acquisition within High
Volume and one divestment within Global Technologies during the quarter. These transactions are expected to be completed during the fourth quarter of 2021 or the first quarter of 2022. Through the acquisition of Shenzhen Huan Cheng Xin Precision Manufacture Co., Ltd, High Volume strengthens and broadens its product portfolio and has the opportunity to offer its customers more complete and attractive solutions. The divestment of Automation Engineering, Inc will enable Global Technologies to focus on and invest in markets that are strategically more relevant for Mycronic.
After a downturn in 2020, the market for photomasks for displays has still not returned to pre-pandemic levels. At the same time, the semiconductor market shows a strong trend, creating favorable conditions for the SLX mask writer. Pattern Generators received orders for six mask writers during the quarter. The division delivered two systems, which was as many as in the same period last year. However, the product mix was less advantageous, since the preceding year included the delivery of a Precision 800 Evo, our most advanced mask writer. At the customer's request, the delivery of an SLX announced earlier was moved from the third to the fourth quarter.
High Flex received many customer inquiries during the third quarter and secured a higher number of orders, but of smaller size. While demand for MYPro products continues to be at a high level, customers are also increasingly interested in the MYSmart product line, with its various dispensing solutions.
Order intake and net sales, rolling 12 months
High Volume's market was stable during the quarter and the division is focused on offering competitive and intelligent automation solutions that help customers to reduce labor costs and raise the quality of production.
Within Global Technologies the integration of atg L&M, which was acquired at the end of the second quarter, is proceeding according to plan. The Chinese market, where customers are implementing significant expansion plans, was strong for systems for electrical tests of bare board PCBs. Sales and production ramp up of a new machine generation that was launched in the first quarter have gone well. Also die bonding displayed healthy activity in the Chinese market and is being positively impacted by 5G investments.
The shortage of supply of components, raw materials and distribution logistics impacted the divisions to various extents during the quarter. Pattern Generators was not impacted to any significant extent, while High Flex began to notice the effects of component shortages and higher transportation costs. For High Volume, increased delivery costs and higher prices for raw materials and certain components impacted the quarter, although there was no shortage of components. At the end of the quarter, power rationing was introduced in China, which may have a negative impact going forward. Global Technologies was affected by disruption in the supply chain and component shortages, creating challenges for deliveries during the fourth quarter. The situation led to customers postponing purchasing decisions in certain cases.
As part of Mycronic's sustainability strategy, an innovation fund for sustainability was established. The purpose of the fund is to finance projects, internal or in collaboration with external partners, that support the transition to a sustainable electronics industry and that connect to Mycronic's strategic sustainability goals.
Anders Lindqvist, President and CEO
Gross and EBIT margin, rolling 12 months
Interim Report January-September 2021
MYCRONIC
Financial performance
GROUP
| Q3 | Jan-Sep | Rolling 12 month | Jan-Dec 2020 | |||
|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||
| Order intake, SEK million | 1,242 | 739 | 3,272 | 2,822 | 4,137 | 3,687 |
| Order backlog, SEK million | 2,030 | 2,096 | 2,030 | 2,096 | 2,030 | 1,969 |
| Net Sales, SEK million | 986 | 1,068 | 3,341 | 2,889 | 4,333 | 3,882 |
| Gross profit, SEK million | 405 | 622 | 1,731 | 1,560 | 2,250 | 2,080 |
| Gross margin, % | 41.0% | 58.3% | 51.8% | 54.0% | 51.9% | 53.6% |
| EBIT, SEK million | 106 | 348 | 845 | 684 | 1,058 | 898 |
| EBIT margin, % | 10.7% | 32.6% | 25.3% | 23.7% | 24.4% | 23.1% |
| EBITDA, SEK million | 162 | 434 | 993 | 857 | 1,248 | 1,112 |
During the third quarter, the acquisition of Shenzhen Huan Cheng Xin Precision Manufacture Co., Ltd was announced, as was the divestment of Automation Engineering, Inc (AEi). These transactions are expected to be completed during the fourth quarter of 2021 or the first quarter of 2022. The company also repurchased 89,600 of its own shares for delivery to participants in the LTIP 2021 long-term incentive program.
As a result of an organizational change, the current CFO, Torbjörn Wingårdh, has decided to leave the company. He will be succeeded on October 25 by Pierre Brorsson, but will remain with Mycronic until March 7, 2022, to ensure a smooth transition.
The Group's order intake increased 68 percent to SEK 1,242 (739) million during the third quarter, which was primarily attributable to Pattern Generators securing orders for six mask writers, but with Global Technologies also contributing to the increase. For the first nine months of the year, order intake increased 16 percent to SEK 3,272 (2,822) million. The Group's order backlog at the end of the quarter was SEK 2,030 (2,096) million.
During the quarter, Pattern Generators delivered two systems, which was as many as in the same period last year. However, the product mix was significantly less advantageous, since the preceding year included the delivery of a Prevision 800 Evo. This is the reason that the Group's net sales for the quarter declined 8 percent to SEK 986 (1,068) million, despite the fact that the acquisition of atg L&M contributed SEK 141 million in net sales. For the first nine months, net sales increased 16 percent to SEK 3,341 (2,889) million. Net sales for the quarter were positively impacted by currency effects of SEK 11 million and the first nine months of the year negatively by SEK 162 million.
The Group's gross margin for the third quarter was 41 (58) percent. The decrease is primarily attributable to a significantly less advantageous product mix in Pattern Generators and the expensing of acquired inventory at fair value at atg L&M of SEK 26 million. This reduces the gross margin until the acquired inventory has been turned over, which happened during the quarter. The gross margin for the first nine months was 52 (54) percent.
EBIT for the period declined to SEK 106 (348) million and EBIT margin was 11 (33) percent. For the first nine months of the year, EBIT amounted to SEK 845 (684) million, corresponding to an EBIT margin of 25 (24) percent. Acquisition-related costs amounted to SEK 73 (71) million.
Cash flow and financial position
Consolidated cash and cash equivalents at the end of September amounted to SEK 887 (1,089) million. Cash flow amounted to SEK -444 (442) million for the first nine months of the year. Cash flow from operating activities amounted to SEK 758 (831) million. Working capital tied up increased by SEK 5 million during the first nine months of the year, compared with a decrease of SEK 188 million in the preceding year.
Investments amounted to SEK 1,093 (122) million, of which the acquisition of atg L&M utilized SEK 1,027 million. Capitalization of product development accounted for SEK 33 (69) million and investments in tangible assets for SEK 29 (37) million. Financing activities utilized SEK 108 (266) million, of which the utilization of credit facilities contributed SEK 306 million, while SEK 294 million pertained to dividend to the shareholders of the parent company. In addition, the acquisition of the holdings of non-controlling interests in Axxon Piezoelectric Technology Co, Ltd utilized SEK 39 million.
Interim Report January-September 2021
MYCRONIC
PATTERN GENERATORS
| Q3 | Jan-Sep | Rolling 12 month | Jan-Dec 2020 | |||
|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||
| Order intake, SEK million | 407 | 122 | 849 | 958 | 1,252 | 1,361 |
| Order backlog, SEK million | 759 | 1,138 | 759 | 1,138 | 759 | 1,156 |
| Net Sales, SEK million | 265 | 506 | 1,246 | 1,178 | 1,631 | 1,563 |
| Gross profit, SEK million | 154 | 404 | 881 | 873 | 1,164 | 1,156 |
| Gross margin, % | 58.0% | 79.7% | 70.7% | 74.1% | 71.4% | 74.0% |
| EBIT, SEK million | 94 | 364 | 686 | 687 | 887 | 889 |
| EBIT margin, % | 35.3% | 71.9% | 55.1% | 58.3% | 54.4% | 56.8% |
| EBITDA | 103 | 368 | 714 | 701 | 921 | 908 |
| R&D expenditures, SEK million | -48 | -47 | -162 | -163 | -220 | -222 |
| R&D costs, SEK million | -45 | -35 | -149 | -112 | -200 | -163 |
After a downturn in 2020, the market for photomasks for displays has still not returned to pre-pandemic levels. At the same time, the semiconductor market shows a strong trend, creating favorable conditions for the SLX mask writer. During the quarter, Pattern Generators had a strong order intake and received orders for six mask writers; a Prevision Lite 8 Evo, an FPS 6100 Evo and four SLXs. Order intake increased 235 percent to SEK 407 (122) million during the quarter. The strong increase is attributable to the fact that there were no orders for mask writers during the third quarter of 2020. For the first nine months, order intake declined 11 percent to SEK 849 (958) million. At the end of September, the order backlog amounted to SEK 759 (1,138) million and contained 13 systems, with planned deliveries as follows:
2021 Q4: 4 SLX, FPS 6100 Evo
2022 Q1: 2 SLX
2022 Q2: 2 SLX
2022 H1: SLX
2022 Q3: 2 SLX
2023 Q2: Prevision Lite 8 Evo
At the customer's request, the delivery of an SLX announced earlier was moved from the third to the fourth quarter. Accordingly, Pattern Generators delivered two systems during the third quarter: one Prevision Lite 8 Evo and one SLX. That is as many systems as during the same period
last year, but with a significantly less advantageous product mix, since the preceding year included the delivery of a Prevision 800 Evo, our most advanced mask writer. Net sales during the quarter decreased as a result of this by 48 percent to SEK 265 (506) million. For the first nine months of the year, net sales increased 6 percent to SEK 1,246 (1,178) million. Net sales for the third quarter were negatively impacted by currency effects of SEK 3 million and the first nine months of the year negatively by SEK 51 million.
Component shortages and higher logistics costs did not impact operations significantly in the third quarter, but continue to comprise a risk going forward. The significantly less advantageous product mix meant that the gross margin declined to 58 (80) percent. The gross margin for the first nine months of the year was 71 (74) percent.
EBIT for the quarter was SEK 94 (364) million, corresponding to an EBIT margin of 35 (72) percent. EBIT for the first nine months of the year amounted to SEK 686 (687) million, corresponding to an EBIT margin of 55 (58) percent.
R&D costs for the third quarter amounted to SEK 45 (35) million and SEK 149 (112) million for the first nine months. The capitalization of development costs amounted to SEK 3 (13) million for the quarter and SEK 13 (51) million for the first nine months.
Interim Report January–September 2021
MYCRONIC
HIGH FLEX
| Q3 | Jan-Sep | Rolling 12 month | Jan-Dec 2020 | |||
|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||
| Order intake, SEK million | 334 | 296 | 936 | 763 | 1,205 | 1,032 |
| Order backlog, SEK million | 214 | 148 | 214 | 148 | 214 | 86 |
| Net Sales, SEK million | 271 | 237 | 809 | 749 | 1,139 | 1,079 |
| Gross profit, SEK million | 111 | 98 | 318 | 289 | 454 | 425 |
| Gross margin, % | 40.8% | 41.2% | 39.3% | 38.6% | 39.8% | 39.4% |
| EBIT, SEK million | 31 | 24 | 77 | 7 | 102 | 33 |
| EBIT margin, % | 11.5% | 10.1% | 9.5% | 1.0% | 9.0% | 3.0% |
| EBITDA | 41 | 32 | 105 | 31 | 141 | 67 |
| R&D expenditures, SEK million | -41 | -39 | -131 | -144 | -173 | -186 |
| R&D costs, SEK million | -36 | -35 | -114 | -129 | -150 | -165 |
High Flex received many customer inquiries during the third quarter and secured a higher number of orders, but of smaller size. While demand for MYPro products continues to be at a high level, customers are also increasingly interested in the MYSmart product line, with its various dispensing solutions. Geographically, the Mexican market noted a very positive development, with strong growth. At the same time, the shortage of components and parts in the supply chain has an impact among High Flex customers, which leads to them focusing mainly on necessary production equipment, while to a certain extent postponing other investments. Order intake increased 13 percent during the quarter and amounted to SEK 334 (296) million. For the first nine months of the year, order intake increased 23 percent to SEK 936 (763) million. At the end of the quarter, the order backlog totaled SEK 214 (148) million.
Net sales rose 14 percent during the quarter and amounted to SEK 271 (237) million. For the first nine months, net sales increased 8 percent to SEK 809 (749) million. Net sales for the quarter were negatively impacted by currency effects of SEK 2 million and the first nine months of the year negatively by SEK 59 million.
During the quarter, High Flex began to notice the effects of component shortages and more expensive transportation. The gross margin for the third quarter was 41 (41) percent and 39 (39) percent for the first nine months.
The division's EBIT for the third quarter was SEK 31 (24) million, corresponding to an EBIT margin of 11 (10) percent. EBIT for the first nine months of the year amounted to SEK 77 (7) million, corresponding to an EBIT margin of 9 (1) percent.
R&D costs for the third quarter amounted to SEK 36 (35) million and SEK 114 (129) million for the first nine months. The capitalization of development costs amounted to SEK 6 (5) million for the quarter and SEK 20 (18) million for the first nine months of the year.
Interim Report January–September 2021
MYCRONIC
HIGH VOLUME
| Q3 | Jan-Sep | Rolling 12 month | Jan-Dec 2020 | |||
|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||
| Order intake, SEK million | 236 | 235 | 1,007 | 820 | 1,170 | 983 |
| Order backlog, SEK million | 759 | 711 | 759 | 711 | 759 | 669 |
| Net Sales, SEK million | 235 | 224 | 918 | 670 | 1,121 | 873 |
| Gross profit, SEK million | 87 | 84 | 418 | 283 | 485 | 351 |
| Gross margin, % | 37.2% | 37.3% | 45.5% | 42.3% | 43.3% | 40.2% |
| EBIT, SEK million | 30 | 38 | 214 | 151 | 244 | 181 |
| EBIT margin, % | 12.8% | 17.1% | 23.3% | 22.5% | 21.8% | 20.7% |
| EBITDA | 35 | 43 | 228 | 164 | 263 | 198 |
| R&D expenditures, SEK million | -27 | -21 | -83 | -58 | -112 | -87 |
| R&D costs, SEK million | -28 | -22 | -86 | -62 | -116 | -92 |
High Volume's market was stable during the quarter. The division is focused on offering competitive and intelligent automation solutions that help customers to reduce labor costs and raise the quality of production. For one mobile telephone manufacturer High Volume went from selling individual dispensing machines to offering an intelligent final assembly line, without operators. Order intake was stable during the quarter at SEK 236 (235) million. For the first nine months of the year, order intake increased 23 percent to SEK 1,007 (820) million. At the end of the quarter, the order backlog totaled SEK 759 (711) million.
During the third quarter, net sales increased 5 percent to SEK 235 (224) million. For the first nine months, net sales increased 37 percent to SEK 918 (670) million. Currency effects impacted net sales in the quarter positively with SEK 15 million. For the first nine months, net sales were affected by SEK 23 million in negative currency effects.
Increased logistics costs and higher prices for raw materials and certain components impacted the quarter. However, no components were unavailable. At the end of the quarter, power rationing was introduced in China, which may have a negative impact going forward. The gross margin for the third quarter amounted to 37 (37) percent and 46 (42) percent for the first nine months.
EBIT for the quarter was SEK 30 (38) million, corresponding to an EBIT margin of 13 (17) percent. EBIT for the first nine months of the year amounted to SEK 214 (151) million, corresponding to an EBIT margin of 23 (23) percent.
R&D costs for the third quarter amounted to SEK 28 (22) million and SEK 86 (62) million for the first nine months.
In August, the acquisition of Shenzhen Huan Cheng Xin Precision Manufacture Co., Ltd was announced, which manufactures automated stencil printers and pick & place machines. Stencil printers account for 80 percent of sales and pick & place machines for the remaining 20 percent. China is the company's principal market, with 95 percent of sales. Through the acquisition, High Volume strengthens and broadens its product portfolio and has the opportunity to offer its customers more complete and attractive solutions. The transaction is expected to be completed during the fourth quarter of 2021.
Interim Report January–September 2021
MYCRONIC
GLOBAL TECHNOLOGIES
| Q3 | Jan-Sep | Rolling 12 month | Jan-Dec 2020 | |||
|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||
| Order intake, SEK million | 282 | 89 | 517 | 306 | 568 | 357 |
| Order backlog, SEK million | 299 | 100 | 299 | 100 | 299 | 57 |
| Net Sales, SEK million | 232 | 104 | 405 | 319 | 498 | 412 |
| Gross profit, SEK million | 52 | 35 | 114 | 114 | 146 | 146 |
| Gross margin, % | 22.6% | 33.6% | 28.2% | 35.8% | 29.3% | 35.5% |
| EBIT, SEK million | -16 | -57 | -23 | -79 | -31 | -87 |
| EBIT margin, % | -6.7% | -55.2% | -5.8% | -24.7% | -6.3% | -21.1% |
| EBITDA | -2 | -7 | 1 | -12 | -3 | -16 |
| R&D expenditures, SEK million | -20 | -17 | -45 | -52 | -59 | -66 |
| R&D costs, SEK million | -26 | -39 | -55 | -79 | -71 | -95 |
The market for camera modules to the automotive industry has recovered from the impact of COVID-19, but is now affected by component and semiconductor shortages. Die bonding displayed healthy activity in the Chinese market and is being positively impacted by 5G investments. The Chinese market, where customers are implementing significant expansion plans, was also strong for systems for electrical tests of bare board PCBs. A new machine generation was launched in the first quarter and sales and production ramp up have gone according to plan. The market was favorable, although customers to a certain extent waited with making purchase decisions due to the prevailing uncertainty. Order intake increased 218 percent to SEK 282 (89) million during the quarter, where the acquisition of atg L&M contributed SEK 121 million. Organic order intake increased 81 percent. For the first nine months of the year, order intake increased 69 percent to SEK 517 (306) million. The order backlog amounted to SEK 299 (100) million.
Net sales increased 124 percent during the third quarter to SEK 232 (104) million, where atg L&M contributed SEK 141 million. Organic net sales declined 12 percent. For the first nine months net sales increased 27 percent to SEK 405 (319) million. Net sales for the quarter were negatively impacted by currency effects of SEK 2 million and the first nine months of the year negatively by SEK 28 million.
Global Technologies was affected by disruption in the supply chain and component shortages, which also creates challenges for deliveries during the fourth quarter.
The gross margin during the third quarter was 23 (34) percent and was negatively impacted by expensing of acquired inventory at fair value at atg L&M of SEK 26 million. This reduces the gross margin until the acquired inventory has been turned over, which happened during the quarter. For the first nine months, the gross margin was 28 (36) percent. Excluding these acquisition-related costs, gross margin during the quarter was 34 percent and for the first nine months 35 percent.
EBIT for the quarter was SEK -16 (-57) million and was impacted by SEK 36 million in total acquisition-related costs. The EBIT margin was -7 (-55) percent. Earnings for the third quarter of 2020 were impacted by the impairment of intangible assets of SEK 43 million. EBIT for the first nine months of the year amounted to SEK -23 (-79) million, corresponding to an EBIT margin of -6 (-25) percent.
R&D costs for the quarter amounted to SEK 26 (39) million and SEK 55 (79) million for the first nine months.
At the end of September the divestment of AEi to Singapore-based ASM Pacific Technology was announced. The divestment will enable Global Technologies to focus on and invest in markets that are strategically more relevant for Mycronic. The transaction is expected to be finalized during the fourth quarter of 2021 or the first quarter of 2022.
Interim Report January–September 2021
The electronics industry
The global electronics industry grew by 1.7 percent in 2020 to USD 2,209 billion1. For full-year 2020, the semiconductor market displayed a positive trend, with growth of 6.5 percent to the equivalent of USD 439 billion1.
OUTLOOK
Annual growth for the electronics industry is forecast at 5.2 percent for the period 2020-20251. Segments with the strongest expected growth during this five-year period are electronics for data center and wireless communication infrastructure, the automotive industry and industrial applications. The electronics industry is forecast to grow 11.1 percent in 2021. The semiconductor market is expected to grow 21.0 percent in full-year 2021 compared with 2020 and is forecast to be positive during the 2021-2025 period as a whole, with annual growth of 3.7 percent1. For the display market, growth for 2020 was 14 percent to USD 124 billion2. This positive trend is expected to continue in 2021, with growth of 30 percent to USD 161 billion2, largely driven by higher prices for LCD displays. The long-term trend toward a larger share of advanced displays is expected to continue.
SMT AND DISPENSING MARKET AREA
The global market for SMT equipment has annual sales of approximately USD 5,000 million7. The segment SMT robots for component mounting grew by 7.2 percent to USD 2,945 million3 in 2020, driven primarily by strong development in China, while markets in America, Europe and Japan declined. During the first two quarters, the segment saw a continued positive global development compared with the same period last year, although the market in Japan declined. The dispensing equipment market decreased 8.8 percent and had sales of USD 730 million8 in 2020. 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 PCBs.
ASSEMBLY AUTOMATION AND TEST MARKET AREA
Mycronic offers die-bonding systems with very high precision for the production of micro and optoelectronics that are used in, for example, the data and telecommunication, aerospace, defense and medical devices industries. With the development of data centers, 5G, artificial intelligence and internet of things, optical components for communication are expected to grow from USD 9.3 billion in 2020 to USD 16.0 billion in 2026, which corresponds to annual growth of 9.4 percent9. Mycronic also offers solutions for assembly and testing of camera modules including those for Advanced Driver Assistance Systems (ADAS) in the automotive market. The number of automotive camera modules manufactured is expected to increase from 187 million units in 2019 to 333 million in 2025, corresponding to 10.1 percent annual growth4. In addition, Mycronic offers advanced equipment for electrical tests of bare board PCBs and substrates.
PATTERN GENERATORS MARKET AREA
PHOTOMASKS FOR DISPLAYS
The market for photomasks showed negative growth of 10.6 percent from USD 918 million to USD 821 million5^{,} 10 during 2020. The negative trend was largely connected with the pandemic generating large demand for displays in the second half of 2020, which led to display manufacturers focusing on producing existing models instead of launching new ones. The forecast for 2021 is that the market will begin to recover and demonstrate positive growth of 4.5 percent to USD 858 million5^{,} 10. The market is driven primarily by a higher proportion of advanced photomasks for AMOLED displays. At the same time, predicted growth for G10 photomasks has been slower due to increased price pressure and lower-than-expected5 volumes. The forecast for the total area growth amounts to an average of 3.8 percent per year for 2020-20255. Strong growth for AMOLED photomasks is expected, with an annual average area growth of 12.1 percent for 2020-20255, which drives the need for photomasks produced by Prevision 80 and Prevision 800 systems.
PHOTOMASKS FOR SEMICONDUCTORS
During 2020, the market showed positive growth of 8.0 percent from USD 5.0 billion to USD 5.4 billion6. Despite the pandemic, the market trend was strong, primarily driven by strong growth for the most advanced photomasks. The forecast for 2021 is that the market will continue to perform positively, with growth of 12.7 percent to USD 6.1 billion6. The market will continue to be primarily driven by higher volumes of the most advanced photomasks.
MYCRONIC
3) Protec MDC, July 2021
4) Prismark, May and December 2020
5) Omdia, June 2021 (annual update)
6) VLSI research, April 2021
7) Prismark April 2019, Protec MDC January 2021, Mycronic analysis
8) Prismark, April 2021
9) Lightcounting, April 2021
10) 110 YEN/USD used by Mycronic for conversion
Other
PARENT COMPANY
Mycronic AB is the Group’s Parent Company.
The Parent Company’s net sales amounted to SEK 1,830 (1,736) million for the first nine months of the year. EBIT amounted to SEK 634 (504) million.
Cash and cash equivalents at the end of September amounted to SEK 157 million, compared with SEK 719 million at the end of 2020.
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 at 8:00 a.m CEST on October 21, 2021.
Financial reports and press releases are published in Swedish and English and are available on www.mycronic.com.
This report was reviewed by the company’s auditor.
CONFERENCE CALL
Mycronic will hold a teleconference at 10:00 a.m. CEST on October 21 with President and CEO Anders Lindqvist and CFO Torbjörn Wingårdh. To take part of the presentation,
Täby, October 21, 2021
Mycronic AB (publ)
Anders Lindqvist
President and CEO
please dial one of the numbers or watch via the web link below.
Sweden: +46 8 566 427 04
UK: +44 333 300 9270
United States: +1 631 913 1422, PIN: 50212021#
https://mycronic-external.creo.se/211021
FINANCIAL CALENDAR
| Year-end report 2021 | February 9, 2022 |
|---|---|
| Interim Report January–March 2022 | April 21, 2022 |
| Annual General Meeting 2022 | May 5, 2022 |
| Capital Markets Day | June 8, 2022 |
| Interim Report January–June 2022 | July 14, 2022 |
| Interim Report January–Sept. 2022 | October 20, 2022 |
| Year-end report 2022 | February 8, 2023 |
FOR ADDITIONAL INFORMATION, PLEASE CONTACT
Anders Lindqvist
President and CEO
+46 8 638 52 00
Torbjörn Wingårdh
CFO
+46 8 638 52 00
Sven Chetkovich
Director Investor Relations
+46 70 558 39 19
Mycronic AB (publ)
PO Box 3141
SE-183 03 Täby, Sweden
Phone: +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–September 2021
MYCRONIC
Group
| Consolidated profit and loss accounts in summary, SEK million | Note | Q3 | Jan-Sep | Rolling 12 month | Jan-Dec 2020 | ||
|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | ||||
| Net sales | 5, 6 | 986 | 1,068 | 3,341 | 2,889 | 4,333 | 3,882 |
| Cost of goods sold | -581 | -446 | -1,609 | -1,329 | -2,082 | -1,802 | |
| Gross profit | 405 | 622 | 1,731 | 1,560 | 2,250 | 2,080 | |
| Research and development | 7 | -136 | -130 | -405 | -382 | -538 | -514 |
| Selling expenses | -120 | -101 | -374 | -359 | -450 | -435 | |
| Administrative expenses | -66 | -52 | -179 | -170 | -245 | -236 | |
| Other income and expenses | 23 | 9 | 71 | 34 | 40 | 3 | |
| EBIT | 106 | 348 | 845 | 684 | 1,058 | 898 | |
| Financial income and expenses | -1 | -2 | -2 | -5 | -4 | -8 | |
| Profit/loss before tax | 105 | 346 | 843 | 679 | 1,054 | 890 | |
| Tax | -25 | -78 | -193 | -156 | -224 | -187 | |
| Net Profit/loss | 80 | 268 | 650 | 523 | 830 | 703 | |
| Earnings per share before/after dilution, SEK | 0.82 | 2.71 | 6.66 | 5.29 | 8.46 | 7.10 | |
| Average number of shares, thousand | 97,599 | 97,741 | 97,656 | 97,764 | 97,662 | 97,743 | |
| Results attributable to owners of the Parent Company | 80 | 265 | 650 | 517 | 826 | 694 | |
| Results attributable to non-controlling interests | - | 3 | - | 5 | 4 | 10 | |
| 80 | 268 | 650 | 523 | 830 | 703 | ||
| Consolidated statement of comprehensive income in summary, SEK million | Q3 | Jan-Sep | Rolling 12 month | Jan-Dec 2020 | |||
| --- | --- | --- | --- | --- | --- | --- | |
| 2021 | 2020 | 2021 | 2020 | ||||
| Net Profit/loss | 80 | 268 | 650 | 523 | 830 | 703 | |
| Other comprehensive income | |||||||
| Items not to be reclassified to profit/loss, after tax | |||||||
| Actuarial profit/loss from defined benefits to employees | - | - | - | - | 3 | 3 | |
| Items to be reclassified to profit/loss, after tax | |||||||
| Translation differences at translating foreign entities | 62 | -32 | 120 | -39 | -2 | -161 | |
| Hedging of net investment in foreign entities | -3 | - | -3 | - | -3 | - | |
| Changes in cash flow hedges | -8 | 18 | -60 | 24 | -24 | 61 | |
| Total comprehensive income | 131 | 254 | 707 | 508 | 805 | 606 | |
| Total comprehensive income attributable to owners of the Parent Company | 131 | 251 | 707 | 502 | 802 | 597 | |
| Total comprehensive income attributable to non-controlling interests | - | 3 | - | 5 | 3 | 9 | |
| 131 | 254 | 707 | 508 | 805 | 606 |
Interim Report January–September 2021
MYCRONIC
| Consolidated statements of financial position in summary, SEK million | 30 Sep 21 | 30 Sep 20 | 31 Dec 20 |
|---|---|---|---|
| ASSETS | |||
| Fixed assets | |||
| Intangible assets | 2,154 | 1,329 | 1,253 |
| Tangible assets | 454 | 442 | 465 |
| Non-current receivables | 37 | 48 | 40 |
| Deferred tax assets | 135 | 119 | 128 |
| Total fixed assets | 2,780 | 1,938 | 1,886 |
| Current assets | |||
| Inventories | 1,363 | 1,242 | 1,181 |
| Trade receivables | 604 | 645 | 601 |
| Other current receivables | 317 | 307 | 348 |
| Cash and cash equivalents | 887 | 1,089 | 1,303 |
| Total current assets | 3,172 | 3,283 | 3,433 |
| Assets held for sale* | 167 | - | - |
| Total assets | 6,118 | 5,220 | 5,319 |
| EQUITY AND LIABILITIES | |||
| Equity | 3,719 | 3,275 | 3,378 |
| Long-term liabilities | |||
| Long-term interest-bearing liabilities | 188 | 239 | 185 |
| Deferred tax liabilities | 286 | 240 | 281 |
| Other non-current liabilities | 56 | 44 | 41 |
| Total long-term liabilities | 529 | 524 | 507 |
| Short-term liabilities | |||
| Short-term interest-bearing liabilities | 377 | 65 | 79 |
| Trade payables | 301 | 261 | 261 |
| Other current liabilities | 1,163 | 1,095 | 1,094 |
| Total current liabilities | 1,840 | 1,421 | 1,434 |
| Liabilities directly associated with the assets held for sale* | 30 | - | - |
| Total liabilities | 2,399 | 1,945 | 1,941 |
| Total equity and liabilities | 6,118 | 5,220 | 5,319 |
*Pertains to the divestment of Automation Engineering, Inc (AEi). The transaction is expected to be finalized in the fourth quarter of 2021 or first quarter of 2022.
Interim Report January–September 2021
MYCRONIC
| Q3 | Jan-Sep | Rolling | Jan-Dec | |||
|---|---|---|---|---|---|---|
| Consolidated cash flow statements in summary, SEK million | 2021 | 2020 | 2021 | 2020 | 12 month | 2020 |
| Profit/loss before tax | 105 | 346 | 843 | 679 | 1,054 | 890 |
| Adjustments for non-cash items and paid income tax | 7 | 28 | -80 | -36 | -26 | 18 |
| Change in working capital | -37 | 190 | -5 | 188 | 25 | 218 |
| Cash flow from operating activities | 76 | 564 | 758 | 831 | 1,053 | 1,126 |
| Cash flow from investing activities | -23 | -26 | -1,093 | -122 | -1,121 | -150 |
| Cash flow from financing activities | -191 | -429 | -108 | -266 | -130 | -288 |
| Cash flow for the period | -138 | 109 | -444 | 442 | -197 | 689 |
| Cash and cash equivalents, opening balance | 1,019 | 984 | 1,303 | 655 | 1,089 | 655 |
| Exchange difference for cash and cash equivalents | 15 | -3 | 37 | -8 | 3 | -41 |
| Cash and cash equivalents classified as assets held for sale | -8 | - | -8 | - | -8 | - |
| Cash and cash equivalents, closing balance | 887 | 1,089 | 887 | 1,089 | 887 | 1,303 |
| Consolidated statement of changes in equity in summary, SEK million | Jan-Sep | Jan-Dec | ||||
| --- | --- | --- | --- | |||
| 2021 | 2020 | 2020 | ||||
| Opening balance | 3,378 | 2,978 | 2,978 | |||
| Dividend to owners | -294 | -196 | -196 | |||
| Dividend to non-controlling interests | -4 | -1 | -1 | |||
| Acquisition of holdings of non-controlling interests* | -53 | - | - | |||
| Swap agreement related to own shares | 4 | -17 | -15 | |||
| Repurchase of own shares | -23 | - | - | |||
| Equity-settled share based payments | 4 | 4 | 5 | |||
| Total comprehensive income | 707 | 508 | 606 | |||
| Closing balance | 3,719 | 3,275 | 3,378 | |||
| Of which holdings of non-controlling interests | - | 10 | 14 |
*Pertains to the acquisition of the non-controlling interest in Axxon Piezoelectric Technology Co, Ltd, of which SEK 39 million was paid during the period.
| Other key figures * | Jan-Sep | Jan-Dec | |
|---|---|---|---|
| 2021 | 2020 | 2020 | |
| Equity per share, SEK | 38.10 | 33.54 | 34.58 |
| Return on equity (rolling 12 months), % | 23.7% | 21.9% | 22.1% |
| Return on capital employed (rolling 12 months), % | 27.2% | 26.9% | 26.1% |
| Net cash, SEK million | 323 | 785 | 1,039 |
| Average number of employees | 1,636 | 1,505 | 1,506 |
*In addition to Key Figures presented on page 1. See calculations on page 19.
Interim Report January–September 2021
MYCRONIC
Parent Company
| Q3 | Jan-Sep | Rolling | Jan-Dec | |||
|---|---|---|---|---|---|---|
| Profit/loss accounts in summary, Parent Company, SEK million | 2021 | 2020 | 2021 | 2020 | 12 month | 2020 |
| Net sales | 457 | 662 | 1,830 | 1,736 | 2,475 | 2,381 |
| Cost of goods sold | -243 | -223 | -779 | -695 | -1,054 | -970 |
| Gross profit | 214 | 439 | 1,051 | 1,041 | 1,421 | 1,411 |
| Other operating expenses | -106 | -155 | -417 | -537 | -688 | -808 |
| EBIT | 108 | 284 | 634 | 504 | 733 | 604 |
| Result from financial items | 3 | 41 | 134 | 157 | 67 | 90 |
| Profit/loss after financial items | 111 | 325 | 768 | 661 | 800 | 694 |
| Appropriations | - | - | - | - | -157 | -157 |
| Profit/loss before tax | 111 | 325 | 768 | 661 | 643 | 537 |
| Tax | -23 | -62 | -132 | -111 | -124 | -103 |
| Net Profit/loss | 88 | 264 | 635 | 550 | 519 | 434 |
| Total comprehensive income | 88 | 264 | 635 | 550 | 519 | 434 |
| Balance sheets in summary, Parent Company, SEK million | 30 Sep 21 | 30 Sep 20 | 31 Dec 20 | |||
| --- | --- | --- | --- | |||
| ASSETS | ||||||
| Fixed assets | ||||||
| Intangible and tangible assets | 340 | 105 | 162 | |||
| Financial assets | 2,762 | 1,993 | 1,842 | |||
| Total fixed assets | 3,102 | 2,099 | 2,005 | |||
| Current assets | ||||||
| Inventories | 553 | 551 | 494 | |||
| Current receivables | 691 | 807 | 722 | |||
| Cash and cash equivalents | 157 | 561 | 719 | |||
| Total current assets | 1,401 | 1,919 | 1,936 | |||
| TOTAL ASSETS | 4,504 | 4,018 | 3,941 | |||
| EQUITY AND LIABILITIES | ||||||
| Equity | 2,515 | 2,300 | 2,188 | |||
| Untaxed reserves | 1,076 | 919 | 1,076 | |||
| Long-term interest-bearing liabilities | - | 18 | 9 | |||
| Other non-current liabilities | 1 | 1 | 1 | |||
| Total long-term liabilities | 1 | 20 | 10 | |||
| Short-term interest bearing liabilities | 323 | 19 | 17 | |||
| Other current liabilities | 587 | 761 | 650 | |||
| Total current liabilities | 911 | 780 | 667 | |||
| TOTAL EQUITY AND LIABILITIES | 4,504 | 4,018 | 3,941 |
Interim Report January–September 2021
MYCRONIC
Notes
NOTE 1 ACCOUNTING POLICIES
The 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.
At the beginning of April 2020, a new organization was implemented according to which the Assembly Solutions business area was divided between the three divisions of High Flex, High Volume and Global Technologies, while Pattern Generators formed the fourth division. As a result of this reorganization, the company identified the four divisions as segments in accordance with IFRS 8. Comparative figures have been restated in this interim report.
The nature of financial assets and liabilities is, in all material respects, the same as on December 31, 2020. As was the case at the end of 2020, 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 2020 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 2020 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
| Q3 | Jan-Sep | Rolling 12 month | Jan-Dec 2020 | |||
|---|---|---|---|---|---|---|
| Revenue by geographical market, SEK million | 2021 | 2020 | 2021 | 2020 | ||
| EMEA | 168 | 113 | 411 | 389 | 602 | 580 |
| North and South America | 126 | 141 | 372 | 378 | 492 | 497 |
| Asia | 692 | 814 | 2,557 | 2,122 | 3,239 | 2,804 |
| 986 | 1,068 | 3,341 | 2,889 | 4,333 | 3,882 | |
| Revenue by type of good/service, SEK million | ||||||
| System | 631 | 774 | 2,412 | 2,021 | 3,098 | 2,707 |
| Aftermarket | 354 | 294 | 929 | 868 | 1,235 | 1,174 |
| 986 | 1,068 | 3,341 | 2,889 | 4,333 | 3,882 | |
| Timing of revenue recognition, SEK million | ||||||
| Goods transferred at a point in time | 791 | 871 | 2,764 | 2,312 | 3,574 | 3,122 |
| Services transferred over time | 195 | 197 | 576 | 577 | 759 | 760 |
| 986 | 1,068 | 3,341 | 2,889 | 4,333 | 3,882 |
Interim Report January–September 2021
MYCRONIC
NOTE 6 SEGMENT REPORTING
| SEK million | Q3 | Jan-Sep | Rolling 12 month | Jan-Dec 2020 | ||
|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||
| Net sales by Division | ||||||
| Pattern Generators | 265 | 506 | 1,246 | 1,178 | 1,631 | 1,563 |
| High Flex | 271 | 237 | 809 | 749 | 1,139 | 1,079 |
| High Volume | 235 | 224 | 918 | 670 | 1,121 | 873 |
| Global Technologies | 232 | 104 | 405 | 319 | 498 | 412 |
| Internal net sales between divisions | -17 | -4 | -37 | -26 | -57 | -46 |
| 986 | 1,068 | 3,341 | 2,889 | 4,333 | 3,882 | |
| EBIT by Division | ||||||
| Pattern Generators | 94 | 364 | 686 | 687 | 887 | 889 |
| High Flex | 31 | 24 | 77 | 7 | 102 | 33 |
| High Volume | 30 | 38 | 214 | 151 | 244 | 181 |
| Global Technologies | -16 | -57 | -23 | -79 | -31 | -87 |
| Group functions etc | -34 | -22 | -109 | -81 | -143 | -115 |
| Amortization of previously acquired intangible assets | - | - | -2 | -2 | -4 | -4 |
| Effects from IFRS 16 | 1 | 0 | 2 | 1 | 2 | 2 |
| Group | 106 | 348 | 845 | 684 | 1,058 | 898 |
| SEK million | 30 Sep 21 | 30 Sep 20 | 31 Dec 20 | |||
| --- | --- | --- | --- | |||
| Assets by Division | ||||||
| Capitalized Development Costs | ||||||
| Pattern Generators | 71 | 62 | 69 | |||
| High Flex | 50 | 45 | 47 | |||
| 122 | 107 | 116 | ||||
| Inventories | ||||||
| Pattern Generators | 430 | 403 | 357 | |||
| High Flex | 260 | 316 | 292 | |||
| High Volume | 521 | 399 | 418 | |||
| Global Technologies | 155 | 126 | 117 | |||
| 1,363 | 1,242 | 1,181 | ||||
| Trade Receivables | ||||||
| Pattern Generators | 150 | 249 | 247 | |||
| High Flex | 201 | 190 | 213 | |||
| High Volume | 91 | 113 | 89 | |||
| Global Technologies | 161 | 92 | 52 | |||
| 604 | 645 | 601 |
Interim Report January–September 2021
MYCRONIC
NOTE 7 RESEARCH AND DEVELOPMENT EXPENSES
| Research and development costs, SEK million | Q3 | Jan-Sep | Rolling 12 month | Jan-Dec 2020 | ||
|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||
| R&D expenditures | ||||||
| Pattern Generators | -48 | -47 | -162 | -163 | -220 | -222 |
| High Flex | -41 | -39 | -131 | -144 | -173 | -186 |
| High Volume | -27 | -21 | -83 | -58 | -112 | -87 |
| Global Technologies | -20 | -17 | -45 | -52 | -59 | -66 |
| -136 | -124 | -422 | -417 | -566 | -561 | |
| Capitalization of Development Costs | ||||||
| Pattern Generators | 3 | 13 | 13 | 51 | 21 | 60 |
| High Flex | 6 | 5 | 20 | 18 | 27 | 25 |
| 9 | 18 | 33 | 69 | 48 | 85 | |
| Amortization of Acquired Technology | ||||||
| High Flex | -1 | -1 | -3 | -3 | -4 | -4 |
| High Volume | -1 | -1 | -3 | -4 | -5 | -5 |
| Global Technologies | -6 | -2 | -10 | -8 | -12 | -10 |
| -9 | -5 | -17 | -15 | -21 | -19 | |
| Impairment of Acquired Technology | ||||||
| Global Technologies | - | -19 | - | -19 | - | -18 |
| Reported cost | -136 | -130 | -405 | -382 | -538 | -514 |
Interim Report January–September 2021
MYCRONIC
NOTE 8 BUSINESS COMBINATIONS
During the second quarter, 100 percent of the shares in atg Luther & Maelzer GmbH was acquired. The acquisition broadens the Group's offering, strengthens Mycronic generally and underlines the Global Technologies division's focus on leading niche technologies, which have the potential to grow faster than the market as a whole. Domiciled in Wertheim in Germany and with approximately 190 employees, atg L&M develops, produces and sells advanced equipment that tests, measures and verifies PCBs and substrates. Mycronic's acquisition of atg L&M encompasses the entire global operations of the company, including companies in Taiwan, Germany and China. Following the transaction, atg L&M becomes part of Mycronic's Global Technologies division. In 2020, atg L&M's sales amounted to approximately SEK 420 million, with an EBIT margin of about 22 percent. The purchase consideration amounts to SEK 1,063 million, corresponding to USD 125 million on a cash and debt-free basis.
Work to assign values to acquired assets and liabilities is ongoing and the acquisition analysis is therefore still preliminary as of September 30. According to the preliminary acquisition analysis, goodwill amounts to SEK 658 million. Goodwill is primarily attributable to the company's leading position as a supplier of advanced equipment for electrical testing of PCBs and substrates, as well as the collective expertise of its employees. The company was consolidated in the Mycronic Group as of June 25, 2021. Had the acquisition been completed at the beginning of the year, the Group's net sales would have been affected by approximately SEK 225 million and EBIT by about SEK 37 million.
| SEK million | 30 Sep 21 |
|---|---|
| Acquisition price atg L&M | |
| Cash paid for the acquisition | 1,063 |
| Deferred considerations for the acquisition | - |
| Total | 1,063 |
| Acquired assets and liabilities at fair value | |
| Intangible assets | 273 |
| Tangible assets | 15 |
| Long-term receivables | 5 |
| Inventories | 97 |
| Current receivables | 135 |
| Cash and cash equivalents | 36 |
| Non-current liabilities | -38 |
| Current liabilities | -118 |
| Total | 405 |
| Goodwill | 658 |
| Changes in consolidated cash and cash equivalents as of the acquisition | |
| Cash paid for the acquisition | 1,063 |
| Cash and cash equivalents in acquired subsidiaries | -36 |
| Total | 1,027 |
Interim Report January–September 2021
MYCRONIC
NOTE 9 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 services, 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–September 2021
MYCRONIC
| Return on equity | Jan-Sep | Rolling | Jan-Dec | |||
|---|---|---|---|---|---|---|
| 2021 | 2020 | 12 month | 2020 | |||
| Net profit/loss (rolling 12 months) | 830 | 675 | 830 | 703 | ||
| Average shareholders’ equity | 3,497 | 3,079 | 3,497 | 3,178 | ||
| 23.7% | 21.9% | 23.7% | 22.1% | |||
| Return on capital employed | ||||||
| Profit/loss before tax (rolling 12 months) | 1,054 | 882 | 1,054 | 890 | ||
| Financial expenses | 14 | 14 | 14 | 14 | ||
| Profit/loss before financial expenses | 1,068 | 896 | 1,068 | 904 | ||
| Average balance sheet total | 5,669 | 5,002 | 5,669 | 5,059 | ||
| Average non-interest-bearing liabilities | 1,738 | 1,665 | 1,738 | 1,591 | ||
| Average capital employed | 3,931 | 3,337 | 3,931 | 3,469 | ||
| 27.2% | 26.9% | 27.2% | 26.1% | |||
| Book-to-bill | ||||||
| Order intake | 3,272 | 2,822 | 4,137 | 3,687 | ||
| Net sales | 3,341 | 2,889 | 4,333 | 3,882 | ||
| 1.0 | 1.0 | 1.0 | 0.9 | |||
| EBITDA | ||||||
| EBIT | 845 | 684 | 1,058 | 898 | ||
| Depreciation/Amortization | 149 | 173 | 190 | 214 | ||
| 993 | 857 | 1,248 | 1,112 | |||
| Underlying EBIT | ||||||
| EBIT | 845 | 684 | 1,058 | 898 | ||
| Acquisition-related costs included in: | ||||||
| Cost of goods sold | 26 | - | 26 | - | ||
| Operating expenses | 47 | 71 | 53 | 77 | ||
| 917 | 755 | 1,137 | 975 | |||
| Equity per share | ||||||
| Equity at balance day | 3,719 | 3,275 | 3,719 | 3,378 | ||
| No. of shares at end of period, thousand | 97,608 | 97,672 | 97,608 | 97,685 | ||
| 38.10 | 33.54 | 38.10 | 34.58 | |||
| Earnings per share before/after dilution, SEK | ||||||
| Net Profit/loss attributable to owners of the Parent Company | 650 | 517 | 826 | 694 | ||
| Average no. of shares before dilution, thousand | 97,656 | 97,764 | 97,662 | 97,743 | ||
| Average no. of shares after dilution, thousand | 97,690 | 97,775 | 97,742 | 97,763 | ||
| 6.66 | 5.29 | 8.46 | 7.10 | |||
| Net cash, SEK million | ||||||
| Cash and cash equivalents | 887 | 1,089 | 887 | 1,303 | ||
| Interest-bearing liabilities | -564 | -304 | -564 | -264 | ||
| 323 | 785 | 323 | 1,039 |
Interim Report January–September 2021
MYCRONIC
| Quarterly data | Q3 21 | Q2 21 | Q1 21 | Q4 20 | Q3 20 | Q2 20 | Q1 20 | Q4 19 |
|---|---|---|---|---|---|---|---|---|
| Order intake | ||||||||
| Pattern Generators | 407 | 209 | 233 | 403 | 122 | 111 | 725 | 1,004 |
| High Flex | 334 | 279 | 323 | 269 | 296 | 171 | 297 | 357 |
| High Volume | 236 | 381 | 391 | 163 | 235 | 314 | 271 | 244 |
| Global Technologies | 282 | 144 | 90 | 51 | 89 | 74 | 143 | 107 |
| Internal order intake between divisions | -17 | -11 | -10 | -20 | -4 | -19 | -3 | -5 |
| 1,242 | 1,002 | 1,027 | 865 | 739 | 651 | 1,432 | 1,706 | |
| Order Backlog | ||||||||
| Pattern Generators | 759 | 617 | 797 | 1,156 | 1,138 | 1,522 | 1,915 | 1,359 |
| High Flex | 214 | 150 | 134 | 86 | 148 | 81 | 166 | 134 |
| High Volume | 759 | 758 | 692 | 669 | 711 | 708 | 610 | 560 |
| Global Technologies | 299 | 249 | 82 | 57 | 100 | 114 | 169 | 112 |
| 2,030 | 1,774 | 1,706 | 1,969 | 2,096 | 2,425 | 2,860 | 2,164 | |
| Net Sales | ||||||||
| Pattern Generators | 265 | 389 | 592 | 385 | 506 | 503 | 169 | 405 |
| High Flex | 271 | 262 | 276 | 331 | 237 | 248 | 263 | 421 |
| High Volume | 235 | 315 | 368 | 203 | 224 | 225 | 220 | 189 |
| Global Technologies | 232 | 107 | 66 | 93 | 104 | 128 | 87 | 172 |
| Internal net sales between divisions | -17 | -11 | -10 | -20 | -4 | -19 | -3 | -5 |
| 986 | 1,064 | 1,291 | 992 | 1,068 | 1,086 | 736 | 1,181 | |
| Gross Profit | ||||||||
| Pattern Generators | 154 | 252 | 476 | 283 | 404 | 361 | 109 | 277 |
| High Flex | 111 | 97 | 110 | 136 | 98 | 99 | 92 | 180 |
| High Volume | 87 | 166 | 165 | 68 | 84 | 98 | 102 | 68 |
| Global Technologies | 52 | 41 | 21 | 32 | 35 | 49 | 30 | 61 |
| 405 | 555 | 772 | 519 | 622 | 605 | 334 | 584 | |
| Gross Margin | ||||||||
| Pattern Generators | 58.0% | 64.6% | 80.4% | 73.5% | 79.7% | 71.7% | 64.6% | 68.3% |
| High Flex | 40.8% | 36.9% | 40.1% | 41.0% | 41.2% | 39.9% | 35.1% | 42.8% |
| High Volume | 37.2% | 52.6% | 44.8% | 33.3% | 37.3% | 43.4% | 46.2% | 35.9% |
| Global Technologies | 22.6% | 37.9% | 32.1% | 34.4% | 33.6% | 38.2% | 34.8% | 35.2% |
| 41.0% | 52.1% | 59.8% | 52.3% | 58.3% | 55.7% | 45.4% | 49.4% | |
| R&D expenses | ||||||||
| Pattern Generators | -45 | -57 | -47 | -51 | -35 | -38 | -39 | -59 |
| High Flex | -36 | -42 | -36 | -36 | -35 | -45 | -49 | -56 |
| High Volume | -28 | -29 | -29 | -30 | -22 | -18 | -20 | -27 |
| Global Technologies | -26 | -15 | -14 | -15 | -39 | -20 | -21 | -15 |
| Total R&D expenses | -136 | -144 | -126 | -132 | -130 | -122 | -130 | -159 |
| Selling expenses | -120 | -132 | -123 | -76 | -101 | -117 | -140 | -148 |
| Administrative expenses | -66 | -55 | -57 | -66 | -52 | -61 | -57 | -66 |
| Other income/expenses | 23 | 17 | 32 | -31 | 9 | -24 | 49 | -8 |
| EBIT | 106 | 241 | 498 | 214 | 348 | 281 | 55 | 204 |
| Of which EBIT Pattern Generators | 94 | 174 | 419 | 201 | 364 | 273 | 51 | 186 |
| Of which EBIT High Flex | 31 | 11 | 35 | 25 | 24 | -15 | -2 | 34 |
| Of which EBIT High Volume | 30 | 94 | 90 | 30 | 38 | 57 | 55 | 29 |
| Of which EBIT Global Technologies | -16 | 7 | -14 | -8 | -57 | -2 | -19 | 5 |
| Of which EBIT Group functions | -34 | -44 | -30 | -35 | -22 | -30 | -29 | -47 |
| EBIT margin | 10.7% | 22.7% | 38.6% | 21.5% | 32.6% | 25.8% | 7.5% | 17.2% |
| Equity per share | 38.10 | 36.96 | 38.43 | 34.58 | 33.54 | 33.07 | 31.52 | 30.46 |
| Earnings per share before/after dilution | 0.82 | 1.84 | 3.99 | 1.80 | 2.71 | 2.18 | 0.40 | 1.57 |
| Closing share price | 218.40 | 258.20 | 205.00 | 245.40 | 211.40 | 175.70 | 121.10 | 185.10 |
Interim Report January–September 2021
MYCRONIC
THIS REPORT IS A TRANSLATION FROM THE SWEDISH ORIGINAL
Review report
Mycronic AB (publ), corporate identity number 556351-2374
Introduction
We have reviewed the condensed interim report for Mycronic AB (publ) as at September 30, 2021 and for the nine months period then ended. The Board of Directors and the Managing Director are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
Scope of review
We conducted our review in accordance with the International Standard on Review Engagements, ISRE 2410 Review of Interim Financial Statements Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and other generally accepted auditing standards in Sweden.
The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act regarding the Group, and in accordance with the Swedish Annual Accounts Act regarding the Parent Company.
Stockholm, date as evidenced by our digital signature
Ernst & Young AB
Erik Sandström
Authorized Public Accountant
Interim Report January–September 2021