Interim Report January-September 2020

Third quarter

• Order intake amounted to SEK 739 (1,238) million, a decline of 40 percent
• Net sales increased 19 percent to SEK 1,068 (900) million and 25 percent based on constant exchange rates
• EBIT rose 76 percent to SEK 348 (198) million and EBIT margin was 33 (22) percent 
• The underlying EBIT was SEK 400 (202) million, an increase of 98 percent. The underlying EBIT margin was 37 (22) percent
• Earnings per share were SEK 2.71 (1.52)

January-September

• Order intake was SEK 2,822 (2,861) million, a decrease of 1 percent
• Net sales declined 8 percent to SEK 2,889 (3,125) million and 6 percent based on constant exchange rates
• EBIT was SEK 684 (920) million, a decline of 26 percent. The EBIT margin was 24 (29) percent
• The underlying EBIT was SEK 755 (955) million, a decline of 21 percent. The underlying EBIT margin was 26 (31) percent
• Earnings per share were SEK 5.29 (7.22)
   

“While we are devoting much energy to addressing the uncertainty in our macro environment, I can feel a fundamental sense of security in the long-term development of the business and in how the organization has handled the pandemic. Our operations are well-diversified across various segments and geographies and offer us a good resilience and risk spread. We have a well-filled order book and we delivered net sales growth of 19 percent for the quarter, increased EBIT by 76 percent and reported a margin of 33 percent,” says Anders Lindqvist, President and CEO.

 
Outlook 2020
It is the Board of Director’s opinion that consolidated net sales for 2020 will be at a level of SEK 3.9 billion, excluding any acquisitions. The adjustment from the previously communicated SEK 4.1 billion is mainly due to currency effects but also to the pandemic's impact on operations. 
  
CEO comments
While we are devoting much energy to addressing the uncertainty in our macro environment, I can feel a fundamental sense of security in the long-term development of the business and in how the organization has handled the pandemic. We delivered net sales growth of 19 percent for the quarter, increased EBIT by 76 percent and reported a margin of 33 percent. It is clear that our well-filled order book and stable financial position in combination with the adjustments we have made to continue to support our customers in the best possible manner have helped to bridge this period marked by greater uncertainty than we are used to handle. Our operations are well diversified across various segments and geographies and offer us a good resilience and risk spread. This is also reflected in the varying performance for the divisions during the quarter.

The robust performance of the High Volume division was further cemented during the quarter. The division’s leading position in dispensing in China and the favorable market in the country contributed to the strong growth. High Flex, which primarily operates in the European and North American markets, noted a slight increase in activity during the quarter. Even if the increase is from low levels, it is pleasing to note that we, for example, secured a few major orders where we support customer businesses with fully automated complete assembly lines including software tools and process monitoring. For the Global Technologies division, optoelectronics has continued to develop favorably, driven by the strong Chinese market while the camera modules to the automotive industry segment was characterized by low levels of activity. Net sales for the Assembly Solutions business area as a whole decreased 4 percent year on year, mainly attributable to lengthier or temporarily postponed investment decisions.

Pattern Generators again reported a strong quarter with a stable aftermarket combined with the delivery of an FPS 6100 Evo and our most advanced system, Prexision 800 Evo.

This is the third Prexision 800 to be delivered and the system is primarily used to write the most advanced photomasks used to manufacture AMOLED displays. Net sales for the division rose 60 percent and EBIT by 132 percent, with a margin of 70 percent. Order books are well-filled and all planned deliveries are unchanged while the long-term outlook is deemed to be unchanged. The rate of development of new display technology is high although we can also see, depending on how long the uncertainty surrounding the pandemic continues, that over time this may lead to longer investment processes. The business area, which experiences natural variations between quarters, has a stable aftermarket but received no system orders during the quarter. Taken together, this contributed to a reduction in order intake for the Group as a whole by 40 percent during the quarter and 1 percent during the first nine months of the year.

Our efficiency improvements in High Flex and Global Technologies are continuing according to plan and the EBIT margin target of at least 10 percent in 2021 for Assembly Solutions as a whole stands firm. It is mainly due to currency effects, but also to the pandemic's impact on operations, that the Board adjusts the 2020 outlook for Group net sales to the level of SEK 3.9 billion. The long-term goal of net sales of SEK 5 billion not later than 2023 stands firm.

We are in a period of uncertainty where we continually assess and plan for various business scenarios depending on the future progress of the pandemic. I am proud of how our employees are managing the new circumstances on a daily basis and helping our customers to deal with problems in the wake of the pandemic. At the same time, I would like to point out that we have a long-term focus to continue investing in the next generation of innovations with the aim of always offering our customers the most efficient and smartest solutions.
 
Anders Lindqvist, President and CEO

Financial information
Mycronic AB (publ) is listed on NASDAQ Stockholm, Large Cap. The information in this report is published in accordance with the EU Market Abuse Regulation and the Swedish Securities Act. The information was submitted for publication, through the contact persons stated below (page 8) on October 22, 2020, at 8:00 a.m.

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

This report was reviewed by the company’s auditor.

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