Sivers IMA Holding AB (publ), Interim Report Q2, January - June 2020

Two Fortune 100 customers & record contract after the end of the quarter

Second quarter 2020
• Revenue amounted to SEK 21 445 thousand (23 871), a decrease of 10%
• Profit before depreciations and amortizations (EBITDA) amounted to SEK -9 068 thousand (-6 400)
• Profit/loss for the period amounted to SEK -22 392 thousand (-14 524)
• Earnings per share amounted to SEK -0,16 (-0,12)
• Equity per share amounted to SEK 2,16 (2,48)

January–June 2020
• Revenue amounted to SEK 44 255 thousand (46 970), a decrease of 6%
• Profit before depreciations and amortizations (EBITDA) amounted to SEK -20 070 thousand (-12 003)
• Profit/loss for the period amounted to SEK -43 609 thousand (-28 528)
• Earnings per share amounted to SEK -0,32 (-0,23)
• Equity per share amounted to SEK 2,16 (2,48)

Significant events during the second quarter:
• On April 14, Photonics received a development order amounting to SEK 7.5 million from a US Fortune 100 customer.
• On June 12, Photonics received orders, together worth SEK 20,7 million, from one of its established Fortune 100 customers.
• On June 24, Photonics announced that they are a founding member of an industry leading group of companies signed up to an agreement to standardize integrated photonics devices. The agreement will define a new, industry-standard for continuous laser light sources. The group include industry leaders such as Arista, Ayar Labs, imec, Intel, Lumentum, Luminous Computing, MACOM, Quintessent, Sumitomo Electric och II-VI.

Significant events following the period:
• On July 28, Sivers IMA Holding AB completed a set-off share issue of 779 696 shares, corresponding to an amount of approximately SEK 8,4 million. The shares were paid for through set-off of receivables, which originated from working capital funding raised in 2019.
• On August 5, Wireless signed a 5G millimeterwave agreement with an estimated future value of SEK 480 million.
• On August 13, Sivers IMA Holding AB completer a set-off share issue of 555 262 shares, corresponding to an amount of approximately SEK 12,7 million. This means that the company has settled the loan amounts within the working capital facility entered into by the company in 2019.

Key figures

 

 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
A web-based presentation of the Interim Report will be held at 10:00 AM Friday, August 21, 2020.
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CEO Statement

Two Fortune 100 customers & record contract after the end of the quarter

I have now completed my fourth year as CEO of Sivers IMA and it has really been four exciting years. Four years ago, I had not dared to hope that we during the second quarter this year would receive photonics orders from two very prominent Fortune 100 customers for a total of approximately SEK 30 million. No one could have guessed that it also happened in the midst of a pandemic. The record deal with an estimated future value of SEK 480 million that was signed after the end of the quarter is also good proof that we have done many things right during these years.

Despite these successes, the corona pandemic significantly slowed down the activity during April and May as many customers took longer time to make decisions or delayed decisions. From June, however, activity returned to more normal levels and looking ahead, the trend is positive. In the short term, we foresee in a recovery during the latter part of the year and in the long term, we do not think that our underlying market is affected by the pandemic. It might even have accelerated the interest in our products, not least in 5G.

Sales in the second quarter were SEK 21 million, a decline of 10 percent compared with the same period last year. The decrease is mainly an effect of reduced activity in April and May as a result of the pandemic, but in June activity increased markedly. In April we, despite the pandemic, received our first small volume order of approximately SEK 3.5 million for delivery during the second and third quarters to CCS / ADTRAN in unlicensed 5G.
 
Our operating profit decreased with SEK 3,6 million to SEK -16,5 million compared with SEK -12,9 million the same period last year. This is mainly related to reduced capitalization of R&D of SEK 4 million. If we also disregard the provisions for social fees on personnel costs linked to the staff option program (corresponding to about SEK 3.2 million), that don’t affect cash flow, it is possible to see an improvement of the outcome.

Our Photonics business area has gone from strength to strength over the past year and has seen strong demand outside its traditional market for optical fiber communication. During the quarter, we secured another development order from a new Fortune 100 customer. The order of SEK 7.5 million for optical sensors will be delivered and invoiced during the year. We also continued to strengthen our relationship with our first Fortune 100 customer in Photonics with an order of SEK 21 million, which now includes several projects.

With regard to 5G, we sold eight new, complete test systems during the quarter, of which three to universities and five to potential new 5G customers in a number of different verticals. In the quarter, three customers continued into the next phase, to so-called design wins, and we now have a total of 19 5G design wins with customers from all over the world who develop products based on our chips and modules.

After the end of the quarter, we signed our first major development and delivery agreement with a global semiconductor company listed on NYSE. Our next generation 5G mmWave technology will form the basis of a CPE (Customer Premises Equipment) product that will be available in large volumes from 2023. During the first three years from commercial launch, we estimate a total value of approximately SEK 480 million. The agreement is an important milestone and strong proof that our 5G millimeter wave technology is of the highest class. It is also proof of the possibility of large volumes in this market.

We continue to build our customer base and are involved in many discussions with both old and new customers and partners. An important growth driver for us, both in 5G and Photonics, is our strong partner network and our many collaborations. One example is that we during the quarter participated as one of the founders in the standardization of integrated photonics solutions. The agreement, a so-called multi-source agreement, MSA, was signed by industry leaders and will help drive industry growth. We are proud to have participated among these industry leaders and I am convinced that our many collaborations will continue to be important growth drivers for us.

My optimism about the future remains very strong. The positive development in the market within old and new verticals within 5G and Photonics will provide continued good growth. The positive development we are seeing, including with our two Fortune-100 customers, means that I have good hope for the future. There is a shift facing both 5G and Photonics as our customers' customers are beginning to demand larger volumes and as these technologies are becoming more widely distributed. The large delivery agreement we signed after the end of the quarter is a strong indication of the potential in our business. Our highly competitive products and our strong global network make us well equipped to take advantage of the market's underlying strong demand and I look forward with anticipation.

Anders Storm, President and CEO


For more information please contact:

Anders Storm, CEO
Tel: +46 70 262 6390
E-mail: anders.storm@siversima.com

Erik Penser Bank is appointed Sivers IMA Holding AB’s Certified Advisor at Nasdaq First North Growth Market.
Tel: +46 8 463 80 00
E-mail: certifiedadviser@penser.se

This information is insider information that Sivers IMA is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication trough the agency of the contact person set out above, on 21 August at 08:00 CET.

Sivers IMA Holding AB is a leading and internationally recognized technology company that, through its two business areas Wireless and Photonics, supplies chips and integrated modules. Wireless develops RF chips and antennas for advanced 5G systems for data and telecommunications networks. Photonics develops and manufactures semiconductor-based optical products for optical fiber networks, sensors and optical fiber communications (Li-Fi). The company is listed on Nasdaq First North Growth Market Stockholm under SIVE. The head office is located in Kista, Sweden. For more information: http://siversima.com