Sivers Semiconductors AB (publ), Interim Report Q3, January - September 2020

Third quarter in brief:
Revenue amounted to SEK 22.208 M (24.023), a decrease of 8% compared to last year. Profit before depreciation and amortization (EBITDA) amounted to SEK -38.699 M (-16.443). EBITDA was charged with SEK -32.147 M (-0.461) in provisions for social security expenses relating to the employee stock option programs. Adjusted for these accruals EBITDA amounted to approx. SEK -6 million, an improvement by approx. SEK 9 million compared to last year. Profit/loss was charged with SEK -107.234 M (0.581) in an accounting revaluation effects from embedded derivatives in convertible debentures. Adjusted for this effect, and the provision for social security expenses relating to options, profit/loss was SEK -12.229 M (-24.469). The adjusted profit/loss was an improvement by approx. SEK 12 million compared to the same period last year.


Major 5G order and stronger cash position

Third quarter 2020
. Revenue amounted to SEK 22.208 M (24.023), a decrease of 8%
. Profit before depreciation and amortization (EBITDA) amounted to SEK -38.699 M (-16.443)
. Profit/loss for the period amounted to SEK -151.610 M (-24.349)
. Earnings per share amounted to SEK -1.07 (-0.18)
. Equity per share amounted to SEK 2.51 (2.32)
. EBITDA was charged with SEK -32.147 M (-0.461) in provisions for social security expenses relating to the employee stock option programs. After adjusting for this item, EBITDA amounted to SEK -6.552 M (-15.982).
. Profit/loss was charged with SEK -107.234 M (0.581) in revaluation effects from embedded derivatives in the convertible debentures. Adjusted for this effect, and the provision for social security expenses relating to options, profit/loss was SEK -12.229 M (-24.469).

January–September 2020
. Revenue amounted to SEK 66.463 M (70.993), a decrease of 6%
. Profit before depreciation and amortization (EBITDA) amounted to SEK -58.769 M (-28.445)
. Profit/loss for the period amounted to SEK -195.219 M (-52.877)
. Earnings per share amounted to SEK -1.40 (-0.42)
. Equity per share amounted to SEK 2,51 (2,32)
. EBITDA was charged with SEK -35.024 M (-0.744) in provisions for social security expenses relating to employee stock option programs. Adjusted for this item, EBITDA amounted to SEK -23.745 M (-27.701).
. Profit/loss was charged with SEK -111.018 M (1.236) in revaluation effects from embedded derivatives in the convertible debentures. Adjusted for this effect, and the provisions for social security expenses for employee stock option programs, profit/loss was SEK -49.177 M (-53.369).

Significant events in the third quarter:
. On July 28 and August 13, Sivers Semiconductors completed off set share issues totaling SEK 21.1 M. The debt redeemed against shares in the company related to operating credits of SEK 20 M raised in 2019 and unpaid interest. A total of 1,334,958 new shares were issued.
. On August 5, Wireless signed a 5G millimeter wave agreement with an estimated future value of SEK 480 M.
. On September 23, Sivers Semiconductors AB completed a directed new issue of 6,517,805 shares, raising some SEK 200 M for the Company.

Significant events after the end of the period:
. On October 1, Ampleon called for conversion of the convertible debentures issued in December 2017. The loan, including accrued interest, was converted to 4,651,727 new shares on October 22.
. On October 9, the Extraordinary General Meeting in Sivers IMA Holding AB decided to change the name of the company to Sivers Semiconductors AB. In connection with the name change, the subsidiaries’ names are also being changed to Sivers Wireless (formerly Sivers IMA AB) and Sivers Photonics (formerly CST Global). The name changes are part of an ongoing brand review.
. On October 12, Sivers Semiconductors announced that the subsidiary Sivers Photonics received an order worth some SEK 4 M for a new project from one of the company’s established Fortune 100 customers.
. On October 29 Sivers Semiconductors announced it has been awarded SEK 3.1 M UK grant for its part in the MAG-V project aimed at developing the world’s first, commercial Quantum Atomic Magnetometer.
. On November 3 Sivers Semiconductors announced that it has received a Chinese 5G order from Siemens Healthineers.


Key figures

An online presentation of the Interim Report will be held at 10:00 AM (CET) Friday, November 13, 2020.
Register for the webinar via: https://attendee.gotowebinar.com/register/7654655227455013647


 

CEO’s Statement
 

Major 5G order and stronger cash position

After many years of building the company and carrying out world-leading research and development, Sivers Semiconductors is now heading for very exciting times. Many of our customers have recently produced finished products and, in turn, their customers are now starting to roll these out.

Net sales totaled SEK 22 M in the third quarter, in line with previous quarters, although down some 8% year-on-year. As we have not yet achieved volume production, the sales figures are in line with plan. We continue to benefit from excellent cost control, and adjusted for social security expenses relating to employee stock options, EBITDA improved by some SEK 9 M to approximately SEK -7 M in year-on-year terms.

Profit for the period was charged with financial expenses not affecting cash flow of SEK 107 M due to the revaluation of convertible debentures as a result of share price increases.

The pandemic is still inhibiting our end customers’ field tests of new products. In the short term, this could delay the roll-out of some of our end customers’ products, but in the slightly longer term we do not expect the underlying market to be affected by the pandemic. It might even be the case that the pandemic accelerates interest in our technology, particularly 5G.

During the quarter, we continued to prepare for the future. In August, Wireless won a key order relating to a 5G millimeter wave agreement. The order has an estimated value of SEK 480 M over three years, from 2023. This was our 19th design win and the first customer to order our next-generation 5G products. The order provides strong confirmation that our next-generation 5G products are right for the market, and we are delighted that we have now secured our first customer for our next-generation products. In addition, the order clearly signals the huge scope of the 5G market.

Our previous 18 design wins are based on existing-generation 5G products that are now heading for volume production. We have a very promising mix of customers active in many diff erent verticals such as Fixed Wireless Access (FWA), Backhaul, transport (Track to Train), defense, multi-gigabit wireless indoor backbone, medical etc.

One example is AirVine, a customer that just launched a groundbreaking product for multi-gigabit wireless indoor backbones. AirVine estimates the value of the system market for commercial buildings at some USD 6 bn over the next five years. We also signed a further two design wins in the quarter, and one with Siemens after the end of the quarter. However, because a minor design win in ultrasound does not look set to go into production, we reported 21 design wins at the end of the quarter.

Photonics had a quieter quarter in terms of new orders. After winning two important orders in the second quarter from two Fortune 100 customers this was natural. Both these projects are proceeding well, and we won another order worth SEK 4 M from our largest Fortune 100 customer after the end of the quarter. This means that this customer has now placed orders totaling SEK 74 M since October 2018.

In the third quarter, we actively worked to strengthen the Balance Sheet. We completed a directed new issue as well as off set issues that raised a total of some SEK 200 M and repaid a debt of SEK 21 M. At the end of the quarter, cash totaled SEK 278 M our strongest cash position ever. After the end of the quarter, Ampleon called for the redemption of its 2017 convertible, which further decreased our debt.

I want to take the opportunity to express my gratitude for the confi dence shown in us in connection with the directed new issue. The strengthened cash position will be used to accelerate our organic and international expansion, mainly through investments in production capacity, customer support, sales and marketing. Our plans include opening an office in the US, and we are proceeding with the plans for a change of listing to Nasdaq’s main list in the first half of 2021.

All of Sivers has worked hard to get where we are today, and following authorization by the Extraordinary General Meeting on October 9 to change our name to Sivers Semiconductors, we are now ready for the incredible journey that lies ahead. I am very optimistic about the future. We are in an excellent position in terms of our customers, Balance Sheet and new products, which means that we are now entering the most exciting period in the company’s history.

Anders Storm, President and CEO
 

For more information please contact: 
Anders Storm, CEO  
Tel: +46 70 262 6390  
E-mail: anders.storm@sivers-semiconductors.com  

Sivers Semiconductors is listed on Nasdaq First North Growth Market in Stockholm.  
The company's Certified Adviser is Erik Penser Bank, +46 8 463 83 00, certifiedadviser@penser.se. 

This is information that Sivers Semiconductors AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the contact person set out above at 08:00 (CET) on November 13, 2020. 

 

Sivers Semiconductors 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 SIE. The head office is located in Kista, Sweden. For more information: www.sivers-semiconductors.com.