Mycronic AB: Interim Report January-June 2020

STOCKHOLM, July 16, 2020 /PRNewswire/ --  Second quarter

• Order intake amounted to SEK 651 (901) million, a decline of 28 percent
• Net sales were SEK 1,086 (1,120) million, a decrease of 3 percent. The currency effect was insignificant. Net sales includes the delivery of a Prexision 10, which was brought forward on the initiative of the customer and was completed in the second quarter instead of the fourth quarter of the year as previously planned
• EBIT was SEK 281 (317) million, a decline of 12 percent. The EBIT margin was 26 (28) percent 
• The underlying EBIT was SEK 290 (332) million, a decline of 13 percent. The underlying EBIT margin was 27 (30) percent
• Earnings per share were SEK 2.18 (2.50)

January-June

• Order intake increased 28 percent to SEK 2,083 (1,622) million
• Net sales declined 18 percent to SEK 1,822 (2,225) million and 19 percent based on constant exchange rates. Net sales includes the delivery of a Prexision 10, which was brought forward on the initiative of the customer and was completed in the second quarter instead of the fourth quarter of the year as previously planned
• EBIT was SEK 336 (723) million, a decline of 54 percent. The EBIT margin was 18 (32) percent
• The underlying EBIT was SEK 355 (753) million, a decline of 53 percent. The underlying EBIT margin was 19 (34) percent
• Earnings per share were SEK 2.58 (5.70)

"I am proud of how our employees are handling the pandemic and particularly how we have adapted to maintain support to our customers in the best possible way. Our operations are well distributed over different segments and geographies, which is why the impact on the Group differs substantially between its various parts. Despite the challenges and increased uncertainty created by COVID-19, I feel secure on the basis of Mycronic's long-standing customer relationships, well-filled order book and stable financial position," says Anders Lindqvist, President and CEO.

Outlook 2020

The uncertainty in the global economy has further intensified over the last months which increases the difficulties in assessing the 2020 outlook. Despite this, it is the Board of Directors' opinion that, as previously communicated, the consolidated net sales for 2020 will be at a level of SEK 4.1 billion, excluding any acquisitions.

CEO comments

I am proud of how our employees are handling the pandemic and particularly how we have adapted to maintain support to our customers in the best possible way. Our operations are well distributed over different segments and geographies, which is why the impact on the Group differs substantially between its various parts. Despite the challenges and increased uncertainty created by COVID-19, I feel secure on the basis of Mycronic's long-standing customer relation-ships, well-filled order book and stable financial position.

Having initially impacted China, it is now apparent that COVID-19 gained momentum during the second quarter of the year, resulting in the lockdown of large parts of Europe and the USA. This entailed challenges we had never encountered before. While we have prioritized the health and safety of our staff, we have been successful in continuing to help our customers conduct operations despite practical and logistical obstacles. It is clear that our strategy to be close to our customers, with local service and installation capacity in combination with digital support, is now proving its strength.

As a whole, net sales decreased 3 percent during the quarter. The performance of our divisions varied and reflects the diversification of our operations in various segments and geographies. Net sales grew 1 percent for the Assembly Solutions business area, driven by the strong momentum of the High Volume division in the Chinese market, while the High Flex division noted a significant negative effect of the closures in Europe. The situation for the Global Technologies division is divided, with a positive perfor-mance and rapid recovery for optoelectronics while the camera modules for the automotive industry segment was characterized by low levels of activity.

The operations in Pattern Generators reports a stable quarter. Order books are well-filled and deliveries of mask writers during the remainder of the year are unchanged. The first two mask writers using the new Evo platform were shipped during the quarter. Despite the current situation, we are also pleased that we have satisfied a request from one of our customers to bring forward delivery of a Prexision 10 limited to G8 size. The system was delivered before July 1, which made a positive contribution to developments during the quarter. However, the positive effect from the early delivery of the system was partly offset from the deferral of a major upgrade where the customer was unable to complete the installation work before the end of the quarter due to COVID-19. Overall, the utilization rate remains high in the installed base and we have performed service as requested by our customers.

The pandemic means some customers have opted to temporarily postpone investments, which impacted order intake for the quarter in Europe and the USA. Although division High Volume reported strong order intake in the Chinese market, this was unable to compensate for the weak markets noted by the High Flex division due to the shutdown in Europe and the USA. Pattern Generators, which experiences natural variations between quarters, has a stable aftermarket, but received no system orders during the quarter. Taken together, this is reflected in a reduction in order intake for the Group as a whole by 28 percent.

We have a favorable risk spread and strong balance sheet. The High Volume division reports a strong quarter and Pattern Generators notes a stable performance. A range of efficiency improvements are being implemented in High Flex and Global Technologies. I am also confident in the way we have continued to support our customers and that we can therefore emerge stronger from the challenges presented by the pandemic. However, the uncertainty in the global economy has further intensified over the last months which increases the difficulties in assessing the 2020 outlook. Despite this, it is the Board of Directors' opinion that, as previously communicated, the consolidated net sales for 2020 will be at a level of SEK 4.1 billion, excluding any acquisitions. The long-term goals of achieving net sales of SEK 5 billion not later than 2023 and an EBIT margin of at least 10 percent in Assembly Solutions during 2021 remain.

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 July 16, 2020, at 8:00 a.m.

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