Mycronic AB Interim Report January–June 2022

Second quarter

• Order intake amounted to SEK 1,203 (1,002) million, an increase of 20 percent 
• Net sales increased 20 percent to SEK 1,273 (1,064) million. Based on constant exchange rates, net sales increased 10 percent
• EBIT amounted to SEK 224 (241) million and the EBIT margin was 18 (23) percent  
• Earnings per share were SEK 1.79 (1.84)

January–June

• Order intake amounted to SEK 2,644 (2,030) million, an increase of 30 percent 
• Net sales increased 2 percent to SEK 2,408 (2,355) million. Based on constant exchange rates, net sales decreased 6 percent
• EBIT amounted to SEK 429 (739) million and the EBIT margin was 18 (31) percent  
• Earnings per share were SEK 3.47 (5.84)

“The order intake and net sales were fairly stable in local currencies during the second quarter. Supported by positive currency effects and acquisitions, both increased 20 percent compared with the same quarter last year. High Flex, High Volume and Global Technologies showed increases in net sales, whereas Pattern Generators’ net sales declined. EBIT was SEK 224 million with an EBIT margin of 18 percent, where all divisions showed double digit EBIT margins. The decline compared to last year was mainly due to the previously communicated change to the sales mix in the Group, resulting in a decrease in Pattern Generators’ share of total net sales, but also due to the second quarter last year being a very challenging comparative period for High Volume”, says Anders Lindqvist, President and CEO.

Outlook 2022

It remains the Board of Directors’ opinion that consolidated net sales for 2022 will be at a level of SEK 5 billion, based on exchange rates at the end of 2021. Due to the product mix of announced orders in Pattern Generators with deliveries in 2022, the Group’s EBIT margin is expected to be slightly above the long-term financial goal of >15 percent.

CEO comments

The order intake and net sales were fairly stable in local currencies during the second quarter. Supported by positive currency effects and acquisitions, both increased 20 percent compared with the same quarter last year. High Flex, High Volume and Global Technologies showed increases in net sales, whereas Pattern Generators’ net sales declined. EBIT was SEK 224 million with an EBIT margin of 18 percent, where all divisions showed double digit EBIT margins. The decline compared to last year was mainly due to the previously communicated change to the sales mix in the Group, resulting in a decrease in Pattern Generators’ share of total net sales, but also due to the second quarter last year being a very challenging comparative period for High Volume.

In June, the Board of Mycronic decided to investigate the possibility of listing Axxon, the core of the High Volume division, on the STAR market of the Shanghai stock exchange and floating a minority stake. Axxon has developed very successfully since Mycronic’s acquisition in 2016. A net sales compound annual growth rate of 39 percent, with healthy profitability, has brought Axxon to a market leadership position in dispensing for the electronics industry. A listing would strengthen Axxon’s brand and position as the global leader in dispensing for the electronics industry and make it easier for the company to achieve its full potential. If feasible, the listing could take place during 2024.

The photomask market for both semiconductors and displays was healthy in the second quarter, even though the war in Ukraine and lockdowns in China created uncertainty regarding investment decisions. The authorities in China announced their intent to further stimulate the semiconductor industry, which could be positive for Pattern Generators. The division did not receive any orders for mask writers during the quarter, while 5 SLX systems were delivered.

For High Flex, the quarter was characterized by continued high demand despite the current world situation. Primarily Europe but also North America noted a strong market development, while China was weak due to lockdowns. There is a trend in High Flex’s market where production of electronics is being relocated to North America and Europe. With our product offering and geographical presence, we are well positioned for this trend and High Flex is in the process of opening an entity in Mexico that is expected to be operational by the end of the year. 

For High Volume, demand from suppliers to the electric car industry was strong. They were not seriously impacted by the lockdowns in China, since contractors that supply electronic components to electric car manufacturers also have production in e.g. Taiwan, Vietnam and Mexico. The surface mount technology (SMT) industry that supplies components for consumer electronics was impacted by the lockdowns. However, the consumer electronics industry is expected to recover in the second half of the year if restrictions are eased.

In Global Technologies, the market for electrical testing of PCBs and substrates performed strongly in Asia, but was slightly weaker in Europe and the US. No slowdown was noted in China despite the lockdowns. Demand in die bonding was solid, even though several large data centers and cloud-service providers announced recruitment freezes during the quarter.

I am pleased to conclude that due to our continued hard work in the second quarter we succeeded in managing the challenges related to the supply of components and transportation and mostly succeeded in delivering our production equipment to our customers according to plan. To date, we have also been successful in managing rising inflation. With a strong balance sheet and net cash of SEK 505 million, we are well prepared to face future challenges and opportunities.

Anders Lindqvist, President and CEO

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.

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