Mycronic Posts 3rd Quarter Results

Third quarter

• Order intake amounted to SEK 1,242 (739) million, up 68 percent
• Net sales decreased 8 percent to SEK 986 (1,068) million. Based on constant exchange rates, net sales decreased 9 percent
• EBIT declined to SEK 106 (348) million and EBIT margin was 11 (33) percent
• Earnings per share were SEK 0.82 (2.71)

January–September

• Order intake amounted to SEK 3,272 (2,822) million, up 16 percent
• Net sales increased 16 percent to SEK 3,341 (2,889) million. Based on constant exchange rates, the increase was 21 percent
• EBIT rose to SEK 845 (684) million and EBIT margin was 25 (24) percent
• Earnings per share were SEK 6.66 (5.29)

“During the third quarter, order intake showed a positive trend, with an increase of 68 percent, while a significantly less advantageous product mix for Pattern Generators led to reduced sales and EBIT. We announced an acquisition within High Volume, which strengthens and broadens the division’s product portfolio and enables it to offer its customers more complete and attractive solutions. We also announced a divestment within Global Technologies, which will enable the division to focus on and invest in markets that are strategically more relevant. Both transactions are expected to be completed during the fourth quarter of 2021 or the first quarter of 2022,” says Anders Lindqvist, President and CEO.

Outlook 2021
It is the Board of Directors’ opinion that consolidated net sales for 2021 will be at a level of SEK 4.5 billion, based on prevailing exchange rates, including the completed acquisition.

CEO comments

During the third quarter, order intake showed a positive trend, with an increase of 68 percent, while a significantly less advantageous product mix for Pattern Generators led to reduced sales and EBIT. We announced one acquisition within High Volume and one divestment within Global Technologies during the quarter. These transactions are expected to be completed during the fourth quarter of 2021 or the first quarter of 2022. Through the acquisition of Shenzhen Huan Cheng Xin Precision Manufacture Co., Ltd, High Volume strengthens and broadens its product portfolio and has the opportunity to offer its customers more complete and attractive solutions. The divestment of Automation Engineering, Inc will enable Global Technologies to focus on and invest in markets that are strategically more relevant for Mycronic.

After a downturn in 2020, the market for photomasks for displays has still not returned to pre-pandemic levels. At the same time, the semiconductor market shows a strong trend, creating favorable conditions for the SLX mask writer. Pattern Generators received orders for six mask writers during the quarter. The division delivered two systems, which was as many as in the same period last year. However, the product mix was less advantageous, since the preceding year included the delivery of a Prexision 800 Evo, our most advanced mask writer. At the customer’s request, the delivery of an SLX announced earlier was moved from the third to the fourth quarter.

High Flex received many customer inquiries during the third quarter and secured a higher number of orders, but of smaller size. While demand for MYPro products continues to be at a high level, customers are also increasingly interested in the MYSmart product line, with its various dispensing solutions.

High Volume’s market was stable during the quarter and the division is focused on offering competitive and intelligent automation solutions that help customers to reduce labor costs and raise the quality of production.

Within Global Technologies the integration of atg L&M, which was acquired at the end of the second quarter, is proceeding according to plan. The Chinese market, where customers are implementing significant expansion plans, was strong for systems for electrical tests of bare board PCBs. Sales and production ramp up of a new machine generation that was launched in the first quarter have gone well. Also die bonding displayed healthy activity in the Chinese market and is being positively impacted by 5G investments.

The shortage of supply of components, raw materials and distribution logistics impacted the divisions to various extents during the quarter. Pattern Generators was not impacted to any significant extent, while High Flex began to notice the effects of component shortages and higher transportation costs. For High Volume, increased delivery costs and higher prices for raw materials and certain components impacted the quarter, although there was no shortage of components. At the end of the quarter, power rationing was introduced in China, which may have a negative impact going forward. Global Technologies was affected by disruption in the supply chain and component shortages, creating challenges for deliveries during the fourth quarter. The situation led to customers postponing purchasing decisions in certain cases.

As part of Mycronic’s sustainability strategy, an innovation fund for sustainability was established. The purpose of the fund is to finance projects, internal or in collaboration with external partners, that support the transition to a sustainable electronics industry and that connect to Mycronic’s strategic sustainability goals.

Anders Lindqvist, President and CEO