Mycronic Reports Record Order Intake in 3Q 2017

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Mycronic has posted net sales of SEK 484 million and order intake of SEK 1.874 billion for the third quarter of 2017. For January to September 2017, cumulative net sales totaled SEK 2.07 billion.

"Mycronic reports a record high order intake of SEK 1.874 billion and SEK 2.995 billion for the third quarter and the first nine months of the year, respectively. We have seen strong demand from our customers within the photomask industry with orders for nine PG (Pattern Generators) systems and several upgrades. Within AS (Assembly Solutions), we have developed a modern and broad product offering and launched several new product platforms. We enter the fourth quarter with a strong backlog also for AS. Our investments in product development also continue," says Lena Olving, CEO and president. "It is gratifying to report today the highest order intake ever for a single quarter as well as for a nine month period. Order intake developed favorably within both of our business areas, even if demand for mask writers was more pronounced during the third quarter. The order backlog, SEK 2.269 billion at the end of the third quarter, is full as regards advanced mask writers for 2018 and starting to build up for deliveries in 2019.

Net sales for the third quarter were somewhat lower than for the same period last year. According to Olving, this is not unusual as a single quarter can be affected by, for example, the delivery of mask writers. Net sales for the first nine months of 2017 increased by 59 percent, and organic growth was 34 percent.

"We also report continuing good profitability," says Olving. "The consolidated EBIT margin for the first nine months reached 26 percent. EBIT was burdened by acquisition-related costs unrelated to operational activities. The underlying operations reached an EBIT margin of 29 percent."

According to market data, the global surface mount equipment market showed growth of 21 percent during the first half of 2017 compared with the same period in 2016.

"Our large investments in product development within surface mount equipment has resulted in the launch of the MYPro series, including two new product platforms, the MY700 and the MY300, for dispensing and for mounting of components," says Olving. "The response from customers has been good since our solutions respond to challenges within advanced electronics production. It is gratifying to see the result of this in terms of high order intake and record high order backlog for surface mount equipment. However, we are not pleased with third quarter net sales and EBIT regarding AS. The quarter was negatively affected in the short term by, among other things, challenges within the supply chain for ramp up of platform changes. I am still pleased to say that all parts of business area AS contributed to the improvement of the underlying result for the nine months period and that operations in Axxon and AEi develope in accordance with our expectations. We are now the fourth largest supplier globally of dispensing equipment, and Axxon’s products are now being sold via all the Group’s sales channels. AEi has also strengthened its global presence through Mycronic’s established channels, and has experienced favorable growth. Within the display industry, a shift is underway toward a greater proportion of AMOLED displays. At the same time, there are plans for more advanced display manufacturing in China, in so-called G10 fabs that are producing large displays, primarily for TV. This also creates a need for advanced photomask manufacturing locally in China. These two factors explain the large investments that have been announced, and which resulted in record high order intake for business area PG.

"We are already well into the fourth quarter with continued intense activities among our customers within all our product areas. Our investments in product development continue within surface mount equipment, as well as within other parts of business area AS, in order to further broaden our offering and the addressable market."

Outlook 2017

The Board's assessment remains that net sales in 2017 will be at the level SEK 2.8 billion.