Mycronic AB (publ)

Hello and welcome to the presentations of Micronix Q4 report. My name is Sven Tjatkovich, I'm the Director of Investor Relations at Micronix and with me today I have Micronix CEO Anders Lindqvist and CFO Pierre Broson who will be presenting today. And with that I hand over to Anders, please go ahead and present Micronix Q4 report.

Thank you very much, Sven, and welcome, everyone. Very happy to present the report today. So the agenda is as usual, talk a little bit about the quarter four last year, going a little bit more in details on the different divisions. Pierre will talk about the financials, a few words on sustainability, and then we move into the question and answer session. And as usual in the presentation that you can find on the website, we have also a market update. which we will not present, but it's there. So when it comes to quarter four, we had quarter four of 2023 delivered a lot of records. We had the best ever sales of close to 2 billion. We had the best ever EBIT, a little bit above to 620 million. We have a very good EBIT margin at 32 and still have a very good backlog at a little bit more than 4 billion. And in that backlog, we have 27 systems. After the quarter, we also received four more orders for five machines. It was one Precision 8 Evo for the display industry and then four SLXs for the semiconductor industry so we are really filling the backlog as well um a comment on the order intake so we had a decline compared to the quarter at the quarter four in 2022 of as much as 43 which can look quite dramatic but that quarter was exceptionally high so the current order intake close to 1.5 billion is more or less on an average level for for our companies still happy with that. If we go a little bit more into details on the different divisions, so the strongest contribution both to sales and to profit came from pattern generators division and we had a lot of focus on execution in the last quarter four. We had commitment to deliver eight machines to our customers, and we fulfilled that commitment totally, so we didn't slip on any order. We delivered six SLXs and two precision eight display writers. Because of that exceptionally high delivery, we also had exceptionally high sales, almost close to 900 million. Also very good gross margin of 68% and record high EBIT of 510. And order intake was still strong, although compared to the same quarter last year, down quite a lot. But that was an exceptionally high quarter. We have orders for four mask writers, one Precision 8 and three SLX in debt. So still a good backlog of more than $3 billion that we will continue to deliver on. So we are very happy with the result here. HiFlex also a lot of records I think I will actually start not with the financial information but we launched a new product last year and this is quite a big launch for us it's a new completely new pick and place machine that is both faster but also more flexible than the previous one and we believe that this will be perfect for the current market That was launched on Productronica, which is one of the world's largest fairs within electronics production, and we received very good feedback on the launch of that machine. For the quarter, good order intake, 360 million, which is up 11%, and extremely good deliveries, beating a very strong quarter in the same period last year. So we increased sales by 7%. Gross margin to very high and good level, 46%, and EBIT close to 100 million, which is a really good result. And because of the extremely high delivery in the quarter we had a little bit we have a backlog of 120 million which is slightly lower than normal I would say which is typical after such a good quarter. but very happy here. On the high volume side, we still have, as before, we struggle in China. The market in China has not yet really recovered. We are still, the consumer electronics segment is slow. We have good demand from the electric vehicle industry customers, but the consumer electronics segment is much, much bigger. effect we see so we focus a lot here on international expansion setting up subsidiaries and sales coverage in in other countries mainly targeting the electrical vehicle industry Despite that, the order intake went up with 29%, but that is also compared to quite weak quarter the previous year. Sales down 18%. We managed to maintain the gross margin at 40% and EBIT down to 32%. And backlog more or less stable at 662%. So no big change in that one. And all that corresponds to an EBIT margin of 10%, which is a little bit lower than what we're used to in this division. Moving on to global technologies. Here we have a little bit of mixed result, and that mix is depending on the demand. We see in both business lines very good demand driven by AI. In the dye bonding, we saw both ordering intake and we managed to turn it into sales already in the quarter. And PCB test, which is our other business line, the demand for Normal electric testing and substrates has been quite weak, but AI demand, which is impacting the high layer count PCBs, much more advanced PCBs, has been very strong to compensate partly for that. For the whole division, order and take up with 84%, sales up almost 40%, gross margin also stable and a little bit improving at 39%, and EBIT of 12% or 37 million. which is quite okay. It's moving in the right direction here. Order backlog close to 300, which is also a good level for us. So moving on to the future a little bit. So with that backlog we have and the order intake and the trends that we see, we believe that this year we will deliver a sales of 6.25 billion. at the end of the year, and this is at current currency rates. So with that, I will now hand over to Pierre Brusson to talk a little bit more on the financials.

Yes, good morning from my side as well and happy to deliver a little bit more insights to the financials. We had a very strong ending of the year, ending the 12-month curve a little bit above our outlook or slightly above the outlook that we have communicated before of 5.5 billion, executing very well in particular in the patent generators in the fourth quarter. Also very happy to see that we continue to grow our aftermarket business. This is a strategic initiative that we run in several of our divisions. Of course, the relative share goes down when we sell a lot of equipment, but the important thing here is that we continue to grow the recurring base. If we look at it quarter by quarter, here you see the standout quarter that we had in Q4 and delivering A sales level of almost 2 billion and an EBIT margin of 32%, 620 million. Distinct record in absolute terms, both in sales and in profits. If we look where this comes from in the profit and loss statement, you can see that this comes from both volume increase and margin improvement. We had in particular a high share of pattern generator sales, which supports an improved margin on company level. We had also very good margin and good volume in the high flex division. and we had a good volume in particular in the global technologies division so the outlier was the the high volume in this case where we did not see the same level of increase we're also happy to see that we can deliver this with a relatively stable cost base overall and that the fall through of this gross margin that we generate is very good down to the bottom line Here you see it division by division. And we have mentioned before the increase in patent generators profitability in the quarter, which was high, of course. And we have then the HyFlex division, which was up against the previous record quarter. So this was a strong comparative. but managed very well, executed, turned orders quickly into sales. You can also see that the backlog is relatively small on the HyFlex going out of the year. So it was really good execution on the orders that came in. High volume, we declined in sales and we have seen that we haven't really turned the corner in full in China. There are some positive signs that we have a higher request for quotations, etc. already in the fourth quarter. So maybe we have at least turned the bottom. there and that we can start to pick up. If we take global technologies like Anders mentioned, we have a strong demand from the AI related investments. But apart from that, the traditional business is somewhat weaker. A year where we have delivered very strong results but we've also managed to deliver a very strong cash flow throughout the year. We have even a positive working capital despite the strong growth we have here and this is to a degree related to that the customers are paying a certain portion of the orders in advance. So this is very supportive to this and we are in a very solid position with more than 2 billion in cash at the end of the period and with strong result and a strong revenue outlook for the next year we have also decided or proposed to increase the dividend to 450. With that I hand the word back again to Anders.