Mycronic AB (publ)

Hello and welcome to the presentation of Micronic's Q4 report. My name is Sven Tjatkovic. I'm the Director of Investor Relations at Micronic. And with me today I have Micronic's CEO Anders Lindqvist and CFO Pierre Brusson who will be presenting today. And with that I hand over to Anders. Please go ahead and present Micronic's Q4 report.

Thank you very much, Sven. And this is what we will talk about today. No change from before. So about a quarter, of course, go deeper within the different divisions. Pierre will talk more about the financials, a few words on sustainability. And then we have a question and answer session at the end of the session. presentation and as usual there is a market update in the material that will be posted on our website which we will not present but it could be interesting reading so starting with a short summary of the last quarter of last year so we had A decline of order intake with 19% to a level just below 2 billion, which is a good level. It's on our annual average, but compared to a very strong quarter in 2024, it was nevertheless a decline of 19%. Very much explained by the lower order intake in pattern generators. Also worth to note is that currency makes a lot of impact on all the numbers here in PR. We'll talk a little bit more about that in the financial part. Also sales were more or less flat compared to last year, around 2 billion. And we had decline in three divisions, so pattern generators, PCB assembly solutions, and also in the high volume division. Then we had quite good growth in the global technology division that almost fully compensated for that difference. So being flat in total compared to the year before. EBIT also declined 342 million, which is a margin of 17%. backlog more or less flat at 4.7 billion which is a good and healthy backlog I would say and also the Board of Directors will propose to make a dividend of 3.25 krona per share which is a little bit an increase from before and no extra dividend as we did last year. We made a small acquisition after the end of the period, a company called ETZ that's a supplier of critical components for our PCB test business line. So it will not have a large impact on the numbers, but it will really reinforce our quality of the supply chain. So quite an important acquisition for us. So going into the different divisions, starting with pattern generators, we could see that the markets were stable, I mean, and even positive. The semiconductor photo mask market has shown positive development. I think you can read it by also in the report from PEERS that it's mainly driven from applications related to AI. On the display, photomask side market, we see that stable as usual, a little bit irregular, but stable nevertheless. And we saw a decrease then of order intake down to 545 million. And this has to be compared to a super strong quarter in 2024. We had five machines on order, or we got orders for five machines. One display mask writer, Precision 8 Evo, FPS 6100 Evo, and also three SLX mask writers for the Semicon industry. Sales down to $577 million. We delivered six equipment and this is 18% down. One display mask writer positioned like the 8 EVO and one FPS 6100 and four SLX. So quite similar to the ordinary tech actually. But it's not the same equipment. Gross margin, 58, which is good, stable around that level, and EBIT, 173. Backlog is a bit down to 2.6 billion. So as we said, the total company backlog was flat, and you can understand that the backlog has increased in the other divisions. So we have 18 systems in the backlog as per end of the year. And after the period this year, we also received orders for Precision, 8EVO, and MMX. You can also see that in the headline we talk about continued R&D investments, and we do increase R&D investments. We develop new products to offer more equipment to our current customer base, and that kind of equipment is in the inspection technology area, so we will launch at the end of this year a range of inspection machines for the semiconductor photo mask market, which are ramping up right now, both in R&D investments, but also we are preparing space for the production for that. So quite a large project for us. On PCB assembly solutions, we have talked before about the difficult market, and this continues to be difficult, especially the European market. We have seen positive trend in Asia and also U.S., but Asia is not so large for us for the PCB assembly solution, and the U.S. market has been stable, but the European market has continued to be very, very weak. Every second year, there's a large show in Munich called Produktionica, where we're We and our peers in the business normally introduce new products, and we had two large introductions there. Gen-I, which is an AI-enabled inspection machine, and MyProA41, which is a continuation of our pick-and-place series. Order intake down to 362, which is 7%. Also sales down 10% to 438. Gross margin at 40%. Okay, and EBIT down to 60. Backlog 147, which is quite okay, but still a difficult market in this division. On the high volume side, also participated on the Productronica show. A large part of our strategy in the high volume is to expand sales outside of China, so very important to be present at those shows outside of China. We have also decided to put the listing. Some years ago we announced that we are contemplating and investigating the possibility to list Axon on the China Stock Exchange and this is put on hold right now. That listing would have contained also an investment program for employees. So as that is not happening, we have launched what is called an ESOP program, which is Employee Share Ownership Participation program. So that is just launched. We also opened a new facility for production in Thailand to be able to supply machines not made in China, which is to be more flexible in this restricted world that we live in today. We are from place of origin of manufacturing. Order intake was down 30% to 271. Sales was very strong at 448. million still a little bit less than the year before gross margin 41 we were good margin and ebit 55 and in this 55 there is a bit of plus and minuses we have a cost of this share ownership program of minus 23 million and then we had a positive impact of provisions for personnel that was made that contributed to 13 million backlog 683 which is quite good or normal i would say So all good there. Global technologies. Here we see a very strong development. As many companies now in these days report that it's driven by AI-related applications, and we have the same. This is in particular notable for our PCB test and also the die bonding business line. So, and also we have some acquisitions, of course, supporting all that. So, order intake up almost 70% to 773 million and sales up 41% to 570. And you can see the sales contribution from acquired businesses, which is H-Probe, Robot and Surface, 131 million. But still a very strong development there. Very solid gross margin at 45%, EBIT 118 and some negative impact from the recently acquired businesses of minus 6. And a very strong backlog of almost 1.3 billion. So very good development in this division and an EBIT margin of 21% in the quarter. And as I said before, we also acquired this very small company, ETZ, which will not really have a lot of impact on the numbers, but really will solidify our supply chain for the PCB test business line. So all that, we believe that we will continue to grow the business and this year we see that an outlook now, which still almost 12 months to go, or at least 11, to reach 8.25 billion in sales. All right, now I hand over to Pierre to talk more about finances.

Yes, good morning from my side as well. And we will do a little bit deeper review of the numbers. Starting with this graph displaying the quarterly numbers and we reach just above 2 billion in sales. And this is compared to last year, a small decline of 2%. But it's really a volume increase. It's both organic and inorganic growth and 11% negative currency impact. And this currency impact is even bigger on the order side because they also revalue the orders on hand. So very significant impact of the currencies in the quarter and also throughout the year. The aftermarket revenue, we exceeded 500 million, so we are approaching 2 billion on an annual basis. This is a good number. However, for the first time since 2021, we were not sequentially growing towards the same quarter. last year, so we were slightly below the good quarter of 2024, mainly related to that we at that time had some upgrades in the pattern generators division, which we could not fully compensate for this year. EBIT margin 17%, a solid number, a bit high on the OPEX side, but really according to the plans that we have made. and how we want to develop the company going forward. If we look at it on an annual basis, we ended the year just below the $8 billion with an EBIT margin on 24% good level. Aftermarket revenue, as I mentioned, we are approaching the $2 billion, which is then constituting 25% of the net sales and continuously growing this part. So we will see fluctuations on the equipment side, but The aftermarket revenue is important to continuously, gradually build and grow, which we are doing at this point in time. We'll go a little bit deeper into the costing details and the different parts of the income statement comparing quarter on quarter. And this may look at us as a less positive staircase, but it's really largely according to plan. We had a little bit lower sales in the patent generators division as a share of the total in the quarter, and thereby we have a small negative gross margin effect. On the R&D side, Anders alluded to that, that we are continuing to spend at high pace and in very relevant projects, particularly in the patent generators, but we also have an organic increase of the R&D spend in the high volume division. In that division, in the high volume division, we are also expanding the footprint in particularly outside China. And this drives a bit the marketing and sales cost. Here we also have, when we compare the numbers versus the prior year, we also have the newly acquired entities. adding to all the cost categories here and also the acquisition related costs and in particular the retention and mechanism for the surface acquisition that is running over six months, which will end now in the fourth quarter, which is affecting the numbers a bit. About 10 million net impact of the China ESOP versus the provision release as well. If we look at the 2025 full year bridge, we can see that we have been growing throughout the year despite the currency headwind that we have had. And in several of the divisions, we have also improved the gross margin, in particular in the global technologies division, which we are very happy about. We have decided to do investments on the R&D side and on the marketing and sales side in order to set the company for the future. and to create the organic growth that we want to have sustainably going forward. We have also a bit higher acquisition related costs and transaction costs this year compared to the prior year. And then this other column that you see there, we have mainly the net effect of the FX, realized and unrealized exchange differences. ending the year at a solid 19.40, which is 24% in relation to sales. Division by division, if we cut it that way, we have said that we had a little bit lower sales and also lower margin and higher R&D in patent generators, and this is really the main explanation for the relatively lower EBIT in the fourth quarter. We had last year record quarter in PCB assembly solutions and in high volume. We could not fully match that this year, but particularly for PCB assembly solutions, we had the best quarter of the year in the fourth quarter. It's normally that way, but I think it's also fair to say that it's not a bad level, it's a good level. In high volume, we had a little bit slower ending of a solid year. And it looks quite good going into 2026 as well. Global technology is really good despite not getting contribution yet from the acquired entities. delivering 20% or about 20% EBIT margin in the quarter, taking us to a total of 17% or 342 million in quarter. Looking at the full year, we were slightly lower than last year in patent generators, mainly related to the R&D investments. The number for PCB assembly solution is of course a bit bigger in relation to the baseline. So we did not reach what we wanted to reach in a tough market where we had our largest markets in Europe. having a negative economy and US having a bit of a difficult investment climate with tariffs as well as the headwind from currencies. High volume and global technologies on track and for global technologies even exceeding the plans we made. And here you see on the group functions that we have and this is largely transaction related costs that has increased over this period of time. ending the year on, as we said, 24% or $19.40. Cash flow-wise, it's all natural in relation to the activities we have conducted and the situation on the P&L, plus the acquisitions and the dividends that has been paid out. Maybe noteworthy is that we have about $200 million less good change of working capital, and this is largely that we have a lower order stock in the patent generators where we have a significant portion of advance payments from customers. We have almost spent one billion in the acquisitions we have done during the year. still at a position where we can be active in the M&A market and with 2.3 billion cash and additionally facilities in place of 2 billion. And with that, I hand the word back to Anders.