Mycronic AB (publ)

Hello and welcome to the presentation of Micronic's Q3 report. My name is Sven Tjatkovich. I'm the Director of Investor Relations at Micronic. And with me today, I have Micronic's CEO Anders Lindqvist and the CFO Pierre Brusson, who will be presenting today. And with that, I hand over to Anders. Please go ahead and present Micronic's Q3 report.

Thank you Sven and welcome everyone to this session. So today we will of course talk about the quarter three short and then go a little bit deeper within the different divisions that we have. Pierre will explain everything about financials and we will talk shortly about sustainability and as usual we will end this session with the question and answer. section. And in the material that is to be found on the website, there is also an appendix where we have collected all the market reports in update. So start to talk about the quarter in general. So we had a very solid quarter and it's on all counts, which meaning that all the divisions contributed very nicely to the result. So we saw an order intake that increased by 10%. and this is to be compared to a very strong quarter in 2025. So almost 2.7 billion in order intake. The greatest contribution came from high volume division and global technologies division. Sales also increased very nicely, 38%, almost up to 2.4 billion, close to. And the primary reason for that is the growth that we have within global technologies. But you can also say that all divisions actually had double digit growth in the quarter. So very nice. Also very solid gross margin, 52%. And with all that together, the EBIT increased to 610 million. which equals to a margin of 26%. Backlog is a record high on a little bit more than 5.5 billion Swedish krona, which is the highest ever. And also we launched new financial targets during the capital markets day that we had on August 31, which also the picture that is not anymore here was from Patent generators, starting with that, and this was happening also during the capital markets day that we launched two new products. One is called SLX Kite, which is a next generation semiconductor mask writer. with extended and enhanced capability, and also for the semiconductor segment, a photomask inspection machine IQX. These are very important launches because both of them are actually expanding our available market, so it's not only an upgrade of already existing equipment, it's really offering new capabilities that will enable us to grow further in the semiconductor market. On the business side, we saw a decrease of order intake down to 616 million. We had three tools on order during the quarter, one Precision 80 EVO, which is the display machine, and two SLX mask writers for the semiconductor industry were received. Increase of sales up to 580 million, 20%. And in that number, we have a small contribution from our recently acquired company, Cowin, that is equals to 23 million. Gross margin stable at 59% and EBIT also quite stable on 188. And in that one, we had also a negative effect from the acquisition of Cowin with 13 million. So that corresponds to a margin of 32%. So in the backlog we have 11 systems in the order backlog which equals to 1.741 billion krona. Another news in the pattern generators divisions and this is just after the quarter but we have appointed Mikael Wahlsten as the new senior vice president of pattern generators and that is effective from November 1 so quite soon and he is replacing Charlotte Samuelsson who has decided to retire Charlotte had 30 years with the company so very long time and Michael has a little bit less but still 23 years with the company so also very senior leader that is taking over and he's recently had the position as head of product strategy and development within the pattern generators division so we look very much forward to welcome Mikael to the management team Going further with the next division, so PCB assembly solutions, we still see that the demand is continue to be quite soft in our segment, which is the high mix and low volume segment. We also see some price pressure, especially from Japanese competitors, and it's quite visible in the order intake that ended on 367 million, which is a decline of 9%. A little bit up on the sales compared to the same quarter last year, 14% up to 3, 5, 8. And we're in quite strong gross margin of 41%, so we were able to increase the EBIT to, I would say, a decent 42 million and a margin of 12%, which is not that bad actually in this environment. Also, the backlog increased a little bit to 266 million, which is quite a good backlog actually. So, see a little bit improvement on the result, although the market is still quite soft in the PCB assembly solution segment. High volume, we see a continued momentum here and we see a difference between the markets inside China and outside China. So outside China we saw very good demand while the domestic market in China weakened a little bit. And this is a typical cycle in the China market where we see the majority of orders coming in the first half of the year. that is supporting our customers to launch the product at this time of the year in the autumn more or less so all together we saw a very nice order intake increase with 42% to a little bit about 600 million also very nice increase of sales to 569 and it's quite solid and normal gross margin on 41% EBIT on 74 and here for comparison we have the the cost of the ESOP program impacting 25 million here so adjusted for that with quite a good increase on EBIT as well margin 13% and very strong backlog of 1.2 billion Swedish krona so strong performance in the high volume And then on global technologies, here we saw all the stars being aligned for the quarters. We had an exceptionally strong quarter, both driven by volume, but also by product mix. We'll talk about product mix when we come to the profitability, but we see that The general market conditions are still very strong. You could see that it's driven by investments in AI infrastructure, but also investments in developing advanced packaging and also defense. This defense segment invests quite a lot of money. Very good for us. We increased our orders with 33%, a bit more than a billion. Very nice. We had more than a doubling of the sales, 105% up to 852. A super strong gross margin of 60%. And we had a very favorable product mix in the quarter and volume. EBIT also very much up to 359 million. A little bit of that is revaluation of a consideration in Surfex that impact 15 million or 2% on the EBIT margin that was 42%. We also had quite low cost in the quarter because of partly the summer period is in this quarter. Backlog, very strong backlog, 2.3 billion, more than doubled than the old ones. So super strong performance here, although a little bit exceptional for the quarter. So all that has enabled us to, again, I would say, revise our outlook for the full year. There's only one quarter to go now, but we believe that we will end on a sales number of 9.75 billion for the full year. So that is a new outlook from the board of directors. So with that, I will hand over to Pierre to talk a little bit more in detail about the financials.

Thank you so much Anders and good morning from my side as well. If we look at the numbers quarter by quarter, you can see that we are just below the very strong Q1 and Q2 in terms of sales at 2.4 billion. up versus a low quarter last year with 38%. The aftermarket revenue was a record 606 million, and we saw good improvement across all divisions in the aftermarket, which is one of the initiatives we are driving. and in particular in global technologies the increase was substantial. The EBIT margin ended at 26% in the quarter which we consider good given the mix between the various divisions we had in this quarter. If we look at it on a rolling 12-month basis we are now up at 9.3 billion with an EBIT margin of 28%. and with the aftermarket continuing to grow and has now passed the 2 billion mark distinctly constituting 24% of our net sales. If we look at the improvement that we had over last year, which was more than a doubling of the profitability, we had a good volume effect, but we also had a gross margin impact. And this was largely stemming from the global technologies division, where we had not only record volumes, but also record gross margin in the quarter, stemming from exceptionally good product mix, high aftermarket share, software updates, et cetera. So really, really good. We don't want to extrapolate this level going forward, but really, really good in the quarter. We are growing the organization in all areas and especially on the R&D side where we are investing a lot in product development across the group, not least in the patent generators division. And this took us in the end then to 610 million EBIT or 26%. If we compare with the same quarter last year, this is of course not the only metric, but you can see that we are improving in all divisions. And if you would exclude the 25 million ESOP costs in the high volume division, you would see that this division would be on similar improvement as pattern generators and PCB assembly solutions. But the main difference to same quarter last year is obviously coming from the global technologies where we had very low result last year and great results this year. If we look at the cash flow, we have strong cash flow from operations. I'm also happy to see that we are developing really good on our receivable collection. So although we are growing strongly, the change in working capital is mainly stemming from a higher inventory, which is logical in a period where we have this growth. If you look at the investing activities, we have acquired in the beginning of the year ETZ and Kovin, which is then 184 million, and apart from that, The majority of the investments are actually stemming from investments in facilities we are building in Taiwan and in China etc. Financing activities is largely the dividends that was paid out in the second quarter. And we have now a very solid cash position above at 2.9 billion and cash at the end of the period even above 3 billion. So really solid financial position as well. And with that quick walkthrough, I hand the word back to Anders again.