Year-end Report, January-December 2018
2018 – order intake, net sales and EBIT once again at record levels
“We deliver a quarter with good growth and strong order intake, while we are laying a fantastic year behind us, in which for the first time in Mycronic’s history, we achieved an EBIT of more than SEK 1 billion, an increase of 21 percent from the preceding year. We reported growth of 26 percent and ended the year with net sales of SEK 3.8 billion. We are reinforcing and strengthening our position in several of our market segments, which is reflected in the Assembly Solutions business area’s improvement of its EBIT margin by nearly 10 percentage points for the full year,” says Lena Olving, President and CEO.
Order intake increased 128 percent to SEK 1,303 (572) million
Net sales increased 14 percent to SEK 1,052 (926) million and 8 percent based on constant exchange rates
EBIT amounted to SEK 151 (306) million, down 51 percent due to a postponement of revenue recognition from 2018 to 2019 for a Prexision-10, together with the product mix. The EBIT margin was 14 (33) percent
The underlying EBIT was SEK 186 (343) million, a decline of 46 percent. The underlying EBIT margin was 18 (37) percent
Earnings per share amounted to SEK 1.33 (2.32)
Order intake increased 2 percent to SEK 3,642 (3,567) million, which must be viewed in comparison with the record order for mask writers of USD 90-100 million in September 2017
Net sales increased 26 percent to SEK 3,781 (3,000) million and 24 percent based on constant exchange rates
EBIT rose 21 percent to SEK 1,020 (844) million, corresponding to an EBIT margin of 27 (28) percent.
The underlying EBIT rose 13 percent to SEK 1,076 (951) million, corresponding to an underlying EBIT margin of 28 (32) percent
Earnings per share were SEK 8.09 (6.37)
The Board of Directors proposes a dividend of SEK 3.00 (2.50) per share to the 2019 Annual General Meeting
The Board’s assessment is that consolidated net sales for 2019 will be at a level of SEK 4 billion, excluding any acquisitions made in 2019.
We have a fantastic year behind us, in which for the first time in Mycronic’s history, we achieved an EBIT of more than SEK 1 billion, an increase of 21 percent from the preceding year. We reported growth of 26 percent and ended the year with net sales of SEK 3.8 billion, exceeding the target we set at the beginning of the year, even if we exclude the acquisition of MRSI Systems. We are reinforcing and strengthening our position in several of our market segments, which is reflected in the Assembly Solutions business area’s improvement of its EBIT margin by nearly 10 percentage points for the full year.
The fourth quarter of the year also ended on a strong note, with net sales growth of 14 percent. Regarding orders, we grew 128 percent, driven by a strong quarter from both of our business areas, which jointly generated an order intake of SEK 1,303 million. The net sales for both the quarter and the full year are to be seen from the perspective that we shipped a Prexision-10 during the fourth quarter, for which, on the customer’s initiative, the terms of delivery entailed revenue recognition being postponed until the beginning of 2019 instead of the end of 2018. Together with the product mix, this contributed to a lower EBIT and margin for the quarter year-on-year.
In the fourth quarter of the year, the Pattern Generators business area received orders from customers in Asia for a Prexision-8 and a Prexision-800, both with limited functionality, and two FPS systems. It is particularly satisfying to see the second order for our most recent mask writer, the Prexision-800. Fully equipped, the system sets an entirely new standard for the world’s photomasks. Looking ahead to 2019, this means that we now have eight planned deliveries. Despite the postponement of the revenue recognition for a Prexision-10 that I described above, the business area had stable net sales for the quarter, nearly in line with the preceding year.
The variation in volumes and product mix between the quarters is a natural feature of the business area’s operations and this was reflected by a lower EBIT and margin during the quarter than for the corresponding period in 2017.
The Assembly Solutions business area also had a strong end to the last quarter of the year, with a net sales growth of 31 percent and an order intake that increased 62 percent. As I mentioned at the beginning, we improved our operating margin by nearly 10 percentage points to 3 percent for the full year. This strong and gratifying performance was driven by the consistent implementation of our strategy in recent years. Our investments have created an attractive product portfolio, which now offers a complete production line. Our acquired units are continuing to deliver significant contributions, while we are also beginning to see results from expanding cross sales to the units’ customer bases.
Slightly more than a month into 2019, we have a confident view of the coming year. At the same time as we continue to invest in the offering of tomorrow, I expect that the invest-ments we have made in recent years will continue to deliver results, while also helping us to support our customers with the best and most efficient solutions. The strategic approach of recent years has created a solid platform for continued growth. If we look ahead to the year that has just begun we have, together with the Board of Directors, determined that we will accomplish net sales of about SEK 4 billion, excluding any acquisitions made during the year.
Our ability to be one step ahead and understand the customers’ needs is a continuous process that ensures that we conduct the right product development and have a competitive offering that creates value for our customers. It is part of the strategic effort that we began already five years ago and which, together with the excellent efforts of our coworkers, laid the foundations for the record year in 2018. Finally, for this reason, I want to express my warm thanks to all coworkers at Mycronic.
Lena Olving, CEO and President