Release Date: October 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Mycronic AB (MICLF, Financial) reported a 40% increase in sales, reaching almost SEK 1.8 billion, driven by strong performance in the Pati generators division.
- The company achieved a robust EBIT margin of 31%, with absolute EBIT more than doubling compared to the same quarter last year.
- The high volume division showed significant improvement, with a 56% increase in order intake and a 37% rise in sales.
- Mycronic AB (MICLF) confirmed its sales target for 2024, aiming to reach SEK 6.5 billion by the end of the year.
- The company made progress in sustainability efforts, with over 60% of its electricity now sourced from renewable energy.
Negative Points
- Order intake was flat, declining by 1% to just under SEK 1.5 billion, indicating potential challenges in maintaining growth momentum.
- The high flex division experienced a 5% decline in order intake and a 7% drop in sales, reflecting ongoing weakness in the European market.
- Despite higher revenues, the high volume division's margins remained unchanged year-over-year, suggesting challenges in improving profitability.
- The newly acquired Vanguard Automation business had no sales contribution in the quarter, impacting EBIT negatively by SEK 14 million.
- The backlog decreased to SEK 4.4 billion, as sales outpaced order intake, potentially affecting future revenue visibility.
Q & A Highlights
Q: Can you describe the landscape for high volume, particularly regarding order intake and customer activity?
A: Anders Lindqvist, President and CEO, explained that the high volume division has seen increased demand, particularly in consumer electronics, driven by new smartphone models and accessories. The company has expanded its market coverage and is serving more applications, including semiconductors and electric vehicles. Sales outside China have also grown, especially in regions like Mexico and Southeast Asia.
Q: Why are margins in the high volume division unchanged despite higher revenue?
A: Pierre Brorsson, CFO, noted that some consumer electronics projects were competitive with low margins. Additionally, there were higher investments in R&D and sales, and a lower level of subsidies and grants compared to previous periods, affecting the margins.
Q: What is driving the strong margin profile in the Pattern Generators (PG) division?
A: Pierre Brorsson stated that the strong margins are due to improved product costs, particularly in the SLX side for the semiconductor industry, and a favorable product mix. There hasn't been a significant shift in aftermarket revenues or pricing strategies.
Q: How should we view the margin trajectory in the Global Technologies division?
A: Pierre Brorsson mentioned that the company aims for all businesses to contribute at least a 10% EBIT margin. The Global Technologies division met this target in the quarter, and while the new business unit may initially dilute margins, it is expected to contribute positively over time.
Q: Is there any sign of stabilization in the European market for the High Flex division?
A: Anders Lindqvist indicated that Europe is not expected to turn around quickly. The market remains weak, particularly in the PCB assembly industry, and this softness is likely to continue for a few more quarters.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
