Earnings call transcript: Mycronic Publ AB sees strong Q2 2025 sales growth

Mycronic Publ AB posted a robust performance in Q2 2025, driven by a significant year-over-year increase in net sales. The company reported net sales of SEK 2 billion, marking a 35% rise compared to the same quarter last year. Despite a decrease in order intake, the company’s stock saw a 4% increase, closing at 218.20 SEK, reflecting investor optimism. According to InvestingPro data, Mycronic maintains a GREAT financial health score of 3.43, with impressive revenue growth of 21.49% over the last twelve months. The company’s strategic acquisitions and expansion plans further bolster its market position in the Electronic Equipment sector, where it’s currently valued near its Fair Value.

Key Takeaways

• Net sales increased by 35% year-over-year to SEK 2 billion.
• Stock price rose by 4% in pre-market trading.
• Order intake decreased to SEK 1.3 billion from SEK 2 billion.
• Strong cash position with SEK 1.8 billion in net cash.
• Continued investment in R&D and strategic acquisitions.

Company Performance

Mycronic’s Q2 2025 performance showcased strong sales growth, although order intake fell to SEK 1.3 billion from SEK 2 billion. The company maintained a solid backlog of over SEK 4 billion, emphasizing its strong market position. Mycronic’s strategic acquisitions in the Global Technologies sector and its expansion plans are expected to drive future growth.

Financial Highlights

• Revenue: SEK 2 billion, up 35% YoY
• EBIT: SEK 568 million with a 27% margin
• Order Intake: SEK 1.3 billion, down from SEK 2 billion
• Cash Position: SEK 1.8 billion net cash
• Dividend: SEK 734 million, including an extra dividend

Outlook & Guidance

Mycronic anticipates full-year sales of SEK 7.5 billion, with continued growth in aftermarket services and a resumption of orders in Pattern Generators. The company remains focused on innovation and market expansion, supported by its strategic acquisitions and capacity expansion plans.

Executive Commentary

"We saw a strong sales increase of 35% compared to the same quarter last year," said Anders Lindquist, CEO. Pierre Bruschon, CFO, highlighted the strategic importance of the Surfex acquisition, stating, "The time has come where this can actually take off and be a meaningful player in the industry."

Risks and Challenges

• Decreased order intake may impact future revenue growth.
• Weak PCB Assembly Solutions market in Europe.
• Potential volatility in semiconductor and display panel investments.
• Increased R&D expenses may pressure margins.
• Global economic uncertainties could affect demand.

Q&A

Analysts inquired about the strategic rationale behind the Surfex and CoVIN acquisitions, to which management emphasized their importance in strengthening Mycronic’s market presence and technological capabilities. Concerns about market volatility were downplayed, with executives expressing confidence in continued investment in R&D and innovation.

Full transcript - Mycronic publ AB (MYCR) Q2 2025:

Sven Chetkovic, Director, Investor Relations, Micronix: Hello, and welcome to the presentation of Micronix Q2 report. My name is Sven Chetkovic. I’m the Director, Investor Relations at Micronix. With me, I have Micronic’s CEO, Anders Lindquist and CFO, Pierre Bruschon, who will be presenting today. And with that, I hand over to Anders.

Please go ahead and present Micronic’s Q2 report.

Anders Lindquist, CEO, Micronix: Thank you very much, and warm welcome, everyone, from me as well. So today, we will, of course, present the quarter two results in short, also go a little bit deeper in the different divisions. Pierre will talk about financials. And also today, Pierre will talk about sustainability. And then we will end with the question and answer session.

And as usual in the material that is on the website, there’s also a market update that we will not present, but it’s there for everyone who wants to read that as well. So with that, I’ll start with the presentation about the second quarter. So we saw a strong sales, an increase of 35% compared to the same quarter last year to a little bit more than SEK2 billion. Also a strong increase of EBIT up to SEK568 million compared to SEK348 million and the corresponding margin of 27%. So very strong sales side.

A decline on the order intake down to SEK 1,300,000,000.0 compared to a little bit more than SEK 2,000,000,000. And this is explained by the Pattern Generators where we had no system orders coming back to that soon. The backlog is still very strong, even though reduced a little bit because of the less order intake and bigger sales. So now the backlog is a little bit more than SEK 4,000,000,000. And in the division Global Technologies, we have completed two acquisitions within the quarter.

One is Robot and another one is Surfex. We’ll talk about this a bit more. Also very excitingly, we had a share split where the existing share was split by two. And at the end of the period or after the end of the period actually, we also signed an agreement to acquire a Korean company, CoVIN. So a lot of activity in the second quarter.

So if we start with the Patian Generators, almost half of the business in terms of revenue on this quarter, you could see that the market is still stable for both displays and the semiconductors. And we have no orders for new systems. So the order intake that we recorded is only related to the aftermarket, which is on the other hand very strong. The order intake had a decline of 84% and was SEK 191,000,000. We delivered eight systems, which is quite a lot, and that resulted in a net sales increasing 50%, up to almost SEK 1,000,000,000 and a strong gross margin of 69%.

And EBIT follows the sales up to SEK $537,000,000, so good. Of course, a decline in the order backlog because of the less orders, strong sales to SEK 2,300,000,000.0, and we have 19 systems in the backlog, so still a very strong backlog. And as said, we signed the agreement with the Korean company, Cowen, to acquire that at the after the end of the period, still not closed however. Moving over to PCB Assembly Solutions, which is a new name, by the way. It was formerly named HyFlex, and the name changes to better reflect what we actually do, and it was a little bit confusing for our customers.

Markets have been quite weak here, especially European market has been weak, but we saw some sign of improvement from a very low level. U. S. Market is very uncertain, mainly caused by tariffs that create some uncertainty on the willingness to invest. And quite flat order intake compared to last year, a small decline of 2% down to SEK $3.56 and a decrease of net sales to SEK $328,000,000.

Margin, 37,000,000, a little bit less than same quarter last year and EBIT, percent, which is 4% of sales. Backlog at the end of the quarter was NOK 133,000,000, which is a little bit on the low side, you can see. High volume. Here we could see very strong demand, very healthy demand from the market, especially from the Chinese domestic market, but also good performance from outside China. We had an order intake up 7% to SEK $383,000,000, which is a very good number also and sales also 40% up to $443,000,000 so even a better number.

The recently acquired business Modus contributed $5,000,000 to that sales, so not so much. Gross margin, 38% EBIT, dollars 74,000,000. And from Modus, we had a loss or a negative impact of minus $7,000,000 Very strong backlog of $915,000,000 so very good on that side as well. So strong performance in this division. Also very strong performance in Global Technologies.

And here we had a lot of activity. We made two acquisitions. So one is Robot, a U. K.-based company that is doing having a technology for test for signal quality on PCB. So this will be part of the PCB test business.

And then another company called Surfex Technologies that are doing atmospheric plasma solutions for surface treatment, both cleaning and removal of oxide, etcetera. And that will form a separate business line. If we look on the existing business, the PCB test business was very strong during the quarter and the eyeballing was a little bit less strong, very much affected by the uncertainties between The U. S.-China tariff discussions. Very strong order increase of 95%, mainly attributed to the PCB test business up to $4.00 $2,000,000 also strong increase of sales, almost 60% up to $3.23 and a small contribution from the recently acquired companies of $23,000,000 So EBIT up to $11,000,000 compared to minus 15 And here we had quite a big negative impact of the recently acquired businesses of minus 23,000,000 So the underlying business performed about 10% in the quarter.

Very strong backlog, more than SEK 700,000,000. So good performance and a lot of activities, of course, here in this division. Then we’re coming to the outlook and where we have changed that slightly or rephrase that a little bit. And that is because of we had a very strong quarter in the quarter two. We also have made some acquisitions.

And also, as we only have six months to go for the year, we have also less uncertainty for the remaining period. So we’re coming back to the original outlook of having a sales of 7,500,000,000.0 by the end of the year. So with that, I will hand over to Pierre to talk a little bit more about the financials. Thank you.

Pierre Bruschon, CFO, Micronix: Thank you so much, Anders, and welcome from my side as well. And taking a look at this graphically as well then. Quarter by quarter, we had a very strong revenue quarter with net sales above SEK 2,000,000,000 for the third quarter in a row. We also had a good aftermarket quarter of SEK $465,000,000, although this is below what we had in the first and fourth quarter of last year, but it’s sequentially stronger than the same quarter of prior year. EBIT margin continued on a high level at 27% in the quarter.

And if we look at how that plays out on a twelve month basis, we can see that we passed for now the 8,000,000,000 mark on a rolling twelve month basis and that we are also hitting a 30% EBIT margin. And as Anders explained, the outlook for the year is 7,500,000,000.0, so we are not fully matching the quarters quarter three and four of last year. Aftermarket continued to grow. We are approaching the SEK 2,000,000,000 mark. However, as a percent of sales, this is slightly declining and is now at 24%.

If we look at quarter on quarter versus the same quarter last year, we had a good growth primarily in the Patent Generators division. And this has a good volume impact for us looking at the result development. At the same time, you can see that we continue to spend our efforts in the R and D, growing the cost base in R and D with SEK 60,000,000, limited effect of the acquired companies here. On the marketing and sales side, we are basically on par. You might remember from the Q1 that we were referring to especially high cost on certain trade fairs, which fell in quarter one this year rather than quarter two last year.

So this is one of the explanations for this. On the G and A side, we have a little bit higher costs on the acquired entities, and we continue to grow our global footprint. So this is also an explanation. On other, we have negative exchange rate effects mainly playing a role, but ending on a strong SEK $568,000,000 for the quarter. If we look at it, if we slice it in the other dimension, we see that very high improvement in the Pattern Generators, which stands for the majority of the profit generation in Micronik at the moment.

On the PCB Assembly Solutions, we were close to par with last year despite a tricky market situation and some negative influence on exchange rate that hits particularly hard on this division. High volume continued improvement, building on the continuous improvement that we also started in the first quarter. And the Global Technologies, despite negative impact from the newly acquired companies, delivered a strong improvement on last year. On the group functions side, this is a reflection of largely the FX impact, but also some costs of the recently made acquisitions has had an impact in the quarter, ending as well then on the 5.68% or 27%. Cash flow with a strong result.

It’s clearly a strong contribution from the operations. Part of that, however, is already prepaid, mainly in the Pattern Generators side. So looking at it this way, it comes as a plus in the operations and the negative in the working capital. We also have a somewhat higher inventory than we had a year ago, and this has an impact so that the cash flow from operations as a whole is SEK $668,000,000 versus above SEK 1,000,000,000 a year ago. On the investing activities side, we have been much more active than before and acquired three companies.

This accounts for a little bit more than SEK 900,000,000. And on the financing side, we had now in the second quarter also the dividends, which were including an extra dividend and added up to SEK $734,000,000 in total. Cash position is still solid. We have a net cash position of SEK 1,600,000,000.0 and cash at the end of the period of SEK 1,800,000,000.0. And in addition to that, we still have the two facilities of revolving credit facilities of SEK 2,000,000,000 in total.

One of them was renewed during the second quarter, and we also added a link to sustainability and to our science based targets, which will give us a small extra discount on the interests if we are able to fulfill the targets we have committed to. And with that, I hand the word back to Sven.

Sven Chetkovic, Director, Investor Relations, Micronix: Thank you, Per, and thank you, Anders. So now we are moving over to our Q session, and we will start with DNB Carnegie and Mikael Lassien. Mikael, please go ahead and ask your questions.

Mikael Lassiene, Analyst, DNB Carnegie: All right. Hope you can hear me. Good morning. I have a question on the photomask side. You mentioned that photomask markets were stable for both displays and semiconductors in Q2, but the PD segment received no new orders in the quarter.

Can you elaborate on the dynamics behind this disconnect and what you see ahead?

Anders Lindquist, CEO, Micronix: Yes. I think a quarter is on the PG business, it’s a very short time. So it has to be seen on a much longer period, even up maybe to twelve months or something like that to really see a connection or not. We can see in the pipeline, is very similar to as usual and also discussion with customers are very similar as usual. I think it’s also possible to look on the photomask manufacturers’ reports and which are reporting a kind of a flat or a stable market from their side as well.

So we haven’t seen any radical dip or any steep increase on that side. And also the technology trends are still there as well. So from that side, change really.

Mikael Lassiene, Analyst, DNB Carnegie: Okay. But you don’t hear any changes or hesitation due to tariffs and allocation of production facilities over time and so on?

Pierre Bruschon, CFO, Micronix: Think But

Mikael Lassiene, Analyst, DNB Carnegie: the customers are thinking about that and maybe hesitating a bit?

Anders Lindquist, CEO, Micronix: No, not really. I think the customers are more strategic in where they invest and so on. But almost all customers have global operations and can manage this without any larger problems.

Mikael Lassiene, Analyst, DNB Carnegie: Okay. Good to hear. And another question here on the Surfex acquisition. It was a high price tag on that $188,000,000 upfront. Can you elaborate on the strategic rationale and business case for Perfex?

And also, what gives you confidence in value creation given the price tag?

Anders Lindquist, CEO, Micronix: Yes.

Pierre Bruschon, CFO, Micronix: Surfix is a company where we have had minority investments since a number of years. We have seen that they have a very interesting and relevant technology for the electronics industry where you have an atmospheric plasma that can treat surfaces and remove oxides. It’s been a bit of technology that has been searching its sweet spots for some time. There are many several possibilities in that space. But now we think that the time has come where this can actually take off and be a meaningful player in the industry for thermal compression bonding, where the finer pitches may make it or looks to make it difficult to use the traditional methods of flux and formic acid to clean the surfaces prior to bonding.

So this is one area where this takes off. But there are also many other opportunities in the semiconductor industry, and plasma solutions is a very commonly used application in the semiconductor industry, often in vacuum, which is much more complicated than expensive, but proven since a long time. And we think that this is a really, really, really good technology for the future.

Mikael Lassiene, Analyst, DNB Carnegie: Okay. So what are your expectations for this company’s top line growth and margin over a few quarters ahead? And can you remind us of the starting point, where they are right now?

Pierre Bruschon, CFO, Micronix: The starting point is that we are projecting a turnover of at least $25,000,000 this year. And given the price tag, as you say, we foresee rather rapid growth without disclosing the exact business case here. This is implied in the valuation, yes.

Mikael Lassiene, Analyst, DNB Carnegie: Okay. Thanks. I’ll get back in line.

Sven Chetkovic, Director, Investor Relations, Micronix: Thank you, Mikael. And with that, we move over to Handelsbanken and Friedrich Litel.

Friedrich Litel, Analyst, Handelsbanken: Okay. Thank you for taking my questions as well. I can sort of continue on Mikael’s question on SurFex. You had the minority investment since before. Did you have an option, so it was really up to you to decide when you wanted to take a bigger step into this company?

Or was this something that the owners came to you and asked now if you want to participate in a bigger way? So how was this triggered?

Pierre Bruschon, CFO, Micronix: We are, of course, having a bit of an advantage having a relation to Surfex historically. We have also delivered certain solutions for optimization from our high volume division in certain ways. And when this came up as an opportunity in the dialogue, we made a business case out of it and could realize this as a one to one process.

Friedrich Litel, Analyst, Handelsbanken: Okay. All right. Another question on Global Technologies from my side is you had on an organic level, you had a very good order intake. Can you specify a little bit where that comes from? What are the pieces of that puzzle coming up to the order intake?

Pierre Bruschon, CFO, Micronix: Think it’s in particular in our PCB test business line, where we have been very successful with certain solutions on the high end PCB, which is used where the end demand is driven by AI and data centers.

Friedrich Litel, Analyst, Handelsbanken: Okay. And a final question from my side. I just wondered on PCB assembly. Has that unit moved now to the new facilities? Or is that still to come in Q3?

Anders Lindquist, CEO, Micronix: That is that’s actually in Q4, the move. Q4? Yes. That will happen to Chista, I think, November or October, but a little bit later this year according to plan. Yes.

Friedrich Litel, Analyst, Handelsbanken: According to plan. And will there be any sort of costs associated to that we should take into consideration?

Pierre Bruschon, CFO, Micronix: It will not be meaningful on group level, but there is a few single digit million already in the year to date results for that move. But on the group level, it will not be meaningful.

Friedrich Litel, Analyst, Handelsbanken: Okay. Thank you. I’ll get back in line. Thank you.

Sven Chetkovic, Director, Investor Relations, Micronix: Thank you, Fredrik. And now we will move over to SEB and Inna Jibson.

Inna Jibson, Analyst, SEB: Hi, and thanks for taking my questions as well. Also a question on M and A. You announced that you did some M and A within the pattern generators here last week. Could you talk a little bit about the kind of opportunity you see here and the business rationality?

Mikael Lassiene, Analyst, DNB Carnegie: Do you want to start or

Pierre Bruschon, CFO, Micronix: You can take it. I can start. Okay. Then yes, CoVIN is a company which is active in the repair of photomasks and the repair of panels as well. It’s been a company also developing some new solutions in this inspection and repair space that could potentially also reach a little bit further than that into at least the back end semicon side, which we find very relevant.

So we think it’s a really good fit with our Pattern Generators division. It will also give us a good footprint in Korea, which is one of the most important market for Pattern Generators. So we think it’s a really good fit. It’s not been a massively successful company in the last few years, so but we really good opportunities in linking this with our existing business.

Inna Jibson, Analyst, SEB: And we’re seeing quite good growth in R and D on a quarterly basis as well. Can we expect this to continue for the rest of 2025? And is this kind of R and D growth related to kind of this M and A that you did within the pattern generators?

Pierre Bruschon, CFO, Micronix: Maybe slightly connected. And I think we have reached now a level where we which you will see for the coming quarters, so not maybe escalating further, still ramping on this high level. So this is one area where we see opportunities, but there are also more areas.

Inna Jibson, Analyst, SEB: So I think it’s good for me to get back in line.

Sven Chetkovic, Director, Investor Relations, Micronix: Thank you, Ina. And now we move over to Nordea and Anders Holke Bloom.

Anders Holke Bloom, Analyst, Nordea: Yes. Thank you, Sam. I guess all the good questions have been taken. On Cohen, it would be interesting to hear just I mean, firstly, could you explain the weakness that you mentioned the past two years, what that is due to and kind of your expectations for that going forward?

Pierre Bruschon, CFO, Micronix: It’s a company which has been supplying to the display panel industry. And this the investment in this part of the industry is fluctuating even more than in the photomask side. And with limited number of customers, this has been a bit volatile.

Anders Holke Bloom, Analyst, Nordea: So will it increase the inherent volatility in PG?

Pierre Bruschon, CFO, Micronix: It will if this will, in relation to the total Pattern Generators division, as we have projected or we have disclosed that this year will be around USD 10,000,000, this will not have a material impact on the size of the Pattern Generators division.

Anders Lindquist, CEO, Micronix: But also, as Per said, they had a very limited customer base, and that is one of the larger synergies with the PG division that we have access to more or less every company or every customer that is target for this kind of technologies.

Anders Holke Bloom, Analyst, Nordea: Okay. Interesting. And on HyFlex or PCB assembly solutions now, mean, you reported quite healthy order growth after assuming they have very weak Q1. You mentioned that was due more to kind of Europe. If we kind of draw out the tangent a bit, I mean, do you expect this to persist in the coming quarters?

Or was it a sort of one off effect in Q2 in terms of some type of recovery in the EMS market?

Pierre Bruschon, CFO, Micronix: This division is probably the one which is most difficult to predict that in this present landscape. We had a strong in particular, actually ending of the quarter. Will this continue? It’s really hard to say.

Anders Holke Bloom, Analyst, Nordea: Okay. I think that’s my questions for now, at least. So thank you. I’ll get back in line.

Sven Chetkovic, Director, Investor Relations, Micronix: Thank you, Anders. So then we move back to DNB Carnegie and Mikael Lassienne again.

Mikael Lassiene, Analyst, DNB Carnegie: Okay. Thanks. I have a couple of clarifications maybe. You mentioned that you had a negative EBIT impact of SEK 23,000,000. I think it was in the Global Teck.

Pierre Bruschon, CFO, Micronix: In Global Teck, yes. Yes.

Mikael Lassiene, Analyst, DNB Carnegie: Can you break down this and explain why you have these costs? Was it acquisition related, transactional cost or operational?

Pierre Bruschon, CFO, Micronix: It’s actually both. So we had in two of the three acquisitions low net sales in the quarter and which then gave an operationally negative result. And then we had on top of that certain acquisition related costs that will, of course, affect us also going forward partly and partly for the transactions as such. So it is a mix, and we don’t publish a breakdown in full of that. What we have said is that as part of the structure of the Surfex acquisition, there is a founder and employee stay on related incentive that will mean that we will actually be slightly below zero for this year in terms of EBIT impact, but we expect it to be supportive to EBIT as from next year onwards.

Mikael Lassiene, Analyst, DNB Carnegie: Okay. That was actually my second question. And then in connection to that, what type of margin should we expect for Surfex? I guess, the price tag now that it must be a very profitable business and given also that they have seems to have a niche position and a unique technology?

Pierre Bruschon, CFO, Micronix: It is a healthy profitable business as such, yes. So it will, of course, depend a bit on how quickly we are able to generate revenue in this business. But it is a highly profitable business, yes.

Mikael Lassiene, Analyst, DNB Carnegie: It must be well above the Global Technology segment margin level that they have right Yes.

Pierre Bruschon, CFO, Micronix: Yes. That’s correct.

Mikael Lassiene, Analyst, DNB Carnegie: Okay. But not this year? It will Not this come year. In next Okay. Just to be clear.

And maybe a follow-up on the PD segment. You didn’t report any orders this quarter. It’s not that unusual. It happens from time to time. But how should I think about the demand trends and order possibilities in the second half, just to be a bit clear here?

I saw also that you have posted new market data in the Q2 report. Anything there that we can focus on?

Anders Lindquist, CEO, Micronix: Yes. I think we expect we don’t see I think, as you said, we had many times before also quarter and even more without orders, and I think we are in the similar situation now. So there’s nothing what we can say see a change in the market that has generated this. And we do believe that we will get orders in the coming quarters. If it’s next quarter or next next quarter, of course, that’s usually a little bit difficult to predict the timing of that.

But the pipeline is normal, I would say, and also the amount of discussions are normal. And then, of course, things move back and forth all the time when it comes to negotiations and timing and all of that. But no change in that climate, I would say. And difficult to translate that into when will what happen, so.

Mikael Lassiene, Analyst, DNB Carnegie: Okay. Yes, fair enough. Thanks.

Sven Chetkovic, Director, Investor Relations, Micronix: Thank you, Mikael. And back now to Anders Branken and Friedrich Litel.

Friedrich Litel, Analyst, Handelsbanken: Yes, thank you. I just wanted to touch a little bit on high volume that has sort of come back a little bit in momentum. Can you describe a little bit more the dynamics and developments? And maybe on sort of customer segment, if you I mean, one of the bigger ones are the handset vendors and how they are acting and what you expect from them. So a little bit give a better color on the trends there.

Anders Lindquist, CEO, Micronix: Yes, guess so China has been, as you have seen in the past, very, very low on the especially on the consumer electronics. And that has been very much because of new really news on the product side on that side. So very much of the sales from high volume into the consumer electronics segment is product development from our customers, new innovation, new models and so on. And now we are in a time where a lot of both Chinese local manufacturers launch new models and so on, but also globally, a lot of that. I think that market is so competitive, so the ability to win in the consumer electronics is really by innovation.

And now we are in such trend again, and it’s visible in China. And as China being the largest market for consumer electronics, we see this swing coming very good. And we have a very good position. We have the number one we are the largest manufacturer and largest we have the number one market share position. So of course, we get quite a lot of that when the market changes.

But we also have seen good development outside of China. I would say that in the past, we referred a little bit more to electrical vehicle than usual. I think now we see more contribution from consumer electronics.

Friedrich Litel, Analyst, Handelsbanken: Okay. Thank you.

Sven Chetkovic, Director, Investor Relations, Micronix: Thank you, Fredrik. And back to SEB and Inna Joobsund.

Inna Jibson, Analyst, SEB: Yes. So question on aftermarket, it’s slightly down sequentially here. Is this related to kind of any specific division? And can you talk a little about the growth drivers for aftermarket going forward?

Pierre Bruschon, CFO, Micronix: If we compare this quarter with Q4 and Q1 of closest preceding quarters, there was less of upgrades and these kind of things in the Patent Generators division, and thereby, the absolute number is lower. However, the underlying contractual business is continuing to increase, and we are also having some headwind on currencies here as we are consolidating Swedish krona, which is stronger now than before. So but continued good development on the contract side and then this upgrade that comes a little bit certain quarters and certain quarters less.

Inna Jibson, Analyst, SEB: And how big of a share of the kind of SLX installed base would you still say is kind of missing this service contract?

Pierre Bruschon, CFO, Micronix: I mean, all the ones that have run out of the warranty period, they have gone into service contracts. So there is no change in business model.

Anders Lindquist, CEO, Micronix: But everything delivered within the last year should not be in the service contract, not because of that.

Inna Jibson, Analyst, SEB: Then I guess a kind of a follow-up on the capacity expansion you’re doing later this year. What can we kind of expect in terms of cost and orders for PG and PCB assembly? Will there be kind of should we expect some kind of impact?

Pierre Bruschon, CFO, Micronix: Say also here that on group level, it’s not a material cost increase that we will have on group level for this. However, it will enable us to take to continue to grow in both the PCB assembly as well as in the Patent Generators to a level where we couldn’t have grown much more than before today. So this opens up good opportunities for us for the future.

Inna Jibson, Analyst, SEB: Okay. Thank you.

Sven Chetkovic, Director, Investor Relations, Micronix: Thank you, Ina. And now over to Nordea and Anders Holkeblum.

Anders Holke Bloom, Analyst, Nordea: Thank you, Sam. Yes, I just wanted to follow-up also on PG and sort of the demand dynamics. I mean perhaps we’ve gotten a bit spoiled with seeing orders in most recent years. But I mean, all else equal, the last time you didn’t receive an order was, I think, Q1 twenty twenty two in the quarter. In any case, I mean, sometimes since that was the case.

I mean, you’re not seeing some type of pent up demand based on your phrasing, I presume. And kind of a second part of that question is, I mean, if we look at what some of the display manufacturers are doing currently, I mean, LG, for example, announced their largest sort of investment in South Korea in several years for OLED production, some USD 500,000,000. When kind of does that come through for you guys, generally speaking? And would be interesting to hear on your expectations for such investments?

Anders Lindquist, CEO, Micronix: I think it’s that link and timing is very difficult to make. But I think the long term, I think you need to see it as those investments support the long term trend and also the projection And also you can see that in material that there is a growth forecasted in this industry and that growth will be beneficial for us. And it’s both in technology and in panel size, of course, in total or mask size. In total, I think still we have a lot to do on the AMOLED side.

Also, could see that panels are also getting more advanced, so not only that they are having different shapes. So every foldable and so on requires AMOLED, of course, but also that you see much more devices in the panels like cameras and sensors and stuff like that. So there’s still happening a lot on that one. And I think the announcements from LG and their peers is just supporting that trend, but we are not able to translate that into equipment sales, except for that we believe it’s a good market going forward.

Anders Holke Bloom, Analyst, Nordea: No, makes sense. Makes sense. Thank you very much.

Sven Chetkovic, Director, Investor Relations, Micronix: Thank you, Anders. So now I would like just to leave the floor open. If anybody has an additional question, please go ahead and ask it. Okay. Seems everybody is happy.

It’s Mikael. Mikael has a question at

Mikael Lassiene, Analyst, DNB Carnegie: Just a quick Did one you have any FX related revaluation effects in the P and L in the quarter due to working capital revaluation maybe?

Pierre Bruschon, CFO, Micronix: We have continuously revaluation, in particular, outstanding receivables that we have. And this has an impact on group level, and it has an impact on divisional level, maybe mostly so you see a little bit lower gross margin in the HyFlex division, where we have a cost base or the PCBA division, I should say, now where we have a cost base in Swedish krona, and we have revenues coming in different currencies.

Mikael Lassiene, Analyst, DNB Carnegie: Okay. Nothing on group level, revaluation of inventories and receivables maybe?

Pierre Bruschon, CFO, Micronix: We had a bit on certain intercompany transactions, intercompany loans, which are on reported on the corporate level as well, as mentioned there. So that’s low double digit million in the quarter.

Mikael Lassiene, Analyst, DNB Carnegie: Okay, got it. Thanks.

Sven Chetkovic, Director, Investor Relations, Micronix: So with that, we have reached the end of today’s presentation of Micronix Q2 report. Thank you very much for attending. Thank you. Thank you.

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