Earnings call transcript: Mycronic Q1 2025 beats EPS forecast, stock dips

Mycronic publ AB reported its first-quarter 2025 earnings on April 25, surpassing analysts' expectations with an earnings per share (EPS) of 6.35 SEK, compared to a forecast of 6.14 SEK. Despite this positive earnings surprise, the company's stock fell by 2.94% in pre-market trading, closing at 369.8 SEK, down from the previous close of 381 SEK. Revenue for the quarter reached 2.14 billion SEK, slightly below the anticipated 2.15 billion SEK. According to InvestingPro analysis indicates the stock is currently trading near its Fair Value, with a beta of 1.12 suggesting moderate market sensitivity.

Outlook & Guidance

Mycronic revised its full-year sales guidance to a range of 7,000-7,500 million SEK, down from an initial 7,500 million SEK. The company cites increased uncertainty due to tariffs and currency fluctuations. Mycronic plans to continue exploring growth vectors close to existing technologies, focusing on inspection and quality control market opportunities.

Executive Commentary

CEO Anders Lindquist remarked, "We had a very good start of the year," highlighting the company's strong performance. CFO Pierre Bruschon added, "The idea is not to collect cash to a very high degree," indicating a strategic focus on reinvestment and growth.

Risks and Challenges

• Tariffs and currency fluctuations pose risks to financial performance.
• Potential market saturation in key technology segments.
• Supply chain sustainability initiatives require ongoing investment.
• US-China trade tensions could impact global operations.
• The shift towards replacing installed base equipment may affect demand.

Q&A

During the earnings call, analysts inquired about the impact of US-China trade tensions and potential new growth areas. The company addressed concerns about the revised sales guidance and outlined its expansion strategies in Asia, including potential moves into India and Thailand.

Overall, Mycronic's Q1 2025 results reflect strong operational performance, despite facing challenges from macroeconomic factors and market conditions. The company's strategic initiatives and focus on innovation continue to position it well for future growth. For deeper insights into Mycronic's performance and prospects, InvestingPro offers a comprehensive research report with detailed analysis of the company's financials, market position, and growth potential, along with access to over 30 key financial metrics and expert insights.

Full transcript - Mycronic publ AB (MYCR) Q1 2025:

Sven Chetkovic, Director, Investor Relations, Micronix: Hello and welcome to the presentation of Micronix Q1 report. My name is Sven Chetkovic, I'm the Director, Investor Relations at Micronix. And with me I have CEO, Anders Lindquist and CFO, Pierre Bruschon, who will be presenting today. With that, I hand over to Anders. Please go ahead and present Micronik's Q1 report.

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Anders Lindquist, CEO, Micronix: Thank you, Sven, and welcome, everyone, to this call. So today, we will, of course, talk about the report, Q1 in short. We will go deeper into different divisions. Pierre will talk about the financials, a few words on sustainability, and then we end the session with the Q and A part. And as always, there is an appendix in the presentation that we will not present, which is containing data from independent sources on the market.

So starting with the quarter. So we had a very good start, a good start of the year. And comparing to the same quarter last year and the same quarter last year was also a good quarter, so it makes the figures even nicer, I would say. So we had a good increase in order intake with 25%, up to a little bit more than SEK 2,000,000,000. And we had a record in sales increasing 27% over the same quarter last year, up to SEK 2,140,000,000.00, which is very high and good.

We also recorded a very strong EBIT, the highest ever in the quarter with SEK $775,000,000 and corresponding to a margin of 36%. Also backlog is continued to be strong at $4,600,000,000 And we also made two acquisitions this year, one within the quarter, which is hProbe, which is a company that have developed a unique technology for high speed testing of what's called MRAM, magnetic memories and also magnetic sensors based in France. And this will be integrated in the Global Technologies division as a new business line. And after the quarter, we also made another acquisition with Global Technologies, a company called Robot, which has a good unique technology for testing of signal quality on PCBs, and that will be an important part of the PCB test business area also within the Global Technologies division. So good start of the year on numbers, but also on acquisitions, two very good acquisitions so far.

If we then move into the different divisions, starting with the Pattern Generators, a lot of the records is coming from here. So we can see that the markets, both for displays and semiconductor, have continued to be stable. We also saw the first order for the Precision 8,000 EVO, the newly launched high end machine for mask writing in the display industry. And we can say that we could say that it confirms that our thinking that it was well in line with the industry needs for more advanced photomask and really to take the most out of the capacity of aligners, etcetera, and so on. So very happy with that.

Also, could see that the order intake was very strong, up 48% to almost SEK 1,000,000,000 and the record in sales to very increasing 43%, close to 1,200,000,000.0. Gross margin, 76,000,000, good and a record EBIT, $752,000,000. So very strong start. And backlog, a little bit more than SEK 3,000,000,000, which contains 27 systems at the moment. So strong performance in Pattern Generators.

HyFlex is maybe that division where we did not see a strong performance. I think every other division contributed nicely. And in the HyFlex business, we could see that the demand in Europe was very weak. We also took part in the largest show or exhibition in North America called Apex, which generated a lot of interest. And at the same time, we could see that the order intake declined 12% down to two ninety five million.

And we also could see the first impact of tariffs. The new tariffs for The U. S. Have led to delays in deliveries. Things get stuck in customs longer than normal.

And for the quarter, we saw a negative impact or delay actually, but it's a negative impact for the quarter, about SEK 15,000,000. And overall, net sales down 1%. Gross margin, okay at 37% and EBIT minus SEK 13 backlog 105%, which is quite low level of backlog for us. So not that good. High volume, much better.

We could see that China is really coming back. We had a very good demand in the Chinese domestic market. You could see the order intake rose to 42% with 42% to SEK $553,000,000, which is a very high number. For this division, we had an increase of sales up to SEK $330,000,000. And the newly acquired company, Modus, contributed with NOK9 million to that.

A good gross margin at 43%, EBIT 59%, and we had an impact of NOK4 million on that EBIT because of acquisition cost of Modus. Also strong backlog of NOK975 million. So overall, good performance from the High Volume division. Then we move to Global Technologies. And as I said initially, we had these two acquisitions.

We could see if we start with the business side, you could see that we have a slowdown in the order intake from the Diebonding business in the quarter. It's not related to market. We have not that many customers in this business, and we saw just fewer orders coming in. And at the same time, we saw that the PCB test business line continued to be very strong. What you see on the picture is the equipment from the newly acquired company, hProbe, based in Grenoble, France.

This has a unique technology for high speed testing of MRAMs and magnetic sensors. This is a technology that is coming, so we believe very much in this acquisition. The orders situations, we had a decrease of 8% down to $254,000,000, while the increase there was an increase of sales, 31%. Gross margin, at 46% and EBIT, 54,000,000. And in that SEK 54,000,000, we have a negative impact of SEK 18,000,000 from the previous and recently acquired businesses.

Backlog was NOK $445,000,000, which is reasonably strong. And after the quarter, as said, we also acquired Robot that has a technology for testing the signal quality on PCBs. So overall, I think a very good performance from the Global Technologies division, and we are happy with that. And we talk about the outlook. So of course, there's a lot of talk on tariffs and what impact that will have on the business.

Because of that, we could see that the uncertainty have increased, and it's more difficult really to say now after one quarter how the year will end. We believe that we can still reach the SEK 7,500,000,000.0, but there is also a little bit downside to that. You can all have seen, I guess, that the currency have changed quite a lot since we gave the forecast. And the Board of Directors' opinion now is that we will reach a sales of between SEK 7,000,000,000 and SEK 7.5 so introducing a range instead for a fixed number here. And then talking more about the tariffs.

So the direct impact on tariffs are quite limited on Micronic. We have not that much flows between U. S. And China that are directly impacted. And in most cases, the customer is the importer, and we don't carry the cost of the duties or the tariffs in that case.

But we believe that the indirect impact is has a bigger impact on us. We can see that the investment climate can change and there's most likely hesitation to invest, we could see changes in currency, etcetera. So therefore, we see that the uncertainty have definitely increased since the introduction of this. All right. So with that, I hand over to Pierre Brochant to talk about the financials.

Pierre Bruschon, CFO, Micronix: Thank you so much, Anders. And going back then to the first quarter, which we are super happy about on a total level, we had the increase of 27% on a pretty good quarter of last year to the level of SEK 2,100,000,000.0. We had also the highest ever aftermarket revenues, SEK $531,000,000. You can see that we have now two really strong quarters in the aftermarket side, and this is mainly in the Patent Generators division where we have additional contracts, but we also have some onetime effects there, works that we have been doing on that side. You can see on this picture that we have also an EBIT margin higher than before, breaking the level of last year where we were at 35%, now even up to 36% on the quarter, so exceptionally high profitability levels on record sales levels.

Here, you can see that we are now we have now reached our previously communicated outlook of SEK 7,500,000,000.0 and which is still the upper range of the interval. So good continued growth over many quarters and a very high EBIT level at 29%. And with the aftermarket, we have been able to continue to grow quarter on quarter all the way back since early twenty twenty one, which we're really proud about and happy about. If we look at the bridge comparing this quarter with a similar quarter of last year, We had a strong improvement of the gross profit partly or largely because of higher volumes at maintained levels, which was the case for Patent Generators. But we also had improvements in the gross margin, in particular, in the Global Technologies division as well as in the High Volume division.

There is also a portion of that which is related to a higher share of Patent Generators sales. On the cost side, we have added costs in all categories, deliberately so because we see opportunities both in developing new products and in the markets. A large portion of the R and D expansion relates to Patent Generators, whereas the marketing and sales cost is more spread across the divisions, and it also includes a portion of acquisition costs for the two acquisitions we have been able to complete in the beginning of the year. Also, the G and A is spread across divisions. And here, the new companies in Global Technologies has also an important portion.

Other items is largely related to currencies. Actually, the revaluation of receivables is, in particular, affected because you get paid later than when the receivables are created. So we have a negative impact here. And the impact of the exchange rates is actually bigger than the total SEK46 million here. So we have received more other positive impacts from largely from government's grants in this amount.

So about SEK60 million is FX related to this. Despite that, we end on a new record level of $775,000,000 If we cut it the other way around and look at it based on how we are organized, you can see that the main part of the improvement comes from Patent Generators, where we have added $2.00 9,000,000, largely by selling more than the prior year. In the HyFlex division, as Anders mentioned, we are actually making a small loss in the quarter, which we are not happy about. But based on the volumes that we saw and the additional cost that we had to bear for having the largest fare we have in North America in the first quarter compared to in the second quarter of last year. This is the main explanation for the negative result and the residual between this quarter this year and last year.

On the high volume side, we had fantastic order intake driven by strong business in China. We couldn't get that all to revenues. So the improvement on the result is limited, but we still consider this as a very good first quarter of the year for for High Volume. For Global Technologies, as Anders referred to, we had a very good quarter in the PCB Test division, and we had also a strong result improvement in the Diebonding part of the business, and this more than covered for the costs that we have with the newly acquired technology companies compared to last year. On the group functions side, we have it's a bit split in two.

We have, on one hand, exchange rate differences on loans that we do from the group to subsidiaries, which are in different currencies and acquisition costs for the two acquisitions we have made. By that, we ended up at 36% or SEK $775,000,000. On the cash flow side, we continue to have strong cash flow from our operations. But in the quarter, we had lower advanced payments, and this is mainly reflection of Patent Generators having stronger sales than order intake. And we also built inventory, and in particular, in the High Volume division, where we had strong order intake but could not realize the sales.

And this is where we are having a rather late point of revenue recognition customer has to accept before we recognize revenue. On the investing activities, we had mainly the acquisition of hProbe in the quarter. And by that, we had a relatively modest cash flow for the period. And with that, I hand the word back again to Anders.

Anders Lindquist, CEO, Micronix: Okay. Thank you very much. And so before going into the Q and A session, a few words about sustainability. What we have done in the quarter, so this is a continuous effort. And in the quarter, we launched an initiative to strengthen the efforts in the supply chain when it comes to environmental and social conditions.

So that was the focus area for the quarter. We also finalized the sustainability report for 2024, which broadly follow the CSRD reporting ESRS reporting standards. So quite big work going into that, of course. And really to optimize and align the sustainability reporting with the company's strategy, we will review both the processes and reporting during 2025 to find a maximum alignment between the business strategy and also the reporting. So that was that for the quarter.

So with that, Sven, we can start the Q and A.

Sven Chetkovic, Director, Investor Relations, Micronix: Thank you, Anders, and thank you, Pierre. So now we are moving over to our Q and A session. And we will start with SEB and Inna Joobsund. Please go ahead and ask your questions, Inna.

Inna Joobsund, Analyst, SEB: Yes, hi. So thanks for taking my question. I wanted to ask about the gross margin strength we saw in the Pattern Generators division. And was this driven by some specific orders or something more structural? And then if you could talk about the kind of customer conversations you had over the past few weeks?

And has there been kind of a significant change in the demand picture for the battery generators orders in your view?

Pierre Bruschon, CFO, Micronix: If I start speaking about the gross margin, there is a little bit different gross margin profile in the display industry and the semicon industry, and we had large display sales in the quarter. So it's more a reflection of that than anything else. And we were on not too dissimilar levels last year as well. When it comes to demand, we have seen so far a stable demand in the pattern generators businesses. So it's yes, not it has not yet changed of any significance.

Anders Lindquist, CEO, Micronix: I can add a little bit on the customer conversation. So we have actually, we had the opportunity to talk with most customers a few weeks ago on big conferences that is normally happening in the beginning of the year. And so far, no one is changing their long term plans. Think everyone in this industry is really in for with a have a quite long horizon and still holding up their investment plans and expansion ideas. So no change of that.

Inna Joobsund, Analyst, SEB: Okay. And you said on outlook, there's a little bit more uncertainty now, which is not a big surprise. But could you give us some flavor on if the higher uncertainty is related to some specific end market or country or division? That would be great.

Pierre Bruschon, CFO, Micronix: I think it's generally a reflection of the uncertainty related to both the underlying demand. I mean, we see a settle if we see a lower general demand, it will also affect the investment climate. So I think that's the most important. Second to that is the exchange rates fluctuations that we see at the moment. And we have little compared to the cost base, we have obviously little revenues in Swedish krona.

When it comes to project orders, this is all hedged. But of course, it affects SEK amount over time.

Anders Lindquist, CEO, Micronix: If you see different divisions, I think the one that have shorter lead times and shorter decision times, of course, will be more affected by hesitation. I think that's typically our HyFlex division would be the most likely the most affected by uncertainty and the Pattern Indirectors most likely the least, if anything, affected.

Inna Joobsund, Analyst, SEB: Great. That's good for me. I get back in line here.

Sven Chetkovic, Director, Investor Relations, Micronix: Thank you, Ina. And now we move over to Friedrich Litel at Handelsbanken. Please go ahead and ask your questions, Friedrich.

Friedrich Litel, Analyst, Handelsbanken: Thank you very much. Thank you for taking my questions as well. I just want to stay with Ina's question actually on the gross margin on the PG side. You also alluded to that you had some one off positive one off related items in the aftermarket revenues in the PG side. So it would be interesting to hear how that sort of inflected or improved your gross margin and how big that could have been.

It would be interesting. So that's the first one. And then in HyFlex, you alluded to that also there, Anders. And I think if you could talk a little bit if you have seen or felt that this is some pre buying in the HyFlex, especially from The U. S.

Clients in front of the tariffs or anything like that would be interesting. Thank you.

Pierre Bruschon, CFO, Micronix: I'll take the first one then. On the PG side, it doesn't have a material impact on the relative gross margin in the quarter.

Friedrich Litel, Analyst, Handelsbanken: Okay.

Anders Lindquist, CEO, Micronix: And on the high flex situation, so the weakening we saw in quarter one in order intake was actually Europe and not North America. So that was that. We haven't really seen a Russia North America either. So it's I think it's more just a business climate that is affecting here.

Friedrich Litel, Analyst, Handelsbanken: So yes, I mean, that was really the feeling that you had a fairly decent North America, so maybe there were clients that were rushing. But I mean, you see the everyday behavior and you don't feel they were rushed?

Anders Lindquist, CEO, Micronix: No, no, not really, Okay.

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

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

Anders Orkeblomma, Analyst, Nordea: Hi, thank you for taking my questions. I was wondering first a bit on the updated sales guidance. So obviously, SEK 7,000,000,000 to SEK 7,500,000,000.0 from SEK 7,500,000,000.0 previously. If I just look at the midpoint value and also with you having moved the delivery of one, Precision eight from this year to being replaced to Precision 8,000 being delivered next year, that accounts for approximately half of this change in the midpoint value. So should one interpret that as being a substantial portion of the updated sales guidance?

Or is it other factors driving this primarily? You mentioned currency as such, but still?

Pierre Bruschon, CFO, Micronix: I think it's more a reflection of the uncertainty that we have opened up. We are delivering a record quarter, which is not almost not at all affected by any of this turmoil that we see in the markets right now. And as such, we want to also signal that, well, there is a downside to this as well potentially. So it's more a reflection of that than any specific other events.

Anders Orkeblomma, Analyst, Nordea: Fair enough. And asking just about PG, I mean, mentioned that it's maybe more resilient of the business areas. But just looking at the quarter and not to in any way sound unpleasant, but I mean, received six orders in the quarter. And as Anders, as you mentioned in the beginning, most of that was in January, I think four or six orders were in January. So I mean, in my mind, that's maybe not stable.

I mean, seems as such at least that there was a quite rapid deterioration towards the end of the quarter. But I'm just trying to balance that a bit with what the display OEMs are saying, as you mentioned, in this environment that they have to continue to invest to support earnings, maybe especially in this environment. So how should one balance that going forward with using stable? I mean, looking at Q2 last year, that was a very strong quarter for display order intake. So is something in line with that?

Or do you get my question?

Anders Lindquist, CEO, Micronix: I think stable in the PG business. I normally say the quarter is much too short window of time to look at. I normally say that we need to have a three years perspective more or less on this. And I think six machines in a quarter is good. And then it happened all in January.

That was not so I think that is kind of a normal distribution. If you see historically, there have been quite a lot of months without machine sales and then all of a sudden it happens. So it's very difficult to when we say stable, it doesn't mean that we will have two orders every month or something like that. It's more kind of the customers', how do you say, investment plans and the technology shift and the whole business. And still, we could see that there is stability in the transformation from LCD panels

We still that according to third party analyst companies and so on. We still see a growth in the display industry. We see a bigger growth on the OLED side. We see it's forecasted also to have quite good growth on the semiconductor side. And then we have the replacement cycle on top of this.

And all of that is very stable, and we have not seen no change of customers' willingness to get quotes or to discuss opportunities and so on. And then the orders, they will come with a little bit irregular pattern.

Anders Orkeblomma, Analyst, Nordea: Yes. No, it makes sense. If I may just ask a follow-up on that. I mean, speaking about the new Precision eight thousand, last time around, mentioned that when you get the inaugural order that tends to create a bit of spurring effect among competitors to also order. Do you still see that that is the case and that maybe we should expect a somewhat similar pattern to when you launch the Precision 800 in terms of the phasing and timing of the orders?

Or has it fundamentally changed?

Anders Lindquist, CEO, Micronix: No, I think that's a very good comparison actually. Think the time between launch and order was quite much shorter actually on the 8,000 than it was on the 800. So that was a really wanted machine in the market. I think we could most likely, we will not sell any or so many 800 anymore. I think customers will really move to the 8,000.

So I think you can look on the 800 as a kind of a proxy to see how the 8,000 will sell in the future.

Anders Orkeblomma, Analyst, Nordea: Helpful. Thank you. I'll get back in line. Thank you.

Sven Chetkovic, Director, Investor Relations, Micronix: Okay. And thank you, Anders. Now we move over to a new participant, Joakim Gunnell at DNB. Please go ahead and ask your questions.

Joakim Gunnell, Analyst, DNB: Thank you for that, and good morning. So when it comes to the AI driven demand opportunity for Micronic, you called out maintain the momentum here for PCD test, saw some weakness in die bonding. So have you observed any sort of hesitancy in customer spend in this end market in your, call it, sales pipeline recently?

Anders Lindquist, CEO, Micronix: Not really. And I mean, AI is a driver for both of these business lines. And despite that, we saw a decline on the die bonding and still a very good demand on the PCB. So this is a little bit contradiction. The difference is that on the PCB test, we have it's quite a big customer population.

So orders are more spread, so you can more easily see trends and general demand will affect more directly. While in the Die Bonding, the customer group or customer universe is quite small, so it depends there a little bit on when the order is coming and so on. But so far, that demand still exists and is still there.

Joakim Gunnell, Analyst, DNB: Great. And if we, call it, raise the line of sight a bit here and focus on the bigger picture. So over the past five years, your select series in the patent generators have been one of the key growth drivers for the overall group growth. So you've you've essentially captured the the low hanging fruit now in in the semicon opportunity.

Pierre Bruschon, CFO, Micronix: Mhmm.

Joakim Gunnell, Analyst, DNB: You will increasingly go head to head and then replace incumbent competitors in that space. So so just if we call it, look over the coming, say, three to five years, just from a more, say, philosophical standpoint, do you think that Micronix needs to find, call it, a new growth vector similar to SLX in order to, call it, deliver high single digit organic growth? Or or do you think that the current product portfolio can support such a growth trajectory?

Anders Lindquist, CEO, Micronix: No, we will certainly welcome one more, I would think. But the display, of course, as we have the majority, if not everything, of the market there, the market growth is, of course, very important for the growth there. And then it's our ability to develop technology to increase the value of that market really to do that. And I think that can continue as before. On the SLX side, it's correct that we have sold the majority of the newly of greenfield installation where new factories have been built or new capacity has been built.

And we haven't been as good in replacing the installed base. But the installed base is still huge and we still have quite a small part of that installed base. So we think that the market will shift a little bit more into replacing existing equipment rather than building new factories or new lines or new capacity. And that can still go on for maybe five, ten years, think. And then the installed base will be old again.

So I think that is that opportunity still exists. We are have recently launched also equipment called MMX and so on. It's not big money, but I think it's a way for us to expand the market and to participate in more applications. And this is also what we would like to continue to do, of course, to launch technology that can participate in new adjacent applications and expand the market by doing that.

Joakim Gunnell, Analyst, DNB: Great. Thank you for that.

Sven Chetkovic, Director, Investor Relations, Micronix: Thank you, Joachim. So now we go back to Ina, you at SEB. I think you had some additional questions.

Inna Joobsund, Analyst, SEB: Yes. I wanted to follow-up on Joachim's question there. You could talk a little bit what kind of new growth vector you're looking at and if you already started doing some R and D for this?

Anders Lindquist, CEO, Micronix: Yes. I can speak in general terms. I think if you see, we were only in display before with mass writers and then we expanded into metrology or measurement equipment in the display. And then we went into semicon and then also launched metrology equipment, MMX into that. I think around that theme, I think we can do more.

So we're looking, of course, into different areas, but we believe it should be close to the existing products or the existing technology. And as an example, the inspection business is almost as big as the mass writer business. Most and that is valid for the almost the whole electronics industry that quality control and inspection is almost as big as production equipment. And we are much, much more leaning to the production side in division actually. That will be a natural step.

But there are several other areas as well, so we're looking wide.

Inna Joobsund, Analyst, SEB: And then I wanted to ask a question on your expansion in Southeast Asia in high volume. And is this kind of proceeding as planned? And have you seen any change in outlook on growth there? If you could talk a little bit about the opportunities you see there?

Anders Lindquist, CEO, Micronix: So we are establishing ourselves in Thailand now with where we also will have production of high volume equipment. And this is as many company have a strategy to be not only producing in China, also to have a second place. And we thought Oregon and Vietnam could be one of them, but now we have considered Thailand to be a better much better place to be at. So that is in line with that strategy to have additional manufacturing location for that kind of business. It's also a very important market, of course.

And Thailand is coming up or Southeast Asia is coming up as a quite big additional market to China in Asia. So that's very important. So that is going according to plan. I think it's maybe that kind of expansion is faster than expected. There's also we have also thoughts about India, which is a little bit more difficult when it comes to regulatory and also the sensitivity between China and India currently and so on.

So not yet decided, but it's under consideration if that could be the next expansion in Southeast Asia.

Inna Joobsund, Analyst, SEB: Awesome. Thanks a lot. That's all for me.

Anders Lindquist, CEO, Micronix: Okay. Thank you.

Sven Chetkovic, Director, Investor Relations, Micronix: Thank you, Ina. Then over to Anders Wanken again and Friedrich.

Friedrich Litel, Analyst, Handelsbanken: Thank you very much. A few more questions then. I was thinking about the strong Swedish krona and your prices you have on the PG side specifically, if this is sort of triggering you to look over the prices you offer to clients and make adjustments to them in any way or if you're sitting still as is. So that's really how you elaborate on your prices would be interesting to hear. And then another question is we got in last week a new update that export restrictions in The U.

S, mostly on the semiconductor side, but still they get tougher and tougher. So the question is really, have you gone through them, evaluated them and see if you are sort of touched by them? Or are you still outside of what is demanded in those routes? Thank you.

Pierre Bruschon, CFO, Micronix: So we had first the prices question. And this is something that we are, of course, always reviewing and considering different factors. And the Swedish krona is one. The competitive landscape is a different one. The tariffs is a third one, etcetera, etcetera.

This so this is something that we work with on a continuous basis, and this we will do going forward as well. On the PG side specifically, it's not that we have a competitor, which is based in a similar competitor, which is based in Swedish krona. So from a competitive point of view, it's not an important consideration. Of course, for us, when it comes to earnings, it pushes us a little bit harder. Customers do not feel the Swedish krona, and we don't have competitors in Swedish krona.

Friedrich Litel, Analyst, Handelsbanken: Okay. And the second one on export restrictions, U. S. Export restrictions, anything that

Anders Lindquist, CEO, Micronix: Nothing at the moment that is changing the situation for us when it comes to export. And also worth to mention is maybe that on the import to U. S, the mask writers are actually exempted from the tariffs. It's Okay. For now, it is.

For now, tomorrow made it. Thank

Friedrich Litel, Analyst, Handelsbanken: you.

Sven Chetkovic, Director, Investor Relations, Micronix: Yes, things can change quickly. Okay. Thank you, Friedrich. Over to Anders at Nordea.

Anders Orkeblomma, Analyst, Nordea: Again, thank you. So firstly, just asking the obvious, I mean, you've had a quite significant net cash position for quite some time now with

Anders Lindquist, CEO, Micronix: SEK 3,000,000,000

Anders Orkeblomma, Analyst, Nordea: currently. I mean, what we think here? Are you going to keep having it and letting it yield 3%? Or will it be more forward leaning in this environment? Or what how should we think about that?

Pierre Bruschon, CFO, Micronix: I think very few companies want to have cash for having cash. So that's not in the plan. We will distribute a bit here in the second quarter to the owners. But of course, we are actively looking and what you've seen so far is maybe a limited size acquisitions. But we continue to look for those opportunities as well as for the opportunities to organically develop products within the company, and we are accelerating the R and D now, as you may have seen in the numbers.

So all fronts, but the idea is not to collect cash to a very high degree.

Anders Orkeblomma, Analyst, Nordea: That's comforting to hear. But kind of talking about R and D, I mean, the quarter, you SEK $230,000,000 in R and D investments. I mean, that continues to trend up quite nicely year over year after Q4 also being seemingly noting something of a substantial step up, I mean, in the least PG. Could you give us any type of indication on the timing of when we might expect to see some results of that?

Pierre Bruschon, CFO, Micronix: I mean, we will once we have new products, we will communicate the launch of the new products. And so nothing to communicate today, unfortunately.

Anders Orkeblomma, Analyst, Nordea: All right. Makes sense. Thank you.

Sven Chetkovic, Director, Investor Relations, Micronix: Thank you, Anders. Over to Joakim at DNB again.

Joakim Gunnell, Analyst, DNB: Yes, thank you. So I just wanted to double click to start off with the revised sales guidance. We all know the FX headwind, right? But can you just comment a bit on what the underlying assumptions are for trajectory of the year when it comes to, call it, the tariff impacts? Have you only baked in a headwind for Q2?

Or have you basically penciled in a headwind for the remainder of the year in what you currently state?

Anders Lindquist, CEO, Micronix: I think what is in that revision is more the uncertainty rather than precision. I mean, we still have three quarters to go. And if currency stays where it is, then there will be quite some impact on the full year. But the currency change is most likely affected by the tariff turmoil, I would say. So if that is that could change in any direction.

So that is kind of the difficulty in the prediction, I think. So currency is a big part, of course. And connected to that will be, of course, the customers' willingness to invest. I think that's just more difficult to predict. And most likely, there's more from the 7,500,000,000.0 we had earlier, it's more if anything, there's downside because of this.

But we could still if everything kind of normalizes or so and then I think we could definitely reach the 7.5% So it's not really that we are seeing a new number, just seeing more difficulty in predicting that number.

Joakim Gunnell, Analyst, DNB: That makes sense. Thank you, Anders. And I mean, how do you think about Micronic, should we say, call it, even more, call it, uncertain world than you currently see. So in the past, of course, Micronic was a bit more cyclical. You have now created a much more, call it, diverse dynamic company.

So can you just comment about, okay, where do you actually see like relative resilience in the portfolio should macro worsen even more? And then where would you anticipate the largest cyclical swings?

Anders Lindquist, CEO, Micronix: Yes. I think long term, we think we have a good position still. I think to be based in Europe and particularly in Sweden, it's today a good geographic location. We have a majority of sales in Asia. I think the EuropeAsia relation is still very strong and maybe could be maybe even better because of what is going on.

I think what we have seen in the past when supply chain kind of localizes, where we had this called reshoring from China to Europe, everywhere, I think we normally sell more. So the more places things are produced at, it's normally better for us. So that could be quite positive. I think the impact is more on the short term hesitation on for our customers really how to position themselves in this. And I would say that in the HyFlex, we've had quite short time between investment and or yes, discussion decision and investment.

I think that will maybe be the more affected. We could see already the good growth in the high volume side because of China taking off. And I think on the Global Technologies, that is also quite long term and driven by factors that are here for long term. So I think we will be we will have a good we have a good position to continue to have good business, I think.

Joakim Gunnell, Analyst, DNB: That sounds encouraging. Thank you. That's all for me.

Anders Lindquist, CEO, Micronix: Thank you.

Sven Chetkovic, Director, Investor Relations, Micronix: Thank you. So now I think I will just leave the floor open to if there are any additional questions. In that case, please jump in. It seems like everybody has had their answers. So with that, we have reached the end of today's presentation.

And thank you very much for participating and listening.

Anders Lindquist, CEO, Micronix: Thank you. Thank you, everyone.

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