q3 jan-sep rolling jan-dec interim report january ...mb.cision.com/main/10432/2652893/931883.pdf ·...

Interim Report January-September 2018 1 (20)

Interim report January-September 2018

Strong growth and increasing profitability "Mycronic delivered a strong third quarter, while we see stable market development within the segments where we operate.

We are demonstrating robust growth, we are improving our margins, and we have a healthy order intake with a number of

significant orders added during the quarter. Net sales for Assembly Solutions grew 104 percent, with a 45 percent increase in

orders. The consolidated order intake as a whole was affected by a challenging comparison because of a record order in

Pattern Generators in mid-September last year," says Lena Olving, President and CEO.

Third quarter The order intake was SEK 813 (1,874) million where the decrease compared to the previous year is attributable to a

record order for mask writers worth USD 90-100 million in September 2017

Net sales increased 123 percent to SEK 1,096 (491) million and 111 percent based on constant exchange rates

EBIT was SEK 436 (66) million, an increase of 560 percent. The EBIT margin was 40 (13) percent

The underlying EBIT was SEK 409 (75) million, an increase of 444 percent. The underlying EBIT margin was 37 (15)

percent

Earnings per share were SEK 3.55 (0.45)

January-September The order intake was SEK 2,339 (2,995) million where the decrease compared to the previous year primarily is

attributable to a record order for mask writers worth USD 90-100 million in September 2017

Net sales increased 32 percent to SEK 2,729 (2,074) million and 30 percent based on constant exchange rates

EBIT was SEK 869 (538) million, an increase of 61 percent. The EBIT margin was 32 (26) percent

The underlying EBIT was SEK 890 (608) million, an increase of 46 percent. The underlying EBIT margin was 33 (29)

percent

Earnings per share were SEK 6.77 (4.04)

Events after the period ended After the end of the period, an order for a Prexision-800 with limited functionality was received from a customer in Asia. The

order is valued at between USD 30-35 million and also includes certain upgrades to the customer’s existing system.

Outlook 2018 The Board's assessment remains that consolidated net sales for 2018 will be at a level of SEK 3,500 million, with the

clarification that this excludes acquisitions already made in 2018 as well as possible additional acquisitions during the

remainder of 2018.

*In this report, comparative figures are restated to account for the effects of the new accounting standard for revenue recognition, IFRS 15 Revenue from Contracts with Customers. See Note 1 for details regarding these effects.

Rolling Jan-Dec

Group summary 2018 2017* 2018 2017* 12 month* 2017*

Order intake, SEK million 813 1,874 2,339 2,995 2,911 3,567

Net Sales, SEK million 1,096 491 2,729 2,074 3,655 3,000

Book-to-bill 0.7 3.8 0.9 1.4 0.8 1.2

Order backlog, SEK million 1,651 2,298 1,651 2,298 1,651 1,963

Gross margin, % 60.3% 53.2% 58.6% 55.2% 59.4% 57.2%

EBIT, SEK million 436 66 869 538 1,175 844

EBIT margin, % 39.7% 13.4% 31.9% 25.9% 32.2% 28.1%

Underlying EBIT margin, % 37.3% 15.3% 32.6% 29.3% 33.7% 31.7%

Earnings per share before/after dilution, SEK 3.55 0.45 6.77 4.04 9.09 6.37

Cash Flow, SEK million -84 489 -607 542 -541 609

Changes in net sales

Total growth, % 123% -1% 32% 59% 18% 29%

Organic growth, % 97% -11% 23% 34% 12% 14%

Growth from acquisitions,% 15% 16% 8% 23% 7% 16%

Currency effects, % 11% -6% 1% 2% -1% -1%

Q3 Jan-Sep

Q3


CEO Comments I am pleased to report that

Mycronic delivered a strong third

quarter, while we see stable

market development within the

segments where we operate. We

are demonstrating robust growth,

we are improving our margins,

and we have a healthy order

intake with a number of

significant orders added during

the quarter. Net sales for

Assembly Solutions grew

104 percent, with a 45 percent

increase in orders. The consolidated order intake as a whole

was affected by a challenging comparison because of a

record order set by Pattern Generators worth

USD 90-100 million in mid-September last year.

Through the strategic focus of recent years, including

investments in a series of acquisitions, we have created a

strong platform for growth. As for the rest of the year, we

have a good base of planned deliveries from our order

backlog. However, we have a planned shipment of a

Prexision-10 to a customer in Asia in the fourth quarter,

where changes initiated by the customer to the delivery

conditions entail a postponement of revenue recognition to

early 2019, rather than before year-end 2018.

Even if the postponement will affect the product mix and

EBIT margin negatively in the fourth quarter it will not

affect our outlook for the full-year. Also when I include the

impact that this postponement entails, I can repeat that I

feel confident that we will achieve net sales excluding

acquisitions at the level of SEK 3.5 billion for 2018.

We have also taken a further step in the implementation of

our digital development through the establishment of a

center in San Jose, California, for advanced machine

learning within electronics manufacturing. It is a

collaboration with NuFlare Technology, D2S and NVIDIA to

exploit the potential of advanced machine learning. In

practical terms, this means that we use digitalization and the

advances that technology can entail to help our customers

streamline and develop their businesses.

The stable, healthy development within Pattern Generators

continues with increasing net sales and improved margins.

During the quarter, orders for two multi-purpose systems,

together with a major system upgrade, were received. After

the end of the period, we also received an order for a

Prexision-800 with limited functionality from a customer in

Asia.

Assembly Solutions shows an underlying EBIT margin of

10 percent for the quarter and order growth reached

45 percent while net sales have more than doubled, largely

driven by the strong performance of our dispensing business

in Asia. The business area is continuing its marketing

initiatives and investments in product development.

In total, our net sales grew 123 percent for the quarter and

32 percent for the first nine months of the year. This is

growth based on healthy deliveries from within all parts of

the Company and where our acquisitions play an important

role.

With a constant focus on quality and innovation, we

continue to improve our operations at all levels with a view

to increasing our volumes and seizing new opportunities.

We continue to invest in our organization and its

development to ensure that we support our customers with

the best and most efficient solutions for their businesses.

This also secures our future growth and profitability.

Lena Olving

President and CEO

Order intake and net sales, rolling 12 months EBIT margin, rolling 12 months

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

Q1-16 Q3-16 Q1-17 Q3-17 Q1-18 Q3-18

Net sales Order intake

MSEK

-20%

0%

20%

40%

60%

80%

Q1-16 Q3-16 Q1-17 Q3-17 Q1-18 Q3-18

Underlying EBIT AS EBIT PG Underlying EBIT


Financial performance - Group

*Restated for comparability, see Note 1. MRSI Systems included as of June 1, 2018. Vi TECHNOLOGY included as of October 30, 2017.

Third quarter Mycronic demonstrated a healthy order intake with a

number of significant orders during the quarter, despite a

decline in the overall order intake of 57 percent to

SEK 813 (1,874) million, corresponding to negative organic

growth of 60 percent. The decrease is primarily attributable

to a challenging comparison within Pattern Generators

where a large order from Photronics worth

USD 90-100 million from mid-September last year affects

the comparison. At the same time, orders within Assembly

Solutions grew 45 percent.

Net sales increased 123 percent to SEK 1,096 million.

Organic growth was 97 percent, excluding positive currency

effects of SEK 56 million. Pattern Generators executed two

planned deliveries during the quarter compared to one

delivery last year. Assembly Solutions shows strong growth,

both organic and from acquisitions in recent years.

Acquisitions made during the year (MRSI Systems)

contributed SEK 41 million to net sales during the quarter.

EBIT for the quarter increased 560 percent and reached

SEK 436 (66) million, corresponding to an EBIT margin of

40 (13) percent. The result was affected primarily by healthy

delivery volumes and a favorable product mix. It also

includes a positive effect of SEK 55 million from a revalued

earn-out related to the acquisition of AEi in the fourth

quarter of 2016. AEi has developed well since the

acquisition, but the criteria for the earn-out are assessed not

to be met. Acquisition-related expenses (see Note 8 for

definition) including revalued earn-outs affected the result

positively in the amount of SEK 27 million in the third

quarter compared with a negative impact of SEK 9 million

the previous year. Of acquisition-related costs,

SEK 10 million was charged to the gross profit compared

with a positive effect of SEK 2 million the previous year. The

underlying EBIT amounted to SEK 409 (75) million,

corresponding to an EBIT margin of 37 (15) percent.

January-September The order intake for the first nine months was healthy

although the total order intake declined 22 percent to

SEK 2,339 (2,995) million, corresponding to organic

negative growth of 27 percent. The decrease is primarily

attributable to a challenging comparison within Pattern

Generators where a large order from Photronics worth

USD 90-100 million in September last year affects the

comparison. Through planned deliveries, the order backlog

decreased 28 percent to SEK 1,651 million.

Net sales increased 32 percent to SEK 2,729 (2,074) million

during the period. Organic growth reached 23 percent,

excluding positive currency effects of SEK 19 million.

Assembly Solutions and Pattern Generators developed well,

with a growth of 47 and 19 percent respectively. During the

period, Pattern Generators executed five planned deliveries

compared to eight last year. Assembly Solutions shows

strong growth, both organic and from acquisitions in recent

years. Acquisitions made during the year (MRSI Systems)

contributed SEK 68 million to net sales during the period.

EBIT rose 61 percent to SEK 869 (538) million,

corresponding to an EBIT margin of 32 (26) percent. The

result was affected primarily by healthy delivery volumes

and a favorable product mix. Revaluation of an earn-out

relating to the acquisition of AEi had a positive impact of

SEK 55 million on the result. AEi has developed well since

the acquisition, but the criteria for the earn-out are assessed

not to be met. Acquisition-related costs amounted to

SEK 20 (70) million, of which SEK 15 (40) million affected

the gross profit. The underlying EBIT amounted to

SEK 890 (608) million, corresponding to an EBIT margin

of 33 (29) percent.

Rolling Jan-Dec

2018 2017* 2018 2017* 12 month* 2017*

Order intake, SEK million 813 1,874 2,339 2,995 2,911 3,567


Net Sales, SEK million 1,096 491 2,729 2,074 3,655 3,000

Gross profit, SEK million 662 261 1,599 1,145 2,170 1,716

Gross margin, % 60.3% 53.2% 58.6% 55.2% 59.4% 57.2%

EBIT, SEK million 436 66 869 538 1,175 844

EBIT margin, % 39.7% 13.4% 31.9% 25.9% 32.2% 28.1%

Underlying EBIT, SEK million 409 75 890 608 1,232 951

Underlying EBIT margin, % 37.3% 15.3% 32.6% 29.3% 33.7% 31.7%

EBITDA, SEK million 455 89 922 590 1,250 919

Q3 Jan-Sep


Cash flow and financial position Cash and cash equivalents at the end of September

amounted to SEK 216 million, compared with

SEK 813 million at the end of 2017. Cash flow amounted to

SEK -607 (542) million for the first nine months of the year.

Cash flow from operating activities amounted to

SEK 70 (829) million. Working capital claimed

SEK 661 million, mainly through increased capital tied up in

inventories and trade receivables related to the Company's

growth.

Investments totaled SEK 419 million, of which the

acquisition of MRSI accounted for SEK 354 million. Other

investments related primarily to fixed assets.

Financing activities claimed SEK 258 million, of which

dividends of SEK 245 million were paid out during the

second quarter.

Financial performance per business area

MRSI Systems included as of June 1, 2018. Vi TECHNOLOGY included as of October 30, 2017.

Assembly Solutions The business area is demonstrating strong performance with

increased net sales, improved margins and an order intake

that rose 45 percent during the third quarter, which

corresponds to organic growth of 24 percent. During the

first nine months of the year, the order intake grew

47 percent, corresponding to organic growth of 32 percent.

The acquisitions during recent years have continued to

provide significant contributions to the order intake and net

sales. The order backlog amounted to SEK 520 million.

Net sales also demonstrated a solid performance during the

quarter, growing 104 percent to SEK 533 (262) million.

Organic growth was 61 percent, excluding positive currency

effects of SEK 38 million. For the nine-month period, net

sales increased 47 percent to SEK 1,391 (946) million, which

corresponds to organic growth of 27 percent, excluding

positive currency effects in the amount of SEK 34 million.

EBIT for the quarter improved by SEK 124 million to

SEK 79 (-45) million, corresponding to an EBIT margin of

15 (-17) percent. For the first nine months of the year, EBIT

improved reaching SEK 52 (-96) million with an EBIT

margin of 4 (-10) percent. The result was affected primarily

by healthy delivery volumes. Additionally, this includes a

positive effect of SEK 55 million from a revalued earn-out

related to the acquisition of AEi in the fourth quarter of

2016. AEi has developed well since the acquisition, but the

criteria for the earn-out are assessed not to be met.

Acquisition-related costs (see Note 8 for definition)

including revalued earn-outs affected the result positively in

the amount of SEK 27 million in the third quarter compared

with a negative effect of SEK 9 million the previous year.

With respect to acquisition-related costs for the first nine

months of the year, the result was affected negatively in the

amount of SEK 20 (70) million. Of acquisition-related costs

in the quarter, SEK 10 million was charged to the gross

profit compared with a positive effect of SEK 2 million the

previous year. During the first nine months, acquisition-

related costs of SEK 15 (40) million were charged against

gross profit.

The underlying EBIT amounted to SEK 52 (-35) million for

the quarter and SEK 72 (-26) million for the first nine

months of the year. This corresponds to an EBIT margin of

10 (-14) and 5 (-3) percent respectively.

Rolling Jan-Dec

Assembly Solutions 2018 2017 2018 2017 12 month 2017

Order intake, SEK million 508 351 1,542 1,050 1,916 1,424

Order backlog, SEK million 520 372 520 372 520 290

Net Sales, SEK million 533 262 1,391 946 1,864 1,419

Gross profit, SEK million 216 102 571 350 778 557

Gross margin, % 40.6% 39.0% 41.1% 37.0% 41.8% 39.3%

EBIT, SEK million 79 -45 52 -96 60 -88

EBIT margin, % 14.8% -17.1% 3.7% -10.2% 3.2% -6.2%

Underlying EBIT, SEK million 52 -35 72 -26 117 19

Underlying EBIT margin, % 9.8% -13.5% 5.2% -2.8% 6.3% 1.3%

R&D expenditures, SEK million -72 -53 -225 -199 -293 -267

R&D costs, SEK million -74 -65 -237 -200 -317 -280

Q3 Jan-Sep


Development costs for existing products as well as

investments in development for future growth amounted to

SEK 74 (65) million in the third quarter and

SEK 237 (200) million for the first nine months of the year.

The increases are mainly due to development costs in the

acquired companies Vi TECHNOLOGY and MRSI Systems.

* Restated for comparability, see Note 1.

Pattern Generators Pattern Generators demonstrated strong growth with

improved margins and increasing net sales. The order intake

is healthy, but faces a challenging comparison because of the

record order from Photronics of USD 90-100 million that

the business area received in September last year.

Fluctuations between quarters are natural for the business

area, which is why the trend should be considered over a

longer period.

The order intake for the quarter amounted to

SEK 304 (1,523) million. Orders during the quarter included

two multi-purpose systems, together with a major system

upgrade to a Prexision-10 system received during the

quarter, which must be compared with orders for a total of

eight systems in the third quarter of 2017. For the first nine

months, the order intake reached SEK 797 (1,945) million.

The order backlog totalling SEK 1,131 (1,926) million

comprises eight systems, two of which have planned

deliveries for the remaining part of 2018 and six systems for

delivery in 2019. The order backlog also contains a major

upgrade with delivery in 2018 and another for delivery in

2019.

Net sales for the quarter amounted to SEK 563 (229) million

and SEK 1,338 (1,128) million for the first nine months of

the year. This corresponds to an increase of 146 and

19 percent respectively. Two systems were delivered during

the quarter and five during the first nine months compared

to one and eight systems in the corresponding periods of the

previous year. The third quarter was positively affected by

currency effects in the amount of SEK 18 million and

negatively by SEK 15 million for the first nine months of the

year.

During the fourth quarter, the business area has a planned

shipment of a Prexision-10 to a customer in Asia, where

changes initiated by the customer to the delivery conditions

entail a postponement of revenue recognition to early 2019,

rather than before year-end 2018. Thus the system is

included in the order backlog as one of the six systems with

planned delivery in 2019. The postponement will affect the

product mix and EBIT margin negatively in the fourth

quarter.

EBIT for the quarter increased 220 percent and amounted

to SEK 357 (112) million, corresponding to an EBIT margin

of 63 (49) percent. The result was affected primarily by

healthy delivery volumes and a favorable product mix. EBIT

for the first nine months of the year increased 29 percent to

SEK 821 (637) million, corresponding to an EBIT margin

of 61 (56) percent.

Development costs increased according to plan to

SEK 36 (15) million for the quarter and to

SEK 97 (42) million for the first nine months, due to

development of the next generation of mask writers along

with further development of existing products.

Rolling Jan-Dec

Pattern Generators 2018 2017* 2018 2017* 12 month* 2017*

Order intake, SEK million 304 1,523 797 1,945 995 2,143


Net Sales, SEK million 563 229 1,338 1,128 1,791 1,581

Gross profit, SEK million 445 159 1,028 794 1,392 1,158

Gross margin, % 79.1% 69.4% 76.8% 70.4% 77.7% 73.3%

EBIT, SEK million 357 112 821 637 1,119 936

EBIT margin, % 63.5% 48.7% 61.3% 56.5% 62.5% 59.2%

R&D costs, SEK million -36 -15 -97 -42 -123 -68

Q3 Jan-Sep


The electronics industry The global electronics industry grew 6.5 percent in 2017 to

USD 2,017 billion1. For 2017, the semiconductor market

grew 22 percent, corresponding to USD 412 billion1. This

increase can be attributed to the number of semiconductor

circuits manufactured and higher prices for memory

circuits.

Outlook Annual growth for the electronics industry is forecast at

3.5 percent for the period 2017-22¹. Segments with the

strongest expected growth during this five-year period are

electronics for the automotive industry, consumer

electronics, the aviation industry, medical and industrial

applications, as well as wireless infrastructure and data

storage. The semiconductor market is expected to demon-

strate average annual growth of 1.6 percent¹ over the

years 2018-22.

Assembly Solutions

SMT and dispensing market area The global market for SMT equipment has annual sales of

approximately USD 4,800 million. The segment SMT robots

for component mounting grew 32 percent in 2017 to

USD 2,615 million² with the strongest growth in China and

Japan. For the first half of 2018, growth was 29 percent. All

markets showed a positive trend during the period. North

and South America demonstrated lower growth but the

trend was still positive. The dispensing equipment market

had sales of USD 770 million3 in 2017. Mycronic's product

portfolio comprises production systems for component

mounting, non-contact high-speed dispensing of solder

paste, inspection equipment, automated storage solutions,

and equipment for dispensing and coating of circuit boards.

Assembly automation market area A growing segment within the electronics industry is

electronics for the automotive industry. One sub-segment of

automotive electronics is camera modules for advanced

driver support, or Advanced Driver Assistance Systems

(ADAS). Manufacture of camera modules in 2017 amounted

to 130 million units and the forecast for 2022 is for

production of 300 million units, corresponding to annual

growth of 18 percent3. Mycronic offers, through AEi,

automated production solutions for assembly and testing of

camera modules.

With the acquisition of the American company MRSI

Systems, Mycronic now also offers die bonding equipment.

The global market in 2017 amounted to USD 919 million7.

MRSI is operating in a fast-growing sub-segment for die

bonding equipment with extremely high precision.

Pattern Generators During 2017, the display market grew 19 percent to

USD 124 billion, corresponding to 3.7 billion units4. This

growth is attributable to a stable price trend for existing

displays, and a shift towards more advanced AMOLED and

high-resolution displays.

In 2018, the market is expected to decline 8 percent. At

present, the availability of displays is good, which means

lower price levels where it is IHS’s assessment that prices

are to some extent beginning to stabilize. Growth for

AMOLED in 2018 is expected to reach 5 percent,

corresponding to a level of USD 23 billion4, which entails a

lower growth rate in 2018 than previously forecast. In 2019,

the growth rate for AMOLED is expected to rise again,

fuelled by more manufacturers starting to produce displays,

and for 2019 the market is expected to grow 21 percent to

USD 28 billion4. Meanwhile, the total display area is also

increasing driven by larger screens and more screens in new

products, e.g. in vehicles.

Photomasks for displays market area In 2017, the photomask market grew 14 percent to

USD 704 million5, 6, driven by an increased need for

photomasks for AMOLED and an increased demand from

China. The forecast for 2018 is for growth of 8 percent to

USD 762 million5, 6 driven by a higher proportion of

advanced photomasks for AMOLED and an increased need

for G10 photomasks in China5. The forecast for area growth

is 2.7 percent for 2017-215 where IHS has adjusted growth in

AMOLED downwards, and weighted in that some older

display factories may close because of new modern factories

in China. Strong area growth for AMOLED photomasks is

expected, with an average area growth of 25 percent for the

years 2017-215, which drives the need for P80 and P800

capacity. During the third quarter of 2018, the degree of

utilization on Mycronic's mask writers was at high levels.

1) Prismark, latest forecast September 2018. 2) Protec MDC, July 2018. 3) Prismark, May 2018. 4) IHS, latest forecast October 2018. 5) IHS, May 2018. 6) 110 YEN/USD used by Mycronic for conversion. 7) VLSI Research, June 2018.

Size/growth 2018F 2017 2016

Electronics industry,

percentual change¹ +5.4% +6.5% +0.2%

Semiconductor industry,

percentual change¹ +14.0% +21.7% +1.1%

SMT, percentual change² not available +32% +5%

Dispensing, USD million³ not available 770 600

Camera modules, units,

million¹ 155 130 97

Displays, USD, billion⁴ 115 124 105

Photomasks, percentual

change in value⁵ +8% +14% -6%

Photomask area, thousand sq.

Meters⁵ 15.6 15.4 14.1


Other

The Parent Company Mycronic AB is the Group’s Parent Company.

The Parent Company's net sales for the first nine months

amounted to SEK 1,930 (1,655) million. EBIT was

SEK 823 (548) million. Research and development

expenditures are expensed as incurred.

Cash and cash equivalents at the end of the first nine

months amounted to SEK 13 million, compared with

SEK 596 million at year-end 2017.

Nomination Committee The Nomination Committee for Mycronic’s 2019 AGM has

been appointed. In accordance with the AGM’s decision,

Mycronic’s Nomination Committee shall consist of four

members. The members shall represent the three largest

known shareholders as of August 31, 2018, together with the

Chairman of the Board. The Nomination Committee consists

of: Henrik Blomquist, Bure Equity, Thomas Ehlin, Fjärde

AP-fonden, Joachim Spetz, Swedbank Robur Fonder and

Patrik Tigerschiöld, Chairman of the Board in Mycronic.

The Nomination Committee represented 47.4 percent of

votes and shares as of August 31, 2018.

Financial information Mycronic AB (publ) is listed on NASDAQ Stockholm,

Mid Cap, MYCR. The information in this report is published

in accordance with the EU Market Abuse Regulation and the

Swedish Securities Act. The information was submitted for

publication, through the contact persons stated below

October 24, 2018, at 8 am.

Financial reports and press releases are published in

Swedish and English and are available on

www.mycronic.com.

Financial calendar Capital Markets Day November 29, 2018

Full year report 2018 February 7, 2019

Interim Report January - March 2019 April 25, 2019

Annual General Meeting Maj 9, 2019

Täby, October 24, 2018 Mycronic AB (publ)

Lena Olving CEO and President


Mycronics vision The business partner of choice, enabling the future of electronics.

Mycronics mission We aim to be the market leader within our key segments across the globe We continuously improve and develop innovative solutions, products and services to meet the changing needs of

our customers We do not compromise with our goal to deliver sustainable growth, profitability and shareholder value We meet our challenging goals by engaging the passion and talent of people dedicated to deliver

Mycronic's long-term financial goals announced in February 2017 Growth Consolidated net sales including acquisitions will reach SEK 5 billion at the end of the business plan period, four to seven years.

Profitability EBIT will exceed 15 percent of net sales over a business cycle.

Capital structure Net debt should be less than 3 times the average EBITDA (earnings before interest, tax, depreciation, and amortization). The average is calculated over three years.

Mycronic's dividend policy The objective of the company is to provide both good returns and value growth. Between 30 and 50 percent of net profit will be distributed to the shareholders, provided the company has a net debt lower than 3 times EBITDA after stipulated dividend. In each case, account shall be taken of the Company's financial position, profitability trends, growth potential and future investment needs.

About Mycronic Mycronic AB is a Swedish high-tech company engaged in the development, manufacture and marketing of production equipment with high precision and flexibility requirements for the electronics industry. Mycronic’s headquarters are located in Täby, north of Stockholm and the Group has subsidiaries in France, Japan, China, the Netherlands, Singapore, the United Kingdom, South Korea, Germany and the USA. Mycronic (MYCR) is listed on Nasdaq Stockholm. www.mycronic.com

For further information, please contact

Lena Olving CEO and President +46 8 638 52 00 [email protected]

Torbjörn Wingårdh CFO +46 8 638 52 00 [email protected]

Tobias Bülow Director IR & Corporate Communications +46 734 018 216 [email protected]

Mycronic AB (publ)

PO Box 3141 SE-183 03 Täby, Sweden Phone: +46 8 638 52 00 Fax: +46 8 638 52 90

www.mycronic.com Reg office: Stockholm Reg no: 556351-2374 VAT no: SE556351237401

http://www.mycronic.com/


Group

*Restated for comparability, see Note 1.

Rolling Jan-Dec

Consolidated profit and loss accounts, SEK

million Note 2018 2017* 2018 2017* 12 month* 2017*

Net sales 1, 5 1,096.4 491.0 2,729.0 2,074.4 3,654.7 3,000.1

Cost of goods sold 1 -434.8 -229.8 -1,129.9 -929.8 -1,484.2 -1,284.1

Gross profit 661.6 261.2 1,599.1 1,144.6 2,170.4 1,716.0

Research and development 6 -109.6 -79.7 -334.2 -242.6 -439.7 -348.0

Selling expenses -109.6 -66.8 -288.2 -216.9 -381.1 -309.8

Administrative expenses -55.4 -39.8 -166.4 -120.6 -227.2 -181.4

Other income and expenses 1 48.6 -8.9 59.0 -26.3 52.8 -32.5

EBIT 435.6 66.0 869.3 538.3 1,175.3 844.2

Financial income and expenses -0.3 -1.2 -6.5 -6.0 -9.1 -8.6

Profit/loss before tax 435.3 64.8 862.8 532.3 1,166.2 835.6

Tax 1 -88.0 -21.1 -200.4 -136.3 -276.4 -212.3

Net Profit/loss 347.3 43.6 662.4 396.0 889.8 623.4

Earnings per share before/after dilution, SEK 3.55 0.45 6.77 4.04 9.09 6.37

Average number of shares, thousand 97,917 97,917 97,917 97,917 97,917 97,917

Results attributable to owners of the Parent

Company 347.1 43.6 662.1 396.0 889.9 623.8

Results attributable to non-controlling interests 0.2 - 0.3 - -0.1 -0.4

347.3 43.6 662.4 396.0 889.8 623.4

Q3 Jan-Sep

Rolling Jan-Dec

Consolidated statement of comprehensive

income, SEK million 2018 2017* 2018 2017* 12 month* 2017*

Net Profit/loss 347.3 43.6 662.4 396.0 889.8 623.4

Other comprehensive income

Items not to be reclassified to profit/loss, after tax

Actuarial loss from defined benefits to employees - - - - -3.2 -3.2

Items to be reclassified to profit/loss, after tax

Translation differences at translating foreign entities -34.6 -34.6 47.0 -77.0 75.7 -48.3

Changes in cash flow hedges 15.7 -2.2 -16.3 11.6 -18.5 9.4

Total comprehensive income 328.4 6.8 693.2 330.6 943.8 581.3

Total comprehensive income attributable to owners of

the Parent Company 328.2 6.8 692.9 330.6 943.9 581.7

Total comprehensive income attributable to non-

controlling interests 0.2 - 0.3 - -0.1 -0.4

328.4 6.8 693.2 330.6 943.8 581.3

Q3 Jan-Sep


*Restated for comparability, see Note 1.

Rolling Jan-Dec

Consolidated cash flow statements, SEK million 2018 2017 2018 2017 12 month 2017

Cash flow from operating activities

before changes in working capital 369.4 62.0 731.7 493.0 1,051.5 812.8

Change in working capital -261.5 407.8 -661.4 336.0 -826.4 171.0

Cash flow from operating activities 107.9 469.8 70.3 829.0 225.1 983.8

Cash flow from investing activities -37.9 19.5 -419.5 -93.0 -507.6 -181.1

Cash flow from financing activities -154.0 -0.6 -258.1 -193.6 -258.1 -193.6

Cash flow for the period -84.0 488.8 -607.3 542.5 -540.6 609.1

Cash and cash equivalents, opening balance 306.4 258.2 812.7 208.6 741.6 208.6

Exchange difference for cash and cash equivalents -6.5 -5.4 10.5 -9.4 14.9 -5.0

Cash and cash equivalents, closing balance 215.9 741.6 215.9 741.6 215.9 812.7

Q3 Jan-Sep

Consolidated statements of financial position, SEK million Note 30 Sep 18 30 Sep 17* 31 Dec 17*

ASSETS

Fixed assets

Intangible assets 1,374.5 985.6 1,037.0

Tangible assets 97.9 64.6 69.5

Non-current receivables 22.1 17.6 17.1

Deferred tax assets 1 85.4 60.4 68.8

Total fixed assets 1,579.9 1,128.2 1,192.4

Current assets

Inventories 923.0 542.7 588.6

Trade receivables 792.8 410.8 512.4

Other current receivables 251.2 96.1 138.4

Cash and cash equivalents 215.9 741.6 812.7

Total current assets 2,182.9 1,791.2 2,052.0

Total assets 3,762.7 2,919.4 3,244.4

EQUITY AND LIABILITIES

Equity 1 2,228.5 1,529.1 1,780.2

Liabilities

Other non-current liabilities 296.8 240.6 269.3

Deferred tax liabilities 113.0 75.0 118.8

Total long-term liabilities 409.8 315.6 388.1

Short-term interest-bearing liabilities 0.9 12.2 12.6

Trade payables 264.9 161.7 154.7

Other current liabilities 1 858.5 900.8 908.8

Total current liabilities 1,124.4 1,074.7 1,076.1

Total liabilities 1,534.2 1,390.3 1,464.2

Total equity and liabilities 3,762.7 2,919.4 3,244.4


*Restated for comparability, see Note 1. Other than key figures presented on page 1.

Jan-Dec

Consolidated statement of changes in equity, SEK million note 2018 2017* 2017*

Opening balance 1 1,780.2 1,394.3 1,394.3

Dividend -244.8 -195.8 -195.8

Transactions with non-controlling interests - - 0.4

Total comprehensive income 693.2 330.6 581.3

Closing balance 2,228.5 1,529.1 1,780.2

Of which holdings of non-controlling interests 0.3 0.0 0.0

Jan-Sep

Jan-Dec

Other key figures * 2018 2017* 2017*

Equity per share, SEK 22.76 15.62 18.18

Return on equity (rolling 12 months), % 47.4% 53.2% 39.1%

Return on capital employed (rolling 12 months), % 62.4% 71.2% 52.6%

Net cash, SEK million 215.0 729.4 800.0

Average number of employees 1,140 931 962

Jan-Sep


Parent Company


Rolling Jan-Dec

Profit/loss accounts in summary, Parent

Company, SEK million Note 2018 2017* 2018 2017* 12 month* 2017*

Net sales 1 741.0 378.7 1,930.5 1,655.2 2,610.2 2,334.9

Cost of goods sold 1 -231.0 -181.3 -697.7 -695.6 -939.0 -936.9

Gross profit 510.0 197.4 1,232.8 959.6 1,671.2 1,398.0

Other operating expenses 1 -165.6 -113.6 -409.9 -411.6 -592.8 -594.5

EBIT 344.4 83.8 823.0 548.0 1,078.4 803.5

Result from financial items 3.1 1.0 5.1 2.1 7.8 4.8

Profit/loss after financial items 347.5 84.8 828.1 550.1 1,086.2 808.3

Appropriations - - - - -204.0 -204.0

Profit/loss before tax 347.5 84.8 828.1 550.1 882.2 604.3

Tax 1 -77.8 -21.2 -187.9 -126.6 -196.2 -134.9

Net Profit/loss 269.7 63.6 640.2 423.5 686.0 469.4

Total comprehensive income 269.7 63.6 640.2 423.5 686.0 469.4

Q3 Jan-Sep

Balance sheets in summary, Parent Company, SEK million Note 30 Sep 18 30 Sep 17* 31 Dec 17*

ASSETS

Fixed assets

Intangible and tangible assets 47.4 40.1 37.4

Financial assets 1 1,731.8 1,146.5 1,281.2

Total fixed assets 1,779.2 1,186.5 1,318.6

Current assets

Inventories 487.7 309.8 346.6

Current receivables 726.9 354.2 426.6

Cash and cash equivalents 12.8 585.9 595.8

Total current assets 1,227.4 1,250.0 1,369.0

TOTAL ASSETS 3,006.6 2,436.5 2,687.6


Equity 1 1,703.7 1,241.9 1,308.4

Untaxed reserves 410.8 206.8 410.8

Other non-current liabilities 211.2 148.6 184.6

Other current liabilities, Note 1 680.9 839.2 783.8

TOTAL EQUITY AND LIABILITIES 3,006.6 2,436.5 2,687.6


Notes

Note 1 Accounting principles This interim report for the Group has been prepared in accordance with IAS 34, Interim Financial Reporting, as well as

applicable parts of the Annual Accounts Act. The report for the Parent Company has been prepared in accordance with

Chapter 9 of the Annual Accounts Act. For the Group and the Parent Company, the accounting principles, estimates

and assumptions used in this report are in accordance with the most recent annual report.

The character of financial assets and liabilities are essentially the same as they were on December 31, 2017. As was the case

at the end of 2017, reported values are the same as fair values.

IFRS 9, Financial Instruments, is being applied by the Group and the Parent Company as of January 1, 2018. The standard

has not had any material effect on the Group’s and Parent Company’s financial statements.

IFRS 15, Revenue from Contracts with Customers, replaces all previously published standards and interpretations for

managing revenues with a single model for revenue recognition. The standard is being applied by the Group and the Parent

Company as of January 1, 2018 with full retrospective. When applying the new standard, system sales within Pattern

Generators are divided into separate performance obligations, with the result that a minor portion of system revenue will be

reported over time and later than for the previous standard. The new standard's effects on the comparative figures in this

report are shown below. All adjustments relate to business area Pattern Generators.

Mycronic is currently completing the analysis of the effects of the new IFRS standard for leases, IFRS 16, which will enter

into force on January 1, 2019. The preliminary assessment of the standard is that most of the lease agreements currently

accounted for as operating leases will be reported in the statement of financial position. This will also mean that the cost of

same will be divided into interest payments and depreciation.

Q3 Jan-Sep Rolling Jan-Dec

Effect on Group and Parent Company income statements, SEK million 2017 2017 12 month 2017

Net sales 6.8 4.3 -5.4 -1.1

Cost of goods sold -4.9 -4.4 0.8 -3.5

Other income and expenses 0.9 2.2 -1.2 0.9

EBIT 2.7 2.1 -5.8 -3.7

Tax -0.6 -0.5 1.3 0.8

Net Profit/loss 2.1 1.6 -4.5 -2.9

Effect on earnings per share 0.02 0.02 -0.05 -0.03

Entire effect is attributable to owners of the Parent Company

Effect on Group statements of financial position and Parent Company balance sheets, SEK

million 30 Sep 17 31 Dec 17

ASSETS

Deferred tax assets 4.4 5.7

Total assets 4.4 5.7


Other current liabilities 20.1 25.9

Total liabilities 20.1 25.9

Accumulated profit/loss -17.3 -17.3

Net profit for the year 1.6 -2.9

EQUITY -15.7 -20.2

Total equity and liabilities 4.4 5.7

Effect on Group and business area PG order backlogs, SEK million 29.2 35.8


Note 2 Transactions with related parties Transactions with related parties are described in Note 12 of the 2017 Annual Report. The scope and focus of these

transactions did not change significantly during the period.

Note 3 Risks and uncertainty factors There are a number of risks and uncertainty factors of an operational and financial character to which the Group is exposed

through its operations, these are described in the 2017 Annual Report. Mycronic is exposed to country-specific risks such as

political decisions or overarching changes to the regulatory framework on partially new markets, both geographically and

product-wise.

Note 4 Events after the period ended After the end of the period, an order for a Prexision-800 with limited functionality was received from a customer in Asia. The

order, which was booked in the fourth quarter, is valued at between USD 30-35 million and also includes certain upgrades to

the customer’s existing system. Delivery is scheduled in the second quarter of 2019.

Note 5 Revenue and segment reporting


Rolling Jan-Dec

Revenue by geographical market, SEK million 2018 2017* 2018 2017* 12 month* 2017*

EMEA 164.8 112.9 532.4 361.8 737.6 566.9

North and South America 115.0 56.3 350.9 256.9 459.5 365.5

Asia 816.7 321.8 1,845.6 1,455.7 2,457.6 2,067.6

1,096.4 491.0 2,729.0 2,074.4 3,654.7 3,000.1

of which, system sales 743.0 299.4 1,910.6 1,401.0 2,598.7 2,089.1

of which, after market sales 353.4 191.6 818.4 673.4 1,056.0 911.0

1,096.4 491.0 2,729.0 2,074.4 3,654.7 3,000.1

Q3 Jan-Sep

Rolling Jan-Dec

SEK million 2018 2017* 2018 2017* 12 month* 2017*

Net sales

Assembly Solutions 533.1 261.7 1,390.6 946.1 1,863.5 1,419.1

Pattern Generators 563.4 229.4 1,338.4 1,128.3 1,791.1 1,581.0

1,096.4 491.0 2,729.0 2,074.4 3,654.7 3,000.1

EBIT

Assembly Solutions 79.1 -44.6 51.5 -96.1 60.0 -87.6

Pattern Generators 357.5 111.6 820.8 637.4 1,119.3 935.9

Amortization of previously acquired intangible assets -1.0 -1.0 -3.0 -3.0 -4.0 -4.0

Group 435.6 66.0 869.3 538.3 1,175.3 844.2

Q3 Jan-Sep


Note 6 Research and development costs

* As of the third quarter of 2018, amortization of capitalized development is included in the cost of acquisition for inventory, which in turn will affect the consolidated cost of goods sold. In view of the fact that amortization amounts to relatively small amounts, comparative figures have not been recalculated.

Note 7 Acquisitions

Acquisition of MRSI Systems, LLC During the second quarter, Mycronic acquired 100 percent of the shares in MRSI Systems, LLC in the USA. The purchase

price amounted to USD 40.7 million on a cash and debt-free basis. Under certain conditions, based on parameters such as

sales and earnings, an additional purchase price up to a maximum of USD 20.2 million will be paid in 2020. The total

acquisition price amounts to SEK 430 million. Efforts to assign values of acquired assets and liabilities is ongoing, and hence

the acquisition analysis was still preliminary as of September 30. In the preliminary acquisition analysis, intangible assets in

the form of technology, customer relationships, brand and goodwill were identified. The useful lives of technology and

customer relationships have been preliminary estimated to seven years. According to the preliminary acquisition analysis,

goodwill amounts to SEK 238 million. Goodwill is primarily attributable to the company’s strong position as an external

supplier in a growth market and to the competence of the company’s employees, as well as synergies such as global presence

within its current market segment. The acquisition price is adjusted for earn-outs, which are estimated at fair value.

Transaction costs regarding the acquisition amount to SEK 7 million. The company was consolidated into the Mycronic

Group as of June 1, 2018.

Rolling Jan-Dec

Research and development costs, SEK million 2018 2017 2018 2017 12 month 2017

R&D expenditures

Assembly Solutions -71.6 -53.3 -224.7 -199.3 -292.5 -267.0

Pattern Generators -35.9 -15.1 -97.2 -42.4 -123.1 -68.3

-107.5 -68.5 -322.0 -241.7 -415.6 -335.3

Capitalization of development costs

Assembly Solutions 2.7 0.0 3.0 21.0 3.0 21.0

Amortization of capitalized development*

Assembly Solutions - -9.1 -3.7 -15.1 -12.7 -24.1

2.7 -9.1 -0.7 5.9 -9.7 -3.1

Amortization of acquired technology

Assembly Solutions -4.8 -2.1 -11.6 -6.8 -14.4 -9.6

Reported cost -109.6 -79.7 -334.2 -242.6 -439.7 -348.0

Q3 Jan-Sep


MRSI’s operations have impacted consolidated net sales in the amount of SEK 68 million and contributed SEK 8 million to

consolidated EBIT from the acquisition date. If the acquisition had been executed at the beginning of the year, consolidated

net sales would have been impacted in the amount of SEK 117 million and EBIT by SEK 5 million.

Acquisition of Japanese development partner During the second quarter, 70 percent of the shares in a Japanese development partner were acquired with an option to

acquire the remaining 30 percent no later than 3 years after the acquisition date. The total acquisition price amounted to

SEK 9 million. According to the preliminary acquisition analysis, goodwill amounts to SEK 4 million. The company was

consolidated into the Mycronic Group as of June 1, 2018.

Note 8 Definitions and reconciliation alternative performance measures, etc. The European Securities and Markets Authority (ESMA) has published guidelines regarding alternative performance

measures for publicly traded companies.

Alternative performance measures relate to financial key figures used by management to control and evaluate the Group's

business, and which cannot be directly inferred from the financial statements. These ratios are also considered to be of

interest to external analysts and investors who monitor the Company. For definitions of other key ratios please refer to the

Annual Report.

Acquisition-related costs Acquisition-related costs include expensing of acquired inventories at fair value, amortization of acquired intangible assets,

revaluation of earn-outs and transaction expenses.

Book-to-bill Order intake in relation to net sales. Indicates future development of net sales.

Capital employed Balance sheet total less non-interest-bearing liabilities. Used to show a company’s ability to meet capital needs from

operations.

SEK million 30 Sep 18

Acquisition price MRSI

Cash paid for the acquisition 390.9

Deferred considerations for the acquisition (estimated fair value) 39.4

Total 430.3

Acquired assets and liabilities at fair value

Intangible assets 83.9

Tangible assets 10.3

Long-term receivables 1.9

Inventories 84.4

Current receivables 29.8

Cash and cash equivalents 37.0

Non-current liabilities -2.0

Current liabilities -52.8

Total 192.4

Goodwill 237.9

Changes in consolidated cash and cash equivalents as of the acquisition

Cash paid for the acquisition 390.9

Cash and cash equivalents in the acquired subsidiary -37.0

Total 353.9


Earnings per share Net result divided by the number of shares at the end of the period. Used to show a company’s results per share.

EBITDA Operating result (EBIT) before depreciation and amortization, interest and tax. EBITDA is a component used in expressing

the Company's financial goals and dividend policy.

Equity per share Equity on balance day divided by the number of shares at the end of the period. Used to measure the value of the Company

per share.

Net cash and cash equivalents Cash and cash equivalents less interest-bearing liabilities.

Order backlog Remaining orders for goods, valued at the closing date exchange rate. Used to show secured future net sales of goods.

Order intake Received orders for goods and aftermarket, valued at average exchange rates. The order intake also includes revaluation of

the order backlog at closing date exchange rates. Used to show orders received.

Organic growth Increase of net sales or order intake excluding increase related to acquisitions, recalculated to the previous year’s currency

rates, as a percentage of the previous year’s net sales or order intake. Net sales and order intake from acquired companies

are included in the calculation of organic growth as of the first day of the first month which falls 12 months after the date of

acquisition.

Return on capital employed Earnings before financial expenses as a percentage of average capital employed. Used to show the return on capital needed

for operations.

Return on equity Net profit/loss as a percentage of average equity. Used to demonstrate the return on shareholder capital over time.

Underlying EBIT and underlying EBIT margin EBIT excluding acquisition-related costs. The underlying EBIT margin is underlying EBIT as a percentage of net sales. Used

to show how the operations develop and perform without the impact of acquisition-related costs.



Rolling Jan-Dec

Return on equity 2018 2017* 12 month* 2017*

Net profit/loss (rolling 12 months) 889.8 701.9 889.8 623.4

Average shareholders' equity 1,878.8 1,320.4 1,878.8 1,595.9

47.4% 53.2% 47.4% 39.1%

Return on capital employed

Profit/loss before tax (rolling 12 months) 1,166.2 936.7 1,166.2 835.6

Financial expenses 10.9 7.4 10.9 9.4

Profit/loss before financial expenses 1,177.1 944.1 1,177.1 845.0

Average balance sheet total 3,341.1 2,460.8 3,341.1 2,999.9

Average non-interest-bearing liabilities 1,455.7 1,134.3 1,455.7 1,392.3

Average capital employed 1,885.4 1,326.5 1,885.4 1,607.6

62.4% 71.2% 62.4% 52.6%

Book-to-bill

Order intake 2,338.9 2,995.3 2,910.8 3,567.2

Net sales 2,729.0 2,074.4 3,654.7 3,000.1

0.9 1.4 0.8 1.2

EBITDA

EBIT 869.3 538.3 1,175.3 844.2

Depreciation/Amortization 52.6 52.2 75.1 74.7

921.9 590.5 1,250.4 919.0

Underlying EBIT

EBIT 869.3 538.3 1,175.3 844.2

Acquisition-related costs included in:

Cost of goods sold 15.0 40.2 17.0 42.3

Operating expenses 5.3 29.8 40.0 64.5

889.6 608.3 1,232.3 951.0

Equity per share

Equity at balance day 2,228.5 1,529.1 2,228.5 1,780.2

No. of shares at end of period, thousand 97,917 97,917 97,917 97,917

22.76 15.62 22.76 18.18

Earnings per share

Net Profit/loss 662.4 396.0 889.8 623.4

No. of shares at end of period, thousand 97,917 97,917 97,917 97,917

6.77 4.04 9.09 6.37

Net cash, SEK million

Cash and cash equivalents 215.9 741.6 215.9 812.7

Interest-bearing liabilities 0.9 12.2 0.9 -12.6

215.0 729.4 215.0 800.0

Jan-Sep



Quarterly data Q3 18 Q2 18 Q1 18 Q4 17* Q3 17* Q2 17* Q1 17* Q4 16

Order Intake Assembly Solutions 508.4 553.5 479.9 374.4 351.4 358.6 339.9 389.2

Order Intake Pattern Generators 304.2 316.9 176.0 197.6 1,522.6 109.9 312.8 128.9

812.5 870.5 655.9 571.9 1,874.0 468.5 652.7 518.1

Order Backlog Assembly Solutions 519.8 544.9 391.1 290.3 371.5 280.4 276.2 266.4

Order Backlog Pattern Generators 1,131.0 1,390.1 1,477.1 1,672.3 1,926.2 633.8 1,077.2 1,075.6

1,650.8 1,935.0 1,868.2 1,962.6 2,297.7 914.3 1,353.4 1,342.0

Net Sales Assembly Solutions 533.1 478.5 379.0 472.9 261.7 354.4 330.1 329.1

Net Sales Pattern Generators 563.4 403.8 371.2 452.7 229.4 550.9 348.1 686.8

1,096.4 882.3 750.2 925.6 491.1 905.3 678.1 1,015.9

Gross Profit Assembly Solutions 216.2 194.7 160.2 207.3 102.0 148.3 99.9 118.3

Gross Profit Pattern Generators 445.4 304.3 278.2 364.0 159.1 373.3 262.0 546.9

661.6 499.0 438.4 571.3 261.1 521.6 361.9 665.2

Gross Margin Assembly Solutions 40.6% 40.7% 42.3% 43.8% 39.0% 41.8% 30.3% 35.9%

Gross Margin Pattern Generators 79.1% 75.4% 75.0% 80.4% 69.4% 67.8% 75.3% 79.6%

60.3% 56.6% 58.4% 61.7% 53.2% 57.6% 53.4% 65.5%

R&D expenses Assembly Solutions -73.7 -85.9 -77.4 -79.6 -64.5 -63.6 -72.0 -91.2

R&D expenses Pattern Generators -35.9 -36.0 -25.4 -25.9 -15.1 -17.1 -10.2 -20.4

Total R&D expenses -109.6 -121.8 -102.8 -105.4 -79.7 -80.6 -82.2 -111.7

Selling expenses -109.6 -97.4 -81.1 -92.9 -66.8 -80.1 -69.9 -85.2

Administrative expenses -55.4 -52.9 -58.1 -60.8 -39.8 -41.1 -39.8 -58.2

Other income/expenses 48.6 10.7 -0.3 -6.2 -8.9 -4.9 -12.5 -4.9

EBIT 435.6 237.6 196.1 306.0 65.9 314.9 157.4 405.2

Of which EBIT Assembly Solutions 79.1 -3.4 -24.2 8.5 -44.6 3.6 -55.1 -71.5

Of which EBIT Pattern Generators 357.5 242.0 221.3 298.5 111.6 312.3 213.5 477.7

EBIT margin 39.7% 26.9% 26.1% 33.1% 13.4% 34.8% 23.2% 39.9%

Equity per share after tax 22.76 19.41 19.95 18.18 15.62 15.55 15.55 14.42

Net earnings per share 3.55 1.77 1.44 2.32 0.45 2.46 1.14 3.12

Closing share price 93.05 100.20 106.80 85.00 111.75 76.75 91.75 98.00


Review report

Mycronic AB (publ), corporate identity number 556351-2374

Introduction We have reviewed the condensed interim report for Mycronic AB (publ) as at September 30, 2018 and for the nine months

period then ended. The Board of Directors and the Managing Director are responsible for the preparation and presentation

of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a

conclusion on this interim report based on our review.

Scope of review We conducted our review in accordance with the International Standard on Review Engagements, ISRE 2410 Review of

Interim Financial Statements Performed by the Independent Auditor of the Entity. A review consists of making inquiries,

primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and

other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain

assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not

express an audit opinion.

Conclusion Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all

material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act regarding the Group, and in accordance

with the Swedish Annual Accounts Act regarding the Parent Company.

Stockholm, October 24, 2018

Ernst & Young AB

Erik Sandström

Authorized Public Accountant

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