We have now 9:30 A.M.. We will begin this conference call here. A warm welcome to everybody to the RoodMicrotec conference call regarding the interim report for the first half of 2022. This year we have moved over from a pure telephone conference to a Teams conference. It's a change. Please stay on mute so that we don't disturb each other while we're doing the presentation. We will be happy to take questions at the end of the presentation. My name is Martin Sallenhag. I'm the CEO of RoodMicrotec, and joining me today in the presentation is Arvid Ladega, our CFO. We will do this in the normal way, where we do an operational update from my side, and at the end, Arvid will do the financial update. As I said, questions are welcome after the presentation. We'll start with a corporate and operational update. Of course, I cannot completely disregard numbers, figures. Looking at the total income, EUR 7.3 million, slightly up on 2021. The total income per full-time employee has gone down slightly. That's mainly due to that we didn't do any short time work in 2022, which we did in the first five months of 2021. EBITDA also increased, and the net result increased with 50% compared to 2021. All in all, a good first half year of 2022. The division between the different operational units that we have in the company is that test operations is continuing to grow, especially in numbers. We have almost EUR 4.5 million in test operations, SEM and failure analysis, as was also on the full year 2021, more or less, the same size. The order book increased considerably compared to December 31st, 2021, which of course is encouraging, and it also indicates that we have a good part of the rest of this year covered with orders. However, there is a little bit of a black cloud in the world, as you all are aware of, that the global shortage of semiconductors and the logistics is a challenge. We have it well under control in the company, but as I said, it can change. I think the last thing here is also a very interesting thing, and that is that we now have four consecutive half years with profit. We started in the second half of 2020, going through 2021 with the first and second half and now the first half of 2022. We have been able to move the company into a situation where we're making good profit before tax. It's also increased from half year to half year. Looking at the market, we are focusing on the fast-growing sectors. The long-term semiconductor industry is looking at an annual growth rate of between 6% and 8%. The short-term market for 2022 looks bright, but there is still quite a few warnings what will happen next year. As I said, we're keeping a close eye on what is happening there. From a short-term perspective, it looks good. The trends in the market, mobility is one of them, connectivity, wireless, energy. Of course, there's also data storage, big data, et cetera, but that is less interesting to RoodMicrotec because we're not active in that area. Looking at the two major areas where we are active is of course, automotive, shows a growth of 11.8% per year. Also in this view, there is still a growth in number of vehicles per year, even though that is quite a lot lower than it was a couple of years ago. Of course, there is push for electric vehicles and autonomous driving, and this drives also the electronic content of the car. About EUR 650 in 2021, and in the next year, the institutes are looking at something closer to EUR 1,500 per car. Of course, this is a good growth sector to be in. The second part is industrial, showing an even higher average growth rate per year of 26%, but this is also much more widely spread market. Of course, we see significant growth in sensor, in safety for all kind of applications at home, in cars. Agriculture is also quite interesting here. We're of course penetrating part of this market, but it is a good and interesting market to be part of. Looking at 2022, the first half year from a RoodMicrotec perspective, we have been able to increase the loading in the test operations department quite a lot. We see a high demand from our customers to get parts, to get tested parts. For now it looks good. The qualification failure analysis is seeing some qualifications being delayed because of availability of scarce parts. We expect the situation to improve in the second half. Not necessarily that the logistics and the problem in the world will improve that much, but the project that we have in the pipeline has now been started from a qualification perspective. The same thing for the SCM, that we also see some issues with availability of material, but it's constantly monitored, and we've been able to deliver the amount of products that our customers have requested on time to the right location. There is no hiccup in our deliveries from that perspective. Looking at publicly funded projects, we have one running now that is the APPLAUSE, which will be finalized during the fourth quarter of 2022. Further publicly funded projects are being looked at, but nothing has been booked so far. We have a turnkey project for a Swiss customer where we do the full turnkey solution, including design through a design house partner, packaging, as well as qualification and test development. Volume production for this will start in early 2023, so that is well underway. The second one here is what we press released a couple of weeks ago, is the chassis control part together with the design house, EnSilica. Here, it's entered mass production, which is of course a very good milestone for such a project. Interestingly enough, there's up to 24 of those devices per car, so of course the volumes will then grow. It is a luxury car, but we together with EnSilica expect for next 12 months about 2.5 million devices to be shipped. The development of the ASIC started in 2018, so you can thereby see that it is a normal flow for an automotive ASIC, is that it takes almost four years to bring it to full volume production. Design was done by EnSilica, and of course, we have been part of testing and qualification for this part, and we will then, in the future, run a full volume production of this device and also shipment to the final end customer. Further, the personnel situation is constant. At the end of the half year, we were 92 employees in the company. The average was 91 employees. Looking at 2021, we were at 86 employees, but that was also reduced due to the short time work. We are in a very stable situation when it comes to the personnel. Also looking into the future where we of course are going to continue growing the revenue, we will see a slight increase also in personnel to be able to handle that. Looking at the services according to technology roadmap, high frequency test solutions, we have a couple of programs, projects where we are using this development around high frequency test solutions. They are running now in the test engineering department and also on the high power. We have a first project where we qualify parts according to AQG 324, which is a high power electronics qualification standard. That is also a good milestone to be able to move forward in this very interesting area, especially around battery management for the electric cars. Unfortunately, we still do need to talk about COVID-19. It is still there. It is influencing the way we do business. So many face-to-face meetings have been moved over to virtual meetings, but it has eased a little bit now, so we do meet our customers face-to-face. We haven't been impacted in the company, so both operational locations have been fully operational throughout the two years that we've had this now. We've delivered all our projects on time and to the right location. We expect that to continue, even though there is a, I think, worldwide view that the autumn could be a little bit more tricky again. We have a very good safety concept in the company to be able to continue operating. With that, I will hand over to Arvid for the financials and outlook. Thank you, Martin. First of all, also from my side, welcome to everyone joining the call today. I'll guide you through the financial figures of the first half year of 2022. The total income we reported, EUR 7.3 million, is equal to the first half year of 2021. The other income, though, a part of the total income, okay, consists of government grants at the subsidized projects. It is reduced due to that one of the two projects came to an end. Good to see that the net sales and what we invoice directly to our customers increased by 3%. The total operating expenses were EUR 5.9 million over EUR 6 million in the first half year of 2021. The costs of raw materials and consumables came down to EUR 1.1 million and mainly due to the increase in operations in the test operations department. Personnel expenses, oh, sorry, and also important to add, as we can see in the graph, that the gross margin increased from 77%-85% in second half of 2022. That's mainly then caused by the increase in activities in the test operations. Personnel expenses increased to EUR 3.6 million due to bonus expenses in the first half year of 2022. We made use of the short-term work in the first half of 2021. Of course, that's the main reason for the increase in the personnel expenses. Other operating expenses remained at the same level. Consequently, the total EBITDA increased from EUR 1.3 million- EUR 1.4 million in the first half year of 2022. Due to low cost of materials and together with good cost control, we continued to reduce the overall cost in 2022. Depreciation levels reduced. Depreciation came down to EUR 0.7 million, mainly caused by lower investments levels. Financial expenses at the same level as the first half of 2021. Coming to a net profit for the first half year of EUR 644,000, which is an increase of 47% compared to the first half year of 2021. We can go to the next slide, the balance sheet. In the balance sheet, just highlighting a few items here. In the total equity, a part of the total equity is a non-controlling interest. A non-controlling interest consists of two perpetual bonds issued by RoodMicrotec Germany. One of the bonds indeed, the small bond of EUR 500,000, is redeemed in the first half year of 2022. We've redeemed the bond of EUR 5 million for EUR 400,000. The EUR 100,000 difference is subject to German income tax. The balance is directly booked into equity. Total solvency increased from end of 2021, 37%-39% mid of 2022. Moving to the next slide, liquidity position. Cash flow from operations was positive by EUR 300,000, a change compared to the first half year of 2021. The change, the reduction is caused by an increase in working capital during the first half year of 2022. Inventories, trade receivables went up and increased because of higher activity levels. The net cash position reduced and was negative by EUR 0.6 million. It was mainly due to the lower, in this case, from operating activities in combination with investments and what I also mentioned, redemption of perpetual bond during the first half year of 2022. Coming to the outlook. The outlook for 2022 remains unchanged. We expect for this year to have an income of total income of between EUR 15 million and EUR 15.6 million and remain positive. As we keep a close eye on the current situation and regarding lead times and supply chain issues, we don't see any impact in the second half year at the moment. I think we can conclude well our session here. I mean, we can move to the questions question sessions. You may open now and unmute yourself to ask questions. Just Henk Slotboom. You want to ask a question? Arvid? Yes. Good morning. Yeah, you can hear me. Good morning. Arvid, I've got a few questions. First of all, you already mentioned on the receivable side that that was one of the reasons why the net working capital was up. Is there a seasonal pattern in the receivables? I noticed that when you compare it to the end of last year that there's quite an increase. When compared to the first half year, the end of the first half year of last year, it's a rather modest increase. Is there a seasonality pattern that influences it or is it something else? Good question. No, I don't think there's a seasonal pattern. We saw at the end of 2021 that customers started to pay their invoices earlier. I think that had to do with the low interest rates. Of course, it's still low, but currently we see a slight increase, but just minor increase in payments. I don't think it's an seasonal pattern. I think has to do with the market situation, interest situation in the market. Okay. Martin, good morning to you as well. Perhaps also a question to you. At the bottom of page five of the press release, you refer to work you're doing for a client in Switzerland. If I understand it correctly, from what you told during the introduction remarks, is this potentially something that could provide multiple years of, or let me put it in those phrases, longer term work, as if it were an SCM contract? You refer to it as a turnkey project, but could it turn into something more structural? Let me put it in those phrases. It is a customer that we have been working with quite a lot, also before. This is the first project where we've also done sort of the control of the design. We're not doing the design ourselves, but we're of course controlling it, project managing it. There is a good chance that this could be a start of more such projects coming in from this customer in Switzerland. Of course, since we are then in for this first project, going to source the wafers as well as do the packaging and logistics and testing for this, it is an SCM project. But it's sort of the extended version of that. It's really a turnkey where we're taking the full responsibility. Okay, clear. On the wafer issue, there was EUR 400,000 included in the revenues and in the cost of materials, the raw material costs in the first half of last year. Now, you did receive, you did sell part of that in the second half of last year. I understand from the press release that another leg of this is coming in the second half of 2022. Is there a very big difference between what I can expect in profit contribution when I compare second half 2022 to second half 2021? From this project, yes, because this project will be finalized during the second half of 2022. If I understand it correctly, the contribution will be higher than in the second half of 2021. For this project, yes. Okay. A final question from my side. You noticed that the labor costs were up, and I understand that part of that was caused by the Kurzarbeit, the short work arrangement, which is obviously not there this year. There's also a part in bonus payments. I assume that is something we won't see back in the second half year, or will we see that also back in the second half year? No, that effect you won't see in the second half year. We made use of this short-time work in Germany only during the first five months of 2021, and that we see the effect only in the first half year compared to the same period in the year before. How much was that roughly in the first half of the year? That's what you can see also in the annual report. It was EUR 100,000, whatever it was. Okay, perfect. I'll look that up. Thank you very much. You're welcome. Any further questions from anybody? I see someone else. Okay. If there is no further questions, I would like to thank you all for taking the time and joining us in this call today. Wishing you all a good further day and week. As we say on our last page of the presentation, stay healthy and take care of yourselves, and we'll hear from each other again in the next conference call. Thanks and have a good day. Thanks, Arvid.
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