Obducat: conclusion from Q1 report
2009-05-12 15:22, Edited at: 2011-03-11 05:46Please note: Community posts are written by its members and not by Redeye’s research department. As a reader you’re always encouraged to critically analyze the content.
Weak orderintake Q1 due to financial crisis pushed stock price down!
Review of Obducat AB (publ)
Obducat’s First Quarter
Obducat AB (publ), OBDU B on the Swedish NGM list published its first quarter report for 2009 with the headline “Obducat executes its first fully automated production machine” on the 6th May 2009.
With the biggest sales ever in the first quarter in the history of Obducat and with its backlog of orders at the end of Q1 with SEK 51.0 M we will dig into this company.
Patrik Lundström, CEO of Obducat is the world-leading supplier of lithography solutions for manufacturing and replication of advanced micro- and nano- scale structures.
Applications where Obducat’s systems are used in today are optoelectronics, magnetic storage and displays.
The company’s headquarter is in Malmö, Sweden where as well the maturity of its 72 employees works.
Finances
The order intake for the first quarter was SEK 3.9M, that is a -53% change compared to the record year 2008(orders booked) and its first quarter of SEK 8.3M
Nevertheless, the sales of the first quarter 2009 increased with 27,4% to the biggest sales ever in Obducat’s history to SEK 15.4M.
The orders booked backlog is now SEK 51.0M compared to SEK 63.5M at the end of 2008.
That orders backlog gives a possibility of receiving higher sales during 2009 but the negative effect here is that until we receive the money, somebody needs to fund hardware and operations and that is clearly a big cost for Obducat.
Book-To-Bill ratio, which is very often used within semiconductor industry, is declining since 2nd Quarter 2008 and it’s now less than 1.00,
A book-to-bill ratio of above 1 indicates that more orders were received than filled, and hence a strong market where demand outpaces supply. Due to the big backlog, 2009 will keep sales up if delivered as expected!
The Current Asset section is very interesting in Balance Sheet. Its Total Current Assets are reported to SEK 71.5M.
Current Assets are normally realized or sold within one year. One item of SEK 16.9M is the worked but not invoiced income, that is very high compared to earlier reports.
All focus should be put to get acceptance on this item(s) and move it to the finance department for invoicing. Q1 accounts receivables is only SEK 1.9M and that is “normally” paid within 30 days.
Investments has more than doubled, +142% to SEK 5.3M in further development and patents.
Obducat’s patent portfolio totalled 262 active patent applications, today they are 146 granted patents registered to Obducat.
The patent portfolio is valued to SEK 17.9M
Summary
The year 2008 was a record for Obducat, SEK 71.5M in sales, which is an increase of SEK 38.8M or +119% year-to-year.
Nevertheless, if Obducat manage to transform all the order backlog of SEK 51.0M into sales this year, it is possible to achieve a whole year 2009 sales of SEK 66.4M. Here the ordered Sindre HDD HVM has to be deducted, an amount of SEK 36M!
With hard work and focus on priorities below, Obducat have a chance to get a sales of at least SEK 30M for year 2009, which is in line with previous years, except record year 2008!
1. Orders intake – despite the financial crisis the sales managers must get orders
2. Get paid for projects – get paid as fast as possible for
outstanding work
3. Adjust costs to sales – The financial crisis and with it the missing orders demands savings in investments and operational costs.
Download the analysis above in pdf from http://www.maestrogarcia.se/