PRESS RELEASE APRIL 28, 2004
Interim Report Obducat AB (publ) January – March 2004
The period in brief:
• Directed new share issue in January 2004 contributed some SEK 13 million
• Over-subscribed debenture issue yielded about SEK 50 million after the report period
• Turnover SEK 4,4 (9,0) million - forecast sales growth of 25-30 per cent in 2004 remains
• Obducat partner in EU sponsored nano project NaPa
• Pre-tax profit was SEK –9,5 million (–7,9) and earnings per share before deferred dilution
was SEK –0,05 (-0,05)
For further information, please contact:
Patrik Lundström, CEO, +46 40 36 21 00 or +46 703 27 37 38
Johan Boman, CFO, +46 40 36 21 00 or +46 703 27 37 30
Obducat AB is an innovative developer and supplier of technologies, products and processes used for the production of advanced micro- and
nano structures. Obducat´s products and services are intended to serve the demands of companies within the information storage, semicon-
ductor, printed circuit board, and sensor industries. Obducat´s technologies include electron beam, and nano imprint technology. Obducat
has offices in Sweden, and the UK, with the head quarter located in Malmö, Sweden. The Obducat shares are publicly traded on the Swedish
NGM exchange. Read more on www.obducat.com.
Interim Report Obducat AB (publ) January – March 2004
• Directed new share issue in January 2004 contributed some SEK 13 million
• Over-subscribed debenture issue yielded about SEK 50 million after the report period
• Turnover SEK 4,4 (9,0) million - forecast sales growth of 25-30 per cent in 2004 remains
• Obducat partner in EU sponsored nano project NaPa
• Pre-tax profit was SEK –9,5 million (–7,9) and earnings per share before deferred dilution
was SEK –0,05 (-0,05)
Sales (All amounts below in SEK 000 unless otherwise stated)
Sales reported for the first quarter amounted to 4,383 (8,970), reflecting a weaker inflow of orders early in
the year compared with the corresponding period the prior year. As previously reported, the number of
quotations – which is regarded as a significant indicator of potential future business volumes – continued
to be large. This mirrors primarily NIL* in which, in addition to EBR*, the key value with respect to quo-
tations lies in larger systems. A recent trend of increasingly longer sales cycles has however been noted,
being one reason for the weakened inflow of orders. Another reason is the fact that orders for the ap-
proximate period of three years that the Company has marketed and sold NIL have been placed at very
irregular intervals, allowing no indication of a specific pattern in the inflow of orders throughout the year.
The 2003 closing backlog was approx. SEK 0,6 million, having today increased to about SEK 4 million.
Gross margin for the first quarter was 54 per cent compared with 53 per cent for the corresponding period
2003 and 48 per cent for the full year 2003.
Ongoing customer projects are carried out together with a number of world-leading players active in a
significant number of trades. As described under “Outlook” there is a prospect of industrial orders arising
from customer projects in an extensive range of applications. These projects are conducted with customers
in areas comprising magnetic storage, bio applications, semiconductors, opto components and optic stor-
age.
*) ”NIL” = Nano imprint lithography; ”Stampers” = Lithography originals type consumer goods; ”SEM” = Scanning Electron Microscope;
”EBR” = Electron beam lithography on rotating discs.
Research and development
Obducat is conducting extensive research and development on a continuous basis, primarily in close co-
operation with existing and potential customers. In this respect the NIL segment is consistently being pri-
oritised based on several system functionalities developed during the past year. The research and devel-
opment efforts are considered to have reinforced and strengthened Obducat’s position and the Company
believes it today still has a technological advantage over its competitors in NIL. During the period, Obdu-
cat has become a partner in the EU sponsored nano project NaPa, with a total budget of some EUR 16 mil-
lion.
The result of this work is continuously evaluated from a patent point of view and when commercial grounds
are considered feasible patent applications are filed. At the end of the reporting period the Company held 23
granted patents covering inventions, and patent applications covering a further 12 inventions had been filed.
In this connection NIL has remained both predominant and intentionally prioritised.
The period was charged with research and development expenses totalling 4,045 (3,418), in addition to
which 1,227 (1,547) were activated as capitalised development expenditure and patents.
Sales and result
Group sales for the first quarter of the year amounted to 4,383 (8,970), generating a gross profit of 2,348
(4,751), corresponding to a gross margin of 54 per cent (53).
Operating loss for the period was –9,061 (–6,822) and was charged with depreciation according to plan
amounting to 3,139 (3,068).
Loss for the period after taxes was –9,526 (–7,870).
Financing and liquidity
At the end of the period shareholders’ equity was 53,921 compared with 50,219 at the beginning of the year.
Early in the year a directed new share issue was implemented, yielding 12,803 after issue expenses. Shares
were subscribed for by Nanostart AG / Hauck & Aufhäuser. In January a total amount of 16,270 series B
shares were issued based on the required conversion of outstanding convertible debentures 2001/2004. The
last day to convert the debenture loan was January 1, 2004. Subsequent to this conversion a little more than
SEK 17,7 million of the convertible loan remains.
Based on a resolution at an extraordinary general meeting in February, a share issue of subordinated deben-
tures with detachable warrants was implemented in the latter part of March. This issue was directed at pre-
sent shareholders for cash with preferential rights, and to holders of the outstanding issue of convertible de-
bentures 2001/2004. The last-mentioned holders were offered, on the basis of set-off, to participate in the
offer. The issue was concluded in April and has therefore not impacted the period being reported. The result
is commented on under the heading “Significant events after the reporting period” below.
Liquid assets at the end of the period amounted to 14,153 in comparison with 6,807 at the start.
The Group’s equity/assets ratio at the end of the period was 59 per cent, unchanged in relation to the be-
ginning of the year.
Cash flow for the period prior to investments and financing activities improved to –4,005 (–9,813). Total
cash flow for the period was 7,346 (26,367), primarily reflecting, in addition to the above-reported result,
a positive change in working capital, investments mainly in intangible fixed assets and the previously de-
scribed directed new share issue.
Investments
The Group’s net investments for the period amounted to 1,372 (1,720), of which approx. 89 per cent is
pertaining to development expenses – carried forward in compliance with RR15 – and patents.
Organisation
At the close of the period the Group had a total of 38 staff (of which 4 women), with total hours of duty
corresponding to 35 full time positions.
External factors
The impact of currency and interest rate fluctuations are considered to be of little consequence to the busi-
ness. Yet there is a limited currency risk in connection with business deals based on public procurement in
US dollars. In the event of a weak US dollar there are limited possibilities to compensate for currency ex-
posure by increasing prices. The Company is not especially dependent upon or limited by circumstances
affecting suppliers.
The Company is of the opinion that the competition has been showing signs of change during the period.
A major competitor in NIL has in a short period of time secured substantial financial resources. Tangible
results by the competition in NIL, such as shipments, have to the best of the Company’s knowledge so far
been limited. Prices of certain NIL related products have recently been showing a downward trend.
Parent Company
During the year no sales were generated in the Parent Company. Pre-tax loss amounted to –4,638
(–6,586). The Parent Company’s net investments amounted to 365 (702), comprising primarily patents.
Accounting Principles
Accounting principles adopted by Obducat comply with the Annual Accounts Act and the general guide-
lines, statements and recommendations issued by the Swedish Financial Accounting Standards Council
and other standard organisations. The accounting principles remain unchanged compared with the previ-
ous interim report and the Annual Report 2003. With regard to accounting by segments – governed by
RR25, the Company has, as previously reported, determined that Obducat’s business is considered to
comprise one business segment only, namely that of system solutions for the production of advance micro
and nano structures. For this reason the Company will give no further information in this report relating to
RR25, referring instead to the profit and loss statement and balance sheet for the primary segment.
Other significant events
Subsequent to the announcement of the new share issue directed at Nanostart AG / Hauck & Aufhäuser at
the beginning of the year, the Company has witnessed a distinctly increased interest by continental play-
ers. Unofficial trading in the Obducat share was in a short time initiated on a number of German stock ex-
changes and the number of traded shares increased significantly. As a result of this, among other things,
the foreign shareholding in Obducat increased from 10 to 35 per cent in the first quarter.
Share Data and Ownership Structure
On March 31, 2004 Obducat had 16,916 shareholders. On the same date the total number shares amounted
to 201,653,886, of which 6,500,000 series A shares (each entitling to ten votes) and the remainder series B
shares (each entitling to one vote). In the first quarter of the year a total of about 104,2 million series B
shares were traded, equivalent to an average number amount of 1,65 million shares per trading day at an
average price of SEK 3:33. Ownership structure on March 31, 2004 was as follows:
Owner A shares B shares % of votes % of capital
Clearstream Banking (Luxembourg) - 35 450 414 13,63 % 17,56 %
Henri Bergstrand (incl. family & co.) 3 350 000 69 568 12,90 % 1,70 %
Lennart Olsson (do.) 3 150 000 13 581 12,11 % 1,57 %
Nanostart AG / Hauck & Aufhäuser (Luxembourg) - 16 655 600 6,40 % 8,26 %
Banco Technology- & Innovation Fund - 3 691 000 1,42 % 1,83 %
Caroline Hamilton - 2 452 812 0,94 % 1,22 %
Hamilton Invest AB - 2 274 976 0,87 % 1,13 %
SIS Segaintersettle (Switzerland) - 2 218 326 0,85 % 1,10 %
Royal Skandia Life Insurance (UK) - 2 039 758 0,78 % 1,01 %
Seaman Invest AB - 2 000 000 0,77 % 0,99 %
Deutsche Bank (Germany) - 1 926 897 0,74 % 0,96 %
SEB Private Bank (Luxembourg) - 1 706 035 0,66 % 0,85 %
Merrill Lynch, Pierce, Fenner & Smith (US) - 1 590 193 0,61 % 0,79 %
Carnila AB - 1 439 062 0,55 % 0,71 %
Kvibergs Marknad AB - 1 102 962 0,42 % 0,55 %
Other shareholders - 120 522 702 46,35 % 59,77 %
Total 6 500 000 195 153 866 100,00 % 100,00 %
Significant events after the reporting period
An extraordinary shareholders’ meeting on February 9, 2004 resolved that the Company in March would
issue convertible debentures with detachable warrants. The issue was directed at existing shareholders,
who were offered to subscribe for one convertible debenture at SEK 1,0 for each four present shares held,
and at holders of current debentures on the basis of set-off. Each debenture had a detachable warrant. Two
such warrants give entitlement to subscribe for one new share. The conversion price as well as the sub-
scription price for the detachable warrant was set at SEK 2,15. The debenture loan matures on March 31,
2007, offering an annual yield of 5 per cent. The preferential rights issue for cash was oversubscribed.
With regard to the offer to off-set directed at holders of the convertible debentures 2001/2004, approxi-
mately 69 per cent were subscribed, implying that about SEK 5 million only remains of the loan, which
matures in May 2004.
Outlook
With regard to future results relating to collaboration projects conducted with a number of global players
active worldwide in several application areas, the Company estimates its present situation as follows.
At present several high intensity collaboration projects in a large number of application areas are ongoing,
including magnetic storage, bio applications, semiconductors (both non-volatile memory and HDI), opto
components and OLED displays, with the potential of resulting in significant industrial orders. In this
connection the Company would repeat its opinion that the application in itself is of greater importance
than any individual customer.
Obducat’s internal research and development progress as of 2003, together with the outcome of the total
application development having been pursued by players reaching consumers, is of such importance that
the foundation has been laid for NIL as a future technique for mass production, with Obducat as a highly
likely and suitable technology provider. It is furthermore considered very likely that mass production
based on NIL will gradually commence starting at the end of 2005. This opinion is based on the timetables
that Obducat’s customers and partners have chosen to communicate to the Company.
In these circumstances the Company believes that it will secure at least one industrial NIL order in 2004.
The possibility of securing at least one industrial order in 2004 is not dependent on how sales of the Com-
pany’s core products are developing.
As of last year the technological progress in Obducat’s EBR business has been positive. The market po-
tential is considered to be enormous, not least thanks to the comparative technology status of the Com-
pany. EBR sales are estimated to commence in 2004/2005.
In the light of the significant investments in focus, the semiconductor industry, as previously established,
in 2003 revised its schedule for the implementation of new production technology on a mass production
level. In this context, the Company wishes to emphasise that such revised plans are entirely due to the
semiconductor industry’s internal decisions.
The Company remains positive about the sales growth in spite of soft sales at the start of the year. In com-
bination with opportunities for a gradual increase in SEM sales, the Company has grounds to maintain its
most recently announced forecast. The Board of Directors and Management thus estimate that it will be
possible to achieve an organic growth rate of 25-30 per cent in 2004 and sales of about SEK 100 million
as well as positive cash flow for full-year 2005.
Future financial reports
Annual Report 2003 May 2004
Annual General Meeting June 4, 2004 at 2 p.m. (Kockum Fritid, Malmö)
Interim Report 2 2004 (January – June) August 6, 2004
Interim Report 3 2004 (January – September) October 28, 2004
Interim Report 4 2004 / Year-end Report February 2005
Malmö, April 28, 2004
The Board of Directors of Obducat AB (publ),
Corporate identity number 556378-5632
On behalf of the Board
Patrik Lundström
CEO
This interim report has not been subject to review by the Company’s authorised public accountant.
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