Mikron generated record results in FY25 despite difficult market conditions. Economic uncertainty has suppressed order intake during the year, which is likely to result in lower revenue and profitability in FY26. Operational improvements, cost-cutting and manufacturing capacity expansion should position the company well for profitable growth when the cycle turns, and management has raised its operating margin targets from FY27 from a mid-point of 8.5% to 9.5%.

Mikron’s preliminary results for FY25 confirmed strong financial performance. Revenue was slightly ahead of our forecast and operating profit was c 3% ahead, with the operating margin expanding 1.9pp y-o-y to 10.4%. Order intake declined 14% y-o-y with book-to-bill below 1x for both divisions, as the uncertain European economic environment delayed customer investment decisions. We maintain our forecasts pending full FY25 results on 6 March, when we expect management to provide guidance for FY26.