The year started well with demand growing by nearly a quarter, i.e., by 24 percent year-on-year. We performed excellently, even as the entire PCB market contracted by more than two percent in the first quarter (Custer Consulting, April 2019). The strongest demand came, as expected, from the telecommunications network segment, with solutions based on new 5G technology as growth drivers. In other customer segments, growth was more modest in the first quarter.
First-quarter net sales grew to EUR 7.6 million and the operating result tripled to EUR 0.9 million. Operating margin rose to 11.3 percent. The major factors behind the rise in profitability were the higher utilization rate of the Oulu plant and the greater share accounted for by the technologically most demanding products. Cash flow from operations strengthened to EUR 2.2 million.
The order book rose to EUR 3.4 million, up 12 percent. The record-high order book at the end of March supports further positive development in the second quarter. Demand is expected to continue to pick up, spreading across a wider range of customer segments.
The investment program is proceeding as planned and at the same time opens up new opportunities to expand into new product areas and technologies. In the first quarter, we introduced a high-temperature laminating press, which enables the deployment of Teflon-based multilayer structures. Teflon laminates are especially needed in high-frequency technologies, which are typically used in radars and antenna amplifiers.
Another major new technology that we introduced is hard gold, which is used for example in semiconductor manufacturing equipment. The investment program also increases the capacity of the Oulu plant. At the beginning of the year, capacity was increased in the drilling and routing work stages as well as in the plasma etching of laminates.
Alongside the investment program, we are constantly developing a partnership network to support the PCB needs of our customers in a comprehensive way, including volume production service and technology offerings over the entire lifecycle of a product.
Espoo, April 30, 2019
Mikko Montonen, President and CEO