Kitron Asa · OSL:KIT

Kitron Asa — Q2 2015 Earnings Presentation

20 slides from Kitron Asa's earnings presentation, Jul 16, 2015

1. Slide 1: First half year and Q2 results 2015

   First half year and Q2 results 2015 Peter Nilsson, CEO Cathrin Nylander, CFO July 16th, 2015

2. Slide 2: Financial highlights Q2: Profitability improvement continued

   Financial highlights Q2: Profitability improvement continued NOK mill.  Fifth consecutive quarter with Q2 2015 vs Q2 2014 improved profitability  Significantly improved cash flow Revenue 489,0  7,0 %  Stable order backlog  Stable working capital in the EBIT 22,1  220,5 % quarter but an increas

3. Slide 3: Financial highlights first half year: Significantly improved profitability and cash flow

   Financial highlights first half year: Significantly improved profitability and cash flow  Stable revenue growth in NOK mill. 2015 vs 2014 spite of declining revenues in offshore/marine sector. Revenue 959,6  7,5 %  Earnings stabilized on higher level since fourth quarter EBIT 42,8  383,9 % 2014.

4. Slide 4: Major new orders: Important orders in the second quarter

   Major new orders: Important orders in the second quarter  Kongsberg Defence & Aerospace awards order to Kitron AS  Kitron Norway has received an order from Kongsberg Defence & Aerospace AS for military communications equipment linked to contracts for deliveries to Hungary.  Kitron will supply var

5. Slide 5: Operational highlights: Shift in operations and expansion

   Operational highlights: Shift in operations and expansion  Shift from high-cost to low-cost regions  53% (49%) Full time employees in low cost regions  Payroll expenses/revenue 23,6% (~29% in Q1 2014)  Revenue per employee at KNOK 420 (~KNOK 369 in Q1 2014)  Expansion of Kaunas facility in Lith

6. Slide 6: Financial statements first half year and Q2 2015

   Financial statements first half year and Q2 2015 6

7. Slide 7: Revenue Q2: Defence/Aerospace and Industry growth offsets decline in Offshore/Marine

   Revenue Q2: Defence/Aerospace and Industry growth offsets decline in Offshore/Marine Q2 2015 vs Q2 2014 Share of total revenue Offshore/Marine -45,0 %  7,7 % Medical equipment -4,6 %  21,5 % Defence/Aerospace 55,6 %  29,0 % Energy/Telecoms 3,8 %  14,7 % Industry 12,3 %  27,1 % 7

8. Slide 8: Revenue first half year: Stable growth

   Revenue first half year : Stable growth 2015 vs 2014 Share of total revenue Offshore/Marine -44,8 %  8,7 % Medical equipment -6,1 %  21,3 % Defence/Aerospace 52,4 %  28,4 % Energy/Telecoms 6,1 %  13,2 % Industry 20,7 %  28,5 % 8

9. Slide 9: Revenue by country Q2: US and China with continued strong growth

   Revenue by country Q2: US and China with continued strong growth 225 Q2 2015 vs Q2 2014 Share of total revenue 216 Norway -4,2 %  38,5 % Q2/2014 Q2/2015 Sweden 8,6 %  21,7 % 112 122 113 119 104 Lithuania 5,2 %  21,2 % 59 NOK million Others 75,3 %  18,6 % Norway Sweden Lithuania Others * Before g

10. Slide 10: Revenue by country first half year: Growth outside Scandinavia

    Revenue by country first half year*: Growth outside Scandinavia 452 447 2015 vs 2014 Share of total revenue Norway -1,0 %  41,1 %  2014 2015 Sweden 0,4 % 20,2 % 231 219 220 208 190 Lithuania 11,3 %  21,2 % 100  NOK million Others 89,8 % 17,4 % Norway Sweden Lithuania Others 10

11. Slide 11: Quarterly EBIT: Fifth consecutive quarter of improved profitability

    Quarterly EBIT: Fifth consecutive quarter of improved profitability  Improvement in both nominal value as well as EBIT margin 20,8 22,1  Strong contribution from service sales, both from development and engineering 14,3  Personnel expense reduction  All sites profitable 6,9 6,9 NOK million 220.5

12. Slide 12: EBIT by country Q2: Strong improvement

    EBIT by country Q2: Strong improvement EBIT*  Norway 8,5 8,6 7,3 7,5 NOK million 6,6  Cost reduction actions continue to yield results 2,7  Sweden 2,3  Significantly improved margins  Lithuania  Reduction due to higher indirect cost and pressure on margins  Other -7,5  China and US continue

13. Slide 13: EBIT by country first half year: Strong improvement

    EBIT by country first half year: Strong improvement EBIT*  Norway NOK million 19,3  Cost reduction actions continue to yield results 14,2 14,5 11,7  Sweden 10,9  Significantly improved margins 5,8  Lithuania 0,8  Reduction due to higher indirect cost and pressure on margins  Other -8,2  Chin

14. Slide 14: Balance sheet: Cash flow improvement

    Balance sheet: Cash flow improvement Operating cash flow  Cash flow  Improved profitability affects cash NOK million 48,6 flow positively this year with a third 35,0 consecutive quarter of improvement. 413.5 %  Compared to last year, improved 9,5 12,9 results and improved working capital -9,7 dev

15. Slide 15: Market development

    Market development www.kitron.com

16. Slide 16: Order backlog: Growth in Energy/Telecom and Medical offset reductions

    Order backlog: Growth in Energy/Telecom and Medical offset reductions in Offshore/Marine Order backlog  Energy/Telecom and Medical NOK million  Double digit growth compared to 868 last year 859 855  Defence/Aerospace and Industry 830  Stable at same level as last year  Offshore/Marine  Expecte

17. Slide 17: Market development

    Market development  Offshore/Marine  General adjustment in the oil service market in Norway  Medical equipment  Stable development  Defence/Aerospace  Continued strong growth and positive outlook  Energy/Telecoms  Stable backlog and positive outlook  Industry  Continues to grow, increased

18. Slide 18: Outlook

    Outlook www.kitron.com

19. Slide 19: Outlook

    Outlook  For 2015, Kitron expects growth and a clear improvement in profitability.  Growth is primarily driven by increased demand in Defence sector for US and Norwegian markets, as well as increases in Energy/Telecoms and Industry.  Offshore/Marine will have reduction due to oil service market i

20. Slide 20: Thank you!

    4 Kitron Your ambition. Our passion. Thank you!

Kitron — Q2 2015 Earnings Presentation on 6ix