Kitron Asa · OSL:KIT
Kitron Asa — Q1 2010 Earnings Presentation
21 slides from Kitron Asa's earnings presentation, May 6, 2010
Slide 1: Q1 results 2010
Q1 results 2010 6 May 2010 Jørgen Bredesen, CEO Björn Wigström, CFO
Slide 2: Positive trend in Q1
Positive trend in Q1 Financial highlights • Order intake increased by 13% and order backlog increased by 7% vs Q1 2009 • Revenue down 25.4% vs Q1 2009. Quarter on quarter trend is positive • Operating profit of NOK 5.9 million. Operating margin 1.4% • Cash flow negative with NOK 32 million. Recoil f
Slide 3: Focus on streamlining operations
Focus on streamlinging operations Operational highlights • Positive effect in 2010 of completed downsizing • Headcount reduced by 350 FTE’s in 2009 • Divesting development department • Final conclusion expected in Q2 • Kitron increasing focus on NPI and Industrialisation • Strong focus on Kitron AB
Slide 4: Focus on streamlining operations
Focus on streamlining operations Operational highlights • Growth initiatives on plan • Germany - Sales and marketing in Germany started. Integration of aquired local company ongoing. • Kitron China operational in Q4. • Focus on operational improvement programs • Sourcing from China increasing • Manu
Slide 5: Major New Orders in Q1
Major New Orders in Q1 NOK million • Medical contract 80 • Industry contract 100 First contract based on China manufacturing! • Kongsberg Group 20 • Maquet Critial Care 40 Important contract with new customer in Q2: • Atlas Copco Tools AB (frame agreement signed) 5
Slide 6: Financial statements Q1 2010
Financial statements Q1 2010
Slide 7: Revenue Group
Revenue Group Revenue as expected 551 420 • Revenue at NOK 411 million, 25% lower 336 424 411 NOK million than last year • Q1 change by market segment: Q1 2010 vs Q1 2009 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Data/Telecoms 2.7% Revenue by market segment Defence -26.0% Total revenue NOK 411 million
Slide 8: Revenue by country
Revenue by country * Revenue by country • Norway and Lithuania negatively affected by drop in Offshore segment Q1 2010 vs Q1 2009 Norway -22.5% Sweden 8.2% Lithuania -47.5% • Capacity in all operations adjusted to lower revenue level Revenue by country Total revenue NOK 411 million * Before group en
Slide 9: Operating profit lower
Operating profit lower Operating profit Group • Operating profit in Q1 was NOK 5.9 million (NOK 34.3 million) and margin was 1.4% (5.1%) • NOK 10.5 million positive impact from reversal of pension liability. • Poor performance in Karlskoga operation • NOK 14 million in loss booked in Q1 Operating ma
Slide 10: Operating profit by country
Operating profit by country * 27,4 Profit by country 14,2 • Profitability for Norway and 11,2 6,9 NOK million Lithuania in line with Q1 2009 expectations. (1,2) • Positive impact on result in (13,8) Norway from reversal of pension Norway Sweden Lithuania liability. Operating margin by country • Nega
Slide 11: Cash flow
Operating cash flow Group Cash flow • Cash flow was negative by NOK 31.7 million (NOK 35 million) • Recoil from strong cash flow in fourth quarter • Reduction of factoring debt included in Q1 cash flow Net working capital Group • Stable development in net working capital. • Low exposure for bad debt
Slide 12: Strong equity ratio
Strong equity ratio Equity • Equity of NOK 441.1 million (478.9) and the equity ratio to 45.7% (40.8%) Equity ratio 40.8% 46.9% 47.2% 45.9% 45.7% 12
Slide 13: Market development
Your ambition. Our passion. g Kitron Market development
Slide 14: Improved market conditions expected
Improved market conditions expected • Data/Telecoms trend mixed, but outlook is positive • Defence trend positive – lower revenue in the short term • Industry showing signs of recovery from a low level • Medical equipment continues strong trend – several companies ramping up manufacturing • Offshore
Slide 15: Order intake trend improving
Order intake trend improving Order intake Group Total Q1 average 15
Slide 16: Order backlog is recovering
Order backlog is recovering Order backlog Group • Order backlog at NOK 783.5 million (NOK 731.9 million) • Expected positive development in the Medical equipment, Industry and Defence segments • Offshore expected to recover Order backlog Segment towards the end of 2010 Definition of order backlog in
Slide 17: Expanding market coverage
Expanding market coverage • Focus on gaining market share in Kitron “home markets” • A smaller EMS company with NPI competence (prototyping) acquired • The German EMS market is the largest in Europe • First orders received, several RFQ’s in process • Focus on NPI and industrialisation • Based primar
Slide 18: Expanding market coverage
Expanding market coverage • Status on the manufacturing operation in China • Factory expected to be operational in Q4 2010 • Offering another lower cost manufacturing alternative and opening up new markets • Establishment in North America • Enable Kitron to serve existing and new customers globally
Slide 19: Outlook
Your ambition. Our passion. g Kitron
Slide 20: Outlook
Outlook • Order intake and backlog expected to continue to improve quarter by quarter • Capacity adjustments expected to yield positive effect on profitability • Continued focus on operational improvements (supply chain management, ERP, exit or turn around loss making activities etc) • Kitron AB exp
Slide 21: Thank you!
Thank youl, Your ambition. Our passion. 4 Kitron