Kitron Asa · OSL:KIT
Kitron Asa — Q3 2019 Earnings Presentation
21 slides from Kitron Asa's earnings presentation, Oct 24, 2019
Slide 1: First three quarters and Q3 results 2019
First three quarters and Q3 results 2019 Peter Nilsson, CEO Cathrin Nylander, CFO 24 October, 2019
Slide 2: Peter Nilsson, Kitron's CEO comments
Peter Nilsson, Kitron’s CEO comments ▪ Strong revenue growth increasing 31 % in Q3 and 28% year to date with particularly strong growth within Defence/Aerospace and Offshore/Marine market sectors. ▪ EBIT margin at 5.4% with margin improvements in Norway and Sweden ▪ Strong order backlog, with strong
Slide 3: Financial highlights Q3: Strong revenue growth and order backlog
Financial highlights Q3: Strong revenue growth and order backlog ▪ Revenue ▪ Continued strong growth 31.0 % NOK Million Q3 2019 vs Q3 2018 ▪ Organic growth 21% Revenue 737,5 31,0 % ▪ Operating Margin/EBIT EBIT 31,9 % ▪ Operating margin at 5.4% (5.3%) 39,6 ▪ EPS 0.14 (0.12) NOK Order Backlog 1 57
Slide 4: Financial highlights First three quarters: Continued strong growth and profitability
Financial highlights First three quarter: Continued strong growth and profitability ▪ Revenue ▪ Continued strong growth 28 % NOK Million 2019 vs 2018 ▪ Organic growth 20% Revenue 2 410,6 28,2 % ▪ Operating Margin/EBIT ▪ Operating margin at 6.1% (6.0%) EBIT 147,3 29,4 % ▪ EPS 0.55 (0.47) NOK Orde
Slide 5: Flooding in the US
Flooding in the US ▪ The facility of Kitron Technologies in Windber, Pennsylvania, was damaged by flooding in July ▪ Production has been moved to a temporary site. ▪ This has led to some inefficiencies in production and increase in net working capital ▪ Minor effects on customers ▪ No significant fi
Slide 6: New factory in Poland
New factory in Poland ▪ Finalized construction of Kitron’s new factory in Grudziądz, Poland ▪ 8,000 square meter facility ▪ Production is ramping up in the fourth quarter ▪ Contributes to growth in the number of employees during the quarter 6
Slide 7: Financial statements First three quarter and Q3 2019
Financial statements First three quarter and Q3 2019
Slide 8: Revenue Q3: Strong revenue growth in Defence/Aerospace and Offshore/marine
Revenue Q3: Strong revenue growth in Defence/Aerospace and Offshore/marine Q3 2019 vs Q3 2018 Share of total revenue Industry 12,3 % 36,7 % 739 813 860 738 Defence/Aerospace 96,4 % 23,0 % 563 Medical devices 4,8 % 18,9 % NOK MILLION 31,0% Energy/Telecoms 25,0 % 15,5 % Q3-2018 Q4-2018 Q1-2019
Slide 9: Revenue First three quarters: Strong revenue growth in all sectors
Revenue First three quarters : Strong revenue growth in all sectors 2019 vs 2018 Share of total revenue Industry 13,8 % 39,5 % 2 411 Defence/Aerospace 47,4 % 20,3 % 1 769 1 881 Medical devices 10,0 % 17,3 % NOK Million 28,2% Q3-2017 Q3-2018 Q3-2019 Energy/Telecoms 28,2 % 16,2 % Offshore/Mari
Slide 10: Revenue by country Q3: Continued strong growth from several regions
Revenue by country Q3: Continued strong growth from several regions Q3 2019 vs Q3 2018 Share of total revenue Norway 25,4 % 24,0 % 201 244 177 Sweden -3,3 % 19,4 % 141 148 143 85 88 NOK Million 71 Lithuania 21,1 % 33,1 % Norway Sweden Lithuania 2 USA Others USA 4394,7 % 11,6 % Q3-2018 Q3-201
Slide 11: Revenue by country First three quarters
Revenue by country First three quarters: Continued strong growth from several regions 2019 vs 2018 Share of total revenue Norway 26,8 % 25,2 % 718 844 607 Sweden 4,1 % 20,7 % 479 478 498 247 NOK Million 215 181 Lithuania 17,5 % 35,0 % 24 Norway Sweden Lithuania USA Others USA 779,9 % 8,9 % Q
Slide 12: Quarterly EBIT: Improved profits
Quarterly EBIT: Improved profits ▪ Strong EBIT at 39,6 million, an increase of 32 per cent compared to last year ▪ Q3 is affected by seasonality 56,4 51,2 43,1 45,0 42,3 ▪ EBIT margin was 5.4% (5.3%) 38,8 39,6 29,6 30,0 NOK Million ▪ Ramp-ups of new customer programs due to strong 32,0% growth tempo
Slide 13: EBIT by Country Q3: Margin improvements in Norway, Sweden, Lithuania
EBIT by Country Q3: Margin improvements in Norway, Sweden, Lithuania EBIT ▪ Another quarter with continued profitability improvements in Norway, Sweden, Lithuania 14,8 10,2 10,5 8,1 8,2 8,5 ▪ US margins turn positive this quarter 5,2 4,8 3,4 ▪ Kitron Technologies profit at expected margins NOK Milli
Slide 14: EBIT by Country First three quarters
EBIT by Country First three quarters: Margin improvement in Norway and Sweden ▪ Continued profitability improvements in Norway, Sweden 59,1 63,0 ▪ Lithuania, lower margins due to ramp-up affects 30,8 31,6 23,1 21,0 NOK Million 16,1 16,7 ▪ US margins turn positive 5,1 ▪ Kitron Technologies profit at
Slide 15: Balance sheet: Working capital and operating cash flow
Balance sheet: Working capital Operating cash flow ▪ Cash flow ▪ Q3 Cash flow from operations 19,2 (-41,0) 53,5 ▪ YTD Cash flow from operations 98,0 (-17,7) 25,4 19,2 146,8% Q3-2018 Q4-2018 Q1-2019 Q2-2019 Q3-2019 NOK Million - 26,8 ▪ Financial gearing - 41,0 ▪ NIBD / EBITDA 3.0 (1.5) ▪ exclusive IF
Slide 16: Working capital – improvements expected
Working capital – improvements expected Procurement Lead Time Days from Components on allocation Raw materials Sub-suppliers 600 500 400 300 200 Million Nok 100 Q2 - 2018 Q3 - 2018 Q4 - 2018 Q1 - 2019 Q2 - 2019 Q2 - 2019 Procurement Lead Time Days from Sub-suppliers 0 Average historical Lead Time Q2
Slide 17: Market development
Market development
Slide 18: Market development: Strong order backlog
Market development: Strong order backlog Particularly strong order growth in the Defence/Aerospace and Offshore/Marine sectors Order Backlog Comparable: ▪ MNOK 1 572 (1 122) +40,1% ▪ Defence: 657,6 +72,1% 1 572 1 466 1 453 ▪ Medical: 207,1 +35,7% 1 335 1 122 ▪ Industry: 399,6 +1,2% NOK million ▪ Ene
Slide 19: Outlook
Outlook
Slide 20: Outlook
Outlook ▪ For 2019, Kitron expects revenue to grow between NOK 3 200 and NOK 3 400 million. ▪ Earnings in value are above previous outlook, however EBIT margin is expected to be between 5.9 and 6.3 per cent. Ramp-ups of new customer programs due to strong growth temporarily result in lower efficienc
Slide 21: Thank you!
Thank you!