Kitron Asa · OSL:KIT
Kitron Asa — Q1 2011 Earnings Presentation
19 slides from Kitron Asa's earnings presentation, Apr 28, 2011
Slide 1: Q1 results 2011
Q1 results 2011 28 April 2011 Jørgen Bredesen, CEO Björn Wigström, CFO
Slide 2: Profitability recovering
Profitability recovering Financial highlights • Order backlog increased by 4.3% vs Q1 2010 • Activity level recovering, revenue up by 4.5% vs Q1 2010 • Operating profit improved to NOK 11.1 million and operating margin was 2.6% • Working capital increased due to component situation and higher activi
Slide 3: Component situation still challenging
Component situation still challenging Operational highlights • Component situation leading to pressure on delivery precision and manufacturing efficiency across all operations • Restructuring plan for Kitron Sweden finalized • Establishment of new entities in USA and China on track but transfer sche
Slide 4: Restructuring of Kitron Sweden
Restructuring of Kitron Sweden • Decission taken to restructure Kitron Sweden with the aim to increase competitiveness and improve profitability: • Key points in the plan: Ø Downsize Karlskoga to a manufacturing site for defence and interface for medical clients with lower cost production. Ø Maintai
Slide 5: Major new orders in Q1
Major new orders in Q1 • LOI with Energy/Telecoms customer worth NOK 400 million • Including deliveries until the end of 2014 given competitive pricing • New five year manufacturing agreement with Kongsberg • Deliveries of electronics to the NSM (Naval Strike Missile) – first delivery in 2012 amount
Slide 6: Financial statements Q1 2011
Financial statements Q1 2011
Slide 7: Positive revenue development
Revenue Group Positive revenue development • Revenue at NOK 430 million, a growth of 4.5% vs Q1 2010 • Q1 change by market segment: Q1 2011 vs Q1 2010 Energy/Telecoms -18.1% Defence/Aerospace -4.8% Industry 41.3% Medical equipment 2.2% Revenue by market segment Offshore/Marine 42.2% Total revenue NO
Slide 8: Revenue by country
Revenue by country * Revenue by country Mixed trend: NOK million • Norway 7.2% higher – Growth driven by strong trend in Industry and Offshore, Medical Equipment while Energy / Telecoms is lower • Sweden 5.2% lower – Downturn related to Revenue by country Medical Equipment while other segments Total
Slide 9: Higher profit as markets recover
Higher profit as markets recover Operating profit Group • Operating profit NOK 11.1 million (NOK 5.9 million) • Operating margin was 2.6% • Improved profitability driven by the recovering top line and stronger contribution margin • Several factors affect profitability: Operating margin Group Ø Compo
Slide 10: Profit by country
Operating profit by country * Profit by country • Performance improving • Q1 2010 profit in Norway boosted by NOK 10 million pension adjustment. • Swedish operation turned around to profitability following restructuring Operating margin by country • Operating margin in Lithuania above 10% • New manu
Slide 11: Working capital increasing
Operating cash flow Group Working capital increasing • Cash flow was negative by NOK 38.3 million (negative NOK 31.7 million) mainly due to working capital build up • Working capital remains at a higher level: Ø Increasing activity level/revenue is driving Net working capital Group working capital n
Slide 12: Comfortable level of equity
Comfortable level of equity • Equity of NOK 424.5 million Equity (443.5 million) and equity ratio of 40.6% (45.7%) • Still among the strongest in the EMS industry Equity ratio 45.7% 44.1% 44.1% 41.4% 40.6% 12
Slide 13: Market development
Your ambition. Our passion. 4 Kitron Market development
Slide 14: Market recovering
Market recovering • Defence/Aerospace – longer term outlook remains promising but lower demand in the short term (2011) • Energy/Telecoms – loss of major account with effect from Q2 2011, partly offset by strong demand from other customers • Industry – firm recovery based on development in Swedish m
Slide 15: Order backlog trend
Order backlog Group Order backlog trend • Order backlog at NOK 817.1 million (NOK 783.5 million) • High order backlog in Q2-Q4 2010 reflect long lead time orders • Backlog in Energy/Telecoms lower due to loss of major account Order backlog Segment • Overall positive development in other segments Def
Slide 16: Expanding market coverage
Expanding market coverage Update on establishment of new entities – overall implementation on track: • German operation fully integrated and operational • Several orders booked in Q1 • China factory operational • Small volume production started • SMT line to be operational in Q3 • US establishment i
Slide 17: Outlook
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Slide 18: Outlook
Outlook • Market recovery expected to continue • Component shortage holding back growth • Continued focus on operational improvements (supply chain management, ERP, indirect cost etc.) • Restructure Swedish operations throughout 2011 • Financial impact booked in 2010 • Establishment of new units (US
Slide 19: Thank you!
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