Kitron Asa · OSL:KIT
Kitron Asa — Q1 2013 Earnings Presentation
18 slides from Kitron Asa's earnings presentation, Apr 22, 2013
Slide 1: Q1 results 2013
Q1 results 2013 22 April 2013 Jørgen Bredesen, CEO Björn Wigström, CFO
Slide 2: Financial highlights for Q1: Weaker demand affect EBIT
Financial highlights for Q1: Weaker demand affect EBIT NOK mill. Q1 2013 vs Q1 2012 • Lower demand from key customers drove Revenue 378,3 -16,0 % down top line EBIT 3,9 -81,6 % • Top line slippage and Order backlog 757,4 -5,0 % delay in start up of US operation caused Operating cash flow -18,1
Slide 3: Operational highlights for Q1: Toward increased profitability and cash flow
Operational highlights for Q1: Toward increased profitability and cash flow • Operational streamlining continues • Cost reductions being implemented • Optimizing supply chain process • Improving performance within manufacturing • Leverage Kitron competence within technical services • New organizatio
Slide 4: Major new orders: Key contract secured
Major new orders: Key contract secured • First contract with HMS Industrial Networks • Value of NOK 100 million over three years • New customer for Kitron • Manufacturing to take place in Lithuania 4
Slide 5: Financial statements Q1 2013
Financial statements Q1 2013
Slide 6: Revenue: Impact of the recession
Revenue: Impact of the recession 462 450 • Weaker demand across all 416 market segments 366 378 • Customers reducing inventories • Shorter order horizon • Some seasonality impact due -16.0 % to the Easter holiday NOK million Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 6
Slide 7: Revenue by market segment: All segments affected
Revenue by market segment: All segments affected Q1 2013 vs Q1 2012 Share of total revenue Offshore/Marine Activity level stable -1,3 % 19,3 % Reduced manufacturing scope from Medical equipment key customers -9,6 % 25,2 % Lower demand from US Army and Defence/Aerospace weak market in Sweden -20,
Slide 8: Revenue by country: Increased revenue in new entities
Revenue by country*: Increased revenue in new entities Q1 2013 vs Q1 2012 Share of total revenue Norway -8,0 % 52,2 % Sweden -36,8 % 20,2 % Lithuania -14,3 % 19,4 % Others 124,3 % 8,2 % * Before group entities and eliminations 8
Slide 9: EBIT: Cost reductions implemented
EBIT: Cost reductions implemented 24,4 • Gains achieved 21,5 • Gross margin improved • Lower payroll expenses 15,4 • Lower other expenses 10,6 • Offset by volume effects • Lower demand from US Army leading - 81.6 % to delay in US profitability build up 3,9 NOK million • Focus on profitability • Oper
Slide 10: EBIT by country: Alleviated by operational streamlining
EBIT by country: Alleviated by operational streamlining EBIT* 11 • Norway: High portion of fixed 10 NOK million 8 costs in the short term 6 • Sweden: Volume impact mitigated by significantly 2 2 reduced cost structure • Lithuania: Profitability maintained through rapid (3) organizational adjustment
Slide 11: Balance sheet: Taking action to reduce inventory
Balance sheet: Taking action to reduce inventory Operating cash flow • Reduction in trade receivable NOK million drive positive working capital 84,8 trend - 66 % • Positive cash effect from lower -10,9 -16,1 -15,4 receivables offset by reduced funding from factoring Net working capital -18,1 • Conti
Slide 12: Market development
Your ambition. Our passion. 4 Kitron Market development
Slide 13: Order backlog: Mixed trend by market segment
Order backlog: Mixed trend by market segment • Mixed backlog trend Order backlog • Increase in Defence/Aerospace NOK million • Offshore/Marine and Industry show a stable trend • Reduced backlog in other segments - 5.0 % • Overall market situation 855 uncertain 824 • Customer forecast volatility 797
Slide 14: Market development: Offshore/Marine and Medical equipment
Market development • Offshore/Marine • Kitron foresee a lower revenue in 2013 compared to 2012 • In dialogue with existing and new customers about new business opportunities • Medical equipment • Flat development expected in short term (2013) as reduced production scope for one customer offsets grow
Slide 15: Market development: Defence/Aerospace, Energy/Telecoms, Industry
Market development • Defence/Aerospace • Promising long term outlook • Several major programs secured and expected to ramp up • Weaker outlook in 2013 due to low demand from Swedish defence customers and slower development in the US • Energy/Telecoms • Expected to stabilize on current lower level •
Slide 16: Outlook
Outlook
Slide 17: Outlook
Outlook • The market outlook has weakened • Slightly lower revenue expected in 2013 compared with 2012 • Kitron has launched several programs to increase profitability and cash flow • Driving top line growth • Streamlining internal operations to reduce costs and improve efficiency • Short term actio
Slide 18: Thank you!
Thank you! 18