Kitron Asa · OSL:KIT
Kitron Asa — Q3 2021 Earnings Presentation
18 slides from Kitron Asa's earnings presentation, Oct 21, 2021
Slide 1: Q3 results 2021
Q3 results 2021 Peter Nilsson, CEO Cathrin Nylander, CFO Kitron Group | 2021-10-21
Slide 2: Very strong demand, revenue constrained by component supply
Very strong demand, revenue constrained by component supply NOK Million Q3 2021 vs Q3 2020 NOK Million 2021 vs 2020 Revenue 831.4 -21.1 % Revenue 2 762.8 -7.0 % EBIT 50.1 -44.7 % EBIT 188.6 -20.4 % Order Backlog 2 568.1 37.8 % Order Backlog 2 568.1 37.8 % Operating cash flow -70.2 Oper
Slide 3: Highlights and important events
Highlights and important events ▪ Strong demand overshadowed by challenging supply situation ▪ EBIT margin 6.0% (8.6%) ▪ EPS NOK 0.11 (0.37), EPS YTD: 0.63 (0.93) ▪ Order backlog growth 38%: strong growth in all sectors due to increased demand. ▪ Cash flow MNOK -70 (MNOK -3) ▪ Second part of ordinar
Slide 4: Activities and actions to mitigate supply chain constraints
Activities and actions to mitigate supply chain constraints ▪ Customer behavior is changing, and future demand is being secured on a longer horizon. Sales targets vs. Customer o Last year, in October 2020, less than half of expected bookings output for 2021 was actively being ordered or forecasted 1
Slide 5: Strategic outlook
Strategic outlook ▪ Demand continues to be very strong ▪ Although supply constraints are projected to continue into next year, many constraints should taper off and supply will normalize. We continue to monitor the situation carefully and take proactive measures to minimize impact to sales. ▪ We see
Slide 6: Financial results
Financial results
Slide 7: Mixed sector development
Mixed sector development Connectivity Electrification Industry Medical Devices Defence/Aerospace 140 350 300 450 300 127 312 395 297 254 400 120 300 240 108 273 250 250 233 219 350 100 250 200 88 87 200 190 186 300 200 188 84 196 80 200 157 250 155 174 150 150 60 150 200 173 160 167 147 100 150 100
Slide 8: Currency development and selling currencies
Currency development and selling currencies NOK EUR NOK/SEK ▪ Currency development has a 12.00 1.10 -2% minor but negative affect on 11.50 -3% 11.00 1.05 1.00 growth in Q3 10.50 0.95 10.00 9.50 0.90 ▪ Re-calculating the selling 9.00 0.85 0.80 currencies shows a total ~-2% 8.50 2019 2019 2019 2019 20
Slide 9: EBIT affected by seasonality and material supply constraints
EBIT affected by seasonality and material supply constraints ▪ EBIT affected by seasonality and material supply situation causing revenue delays and inefficiencies ▪ Economies of scale and exceptional utilization of overhead Q2/Q3 2020 88.0 90.5 75.7 73.1 65.4 58.4 54.2 50.1 NOK Million 39.6 Q3-2019
Slide 10: Q3 EBIT by country: Mixed margin trends
Q3 EBIT by country: Mixed margin trends ▪ Norway and Sweden at stable margin EBIT levels compared to last year, in spite of 53.4 lower volumes. ▪ CEE (Lithuania and Poland) ended at lower profits and profitability levels. o Revenue and margins affected by NOK Million 16.0 revenue delays 14.9 13.9 13
Slide 11: Balance sheet: Capital build up due to material supply delays
Balance sheet: Capital build up due to material supply delays Net working capital ▪ Working capital ratios o NOWC* 31.8% (25.1%) 1 157 1 134 o Cash conversion cycle* 124 (96) o ROOC* 12.8% (22.4%) NOK Million 1 064 1 035 1 034 2% ▪ Cash flow Q3-2020 Q4-2020 Q1-2021 Q2-2021 Q3-2021 o Q3 Cash flow fro
Slide 12: Market development
Market development
Slide 13: Strong order backlog
Strong order backlog Order Backlog ▪ Growth 38 % Q3 2021 vs Q3 2020 Share of total revenue 2 568 Connectivity 2 293 230.2 132.4 % 14.7 % 1 863 2 006 2 060 NOK million Electrification 774.6 51.9 % 49.6 % 38% Industry 373.0 6.7 % 23.9 % Q3-2020 Q4-2020 Q1-2021 Q2-2021 Q3-2021 Medical Devices 298
Slide 14: Outlook
Outlook
Slide 15: Outlook
Outlook ▪ Total demand is very strong and the order backlog at a record level. However, in the very short term, supply shortages has somewhat limited Kitron's ability to turn demand into revenues, and the outlook for 2021 is adjusted to reflect this. ▪ For 2021, Kitron has previously indicated a rev
Slide 16: Key take-aways
Key take-aways ▪ Solid quarter despite challenges in the supply chain. ▪ Order backlog and 2022 demand outlook supports continued growth. ▪ We see strong long term customer demand and well identified strategic program acquisitions to sufficiently to follow our strategic trajectory. 16
Slide 17: Q&A
Q&A
Slide 18: Appendix: Definition of alternative performance measures
Appendix: Definition of alternative performance measures Order backlog Return on capital employed (ROCE) Cash conversion cycle (CCC) All firm orders and 4 months of committed customers forecast at EBIT/(Total assets - short term debt) Days of inventory outstanding + Days of receivables outstanding –