Kongsberg Gruppen Asa · OSL:KOG
Kongsberg Gruppen Asa — Q4 2018 Earnings Presentation
28 slides from Kongsberg Gruppen Asa's earnings presentation, Feb 14, 2019
Slide 1: Investor Presentation Q4 2018
INVESTOR PRESENTATION Q4 2018 14/02/2019 Geir Håøy, President & CEO Gyrid Skalleberg Ingerø, CFO WORLD CLASS – Through people, people, technology technology and anddedication dedication KONGSBERG KONGSBERG PROPRIETARY PROPRIETARY - See- See Statement Statement of Proprietary of Proprietary informati
Slide 2: Challenges addressed in 2018
CHALLENGES ADDRESSED IN 2018 2018 2018 ACQUISITION OF RRCM CONTINUED STRONG AND AIM NORWAY MARGIN IN DEFENCE GROWTH IN MARITIME AFTER UNDERLYING MARGIN IN GROWTH THREE YEARS OF DECLINE MARGINS MARITIME AT 9.3 % 2018 ORDER BACKLOG IMPROVED 11 % SECURED FRAMEWORK AGREEMENTS WITH I.E. OTH AND CROWS ORD
Slide 3: An extremely eventful year
AN EXTREMELY EVENTFUL YEAR JOHAN SVERDRUP YARA BIRKELAND FASE ONE & TWO AWILCO SINGAPORE POLICE AWARDS MASSTERLY GRIMALDI DIGITAL TWIN KOG KDA KM KDI CAPITAL INCREASE RRCM OTH CONTRACT NSM CROWS FOLLOW ON JSM TEST AIM NORWAY MOST ATTRACTIVE NORSPACE GALILEO NSM TO MALAYSIA QATAR WORLD CLASS – Throug
Slide 4: Highlights Q4
HIGHLIGHTS Q4 DIGITAL: DEFENCE: • Strongest revenues • Acquisition of since Q1 2016 AIM Norway • Order backlog • Secured MNOK 805 improved by 38% from CROWS order strong H2 order intake GROUP: MARITIME: • Solid quarter • Strongest revenues throughout the since Q4 2016 organization • Preparations for
Slide 5: Financial Status
FINANCIAL STATUS WORLD CLASS – Through people, technology and dedication KONGSBERG KONGSBERG PROPRIETARY PROPRIETARY - See- See Statement Statement of Proprietary of Proprietary information information Q4 FINANCES - FEBRUARY 14, 2019
Slide 6: 2018 revenues, EBITDA and order intake
REVENUES KM MNOK 7 545 (7 429) 14 381 MNOK (14 490) KDA MNOK 6 104 (6 333) EBITDA KM MNOK 594 (589) 1 394 MNOK (1 279) KDA MNOK 863 (612) 2018 EBITDA MARGIN KM 7.9 % (7.9 %) 9.7% (8.8%) KDA 14.1 % (9.7 %) ORDER INTAKE KM MNOK 8 884 (7 336) 16 574 MNOK (13 430) KDA MNOK 6 885 (5 376) WORLD CLASS – Th
Slide 7: Rolling LTM underlying/reported performance
18 000 14% 16 000 12% 11,0 % 14 000 10% 12 000 9,7 % 10 000 8% 8 000 6% 6 000 4% 4 000 2% 2 000 - 0% ROLLING LTM UNDERLYING/REPORTED PERFORMANCE KOG Adjustments include: =<2017: Released provisions, impairment and restructuring, >=2018: acquisition costs, integration costs LTM Revenues LTM EBITDA %
Slide 8: Revenues Q4
4 148 3 952 3 757 UNANIMOUS SUPPORT ON RIGHTS ISSUE FROM NORWEGIAN PARLIAMENT REVENUES Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2016 / 15 845 2017 / 14 490 2018 / 14 381 REVENUES UP 10.4% YoY KM revenues up 8.7% YoY KDA revenues up 12.8% YoY KDA / 1 898 KM / 2 041 OTHER / 209 (1 683) (1 877) (197) WOR
Slide 9: EBITDA Q4
Q4 FINANCES - FEBRUARY 14, 2019 520 459 UNANIMOUS SUPPORT ON RIGHTS ISSUE 334 FROM NORWEGIAN PARLIAMENT EBITDA Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2016 / 1 217 2017 / 1 279 2018 / 1 394 12.5 % OVERALL MARGIN (12.2%) MNOK 85 integration costs included in Q4 2018 STRONG KDA QUARTER Project mix, pro
Slide 10: New orders Q4
5015 UNANIMOUS SUPPORT ON RIGHTS ISSUE 3012 3859 FROM NORWEGIAN PARLIAMENT NEW ORDERS Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2018 BOOK/BILL 1.15, 0.93 IN Q4 2016 / 14 319 2017 / 13 430 2018 / 16 574 MNOK 17 283 total order backlog KM BOOK/BILL 0.91 Order backlog grew 19.5 % in 2018 MNOK 700 more sec
Slide 11: New orders Kongsberg Maritime
19% 27% VESSEL SYSTEMS SOLUTIONS 2018 23% 31% GLOBAL CUSTOMER SUBSEA** SUPPORT* NEW ORDERS KONGSBERG 22% 13% SOLUTIONS MARITIME VESSEL SYSTEMS 2018: MNOK 8 884 Q4: MNOK 1 853 Q4 2018 37% SUBSEA** 28% GLOBAL CUSTOMER SUPPORT* *Global Customer Support does not include Subsea aftermarket ** Subsea also
Slide 12: New orders Kongsberg Defence and Aerospace
7% SPACE AND SURVEILLANCE 35% MISSILE SYSTEMS 8% 2018 7% INTEGRATED DEFENCE DEFENCE SYSTEMS COMMUNICATION 29% PROTECH 14% SYSTEMS NEW ORDERS AEROSTRUCTURES KONGSBERG DEFENCE 7% 12% MISSILE AND AEROSPACE SPACE AND SURVEILLANCE SYSTEMS 2018 MNOK 6 885 0.5% 11% DEFENCE Q4 MNOK 1 770 INTEGRATED DEFENCE
Slide 13: Development in cash and short term deposits
Operating activities Investing activities Financing/other activities MNOK 2 189 MNOK -382 MNOK 5 250 4.937 6 10.038 120 115 450 158 992 969 DEVELOPMENT IN 1.394 181 78 73 352 30 CASH AND SHORT 2.956 TERM DEPOSITS Share issue: amount is net received after capital costs Cash 1.1 EBITDA Change in worki
Slide 14: Strong balance sheet
Q4 2018 Q3 2018 2017 Gross interest bearing debt 4 020 3 019 3 340 Cash and short-term deposits 10 038 2 990 2 956 STRONG BALANCE SHEET Net interest bearing debt -5 706 336 384 Equity ratio 45.7 % 35.5 % 35.6 % ROACE 12.5 % 10.7 % 9.0 % WORLD CLASS – Through people, technology and dedication KONGSBE
Slide 15: Debt position
1 500 BONDS - MATURITY PROFILE 1 000 550 500 450 250 DEBT POSITION 2019 2020 2021 2022 2023 2024 2025 2026 HEALTHY MATURITY PROFILE 2195 NET INTEREST BEARING DEBT 384 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2016 2017 2018 -5706 WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETAR
Slide 16: Dividend
2016 2017 2018* Total dividends MNOK 450 MNOK 450 MNOK 450 Payout ratio 68.9 % 81.2 % 64.2 % * Proposal for 2018 AGM DIVIDEND 127,1 % HISTORICAL PAYOUTS RATIOS THE BOARD PROPOSES FOR THE ANNUAL GENERAL MEETING ON 14 MAY 2019 A DIVIDEND OF NOK 2,50 PER SHARE FOR FY 2018 81,2 % 68,7 % 68,9 % Dividends
Slide 17: Status integration Rolls-Royce Commercial Marine
STATUS INTEGRATION ROLLS-ROYCE COMMERCIAL MARINE INTEGRATION COSTS ACTIONS AND TIMELINE Close to 6 000 actions to be completed prior to closing Largest external costs related to IT, legal, and harmonization and separation actions. 340 450 Closing expected to take place 1st april, 2019 Presentation o
Slide 18: Status integration Rolls-Royce Commercial Marine: synergies
STATUS INTEGRATION ROLLS-ROYCE COMMERCIAL MARINE OVERVIEW OF SYNERGIES KEY AREAS OF POTENTIAL COST SYNERGIES 100% Estimated annual 95% run-rate synergies: Expected annual run-rate cost synergies in excess of NOK 500 million through infrastructure Site co-locations and optimization and streamlining s
Slide 19: Business Update
BUSINESS UPDATE WORLD CLASS – Through people, people, technology technology and anddedication dedication KONGSBERG KONGSBERG PROPRIETARY PROPRIETARY - See- See Statement Statement of Proprietary of Proprietary information information Q4 BUSINESS UPDATE - FEBRUARY 14, 2019
Slide 20: Business update Kongsberg Defence & Aerospace
Acquisition of AIM Norway • Strengthens position as BUSINESS UPDATE Norwegian armed forces’ strategic partner KONGSBERG for operative requirements DEFENCE & AEROSPACE Strong quarter with solid margins Order backlog increased 7.9 % in 2018 • Revenue increase • MNOK 805 contract from ramp-up of new fo
Slide 21: Secured position for future growth
SECURED POSITION FOR FUTURE GROWTH MNOK 6104 WORLD CLASS – Through people, people, technology technology and anddedication dedication KONGSBERG KONGSBERG PROPRIETARY PROPRIETARY - See - See Statement Statement of Proprietary of Proprietary information information Q4 BUSINESS UPDATE - FEBRUARY 14, 20
Slide 22: AIM Norway
AVIATION ELECTRONICS AIM NORWAY A MAJOR ACTOR IN AVIATION INDUSTRY SINCE 1916 Strengthens KONGSBERGs role as a strategic partner for the Norwegian armed force’s operative requirements, both MECHANICS as a supplier of equipment and for maintenance Closing expected within H1 2019 EMPLOYEES / 440 OFFIC
Slide 23: Business update Kongsberg Maritime
Delivering operational excellence • Our customers have first priority, at the BUSINESS UPDATE same time we are preparing the largest KONGSBERG integration in the company’s history MARITIME Revenue improvement, margins impacted by Order backlog increased 19.1 % in 2018 integration costs • Integrated
Slide 24: Solid and diversified order intake KM
34% 9% SUBSEA OTHERS* 2017 22% OPU & LNG 21% SEABORN & PAX 14% SOLID AND | OFFSHORE DIVERSIFIED 6% ORDER INTAKE KM 30% SUBSEA OTHERS* TOTAL ORDER INTAKE 2017: MNOK 7 336 24% TOTAL ORDER INTAKE 2018: MNOK 8 884 2018 OPU & LNG 22% 18% SEABORN & PAX OFFSHORE * Fish, Research & Aquaculture + Seatex WORL
Slide 25: Business update Kongsberg Digital & Patria
KDI HIGHEST REVENUES SINCE Q1 16 AND 1.13 BOOK/BILL IN Q4 Order backlog grew 38% in 2018 | Continued focus on further developing positions within digitalization of core areas such as oil&gas, wind and merchant marine. BUSINESS UPDATE KONGSBERG DIGITAL & PATRIA PATRIA 2018 REVENUES AT MEUR 476, UP 1.
Slide 26: Focus forward
FOCUS FORWARD OPERATIONAL EXCELLENCE PROFITABILITY KM KDA KDI Successful integration RRCM Successful integration of AIM Secure scaling NORWAY Secure orders Continue positive development for Secure orders Maritime Simulation WORLD CLASS – Through people, people, technology technology and anddedicatio
Slide 27: 2019 outlook
2019 OUTLOOK KM KDA KDI Integration of RRCM will impact Due to sizable contracts in Continued focus on further overall profitability negotiation, time of signing might development of the area influence this years’ revenues Good order intake in 2018 and 25 % increased order intake in 2018 some improv
Slide 28: Q&A
Q&A WORLD CLASS – Through people, people, technology technology and anddedication dedication KONGSBERG KONGSBERG PROPRIETARY PROPRIETARY - See- See Statement Statement of Proprietary of Proprietary information information Q4 - FEBRUARY 14, 2019