Kitron Asa · OSL:KIT
Kitron Asa — Q3 2018 Earnings Presentation
21 slides from Kitron Asa's earnings presentation, Oct 19, 2018
Slide 1: First three quarters and Q3 results 2018
First three quarters and Q3 results 2018 Peter Nilsson, CEO Cathrin Nylander, CFO 19 October, 2018
Slide 2: Strong order growth, including oil and gas
Financial highlights Q3: Strong order growth, including oil and gas Orders Received 25% growth NOK mill. Q3 2018 vs Q3 2017 MNOK 669 (535) Revenue 562,8 5,1 % EBIT margin 5.3% (5.5%) Program postponements EBIT 30,0 2,7 % EPS 0.12 (0.09) NOK Order backlog 1122,0 11,3 % Inventory bui
Slide 3: Strong order growth, including oil and gas
Financial highlights First three quarter: Strong order growth, including oil and gas NOK mill. 2018 vs 2017 Revenue growth 6.3% 21% growth excluding Revenue 1880,7 6,3 % Defence/Aerospace EBIT 113,8 7,8 % EBIT margin 6.1% (6.0%) Order backlog 1122,0 11,3 % EPS 0.47 (0.40) NOK Operating
Slide 4: Important agreements in the third quarter
Major new orders: Important agreements in the third quarter Kitron receives NOK 150 million order In August, Kitron was chosen as electronics manufacturing services (EMS) partner for a global leader in queue management and customer journey solutions. Kitron will build electronic boards and suppl
Slide 5: Expansion in Poland
Expansion in Poland In July, Kitron announced plans to expand its Eastern European presence through a facility in northern Poland. Production at the 8,000 square meter facility is now scheduled to begin in the fourth quarter 2019. Kitron intends to hire a staff of approximately one hundred for
Slide 6: Financial statements First three quarter and Q3 2018
Financial statements First three quarter and Q3 2018 6
Slide 7: New accounting standard implemented
IFRS 15: New accounting standard implemented IFRS 15 implemented 1.1.2018 Over time revenue recognition (point in time) Marginal effects on P&L Re-classification within NWC in balance sheet Order backlog adjustment See note 5 for complete overview Old Effects from New Old Effects from Ne
Slide 8: 18% revenue growth excl. Defence/Aerospace sector
Revenue Q3: 18% revenue growth excl. Defence/Aerospace sector Q3 2018 vs Q3 2017 Share of total revenue 668 651 667 535 563 Industry 26,0 % 42,9 % Defence/Aerospace -34,1 % 15,3 % Medical devices 22,8 % 23,6 % 5.1 % Energy/Telecoms -8,9 % 16,3 % NOK million Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3
Slide 9: 21% revenue growth excl. Defence/Aerospace sector
Revenue First three quarter: 21% revenue growth excl. Defence/Aerospace sector 2018 vs 2017 Share of total revenue Revenue first three quarters 1 769 1 881 Industry 31,2 % 44,5 % 1 523 Defence/Aerospace -31,5 % 17,7 % Medical devices 18,9 % 20,1 % 6.3 % Energy/Telecoms -1,0 % 16,2 % NOK mill
Slide 10: Continued strong growth in Lithuania and China
Revenue by country Q3*: Continued strong growth in Lithuania and China Q3/2017 Q3 2018 vs Q3 2017 Share of total revenue Q3/2018 201 Norway -5,8 % 23,5 % 174 157 148 150 141 Sweden -6,1 % 24,5 % 112 104 Lithuania 15,4 % 33,4 % NOK million Others 7,9 % 18,6 % Norway Sweden Lithuania Others No
Slide 11: Continued strong growth in Lithuania and China
Revenue by country First three quarter*: Continued strong growth in Lithuania and China 2018 vs 2017 Share of total revenue Norway -12,3 % 23,9 % 596 718 2017 2018 546 514 Sweden -7,0 % 23,9 % 479 478 327 Lithuania 20,5 % 35,9 % 288 NOK million Others 13,2 % 16,3 % Norway Sweden Lithuania Ot
Slide 12: Seasonal variations in profitability
Quarterly EBIT: Seasonal variations in profitability Postponed programs have negatively affected 45,5 45,0 43,1 profitability in Q3 38,8 34,1 In general, lower volumes 30,1 30,8 30,0 29,2 due to vacation period causes higher mix sensitivity NOK million Component allocations -0.3 % creates less
Slide 13: Improvements in Norway and Sweden
EBIT by country Q3: Improvements in Norway and Sweden EBIT* Lithuania had late demand push out affecting profitability in the 10,3 10,2 9,4 quarter 8,2 7,5 6,9 Profitability improvements in 5,2 Sweden and Norway in spite of lower volumes from defence projects (total volume reductions 1,9 of appr
Slide 14: Lithuania continues to drive profits
EBIT by country First three quarter: Lithuania continues to drive profits EBIT* Lithuania and China show EBIT 59,1 improvement, both in value and margin 47,4 Profitability improvements in 23,1 25,5 21,9 21,0 21,7 Sweden and Norway in spite of 19,7 lower volumes from defence projects (total volum
Slide 15: Inventory build-up to secure deliveries and future growth
Balance sheet: Inventory build-up to secure deliveries and future growth Operating cash flow Cash flow 90,8 NOK million Q3 Cash flow MNOK -41.0 (22.4) 42,7 Inventory build-up 22,4 Allocated material /postponements Growth -19,5 Production for later deliveries -41,0 Q3 2017 Q4 2017 Q1 2018
Slide 16: Market development
Market development 16
Slide 17: Growing order backlog
Market development: Growing order backlog Order backlog Comparable: MNOK 1 279 (1 008) +26.8% NOK million 1 306 Defence: 422 +22% 1 279 1 161 Medical: 180 -1% 1 141 Industry: 459 +35% 1 008 Energy/Telecom: 175 +44% Offshore: 42 +160% IFRS adjusted: MNOK 1 122 26.8 % Fluctuations to b
Slide 18: Peter Nilsson, Kitron's CEO, comments
Peter Nilsson, Kitron's CEO, comments: Strong order intake of NOK 669 million in the quarter resulted in close to 27 per cent growth of order backlog. Although margins are slightly weaker in the quarter compared to 2017, earnings per share improved 33 per cent to NOK 0.12. New quote pipeline g
Slide 19: Outlook
Outlook 19
Slide 20: Outlook
Outlook For 2018, Kitron expects revenue to grow to between NOK 2 500 and 2 700 million. EBIT margin is expected to be between 6.1 and 6.5 per cent. The growth is primarily driven by customers in the Industry sector and the Energy / Telecom sector. The profitability is driven by cost reduction
Slide 21: Thank you!
Thank you!