Slide 1: 2nd Quarter 2017 Investor Presentation
2ND QUARTER 2017 INVESTOR PRESENTATION, 24 AUGUST 2017 Geir Håøy, President & CEO Harald Aarø, Acting CFO © KONGSBERG - All rights reserved
Slide 2: Adapting, Delivering & Positioning
ADAPTING, DELIVERING & POSITIONING • Adaptation to challenging markets continue – Challenging offshore market drives revenue decline – Further cost reductions initiated • Solid operations – All major projects on plan across the group – Profitable maritime operations – Good working capital improvemen
Slide 3: Financial Status
FINANCIAL STATUS © KONGSBERG - All rights reserved
Slide 4: Revenues Q2
REVENUES Q2 4 567 4 234 4 222 4 340 4 009 4 125 3 952 3 721 3 733 3 428 Q2 revenues down 9.5 % YoY due to the continuing weak offshore market • KM revenues down 14.2 % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 • KDS revenues up 12.7 % 2015 2016 2017 • KPS revenues down 18.4 % KM 1 969 Revenues: KDS 1 227 3 733
Slide 5: Orders Q2
ORDERS Q2 4 970 3 993 4 067 3 749 3 491 3 451 3 388 New orders: 2 887 3 012 2 535 2 535 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2015 2016 2017 22 033 21 439 21 059 19 597 18 718 18 069 17 858 16 914 16 672 15 308 Backlog: 15 308 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2015 2016 2017 © KONGSBERG - All rights reserved 24
Slide 6: EBITDA Q2
EBITDA Q2 493 515 486 Q2 EBITDA – strong in KDS, but negatively 419 408 386 334 339 impacted by special items in KM and KPS 207 Margin • EBITDA margin 5.5 % compared to 12.5 % in Q2 2016 5.5% – MNOK 128 in net negative effects from special items Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 - 40 – Q2 2016 positivel
Slide 7: Special Items in EBITDA Q2 and H1
SPECIAL ITEMS IN EBITDA Q2 AND H1 Q2 H1 Restructuring costs (KM) −68 −79 Buy-back of FX hedges + released provisions (KPS) −60 −60 Total1 −128 −139 1) List is not exhaustive © KONGSBERG - All rights reserved 24.08.2017 WORLD CLASS - through people, technology and dedication Page 7
Slide 8: Patria
PATRIA REVENUES (EUR) EBITDA (EUR) 152 136 141 29 109 116 24 25 102 106 94 89 96 20 19 17 14 12 9 5 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2015 2016 2017 2015 2016 2017 BRIDGE FROM EBITDA TO KOG’S SHARE OF NET PROFIT Q2 YTD EUR NOK EUR NOK EBITDA 14 23 Financial items, taxes, de
Slide 9: Revenues and EBITDA H1
REVENUES AND EBITDA H1 Growth in KDS, decline in KM and KPS REVENUES • KDS revenues up 15.5 %, overall solid development 8 456 8 576 8 465 7 380 7 454 • KM revenues down 15.5%, mainly related to the continued weak oil and gas market • KPS revenues down 20.1 %, mainly due to lower deliveries of new r
Slide 10: Operational Program – Cost Reductions
OPERATIONAL PROGRAM – COST REDUCTIONS Adapting to challenging markets, positioning for future growth • MNOK ~500 full-year cost base reductions in effect from Q1 2017 • Additional MNOK 300-400 from Q2 2017 downsizing, full year effect from Q1 2018 • Number of employees and consultants reduced by >1,
Slide 11: Operational Program – Working Capital
OPERATIONAL PROGRAM – WORKING CAPITAL Working capital excl. currency rollover effects 2 000 Group 2 500 KM KDS KPS 2 000 1 500 1 500 1 000 500 1 000 0 - 500 -1 000 500 -1 500 -2 000 0 -2 500 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2015 2016 2017 2015 2016 2017 • Continuous strong
Slide 12: Improved Operational Cash Flow
IMPROVED OPERATIONAL CASH FLOW 1 000 500 CapEx and R&D 0 Financining activities Dividend paid - 500 Other operating items EBITDA -1 000 Total cash flow -1 500 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2015 2016 2017 *Line represents total cash flow. Columns exclude acquisitions and loan movements for better rea
Slide 13: Cash Flow and Net Debt Q2 and H1
CASH FLOW AND NET DEBT Q2 AND H1 H1 Operating cash flow MNOK 826 in Q2, 800 450 241 286 MNOK 1,346 year to date 546 2 257 • Working capital reduced by MNOK 761 in H1 1 888 – MNOK ~600 reduction in KM • In Q2, MNOK 450 in ordinary dividend paid out and Cash Q4 2016 EBITDA Change in Dividend paid Net
Slide 14: Business Update
BUSINESS UPDATE © KONGSBERG - All rights reserved
Slide 15: Kongsberg Maritime
KONGSBERG MARITIME SECURING COMPETITIVE • Adapting the business to a challenging market POSITION IN CORE • Operational programs securing profitability and cash MARKETS • Deliver the same high quality as before TAKING POSITIONS • Taking new positions with innovative solutions WITHIN NEW MARITIME • In
Slide 16: Taking Positions in Maritime Transformation
TAKING POSITIONS IN MARITIME TRANSFORMATION INTEGRATED SOLUTIONS DIGITALIZATION REMOTE SERVICES AUTONOMY Full Triangle-solution to “SESAME Strait” connecting KONGSBERG’s 24/7 “Follow the “Yara Birkeland” with Yara German research vessel harbor and ship operation Sun” remote operations center – digit
Slide 17: Kongsberg Defence Systems
KONGSBERG DEFENCE SYSTEMS GOOD PERFORMANCE, • Continued solid project execution STRONG MARGINS • Improved YoY profitability in both Integrated Defence Systems, Defence Communications and Space & Surveillance ONGOING PROJECTS IN ALL • Large projects progressing as planned PHASES • NASAMS to Raytheon
Slide 18: Kongsberg Protech Systems
KONGSBERG PROTECH SYSTEMS GOOD PROJECT EXECUTION • KPS is the world #1 provider of remote weapon stations • Project execution on plan • MCT-30 deliveries to Stryker on plan REVENUE AND EBITDA • Revenues driven by life-cycle business STILL AT A LOW LEVEL • Low delivery volumes for new remote weapon Q
Slide 19: Patria
PATRIA Patria delivers according to plan • Performance expected to catch up towards year-end • Patria has recently announced adjustments to the organization to streamline and further strengthen the business – An important step towards achieving Patria’s business goals and strategic targets Photo: Pa
Slide 20: Reflections After One Year as CEO
REFLECTIONS AFTER ONE YEAR AS CEO MARITIME MARKETS ORGANISATION RESPONDS • Declining demand • Agile, dynamic and highly adaptable • Changes in customer behavior – Executing a major reorganization • Intensified competition in short time ADAPTING • New technology trends – Seizing opportunities, “punch
Slide 21: Invitation to Capital Markets Day
INVITATION TO CAPITAL MARKETS DAY Time: 26 October 2017 10.00−15.00 Venue: Thon Conference Vika Atrium, Oslo Sign up: By 23 October on www.kongsberg.com/ir CAPITAL MARKETS DAY AGENDA 10.00−10.30 3rd quarter presentation 10.30−15.00 Strategy and business update (with lunch) © KONGSBERG - All rights r
Slide 22: Outlook
OUTLOOK © KONGSBERG - All rights reserved
Slide 23: 2017 Outlook
2017 OUTLOOK KONGSBERG MARITIME • Weak offshore market expected to continue • Adaptation of cost base and operations on plan • Revenues expected to decline compared to 2016 KONGSBERG DEFENCE SYSTEMS • Strong position in selected niches and several important opportunities in a generally stronger defe
Slide 24: Disclaimer
DISCLAIMER This presentation contains certain forward-looking information and statements. Such forward-looking information and statements are based on the current, estimates and projections of the Company or assumptions based on information currently available to the Company. Such forward-looking in
Slide 25: World Class
WORLD CLASS THROUGH PEOPLE, TECHNOLOGY AND DEDICATION © KONGSBERG - All rights reserved