Kongsberg Automotive Asa · OSL:KOA
Kongsberg Automotive Asa — Q3 2022 Earnings Presentation
33 slides from Kongsberg Automotive Asa's earnings presentation, Nov 8, 2022
Slide 1: Kongsberg Automotive Q3 2022 Earnings Call
KONGSBERG AUTOMOTIVE Q3 2022 EARNINGS CALL NOVEMBER 8, 2022
Slide 2: Forward-Looking Statements and Non-IFRS Measures
Kongsberg Automotive Q3 2022 Earnings Call FORWARD-LOOKING STATEMENTS AND NON-IFRS MEASURES FORWARD-LOOKING STATEMENTS This presentation contains certain “forward-looking statements”. These statements are based on management’s current expectations and are subject to risks, uncertainty and changes in
Slide 3: Agenda and Today's Presenters
Kongsberg Automotive Q3 2022 Earnings Call AGENDA TODAY’S PRESENTERS EXECUTIVE SUMMARY MARKET UPDATE FINANCIAL UPDATE SHIFT GEAR UPDATE SUBSEQUENT EVENTS & OUTLOOK Q&A JOERG BUCHHEIM FRANK HEFFTER CEO // Zurich (Switzerland) CFO // Zurich (Switzerland) KONGSBERG AUTOMOTIVE // 3
Slide 4: Executive Summary: Revenue Improved, Deleverage Allows Further Growth
Kongsberg Automotive Q3 2022 Earnings Call EXECUTIVE SUMMARY REVENUE IMPROVED. DELEVERAGE ALLOWS FURTHER GROWTH Comparisons are to 2021 results restated to exclude discontinued operations €246.0M €12.9M 2.0x REVENUES ADJ. EBIT L E V E R A G E R A T I O 1,2 Increase of 27.6% vs. Q3 2021 Increase by M
Slide 5: Business Segments Update
Segment highlights AT A GLANCE BUSINESS SEGMENTS UPDATE POWERTRAIN & CHASSIS SPECIALTY PRODUCTS REVENUES, MEUR NEW BUSINESS WINS REVENUES, MEUR NEW BUSINESS WINS 118 94 128 35 102 89 21 23 Q3 2021 Q3 2022 Q3 2022 Q3 2022 Q3 2021 Q3 2022 Q3 2022 Q3 2022 Annualized Lifetime Annualized Lifetime ADJUSTE
Slide 6: Market Update
EXECUTIVE SUMMARY MARKET UPDATE FINANCIAL UPDATE SHIFT GEAR UPDATE SUBSEQUENT EVENTS & OUTLOOK Q&A
Slide 7: Market Trends: Higher Activity Observed for Passenger Cars
Market update MARKET TRENDS HIGHER ACTIVITY OBSERVED FOR PASSENGER CARS MARKET DEVELOPMENT REGION Q3-22 vs. Q3-21 2022 vs. 2021 GLOBAL PASSENGER CAR PRODUCTION, million units China +24.6% +3.8% +25.6% APAC w/o China +25.5% +7.7% 23.6 20.5 20.7 21.2 20.0 20.9 Europe +22.4% -0.6% 18.7 19.1 16.6 North
Slide 8: Challenging Global Market Situation
Market update CHALLENGING GLOBAL MARKET SITUATION HIGHER ENERGY PRICES ADDING TO INCREASED RAW MATERIAL PRICES CURRENT TRIGGERS MACROECONOMIC FACTORS AFFECTING FOR DISRUPTION GLOBAL MARKET ENVIRONMENT Increasing energy prices in Europe affecting direct cost. Many raw material ENERGY PRICES/INFLATION
Slide 9: Macroeconomic Uncertainty, Positive Development for Commercial Vehicles
Market update MACROECONOMIC UNCERTAINTY STILL POSITIVE DEVELOPMENT FOR COMMERCIAL VEHICLES REVENUE GROWTH VS MARKET GROWTH* OUTPERFORMANCE IN KEY MARKETS KA MARKET NO RT H A MERICA > Lower revenues in passenger cars in Asia as expected due to one KA Market customer changing product line. This was co
Slide 10: Book-to-Bill
Market update BOOK-TO-BILL SALE TO BRP IMPACTING ORDER BOOK. CUSTOMERS HAVE BEEN CAUTIOUS DUE TO THE MACROECONOMIC UNCERTAINTY BOOK-TO-BILL PERFORMANCE, MEUR New business wins (lifetime sales1, last 12 months in MEUR) Revenues (last 12 months in MEUR) Book-to-bill ratio 1.4 1.1 1.1 1.0 1.0 1.0 0.9 0
Slide 11: Financial Update
EXECUTIVE SUMMARY MARKET UPDATE FINANCIAL UPDATE SHIFT GEAR UPDATE SUBSEQUENT EVENTS & OUTLOOK Q&A
Slide 12: Revenues: All-Time High Revenues in Q3
Financial update REVENUES ALL-TIME HIGH REVENUES IN Q3 QUARTERLY REVENUES (continuing operations), MEUR 246 2018 224 226 218 219 216 215 2019 212 211 208 209 202 202 206 2020 193 187 190 2021 179 2022 112 2018 2019 2020 2021 20221 2018 2019 2020 2021 20221 2018 2019 2020 2021 20221 2018 2019 2020 20
Slide 13: Adjusted EBIT: Earnings in Accordance with Guidance
Financial update ADJUSTED EBIT EARNINGS IN ACCORDANCE WITH GUIDANCE QUARTERLY ADJ. EBIT (continuing operations), MEUR and % of revenues 2018 2019 2020 2021 2022 2018 2020 2022 Q1-Q3 2019 2021 2022 Q4 (expected) 23.7 10.6% 9.6% 21.4 9.8% 20.2 8.6% 19.2 9.0% 18.1 18.0 16.5 7.0% 8.0% 8.4% 7.0% 5.7% 12.
Slide 14: Q3 2022 Earnings
Financial update Q3 2022 EARNINGS ADJUSTED EBIT AND NET PROFIT INCREASED, DESPITE HIGHER COSTS ADJUSTED EBIT (continuing operations), MEUR NET INCOME DEVELOPMENT (continuing operations), MEUR 12.9 +3.1 +2.8 -3.9 -0.2 +0.4 8.5 8.1 -1.9 +1.8 +4.8 +6.9 -5.0 4.5 Q3 2021 P&C SPP Other FX Q3 2022 Q3 2021
Slide 15: Net Financial Items
Financial update NET FINANCIAL ITEMS CONTINUING OPERATIONS NET FINANCIAL ITEMS, MEUR Other financial items Net interest Currency effects Account receivables securitization - Expenses FOREX GAINS/LOSSES 2.6 The foreign exchange effects in Q3 2022 are made up of: 7.8 0.0 > realized foreign exchange ga
Slide 16: Free Cash Flow
Financial update FREE CASH FLOW FREE CASH FLOW1 (continuing operations), MEUR Q3 2022 FCF DETAILS Operating activities +7.5 Therein: NWC increase (continued only) -8.9 19 +16.2 Investing activities -7.0 Financing activities -18.2 +8.8 +8.1 Therein: +4.0 Payments of interests and lease -3.1 -0.2 liab
Slide 17: Total Cash Flow YTD Q3 2022
Financial update TOTAL CASH FLOW YTD Q3 2022 CONTINUING AND DISCONTINUED OPERATIONS TOTAL CASH FLOW, MEUR Continuing operations Discontinued operations 146.7 Proceeds for intangible and -16.1 tangible assets (MEUR 126.0) and net proceeds from sale of Mainly partial repayment of subsidiaries (MEUR 39
Slide 18: Total Cash Flow QTD Q3 2022
Financial update TOTAL CASH FLOW QTD Q3 2022 CASH FLOW INCLUDING SHARE AND BOND BUY-BACK CONTINUING AND DISCONTINUED OPERATIONS TOTAL CASH FLOW, MEUR Continuing operations Share buy-back Discontinued operations Proceeds from the true-up will (MEUR 9.9) and be received in Q4 2022 payment of interests
Slide 19: Liquidity Development
Financial update LIQUIDITY DEVELOPMENT SOLID LIQUIDITY ENABLES FURTHER GROWTH CONTINUING AND DISCONTINUED OPERATIONS LIQUIDITY DEVELOPMENT, MEUR Cash Unutilized Securitization facility Undrawn RCF -0.2 +2.3 -10.6 +20.2 -7.3 219.1 -2.2 -3.1 -5.9 210.0 -9.9 +7.0 144.1 +0.6 135.0 25.0 25.0 50.0 50.0 Q2
Slide 20: Financial Ratios
Financial update FINANCIAL RATIOS CONTINUING AND DISCONTINUED OPERATIONS Excluding IFRS16 Incl. IFRS 16 effect ADJUSTED GEARING RATIO 1,2, NIBD3/ADJUSTED EBITDA, LTM ADJUSTED ROCE 2, %, LTM 3.8 9.2 8.8 3.1 3.3 6.7 6.8 2.4 2.4 5.4 2.0 2.0 4.3 4.4 4.7 1.5 3.5 3.6 1.1 1.1 Q3 2021 Q4 2021 Q1 2022 Q2 202
Slide 21: Shift Gear Update
EXECUTIVE SUMMARY MARKET SUMMARY GROUP FINANCIAL UPDATE SHIFT GEAR UPDATE SUBSEQUENT EVENTS & OUTLOOK Q&A
Slide 22: Increasing Contribution from Performance Improvement Measures
Shift Gear update GEAR I PERFORMANCE INCREASING CONTRIBUTION FROM PERFORMANCE IMPROVEMENT IMPROVEMENT MEASURES FY 2022 MEASURE IMPACT DEVELOPMENT BY CALENDAR WEEK, MEUR > Performance improvements Approved 61 offsetting majority of the Implemented supply chain, inflation, and 51 59 53 volumes effects
Slide 23: Cost Increase Gap Closed by 84%
Shift Gear update COST INCREASE GAP CLOSED BY 84% ESTIMATE FY 2022 COST VS CUSTOMER PRICE INCREASE, MEUR ESTIMATED ACHIEVMENT: > Total recovery of cost increases/ variances through successful claims to customers 84% 59.8 NEXT STEP: 50.1 > Negotiate terms & conditions with 32.8 34.1 = customers and s
Slide 24: Subsequent Events & Outlook
EXECUTIVE SUMMARY MARKET SUMMARY GROUP FINANCIAL UPDATE SHIFT GEAR UPDATE SUBSEQUENT EVENTS & OUTLOOK Q&A
Slide 25: Divestments and Discontinued Operations
Subsequent events & outlook AT A GLANCE DIVESTMENTS AND DISCONTINUED OPERATIONS SHIFT GEAR SIZE OF BUSINESS PORTFOLIO TRANSFORMATION FULL YEAR FORECAST RESULTS GEAR II REDUCE DEPENDENCY €~74M T R A N S A C T IA OD €9M NJV. AELBUI TE UNIT REVENUE SALE AGREED: (FY22 EST) (FY22 EST) SIGNED ON CANADA AU
Slide 26: Market Forecasts
Subsequent events & outlook MARKET FORECASTS GLOBAL PASSENGER CAR PRODUCTION, sales in million units, including China GLOBAL PASSENGER CAR PRODUCTION, sales in million units, excluding China +19% +18% +5% +6% 86 89 91 92 59 61 62 62 77 82 52 56 2021 2022 2023 2024 2025 2026 2021 2022 2023 2024 2025
Slide 27: ICE vs EV Market Share Development
Subsequent events & outlook ICE VS EV MARKET SHARE DEVELOPMENT ICE STILL VERY IMPORTANT, AND A GROWTH MARKET IN CERTAIN REGIONS COMMERCIAL VEHICLES PASSENGER CARS 120% 120% 100% 100% 80% 80% 60% 60% 40% 40% 20% 20% 0% 0% 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032
Slide 28: Expect to Further Outpace the Market in Revenue Growth
Subsequent events & outlook EXPECT TO FURTHER OUTPACE THE MARKET IN REVENUE GROWTH AND IN TRANSITION SPEED TOWARDS ELECTRIC VEHICLES SEGMENT GROWTH RATES SPP GROWTH TOWARDS EV 2022-2026 2022-2026 P&C SPP 78% - 141% 7% - 9% 10% - 12% CAGR CAGR SEGMENT/UNIT PROFITABILITY P&C GROWTH TOWARDS EV 2022-202
Slide 29: Sales CAGR for ICE and EV 2022-2026
Subsequent events & outlook SALES CAGR FOR ICE AND EV FOR 2022-2026 KA WILL GROW MORE THAN THE MARKET TOWARDS EV WITHIN CV AND PASSENGER CARS 2022-2026 CAGR FOR EV AND ICE IN P&C AND SPP > On average, KA will grow more than the +141% GROWTH RATE EV market towards EV within commercial GROWTH/DECREASE
Slide 30: Outlook 2022
Subsequent events & outlook OUTLOOK 2022 TOP LINE GUIDANCE REITERATED, EBIT GUIDANCE SLIGHTLY ADJUSTED GLOBAL SITUATION KA SITUATION GUIDANCE SLIGHTLY ADJUSTED We have seen a drop or > Despite the challenging macro > Despite the challenging macro stabilization for many raw environment, we have a hea
Slide 31: Deliver as Promised on the CMD 2021
Subsequent events & outlook DELIVER AS PROMISED ON THE CMD 2021 CASH RETURN DE-LEVERAGING TO SHAREHOLDERS LIQUIDITY TO INVEST > Bond Call MEUR 75 > 10% of the Market Cap in > CAPEX to fuel organic share buybacks growth and innovation > Cost 2.5% of call > We will continue to look > Accelerate produc
Slide 32: Q&A
EXECUTIVE SUMMARY MARKET SUMMARY GROUP FINANCIAL UPDATE SHIFT GEAR UPDATE SUBSEQUENT EVENTS & OUTLOOK Q&A
Slide 33: Kongsberg Automotive
mS KONGSBERG AUTOMOTIVE