Kongsberg Gruppen Asa · OSL:KOG
Kongsberg Gruppen Asa — Q1 2019 Earnings Presentation
37 slides from Kongsberg Gruppen Asa's earnings presentation, May 10, 2019
Slide 1: Investor Presentation Q1 2019
INVESTOR PRESENTATION Q1 2019 10/05/2019 Geir Håøy, President & CEO Gyrid Skalleberg Ingerø, EVP & CFO Lisa E. Haugan, EVP Finance KM KONGSBERG PROPRIETARY: This document contains KONGSBERG information which is proprietary and confidential. Any disclosure, copying, distribution or use is prohibited
Slide 2: Highlights Q1
HIGHLIGHTS Q1 3 627 3 766 414 11.4% REVENUES NEW ORDERS EBITDA EBITDA MARGIN GROUP: DEFENCE: MARITIME: DIGITAL: • Continued strong order • First JSM delivery contract • Solid order intake • Growth and improved intake secured • Successful closing of RRCM profitability • Margins affected by sales • NA
Slide 3: "New" Kongsberg
“NEW” KONGSBERG 11 000 EMPLOYEES 22 600* MNOK REVENUES 40 COUNTRIES WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information *Preliminary proforma consolidated figures 2018 3
Slide 4: Financial Status
FINANCIAL STATUS Gyrid Skalleberg Ingerø, CFO WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information
Slide 5: IFRS 16 effects
IFRS 16 effects Q1 2019 EBITDA 414 51 KOG incl. KM KDA Others KOG ex. 33 338 8 IFRS 16 IFRS 16 Revenues 3 627 - - - 3 627 EBITDA 414 -51 -33 8 338 EBIT 239 -7 -4 1 229 EPS 0.95 - - - 1.02 KOG incl. KM KDA Others KOG ex. IFRS 16 IFRS 16 WORLD CLASS – Through people, technology and dedication KONGSBER
Slide 6: Q1 2019 revenues, EBITDA, margin and order intake
REVENUES KM MNOK 2 072(1 796) 3 627 MNOK (3 554) KDA MNOK 1 369 (1 585) EBITDA KM MNOK 187 (134) 338 MNOK (286) KDA MNOK 138 (172) Q1 2019 EBITDA MARGIN KM 9.0% (7.5 %) 9.3% (8.0%) KDA 10.1% (10.9 %) ORDER INTAKE KM MNOK 2 413 (1 900) 3 766 MNOK (2 939) KDA MNOK 1 137 (798) WORLD CLASS – Through peo
Slide 7: Special items Q1
Special items Q1 Kongsberg Maritime Revenues EBITDA EVOTEC-sale: MNOK 107 EVOTEC sale: MNOK 107 Integration costs: MNOK 79 KOG 3 627 3 520 107 338 79 107 KOG 310 KM 2 072 1 965 KM 187 159 KDA + OTHERS 1 555 1 555 KDA + OTHERS 151 151 Reported Revenues Sale EVOTEC "Clean" Revenues Reported Integratio
Slide 8: Underlying/reported performance, rolling LTM
KOG Adjustments include: =<2017: Released provisions, impairment and restructuring, >=2018: acquisition costs, integration costs 18 000 11,2 % 12% 16 000 10,0 % 10% 14 000 12 000 8% 10 000 6% 8 000 6 000 4% 4 000 2% 2 000 - 0% ROLLING LTM UNDERLYING/REPORTED PERFORMANCE KDA Adjustments: Released pro
Slide 9: Revenues Q1
3 721 3 627 3 554 UNANIMOUS SUPPORT ON RIGHTS ISSUE FROM NORWEGIAN PARLIAMENT REVENUES Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2017 2018 2019 TOTAL REVENUES UP 2.1% YoY Adjusted for Evotec, down 1.0% KM revenues up 15.4% YoY Adjusted for Evotec , up 9.4% YoY KDA revenues down -13.6% YoY Mainly related to lowe
Slide 10: EBITDA Q1
Q4 FINANCES - FEBRUARY 14, 2019 339 338 UNANIMOUS SUPPORT ON RIGHTS ISSUE 286 FROM NORWEGIAN PARLIAMENT EBITDA Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2017 2018 2019 9.3 % OVERALL EBITDA MARGIN (8.0%) 8.8 % EBITDA margin adjusted for special items 9.0 % EBITDA MARGIN IN KM (7.5%) 8.1 % EBITDA margin adjusted
Slide 11: Status integration - Rolls-Royce Commercial Marine
Status integration - Rolls-Royce Commercial Marine INTEGRATION COSTS ACTIONS COMPLETED PRIOR TO CLOSING 450 Approximately 6 000 actions completed prior to closing Largest external costs related to IT, legal, new organization design, separation actions and re-branding 261 Verification of potential fo
Slide 12: New orders Q1
NEW ORDERS 3 451 UNANIMOUS SUPPORT ON RIGHTS ISSUE 2 939 3 766 FROM NORWEGIAN PARLIAMENT NEW ORDERS Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 BOOK/BILL 1.07 (adjusted for special items) 2017 / 13 430 2018 / 16 574 2019 MNOK 17 301 total order backlog KM BOOK/BILL 1.23 (adjusted for special items) Order backlog
Slide 13: New orders Kongsberg Maritime
23% 44% GLOBAL CUSTOMER SENSORS & SUPPORT* ROBOTICS** Q1 2018 33% INTEGRATED SOLUTIONS NEW ORDERS KONGSBERG 23% MARITIME GLOBAL CUSTOMER SUPPORT* Q1 2018: MNOK 1 900 33% SENSORS & Q1 2019: MNOK 2 413 Q1 2019 ROBOTICS** 44% INTEGRATED SOLUTIONS *Global Customer Support does not include Sensors & Robo
Slide 14: New orders Kongsberg Defence and Aerospace
8% MISSILE SYSTEMS 15% PROTECH SYSTEMS 20% Q1 2018 23% SPACE & SURVEILLANCE AEROSTRUCTURES 11% 23% DEFENCE INTEGRATED DEFENCE NEW ORDERS COMMUNICATIONS SYSTEMS KONGSBERG DEFENCE 17% 22% MISSILE AND AEROSPACE SPACE AND SURVEILLANCE SYSTEMS Q1 2018 MNOK 798 20% PROTECH SYSTEMS Q1 2019 MNOK 1 137 Q1 20
Slide 15: Strong balance sheet
Q1 2019 2018 2017 Gross interest bearing debt 4 348 4 332 3 340 Cash and short-term deposits 10 389 10 038 2 956 STRONG BALANCE SHEET Net interest bearing debt -6 041 -5 706 384 Equity ratio 43.3% 45.7 % 35.6 % ROACE 13.6 % 12.5 % 9.0 % WORLD CLASS – Through people, technology and dedication KONGSBE
Slide 16: Debt position
1 500 BONDS - MATURITY PROFILE 1 000 550 500 450 250 2019 2020 2021 2022 2023 2024 2025 2026 DEBT POSITION HEALTHY MATURITY PROFILE 1 898 NET INTEREST BEARING DEBT 601 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q4 Q1 2017 2018 -6 041 WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See S
Slide 17: Dividend
2016 2017 2018* Total dividends MNOK 450 MNOK 450 MNOK 450 Payout ratio 68.9 % 81.2 % 64.2 % * Proposal for 2018 DIVIDEND 127,1 % HISTORICAL PAYOUTS RATIOS THE BOARD PROPOSES FOR THE ANNUAL GENERAL MEETING ON 14 MAY 2019 A 81,2 % DIVIDEND OF NOK 2,50 PER SHARE FOR FY 2018 68,7 % 68,9 % Dividends sha
Slide 18: Business Update
BUSINESS UPDATE Geir Håøy, President & CEO WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information
Slide 19: Business update Kongsberg Defence & Aerospace
BUSINESS UPDATE KONGSBERG DEFENCE & AEROSPACE Good activity in general Missile breakthroughs NASAMS contract approaching • Revenue improvement in • Japan signs contract for most divisions JSM deliveries • Australia confirms • Low MCT30 activity • US Marine Corps to selection of NASAMS • Solid projec
Slide 20: Joint Strike Missile
Joint Strike Missile First commercial order received Development 9 Countries have Increased number of finished selected F-35 potential F-35 clients WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information 20
Slide 21: Business update Kongsberg Maritime
BUSINESS UPDATE KONGSBERG MARITIME Continued positive Delivering and integrating Solid order intake development in revenues, margins and order intake • We have started the • Strong order intake for largest integration in the LNG Carriers and fisheries • Revenue growth within company’s history. At th
Slide 22: Solid and diversified order intake at KM
40% 6% SUBSEA OTHERS* Q1 2018 26% OPU & LNG 16% SEABORN & PAX 12% SOLID AND G77FI-YMUGQ-A9VXF-WGVL4-3T4N3 OFFSHORE DIVERSIFIED ORDER 7% INTAKE AT KM 29% SUBSEA OTHERS* TOTAL ORDER INTAKE Q1 2018: MNOK 1 900 37% Q1 2019 OPU & LNG TOTAL ORDER INTAKE Q1 2019: MNOK 2 413 11% SEABORN & PAX 16% OFFSHORE *
Slide 23: Business update Kongsberg Digital and Patria
KDI 40% SUBSEA OTHERS* 6% REVENUES INCREASED 38% - ACCELERATING DEVELOPMENT Book/bill 1.09 in Q1, margin improvement | Q1 2018 26% OPU & LNG Experiencing substantial attention on strategic offerings from a broad range of clients Accelerating development and initiated a strategy process to secure eno
Slide 24: The "New" Kongsberg Maritime
THE “NEW” KONGSBERG MARITIME WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information
Slide 25: Broadening our portfolio for the maritime industry
BROADENING OUR PORTFOLIO FOR THE MARITIME INDUSTRY INTEGRATED SOLUTIONS PROPULSIONS & ENGINES Finn bedre bilder Proff opp siden SENSORS AND ROBOTICS SHIP DESIGN DECK MACHINERY WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information 25
Slide 26: Kongsberg Maritime from 1 April 2019
Kongsberg Maritime from 1 April 2019 - A strong and scalable business Kongsberg Maritime Revenues1: Sensors & Integrated Propulsion & Systems & Deck Global Customer Robotics Solutions Engines Machinery 2) Support BNOK 15.8 ~BNOK 2.91) ~BNOK 2.61) ~BNOK 2.21) ~BNOK 1.21) ~BNOK 6.81) Order intake1: ~1
Slide 27: Pro Forma Financials and Orders
PRO FORMA FINANCIALS AND ORDERS WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information
Slide 28: Key pro forma financial information 2018
Key pro forma financial information* 2018 Unaudited pro forma 2018 revenue (MNOK) Unaudited pro forma 2018 EBITDA (MNOK) 22 596 945 8 215 14 381 273 OTHERS 732 KDA 621 672 KDA 6 104 KM 7 545 KM 453 KOG CM Pro Forma OTHERS 129 KOG CM Pro Forma WORLD CLASS – Through people, technology and dedication K
Slide 29: Key pro forma financial information Q1 2019
Key pro forma financial information* Q1 2019 Unaudited pro forma Q1 2019 revenue (MNOK) Unaudited pro forma Q1 2019 EBITDA (MNOK) 5 498 338 OTHERS 13 64 274 1 871 3 627 KDA 138 OTHERS 186 KDA 1 369 KM 187 KM 2 072 KOG CM Pro Forma KOG CM Pro Forma WORLD CLASS – Through people, technology and dedicat
Slide 30: Order backlog
Order backlog «New» KM 12,3 12,7 12,0% 9,8 6,6 6,7 CM 2019 5,1 Order backlog by delivery 25,0% 2020 2021=> 63,0% 5,7 6,0 KM 4,7 Q1 2018 2018 Q1 2019 WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information 30
Slide 31: Value Capture
VALUE CAPTURE WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information
Slide 32: Capturing the synergies
Capturing the synergies - Our stated ambition is unchanged after closing Overview of cost improvements and synergies Key areas of cost savings Planned annual Annual P&L effect, MNOK • Expected annual run-rate cost synergies in excess of MNOK run-rate savings: ~500 500 through optimization and ~475 s
Slide 33: Capturing the synergies - key areas
Capturing the synergies - Key areas for cost improvements and synergies Area Key initiatives Total savings target • Restructuring of loss-making businesses: Deck Machinery and Ship Design & Systems Footprint & • Co-location of overlapping global footprint (close to 20 sites) delivery • Move non-core
Slide 34: Capturing the synergies - key activities during 2019
Capturing the synergies - Key activities during 2019 Savings expected Signing - ’19 Q1 ’19 Q2 ’19 H2 realized in ’19 (MNOK): • Verification of • 6 sites co-located from Day 1 • Moving non-core production activities to Footprint & potential for cost • Deck Machinery and Ship Design supply chain impro
Slide 35: Capital Markets Day 2019
CAPITAL MARKETS DAY 2019 Date: 24 September 2019 Time: 10:00 Place: Kongsberg Strategy and business update, including updated financial targets WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information
Slide 36: 2019 Outlook
2019 OUTLOOK KM KDA KDI Good order backlog and some Current backlog indicates some Accelerating development and improvement in lifecycle business growth independent of new initiated a strategy process to founds some revenue growth contracting secure a global number one position Integration of RRCM w
Slide 37: Q&A
Q&A WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information