Kitron Asa · OSL:KIT
Kitron Asa — Q3 2013 Earnings Presentation
17 slides from Kitron Asa's earnings presentation, Oct 23, 2013
Slide 1: Q3 results 2013
Q3 results 2013 23 October 2013 Dag Songedal, interim CEO Cathrin Nylander, CFO
Slide 2: Financial highlights for Q3
Financial highlights for Q3: Strengthened order intake in challenging quarter • Strengthened order NOK mill. Q3 2013 vs Q3 2012 intake underpins Revenue 346,6 -5,2 % revenue growth going forward EBIT 7,6 -50,9 % • Weaker demand led to lower profitability Order backlog 847,1 -1,0 % • Production
Slide 3: Operational highlights for Q3: Investments in Lithuania and major contract
Operational highlights for Q3: Investments in Lithuania and major contract • Major industrial contract secured • Value of MNOK 150 over three years • Extension of existing contract • Production in Arendal and Kaunas • Offshore/marine and Industry strengthening order intake • Order backlog improved b
Slide 4: Financial statements Q3 2013
Financial statements Q3 2013
Slide 5: Revenue: Lower demand and production postponements
Revenue: Lower demand and production postponements 462 • Seasonally lower revenue 430 • Lower demand in several 366 378 segments 347 • Production - 5.2 % postponements due to challenging product mix and changes in customer NOK million specifications Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 5
Slide 6: Revenue by market segment: Industry segment growth
Revenue by market segment: Industry segment growth Q3 2013 vs Q3 2012 Share of total revenue Offshore/Marine Long-term prospects remain positive -16,5 % 16,2 % Market growth offsets reduced Medical equipment manufacturing scope from key -11,0 % 27,1 % customers Defence/Aerospace Still uncertaint
Slide 7: Revenue by country: Strong growth in Lithuania
Revenue by country*: Strong growth in Lithuania Q3 2013 vs Q3 2012 Share of total revenue Norway -9,9 % 46,0 % Sweden -19,3 % 22,9 % Lithuania 27,9 % 20,8 % Others -1,9 % 10,3 % * Before group entities and eliminations 7
Slide 8: EBIT: Operational streamlining continues
EBIT: Operational streamlining continues • Improvement initiatives 24,4 implemented • Focus on profitability • Operational improvement 15,4 programs 9,3 • Some effects in 2013 3,9 NOK million 7,6 • Offset by volume effects - 50,9 % Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Margin 4,2 % 5,3 % 1,0 % 2,2
Slide 9: EBIT by country: Hit by volume effects
EBIT by country: Hit by volume effects EBIT* • Norway: Volume impact 8,1 NOK million • Sweden: Volume impact 5,5 5,3 • Lithuania: Improved profitability 4,4 3,1 due to increased volume 2,3 • New entities: Lower demand from US Army and posponement due to technical -1,6 issues leading to delay in US Q
Slide 10: Balance sheet: Inventory affected by postponements
Balance sheet: Inventory affected by postponements Operating cash flow • Focus on inventory reduction NOK million across the group continues - 117,9 % 84,8 • Target to reduce MNOK 50 upheld • Effects moving into 2014 29,2 • Due to inventory build-up caused by -15,4 -18,1 -33,5 production postponemen
Slide 11: Market development
Your ambition. Our passion. < Kitron Market development
Slide 12: Order backlog: Mixed trend by market segment
Order backlog: Mixed trend by market segment • Strengthening of order Order backlog backlog NOK million • Increase in Defence/Aerospace and Industry • Reduced backlog in other segments - 1,0 % • Overall market situation 855 847 uncertain • Customer forecast volatility continues 776 757 • Customers r
Slide 13: Market development: Offshore/Marine and Medical equipment
Market development • Offshore/Marine • Stable demand • Long-term prospects remain positive • Medical equipment • Flat development expected in short term as reduced production scope for one customer offsets growth • Long-term healthy market fundamentals for Kitron’s product portfolio are expected to
Slide 14: Market development: Defence/Aerospace, Energy/Telecoms, Industry
Market development • Defence/Aerospace • Promising long-term outlook • Still uncertainty in the Swedish defence market and slow development in the US • Energy/Telecoms • Expected modest growth • Industry • Key customers indicate modest growth • New customers ramping up 14
Slide 15: Outlook
Outlook
Slide 16: Outlook
Outlook • Reiterates revenue outlook for second half 2013 • Expected to be at same level as second half 2012 • Revenue outlook shows some growth going into 2014 • Programs to increase profitability and cash flow • Streamlining of internal operations to reduce costs and improve efficiency continues 1
Slide 17: Thank you!
Thank you! 17