Kitron Asa · OSL:KIT
Kitron Asa — Q3 2014 Earnings Presentation
18 slides from Kitron Asa's earnings presentation, Oct 22, 2014
Slide 1: Q3 results 2014
Q3 results 2014 October 22 2014 Dag Songedal, Interim CEO Cathrin Nylander, CFO
Slide 2: Continued growth outside Norway
Financial highlights for Q3: Continued growth outside Norway NOK mill. Q3 2014 vs Q3 2013 • Growth and improved profitability outside Revenue 382,1 10,2 % Scandinavia • Profitability challenge in EBIT 6,9 -9,6 % Norway continued into Q3 • Positive cash flow Order backlog 807,2 -4,7 % developme
Slide 3: Important Defence orders for Kitron USA
Major new orders: Important Defence orders for Kitron USA • Orders from Kongsberg Protech • In June and July , orders were received of NOK 18 and 13 million respectively, and will be fulfilled in the fall of 2014 until mid-2016. • Electronic modules that are part of Kongsberg Protech’s Remote Weapon
Slide 4: Growth and improved profitability outside Scandinavia
Additional information: Growth and improved profitability outside Scandinavia • Operations in Lithuania, China and US • Revenue increase by 42 per cent and the results have increased by over 200 per cent in Q3 compared to last year • The improvement in profitability is due to improved utilisation of
Slide 5: Restructuring of operation in Norway
Operational information: Restructuring of operation in Norway • In order to secure a competitive setup • Several activities are initiated to reduce operational cost and increase profitability • The current plans imply a reduction of 85 employees during 2014. At the end of September, 70 of these have
Slide 6: Financial statements Q3 2014
Financial statements Q3 2014
Slide 7: Strong development in Defence/aerospace, Offshore/Marine reductions continues
Revenue: Strong development in Defence/aerospace, Offshore/Marine reductions continues Q3 2014 vs Q3 2013 Share of total revenue 436 457 Offshore/Marine -25,9 % 10,9 % 476 347 Medical equipment 3,1 % 25,4 % 382 10,2 % Defence/Aerospace 38,1 % 20,1 % Energy/Telecoms 6,4 % 13,0 % NOK million Q
Slide 8: Strong growth outside Scandinavia
Revenue by country*: Strong growth outside Scandinavia Q3 2014 vs Q3 2013 Share of total revenue Norway -0,4 % 40,6 % Sweden 3,6 % 21,0 % Lithuania 25,4 % 23,1 % Others 67,5 % 15,3 % * Before group entities and eliminations
Slide 9: Reduction in EBIT
EBIT: Reduction in EBIT 7,6 6,9 • Profitability reduction • Arendal profitability continue to be challenging but partially 4,3 compensated by improved profitability in the other units 6,9 • EBIT margin improved compared to the last three quarters 2,0 • Cost reduction measures NOK million initiated -
Slide 10: Norway still challenging, strong profitability improvement other sites
EBIT by country: Norway still challenging, strong profitability improvement other sites EBIT* • Norway 6,8 NOK million 5,5 • Product mix change 4,4 • Adverse effects on profitability due to 2,3 development of the Norwegian krone 1,5 1,9 • Sweden • Revenue stabilised, margins reduced • Lithuania -2,7
Slide 11: Cash flow improvement
Balance sheet: Cash flow improvement Operating cash flow NOK million • Cash flow increase 51,0 • Trade payables increased more 9,5 than inventory -9,7 -17,4 -33,9 • Working capital reduction 71,3 % Net working capital • Inventory turns up to 3.5 from 3.3 last year. NOK million 522 488 505 488 498 -
Slide 12: Market development
4 Kitron Market development www. kitron.com
Slide 13: Strong development in Defence, reductions in marine & Offshore
Order backlog: Strong development in Defence, reductions in marine & Offshore • Defence increase of NOK 96,1 million • Offshore Marine reductions of NOK 96,4 million • Industry reductions of NOK 29,3 million • Reductions across the sites Definition of order backlog includes firm orders and four mont
Slide 14: Market development
Market development • Offshore/Marine • General adjustment in the oil service market in Norway • Medical equipment • Stable development in both Norway and Sweden
Slide 15: Market development
Market development • Defence/Aerospace • Strong growth and positive outlook • Energy/Telecoms • Stable demand • Industry • Conservative forecasting even though the current revenue is strong.
Slide 16: Outlook
Outlook
Slide 17: Outlook
Outlook Kitron expects growth in revenue in 2014, partly explained by development in foreign exchange. The growth in the first nine months has been significant, while the expectations for the fourth quarter are slightly lower than in 2013. In spite of revenue growth, profitability is not satisfactor
Slide 18: Thank you!
Thank you!