Kongsberg Gruppen Asa · OSL:KOG
Kongsberg Gruppen Asa — Q4 2019 Earnings Presentation
44 slides from Kongsberg Gruppen Asa's earnings presentation, Feb 12, 2020
Slide 1: Investor Presentation Q4 2019
INVESTOR PRESENTATION Q4 2019 12/02/2020 Geir Håøy, President & CEO Gyrid Skalleberg Ingerø, EVP & CFO KONGSBERG PROPRIETARY: This document contains KONGSBERG information which is proprietary and confidential. Any disclosure, copying, distribution or use is prohibited if not otherwise explicitly agr
Slide 2: 2019 - A Game Changer
2019 - A GAME CHANGER WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information 2
Slide 3: Highlights Q4
Highlights Q4 8 164 6 934 851 10.4% REVENUES NEW ORDERS EBITDA EBITDA MARGIN GROUP: DEFENCE: MARITIME: DIGITAL: ▪ Solid organic growth ▪ RWS to Switzerland and ▪ High activity in Sensors & ▪ Nyhamna dynamic digital ▪ Good earnings Denmark Robotics and Global twin in operation since ▪ Strong cash flo
Slide 4: Value Capture program targets completion two years ahead of original plan
Value Capture program targets completion two years ahead of original plan Revised plan for cost savings Comments P&L effect relative to 2018, MNOK ▪ The program is ahead of schedule and planned realization of 500 Initial plan MNOK annual cost synergies is expedited from 2022 to 2020 Revised plan 500
Slide 5: Financial status
Financial status Gyrid Skalleberg Ingerø, CFO WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information
Slide 6: FY 2019 – KONGSBERG (KOG)
FY 2019 – KONGSBERG (KOG) MNOK Revenues EBITDA EBIT 24 081 2 279 1 183 24 081 9.5% 4.9% 7.7% 7 409 67% 4.6% 2 279 14 490 14 381 16% 1 183 423 75 945 17% 1 394 33% 1 279 772 16 672 1 856 1 108 2017 2018 2019 2017 2018 2019 2017 2018 2019 From Acquired Companies IFRS 16 effects Margin ex. IFRS Margin
Slide 7: FY 2019 – KONGSBERG (KOG)
FY 2019 – KONGSBERG (KOG) MNOK Order intake Order backlog 32 452 33 129 32 452 33 129 6 648 50% 2021 56% 17 283 25 804 40% 2020 → 16 574 50% 2020 13 430 60% 2019 2017 2018 2019 4Q19 4Q18 From Acquired Companies WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See State
Slide 8: Q4 – KONGSBERG (KOG)
Q4 – KONGSBERG (KOG) MNOK Order Intake Revenues EBITDA EBIT 6 934 8 164 851 554 12,5% 10,4% 9,8% 6,8% 9,0% 8 164 6,5% 851 554 6 934 97% 120 24 3 122 1 991 80% 406 3 859 28% 4 148 22% 520 530 731 4 943 5 042 4Q18 1Q19 2Q19 3Q19 4Q19 4Q18 1Q19 2Q19 3Q19 4Q19 4Q18 1Q19 2Q19 3Q19 4Q19 4Q18 1Q19 2Q19 3Q1
Slide 9: Kongsberg Maritime Q4
▪ Including Commercial marine (cm) ▪ Kongsberg Maritime ▪ (KM) Kongsberg Maritime Q4 WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information 9
Slide 10: Improved order intake YoY in KM
Improved order intake YoY in KM MNOK Order backlog (KM) 12 095 12 095* *xCM: 6 131 MNOK *xKM: 5 964 MNOK 26% 2021 5 739 74% 2020 26% 2020-> 5 739 74% 2019 4 820 4 148 Q4 2019 Q4 2018 1 954 Book/Bill Q4: 0.76 1 693 1 853 +18.4% 2 193 Order intake Q4: MNOK 4 148 Order backlog Q4: MNOK 12 095 Q1 Q2 Q3
Slide 11: Q4 KM Order intake
30% 48% GLOBAL CUSTOMER SENSORS & SUPPORT (KM excl CM)* ROBOTICS** Q4 2019 KM excl. CM Q4 22% KM Order intake INTEGRATED SOLUTIONS 6% SYSTEMS & DECK Order intake Q4: MNOK 4 148 MACHINERY 10% KM ex. CM Q4: MNOK 2 193 PROPULSION & (+18.4% YoY) ENGINES 26% CM Q4: MNOK 1 954 SENSORS & Q4 2019 ROBOTICS**
Slide 12: Q4 KM Revenues
KM ex. CM CM 5 490 Q4 KM Revenues 3 016 169% Revenues Q4: MNOK 5 490 KM excl. CM Q4: MNOK 2 474 2 041 21% 1 877 (*Growth +21.2% YoY) CM Q4: MNOK 3 016 2 474 (+21.9% YoY**) MNOK Revenues 2019: MNOK 16 038 (*Growth +18.0% YoY) CM figures included as from Q2-2019 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 201
Slide 13: Commercial Marine Development
MNOK Order intake MNOK Revenues 4 000 4 000 2 791 3 016 3 000 3 000 2 475 1 954 2 000 2 000 Q4 1 000 1 000 Development 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Commercial Marine* 2018 2019 2018 2019 300 EBITDA* 239 Special items Q4 2019 200 (MNOK) Integration costs 44 194 100 52 78 209 Co
Slide 14: Q4 KM EBITDA
EBITDA IFRS 16 effects Margin ex. IFRS Margin inc. IFRS * 10.0% 650 12.1% Q4 600 6.9% 7.9% 550 KM EBITDA 500 6.5% 450 436 *) Bridge to xKM EBITDA Q4 (YoY MNOK) 400 80 MNOK 350 EBITDA excl. IFRS 16 356 300 250 228 Restructuring- and + integration costs 100 200 140 356 150 = Adjusted EBITDA 456 100 -
Slide 15: Value Capture program ahead of schedule
Value Capture program ahead of schedule Broad range of measures executed in 2019 Realized cost savings FY19 P&L effect relative to 2018, MNOK • Footprint optimization: 15 sites co-located • Exit of Vung Tau (Vietnam) and Gdansk (Poland) 260 250 • Ship Design restructuring 200 • Announced restructuri
Slide 16: Integration cost status
Integration cost status Integration cost overview MNOK 450 110 Main activities ▪ IT infrastructure enabling collaboration ▪ Legal entities clean-up 273 67 Total 2018 Act 2019 Act "Remaining" WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary
Slide 17: Kongsberg Defence & Aerospace Q4
▪ Kongsberg Defence & Aerospace ▪ (KDA) Kongsberg Defence & Aerospace Q4 WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information 17
Slide 18: Increasing order intake, strong backlog
Increasing order intake, strong backlog MNOK Order backlog (KDA) 20 146 20 146 64% 2021 10 744 48% 2020 → 10 744 9 956 36% 2020 52% 2019 Q4 2019 Q4 2018 Book/Bill Q4: 1.02 3 168 2 509 1 770 42% Book/Bill YTD: 2.22 Order intake 2019: MNOK 16 060 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2017 2017 2017 2017
Slide 19: Q4 KDA Order intake
18% 25% PROTECH MISSILE SYSTEMS SYSTEMS 7% Q4 2019 30% AEROSTRUCTURES Q4 SPACE & SURVEILLANCE 19% KDA Order intake 1% DEFENCE INTEGRATED DEFENCE SYSTEMS COMMUNICATIONS Order intake Q4: MNOK 2 509 17% 19% (+41.7% YoY) PROTECH SYSTEMS AEROSTRUCTURES Order intake 2019: MNOK 16 060 (+133.3% YoY) 9% MISS
Slide 20: Q4 KDA Revenues
KDA KAMS 2 468 106 30% 24% Q4 1 898 KDA Revenues 1 683 2 362 Revenues Q4: MNOK 2 468 Growth +30% YoY MNOK Revenues 2019: MNOK 7 245 Growth +19% YoY Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019 WORLD CLASS – Through people, technology and dedication
Slide 21: Q4 KDA EBITDA
EBITDA IFRS 16 effects Margin ex. IFRS Margin inc. IFRS 19.5% 650 18.2% 20 600 13.1% 16.1% 15 Q4 550 500 KDA EBITDA 450 448 10 50 400 371 5 350 0 EBITDA Q4: MNOK 448 / MNOK 398* 300 EBITDA-margin: 18.2% / 16.1%* 250 221 -5 200 398 EBITDA 2019: MNOK 1 157 / MNOK 990* -10 EBITDA-margin: 16.0% / 13.7%*
Slide 22: Balance sheet and cash flow (KOG)
Balance sheet and cash flow (KOG) WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information
Slide 23: Development in cash 2019
Development in cash 2019 Operating activities: Investing activities: Financing activities: MNOK +2 006 MNOK -5 174 MNOK -1 216 2 279 123 31 21 344 10 038 -4 384 4 464 710 5 654 448 423 238 122 15 Cash 1.1 EBITDA Change in Income Dividend Others Acquisitions Investm. Dividend IFRS16 Debt Interest Oth
Slide 24: Q4 Strong balance sheet
2017 2018 Q3 2019 Q4 2019 Q4 Gross interest bearing debt 3 340 4 332 4 090 4 089 Strong balance sheet Cash and short-term deposits 2 956 10 380 3 667 5 654 Net interest bearing debt 384 -5 706 423 -1 565 Strong cash flow in Q4 Equity ratio 35.6% 45.7% 35.7% 32.7% 38.1%* 34.7%* ROACE 9.0% 12.5% 9.5%
Slide 25: R&D: Sum of expensed and capitalized Research & Development
2 000 7% 1 800 6% 1 600 2019 1 400 5% R&D 1 200 1 056 4,2 % 1 023 4,4 % 4% 1 000 126 894 133 832 849 849 807 796 3% 800 136 97 73 136 190 115 328 139 Sum of expensed and capitalized 208 195 2,6 % 600 264 178 200 140 2% Research & Development 400 699 550 556 602 1% 494 514 513 517 200 0 0% 2012 2013
Slide 26: CAPEX
Capital Expenditures (MNOK) 700 5% 4% 600 4% 2019 500 3% CAPEX 400 3% 2,3 % 641 2% 300 535 544 Capital Expenditures 2% 200 361 373 339 346 1% 230 100 1% 0 0% 2012 2013 2014 2015 2016 2017 2018 2019 Kongsberg Gruppen ASA Total Capex in % of Revenue WORLD CLASS – Through people, technology and dedicat
Slide 27: Depreciation and amortization
Depreciation Amortization IFRS16 effects 329 - 335 Depreciation and 279 299 15 15-20 20 amortization 95 95 95 Q4 19 actuals depreciation includes; G77FI-YMUGQ-A9VXF-WGVL4-3T4N3 100 • 30 MNOK of PPA effects, of which 85 85 20 MNOK are from previous periods (Q2 and Q3) 135 - 140 99 119 • Increased dep
Slide 28: Dividend
2017 2018 2019* Total dividends MNOK 450 MNOK 450 MNOK 2 250 Dividend Payout ratio 81.2 % 64.2 % 313.8% The board proposes for the annual general meeting (AGM) on 14 may 2020 a dividend of NOK 12.50 per share for FY 2019 * Proposal for 2019 AGM 314% The proposal is split into an ordinary dividend of
Slide 29: Proposed dividend and share buy-back
Proposed dividend and share buy-back Dividend and share buy-back Total remuneration Total MNOK NOK/ share 2 750 ▪ 450 MNOK in ordinary dividend equivalent to 2.50 NOK /share 500 ▪ 1 800 MNOK in extra ordinary dividend, equivalent to 10.00 NOK/share 1 800 450 ▪ 500 MNOK in share buy-back, equivalent
Slide 30: Business update
Business update Geir Håøy, President & CEO WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information
Slide 31: Business update Kongsberg Defence & Aerospace
Business update Kongsberg Defence & Aerospace Important contracts Scaling business to deliver Maintenance, Repair and and position for new overhaul (MRO) ▪ Mobile Ground Based Air opportunities Defence to the Norwegian ▪ KONGSBERG has long Army ▪ Increasing activity in all traditions on Helicopter M
Slide 32: Two important MRO-contracts signed with NDLO in Q4
Two important MRO- contracts signed with NDLO in Q4 Naval vessels Maintenance and engineering services including a breadth of the company's portfolio, from missile systems and weapon stations to command / control and navigation systems. Annual minimum scope is NOK 71 million for the first years. NH-
Slide 33: Business update Kongsberg Maritime
Business update Kongsberg Maritime Solid performance… …in a challenging market… …positioned to be there in the future ▪ Revenue growth and ▪ 2019 turned out to be one improving margin historic low when it comes ▪ Product and portfolio ▪ Marine Robotics and Global to contracting of new optimization C
Slide 34: Enabling customers to reach their commitments to the UN Sustainability Goals
Enabling customers to reach their commitments to the UN Sustainability Goals Hybrid Power Delivery to Golden Energy ▪ KM’s integrated hybrid power propulsion ▪ Upgrade of two Golden Energy offshore vessels system offer proven efficiency benefits including integrated hybrid power propulsion ▪ Designe
Slide 35: KONGSBERG has entered into an agreement with Huntington to sell Kongsberg Hydroid
KONGSBERG has entered into an agreement with Huntington to sell Kongsberg Hydroid Successful development of Attractive exit multiple New alliance and Hydroid opportunities ahead ▪ Acquired in 2008 for ~430 ▪ Sales price of ~3.2 BNOK on ▪ KONGSBERG and Huntington MNOK a debt and cash free basis have
Slide 36: Business update Kongsberg Digital
Development KDI MNOK LTM Order Intake LTM Revenues 1 000 25 % revenue increase in 2019 and growing order intake 800 | Book/bill 1.11 in 2019, 1.22 in Q4 600 Dynamic Digital Twin delivered and in 400 Business update operation 200 Kongsberg Digital Continued roll out of Vessel Insight 0 and Patria PAT
Slide 37: Outlook
Outlook KM KDA KDI Good order backlog coverage and Current backlog founds solid growth Capitalize and accelerate on our strong lifecycle business founds in 2020 independent of new positions related to dynamic digital some revenue growth in 2020 contracting twin and Vessel Insight Segments within new
Slide 38: Q&A
Q&A WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information
Slide 39: Appendix
Appendix WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information
Slide 40: Q4 IFRS 16 effects
Q4 2019 KOG incl. KM KDA Others KOG ex. IFRS 16 IFRS 16 Revenues 8 164 - - - 8 164 Q4 EBITDA 851 -80 -50 10 731 IFRS 16 effects EBIT 554 -19 -14 9 530 (MNOK) EPS 1.92 - - - 1.98 2019 KOG incl. KM KDA Others KOG ex. IFRS 16 IFRS 16 Revenues 24 081 - - - 24 081 EBITDA 2 279 -296 -167 40 1 856 EBIT 1 1
Slide 41: Q4 Debt position Healthy maturity profile
1 500 1 000 550 450 500 Q4 Debt position 2020 2021 2022 2023 2024 2025 2026 Healty maturity profile 1 898 1 642 1 991 384 601 707 336 423 -173 -1 565 -5 706 -6 041 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Bonds - Maturity profile (MNOK) 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019 Net inte
Slide 42: Realized savings of 260 MNOK FY2019
Realized savings of 260 MNOK FY2019 Realized cost savings P&L effect relative to 2018, MNOK Realized Area Comments to realized savings FY19 Initial effects of co-locations, production facility shutdowns and Footprint & delivery streamlining 41 optimization of delivery organizations Savings driven by
Slide 43: Q4 NWC
Net Working Capital – Kongsberg Maritime (MNOK) 4 000 25% 19,5% 20% 3 000 16,2% 11,7% 15% 2 000 Q4 1 000 1 674 5,0% 8,7%* 9,1%* 1 545 6,4%* 10% 5% 1 430 NWC 0 2016 1 202 2017 880 2018 817 Q1 2019 Q2 2019 Q3 2019 1 151 Q4 2019 0% NWC in % of LTM revenue Kongsber Maritime *Includes Proforma Revenue fo
Slide 44: Thanks
Thanks WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information