Kongsberg Gruppen Asa · OSL:KOG
Kongsberg Gruppen Asa — Q3 2019 Earnings Presentation
41 slides from Kongsberg Gruppen Asa's earnings presentation, Oct 30, 2019
Slide 1: Investor Presentation Q3 2019
INVESTOR PRESENTATION Q3 2019 30/10/2019 Geir Håøy, President & CEO Gyrid Skalleberg Ingerø, EVP & CFO Lisa E. Haugan, EVP Deck Machinery & Motion Control KONGSBERG PROPRIETARY: This document contains KONGSBERG information which is proprietary and confidential. Any disclosure, copying, distribution
Slide 2: Highlights Q3
Highlights Q3 6 046 12 325 535 8.8% REVENUES NEW ORDERS EBITDA EBITDA MARGIN GROUP: DEFENCE: MARITIME: DIGITAL: • Solid organic growth • NASAMS Qatar – the • Continued strong order • Growing revenues and • Strong order intake largest KOG-contract ever intake within sensors and improved profitability
Slide 3: Financial status
Financial status Gyrid Skalleberg Ingerø, CFO WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information
Slide 4: Q3 – KONGSBERG (KOG)
Q3 – KONGSBERG (KOG) MNOK Revenues EBITDA EBIT 6 046 535 230 +92% 11.0% 8.8% 7.6% 6 046 3.8% 6.9% 520 535 3.5% 479 414 118 406 3 154 347 240 239 230 417 160 21 209 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 IFRS 16 effects Margin ex. IFRS Margin inc. IFRS WORLD CLASS
Slide 5: Improving revenue trend
Improving revenue trend MNOK Organic growth -7% +10% 20 065 16 613 17 032 4 118 16 323 15 845 15 601 169 722 14 490 14 380 780 690 637 5 798 5 742 6 834 6 316 6 505 7 347 6 333 6 104 9 568 10 197 8 148 8 597 8 471 7 279 7 429 7 544 2012 2013 2014 2015 2016 2017 2018 LTM Q3 2019 Commercial Marine Oth
Slide 6: Strong order intake
Strong order intake MNOK Order intake Order backlog 12 325 34 244 34 244 34 244 40% 2021-> +175% 17 602 17 602 12 325 41% 2020 32% 2020-> 4 477 47% 2019 19% 2019 2018 21% 3Q18 4Q18 1Q19 2Q19 3Q19 3Q19 3Q18 Order backlog BNOK 7 aftermarket in KM by large not reflected in backlog (annual basis) WORLD
Slide 7: Kongsberg Maritime Q3
▪ Including Commercial marine (cm) ▪ Kongsberg Maritime ▪ (KM) Kongsberg Maritime Q3 WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information 7
Slide 8: Short- and long-term backlog improved in KM
Short- and long-term backlog improved in KM 13 386 Order backlog (KM) 13 386* CM KM ex. CM Order Backlog *xCM: 7 077 MNOK 18% 2021-> *xKM: 6 309 MNOK 52% 2020 5 395 17% 2020-> 30% 56% 2019 2019 27% 2018 5 975 Q3 2019 Q3 2018 4 908 3 860 Book/Bill Q3: 0.91 3 024 1 840 Order intake Q3: MNOK 3 860 -33.
Slide 9: Q3 KM Order intake
31% 39% GLOBAL CUSTOMER SENSORS & SUPPORT (KM excl CM)* ROBOTICS** Q3 2019 KM excl. CM Q3 30% KM Order intake INTEGRATED SOLUTIONS 6% SYSTEMS & DECK Order intake Q3: MNOK 3 860 MACHINERY 21% KM ex. CM Q3: MNOK 2 020 SENSORS & ROBOTICS** (-33.2% YoY) 14% PROPULSION & CM Q3: MNOK 1 840 ENGINES Q3 2019
Slide 10: Q3 KM Revenues
CM KM ex. CM 4 255 Q3 KM Revenues* 2 089 1 815 1 798 +20.5% Revenues Q3: MNOK 4 255 KM excl. CM Q3: MNOK 2 166 (Organic growth +20.5% YoY) 2 166 CM Q3: MNOK 2 089 (+5.5% YoY**) Revenues YTD: MNOK 10 549 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 (Organic growth +16.8% YoY) 2017 2017 2017 2017 2018 2018 2018 2
Slide 11: Q3 KM EBITDA
IFRS 16 effects EBITDA Margin ex. IFRS Margin inc. IFRS 650 * Q3 600 8.9% 11.4% 550 KM EBITDA 500 7.0% 450 4.4% MNOK 400 EBITDA incl. IFRS 16 271 350 EBITDA excl. IFRS 16 189 300 271 Restructuring- and 250 205 82 integration costs 152 200 161 150 Adjusted EBITDA 341 100 189 50 CM 47 0 Q1 Q2 Q3 Q4 Q1
Slide 12: Commercial Marine Q3 order intake and revenues
Order intake Revenues 3 000 2 500 2 404 1 980 2 089 2 500 2 000 2 000 1 840 1 500 1 500 1 000 Q3 1 000 500 500 Development 0 0 Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3 Commercial Marine* 2018 2019 2018 2019 Special items 100 Adjusted EBITDA 78 2019 Q3 52 50 Integration costs 96 47 0 22 Commercial Marine
Slide 13: Q3 Status integration
Integration costs 450 Q3 111 Status integration Commercial Marine 229 450 Selected ongoing actions • IT & Infrastructure • Branding • Legal • Harmonization & Streamlining 110 • Organizational design • Restructuring costs of MNOK 56 in Q3, Act2018 Act2019 Remaining TOT MNOK 87 YTD WORLD CLASS – Throu
Slide 14: Kongsberg Defence & Aerospace Finance
▪ Kongsberg Defence & Aerospace ▪ (KDA) Kongsberg Defence & Aerospace Finance WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information 14
Slide 15: Solid pick up in order intake, major improvement in backlog
Solid pick up in order intake, major improvement in backlog Order backlog (KDA) Order intake Order backlog 20 027 20 027 55% 2021-> 10 867 40% 2020-> 33% 2020 43% 2019 10 867 11% 2019 17% 2018 Q3 2019 Q3 2018 8 476 8 254 Book/Bill Q3: 5.23 Book/Bill YTD: 2.84 +549% Order intake YTD: MNOK 13 551 1 27
Slide 16: Q3 KDA Order intake
15% PROTECH SYSTEMS 6% AEROSTRUCTURES 5% MISSILE SYSTEMS Q3 2019 5% Q3 SPACE & SURVEILLANCE 63% KDA Order intake 6% DEFENCE INTEGRATED DEFENCE SYSTEMS COMMUNICATIONS Order intake Q3: MNOK 8 254 15% 16% (+549% YoY) PROTECH SYSTEMS AEROSTRUCTURES Order intake YTD: MNOK 13 551 (+165% YoY) 7% MISSILE SY
Slide 17: Q3 KDA Revenues
KAMS KDA 1 578 Q3 KDA Revenues 1 281 +23.1% 1 180 Revenues Q3: MNOK 1 578 1 452 (Organic growth +23.1% YoY) Revenues YTD: MNOK 4 776 (Organic growth +9.5% YoY) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 WORLD CLASS – Through people, technology and dedicat
Slide 18: Q3 KDA EBITDA
IFRS 16 effects EBITDA Margin ex. IFRS Margin inc. IFRS 650 20 600 15.7% 15 Q3 550 10.2% 12.8% 500 KDA EBITDA* 450 4.8% 10 400 5 350 0 EBITDA Q3: MNOK 248 / MNOK 202* 300 EBITDA-margin: 15.7% / 12.8%* 248 250 -5 68% YoY increase 46 200 150 -10 120 EBITDA YTD: MNOK 709 / MNOK 592* 100 202 EBITDA-marg
Slide 19: 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 20: Q3 Strong balance sheet
Q3 Q2 2018 2017 2019 2019 Q3 Gross interest bearing debt 4 090 4 349 4 332 3 340 Strong balance sheet Cash and short-term deposits 3 667 4 522 10 038 2 956 Net interest bearing debt 423 -173 -5 706 384 Repayment bond KOG07 – MNOK 250 Equity ratio 35.7% 35.7% 45.7% 35.6% 38.1%* 38.2%* ROACE 9.5% 11.0
Slide 21: Q3 NWC
Net Working Capital – Kongsberg Maritime (MNOK) 3 000 25% 19,5 % 2 500 20% 16,2 % 2 000 15% 11,7 % 1 500 10,5 % 8,7 % * 9,1 %* Q3 1 000 1 674 1 202 1 430 1 545 10% 5% NWC 500 880 817 0 0% 2016 2017 2018 Q1 2019 Q2 2019 Q3 2019 *Includes Proforma Revenue for Commercial Marine. Net Working Capital – K
Slide 22: Development in cash YTD
Development in cash YTD Operating activities: Investing activities: Financing activities: MNOK -231 MNOK -5 103 MNOK -1 103 1 428 10 038 123 -1 680 -23 -79 -6 371 -4658 66 3 667 -445 -448 -304 -238 -86 -27 Cash 1.1 EBITDA Change in Income Dividend Others Acquisitions Investm. Dividend IFRS16 Debt In
Slide 23: CM final purchase price
37 5 145 CM final purchase price -283 4 862 -320 Final closing accounts, October 2019 Prelim. PP at Cost coverage, Price reduction final Final purchase prise closing (Q1) part of settlment closing accounts *) exclusive IFRS 16 effects. WORLD CLASS – Through people, technology and dedication KONGSBER
Slide 24: Business update
Business update Geir Håøy, President & CEO WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information
Slide 25: Business update Kongsberg Defence & Aerospace
Business update Kongsberg Defence & Aerospace Photo: Forsvaret Increased Record high New division: activity order backlog Land Systems • Merger of Protech • Activity ramping up for • BNOK 20 + Systems and Defence both missiles, • Solid coverage for growth Communications divisions aerostructures, NAS
Slide 26: NASAMS Qatar / CROWS
NASAMS Qatar / CROWS NASAMS QATAR – Largest contract in KONGSBERG ever (BNOK 5.6) CROWS – Highest order intake (LTM BNOK 3.1) since 2010 WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information 26
Slide 27: Littoral Combat Ship successfully launches NSM
Littoral Combat Ship successfully launches NSM The Independence-variant littoral combat ship USS Gabrielle Giffords successfully demonstrated the capabilities of the Naval Strike Missile Oct. 1 during exercise Pacific Griffin. WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIE
Slide 28: Business update Kongsberg Maritime
Business update Kongsberg Maritime Another strong quarter LNG increasingly Extensive Full picture- important delivery for expedition cruise • Revenue growing due to • ~50 % growth in new build ship “Innovation” strong order intake the orders YTD, Expecting • To be built on Damen past year close to B
Slide 29: Solid and diversified KM order intake
37% 11% SUBSEA OTHERS* YTD Q3 2018 22% OPU & LNG Solid and diversified KM order intake 17% SEABORN & PAX 13% OFFSHORE G77FI-YMUGQ-A9VXF-WGVL4-3T4N3 MNOK 11 511 order intake YTD 2019 10% Order intake KM ex CM at Q3 2019: MNOK 7 217 35% OTHERS** SUBSEA Order intake KM ex CM at Q3 2018: MNOK 7 038 YTD
Slide 30: Business update Kongsberg Digital and Patria
Development KDI MNOK LTM Order Intake LTM Revenues 1 000 Solid revenue increase and order intake past year 800 | Book/bill 1.07 YTD, 0.99 in Q3 600 Breakthrough contract October 2019 400 Business update Continued roll out of Vessel Insight 200 Kongsberg Digital 0 and Patria PATRIA Q3 revenues at MEU
Slide 31: Kongsberg Digital and Shell signs agreement
Kongsberg Digital and Shell signs agreement on digitalization partnership of the Nyhamna gas facility WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information 31
Slide 32: Value capture
Value capture WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information
Slide 33: Value Capture program with strong progress
Value Capture program with strong progress Recap: Overview of cost improvements and synergies Status per Q3 Planned annual P&L effect relative to 2018, MNOK • Value Capture program with strong progress, concerning both realization of savings, execution of measures and ongoing ~500 identification of
Slide 34: Realized savings YTD September of ~MNOK 170
Realized savings YTD September of ~MNOK 170 Realized cost savings P&L effect relative to 2018, MNOK Realized Area Comments to realized savings YTD Sept. Footprint & delivery streamlining 32 Initial effects of co-locations and optimization of delivery organizations Savings driven by more cost efficie
Slide 35: Outlook
Outlook KM KDA KDI 2019 revenues will grow compared Current backlog founds solid growth Continue development to secure a to 2018. both in 2019 and 2020 independent global number one position of new contracting Good order backlog and some Accelerating our campaigns related improvement in lifecycle bu
Slide 36: Q&A
Q&A WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information
Slide 37: Appendix
Appendix WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information
Slide 38: Q3 IFRS 16 effects
Q3 2019 KOG incl. KM KDA Others KOG ex. IFRS 16 IFRS 16 Revenues 6 046 - - - 6 046 Q3 EBITDA 535 -82 -46 10 417 IFRS 16 effects EBIT 230 -14 -6 -1 209 EPS 0.62 - - - 0.72 YTD 2019 KOG incl. KM KDA Others KOG ex. IFRS 16 IFRS 16 Revenues 15 917 - - - 15 917 EBITDA 1 428 -215 -117 30 1 126 EBIT 629 -3
Slide 39: Q3 IFRS 16 adjustments
~450 ~350 Q3 ~100 ~150 IFRS 16 adjustments -~50 EBITDA effect Depreciation EBIT effect Interest leasing EBT effect Estimated full year leasing effects from IFRS16 ~450 adjustments (MNOK) ~270 ~120 ~100 ~40 EBITDA effect Depreciation KM Depreciation KDA Other/Eliminations EBIT WORLD CLASS – Through p
Slide 40: Q3 Debt position
1 500 1 000 550 450 500 Q3 0 0 Debt position 2020 2021 2022 2023 2024 2025 2026 Healty maturity profile 1 898 1 642 1 991 Repayment of bond KOG07 384 601 707 336 423 MNOK 250 September 2019 -173 -5 706 -6 041 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Bonds - Maturity profile (MNOK) 2017 2017 2017 2017 2018 2
Slide 41: Thanks
Thanks WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information