Kitron Asa · OSL:KIT
Kitron Asa — Q1 2024 Earnings Presentation
14 slides from Kitron Asa's earnings presentation, Apr 25, 2024
Slide 1: 2024 Q1 Presentation
2024 Q1 Presentation Kitron Group | 2024-04-25
Slide 2: CEO comments 2024 outlook
CEO comments 2024 outlook ▪ Strong demand in key areas. These products are built in in Norway, Sweden, and the U.S. leading to an overall growth in these sites by more than 20% in 2024. ▪ However, following a remarkable growth in 2023, the broader market environment is challenging, leading us to rev
Slide 3: Maintaining profitability
Maintaining profitability ▪ To meet the challenges of the market outlook, substantial steps are taken to create a unified "One Kitron" through adopting: o Common business platforms o Streamlining organizational structures o Aligning capacity with demand ▪ Actions will lead to a: o Reduction in force
Slide 4: First quarter sector trends
First quarter sector trends Sector trends 2024-Q1 ▪ Connectivity: Connectivity o Sector decline 18% Expect slow growth o Market saturation and economic downturns affecting spending on returning to the sector new technologies in mid 2024 o Growth on products supporting infrastructure investments. o E
Slide 5: R06 and R12 Forward demand
R06 and R12 Forward demand ▪ Rolling six-month outlook 354 €M o R06 demand relevant considering shorter demand horizon from customers o R06 demand decreases to 354 €M from 386 €M from last quarter o Reduction indicates more uncertain outlook in third quarter ▪ Rolling twelve-month outlook 654€M o R1
Slide 6: First quarter 2024 Highlights
First quarter 2024 Highlights ▪ Revenue: 173.9 -8.8% (190.6) ▪ EBIT: 10.6, -38.9% (17.3) ▪ EBIT margin: 6.1% (9.1%) ▪ EBIT and EBIT % adj for non-recurring items: 15.4, 8.8% ▪ ROOC: 15.4% (28.4%) ▪ Cash Cycle Conversion days: 113 (90) ▪ Operating Cash flow 8.5 (10.5) ▪ NIBD: 123.1 (140.7) ▪ NIBD/EBI
Slide 7: Order backlog
Order backlog ▪ Order backlog: 445.0 €M, -24.1% (585.9 €M) year-over year. Sequentially the order backlog is reduced with 10% compared to the previous quarter. ▪ Strength in the Defence/Aerospace sector connected to heightened defense spending amidst global security concerns, regional conflicts, and
Slide 8: Business sectors
Business sectors ▪ Nordics & North America show 15% growth, increased profits and profit margins at 8.8% ▪ CEE volumes reduced with 12%, profits reduced with 26%, profit margins at Revenue Business Sectors Q1 2024 Q1 2023 Change 31.12.2023 8.5% Nordics & North America 92.0 79.6 12.5 325.0 CEE 61.9 7
Slide 9: Cash flow and working capital
Cash flow and working capital €M ▪ Q1 Cash flow from operating activities Cash Flow Profit before tax Q1 2024 8.6 Q1 2023 16.3 Change -7.7 31.12.2023 64.7 at 8.5 €M (10.6 €M). Depreciations Change in inventory, accounts receivable, 4.7 4.1 0.6 17.6 contract assets and accounts payable -3.1 0.1 -3.2
Slide 10: Ratios
Ratios €M Ratios 31.03.2024 31.03.2023 Change 31.12.2023 R3 NWC % sales 28.0 % 23.7 % 4.3 % 24.4 % R3 ROOC % sales 15.4 % 28.4 % -13.0 % 26.9 % ▪ Net gearing and NIBD/EBITDA 0.65 and 1.5 R3 Cash Cycle Conversion 113 90 23 95 ▪ Adjusted for restructuring- charge Net Interest bearing debt €M 123.1 140
Slide 11: Outlook full-year 2024
Outlook full-year 2024 ▪ In the face of a challenging market, Kitron is preserving its profitability. ▪ Outlook for 2024 has been revised, with an expected decline of about 12% from the previous year, attributed to ongoing reductions in customer orders and forecast cancellations. Revised outlook ▪ F
Slide 12: Key take-ways
Key take-ways ▪ Q1 revenue – markets sector development. Continued strength is Defense and a few product sectors in Electrification and Industry. ▪ Outlook for 2024 has been revised, with an expected decline of about 12% compared to previous year. o Nordics and U.S showing solid growth of 20% for 20
Slide 13: Q&A
Q&A
Slide 14: Appendix: Definition of alternative performance measures
Appendix: Definition of alternative performance measures Order backlog Return on capital employed (ROCE) Cash conversion cycle (CCC) All firm orders and 4 months of committed customers forecast at EBIT/(Total assets - short term debt) Days of inventory outstanding + Days of receivables outstanding –