Kitron Asa · OSL:KIT
Kitron Asa — Q1 2014 Earnings Presentation
17 slides from Kitron Asa's earnings presentation, Apr 23, 2014
Slide 1: Q1 results 2014
Q1 results 2014 April 23 2014 Dag Songedal, Interim CEO Cathrin Nylander, CFO
Slide 2: Continued revenue growth, but profitability remains challenging
Financial highlights for Q1: Continued revenue growth, but profitability remains challenging NOK mill. Q1 2014 vs Q1 2013 • Revenue growth • Exchange rate development Revenue 435,8 15,2 % strengthens underlying growth EBIT -50,1 % • Margin pressure 2,0 • Focus on customer profitability Order b
Slide 3: Key contracts secured
Major new orders: Key contracts secured • Kitron signs a new two-year frame agreement with Sensys Traffic • Estimated value of SEK 10-30 million during 2014-2015, with options of prolonging • Delivery of automatic speed surveillance and traffic light systems • Production in Jönköping • Order from Ko
Slide 4: Operational profitability measures
Operational information: Operational profitability measures • Downsizing of Arendal operations • The Norwegian operations in Arendal will be downsized by 60-100 employees during 2014, compared to the level at year-end 2013. Part of the reduction in employees took effect in March, and further cost re
Slide 5: Financial statements Q1 2014
Financial statements Q1 2014
Slide 6: Strong development in Defence/Aerospace and Energy/Telecoms
Revenue: Strong development in Defence/Aerospace and Energy/Telecoms Q1 2014 vs Q1 2013 Share of total revenue 430 476 Offshore/Marine 13,2 % 19,0 % 378 436 347 Medical equipment 12,5 % 24,6 % 15.2 % Defence/Aerospace 27,1 % 20,1 % Energy/Telecoms 23,2 % 11,4 % NOK million Q1 2013 Q2 2013 Q3
Slide 7: Growth in all countries
Revenue by country*: Growth in all countries Q1 2014 vs Q1 2013 Share of total revenue 227 219 Norway 3,2 % 48,3 % Sweden 26,4 % 22,8 % 107 Q1/2013 95 Q1/2014 85 82 Lithuania 16,0 % 20,2 % 41 NOK million 34 Others 17,9 % 8,7 % Norway Sweden Lithuania Others * Before group entities and elimin
Slide 8: Significant reduction in EBIT
EBIT: Significant reduction in EBIT • Profitability reduction 9,3 • Change in revenue mix 7,6 • Margin pressure, both on existing and new customers 4,3 3,9 • Cost reduction measures NOK million initiated 2,0 • Downsizing of Arendal - 48.7 % • Sourcing Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Margin 1
Slide 9: EBIT by country: Norway profitability under pressure
EBIT by country: Norway profitability under pressure EBIT* • Norway: Change in revenue mix 6,3 NOK million 5,7 towards lower-margin products • Sweden: Revenue increase 3,0 • Lithuania: Higher revenue, but 1,6 1,7 at lower margins • Other: Accrual for sourcing -0,6 (MNOK 2,0). US and China -1,6 Q1 20
Slide 10: Balance sheet: Negative cash flow
Balance sheet: Negative cash flow Operating cash flow NOK million 54,4 • Reduced profitability and 26,9 - 9.4 % working capital increase -15,9 -17,4 • Cash flow in Q1 seasonally weak -33,5 Net working capital • Working capital increase due to higher inventories NOK million • Inventory increased, but
Slide 11: Market development
4 Kitron Market development www. kitron.com
Slide 12: Order backlog: Reduction in Norway
Order backlog: Reduction in Norway • Reduction within Defence/Aerospace Order backlog and Offshore/Marine segments – NOK million primarily in Norway • The defence orders from Kongsberg reported in April will increase the order backlog for Norway • Energy/Telecom and Medical show 847 growth 757 746 •
Slide 13: Market development: Offshore/Marine, Medical equipment
Market development • Offshore/Marine • Decline in the Norwegian Market • Medical equipment • Positive development in the Swedish market with growth from existing customers • Stable development in Norway
Slide 14: Market development: Defence/Aerospace, Energy/Telecoms
Market development • Defence/Aerospace • Strong growth compared to last year in all our markets • Order backlog reduction in Norway, partly offset by increasing backlog in the US. However, orders reported in April increases the order backlog for Norway. • Energy/Telecoms • Growth from increased dema
Slide 15: Outlook
Outlook
Slide 16: Outlook
Outlook • Kitron expects a positive development in the Swedish and German markets, which suggests growth for the factories in Sweden and Lithuania • Growth is also expected in China and the US, whereas a lower volume is expected in the Norwegian operation • Overall, Kitron expects growth in revenue
Slide 17: Thank you!
Thank you!