Kongsberg Automotive Asa · OSL:KOA
Kongsberg Automotive Asa — Kongsberg Automotive New — Q3 2024 Earnings Presentation
33 slides from Kongsberg Automotive Asa's earnings presentation, Nov 5, 2024
Slide 1: Kongsberg Automotive Q3 2024
KONGSBERG AUTOMOTIVE Q3 2024 NOVEMBER 05, 2024
Slide 2: Forward-Looking Statements and Non-IFRS Measures
Kongsberg Automotive Q3 2024 Earnings Call FORWARD-LOOKING STATEMENTS AND NON-IFRS MEASURES FORWARD-LOOKING STATEMENTS This presentation contains certain “forward-looking statements”. These statements are based on management’s current expectations and are subject to risks, uncertainty and changes in
Slide 3: Today's Presenters and Agenda
Kongsberg Automotive Q3 2024 Earnings Call TODAY’S PRESENTERS AGENDA EXECUTIVE SUMMARY MARKET UPDATE FINANCIAL UPDATE SUMMARY Q&A LINDA NYQUIST-EVENRUD CHRISTIAN JOHANSSON CEO & PRESIDENT CFO KONGSBERG AUTOMOTIVE KONGSBERG AUTOMOTIVE // // 33
Slide 4: Executive Summary
EXECUTIVE SUMMARY KONGSBERG AUTOMOTIVE KONGSBERG AUTOMOTIVE // // 44
Slide 5: Increased Efficiency Offsetting Lower Volumes
Executive summary INCREASED EFFICIENCY REVENUES OFFSETTING LOWER VOLUMES 220.6 211.0 212.1 209.3 181.6 Q3 Q4 Q1 Q2 Q3 2023 2024 > Q3 revenues down 16.9%1 from Q3 2023 due to lower demand in automotive markets 10% 4.4 % 4.8 % 3.1 % > Lost contribution due to lower volumes and higher 0.6 % 5% 6.4 warr
Slide 6: Revenues Year-to-Date Impacted by Weak Automotive Markets
Executive summary REVENUES YEAR-TO-DATE IMPACTED BY WEAK AUTOMOTIVE MARKETS EUROPE 47%* NORTH AMERICA 37%* SOUTH AMERICA 4%* CHINA 9%* ASIA (EXCL. CHINA) 3%* 284.1 MEUR 222.3 MEUR 24.1 MEUR 56.1 MEUR 16.4 MEUR -13.2% -9.8% +19.9% -11.2% +10.0% *OF KA REVENUES CHANGE IN REVENUES AT CONSTANT CURRENCIE
Slide 7: Increased Operational Efficiency
Executive summary INCREASED OPERATIONAL EFFICIENCY MEASURES FOR 2024 IMPROVING EARNINGS > OVERHEAD COST REDUCTION >17 M€ > SUPPORT FUNCTION OPTIMIZATION > GLOBAL FOOTPRINT ADJUSTMENT ONGOING MEASURES IMPROVING EARNINGS > REDUCTION OF ~1 50 POSITIONS ~10 M€ > ADDITIONAL ANNUAL SAVINGS OF AT LEAST MEU
Slide 8: Assessing Further Optimization Measures
Executive summary ASSESSING FURTHER OPTIMIZATION MEASURES HEADQUARTERS: REVIEWING GLOBAL FOOTPRINT KONGSBERG, NORWAY AMERICAS: > Europe CANADA > APAC - H1 2025 … ASIA: USA CHINA > Americas - H2 2025 … MEXICO INDIA BRAZIL SOUTH KOREA CONTINUED GLOBAL AND REGIONAL REBALANCING EUROPE: > Production – mo
Slide 9: Revenues and EBIT Guidance for 2024 Revised
Executive summary REVENUES AND EBIT GUIDANCE FOR 2024 REVISED, NEW BUSINESS WINS GUIDANCE MAINTAINED REVENUES, MEUR EBIT, MEUR NBW, MEUR BOOK-TO-BILL 885 35 830 28 5 790 790 161 760 3 23 130 120 125 18 6 120 25 30 5 17 17 13 1.1 >1,500 >1.5 724 670 700 640 665 989 1.1 -37 2023 2024 2024 (REVISED) 20
Slide 10: New Business Wins of EUR 1.23bn Year to Date
Executive summary NEW BUSINESS WINS OF EUR 1.23BN YEAR TO DATE SUPPORTING LONG-TERM AMBITIONS BOOK-TO-BILL PERFORMANCE, MEUR Revenues (LTM) NBW Incremental (lifetime sales, LTM) NBW Extensions (lifetime sales, LTM) Book-to-bill ratio 2.1 2.0 1.4 1,765 1,644 1.1 0.9 0.8 0.8 0.8 0.8 0.7 785 1,241 677
Slide 11: New Business Wins Q3 2024 Lifetime Revenues
Executive summary NEW BUSINESS WINS Q3 2024 LIFETIME REVENUES, MEUR PER BUSINESS SEGMENT PER AREA 8.9 9.0 29.9 3.5 86.1 86.1 MEUR 55.8 MEUR 56.2 8.9 DRIVE CONTROL SYSTEMS TRUCK, TRAILER, BUS & COACHES AFTERMARKET FLOW CONTROL SYSTEMS PASSENGER CARS AGRICULTURE & CONSTRUCTION INDUSTRIAL KONGSBERG AUT
Slide 12: Q3 New Business Win on Raufoss ABC System Air Couplings
Executive summary Q3 NEW BUSINESS WIN ON RAUFOSS ABC SYSTEM AIR COUPLINGS OVER MEUR 13.5 IN ESTIMATED LIFETIME REVENUE ANNOUNCED ON AUGUST 29, 2024 ASSEMBLY SECURITY SUSTAINABILITY INTEGRATED ASSEMBLY SIGNAL > 100% RECYCLABLE COMPOSITE MATERIALS FOR OPERATOR AND SAFETY > PRODUCED WITH 100% RENEWABLE
Slide 13: Strategy for Profitable Growth
Executive summary STRATEGY FOR PROFITABLE GROWTH REVENUES, MEUR PASSENGER COMMERCIAL OTHER* VEHICLES VEHICLES 1.170 >1,000 DIVESTMENTS CORE BUSINESS >50% 760-790 2024E DRIVELINE NON-CORE FCS REVENUE ~31% ~53% ~16% INTERNAL WIND DOWN CORE BUSINESS FCS 2028E DCS REVENUE 15-20% >65% 15-20% DCS 2021 202
Slide 14: Higher-Margin Products Driving Profitability
Executive summary HIGHER-MARGIN PRODUCTS DRIVING PROFITABILITY AIR COUPLINGS GEAR CONTROL UNITS ELECTRIC ACTUATORS > Safe, flexible, and sustainable system > Proven track record and very > Scaling the existing know-how successful order intake to PV, CV and Off-highway > Expanding the technology to o
Slide 15: Product Portfolio Well-Aligned with Market Trends
Executive summary PRODUCT PORTFOLIO WELL-ALIGNED WITH MARKET TRENDS DRIVE CONTROL SYSTEMS FLOW CONTROL SYSTEMS MEGA TRENDS: MEGA TRENDS: MEGA TRENDS: MEGA TRENDS: MEGA TRENDS: REGULATIONS: REGULATIONS: REGULATIONS: REGULATIONS: REGULATIONS: POWERTRAIN AND OFF-HIGHWAY AIR FLUID AND THERMAL INDUSTRIAL
Slide 16: Market Update
MARKET UPDATE KONGSBERG AUTOMOTIVE KONGSBERG AUTOMOTIVE // // 16 16
Slide 17: Commercial Vehicle and Passenger Car Market Presently Weak
Market update MARKET DEVELOPMENT GLOBAL COMMERCIAL VEHICLES PRODUCTION, thousand units COMMERCIAL VEHICLE AND PASSENGER CAR MARKET CHINA GLOBAL EXCL CHINA ARE PRESENTLY WEAK -6.8% 873 857 858 892 863 767 815 759 786 706 CHINA NORTH AMERICA 554 -7.6% 512 Q vs. Q ’24 vs. ‘23 Q vs. Q ’24 vs. ‘23 EUROPE
Slide 18: Q3 2024 vs Q3 2023: KA vs. Market
Market update Q3 2024 VS Q3 2023: KA V. MARKET HEADWINDS FROM DECLINING GLOBAL COMMERCIAL VEHICLES PRODUCTION IN KA’S KEY REGIONS EUROPE 44% OF KA SALES CHINA NORTH AMERICA 11% OF KA SALES KA*** MARKET 37% OF KA SALES KA*** MARKET KA*** MARKET CV* -14.2% -17.8% CV* +3.0% -5.0% -21.2% -11.3% LV* -30.
Slide 19: Market Forecasts
Market update MARKET FORECASTS FOLLOWING NEGATIVE DEVELOPMENT IN 2024, KA KEY MARKETS WILL REMAIN FLAT IN 2025, THERAFTER UNDERLYING GROWTH IN THE COMMERCIAL VEHICLE MARKET WILL RETURN EUROPE CHINA NORTH AMERICA 1,470 744 32.3 590 590 1,288 533 585 598 1,140 GLOBAL 18.2 15.7 30.1 15.5 15.4 17.2 17.3
Slide 20: Financial Update
FINANCIAL UPDATE KONGSBERG AUTOMOTIVE KONGSBERG AUTOMOTIVE // // 20 20
Slide 21: Revenues: Lower Demand in Commercial Vehicle Market
Financial update REVENUES LOWER DEMAND IN COMMERCIAL VEHICLE MARKET DAMPEN LAST YEARS GROWTH IN CORE BUSINESS REVENUES 1 , MEUR CORE2 12M Trend 12M Trend (CORE excl. BRP) NON-CORE 12M Trend (excl. BRP) 896.2 905.8 915.7 914.6 889.2 871.1 885.9 884.9 868.2 847.4 853.0 790.6 817.7 814.0 694.0 711.7 71
Slide 22: EBIT: Earnings Improvement Trend Reversed in Q3
Financial update EBIT EARNINGS IMPROVEMENT TREND REVERSED WITH A DIFFICULT Q3 AND ONE-TIME EFFECTS IN Q3 2023 EBIT 1 , MEUR CORE2 NON-CORE 12M Trend (excl. BRP) [MEUR] 9.3 7.4 2.8 5.7 2.5 -2.9 -10.6 -13.2 -19.7 10.1 9.7 5.1 5.8 6.4 3.6 5.5 1.7 5.7 4.5 5.0 1.1 3.9 2.4 1.9 0.2 0.2 0.9 -0.7 -0.9 -0.8 -
Slide 23: Flow Control Systems Business Area Update
Financial update FLOW CONTROL SYSTEMS BUSINESS AREA UPDATE REVENUES, MEUR 82.7 Q3 2024 79.7 75.2 > Revenues: 74.5 71.4 > FTS revenues held up well in a weak market > Couplings’ revenues in Europe, coming off high levels in 2023 due to inventory build-up, partially offset by higher volumes in Asia an
Slide 24: Drive Control Systems Business Area Update
Financial update DRIVE CONTROL SYSTEMS BUSINESS AREA UPDATE REVENUES, MEUR Q3 2024 101.3 101.0 95.6 92.5 > Revenues: > Revenues down -19,4 % versus high levels in 80.9 Commercial vehicle deliveries in Q3 2023 > Significant inventory adjustments made by Tier 1 customers in North America due to market
Slide 25: EBIT Bridge (Q3 & YTD)
Financial update EBIT BRIDGE (Q3 & YTD) SAVINGS IN ADMIN EXPENSES & REDUCTION IN FIXED COSTS FULLY OFFSET LOWER MARKET DEMAND EBIT (Q3), MEUR 2023 SPECIAL ITEMS (ONE-OFF ITEMS) 9.7 > Q3: MEUR 5.7 of retrospective customer -2.4 reimbursements partially offset by a one-time adjusting 7.3 item of MEUR
Slide 26: Net Income Bridge (Q3 & YTD)
Financial update NET INCOME BRIDGE (Q3 &YTD) STRONG IMPROVEMENT YEAR TO DATE, NEGATIVE IMPACT FROM EXCHANGE RATE EFFECTS IN Q3 NET INCOME (Q3), MEUR 5.8 NET INTERESTS > Q3 & YTD: Interests on Account Receivables -8.6 Securitization facility and less interest income -0.7 OTHER FINANCIAL ITEMS -0.6 >
Slide 27: Free Cash Flow
Financial update FREE CASH FLOW CASH FLOW FROM OPERATIONS STRONGLY IMPROVED NEGATIVE CURRENCY EFFECTS IMPACT Q3 FREE CASH FLOW 1 , MEUR 12M Trend3 FREE CASH FLOW Q3 2024 YTD 2024 Operating activities +11.9 +18.7 +2.5 +4.8 +4.5 -1.3 Investing activities -5.1 -14.5 -4.3 -5.2 Financing activities -7.6
Slide 28: Q3 2024 Liquidity Development
Financial update Q3 2024 LIQUIDITY DEVELOPMENT LIQUIDITY DEVELOPMENT 1 , MEUR CASH UNUTILIZED SECURITIZATION FACILITY UNDRAWN RCF -1.6 -6.8 +12.3 -5.1 -2.5 +8.1 -3.3 100.8 -0.6 -1.2 -4.8 85.8 95.3 80.3 15.0 15.0 Q2 2024 EBITDA Change in Tax payments Other operating Investment Interests on bond IFRS
Slide 29: Financial Ratios
Financial update FINANCIAL RATIOS Incl. IFRS 16 effect LEVERAGE RATIO, NIBD 1/ ADJUSTED EBITDA, LTM ROCE 2, %, LTM 1.7 0.8 -0.8 2.1 -3.9 1.8 1.8 1.7 -5.9 1.5 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 EQUITY RATIO, % CAPITAL EMPLOYED 3 , MEUR 33.4 34.3 34.6 361 3
Slide 30: Summary
SUMMARY KONGSBERG AUTOMOTIVE KONGSBERG AUTOMOTIVE // // 30 30
Slide 31: Summary
Kongsberg Automotive Q3 2024 Earnings Call SUMMARY > Cost initiatives helping offset lower demand > Further steps to improve efficiency, profitability, and competitiveness > Record New Business Wins YTD with higher-margin products > Positioned in markets with strong underlying growth > Well prepared
Slide 32: Q&A
Q&A ON THE AGENDA FOR Q4 2024 AND Q1 2025: > Breakfast meeting December 17, 2024 > Q4 report 2024, February 25, 2025 > Annual Report 2024, March 27, 2025 KONGSBERG AUTOMOTIVE KONGSBERG AUTOMOTIVE // // 32 32
Slide 33: Mobility Solutions for the Future
MOBILITY SOLUTIONS FOR THE FUTURE
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