Kitron Asa · OSL:KIT

Kitron Asa — Q4 2017 Earnings Presentation

20 slides from Kitron Asa's earnings presentation, Feb 16, 2018

1. Slide 1: Whole year and Q4 results 2017

   Whole year and Q4 results 2017 Peter Nilsson, CEO Cathrin Nylander, CFO 16 February, 2018

2. Slide 2: Financial highlights Q4: Strong growth and profitability

   Financial highlights Q4: Strong growth and profitability NOK mill.  Strong revenue growth Q4 2017 vs Q4 2016  Underlying growth 12.5% Revenue 667,6  17,1 %  EBIT margin 6.5% (6.0%) EBIT 43,1  26,3 %  Solid order backlog and high order intake Order backlog 1306,4  28,2 %  Net working capital

3. Slide 3: Financial highlights whole year: Strong growth and profitability

   Financial highlights whole year: Strong growth and profitability NOK mill. 2017 vs 2016  Strong revenue growth  Underlying growth 16.9% Revenue 2436,7  16,4 %  Strong profitability  EBIT margin 6.1% (5.6%) EBIT 148,7  26,2 %  Solid order backlog  Underlying growth 24% Order backlog 1306,4 

4. Slide 4: Important agreements in the fourth quarter

   Major new orders: Important agreements in the fourth quarter  Agreement related to manufacturing of medical equipment In December, Kitron was awarded a contract from a leading medical supplier for a period of two years from 2018. The expected turnover linked to the contract is between NOK 100 milli

5. Slide 5: Active management of component availability

   Active management of component availability  The shortage of electronic components made 2017 a challenging year for many companies in the Electronics Manufacturing Services business. Kitron’s swift and systematic approach combined with our preferred partner program has prevented us from having any

6. Slide 6: Adjusted dividend policy and dividend

   Highlights: Adjusted dividend policy and divided  Following a fundamental strengthening of Kitron’s business, with an improved profitability and successful programs to improve the working capital, the Board has decided to adjust the dividend policy “Kitron’s dividend policy is to pay out an annual

7. Slide 7: Financial statements Whole year and Q4 2017

   Financial statements Whole year and Q4 2017 7

8. Slide 8: Revenue Q4: Strong growth in Industry

   Revenue Q4: Strong growth in Industry Q4 2017 vs Q4 2016 Share of total revenue 570 585 649 535 668 Industry 46,6 %  40,1 % Defence/Aerospace 5,8 %  25,1 % Medical devices -1,5 %  20,7 % 17.1 % Energy/Telecoms 2,0 %  12,5 % NOK million Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Offshore/Marine 45,5

9. Slide 9: Revenue Whole year: Good growth in several sectors

   Revenue Whole year: Good growth in several sectors 2017 vs 2016 Share of total revenue Revenue whole year Industry 36,5 %  38,5 % 1 952 2 093 2 437 Defence/Aerospace 14,0 %  26,9 % Medical devices -6,1 %  18,7 % 16.4 % Energy/Telecoms 17,7 %  14,6 % NOK million 2015 2016 2017 Offshore/Marine -26

10. Slide 10: Revenue by country Q4: Continued strong growth in Lithuania and China

    Revenue by country Q4*: Continued strong growth in Lithuania and China Q4 2017 vs Q4 2016 Share of total revenue  Q4/2016 222 Q4/2017 Norway -5,2 % 26,8 % 202 192 193 176  160 Sweden 9,6 % 27,1 % 106 Lithuania 38,5 %  31,1 % 84 Others 27,1 %  14,9 % NOK million Norway Sweden Lithuania Others 10

11. Slide 11: Revenue by country whole year: Strong growth in Lithuania and Sweden

    Revenue by country Whole year*: Continued strong growth in Lithuania and Sweden 2017 vs 2016 Share of total revenue 818  767 2016 738 Norway -3,8 % 27,7 % 708 2017 636 593 Sweden 19,4 %  26,6 % 357 395 Lithuania 28,7 %  30,8 % Others 10,7 %  14,9 % NOK million Norway Sweden Lithuania Others 11

12. Slide 12: Quarterly EBIT: Strong profits

    Quarterly EBIT: Strong profits  Improved efficiency 45,5 43,1  Inefficiencies due to relocations in Q1 and 34,1 Q4 2016 and Q1 2017 33,6 33,1 30,8 30,1 29,2  Profitability in Q1 2016 20,5 includes negative one- offs of MNOK 5 NOK million 28.2 % Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2

13. Slide 13: EBIT by country Q4: Lithuania drives the improvement

    EBIT by country Q4: Lithuania drives the improvement EBIT*  Lithuania show strong EBIT improvement, both in value and 21.8 margin, and drives the improvement for the whole group 13.1 13.3  In all, sites ended in line with 11.0 9.7 9.9 expectations 7.0 5.0  Group cost re-alignment in Q4 Q4 2016 Q4

14. Slide 14: EBIT by country whole year: Profit improvements

    EBIT by country Whole year: Profits improvements EBIT*  Norway 69.1  Decline in revenue, improved margins due to cost reductions and efficiency improvements 48.3  Sweden 38.8  Whole year affected by move in first 31.7 34.6 quarter. Efficiency improvements during 27.5 28.5 26.7 the year  Lithuan

15. Slide 15: Balance sheet: Strong cash flow

    Balance sheet: Strong cash flow Operating cash flow NOK million 90.8  Cash flow 63.1  Q4 Cash flow MNOK 90.8 (36.3) 36.4  YTD Cash flow MNOK 160.8 (108.5) 22.4 149.7 %  Low financial gearing -15.5 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017  NIBD / EBITDA 0.9 (1.3) Net working capital  Working cap

16. Slide 16: Market development

    Market development www.kitron.com

17. Slide 17: Order backlog: Solid order backlog

    Order backlog: Solid order backlog Order backlog Order backlog MNOK NOK million  1306 vs. 1019 last year. Growth of 1 306 28%, underlying growth 24% 1 059  Defence: 504 +12% (449) 1 019 1 018 1 008  Medical: 158 +13% (140)  Industry: 514 +70% (302)  Energy/Telecom: 110 -5% (116)  Offshore: 21

18. Slide 18: Outlook

    Outlook www.kitron.com

19. Slide 19: Outlook

    Outlook  For 2018, Kitron expects revenue to grow to between NOK 2 500 and 2 700 million. EBIT margin is expected to be between 6.1 and 6.5 per cent.  The growth is primarily driven by customers in the Industry sector and the Energy / Telecom sector  The profitability is driven by cost reduction

20. Slide 20: Thank you!

    4 Kitron Your ambition. Our passion. Thank you!

Kitron — Q4 2017 Earnings Presentation on 6ix