Kitron Asa · OSL:KIT
Kitron Asa — Q4 2013 Earnings Presentation
21 slides from Kitron Asa's earnings presentation, Feb 12, 2014
Slide 1: Q4 results 2013
Q4 results 2013 February 12th 2014 Dag Songedal, Interim CEO Cathrin Nylander, CFO
Slide 2: Revenue growth but reduced profitability
Financial highlights for Q4: Revenue growth but reduced profitability NOK mill. Q4 2013 vs Q4 2012 • High activity level • EBIT affected by Revenue 476,3 3,0 % accruals EBIT 4,3 -82,5 % • Positive cash flow even though lower Order backlog 718,1 -7,5 % than last year Operating cash flow 51,0
Slide 3: Key contracts secured in new markets
Major new orders: Key contracts secured in new markets • Kitron signs agreement with Maquet • Extension of existing contract • Deliveries of mechanical and electronic-based products in the Medical segment • Production in Ningbo and Jönköping • Kitron receives the first prototype orders from Cassidia
Slide 4: Change of strategy affects results
Operational information: Change of strategy affects results • Change of strategy regarding distribution centre • The project has proved to be costlier and more complex that originally assumed • Kitron will take other measures in order to achieve the cost savings that the project was meant to deliver
Slide 5: Change in the Board of Directors
Other information: Change in the Board of Directors • Asa-Matti Lyytinen to resign as chairman • Lyytinen has been chairman from November 2010 • Will stay in position until a new chairman is elected • Extraordinary General Meeting to be held at February 21 2014 5
Slide 6: Financial statements Q4 2013
Financial statements Q4 2013
Slide 7: Growth within Defence/Aerospace and Industry
Revenue: Growth within Defence/Aerospace and Industry Q4 2013 vs Q4 2012 Share of total revenue 462 430 378 476 Offshore/Marine -18,4 % 14,9 % 347 3.1 % Medical equipment -7,9 % 27,4 % Defence/Aerospace 34,5 % 24,5 % NOK million Energy/Telecoms -4,3 % 10,6 % Q4 2012 Q1 2013 Q2 2013 Q3 2013
Slide 8: Continued growth in Lithuania
Revenue by country*: Continued growth in Lithuania Q4 2013 vs Q4 2012 Share of total revenue 271 274 Norway 1,0 % 53,2 % Sweden -14,5 % 21,4 % 129 Q4/2012 Q4/2013 110 Lithuania 18,1 % 16,6 % 85 72 46 38 NOK million Others 20,0 % 8,9 % Norway Sweden Lithuania Others * Before group entities an
Slide 9: Significant reduction in EBIT
EBIT: Significant reduction in EBIT • Profitability reduction 24,4 • Accruals related to Distribution Centre • Change in revenue mix • Margin pressure, both on existing and new customers 9,3 7,6 • Cost reduction measures 3,9 NOK million 4,3 initiated • Sourcing - 85.2 % • Continue initiatives starte
Slide 10: Norway profitability under pressure
EBIT by country: Norway profitability under pressure EBIT* • Norway: Change in revenue 19,9 NOK million mix, low-margin products have increased in volume. 10,5 8,0 • Sweden: Lower revenue 4,3 3,9 3,9 • Lithuania: Higher revenue but at lower margins -0,7 • Other: Accrual for Distribution Centre (MNOK
Slide 11: Positive cash flow
Balance sheet: Positive cash flow Operating cash flow NOK million - 39.9 % • Reduction compared to last 84,8 51,0 year 29,2 • Reduced profitability and working -18,1 -33,5 capital increase • Working capital increase Net working capital due to higher inventories NOK million 3,2% • Inventory reduction
Slide 12: Financial highlights 2013
Your ambition. Our passion. < Kitron Financial highlights 2013
Slide 13: Reduction in revenue and margin pressure
Financial highlights for 2013: Reduction in revenue and margin pressure NOK mill. 2013 vs 2012 • Activity level reduction in Sweden Revenue 1631,6 -3,7 % • Growth in Lithuania EBIT 25,1 -65,1 % • Decreased margins • EBIT affected by Order backlog 718,1 -7,5 % accruals in Q4 Operating cash flow
Slide 14: Increased activity during 2nd half of 2013
Revenue 2013: Increased activity during 2nd half of 2013 • Weak first half of 2013, Revenue first half year Revenue second half year 867 second half at same 861 828 823 level as 2012 796 • Defence/aerospace and 809 -0,6 % NOK million - 6.7 % NOK million industry show growth 2011 2012 2013 2011 2012
Slide 15: Market development
Your ambition. Our passion. < Kitron Market development
Slide 16: Reduction in Norway (Order backlog)
Order backlog: Reduction in Norway Order backlog • Reduction within Defence/Aerospace NOK million and Offshore/Marine segments – primarily in Norway. - 7.5 % • Industry segment shows growth • Sweden, Lithuania and US have 847 growth in order backlog compared to 776 757 last year 746 718 Q4 2012 Q1 2
Slide 17: Market development: Offshore/Marine, Medical equipment
Market development • Offshore/Marine • Kitron foresees stable demand at previous levels for the first half of 2014. • Low visibility for second half of 2014 and forward. • Medical equipment • Expects a long-term positive development with customers in Norway, Sweden and Germany. 17
Slide 18: Market development: Defence/Aerospace, Energy/Telecoms, Industry
Market development • Defence/Aerospace • Kitron has had a strong quarter within Defence/Aerospace but expects a more stable level going forward. • Energy/Telecoms • Kitron expects growth within the Energy/Telecoms segment in 2014, primarily driven by larger individual customers and their projects. •
Slide 19: Outlook
Outlook
Slide 20: Outlook
Outlook Kitron expects a positive development in the Swedish and German markets, which suggests growth in the factories in Sweden and Lithuania. Growth is also expected in China, whereas the development in the Norwegian market is more uncertain. 20
Slide 21: Thank you!
Thank you! 21