Kongsberg Gruppen Asa · OSL:KOG
Kongsberg Gruppen Asa — Q2 2019 Earnings Presentation
29 slides from Kongsberg Gruppen Asa's earnings presentation, Aug 28, 2019
Slide 1: Investor Presentation Q2 2019
INVESTOR PRESENTATION Q2 2019 28/08/2019 Geir Håøy, President & CEO Gyrid Skalleberg Ingerø, EVP & CFO Lisa E. Haugan, EVP Finance KM KONGSBERG PROPRIETARY: This document contains KONGSBERG information which is proprietary and confidential. Any disclosure, copying, distribution or use is prohibited
Slide 2: Highlights Q2
HIGHLIGHTS Q2 6 244 9 617 479 7.7% REVENUES NEW ORDERS EBITDA EBITDA MARGIN GROUP: DEFENCE: MARITIME: DIGITAL: • Rolls-Royce Commercial • Strong order-intake with • Strong order intake despite • Growing revenues and Marine acquisition closed both NASAMS Australia challenging markets order intake on
Slide 3: Financial Status
FINANCIAL STATUS Gyrid Skalleberg Ingerø, CFO WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information
Slide 4: IFRS 16 effects
IFRS 16 effects Q2 2019 KOG incl. KM KDA Others KOG ex. IFRS 16 IFRS 16 Revenues 6 244 - - - 6 244 EBITDA 480 -81 -39 11 371 EBIT 160 -13 -6 - 141 EPS 0.40 - - - 0.48 H1 2019 KOG incl. KM KDA Others KOG ex. IFRS 16 IFRS 16 Revenues 9 871 - - - 9 871 EBITDA 893 -132 -72 19 708 EBIT 399 -19 -10 -1 369
Slide 5: H1 2019 revenues, EBITDA and order intake
REVENUES KM MNOK 6 293 (3 706) 9 871 MNOK (7 079) KDA MNOK 3 198 (3 026) EBITDA KM MNOK 311 (249) 708 MNOK (527) KDA MNOK 390 (372) H1 2019 Excl. IFRS 16 EBITDA MARGIN KM 4.9% (6.7%) 7.2% (7.4%) KDA 12.2% (12.3%) ORDER INTAKE KM MNOK 7 651 (4 007) 13 383 MNOK (8 238) KDA MNOK 5 297 (3 843) WORLD CLA
Slide 6: Special items
Special items Kongsberg Maritime EBITDA Q2 EBITDA H1 765 KOG 708 31 107 133 456 368 KM 311 31 KOG 371 54 209 KM 124 KDA + OTHERS 397 397 KDA + OTHERS 247 247 Reported Integration Restructuring "Clean" Reported Profit from Integration Restructuring "Clean" EBITDA* Costs costs EBITDA EBITDA* sale of C
Slide 7: Underlying/reported performance, rolling LTM
KOG 20 000 12% 18 000 10,2 % 10% 16 000 9,2 % 14 000 8% 12 000 10 000 6% 8 000 4% 6 000 4 000 2% 2 000 - 0% ROLLING LTM UNDERLYING/REPORTED PERFORMANCE KDA KM 12 000 12 000 16% 14,0 %16% 14% 14% Commercial Marine included from Q2 2019 10 000 10 000 12% 12% 8 000 8 000 10% 10% 8,2 % 6 000 8% 6 000 8%
Slide 8: Revenues Q2
6 244 3 733 UNANIMOUS SUPPORT ON RIGHTS ISSUE 3 525 4 215 FROM NORWEGIAN PARLIAMENT CM KOG ex. CM REVENUES Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2017 2018 2019 Total revenues MNOK 6 244 19.6 % YoY growth excl. CM KM revenues MNOK 4 221 KM excl. CM MNOK 2 192, up 14.8 % YoY CM revenues MNOK 2 029 – on par
Slide 9: EBITDA Q2
Q4 FINANCES - FEBRUARY 14, 2019 371 UNANIMOUS SUPPORT ON RIGHTS ISSUE 241 207 FROM NORWEGIAN PARLIAMENT EBITDA Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2017 2018 2019 5.9 % Overall EBITDA margin (6.8%) 7.3 % EBITDA margin adjusted for special items KM EBITDA MNOK 124 (115) KM excl. CM EBITDA MNOK 187 (8.5%
Slide 10: Status integration
Status integration Commercial Marine INTEGRATION COSTS Selected ongoing actions 450 • IT & Infrastructure • Branding 207 • Legal • Harmonization & Streamlining 450 • Organizational design 133 110 Act2018 Act2019 Remaining TOT WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIET
Slide 11: New orders Q2
NEW ORDERS 9 617 UNANIMOUS SUPPORT ON RIGHTS ISSUE 6 972 FROM NORWEGIAN PARLIAMENT 5 299 CM KOG ex. CM 2 535 NEW ORDERS Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 BOOK/BILL 1.54 2017 / 13 430 2018 / 16 574 2019 / 13 383 MNOK 27 774 total order backlog 37% of order backlog to be delivered in 2019 38% of order
Slide 12: New orders Kongsberg Maritime
22% 39% GLOBAL CUSTOMER SENSORS & SUPPORT* ROBOTICS** Q2 2019 KM excl. CM 39% INTEGRATED SOLUTIONS NEW ORDERS KONGSBERG 7% SYSTEMS & DECK MACHINERY 23% MARITIME SENSORS & ROBOTICS** Q2 2019: MNOK 5 238 19% PROPULSION & Q2 2019 ENGINES KM excl. CM: MNOK 2 593 (+23.1 % YoY) KM incl. CM 18% INTEGRATED
Slide 13: New orders Kongsberg Defence and Aerospace
12% PROTECH SYSTEMS 32% AEROSTRUCTURES 7% MISSILE SYSTEMS Q2 2019 6% SPACE & SURVEILLANCE 42% 1% INTEGRATED DEFENCE SYSTEMS DEFENCE NEW ORDERS COMMUNICATIONS KONGSBERG DEFENCE 14% AND AEROSPACE PROTECH SYSTEMS 32% AEROSTRUCTURES Q2 2019 MNOK 4 160 (+36.6% YoY) 11% MISSILE H1 2019 MNOK 5 297 (+37.8 %
Slide 14: Strong balance sheet
Q2 2019 2018 2017 Gross interest bearing debt 4 349 4 332 3 340 Cash and short-term deposits 4 522 10 038 2 956 STRONG BALANCE SHEET Net interest bearing debt -173 -5 706 384 Equity ratio 35.7%* 45.7 % 35.6 % ROACE 11.0 % 12.5 % 9.0 % *) included IFRS 16 effects. (38.2% excluded). WORLD CLASS – Thro
Slide 15: Development in cash and short term deposits Q2
Operating activities Investing activities Financing/other activities MNOK -461 MNOK -4 843 MNOK -553 479 962 10.389 22 154 161 2 74 4.522 4.850 29 448 10 DEVELOPMENT IN CASH AND SHORT TERM DEPOSITS Q2 Cash 1.4 EBITDA Change in working capital Other operating activities Investments R&D/PPE Acquisitio
Slide 16: Debt position
1 500 BONDS - MATURITY PROFILE 1 000 550 500 450 250 2019 2020 2021 2022 2023 2024 2025 2026 DEBT POSITION HEALTHY MATURITY PROFILE 1 642 NET INTEREST BEARING DEBT 707 -173 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 2017 2018 WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See
Slide 17: Business Update
BUSINESS UPDATE Geir Håøy, President & CEO WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information
Slide 18: Business update Kongsberg Defence & Aerospace
BUSINESS UPDATE KONGSBERG DEFENCE & AEROSPACE Increased Record high Kongsberg Aviation activity order backlog Maintenance Services • Revenue improvement in • NASAMS Australia • Acquisition closed 29 May all divisions, except • F-35 orders • MRO on fighters and Protech Systems • …and continued to gro
Slide 19: F-35 status
F-35 STATUS BOOKED 5,7 BNOK POTENTIAL 16 BNOK JSM POTENTIAL COMES IN ADDITION Program of Record: U.S.A. U.K. Italy Holland Turkey Australia Norway Denmark Canada Israel Japan Korea Belgium Tot. # 3.359 Source: Lockheed Martin 2.456 138 90 37 100 100 52 27 88 50 147 40 34 WORLD CLASS – Through people
Slide 20: Business update Kongsberg Maritime
BUSINESS UPDATE KONGSBERG MARITIME A strong quarter within Global aftermarket Other segments Sensors & Robotics increasingly important • Good revenues as well as • Revenue growing due to • 60% of CM’s revenues in order intake for LNG/OPU strong order intake the Q2 from aftermarket segment past year
Slide 21: Solid and diversified order intake at KM
37% 11% SUBSEA OTHERS** H1 2018 22% OPU & LNG 17% SEABORN & PAX 13% SOLID AND G77FI-YMUGQ-A9VXF-WGVL4-3T4N3 OFFSHORE DIVERSIFIED ORDER 10% INTAKE AT KM 35% SUBSEA OTHERS** TOTAL ORDER INTAKE H1 2018: MNOK 4 007 30% H1 2019 OPU & LNG TOTAL ORDER INTAKE H1 2019: MNOK 5 006* 10% * Does not include orde
Slide 22: Norway's new coast guard vessels
NORWAY’S 3 NEW COAST GUARD VESSELS ▪ The 136 meter long vessels are to be constructed at Vard Langsten, Norway ▪ Significant equipment delivery from Kongsberg Maritime ▪ Contract value of approx. MNOK 280 ▪ To be delivered from KM in 2020, 2021 and 2022 ▪ About 80 % of KMs deliveries to these vessel
Slide 23: Business update Kongsberg Digital and Patria
KDI 40% SUBSEA MNOK Development in LTM Revenues OTHERS* 6% 800 SOLID REVENUE INCREASE PAST YEAR 600 400 | 26% Book/bill 1.11 in Q2, 1.10 in H1 Q1 2018 200 OPU & LNG Experiencing substantial attention on strategic offerings from a broad range of 0 clients June 18 June 19 16% SEABORN & PAX 12% BUSINES
Slide 24: Value Capture
VALUE CAPTURE WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information
Slide 25: Value Capture program progressing according to plan
VALUE CAPTURE PROGRAM PROGRESSING ACCORDING TO PLAN Overview of cost improvements and synergies Overall status Planned annual P&L effect relative to 2018, MNOK • Execution of Value Capture program proceeding according to the plan outlaid in the Q1 2019 Investor Presentation ~475 ~500 • Realized savi
Slide 26: Effects starting to materialize
EFFECTS STARTING TO MATERIALIZE Realized cost savings P&L effect relative to 2018, MNOK Realized Area FY plan Comments to realized savings YTD June Initial effects of co-locations and optimization of Footprint & delivery streamlining 18 90 delivery organizations Savings driven by more cost efficient
Slide 27: Capital Markets Day 2019
CAPITAL MARKETS DAY 2019 Date: 24 September 2019 Time: 12:00 – 15:30 Place: Oslo, Felix Conference Center Strategy and business update, including updated financial targets WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information 27
Slide 28: 2019 Outlook
2019 OUTLOOK KM KDA KDI Good order backlog and some Current backlog indicates growth Solid growth in backlog improvement in lifecycle business independent of new contracting founds some revenue growth Order backlog continued to grow in Accelerating development to secure Integration of CM will impact
Slide 29: Q&A
Q&A WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information