Kitron Asa · OSL:KIT
Kitron Asa — Q2 2018 Earnings Presentation
20 slides from Kitron Asa's earnings presentation, Jul 12, 2018
Slide 1: First half year and Q2 results 2018
First half year and Q2 results 2018 Peter Nilsson, CEO Cathrin Nylander, CFO 12 July, 2018
Slide 2: Financial highlights Q2: Continued growth and solid profitability
Financial highlights Q2: Continued growth and solid profitability ▪ Continued revenue growth NOK mill. Q2 2018 vs Q2 2017 ▪ Highest Q2 revenue ever ▪ Underlying growth 2.6% Revenue 666,6 2,8 % ▪ EBIT margin 6.8% (7.0%) EBIT 45,0 -1,0 % ▪ EPS 0.20 (0.18) NOK Order backlog 1008,9 -0,9 % ▪ Order
Slide 3: Financial highlights First half year: Continued growth and solid profitability
Financial highlights First half year: Continued growth and solid profitability ▪ Strong revenue growth NOK mill. 2018 vs 2017 ▪ Highest H2 revenue ever ▪ Underlying growth 6.7% Revenue 1317,9 6,8 % ▪ EBIT margin 6.4% (6.2%) EBIT 83,8 9,8 % ▪ EPS 0.34 (0.31) NOK Order backlog 1008,9 -0,9 % ▪ Or
Slide 4: Peter Nilsson, Kitron's CEO, comments
Peter Nilsson, Kitron's CEO, comments: ▪ This is the highest second quarter revenue in Kitron’s history. ▪ Financial results increase our confidence in the 2018 outlook and our strategic ambitions of Revenues of NOK 3 billion and an EBIT margin of 7 per cent in 2020. ▪ Gratifying to make progress in
Slide 5: Effective actions to counter component shortages
Effective actions to counter component shortages ▪ Shortages of electronic components challenges Electronics Manufacturing Services business continues. ▪ The situation is expected to prolong into 2019 ▪ Kitron works closely with its customers to alleviate the situation ▪ Kitron’s timely and systemat
Slide 6: Financial statements First half year and Q2 2018
Financial statements First half year and Q2 2018 6
Slide 7: IFRS 15: New accounting standard implemented
IFRS 15: New accounting standard implemented ▪ IFRS 15 implemented 1.1.2018 ▪ Over time revenue recognition (point in time) ▪ Marginal effects on P&L ▪ Re-classification within NWC in balance sheet ▪ Order backlog adjustment ▪ See note 5 for complete overview Old Effects from New Old Effects from Ne
Slide 8: Revenue Q2: Sector growth in line with expectations
Revenue Q2: Sector growth in line with expectations Q2 2018 vs Q2 2017 Share of total revenue 668 667 649 651 Industry 31,6 % 43,7 % 535 Defence/Aerospace -38,7 % 17,6 % Medical devices 24,7 % 20,2 % 2.8 % Energy/Telecoms -4,0 % 16,9 % NOK million Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Offs
Slide 9: Revenue First half year: Sector growth in line with expectations
Revenue First half year: Sector growth in line with expectations 2018 vs 2017 Share of total revenue Revenue first half year 1 234 1 318 Industry 33,5 % 45,2 % 1 060 Defence/Aerospace -30,5 % 18,8 % Medical devices 16,9 % 18,5 % 6.8 % Energy/Telecoms 2,9 % 16,1 % NOK million 2016 2017 2018 O
Slide 10: Revenue by country Q2: Continued strong growth in Lithuania and China
Revenue by country Q2*: Continued strong growth in Lithuania and China Q2 2018 vs Q2 2017 Share of total revenue Q2/2017 Q2/2018 250 Norway -15,9 % 24,7 % 212 209 195 178 174 Sweden -10,5 % 24,2 % 119 96 Lithuania 19,7 % 34,7 % NOK million Others 24,3 % 16,5 % Norway Sweden Lithuania Others
Slide 11: Revenue by country First half year: Continued strong growth in Lithuania and China
Revenue by country First half year*: Continued strong growth in Lithuania and China 2018 vs 2017 Share of total revenue 517 2017 Norway -14,8 % 24,1 % 396 337 357 422 2018 331 Sweden -7,4 % 23,6 % 214 184 Lithuania 22,6 % 36,9 % NOK million Others 16,3 % 15,3 % Norway Sweden Lithuania Others
Slide 12: Quarterly EBIT: Profits stabilizing on a higher level
Quarterly EBIT: Profits stabilizing on a higher level ▪ Improvements in 45,5 45,0 efficiency 43,1 38,8 ▪ Component allocations 33,1 34,1 30,1 30,8 29,2 have not had significant impact on results NOK million 36.0 % Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Margin 5,9 % 6
Slide 13: EBIT by country Q2: Lithuania drives profits
EBIT by country Q2: Lithuania drives profits EBIT* ▪ Lithuania and China show strong 21,6 EBIT improvement, both in value and margin 17,2 12,0 11,2 ▪ Sweden, Norway and US affected 9,3 9,7 8,9 10,1 by Defense projects timing on revenue, cost reductions in place to manage margins Q2 2017 Q2 2018 Norw
Slide 14: EBIT by country First half year: Lithuania drives profits
EBIT by country First half year: Lithuania drives profits EBIT* ▪ Lithuania and China show strong 49,0 EBIT improvement, both in value 37,0 and margin ▪ Sweden, Norway and US affected 20,0 16,1 15,7 14,9 14,2 by Defense projects timing on 12,8 revenue, cost reductions in place to manage margins 30.0
Slide 15: Balance sheet: Seasonal effects
Balance sheet: Seasonal effects Operating cash flow NOK million 90,8 ▪ Cash flow 63,1 ▪ Q2 Cash flow MNOK 42.7 (63.1) 42,7 ▪ Financial gearing 22,4 ▪ NIBD / EBITDA 1.3 (1.3) -32.4 % ▪ Dividend MNOK 96.9 (44.0) -19,5 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Net working capital ▪ Working capital NOK mi
Slide 16: Market development
Market development www.kitron.com
Slide 17: Market development: Solid order backlog
Market development: Solid order backlog Order backlog NOK million Order backlog (comparable) ▪ MNOK 1141 (1018) 1 306 1 161 ▪ Growth of 12.1% 1 141 1 018 1 008 ▪ Defence: 398 -1% ▪ Medical: 171 +6% ▪ Industry: 410 +39% ▪ Energy/Telecom: 133 -9% ▪ Offshore: 29 +142% ▪ IFRS adjusted: MNOK 1009 12.1 %
Slide 18: Outlook
Outlook www.kitron.com
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
Slide 20: Thank you!
4 Kitron Your ambition. Our passion. Thank you!