Kitron: Q1 2020 - Strong overall development
(2020-04-23) Kitron today reported revenue and profit growth for the first quarter. The order backlog was record high, and Kitron maintains its outlook for 2020.
Kitron's revenue for the first quarter was NOK 878 million, an increase of 8 per cent compared to last year. Growth adjusted for foreign exchange effects in consolidation was 3 per cent.
The order backlog ended at NOK 2 064 million, an increase of 41 per cent compared to last year.
Profitability expressed as EBIT margin was 6.7 per cent in the first quarter, compared to 6.3 per cent in the same quarter last year.
Peter Nilsson, Kitron's CEO, comments:
“The first quarter 2020 has been a record quarter for Kitron in regards to revenue, profit, and order backlog. Kitron has been quick to adjust to the global environment caused by the outbreak of the corona pandemic. A number of actions have been in place since late February to minimize risk to our employees and our capacity. All Kitron sites are up and running at normal or high load. We can see that the demand outlook has changed compared to expectations coming into this year. Growth is stronger within medical devices, warehouse automation and defence communication. Growth is weaker to flat for products where demand is more directly driven by end consumer. All in all, we uphold our outlook for 2020.”
Revenue growth
Kitron's revenue in the first quarter amounted to NOK 878 million, compared to 813 million in the same quarter last year. Revenue growth compared to the same quarter last year was particularly strong in the Defence/Aerospace sector.
Record order backlog
The order backlog ended at NOK 2 064 million, compared to 1 466 million last year. The order backlog increase was particularly strong in the Defence/ Aerospace, Energy/Telecoms and Medical devices market sectors. The increased order backlog in the Medical devices sector is partly related to the corona pandemic.
Improved profitability
First quarter operating profit (EBIT) was NOK 58.4 million, compared to 51.2 million last year. EBITDA was NOK 82.7 million, compared to 68.6 million last year.
Profit after tax amounted to NOK 40.9 million, compared to 37.5 million in the same quarter the previous year. This corresponds to earnings per share of NOK 0.23, up from 0.21 last year.
Operating cash flow was NOK 102.4 million, compared to 25.4 million in the first quarter of 2019.
Temporary increase of working capital ratio
Net working capital was NOK 1 013 million, an increase of 9 per cent compared to the same quarter last year. The ratio of net working capital compared to revenue also increased. While reducing inventory levels remains a key ambition for Kitron, in the extraordinary corona pandemic situation, holding more inventory has been important in order to safeguard the company’s ability to serve customers. Longer term, capital ratios are expected to improve going forward.
Outlook
While Kitron recognizes increased uncertainty and expect volatility, the company’s overall outlook for 2020 remains unchanged. For 2020, Kitron expects revenue to grow to between NOK 3 300 and 3 700 million. EBIT margin is expected to be between 6.4 and 7.0 per cent. Growth is driven by the Defence/Aerospace and Medical devices sectors. Profitability is mainly driven by growth and operational improvements in Norway, China and U.S
Enclosed in PDF are the quarterly report and the presentation. The interim report is presented today at 8:30 a.m. CEST. The presentation will be given in English by CEO Peter Nilsson and CFO Cathrin Nylander, and will be webcast at the following link:
For further information, please contact:
Peter Nilsson, President and CEO, tel.
Cathrin Nylander, CFO, tel:
E-mail:
Kitron is a leading Scandinavian electronics manufacturing services company for the Defence/Aerospace, Energy/Telecoms, Industry, Medical devices and Offshore/Marine sectors. The company is located in Norway, Sweden, Lithuania, Germany, Poland, China and the United States. Kitron had revenues of about NOK 3.3 billion in 2019 and has about 1 700 employees.
This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
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