Investor Presentation • Mar 15, 2022
Investor Presentation
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MARCH 15, 2022
This presentation contains certain "forward-looking statements". These statements are based on management's current expectations and are subject to risks, uncertainty and changes in circumstances, which may cause actual results, performance, financial condition or achievements to differ materially from anticipated results, performance, financial condition or achievements. All statements contained herein that are not clearly historical in nature are forward-looking and the words "anticipate," "believe," "expect," "estimate," "plan," and similar expressions are generally intended to identify forward-looking statements. We have no intention and are under no obligation to update or alter (and expressly disclaim any such intention or obligation to do so) our forward-looking statements whether as a result of new information, future events or otherwise, except to the extent required by law. The forward-looking statements in this presentation include statements addressing our future financial condition and operating results. Examples of factors that could cause actual results to differ materially from those described in the forward-looking statements include, among others, business, economic, competitive and regulatory risks, such as conditions affecting demand for products, particularly in the automotive industries; competition and pricing pressure; fluctuations in foreign currency exchange rates and commodity prices; natural disasters and political, economic and military instability in countries in which we operate; developments in the credit markets; future goodwill impairment; compliance with current and future environmental and other laws and regulations; and the possible effects on us of changes in tax laws, tax treaties and other legislation. More detailed information about these and other factors is set forth in the 2020 Kongsberg Automotive Annual Report and the Kongsberg Automotive Quarterly Reports.
Where we have used non-IFRS financial measures, reconciliations to the most comparable IFRS measure are provided, along with a disclosure on the usefulness of the non-IFRS measure, in this presentation.
FINANCIAL HIGHLIGHTS & NBW
MARKET SUMMARY
SEGMENT HIGHLIGHTS
GROUP FINANCIAL UPDATE
OUTLOOK
Q&A
JOERG BUCHHEIM CEO // Zurich (Switzerland)
Kongsberg Automotive Q4 2021 Earnings call
Comparisons are to 2020 results restated to exclude discontinued operations
| REVENUES | ADJ. EBIT | |
|---|---|---|
| €205.7M | €8.3M | |
| Q 4 2021 |
Reduced by 1.6% vs. Q4 2020 | Impacted by cost of raw materials, semiconductors and freight |
| FY | €831.4M | €50.7M |
| 2021 | Increase of 21% vs. 2020, and EUR 31m above guidance* |
Increase of 216% compared to FY 2020* and in line with guidance |
Kongsberg Automotive Q4 2021 Earnings call
Comparisons are to 2020 results restated to exclude discontinued operations
| NEW BUSINESS | FREE CASH FLOW | |
|---|---|---|
| Q 4 |
€61M | €-14M |
| 2021 | Lifetime revenue of business wins during the quarter |
Focus on securing supply chain led to increased inventory, reduced payables |
| BOOK-T O-BILL |
€19.1M | |
| FY 2021 |
1.0 Compared to 1.1 in FY 2020 |
Increase of EUR 37.2m compared to 2020* and in line with guidance |
> Earnings were reduced by increased costs of resin, brass and steel, and semiconductors – as well as increased associated freight costs
> Executing on the Shift Gear portfolio transformation to ensure KA is a top-3 supplier in all its product areas
Kongsberg Automotive Q4 2021 Earnings call
> Discontinued operations showed a Revenue growth of 18,8%
MARKET SUMMARY SEGMENT HIGHLIGHTS GROUP FINANCIAL UPDATE Q&A
SEGMENT HIGHLIGHTS GROUP FINANCIAL UPDATE OUTLOOK Q&A
Source: IHS Light Vehicle Production Base (January 2022); LMC Global Commercial Vehicle Forecast (Q4 2021)
GLOBAL PASSENGER CAR PRODUCTION, SALES IN MILLION UNITS, INCLUDING CHINA
Source: IHS Light Vehicle Production Base (September 2021); LMC Global Commercial Vehicle Forecast (Q3 2021)
EXECUTIVE SUMMARY FINANCIAL HIGHLIGHTS & NBW MARKET SUMMARY
GROUP FINANCIAL UPDATE
Q&A
KONGSBERG AUTOMOTIVE // 18
P&C Operations in Q4 were dramatically impacted by supplier delivery & material cost premiums due to global commercial conditions. Cost increases in raw materials, freight and utilities were largely overcome by rapid sales price surcharges and successful implementation of cost reduction measures across all P&C plants. Customer schedule disruptions, due to their own e-components challenges and supplier delivery issues further complicated production planning. We have been able to harvest benefits in all regions from intense focus on our Cost Improvement
REVENUES, MEUR ADJ. EBIT, MEUR Revenues in Powertrain & Chassis decreased by MEUR 9.0 (-7.7%) to MEUR 108.3 in the fourth quarter 2021 compared to the same quarter in 2020, despite positive currency translation effects of MEUR 4.6. On a constant currency basis, revenues in Q4 2021 decreased by MEUR 13.6 in total compared to Q4 2020, which was mainly driven by decrease in the European passenger car market (MEUR 11.8). However, revenues in the Chinese passenger car end markets grew by MEUR 4.3. Revenues in the commercial vehicles end market declined by MEUR 3.1 and MEUR 2.1 in China and the United States, respectively.
Programs.
Within the quarter, Powertrain & Chassis was awarded a significant contract to supply Gear Shift Systems to a Chinese automobile manufacturer (MEUR 21.4 in expected lifetime revenues and MEUR 3.0 in expected annualized revenues) with start of production in Q3 2022.
Despite the reduced sales volume, adjusted EBIT was MEUR 6.2 in the fourth quarter 2021, a slight increase of MEUR 0.3 compared to the adjusted EBIT in Q4 last year. On the one hand, the negative impact of the material shortages of electronic components, resin, and steel was mitigated by the improvement programs. On the other hand, the increasing passenger car business in China and the commercial car business in America as well as successful implementation of the Shift Gear measures contributed to the increased profitability in Q4
2021.
% Adj. EBIT margin (%)
Excluding the cable-related part of the Off-Highway business which is included in discontinued operation, revenues in Specialty Products increased by MEUR 6.4 (+7.2%) to MEUR 95.2 compared to the fourth quarter of 2020, including positive currency translation effects of MEUR 4.6. All business units contributed to the revenue increase.
Adjusted EBIT was MEUR 5.4 in the fourth quarter of 2021, a decrease of MEUR 9.7 compared to the same quarter of last year. Despite higher revenues in Q4 2021, adjusted EBIT declined mainly due to the disproportional increase in costs related to impacts of the electronic components supply chain crisis and higher raw material cost.
Plant operations remained stable and performed at pre-pandemic levels, however many customers, impacted by semi-conductors crisis, have moved demand in short time. Capacity expansion in facilities of FTS in Mexico and Poland has commenced. Material availability for certain products has remained challenging and will continue into 2022.
During the fourth quarter 2021, total business wins amounted to MEUR 25.6 of lifetime revenues (MEUR 18.2 in annualized revenues).
Within the quarter, Couplings was awarded a contract with a major German OEM that totals MEUR 0.9 in expected annualized revenues and MEUR 3.1 in expected lifetime revenues.
EXECUTIVE SUMMARY FINANCIAL HIGHLIGHTS & NBW MARKET SUMMARY SEGMENT HIGHLIGHTS
OUTLOOK
Q&A
The impact of supply chain crisis on adj. EBIT shown here does not include the shortfall in revenues
» Adj. EBIT lower by MEUR 9.8 compared to Q4 2020 due to the significant disruptions in the supply chain throughout the automotive sector.
» Restructuring costs include consultancy fees in relation to the Company's portfolio transformation.
» The interest expenses in Q4 2021 were slightly higher than in Q4 2020 (MEUR 5.6 in Q4 2021 vs. MEUR 5.1 in Q4 2020).
» Foreign currency gains were MEUR 4.4 in Q4 2021 compared to the losses of MEUR 4.9 in Q4 2020.
» Tax expenses in Q4 2021 amounted to MEUR 4.8 compared to MEUR 0.5 in Q4 2020. The tax rate for full year 2021 amounts to 25%, whereas the tax rate last year was impacted by nondeductible items like goodwill impairment.
* Adjusted EBIT is EBIT before restructuring costs.
EQUITY RATIO4, %
CAPITAL EMPLOYED3, MEUR
Excluding restructuring costs and impairment losses in Q2 2020 2. Net interest-bearing debt 3. Capital employed at quarter end
As the indices are calculated based on the figures from last 12 months, they are impacted by the capital increases in Q2 and Q3 2020
Excluding IFRS16
MARKET SUMMARY
EXECUTIVE SUMMARY
FINANCIAL HIGHLIGHTS
Q&A
> Powertrain & Chassis is a global Tier 1 supplier of driver control and driveline products to the passenger and commercial vehicle automotive markets
> The Specialty Products segment designs and manufactures products for both the automotive and commercial vehicle markets, as well as for power sports, construction, agriculture, outdoor power equipment and power electronics applications.
> KA is among the top 10 suppliers in the segment
> Vehicle dynamics, clutch and gear actuators for passenger and commercial vehicles
> KA is a top supplier in the segment
> Fluid handling systems for a wide variety of vehicles
> KA is a top supplier in the segment
> Couplings systems for compressed-air circuits
Outlook
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