Kitron — Earnings Release 2013

Feb 12, 2014

Kitron: Q4 2013 - Revenue growth but lower profitability in the fourth quarter

Kitron: Q4 2013 - Revenue growth but lower profitability in the fourth quarter

(2014-02-12) Kitron ASA today reported that a high activity level in the fourth

quarter results in increased revenue. Lower profitability is due to product mix.

Lower order intake in the quarter reduces the order backlog. Operational cash

flow is positive.

Kitron's revenues amounted to NOK 476.3 million, compared to NOK 462.4 million

in the fourth quarter 2012. EBIT was reduced from NOK 24.4 million to NOK 4.3

million. Net loss amounted to NOK 4.0 million, compared to a net profit of NOK

27.9 million the corresponding quarter a year ago. Operating cash flow for the

fourth quarter was NOK 51.0 million, compared to NOK 84.8 million during the

same quarter 2012.

Dag Songedal, interim CEO, comments:

"Kitron's top line grew in the fourth quarter, but all in all this was a weak

quarter for us. Clearly, profitability must and will be improved. This will be

on top of management's agenda in 2014. On the positive side, it should be noted

that we have won important contracts in the fourth quarter."

* Important customer contracts secured

* Revenue growth but lower profitability

* Change of strategy regarding distribution centre

Important contracts secured

Kitron has during the fourth quarter renewed the agreement with Maquet Critical

AB, a part of the Getinge Group. Husqvarna has also decided to renew its

contract with Kitron and has increased the contract scope by adding new

products. Kitron has also received the first orders from Cassidian Optronics

GmbH, a worldwide leader in optronic defense and security solutions. The orders

cover prototype production of power supply units for one of Cassidian Optronic's

target acquisition systems. These initial orders from Cassidian are of limited

value in terms of revenue, but they are a milestone for Kitron's operations in

Germany.

The order backlog was reduced by NOK 128.9 million in the quarter and ended at

NOK 718.1 million.

Revenue growth but lower profitability

The reduction in profitability compared to last year is partly due to changed

product mix and partly due to costs related to change of strategy regarding the

distribution centre in Lithuania. There has been a negative development in the

product mix com- pared to previous periods as low margin products have increased

in volume. Also, Kitron experiences strong margin pressure, both on existing and

new customers.

Change of strategy regarding distribution centre

Kitron has over the last year been in a process to establish a distribution

centre in Lithuania. However, the project has proved to be costlier and more

complex that originally assumed. Kitron has therefore decided to terminate the

project, partly to avoid increased operating costs going forward. Kitron will

take other measures in order to achieve the cost savings that the project was

meant to deliver.

Outlook

Kitron expects a positive development in the Swedish and German markets, which

suggests growth for the factories in Sweden and Lithuania. Growth is also

expected in China, whereas the development in the Norwegian market is more

uncertain.

Enclosed in pdf are the quarterly report and the presentation.

For further information, please contact:

Dag Songedal, interim CEO, Tel.: +47 913 86 468 or e-mail:

dag.songedal@kitron.com

Cathrin Nylander, CFO, Tel: +47 900 43 284 or e-mail:

cathrin.nylander@kitron.com

Kitron is one of Scandinavia's leading electronics manufacturing services

companies for the Defence, Energy/Telecoms, Industry, Medical equipment and

Offshore/Marine sectors. The company is located in Norway, Sweden, Lithuania,

Germany, China and the United States. Kitron had revenues of about NOK 1.6

billion in 2013 and has about 1,200 employees. www.kitron.com

This information is subject of the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.

[HUG#1760949]