Kitron — Earnings Release 2016

Oct 25, 2016

Kitron: Q3 2016 - Margin improvements on track

Kitron: Q3 2016 - Margin improvements on track

(2016-10-25) Kitron ASA today reported a stable top line and continued

operational improvements.

Kitron's revenue in the third quarter amounted to NOK 463 million, compared to

468 million in the third quarter last year.

Operating profit (EBIT) was NOK 30.1 million, compared 26.3 million last year.

Net profit amounted to NOK 17.7 million, a decrease from 22.8 million. The

decrease is caused by a change in net finance related to non-cash currency

effects. This corresponds to earnings per share of NOK 0.10, compared to NOK

0.13 last year.

Peter Nilsson, Kitron's CEO, comments:

"We had some issues on the top line this quarter, due to postponements into the

coming quarters. However, our work on operational improvements progressed well,

resulting in a positive development of operating profit and cash flow. This,

combined with a strong order backlog, gives me confidence in the coming

quarters."

* Stable revenue, solid order backlog

* Improved underlying profitability

* Key customer agreements signed

* Improved capital efficiency

* Significant change in shareholder structure

Stable revenue, solid order backlog

Kitron's revenue in the third quarter was 1 per cent lower than last year.

Adjusted for foreign exchange effects, the decline was 2 per cent. The third

quarter sales were affected by normal seasonality while the seasonality last

year was unusually weak. In addition, some customer projects were postponed.

The order backlog ended at NOK 980 million, an increase of 7 per cent compared

to last year.

Improved underlying profitability

Profitability expressed as EBIT margin was 6.5 per cent for the quarter,

compared to 5.6 per cent in the third quarter of 2015.

Key customer agreements signed

Kitron signed two strategically important customer agreements in the third

quarter.

In July, Kitron was selected as a new preferred supplier for Dentsply Sirona,

the world's largest manufacturer of professional dental products and

technologies, validating Kitron's long-term investments in the German market.

In September, Kitron received orders from Aidon OY of Finland for communication

modules with a value for Kitron of more than NOK 100 million over the next three

years. This increases the current business scope with Aidon. Production will

take place at Kitron's plant in Kaunas, Lithuania.

Improved capital efficiency

Net working capital was reduced by 8 per cent from the same quarter last year.

Operational cash flow was NOK 36.4 million, compared to 32.7 million last year.

Significant change in shareholder structure

During October, the two largest shareholders sold all their shares, resulting in

a significant increase in the float of the Kitron share.

Outlook

For 2016, Kitron has previously indicated revenue of between NOK 2 050 and

2 250 million and EBIT margin of 5.3 to 6.3 per cent. Due to currency effects

and postponed projects, revenue is now expected to be in the lower half of the

indicated range. The growth is driven by increased demand in the Industry and

Defence/Aerospace sectors. The profitability increase is driven by cost

reduction activities and improved efficiency.

Enclosed in PDF are the quarterly report and the presentation.

The interim report is presented today at 8.30 a.m. CEST at Kitron ASA's head

office, Olav Brunborgs vei 4, Billingstad.

The presentation will be given in English by CEO Peter Nilsson and CFO Cathrin

Nylander, and will be distributed through webcast at the same time at the

following link: http://webtv.hegnar.no/presentation.php?webcastId=40091248

For further information, please contact:

Peter Nilsson, CEO of Kitron ASA, Tel: +47 948 40 850

Cathrin Nylander, CFO of Kitron ASA, Tel: +47 900 43 284

E-mail: investorrelations@kitron.com

Kitron is one of Scandinavia's leading electronics manufacturing services

companies for the Defence/Aerospace, Energy/Telecoms, Industry, Medical devices

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

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

NOK 1.95 billion in 2015 and has about 1 250 employees. www.kitron.com

This information is subject of the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.