Kitron — Earnings Release 2017

Apr 26, 2017

Kitron: Q1 2017 - Strong revenue growth and improved profitability

Kitron: Q1 2017 - Strong revenue growth and improved profitability

(2017-04-26) Kitron ASA today reported strong revenue growth and improved

profitability for the first quarter.

Kitron's revenue in the first quarter amounted to NOK 585 million, compared to

497 million in the same quarter last year. Operating profit (EBIT) was NOK 30.9

million, compared 20.5 million last year.

Net profit amounted to NOK 21.6 million, an increase from 10.0 million. This

corresponds to earnings per share of NOK 0.12, compared to NOK 0.06 last year.

Peter Nilsson, Kitron's CEO, comments:

"While growth, both on the top and bottom line, was unusually strong this

particular quarter, the main message is that the quarterly figures confirm the

underlying progress that Kitron has made over the past couple of years. The

order backlog is solid and the main production facilities are now updated and

highly competitive, supporting our outlook for the rest of 2017."

Very strong growth

Kitron's revenue for the first quarter increased by 18 per cent compared to the

same period last year. Adjusted for foreign exchange effects, the increase was

23 per cent. Growth compared to the same quarter last year was particularly

strong in the Defence/Aerospace market sector. Industry and Energy/Telecoms also

recorded solid growth.

Improved profitability

Operating profit (EBIT) for the first quarter was NOK 30.9 million, an increase

of 51 per cent. Profitability expressed as EBIT margin was 5.3 per cent,

compared to 4.1 per cent in the first quarter of 2016. EBITDA was NOK 42.7

million, an increase of 36 per cent compared to last year.

Solid order backlog

The order backlog ended at NOK 1 059 million, an increase of 17 per cent

compared to last year. Orders received in the quarter were NOK 620 million.

Improved capital efficiency

Net working capital increased by 6 per cent from NOK 522 million to NOK 553

million compared to the same quarter last year, continuing the trend of

decreasing net working capital compared to revenue. Operating cash flow was

negative NOK 15.4 million, compared to negative 25.3 million in the first

quarter 2016.

Key defence orders

During the quarter, Kitron reported two key defence orders. Kitron received a

NOK 120 million order from Kongsberg Defence Systems (KONGSBERG) for military

communications equipment. Manufacturing and technical services will be provided

by Kitron in Arendal, and deliveries will take place from 2017 to 2020. Further,

Kitron signed an agreement with Rheinmetall MAN Military Vehicles. The potential

contract value is NOK 250 million over a five-year period. The agreement covers

manufacturing of electronics, measuring instruments and control devices. The

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

Modern facility and new MD in Sweden

Kitron Sweden has relocated to the new-built facility in Torsvik. While the move

was completed according to budget and without significant technical problems,

some temporary inefficiencies impacted profitability in the first quarter. In

March, Stefan Hansson Mutas assumed the role of Managing Director of Kitron

Sweden.

Outlook

For 2017, Kitron expects revenue to grow to between NOK 2 150 and 2 350 million.

The EBIT margin is expected to be between 5.6 and 6.4 per cent. The growth is

primarily driven by customers in the Industry sector. 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. The presentation will

be given in English by CEO Peter Nilsson and CFO Cathrin Nylander, and will be

webcast at the following link:

http://webtv.hegnar.no/presentation.php?webcastId=51444445

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 2.1 billion in 2016 and has about 1 350 employees. www.kitron.com

This information is subject to the disclosure requirements pursuant to section

5 -12 of the Norwegian Securities Trading Act.