Kitron — Earnings Release 2020

Jul 10, 2020

Kitron: Q2 2020 - Record performance

Kitron: Q2 2020 - Record performance

(2020-07-10) Kitron today reported strong growth and record profit for the

second quarter driven by Defense/Aerospace, Medical devices and Industry

sectors.

Kitron's revenue for the second quarter was NOK 1 041 million, an increase of

21 per cent compared to last year. Growth adjusted for currency effects  was 11

per cent.

Profitability expressed as EBIT margin was 8.5 per cent in the second quarter,

compared to 6.6 per cent in the same quarter last year.

The order backlog ended at NOK 2 102 million, an increase of 45 per cent

compared to last year.

Peter Nilsson, Kitron's CEO, comments:

"This was a record quarter for Kitron in terms of revenue, profitability and

order backlog.

Revenue is driven by a robust underlying demand within Defense/Aerospace,

Medical and Industry Sectors. Strong performance in all Kitron sites contributed

to the profitability of 8.5 per cent. Our third and fourth quarter outlook

leaves us confident in reaching our upgraded full year 2020 targets. Our third

quarter is expected to be particularly strong and the fourth quarter should

settle on a more normalized level."

Record revenue

Kitron's revenue in the second quarter amounted to NOK 1 041 million, compared

to 860 million in the same quarter last year. There was growth within the

Defence/Aerospace, Industry and Medical devices sectors.

Record order backlog

The order backlog ended at NOK 2 102 million, compared to 1 453 million last

year. The order backlog increased within all market sectors except

Offshore/Marine. Growth is particularly strong in Medical Devices.

Improved profitability

Second quarter operating profit (EBIT) was NOK 88.0 million, compared to 56.4

million last year. EBITDA was NOK 113.8 million, compared to 75.1 million last

year.

Profit after tax amounted to NOK 64.3 million, compared to 36.3 million in the

same quarter the previous year. This corresponds to earnings per share of NOK

0.36, up from 0.20 last year.

Operating cash flow was NOK 5.5 million, compared to 53.5 million in the second

quarter of 2019.

Capital efficiency ratios improved

Net working capital was NOK 1 059 million, an increase of 14 per cent compared

to the same quarter last year. Net working capital as a percentage of revenue

was 24.5 per cent, compared to 27.4 per cent last year. 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, not least within Medical devices. Longer

term, capital ratios are expected to improve going forward.

Outlook

Demand is expected to continue to be strong in Defence/Aerospace, Industry and

Medical devices sectors.  Demand within the Medical devices sector is expected

to be particularly strong during the third quarter and normalize in the fourth

quarter.

For 2020, Kitron has previously indicated a revenue outlook of between NOK

3 300 and 3 700 million and EBIT margin between 6.4 and 7.0 percent.

Due to increased growth in Defence/Aerospace, Industry and Medical devices

sectors, overall profitability improvement and favorable currency, revenue is

now expected to be between 3 500 and 3 800 million and EBIT margin is expected

to be between 6.7 and 7.5 per cent.

Enclosed in PDF are the quarterly report and the presentation. The interim

report is presented today at 2 p.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:

https://channel.royalcast.com/hegnarmedia/#!/hegnarmedia/20200710_6

For further information, please contact:

Peter Nilsson, President and CEO, tel. +47 94 84 08 50

Cathrin Nylander, CFO, tel: +47 900 43 284

E-mail: investorrelations@kitron.com (mailto:investorrelations@kitron.com)

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. www.kitron.com

(http://www.kitron.com)

This information is subject to the disclosure requirements pursuant to section

5 -12 of the Norwegian Securities Trading Act.