Kitron — Earnings Release 2020

Apr 23, 2020

Kitron: Q1 2020 - Strong overall development

Kitron: Q1 2020 - Strong overall development

(2020-04-23) Kitron today reported revenue and profit growth for the first

quarter. The order backlog was record high, and Kitron maintains its outlook for

Kitron's revenue for the first quarter was NOK 878 million, an increase of 8 per

cent compared to last year. Growth adjusted for foreign exchange effects in

consolidation was 3 per cent.

The order backlog ended at NOK 2 064 million, an increase of 41 per cent

compared to last year.

Profitability expressed as EBIT margin was 6.7 per cent in the first quarter,

compared to 6.3 per cent in the same quarter last year.

Peter Nilsson, Kitron's CEO, comments:

"The first quarter 2020 has been a record quarter for Kitron in regards to

revenue, profit, and order backlog. Kitron has been quick to adjust to the

global environment caused by the outbreak of the corona pandemic. A number of

actions have been in place since late February to minimize risk to our employees

and our capacity. All Kitron sites are up and running at normal or high load. We

can see that the demand outlook has changed compared to expectations coming into

this year. Growth is stronger within medical devices, warehouse automation and

defence communication. Growth is weaker to flat for products where demand is

more directly driven by end consumer. All in all, we uphold our outlook for

2020."

Revenue growth

Kitron's revenue in the first quarter amounted to NOK 878 million, compared to

813 million in the same quarter last year. Revenue growth compared to the same

quarter last year was particularly strong in the Defence/Aerospace sector.

Record order backlog

The order backlog ended at NOK 2 064 million, compared to 1 466 million last

year. The order backlog increase was particularly strong in the Defence/

Aerospace, Energy/Telecoms and Medical devices market sectors. The increased

order backlog in the Medical devices sector is partly related to the corona

pandemic.

Improved profitability

First quarter operating profit (EBIT) was NOK 58.4 million, compared to 51.2

million last year. EBITDA was NOK 82.7 million, compared to 68.6 million last

year.

Profit after tax amounted to NOK 40.9 million, compared to 37.5 million in the

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

0.23, up from 0.21 last year.

Operating cash flow was NOK 102.4 million, compared to 25.4 million in the first

quarter of 2019.

Temporary increase of working capital ratio

Net working capital was NOK 1 013 million, an increase of 9 per cent compared to

the same quarter last year. The ratio of net working capital compared to revenue

also increased. 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. Longer term, capital ratios are expected to improve going forward.

Outlook

While Kitron recognizes increased uncertainty and expect volatility, the

company's overall outlook for 2020 remains unchanged. For 2020, Kitron expects

revenue to grow to between NOK 3 300 and 3 700 million. EBIT margin is expected

to be between 6.4 and 7.0 per cent.  Growth is driven by the Defence/Aerospace

and Medical devices sectors. Profitability is mainly driven by growth and

operational improvements in Norway, China and U.S

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:

https://sdk.companywebcast.com/sdk/player/?id=hegnarmedia_20200423_3&customBtnCo

lor=da7038,674429

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.