Kitron — Investor Presentation 2025

Apr 24, 2025

2025 Q1 Presentation

Kitron Group | 2025-04-24

Quarter highlights

Strong start to 2025

• Solid performance in Q1 driven by momentum in key sectors.
• Order backlog grew 11% sequentially to 525 €M .
• Defence & Aerospace revenue up 30% year-over-year.

Q1 -2025 Performance

• Q1: REVENUE 165 €M; EBIT 12.5 €M; EBIT margin 7.6%
• Strong Cash Flow in the quarter 12. 1 (8.5) € M

Significant Contract Wins

• EUR 76 million in new Defence & Aerospace orders.
• Key customers: Kongsberg Defence & Aerospace, Thales, and others.
• Contracts include:
  • Joint Strike Missile (JSM)
  • Naval Strike Missile (NSM)
  • Communications and air defence systems
  • Optical assemblies for UAVs and drones
• Production allocated to Nordic and CEE facilities.

Market and Operations

Defence & Aerospace: Strategic Pillar

• Five Kitron sites focused on Defence & Aerospace.
• Additional EU site undergoing accreditation for defence production.
• Flexible and rapid scalability in production.
• Capability to triple output across EU and U.S. operations.

Norway Ramp-up Success

• Norway operations ramp-up progressing well.
• Targeting a 50% increase in defence volumes compared to last year.

Market sentiment

• New Malaysia facility receiving positive customer feedback with rapid deployment of new products underway.
• Post-semiconductor oversupply de-stocking largely resolved.
• Rebound in quick-turn demand. Shift to short-term buying patterns reflects customer caution.

Tariffs, M&A and Growth

Tariffs and U.S. Market Position

• U.S. accounts for ~15% of Kitron's direct revenue. U.S. domestic production amounts to 30% of U.S. sales.
• Tariffs passed through to customers.

M&A Progress

• M&A project advancing as planned.
• Aligned with long-term growth and capability expansion.

Positioned for Growth in 2025

• 2025 Q1 Order intake 217 €M Book-to-Build ratio: 1.32
• Revenue projections for 2025 to between 640 €M and 710 €M, with Operating profit (EBIT) expected to between 47 €M and 65 €M.
• Trade wars and global economic uncertainties could impact demand.

Sector trends Q1

Connectivity:

• Growth driven by sensor and asset tracking solutions, new customer wins, Smart integration of emerging technologies.
• De-stocking activities appears to be complete.

Electrification:

• Continued strength for Energy transmission and weakness in Consumer-focused tech (EV charging, home storage, solar)

Industry:

• Sector growth over previous quarter, up 21%. AI infrastructure and subsea applications showing resilience, general manufacturing demand is starting to pick up.

Medical Devices:

• Sector declined over previous quarter 17% as disengagement from one customer due to end-of-life on product.
• Demand is picking up for most other customers with indicated by more frequent drop-in expedited orders.

Defence/Aerospace:

• Sector performed the best , growing YoY 29% and 14% for the quarter.
• Product categories: Avionics, missile electronics, and surveillance systems saw strong demand.
• Rising defense budgets sustain long-term growth, and UAV and missile technology advancements are key growth areas. New defense tech is creating substantial new opportunities.

Connectivity	Electrification	Industry
Expect full sector	Expect strengthening	Expect strength
growth returning mid	in consumer sector in	returning to the sector
2025.	late 2025	in late 2025

Order Backlog Review

Performance, Trends, and Strategic Outlook

Overview of 2025 Q1 Order Backlog

• Total backlog approached 525 €M, reflecting a 11% sequential growth and 18% YoY.
• Defence & Aerospace (+79% YoY) strongest sector
• The non-defence sectors down 9% YoY but up 2% sequentially.

Defence & Aerospace:

• Strongest growth sector, increasing 79% YoY and 23% sequentially
• Key contracts secured in missile systems, avionics, and surveillance

Connectivity:

• Backlog fell 11% YoY, but stabilized sequentially, indicating a recovery in demand
• IoT, sensor networks, and smart asset tracking seeing renewed orders

Electrification:

• Backlog fell 5% YoY, and up 4% sequentially due to sluggish consumer demand
• Grid Networks and Energy Transmission projects growing

Industry:

• Backlog declined 11% YoY, but stabilized sequentially, reflecting broad weakness in manufacturing
• Maritime, AI-driven automation, and subsea applications remain strong

Medical Devices:

• Backlog declined 11% YoY, and up 3% sequentially
• One product end-of-life affecting annual volume ~ 10 €M

The Order backlog features all firm customer orders and the

2025 Q1 Highlights

• Revenue: 164.6 -5.3 % (173.9)
• EBIT: 12.5, 18.0% (10.6)
• EBIT margin: 7.6% (6.1%)
• ROOC: 18.7% (15.4%)
• Cash Cycle Conversion days: 111 (113 )
• Operating Cash flow: 12. 1 (8.5)
• NIBD: 108.2 (123.1 )
• NIBD/EBITDA: 1.6 (1.5)
• Net Gearing: 0.52 (0.65)
• Equity %: 36.3% (33.4%)
• Order Backlog: 524.8, 17.9% (445.0 )
• Net Income: 7.5 (6.5)
• EPS (EUR): 0.038, 15% (0.033)
• Proposed dividend of 0.35 NOK pr share

*Performance measures expressed in €M

Business sectors

• The regional revenue stabilized sequentially and vs last year apart from CEE, where Q1 last year still was strong in Electrification
• Profitability is improved in Nordica & NA and CEE.
• No of employees 2 391 and reduced with 380 compared to last year
  • o Nordics 1%, CEE -25%, China -14%

				3
				1
Revenue Business Sectors	Q1 2025	Q1 2024	Change	31.12.2024	Change
Nordics & North America	93.7	92.0	1.7	355.6	30.6
CEE	51.6	61.9	-10.3	205.7	-99.1
Asia	21.1	22.6	-1.5	95.7	-61.7
Group and eliminations	-1.7	-2.7	1.0	-9.9	2.1
Revenue	164.6	173.8	-9.2	647.2	-128.1

EBIT Business Sectors			3 1
	Q1 2025	Q1 2024	Change	31.12.2024	Change
Nordics & North America	7.7	8.1	-0.4	26.2	-1.1
CEE	4.3	5.3	-1.0	16.8	-12.4
Asia	1.6	1.9	-0.3	11.1	-8.7
Group and eliminations*	-1.2	-4.7	3.6	-6.4	-0.8
EBIT	12.5	10.6	1.9	47.7	-23.0

FTE Business Sectors	31.03.2025	31.03.2024	31.12.2024	Change
Nordics & North America	1 014	1 009	994	994
CEE	902	1 209	930	930
Asia	475	553	488	488
FTE	2 391	2 771	2 411	2 412

* includes restructuring charge in Q1 and YTD 2024

Cash flow and working capital

• Cash flow from operating activities at 12.1 €M (8.5 €M).
• Net working capital at 189.8 €M (196.8 €M), down 4% from last year, up 1% from last quarter.

				€M
Cash Flow	Q1 2025	Q1 2024	Change	31.12.2024
Profit before tax	10.0	8.6	1.4	39.9
Depreciations	4.6	4.7	-0.1	18.7
Change in inventory, accounts receivable, contract assets and accounts payable	-2.0	-3.1	1.1	5.8
Change in net other current assets and other operating related items	-0.5	-1.7	1.2	-20.6
Net cash flow from operating activities	12.1	8.5	3.6	43.7
Net cash flow from investing activities	-1.6	-2.6	1.0	-8.6
Net cash flow from financing activities	-9.5	2.1	-11.6	-16.3

				€M
Net working capital	31.03.2025	31.03.2024	Change	31.12.2024
Inventory	151.3	155.5	-4.2	141.4
Contract assets	79.4	75.8	3.6	77.6
Trade receivables	129.4	123.8	5.6	124.1
Trade payables	170.3	158.3	12.0	155.1
Net working capital	189.8	196.8	-7.0	188.0

Ratios

• Net gearing and NIBD/EBITDA 0.5 and 1.6
• Finance cost -2.5 (-1.9)
• Proposed dividend of 0.35 NOK pr share ~ 0.03 €

Ratios	31.03.2025	31.03.2024	Change	31.12.2024
R3 NWC % sales	28.6 %	28.0 %	2.1 %	28.8 %
R3 ROOC % sales	18.7 %	15.4 %	21.4 %	18.0 %
R3 Cash Cycle Conversion	111	113	-2	106
Net Interest bearing debt €M	108.2	123.1	-14.9	113.5
Net gearing	0.52	0.65	-0.13	0.57
NIBD/EBITDA	1.6	1.5	0.1	1.7
Equity percent	36.3 %	33.3 %	3.0 %	35.8 %
Earnings per share quarter €	0.038	0.033	15.2 %	0.020
Earnings per share ytd €	0.038	0.033	15.2 %	0.140

2025 Q1 Key take-ways

• Revenue of 164.6 €M, up 2% sequentially.
• Order backlog comes in strong at close to 525 €M (+18% YoY)
• Defence & Aerospace was the strongest sector, revenue growing 29% YoY and 14% QoQ, driven by increased NATO investments.
• Non-defence sectors revenue flat sequentially and Order backlog up 3% sequentially indicating an improvement in market sentiment and a completion of de-stocking activities.
• New defense tech is creating substantial new opportunities
• Five Kitron sites focused on Defence & Aerospace.
• Flexible and rapid scalability in production. Capability to triple output across EU and U.S. operations.
• 2025 outlook: Revenue between 640-710 €M and EBIT between 47-65 €M

Appendix: Definition of alternative performance measures

Order backlog

All firm orders and 4 months of committed customers forecast at revenue value as at balance sheet date.

Foreign exchange effects

Group consolidation restated with exchange rates as comparable period the previous year. Change in volume or balance calculated with the same exchange rates for the both periods are defined as underlying growth. Change based on the change in exchange rates are defined as foreign exchange effects. The sum of underlying growth and foreign exchange effects represent the total change between the periods.

EBITDA Operating profit (EBIT) + Depreciation and Impairments

EBIT Operating profit

EBIT margin (%) Operating profit (EBIT) / Revenue

Net working capital Inventory + Accounts Receivable – Accounts Payable

Operating capital Other intangible assets + Tangible fixed assets + Net working capital

Return on operating capital (ROOC) % Annualised Operating profit (EBIT) / Operating Capital

Return on operating capital (ROOC) R3 % (Last 3 months Operating profit (EBIT))*4 /(Last 3 months Operating Capital /3)

Return on capital employed (ROCE) EBIT/(Total assets - short term debt)

Return on equity Net Income/Equity

Direct Cost

Cost of material + Direct wages (subset of personnel expenses only to include personnel directly involved in production)

Days of Inventory Outstanding 360/ (Annualised Direct Costs/Inventory)

Days of Inventory Outstanding R3 360/ ((Last 3 months Direct Costs *4) /(Last 3 months Inventory/3))

Days of Receivables Outstanding 360/ (Annualised Revenue/Trade Receivables)

Days of Receivables Outstanding R3 360/ ((Last 3 months Revenue*4)/(Last 3 months Trade Receivables/3))

Days of Payables outstanding 360/ ((Annualised Cost of Material + Annualised other operational expenses) /Trade Payables)

Days of Payables Outstanding (R3) 360/ (((Last 3 months (Cost of Material + other operational expenses)*4) /(Last 3 months Trade Payables)/3))

Cash conversion cycle (CCC) Days of inventory outstanding + Days of receivables outstanding – Days of payables outstanding

Cash conversion cycle (CCC) R3

Days of inventory outstanding (R3) + Days of receivables outstanding (R3) – Days of payables outstanding (R3)

Net Interest-bearing debt

• Cash and cash equivalents + Loans (Non- current liabilities) + Loans (Current liabilities)

Interest-bearing debt Loans (Non- current liabilities) + Loans (Current liabilities)

Net gearing Net Interest-bearing debt / Equity

Free Cash flow Net Cash Flow from operating activities – Cash flows from acquisition of tangible fixed assets – Cash flows from acquisition of other intangible assets

13

Equity ratio Total Equity / Total Assets

EPS Earnings Per Share