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.

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:

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

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.

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

Kitron report Q3 2016
Kitron presentation Q3 2016

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Source: Kitron ASA via GlobeNewswire