Kitron Posts Stable Top Line and Continued Operational Improvements

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Kitron's revenue in the third quarter amounted to NOK463 million, compared to NOK468 million in the third quarter last year. 

Operating profit (EBIT) was NOK30.1 million, compared 26.3 million last year. 

Net profit amounted to NOK17.7 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 NOK0.10, compared to NOK0.13 last year.

Kitron CEO Peter Nilsson said, "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% lower than last year. Adjusted for foreign exchange effects, the decline was 2%. 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 NOK980 million, an increase of 7% compared to last year. 

Improved underlying profitability

Profitability expressed as EBIT margin was 6.5% for the quarter, compared to 5.6% 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% from the same quarter last year. Operational cash flow was NOK36.4 million, compared to NOK32.7 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. 

Outlook

For 2016, Kitron has previously indicated revenue of between NOK2,050 and NOK2,250 million and EBIT margin of 5.3 to 6.3%. 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.

About Kitron

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. www.kitron.com