(2022-02-11) Kitron today reported fourth-quarter results showing very strong
demand, but also revenue constraints due to the component supply and covid
lockdown in China. A record order backlog and the acquisition of BB Electronics
support revenue growth in 2022.
Kitron's revenue for the fourth quarter was NOK 949 million, compared to NOK
992 million last year. Demand is very strong, but revenue growth was limited by
ongoing component shortages and a lockdown of Kitron's facility in Ningbo,
China, due to an outbreak of COVID-19 in the area, as previously reported. More
than NOK 160 million of demand in the quarter has been delayed into 2022.
Nevertheless, there was strong growth within the Connectivity market sector.
Adjusted for foreign exchange effects in consolidation, revenue is at the same
level as last year.
Profitability expressed as EBIT margin was 5.5 per cent in the fourth quarter,
compared to 7.6 per cent in the same quarter last year. The EBIT margin in the
quarter is affected by inefficiencies caused by the component situation and the
lockdown in China.
The order backlog ended at NOK 2 827 million, an increase of 41 per cent
compared to last year. The order backlog increased within all market sectors
except Defence and Aerospace.
Peter Nilsson, Kitron's CEO, comments:
"Two forces dominated the fourth quarter: on the positive side, excellent demand
and a record order backlog, on the negative challenges caused by lack of
components and the covid pandemic. The highlight of the fourth quarter was the
acquisition of BB Electronics. I was convinced about the merits of this deal
before we announced it, and my conviction has grown even firmer as we have
worked with the BB team on common plans. This strengthens my positive view of
the coming quarters and years.
Fourth-quarter operating profit (EBIT) was NOK 52.3 million, compared to 75.7
million last year. EBITDA was NOK 78.4 million, compared to 102.2 million last
year.
Profit after tax amounted to NOK 40.4 million, compared to 47.1 million in the
same quarter the previous year. This corresponds to earnings per share of NOK
0.20, down from 0.26 last year.
Solid full-year results
Full-year revenue of NOK 3 711 million gave an overall decrease in revenue of 6
per cent for the year, where 3% is due to currency. The decrease is explained by
the exceptional Corona-related volumes within Medical devices being normalized
from 2020 to 2021, as previously indicated.
Operating profit (EBIT) for the year ended at NOK 240.8 million, compared to NOK
312.6 million in 2020, resulting in an EBIT margin of 6.5 per cent, compared to
7.9 per cent. Profit after tax was NOK 152.8 million, down from NOK 213.1
million, corresponding to NOK 0.78 earnings per share, compared to NOK 1.19 in
2020.
Dividend policy and dividend
The Kitron board has as a consequence of the investment in BB Electronics and
the future capital needs of the company decided to change the Kitron dividend
policy into:
"Kitron's dividend policy is to pay out an annual dividend of 20 to 60 per cent
of the company's consolidated net profit before non-recurring items. When
deciding on the annual dividend the company will take into account the company's
financial position, investment plans as well as the needed financial flexibility
to provide for sustainable growth
The board proposes an ordinary dividend of NOK 0.25 per share (NOK 0.70).
Ratios affected by constraints in supply chain
Operating cash flow was NOK 9.0 million, compared to NOK 132.2 million in the
fourth quarter of 2020.
Net working capital was NOK 1 228 million, an increase of 15 per cent compared
to the same quarter last year. Net working capital as a percentage of revenue
was 31.7 per cent compared to 26.3 per cent last year. Capital efficiency ratios
are heavily affected by the supply situation, with material decommitments and
new delivery dates. The material constraints continue to be difficult. Our focus
going forward is on balancing demand with the constraints in supply, executing
demand into deliveries and improving cash flow.
Acquisition of Danish EMS provider
In December, Kitron announced an agreement to acquire the Danish EMS company BB
Electronics A/S, which has production facilities in Denmark, China and the Czech
Republic. The deal is clearly earnings accretive and adds significant
shareholder value. BB Electronics is a full-service EMS (Electronics
Manufacturing Services) provider based in Horsens, Denmark. The group had
revenues of about DKK 1,000 million in 2021 and about 750 employees. It has over
the past years grown significantly, both organically and through M&A. The
customer base is concentrated within connectivity and industry. The acquisition
was completed early in January 2022.
Outlook
For 2022, Kitron expects revenue between NOK 5 200 and 5 800 million, including
BB Electronics. Operating profit (EBIT) is expected to be between NOK 330 and
430 million. Growth is driven by the Electrification, Connectivity and Industry
market sectors. Currently, the growth is constrained by the material supply
situation.
Enclosed in PDF are the quarterly report and the presentation. The interim
report is presented today at 08:30 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://channel.royalcast.com/hegnarmedia/#!/hegnarmedia/20220211_5
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
About Kitron
Kitron is a leading Scandinavian electronics manufacturing services company for
the Connectivity, Electrification, Industry, Medical devices and
Defence/Aerospace sectors. The group is located in Norway, Sweden, Denmark,
Lithuania, Germany, Poland, the Czech Republic, China and the United States.
Included the acquisition of BB Electronics in January 2022, Kitron has about
2 500 employees, and pro forma revenues were about NOK 5 billion in 2021.
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.