Kitron: Q2 2021 – Strong quarter and record order book
(2021-07-12) Kitron today announced strong second quarter sales and profitability as well as a record backlog. Strong growth in other areas of the market offset lower demand in medical devices.
Kitron’s turnover for the second quarter was NOK 994 million, compared to NOK 1,041 million last year. Underlying second quarter revenue growth was 5%, with both first half and second quarter revenue negatively impacted by currency effects compared to last year by around 10%, due to the strengthening Norwegian krone against Kitron’s billing currencies.
Profitability expressed as EBIT margin was 7.4 percent in the second quarter, compared to 8.5 percent in the same quarter last year. The EBIT margin is at the top of the company’s 2021 forecast, and in line with the strategic target trajectory, although lower than last year, when there were economies of scale due to exceptional volumes within medical devices.
The order book closed at NOK 2,294, an increase of 9 percent over last year.
Peter Nilsson, CEO of Kitron, comments:
Despite the headwinds, Kitron had another strong quarter. Other sectors of the market have taken over as the surge in Corona-related demand in medical devices subsides. The underlying growth and profitability are in line with our annual objectives and our strategic ambitions, the record order book and very strong demand in several market sectors give us confidence for the second half of the year.
Electrification and industry show strong growth
The Electrification, Connectivity and Industry sectors are experiencing strong growth, while sales are down in Defense / Aeronautics. As expected, medical device revenues have been gradually normalized after the surge in demand linked to the pandemic in 2020.
Save the order book
The order book closed at NOK 2,294 million, compared with 2,102 million last year. This is a record that reflects the strong total demand within IOT and warehouse automation. Adjusted for currency effects, the order book increased by 13%.
The order book increased in the Electrification, Connectivity and Industry sectors, while it decreased in Defense / Aeronautics. As expected, the medical device order book gradually normalized.
7.4% EBIT margin
Second quarter operating profit (EBIT) was NOK 73.1 million, compared to NOK 88.0 million last year. EBITDA amounted to NOK 97.5 million, compared to NOK 113.8 million last year.
Profit after tax was NOK 49.5 million, compared to NOK 64.3 million in the same quarter of the previous year. This corresponds to earnings per share of NOK 0.28, compared to 0.36 last year.
Strong operating cash flow
Cash flow from operations amounted to NOK 109.3 million, compared to NOK 5.5 million in the second quarter of last year.
Net working capital amounted to NOK 1,034 million, a decrease of 2% compared to the same quarter last year. Net working capital as a percentage of revenue was 25.8 percent, compared to 24.5 percent last year. Longer term, capital ratios are expected to improve in the future.
Difficult material supply situation
The general material supply situation continues to be a challenge for deliveries. Kitron expects some relief in the fourth quarter and more relief in the first half of 2022.
For 2021, Kitron expects sales of between NOK 3,900 and 4,200 million. The EBIT margin is expected to be between 6.8 and 7.4 percent. The outlook for 2021 implies that Kitron is back on its long-term trajectory of revenue and profitability after exceptional growth in 2020, largely driven by Corona-related demand in the medical device industry. Growth is driven by the connectivity, electrification and industrial sectors. The medical device sector is expected to be standardized and in line with previous years. The outlook for Defense / Aeronautics is slightly down.
The quarterly report and the presentation are attached as PDF. The interim report is presented today at 2:00 p.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/20210712_2
For more information, please contact:
Peter Nilsson, President and CEO, Tel. +47 94 84 08 50
Cathrin Nylander, Chief Financial Officer, tel. : +47 900 43 284
Email: [email protected]
Kitron is a leading Scandinavian electronics manufacturing service company for the connectivity, electrification, industrial, medical device, and defense / aerospace industries. The company is established in Norway, Sweden, Lithuania, Germany, Poland, China and the United States. Kitron reported sales of approximately NOK 4.0 billion in 2020 and has approximately 1,800 employees. www.kitron.com
This information is subject to disclosure requirements in accordance with Section 5-12 of the Norwegian Securities Law.
Kitron Report 2021 Q2
Kitron 2021 Q2 presentation