Kitron: Q4 2021 - Acquisition and strong demand supporting growth
outlook
(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 resultsFull-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 providerIn 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.
OutlookFor 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 50Cathrin
Nylander, CFO, tel. +47 900 43 284E-mail:
investorrelations@kitron.com
About KitronKitron 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
This information is subject to the disclosure requirements
pursuant to section 5 -12 of the Norwegian Securities Trading
Act.
- Kitron 2021 Q4 report
- Kitron 2021 Q4 Presentation
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