Transcript
Page 1: KOA 1st quarter 2017 presentation final...Microsoft PowerPoint - KOA 1st quarter 2017 presentation_final 5/9/2017 11:49:12 AM

Kongsberg Automotive ASAFirst quarter 2017 | May 9, 2017

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Revenues

• Revenues of MEUR 270.7 in Q1 2017, up MEUR 26.9 (11.0%) from Q1 2016, including positive translation currency effects of MEUR 5.4

• Annualized business wins in the first quarter amounted to MEUR 35, maintaining the run-rate of last twelve months at MEUR 282

Performance

• Adjusted EBIT was MEUR 13.5 in Q1, an increase of MEUR 1.7 (14.8%) from Q1 2016

• The sale of the North American Headrest and Armrest business was completed in the first quarter. The business is reported as discontinued operations

• In March, KA announced the intention to close the Heiligenhaus facility in Germany.

• The restructuring costs for the period amounted to MEUR 6.6; most of which

relates to the accruals in conjunction with the proposed Heiligenhaus closure

Gearing • The adjusted gearing ratio at the end of Q1 2017 was 2.86 X NIBD/EBITDA

Highlights for Q1 2017 (continuing business)

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Market Summary

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New business wins in Q1 2017 - Trend in line with pervious years

New business wins LTM (per annum value)EUR Million

New business wins per quarter (per annum value)EUR Million

71,040 68,0

126,527

35,628

59,782 68,730

118,272

35

,0

20,0

40,0

60,0

80,0

100,0

120,0

140,0

2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

318 321 319301 290 291 282 282

0

50

100

150

200

250

300

350

2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

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Market summary

▸ Light Vehicle production up YoY 2.4% in Q1 2017

– Flat production in China (-0.8%), in Europe (+5.3%) and in North America (+2.3%)

– Expected growth for FY2017 is 2.0% YoY (approx. 94.9 million vehicles)

▸ Commercial Vehicle (CV) production YoY up 10.2% in Q1 2017

– Significant growth in China (+35.7%), still decline in North America (-17.5%) and South America (-7.5%). High growth in Europe (+8.0%)

– CV production is expected to be flat in 2017, approx. 2.8 million vehicles

Source: LMC Automotive – March -2017

18,0

19,0

20,0

21,0

22,0

23,0

24,0

25,0

26,0

2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1

Mill

ion

s

Global Light Vehicle production

560,0

610,0

660,0

710,0

760,0

810,0

2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1

Tho

usan

ds

Global Commercial Vehicle production

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Operational Summary

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Initiatives taken in Q1 2017

▸ KA’s cost restructuring plan - which includes reducing the manufacturing

footprint from 31 to 25 facilities – is progressing as planned

– Cost Competiveness:.• In Q1 KA announced the intention to close the Heiligenhaus plant

– In December 2016, KA initiated measures relating to closing its Basildon, UK facility

– Portfolio: KA completed the sales of its North American Headrest/Armrest

business

• KA sold the HR/AR business to Futuris Group (Futuris), and all contracts, employees,

and other assets were transferred to Futuris at the closing the deal in mid March.

– The sale enables KA to focus its Interior segment on the seat climate and

support systems and Light Duty Cable products

– Organization:• The new Business segments organization is in place

• The new Swiss based, operational headquarter in Zürich is operational

• Mr. Norbert Loers, assumed his position as KA’s CFO in January 2017

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Operational update (continuing business)

Revenues

▸ Strong quarterly revenues with 11% growth YoY

▸ Growth rate at constant FX rates was 9%

Adjusted EBIT

▸ YoY sales / adj. EBIT increase amounted to MEUR 26.9 / 1.7

▸ On a constant currency basis this represents an improvement of MEUR 17.1 in revenues and

MEUR 1.3 adj. EBIT

▸ The main drivers behind the adj. EBIT improvement were (MEUR);

– Translational FX +0.4

– Volume / Seasonality / Mix +1.7

– Raw Materials (commodities) headwind (1.1)

– Performance +0.7

Kongsberg Automotive

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Operational update

▸ Revenues of MEUR 66.1 in Q1, up MEUR 4.2 compared to Q1 2016

– Positive currency effects of MEUR 1.0

– The increase was mainly related to growth in both the European and Chinese comfort business, partly

offset by a decrease in the North American Light Duty Cable business

▸ Adjusted EBIT was MEUR 4.8 in Q1, down MEUR 0.4 compared to Q1 2016

– The decline in EBIT was related to one–off costs and increased engineering costs (MEUR 0.4), partially

offset by higher sales volume and operational improvements

– Increased engineering costs due to upcoming launches

▸ In Q1 Interior booked new business worth a total of MEUR 3.9 in annual value

– Very high quoting activities going on in early and advances stages

▸ Divestiture of the North American Head and Armrest business completed in Q1 2017

– This includes a transfer of 170 employees in the Milan / USA facility

Interior Systems

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Operational update

▸ Revenues of MEUR 102.3 in Q1, up by EUR 17.8 mill. from Q1 2016

– Positive currency effects of EUR 2.3 million

– The revenue increase came from both the European and Chinese businesses, and non-product revenues

– A higher level of new programs drove the increase in revenues

▸ Adjusted EBIT was MEUR -1.3 in Q1, up EUR 0.9 mill compared to 1Q16

– Higher sales volumes and cost improvements, partially offset by plant and product start-up costs and increased

engineering efforts (MEUR 1.4)

▸ In Q1 Powertrain & Chassis booked new business worth a total of MEUR 20.9 in annual value

– Supply of actuators to a major Chinese OEM, with est. annual value of MEUR 7.9

• SOP in 2019 from KA’s manufacturing facility in Wuxi, China

▸ The transfers of production and closures of the Rollag and Basildon facilities are progressing

according to plan.

▸ The intention to close of the Heiligenhaus facility was announced.

Powertrain & Chassis

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Operational update

▸ Revenues of MEUR 103.0 mill. in Q4, up MEUR 5.6 from Q1 2016

– Positive currency effect of MEUR 2.0

– The increases in sales was driven by growth in Europe for fluid handling systems, and couplings sales in the

commercial vehicle business.

– Off-highway sales declined, mainly related to the North American recreational vehicle business

▸ Adjusted EBIT increased by MEUR 2.0, to MEUR 14.8 in Q1 2017

– Higher sales volume and a favorable product mix

– Significant headwinds from increased raw material commodity prices

▸ In Q1 Specialty Products booked new business worth MEUR 10.6 in annual value

– Supply of PTFE to a major tier 1 with est. annual value of MEUR 1.4

– Supply from KA’s Suffield facility (U.S), with SOP from the second half of 2018

Specialty Products

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Financial UpdateNorbert Loers

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Revenue and Adjusted EBIT (continuing business)

* Revenues from continued business and EBIT adjusted for restructuring. See details in the quarterly report.

244 241

218

241

271

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017

Revenues* MEUR

11.7

9.0

0.6

6.4

13.5

4.8%

3.7%

0.3%

2.6%

5.0%

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017

Adjusted EBIT and Adjusted EBIT margin*MEUR and percent

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Revenue development (continuing business)

Revenues continued businessMEUR

* Variances excluding FX effects

Revenue:

► MEUR 26.9 (11.0%) above

the first quarter 2016

► Higher product sales and

non-product sales

► Growth in Europe and

China

► New programs

3.1

15.5-0.73.6

5.4

243.8

270.7

190.0

205.0

220.0

235.0

250.0

265.0

280.0

Q12016

Interior* PAC* SPR* Others* FX Q12017

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Adjusted EBIT development (continuing business)

Adjusted EBIT continued businessMEUR

* Variances excluding FX translation effects and restructuring costs

Adjusted EBIT: MEUR 1.7, MEUR 4.5 (14.8%) above first quarter last year

-0.5

-0.1

0.91.4

11.713.5

0.0

3.0

6.0

9.0

12.0

15.0

18.0

Q12016

Interior* PAC* SPR* Others/FX Q12017

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Net Profit development (total Group)

Net ProfitMEUR

Net profit:

► Influenced by restructuring

costs, and;

► unrealized and realized FX

effects

► Interest expenses

impacted by new bank

waiver

*related to non-cash unrealized FX gains in Q1 2016

1.7

-8.8

-0.4

-6.6

-0.6

0.41.5

13.0

0.2

-4.0

-1.0

2.0

5.0

8.0

11.0

14.0

17.0

Q12016

Adj.EBIT

effect

Restr. Interest FXEffects

financialitems*

Othersfinancial

items

Netprofitdisc.

Business

Tax Q12017

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Free Cash Flow (continuing business)

First quarter Free Cash Flow before debt

repayments:

► Positive change in net working capital

► Operating profit, excluding restructuring

costs

► Decrease in taxes paid

► Investments

► Sale of HR/AR adds 2,2 from the sale of

HR/AR business

Free Cash Flow MEUR

42

15

-7

13

-10

17

-4

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

Q12017

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Cash flow and facility development

75.361.8

Available fundsMEUR

34.2 31.7

(10.9)(7.9)

(2.3) 1.7

19.1 (1.7) (2.9)

106.6 104.2

140.8 135.9

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

200.0

Q4 2016 EBITDA Change intotal NWC,and taxes

paid

Investments Net financialexpenses

Change indrawn

amount incl.overdraft

Change inunutilized

facility

Other Q1 2017

Cash (unrestricted) Unutilized facility

Cash flow Facility Other

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Financial ratios

*Continued business and excludes restructuring costs, see details in the quarterly report.

2.37 2.42 2.86 2.92 2.86

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017

Adjusted NIBD/EBITDA* (Ltm)

Times

32.3% 32.7%31.0% 30.2%

29.1%

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017

Equity ratioPercent

10.3% 9.3%7.2% 6.1% 6.5%

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017

Adjusted ROCE (Ltm)*

Percent

463 460 457 456 449

2.0 2.0 2.0 2.12.2

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017

Avg. Capital Employed and turnover (Ltm)*

MEUR and Times

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Segment financials 1st quarter (continuing business)

Revenues and Adjusted EBITMEUR and percent

85 9082

94102

Powertrain & ChassisRevenues

-2.2 -1.3-0.1

0.4

-1.3

-2.6%-1.5%

-0.1% 0.4%

-1.3%

Q12016

Q22016

Q32016

Q42016

Q12017

Adjusted EBIT

97 9281 87

103

Specialty Products

Revenues

12.8 10.5 3.0 9.6 14.8

13.2% 11.4%

3.7%

11.1%14.4%

Q12016

Q22016

Q32016

Q42016

Q12017

Adjusted EBIT

62 59 5560

66

Interior

Revenues

5.24.0

1.4 0.9

4.8

8.4% 6.9%2.5% 1.5%

7.3%

Q12016

Q22016

Q32016

Q42016

Q12017

Adjusted EBIT

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Financial items

Net financial items:

► Change in currency effects related to

non-cash unrealized FX gains in Q1

2016

► Increased interest expenses due to

waiver agreement conditions-1.7 -1.7 -1.8 -1.5 -2.3

9.0

1.56.1

-7.8

0.2

-0.1 -0.3 -0.2

-0.5

-0.5

7.1

(0.5)

4.2

(9.8)

(2.6)

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017

Other items Currency effects

Net interest Net financial items

Net financial itemsMEUR

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Summary & Outlook

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Summary

▸ We expect the underlying markets to be fairly stable

throughout 2017

– Commercial vehicle segment is expected to be flat

– Modest growth (2.0%) expected in the Passenger vehicle segment

▸ We expect Q2 2017 Revenues to be around MEUR 260, up

MEUR 20 compared to Q2 2016

▸ Raw material commodity pricing continues to be challenging

– There is some level of ramping taking place

– Some of our sales contracts call for price adjustments based on material price

movements on a retroactive basis

▸ We confirm our CMD plan:

– 3 footprint closure actions underway

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