1

Q1 results 2009

7 May 2009

Jørgen Bredesen, CEO

Björn Wigström, CFO

2

Strong cash generation

Financial highlights in Q1

• Excellent cash flow

• Revenue growth of 15.4%

• Operating profit increase by 33.4%

• Decline in order intake and backlog

2

3

Capacity adjustments

Operational highlights in Q1

• Activity level high in Q1 but customers signal lower demand

• Capacity adjustments ongoing. Downsizing with 60 FTEs in Q1

• Continued focus on operational improvements:

• Manufacturing efficiency programmerolled out in Sweden and Norway

• Positive effect from sourcing efforts

Financial statements Q1 2009

3

5

Revenue growth

• Revenue reached NOK 571.2 million which represents a 15.4% increasecompared to Q1 2008

• Strong growth within Defence/Offshore and growth in Data/Telecom

• Growth by market segments

Q1 2009 vs Q1 2008

Data/Telecom 1.7%Defence/Offshore 78.3%Medical Equipment -5.7%Industry -32.3%

Industry15%

Medical equipment

17%

Defence/Offshore

47%

Data/Telecom

21%

Revenue Group

Revenue by market segmentTotal revenue NOK 571.2 million

571.2

677.4

483.6

613.3

495.0

0

120

240

360

480

600

720

Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009

NO

K m

illio

n

6

Norway60%

Sweden16%

Lithuania24%

Revenue by country

• Growth in Lithuania and Norway

Growth by countryQ1 2009 vs Q1 2008

Norway 11.4%Sweden -9.4%Lithuania 23.1%

• Transfer of manufacturing to Lithuania continues

328.7

103.5

366.1

93.8

143.9116.9

Norway Sweden LithuaniaQ1 2008 Q1 2009

Revenue by countryTotal revenue NOK 571.2 million

Revenue by country*

* before Kitron Group eliminations

4

7

Revenue mix impact gross margin

• Gross margin is down from 39.8 % in Q1 2008 to 37.5 % in Q1 2009.

• This is due to different revenue mix and not a margin performance issue:

• Lower sales of Development & Services

• Lower sales in Microelectronics

• Transfer of business to low cost

39,8 % 39,5 %

38,8 %

37,5 %37,3 %

30,0 %

32,0 %

34,0 %

36,0 %

38,0 %

40,0 %

42,0 %

Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009

Per

cen

t

Gross margin Group

Gross margin in Kitron is meassured after direct material but before direct labour.

8

Improved operating profit

• Operating profit up by 33.4%

• Operating margin improved from 4.4% to 5.1%

• Operational efficiency improvements (5S, LEAN etc)

• Global sourcing yield strong contribution

• Relative payroll costs improved to 24.6% of revenue (27.1%)

• Other operating costs down to 6.0% of revenue (6.5%)

Operating profit Group

Operating margin Group

21.6

48.7

37.2

51.0

28.9

10

20

30

40

50

Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009

NO

K m

illio

n

4.4%

7.9% 7.7% 7.5%

5.1%

Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009

NO

K m

illio

n

5

9

10.3%

1.3%

3.0%

7.8%

6.0%

-1.2%-2 %

0 %

2 %

4 %

6 %

8 %

10 %

12 %

Norway Sweden Lithuania

Per

cen

t

Q1 2008

Q1 2009

Profit by country

• Norway (Arendal) and Lithuania deliver a solid profit

• Slow start in Sweden but improvements expected following capacity adjustments.

(1.2)

12.19.8

1.3

11.2

22.1

(5.0)

-

5.0

10.0

15.0

20.0

25.0

Norway Sweden Lithuania

NO

K m

illio

n

Q1 2008

Q1 2009

Operating margin by country

Operating profit by country

10

430.7

482.3 476.0

541.8

457.4

200

250

300

350

400

450

500

550

Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009

NO

K m

illio

n

(60.9)

51.6

27.8

66.5

35.0

-80

-60

-40

-20

20

40

60

80

Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009

NO

K m

illio

n

Strong operating cash flow

• Fourth quarter in a row with a strong operating cash flow

• Operating cash flow was NOK 35 million vs negative NOK 60.9 million in Q1 2008

• Cash flow before repayment of factoring debt was NOK 100 million

• Net Working capital improved to 20% of revenue from 22% in Q1 2008

• Strong cash flow mainly driven by a reduction in receivables

Operating cash flow Group

Net working capital Group

6

11

262.5303.1

400.4

480.4 478.9

100

200

300

400

500

600

Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009

NO

K m

illio

n

Equity ratio above 40%

• Equity of NOK 478.9 million (262.5) and the equity ratio to 40.8% (26.8%)

• Mainly driven by the working capital improvement.

• Positive net profit offset by negative currency translation difference. 26.8% 28.2% 34.9% 38.4% 40.8%

Equity

Equity ratio

Market development

7

13

60

110

160

210

260

Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009

NO

K m

illio

n Data/Telecom

Defence/Marine

Medical equipment

Industry

Continued strong activity in Q1• Revenue trend driven by strong trend in Defence/Offshore.

• Drop in demand from Offshore.

• Mixed trend in Data/Telecom but video projection positive.

• Customers in Medical equipment adjusting inventory level.

• Industry segment most affected by the crisis

Revenue by market segment

14

300

350

400

450

500

550

600

650

Q4/2007 Q1/2008 Q2/2008 Q3/2008 Q4/2008 Q1/2009

NO

K m

illio

n

Order intake down

Order intake Group

Total

Q1 average

8

15

Medical equipment23%

Indusrty13% Data/Telecom

21%

Defence/Offshore43%

Order backlog signals reduction in activity level• Order backlog at NOK 732

million (NOK 994 million).

• Backlog reduced across all segments.

• Sharp drop for Offshore during Q1.

Definition of order backlog includes firm orders and four months customer forecast

732

971

1100

1006994

400

500

600

700

800

900

1000

1100

Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009

NO

K m

illion

Order backlog Group

Order backlog Segment

Outlook

9

17

Safeguarding competitive edge and profitability

• Kitron to reduce work force by 370 FTE’s in 2009• Productivity improvements

• 15% drop in revenue outlook

• Reduction of cost by NOK 60 million in 2009 (excl material)

• Annualised NOK 135 million in cost reduction

• Accelerate operational improvement activities• Transfer of manufacturing to

Lithuania (lower costs)

• Manufacturing efficiency programme

• Global sourcing

• Strategic opportunities emerging

18

2009 Outlook

• 15% drop in revenue expected

• A solid profit level but lower margin expected:

• Lower productivity due to capacity adjustments

• Difficulties to immediately adjust fixed costs

• Investments to improve competitiveness are prioritised while capacity related investments are being postponed

10

19