Kitron: Q4 2019 - Strong development continues


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Kitron today reported solid financial improvements, both for the fourth quarter and full year 2019.

Kitron's revenue for the fourth quarter was NOK 889 million, an increase of 20% compared to last year. Organic growth, excluding the acquisition of the EMS division of API Technologies Corp., was 8%.

The order backlog ended at NOK 1 884 million, an increase of 41% compared to last year. Organic order backlog growth, excluding the API acquisition, was 29%.

Profitability expressed as EBIT margin was 6.1% in the fourth quarter, compared to 5.7% in the same quarter last year.

Peter Nilsson, Kitron's CEO, comments:"We continued to grow both our top line and operating margin in 2019. We also took major strategic steps to increase our capabilities in the US and China, as well as establishing a strong presence in Poland. I am also pleased that we are able to reduce our inventory and improve our working capital metrics. Moving into 2020, we feel confident that Kitron is well prepared for another good year.”

Strong revenue growth
Kitron's revenue in the fourth quarter amounted to NOK 889 million, compared to 739 million in the same quarter last year. Revenue growth compared to the same quarter last year was particularly strong in the Defence/Aerospace sector.

Strong order backlog
The order backlog ended at NOK 1 884 million, compared to 1 335 million last year, and similar to the revenue development the order backlog increase was particularly strong in the Defence/Aerospace market sector.

Improved profitability
Fourth quarter operating profit (EBIT) was NOK 54.2 million, compared to 42.3 million last year. EBITDA was NOK 82.2 million, compared to 54.6 million last year. The effect on fourth quarter EBITDA and EBIT from implementation of the IFRS 16 accounting standard is an increase of NOK 5.6 million and NOK 1.0 million respectively.

Profit after tax amounted to NOK 34.0 million, compared to 27.7 million in the same quarter the previous year. This corresponds to earnings per share of NOK 0.19, up from 0.16 last year.

Full-year growth and profit improvement
Full year revenue of NOK 3 299 million gave an overall revenue growth of 26% for the year. Operating profit for the year ended at NOK 201.5 million, compared to 156.1 million in 2018, resulting in an EBIT margin of 6.1%, compared to 6.0% in 2018. Profit after tax was NOK 132.5 million, up from 110.3 million, corresponding to NOK 0.74 earnings per share, compared to 0.63 in 2018.

The Board of Directors proposes a dividend of NOK 0.50 per share for 2019. Last year Kitron paid a dividend of NOK 0.40 per share.

Working capital ratios improving
Net working capital was NOK 942 million, an increase of 21% compared to the same quarter last year. The ratio of net working capital compared to revenue is improving from the third quarter. Capital ratios are expected to improve going forward.

Outlook
For 2020, Kitron expects revenue to grow to between NOK 3 300 and NOK 3 700 million. The EBIT margin is expected to be between 6.4% and 7.0%. Growth is driven by the Defence/Aerospace and Industry sectors. Profitability is mainly driven by operational improvements in Poland and the U.S.

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