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Kitron: Q2 2020 – Record performance

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(2020-07-10) Kitron today reported strong growth and record profit for the second quarter driven by Defense/Aerospace, Medical devices and Industry sectors.

Kitron's revenue for the second quarter was NOK 1 041 million, an increase of 21 per cent compared to last year. Growth adjusted for currency effects  was 11 per cent.

Profitability expressed as EBIT margin was 8.5 per cent in the second quarter, compared to 6.6 per cent in the same quarter last year.

The order backlog ended at NOK 2 102 million, an increase of 45 per cent compared to last year.

Peter Nilsson, Kitron's CEO, comments:
"This was a record quarter for Kitron in terms of revenue, profitability and order backlog.
Revenue is driven by a robust underlying demand within Defense/Aerospace, Medical and Industry Sectors. Strong performance in all Kitron sites contributed to the profitability of 8.5 per cent. Our third and fourth quarter outlook leaves us confident in reaching our upgraded full year 2020 targets. Our third quarter is expected to be particularly strong and the fourth quarter should settle on a more normalized level.”

Record revenue
Kitron's revenue in the second quarter amounted to NOK 1 041 million, compared to 860 million in the same quarter last year. There was growth within the Defence/Aerospace, Industry and Medical devices sectors.

Record order backlog
The order backlog ended at NOK 2 102 million, compared to 1 453 million last year. The order backlog increased within all market sectors except Offshore/Marine. Growth is particularly strong in Medical Devices.

Improved profitability
Second quarter operating profit (EBIT) was NOK 88.0 million, compared to 56.4 million last year. EBITDA was NOK 113.8 million, compared to 75.1 million last year.

Profit after tax amounted to NOK 64.3 million, compared to 36.3 million in the same quarter the previous year. This corresponds to earnings per share of NOK 0.36, up from 0.20 last year.

Operating cash flow was NOK 5.5 million, compared to 53.5 million in the second quarter of 2019.

Capital efficiency ratios improved
Net working capital was NOK 1 059 million, an increase of 14 per cent compared to the same quarter last year. Net working capital as a percentage of revenue was 24.5 per cent, compared to 27.4 per cent last year. While reducing inventory levels remains a key ambition for Kitron, in the extraordinary corona pandemic situation, holding more inventory has been important in order to safeguard the company's ability to serve customers, not least within Medical devices. Longer term, capital ratios are expected to improve going forward.

Outlook
Demand is expected to continue to be strong in Defence/Aerospace, Industry and Medical devices sectors.  Demand within the Medical devices sector is expected to be particularly strong during the third quarter and normalize in the fourth quarter.
For 2020, Kitron has previously indicated a revenue outlook of between NOK 3 300 and 3 700 million and EBIT margin between 6.4 and 7.0 percent.

Due to increased growth in Defence/Aerospace, Industry and Medical devices sectors, overall profitability improvement and favorable currency, revenue is now expected to be between 3 500 and 3 800 million and EBIT margin is expected to be between 6.7 and 7.5 per cent.

Enclosed in PDF are the quarterly report and the presentation. The interim report is presented today at 2 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/20200710_6

For further information, please contact:
Peter Nilsson, President and CEO, tel. +47 94 84 08 50
Cathrin Nylander, CFO, tel: +47 900 43 284
E-mail: investorrelations@kitron.com

Kitron is a leading Scandinavian electronics manufacturing services company for the Defence/Aerospace, Energy/Telecoms, Industry, Medical devices and Offshore/Marine sectors. The company is located in Norway, Sweden, Lithuania, Germany, Poland, China and the United States. Kitron had revenues of about NOK 3.3 billion in 2019 and has about 1 700 employees. www.kitron.com

This information is subject to the disclosure requirements pursuant to section 5 -12 of the Norwegian Securities Trading Act.

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