Kongsberg Automotive Third quarter 2014 | October 17, 2014 1 1 - PowerPoint PPT Presentation

Kongsberg Automotive Third quarter 2014 | October 17, 2014 1 1

Group highlights for Q3 2014 Revenues of EUR 228.6 million in third quarter, EUR 6.2 (-2.6%) million ► below third quarter last year and in line with guiding REVENUES Market outlook for Q4 indicates revenue level of EUR 235 million ► EBIT was EUR 13.2 million in Q3 with EBIT margin 5,8% in line with Q3 2013 ► FINANCIALS Financial gearing ratio at 2.3X NIBD/EBITDA ► Europe: Light vehicle & commercial vehicle segment down due to ► Russia/Ukraine crisis MARKETS ► North America: Steady growth in Commercial vehicle segment ► South America/Brazil: Continue at a very low level 2

New business wins ▸ EUR 64 million per annum of new business booked New business wins LTM in Q3 2014 EUR Million 250 ▸ After a period of strong operational focus, the attention needs to move more towards growth 200 ▸ Increased focus on BRIC and innovations are key 64 levers to strengthen our growth momentum 150 100 140 50 0 Q4 2013 to Q2 2014 Q3 2014 3 3

Hans Peter Havdal, President & CEO OPERATIONAL REVIEW 4 4

Q3 2014: Business areas overview Interior Driveline Fluid Transfer Driver Control 30% of revenues 26% of revenues 20% of revenues 24% of revenues MARKET MARKET MARKET MARKET Safety and comfort related Gear shift systems for light Fluid handling systems Driver control systems, cabin products for vehicle duty vehicles for commercial vehicles suspension and vehicle dynamics interiors and passenger cars for commercial vehicles 13.1% 12.8% EBIT-margin 8.4% 7.3% 7.2% 7.0% 2.8% 1.6% 3Q13 3Q14 3Q13 3Q14 3Q13 3Q14 3Q13 3Q14 5 5

COMMERICAL VEHICLES Operational update – Increased R&D effort in Driver Control on developing Automated Manual Transmission (AMT) technology which is growing in mature markets – Increased R&D spend will continue – KA to downscale the activity in the Rollag plant in Norway – Revenue of EUR 17.5M with 87 employees – Made a EUR 3M loss in 2013 – Key products are stabilizers for truck cabins and axles – Operations will be moved to another KA facility by 2018 6 6

PASSENGER CARS Operational update – Driveline continues to further improve margins & focus on profitable growth – New program launch for Volvo Car for seat heaters • Volume 31.000 units annually from Wuxi (China) facility – New program launch for Ford for window cables • Volume 400.000 units annually from Matamoros (Mexico) facility 7 7

COMMERCIAL WINS & CUSTOMER MARKETING IN Q3 8 8

Substantial commercial wins in North American market - Est. annual value 64 million EUR in Q3 2014 total; 44 mill. EUR in North America Business Area Per Annum Product Market Segment SoP Production Value location Fluid Transfer 6.2M EUR Fluid North America Truck, bus & 2014 Easley & Suffield assemblies passenger car USA Driveline 8.9M EUR AT shift North America B, C segment cars Q3 2016 Nuevo Laredo, cables Mexico & Wuxi, China Driveline 17.4M EUR AT shifters Global Passenger car Q1 2016 Wuxi, China, (CUV) Nuevo Laredo, Mexico 9 9

KA ramping up sales & marketing activities to fuel future growth 10 10

Trond Stabekk EVP & CFO FINANCIAL UPDATE 11 11

Revenue and EBIT Revenues EBIT and EBIT margin EUR million EUR million and percent 7.1% 7.0% 5.8% 5.8% 3.5% 256 254 242 235 229 18.1 17.8 13.6 13.2 8.4 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 12

Segment financials 3 rd quarter Revenues and EBITDA margin EUR million and percent Fluid Interior Driver Control Driveline Revenues Revenues Revenues Revenues 78 78 74 72 71 71 69 69 67 67 67 62 60 58 57 50 49 48 47 47 EBIT EBIT EBIT EBIT 10.6% 9.8% 13.1% 12.9% 13.2% 13.3% 12.8% 7.3% 7.4% 7.2% 3.3% 9.8% 8.4% 8.9% 2.8% 7.0% 1.6% 2.6% 0.9% -0.6% 5.2 5.4 8.3 7.6 5.2 1.0 0.6 2.3 4.8 1.6 6.6 5.9 4.0 6.2 6.2 6.6 6.5 6.0 1.7 -0.4 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 2013 2013 2014 2014 2014 2013 2013 2014 2014 2014 2013 2013 2014 2014 2014 2013 2013 2014 2014 2014 13

Consolidated income statement Twelve months ending EUR Million 30.09.13 31.12.13 31.03.14 30.06.14 30.09.14 REVENUE run rate in line with full ► Revenues 981.5 990.9 994.5 987.0 980.8 OPEX -884.5 -893.8 -894.0 -887.1 -881.8 year guiding. EBITDA 97.0 97.1 100.5 99.9 99.0 EBITDA (%) 9.9% 9.8% 10.1% 10.1% 10.1% EBIT run rate kept despite lower ► D&A -44.6 -43.9 -42.7 -41.9 -41.4 revenues EBIT 52.5 53.2 57.8 57.9 57.6 EBIT (%) 5.3% 5.4% 5.8% 5.9% 5.9% Financial items -35.3 -40.4 -32.7 -29.4 -23.8 Improved NET PROFIT ► Profit before taxes 17.2 12.8 25.1 28.5 33.8 Tax -8.1 -6.2 -9.4 -12.3 -14.5 Net profit 9.1 6.6 15.7 16.2 19.3 14

Financial KPIs ROCE (Ltm) Revenues (Ltm) Percent EUR million 995 991 987 982 981 12.1% 12.0% 11.8% 10.9% 10.3% Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 EBIT and EBIT margin (Ltm) Avg. Capital Employed and turnover (Ltm) 75.3 EUR million and percent EUR million and Times 5.9% 2.06 2.04 5.9% 2.05 5.8% 2.03 5.4% 5.3% 1.93 57.8 57.9 57.6 53.2 508 52.5 490 486 479 480 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 15

Financial items Net financial items EUR million Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 1.5 0.8 ▸ Interest expenses reduced -2.9 – Lower debt level -2.7 -3.0 -3.0 -3.3 – -0.4 Lower interest margin -1.4 -4.4 -3.3 -4.8 -1.4 -0.8 -2.6 Other items Currency effects Net interest Net financial items 16

Cash flow and facility development Available funds Cash Unutilized facility EUR Million Cash flow Facility Other 160 23.5 (10.9) (7.0) 7.4 (14.5) (1.6) 140 128.0 3.6 128.6 120 111.6 106.5 106.3 100 70.7 82.6 80 52.1 65.6 75.3 64.2 61.8 60 40 57.8 54.4 46.0 45.4 42.1 20 0 Q3 2013 Q4 2013 Q1 2014 Q2 2014 EBITDA Change in total Investments Net financial Change in Change in Other Q3 2014 NWC, and taxes expenses drawn amount unutilized paid incl. overdraft facility 17

Financial ratios NIBD Equity EUR million EUR million 222.5 265.0 241.3 238.6 206.0 227.7 223.4 198.6 193.4 189.6 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 NIBD/EBITDA Equity ratio Times Percent 2.7 31.2% 2.5 30.1% 2.4 2.3 2.2 28.7% 27.6% 27.4% Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 18

Philippe Toth, VP Investor Relations and M&A MARKET UPDATE 19 19

Light vehicle production – LMC Automotive Oct 2014 -0,9% Light vehicle production growth: revised world estimates (ch Y/Y) Europe: Strong premium export. Spain and France is on 6% the way back, but Russia is pulling the total down 5% 7,4% 4% North America: Good credit availability in USA helps fast growth. 3% 2% 8,1% 1% China: Continue strong positive growth, even when GDP growth is leveling of to 7-8% 0% 2014Q1 2014Q2 2014Q3 2014Q4 2014 2015 2016 2017 World new (Oct) World old (Jul) 3,6% Total production: Q3-14 3,6% higher than Q3-13, mainly driven by growth in China and US. Total 2014 production is expected to be around 87,7 million Light Duty Vehicles Source: LMC Automotive – October 2014 20

Commercial vehicle production – LMC Automotive Oct 14 Medium and heavy duty truck production growth: revised world estimates (ch Y/Y) -7,4% Europe: Decline in both E27 and Russia. 10% 8% 6% 9,3% 4% North America: Continue growth, mainly from 2% Class8 segment 0% -2% -14% -4% China: Slowing down. “New normal” sees cut -6% in construction activity -8% 2014Q1 2014Q2 2014Q3 2014Q4 2014 2015 2016 2017 World new (Oct) World old (Jul) -3,1% World Wide: Decline in South America, Europe and China, with only North America growing, will see 2014 more than 3% below 2013. For 2014 the world production is expected to be 2.76 million vehicles. Source: LMC Automotive – October 2014 21

Sales by region LMC Automotive – October 2014 Sales in % by region Expected 2014 growth Sales in MEUR by region* 250 7 7 18 19 200 50% 2.7% - 9% 83 85 ROW Europe 150 Asia 235 230* NA 39% 100 4% 12% Europe 127 119 50 North America 0 5.4% -2.2% 8% 3Q13 3Q14 * Adjusted for currency effect Source: LMC Automotive – October 2014 Asia 3% ROW 22 22

Hans Peter Havdal SUMMARY & OUTLOOK 23 23

Summary and outlook ▸ Company outlook for Q4 2014 Operating profit in line with last year, despite EUR Million 2.6% lower revenues, due to operational improvements 300 250 ▸ Markets: North America and China passenger cars remain positive while European outlook is 200 still uncertain 150 242 235 100 ▸ KA expects Q4 2014 revenues of approx. EUR 235 million 50 0 Q4-2013 Q4-2014 24

Save the date: CAPITAL MARKETS DAY ON DEC. 3, 2014 PLACE: LYSAKER TORG 35 TIMING: 09-12 25 25

Thank you for your attention! QUESTIONS & ANSWERS 26 26

Our values Passionate Accountable Prepared 27 27

APPENDIX 28 28