The order backlog remained high and the cash flow was solid as a result of both a strong positive contribution from the operations and the sale of underwater technology company Hydroid.
The financial effect of the COVID-19 pandemic was limited in the first quarter. However, the situation is creating increased market uncertainty going forward, especially in the maritime industry.
WEBCAST: Recording of online presentation of KONGSBERG's 1st quarter 2020
Key figures:
- The order intake came to MNOK 6,812, compared with MNOK 3,661 in Q1 2019, an increase of MNOK 3,151. Including the pro forma order intake from Commercial Marine (CM) in Q1 2019, the increase was MNOK 1,178.
- The operating revenue totalled MNOK 6,678, compared with MNOK 3,462 in Q1 2019, an increase of MNOK 3,216. Including the pro forma operating revenue from CM in Q1 2019, the increase was MNOK 1,345.
- The EBITDA was MNOK 643, compared with MNOK 381 in Q1 2019. Including pro forma EBITDA of MNOK -33 from CM, the EBITDA was MNOK 348 in Q1 2019.
- The EBITDA margin equalled 9.6%, compared with 11.0% in Q1 2019. Including the pro forma figure for CM in Q1 2019, the comparable EBITDA margin was 6.5%.
Logistics in the maritime sector
KONGSBERG delivered growth in all business areas and the order intake was good for the whole group"
"KONGSBERG delivered growth in all business areas and the order intake was good for the whole group. The COVID-19 situation is challenging for international trade and the global economy and is leading to greater market uncertainty going forward, especially within the maritime sector. At the same time, we see difficulties in general related to logistics and the international flow of goods.”
“Our key priorities in this extraordinary situation are to safeguard the health and safety of our employees, to deliver on our obligations to customers, and to make the necessary efforts to ensure financial robustness.”
Maritime sales
“We implemented extensive measures to adapt to the situation during the quarter and are prepared to take further action if the situation changes," says Geir Håøy, CEO of KONGSBERG.
KONGSBERG had a record-high order backlog at the end of 2019. This explains the high level of activity in Q1 2020, together with the strong maritime after-sales market. The Group increased its revenue by 93% compared to Q1 2019. When pro forma operating revenues for Commercial Marine are included, the revenue increased by 25%.
Growth and a good order intake
Kongsberg Maritime (KM) achieved growth in all divisions and operating revenue of MNOK 4,543 in Q1 2020. The order intake increased to a total of MNOK 4,813, due to a good after-sales market as well as increased order intake in the Integrated Solutions and Propulsion & Engines divisions.
The sale of US underwater technology company Hydroid, Inc. to Huntington Ingalls Industries (HII) was finalised on 26 March. This produced an accounting gain of MNOK 1,340 during the quarter and a cash flow of MNOK 3,631 before tax. The integration of acquired company Commercial Marine is going according to plan and, as previously announced, we expect to achieve annual cost savings of MNOK 500 as early as 2020.
Defence operations with higher revenue
With offices, service systems, and factories, we've been able to maintain critical global operations"
Kongsberg Defence & Aerospace (KDA) had a record-high order backlog at the end of 2019. In the first quarter, its operating revenue increased by 42% compared to Q1 2019. This business area had a high level of activity during the quarter related to deliveries under existing F-35 contracts and the US vehicle programme CROWS, as well as of the NASAMS air-defence system.
"I'm very pleased with these quarterly results and how we’ve managed to adapt and maintain more or less normal operations in a difficult COVID-19 situation. With offices, service systems, and factories in 40 countries, we've been able to maintain critical global operations even with extensive travel restrictions.”
Digital solutions
“We're now seeing how important our international presence is. Kongsberg Maritime has equipment installed on 30,000 ships worldwide, and a significant part of our service offerings are still operational, among other things due to KONGSBERG’s digital solutions.”
Right now, it’s impossible to predict the consequences and duration of the COVID-19 pandemic. However, we're prepared for the situation to last for a long time. “KONGSBERG has a sound balance sheet, and we're well equipped to tackle extraordinary situations and safeguard our stakeholder interests”, concludes Håøy.