KONGSBERG has a reduction in revenues in the third quarter of 2017, but restructuring measures improve profitability. The order backlog is at end quarter lower than previous quarters, but order intake within defence is expected to improve in the fourth quarter.
Q3 2017 revenues are NOK 3,279 million, a reduction of 4.3 percent compared to the same quarter of 2016. The quarterly EBITDA is NOK 274 million, including restructuring costs of NOK 90 million. Order intake in the quarter is NOK 2,429 million, resulting in an order backlog at the end of the quarter of NOK 14,298 million.
“We have been through a period of significant restructuring since 2015 that includes reductions in staff, cost efficiency measures, and organisational changes including closing down and establishing new businesses. Throughout this period, the main focus has at the same time been to deliver to the expectations of the customer. We have succeeded in this. Many important positions have been secured in relation to future solutions and important programs. Now comes a period where we seek to realise these positions. Fast growth is not expected, but we consider our growth potential to be significant, and at the same time we have reduced our cost level. Our recipe for success remains the same – world-class delivery on existing projects as well as future positions and contracts”, says Geir Håøy, President and CEO of KONGSBERG.
Restructuring measures in Kongsberg Maritime with positive effects
Kongsberg Maritime has revenues on level with the equivalent quarter of 2016 and an EBITDA margin of 9.7 percent. The business area’s order intake in the quarter is at NOK 1,670 million. This results in an accumulated order intake at quarter end of NOK 5,643 million, corresponding to a book/bill of 1.02.
“Kongsberg Maritime has in the last two years carried out significant organisational changes and capacity adjustments that are beginning to yield improved profitability. This restructuring has been necessary both in dealing with lower demand in certain markets and at the same time due to intensified competition. Some markets are still challenging, but we expect the new organisation and business model to make Kongsberg Maritime more robust and better adapted to the current market situation and expected future development. We are continuing to take strategic positions with new concepts and focusing on segments with growth, and see considerable opportunities ahead of us”, says Håøy.
Strengthening of the defence business
Kongsberg Defence Systems has a quarter with revenues and results on level with the equivalent quarter of 2016. The business area has good operations in all divisions in the third quarter. Kongsberg Protech Systems has a weaker quarter compared to the same quarter of 2016. As of October 1, the two areas have been merged to Kongsberg Defence & Aerospace.
“Kongsberg Defence Systems deliver yet another solid quarter with major deliveries and development projects on plan. The defence industry is characterized by relatively few, but large contracts. This entails fluctuations between quarters, and currently a reduced order backlog. However, we are expecting increased order intake in the closest quarters, contributing to increased order backlog. In the quarter we merged our two defence areas. A joint defence business strengthens our competitiveness and position for the opportunities ahead of us”, says Håøy.