Kontron announces Q3 results in line with the revised expectations for the full year 2016

• Revenues € 89.5 million (down 21.1 % on 3Q15: € 113.4 million)
• Order intake € 79.0 million (down 29.0 % on 3Q15: € 111.2 million)
• Order backlog € 261.7 million (down 18.4 % on 3Q15: € 320.7 million)
• Gross margin still suffering from weak revenues: 20.6 % (26.7 % in 3Q15)
• EBIT net of restructuring cost and non-recurring costs comes to € -6.7 million (3Q15: € 5.1 million)
• New restructuring program commenced

• Augsburg, October 27, 2016 – Kontron AG, a leading global provider of Embedded Computer Technology (ECT), reports results for the third quarter that, as expected, are below the prior year and in line with the expectations for the full year 2016 after the revision of the guidance  in July 2016. 

  Third quarter on a par with the first two quarters

  At € 89.5 million, revenues are on a par with the first two quarters of 2016 and 21.1 % below the third quarter of 2015, when revenues came to € 113.4 million. Likewise, the order intake of € 79.0 million was 29.0 % down on the same quarter of the prior year, when it came to € 111.2 million.

  The order backlog mirrored this development, coming to € 261.7 million as of September 30, 2016 (2015: € 320.7 million). The same holds true for EBIT and the gross margin: EBIT, adjusted for restructuring cost and non-recurring costs, was negative at € 6.7 million, compared to a positive figure of € 5.1 million in the third quarter of 2015. The gross margin of 20.6 % is approximately 6.1 percentage points below the level of the prior year of 26.7 %.

  Weak revenues continued to be recorded in all three business units: Industrial saw a decline of € 8.8 million, down 16.2 % on the same quarter last year. Within this business unit, Industrial Automation recorded a rise in revenue of € 1.6 million, or 6.9 %. Infotainment and Medical recorded a combined fall of € 10.4 million, or 32.1 % compared to the prior year. The decline in revenues generated by the Avionics/Transportation/Defense business unit of € 11.2 million, or 34.9 %, was disappointing. However, some of this decline is explained by a shift in revenue recognition to later periods. Within the business unit, the Transportation segment recorded a decrease of € 6.7 million and the Defense segment a decrease of € 6.1 million. The Avionics segment improved slightly by € 1.8 million. In the business unit Communication revenues also contracted, as expected, and were down by € 3.9 million, or 14.4 %, in comparison to the same period of the prior year.

  Management Board working on a new restructuring plan

  The Management Board of Kontron AG is working on a new restructuring plan to return Kontron to profitable revenue growth by making the most of the company’s existing potential.

  “We are already focusing on implementing the first measures,” says Sten Daugaard, CEO of Kontron AG. “One of the objectives of the plan is to create a high-performance product portfolio and establish an optimized technology roadmap that will allow the company to better address future markets and offer our customers even better products and services.”    

  “We are planning to implement all the points of the plan within twelve months, which is ambitious but nevertheless feasible,” says Dr. Thomas Riegler, CFO of Kontron AG. “Kontron has numerous strengths which we must exploit and nurture, and the ECT market itself continues to offer us promising growth opportunities.”

  Dr. Thomas Riegler will remain at the helm as member of the management board to guide Kontron through the restructuring process

  Dr. Thomas Riegler, who has been in charge of Finance at Kontron AG since March 2016 and was appointed to the Management Board on July 25, 2016, has agreed to remain in office. Mr. Frank Gumbinger decided not to join the Management Board of Kontron effective January 1, 2017 for personal reasons.

  “It is with great regret that the Supervisory Board and Management Board acknowledge Mr. Gumbinger's decision. We wish him all the best for the future and his professional career,” says Rainer Erlat, Chairman of the Supervisory Board of Kontron AG. “At the same time we are delighted to have Dr. Thomas Riegler, a very experienced and competent member of the management board, to accompany the restructuring efforts over the coming months and that with this appointment we can ensure continuity within the company.”

  Guidance for 2016

  Kontron expects revenues in the second half of 2016 to remain comparable to the first six months. However, both the adjusted EBIT margin and the gross margin are likely to be lower in the second half of 2016 than in the first six months.

  Key performance indicators for the third quarter of 2016

  		Q3 2016	Q3 2015	Δ
  Order intake	€ m	79.0	111.2	- 29.0 %
  Order backlog	€ m	261.7	320.7	- 18.4 %
  Revenues	€ m	89.5	113.4	- 21.1 %
  Book-to-bill ratio		0.88	0.98
  Gross margin	%	20.6	26.7	- 6.1 ppt
  EBIT net of restructuring cost and non-recurring costs	€ m	- 6.7	5.1	- 11.8
  EBIT (reported)	€ m	- 6.7	3.5	- 10.2
  Cash flow from operating activities	€ m	7.5	- 1.2

   

   

   

   

   

   

   

   

   

   

   

   

   

   

  ###

   

  About Kontron:

  Kontron, a global leader in embedded computing technology and a pioneer in secure IoT platform solutions, provides a combined portfolio of hardware, middleware and services. With its leading-edge standard products and solution ready platforms, Kontron enables new technologies and applications across multiple industries. As a result, customers benefit from accelerated time-to-market, reduced total cost of ownership, product longevity and the best overall application with the highest reliability in embedded technology. Kontron is a listed company. Its shares are traded in the Prime Standard segment of the Frankfurt Stock Exchange and on other exchanges under the symbol “KBC”. For more information, please visit: www.kontron.com

   

  For more information:

  Alexandra Habekost
  Head of Investor Relations
  Kontron AG
  Tel: +49 (0) 821 4086 114
  Alexandra.Habekost@kontron.com

  Chari Lazaridis
  Head of Global Corporate Communications
  Kontron AG
  Tel: +49 (0) 821 4086 484
  Chari.Lazaridis@kontron.com

   

   

   

   

   

  back all news