Kontron sticks to 2015 plans despite slow start

• Order intake EUR 87.7 million, minus 17 percent yoy
• Order backlog EUR 338.1 million, up nearly 20% yoy
• Revenue EUR 98.5 million, minus 4 percent yoy
• Gross margin solid at 25.5 percent, adjusted EBIT margin minus 2.2 percent
• Revenue shortfall to be made up, FY guidance unchanged

Augsburg, 6 May 2015 – Kontron AG, a leading global provider of Embedded Computing Technology (ECT), delivered Q1 results signifying a slow start to the year. However, management continues to be confident regarding the company’s strategic, operational and financial objectives for 2015: financial guidance for the year remains unchanged.

The company’s underperformance can be clearly pinpointed and occurred in its business unit Communications where two large customers ordered less than forecast in the first two months of the year. March was profitable again with group revenues of about EUR 44 million and with Communications customers back to normal order patterns.

Order intake for the quarter came in at EUR 87.7 million, minus 17 percent on the same quarter last year, and revenues at EUR 98.5 million or 4 percent lower than Q1 2014. Order backlog stood at EUR 338.1 million as per the end of the first quarter, which represents a substantial part of the revenue the company will have to generate in order to achieve its guidance for the year. Q1 profitability has suffered as a direct consequence of the low revenues generated: although Q1 gross margin remained solidly above its 25 percent target at 25.5 percent, the EBIT margin dropped into slightly negative territory even when adjusted for restructuring costs: minus 2.2 percent.

The revenue breakdown by business unit and by region gives a clear picture for the reasons of Q1’s weakness: Communications revenue dropped by 16 percent relative to the same quarter last year. Revenues in North America dropped by 14 percent.

“We have to admit that our first quarter did not go according to plan”, says Rolf Schwirz, CEO of Kontron AG. “But March revenues looked very solid again, and we fully intend to use the remaining three quarters of the year to catch up. Our financial targets for the year remain unchanged.”

Management is confident that revenue shortfalls suffered in Q1 will be compensated by growth in the business units Avionics/Transportation/Defense and Industrials, as well as its innovation portfolio. Moreover, the strong growth momentum the company predicted for Asia is beginning to materialize: order intake from the region is up by 50 percent.

Key figures for the first quarter 2015

In the past quarters, Kontron has built a platform that puts it in a strong position to profit from powerful megatrends such as the Internet of Things and Industry 4.0. Today, activities focus on collaborating closely with customers and technology providers, developing innovative devices and systems with them, and expanding globally. Kontron is leading the embedded systems industry in the delivery of solutions that will help enable commercial and industrial organizations as well as customers from the public sector. It already has innovative IoT products commercially available that help customers unleash the true potential of the Internet of Things.

The company has built a new website www.kontron.com, where many examples of these new developments are pictured and described.

For further information, please contact
Alexandra Habekost
Kontron AG
Tel: +49 (0) 821 4086 114
Alexandra.Habekost@kontron.com