27.04.2006 Q1-2006 presentation 1 Group Finance Kongsberg Automotive 1Q 2006 Olav Volldal (CEO)
27.04.2006Q1-2006 presentation 1Group Finance
Kongsberg Automotive1Q 2006Olav Volldal (CEO)
27.04.2006Q1-2006 presentation 2Group Finance
Highlights first quarter 2006
• The market has been stable for car production in Europe and North America and a small increase in volumes for heavy trucks. Some key customers have lost market share.
• The volume growth corrected for the effect of Milan, currency effects and price reductions is 3,6 %.
• New important orders won for Head Restraints in North America and Seat Comfort products in Asia.
• Improved operations.
• Actions taken to prepare for a weaker market in second half of 2006 and growth in 2007.
27.04.2006Q1-2006 presentation 3Group Finance
Operating revenue pr quarter KA Group
527 539620 620 651
597653
720
0
100
200
300
400
500
600
700
800
Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06
27.04.2006Q1-2006 presentation 4Group Finance
Operating revenue pr quarter KA Group
• Milan contributed with NOK 101 mill in 1st quarter 2006.
• Adjusting for – non-product sales (tooling and
R&D income)
– price reductions
– currency effects
• the underlying volume increase is 3,6 %.
620
720
500
550
600
650
700
750
800
Q1 05 Q1 06
27.04.2006Q1-2006 presentation 5Group Finance
EBITA pr quarter KA Group
86
7275
85
71
90
75
57
0
10
20
30
40
50
60
70
80
90
100
Q2 04* Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06
0 %
2 %
4 %
6 %
8 %
10 %
12 %
14 %
16 %
27.04.2006Q1-2006 presentation 6Group Finance
EBITA pr quarter KA Group
• Milan contributes with NOK 12 mill in 1st quarter 2006.
• The increase in EBITA for the rest of the Group is consequently NOK 3 mill.
• The main explanation factors are– Higher raw material prices.
– Lower R&D and marketing cost.
– Excluding Milan other operating expenses are down.
86
71
50
55
60
65
70
75
80
85
90
95
100
Q1 05 Q1 06
27.04.2006Q1-2006 presentation 7Group Finance
KA Group – Key figures
1000 Nok 2006 2005 2005
Product Sales 689 381 582 660 2 385 956 Other Sales 30 385 37 122 139 284Total Operating revenue 719 766 619 782 2 525 240Cost of Goods sold (426 193) (359 347) (1 426 979)Contribution 293 573 260 435 1 098 261Contribution m argin 40,8 % 42,0 % 43,5 %R&D and Marketing (54 260) (56 237) (214 689)Other Operating expenses (132 303) (113 740) (501 132)EBITDA 107 010 90 458 382 440Depreciation (21 046) (19 256) (79 679)EBITA 85 964 71 201 302 761EBITA % 11,9 % 11,5 % 12,0 %Am ortisation (2 797) (3 332) (10 552)EBIT 83 167 67 869 292 209Profit before taxes 65 426 43 327 240 313EBIT % 11,6 % 11,0 % 11,6 %Net Profit 46 452 34 685 177 809
Capital em ployed 793 675 755 173 757 023Capex 22 516 34 103 121 450
Net interes t bearing-debt 591 017 617 597 638 362Equity 529 373 362 970 489 483Total Assets 1 887 964 1 545 588 1 748 469Equity ratio 28,0 % 23,5 % 28,0 %
1st quarter
*Profit before tax includes extraordinary finance elements of NOK 8 million.
27.04.2006Q1-2006 presentation 8Group Finance
Net Interest bearing debt(Incl Vikaberg and Bilco)
799772
797
717 712
657
591
200
250
300
350
400
450
500
550
600
650
700
750
800
850
900
Q2 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06
NOK mill
27.04.2006Q1-2006 presentation 9Group Finance
Seat Comfort (SC)
Head Restraints
Seat Ventilation & Cooling
Seat Heating
Seat Support Systems
Smart TCU
Smart Wire
27.04.2006Q1-2006 presentation 10Group Finance
SC Highlights
• Market stable compared to 1st quarter 2005.
• Several new businesses won for Head Restraints and Seat Heaters in the North American market . . .
• and Seat Comfort products in Asia.
• High activity regarding the German market.
• Significant cost reduction programs introduced.
27.04.2006Q1-2006 presentation 11Group Finance
Operating revenue pr quarter SC
242 225252 245
274304 307
357
0
50
100
150
200
250
300
350
400
Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06
27.04.2006Q1-2006 presentation 12Group Finance
Operating revenue pr quarter SC
• Milan contributed with 101 mill.• The remaining product sale is
up NOK 1 mill– Higher volume for Seat
Support in Europe and seat heaters in China
– Negative impact of price reductions.
– Positive currency
• Other revenue up NOK 10 mill
357
245
0
50
100
150
200
250
300
350
400
Q1 05 Q1 06
27.04.2006Q1-2006 presentation 13Group Finance
EBITA pr quarter SC
5854
515543
4744
39
0
10
20
30
40
50
60
70
Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06
0 %
3 %
5 %
8 %
10 %
13 %
15 %
18 %
20 %
23 %
27.04.2006Q1-2006 presentation 14Group Finance
EBITA pr quarter SC
• Milan contributes with NOK 12 mill in 1st quarter 2006.
• The rest of the portfolio is up NOK 3 mill– Relocation of production
– Higher R&D and marketing costs.
58
43
20
30
40
50
60
70
80
Q1 05 Q1 06
27.04.2006Q1-2006 presentation 15Group Finance
Commercial Vehicle Systems (CVS)
Clutch Actuation Systems
Gearshift Systems
Components
Air Couplings
27.04.2006Q1-2006 presentation 16Group Finance
CVS Highlights
• The European market for Commercial Vehicles up in the 1st quarter.
• Raw material prices hurt the profit.
• High market and R&D activities.
• Strong improvements of internal productivity.
27.04.2006Q1-2006 presentation 17Group Finance
Operating revenue pr quarter CVS
188
231
273 262278
216249
275
0
50
100
150
200
250
300
Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06
27.04.2006Q1-2006 presentation 18Group Finance
Operating revenue pr quarter CVS
The increase reflects the market in general and the production rate of our customers.
262
275
200
210
220
230
240
250
260
270
280
Q1 05 Q1 06
27.04.2006Q1-2006 presentation 19Group Finance
EBITA pr quarter CVS
25
6
22
27
26
31
27
13
0
5
10
15
20
25
30
35
Q2 04* Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06
0 %
2 %
4 %
6 %
8 %
10 %
12 %
14 %
16 %
27.04.2006Q1-2006 presentation 20Group Finance
EBITA pr quarter CVS
Positive impact from higher sales balanced by:
– Lower contribution as a result of significant increase in raw materials.
– Increased activity in R&D and marketing to be able to leverage on future opportunities.
2526
15
17
19
21
23
25
27
29
31
33
35
Q1 05 Q1 06
27.04.2006Q1-2006 presentation 21Group Finance
Gearshifts (GS)
Manual shiftersAutomatic shifters
27.04.2006Q1-2006 presentation 22Group Finance
GS Highlights
• GM Opel is picking up – Zafira is estimated to sell more than earlier planned.
• New Saab models have a positive effect on sales.
• Weak Volvo and Renault sales have negative impact on the top–line.
• Improved productivity and quality.
• Drop in revenues for plastic containers.
27.04.2006Q1-2006 presentation 23Group Finance
Operating revenue pr quarter Gearshift
9782
96
11298
7791 88
0
20
40
60
80
100
120
Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06
27.04.2006Q1-2006 presentation 24Group Finance
Operating revenue pr quarter Gearshift
• Product sales down 9 mill. – Lower sales of non-strategic
plastic products (6 mill).
– Price reductions
– Some main customers are loosing market shares
• Other sales down by 15 mill due high tooling sales in 1st quarter 2005.
112
88
0
20
40
60
80
100
120
Q1 05 Q1 06
27.04.2006Q1-2006 presentation 25Group Finance
EBITA pr quarter Gearshift
3
12
2
5
3
8
460
2
4
6
8
10
12
14
Q2 04* Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06
0 %
2 %
4 %
6 %
8 %
10 %
12 %
14 %
27.04.2006Q1-2006 presentation 26Group Finance
EBITA pr quarter Gearshifts
Despite lower sales EBITA is stable at NOK 3 mill. This is due to – Higher capitalization of R&D….
– and reduction of total R&D cost level.
– Improved productivity.
33
0
1
2
3
4
5
6
Q1 05 Q1 06
27.04.2006Q1-2006 presentation 27Group Finance
KA Group - Outlook
• The market for 2nd quarter seems to be much in line with 1st quarter. For the rest of the year we foresee a weaker market.
• Raw material prices are expected to increase and sales prices will decrease
• To compensate for this:– Produce more in low cost countries.– Source more from low cost areas.– Improve operations.– Get price compensation for extraordinary raw material price
increases.
27.04.2006Q1-2006 presentation 28Group Finance
General info
Change in dividend policy Kongsberg Automotive shall create good financial value for
its shareholders, employees and society. Returns to shareholders should be a combination of changes in share price and dividends. Dividends should reflect the results of the company, while recognizing opportunities for new, profitable investments. Over time the returns to shareholders should come more from an increased share price rather than through dividend distributions.
The Board of Directors of Kongsberg Automotive considers that dividends over a period should average roughly 35 percent of the company's net income.
27.04.2006Q1-2006 presentation 29Group Finance
General meeting
Remind all shareholders about the General meeting on the 15th of May at 1300
in Oslo
27.04.2006Q1-2006 presentation 30Group Finance
Q & A