© Electronics Production | February 13, 2013

Strong finish for Kitron

Manufacturer Kitron saw some major ups during the fourth quarter - Offshore/Marine grew a massive 78.5% in revenues compared to the same quarter last year.
Also the Defence/Aerospace and Medical segments saw revenue growth of 8.3% and 8.8% respectively. Kitron is particularly bullish about the outlook for the Defence/Aerospace segment.

Kitron's revenue amounted to EUR 62.6 million in the fourth quarter of 2012, a 4.4 % increase compared with the same period last year. EBIT increased 416% from fourth quarter last year to EUR 3.17 million. Operating cash flow for the fourth quarter was EUR 11.4 million compared to EUR 1.8 million same period last year.

Significant inventory reduction

Kitron is targeting to significantly reduce the capital tied up in operations. During the fourth quarter inventory was reduced by more than EUR 6.7 million and the company achieved a positive cash flow of EUR 11.4 million. The improvement is the result of close follow-up during the quarter across all entities.

Based on today's business volume an additional reduction of at least EUR 6.7 million is expected, mainly as the result of the implementation of a common distribution centre for the Kitron manufacturing entities. The establishment of the distribution centre has started and will be completed during 2013.

The restructuring of Sweden completed

The restructuring of the Swedish operation which has been on-going for the last couple of years has now been fully completed. Following a number of years with poor profitability the Swedish posted a solid EBIT margin of 6.3% for the year as a total. The Swedish operation has now been concentrated in Jönköping which enables further streamlining of the operation and reduction of the operating cost.

Trend towards higher profitability

The improved profitability in the quarter and for the year in total is partly the result of the successful restructuring in Sweden and partly due to the improved profitability from new operations. The new operations in China and Germany are now profitable, while the factory in US is expected to be profitable from the second quarter of 2013 onwards.

While streamlining the operations in Norway and Sweden down to one factory per country, Kitron has during the past few years been expanding its operations globally. This has been part of a deliberate strategy to increase competiveness and to follow the customers.

The parallel establishment of factories in US and China while entering Germany through a smaller acquisition has been a major undertaking for Kitron and has had a significant negative impact on the result during the start-up phase. In Germany the company have secured a number of new customers since the start up and revenue volume is increasing. Most of the manufacturing for the German market is done in our factory in Lithuania.


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