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Highlights...2 Our business. 3 Financials KA Group...4 Financials Divisions...5 Balance sheet, cash-flow and statement of changes in equity...6 Secondary segment reporting...9 Accounting Principles...11 Other company information...12 Page 2/13
KONGSBERG AUTOMOTIVE GROUP Interim report 4th quarter 2009 (The report is based on IFRS) Highlights 4 th Quarter Revenues above indications for Q4 09 (MEUR 177 vs MEUR 165) Revenues up 13 % from Q3 09 and in line with Q4 08 EBITDA adjusted for one-off effects MEUR 9.5 EBITDA improved by MEUR 13 compared to Q4 08 Adjusted EBITDA margin improved to 5.4 % from 3.5 % in Q3 2009 Positive cash flow from operations in Q4 09 Improved liquidity and capital structure Stronger integration of Power Products System 2009 Positive EBITDA and cash-flow from operations despite extreme market conditions Many and significant new orders Maintained focus on market and R&D Improved the capital structure and reduced cost level well positioned to take advantage of new opportunities Positive support from all stakeholders Page 3/13
Our business Kongsberg Automotive is a global provider of engineering, design, and manufacture for seat comfort, driver and motion control systems, fluid assemblies, and industrial driver interface products. currently delivering a complete range of seat comfort products. Commercial Vehicles Systems (former Actuation Systems) Our product line includes systems for seat comfort, clutch actuation, cable actuation, gear shifters, transmission control systems, stabilizing rods, couplings, electronic engine controls, specialty hoses, tubes and fittings. We target the automotive, commercial vehicle and industrial markets. Automotive Systems Automotive Systems consists of two business units. Commercial Vehicle Systems is a global developer and manufacturer of operator control systems for industrial vehicle markets, offering a robust product portfolio backed by the expertise and commitment to support our customers. We strive to add value by listening, identifying and understanding needs, and working to provide innovative solutions that benefit our valued customers. Power Products Systems Driveline Systems vision is to be the customers preferred choice for driver controls in the global light vehicle automotive market. We are a Tier 1 global supplier of customengineered cable controls and complete shift systems, as well as fluid bulk hoses and engineered hose assemblies. We are strong leaders in both control cables and shifter systems world-wide. Interior Systems is a global leader in the design, development and manufacture of mechanical and electro-mechanical light-duty motion comfort and seat comfort systems to Tier 1 and Tier 2 customers. Product range includes seat adjusters, seat recline, side bolsters and lumbar support, cables, seat heating, -ventilation and -massage systems, arm rests and head restraints. Kongsberg Automotive is the only supplier in the world Power Products Systems is a global leader in the design, manufacture and supply of vehicle control systems, providing quality engineered pedal systems, steering systems, electronic displays and cable controls to the world s foremost manufacturers of commercial, industrial, agricultural and construction vehicles. Page 4/13
Financials Kongsberg Automotive Group 4 th quarter 2009 Income statement 4th Quarter Year MEUR 2009 2008 2009 2008 Revenues 176.9 179.6 622.8 905.9 Opex (172.9) (188.1) (622.2) (859.8) EBITDA 3.9 (8.6) 0.5 46.1 EBITDA % 2.2 % -4.8 % 0.1 % 5.1 % Deprecation and Amortization (11.6) (11.8) (46.8) (46.9) EBIT (7.7) (20.3) (46.3) (0.8) EBIT % -4.3 % -11.3 % -7.4 % -0.1 % Financial items (15.3) (88.1) 18.4 (141.1) Profit before taxes (23.2) (108.4) (28.2) (142.2) Taxes on ordinary profit 5.6 37.8 0.7 47.9 Net profit (17.6) (70.6) (27.5) (94.3) Revenues in the 4 th quarter of 2009 for the Group were MEUR 176.9. Adjusted for negative currency effects of MEUR 8.4 revenues were MEUR 5.7 (3 %) above the 4 th quarter of 2008. EBITDA for the Group was MEUR 3.9 (2.2 %) in the 4 th quarter. The EBITDA margin was 7 %-points above the comparable period last year. Adjusted for year end adjustments (MEUR 3.2) and restructuring effects (MEUR 2.4) the EBITDA in the 4 th quarter was MEUR 9.5. Compared to 4 th quarter 2008 the EBITDA has improved by MEUR 12.5.The effect of slightly better market conditions, new orders and significant reductions in the fixed cost level were driving the strong improvement. Interest charges were offset by positive currency effects giving net financial items of MEUR 15.3 in the 4 th quarter. Other financial items include the effect of the warranties issued as part of the refinancing in September. Net profit in the 4 th quarter after interest and tax was negative with MEUR 17.6.For the full year the Net profit was negative MEUR 27.5 compared to a negative figure of MEUR 94.3 for 2008. Financial income and expenses 4th Quarter Year MEUR 2009 2008 2009 2008 Interest income 0.1 0.9 1.4 1.5 Interest expenses (7.0) (10.8) (41.6) (38.9) Foreign currency gains/losses 4.8 (69.5) 61.4 (89.5) Change in valuation currency contracts (7.2) (10.1) 2.9 (12.7) Other financial items (6.0) 1.3 (5.7) (1.5) Net financial items (15.3) (88.1) 18.4 (141.1) Interest expenses in the 4 th quarter of 2009 are 30 % below the same period in 2008. The debt is drawn up in a combination of NOK, EUR and USD to match the underlying cash flow of the business. There were positive currency effects of MEUR 61.4 in 2009. Page 5/13
Financials Divisions 4 th quarter 2009 Revenues 4th Quarter Year MEUR 2009 2008 2009 2008 Automotive Systems 114.5 103.7 385.4 528.6 Commercial Vehicles Systems 42.8 50.1 147.9 267.7 Power Products Systems 25.3 32.1 108.4 145.7 Elim & other (5.7) (6.3) (18.9) (36.1) Group 176.9 179.6 622.8 905.9 The Automotive Systems revenues were up MEUR 17.9 (17 %) compared to 4 th quarter 2008, after adjustment for a negative currency effect of MEUR 7.1. A better market across regions have contributed to higher production of cars and hence increased the sales for the division. Start of production of new orders during 2009 has also contributed positively. The Commercial Vehicles Systems revenues were down MEUR 7.5 (- 15 %), reflecting a weaker market for commercial vehicles, in addition to a negative currency effect of MEUR 0.2. Also for this division new orders have partly compensated for the market drop. The Power Products Systems revenues were down MEUR 5.1 (- 20 %) compared to 4 th quarter 2008. This includes a negative currency effect of MEUR 1.7. The market in general has declined with more than 30 %. All product areas were affected by a weak market. EBITDA MEUR 4th Quarter Year 2009 2008 2009 2008 Automotive Systems 4.2 3.7 % (10.6) -10.2 % (1.4) -0.4 % 5.4 1.0 % Commercial Vehicles Systems 2.8 6.5 % 1.9 3.8 % 2.3 1.6 % 30.3 11.3 % Power Products Systems (2.0) -7.8 % 2.3 7.2 % 2.0 1.9 % 10.5 7.2 % Elim & other (1.0) (2.2) (2.4) (0.2) Group 3.9 2.2 % (8.6) -4.8 % 0.5 0.1 % 46.1 5.1 % EBITDA for Automotive Systems was MEUR 4.2 in the 4 th quarter 2009, which is MEUR 14.8 above comparable period last year. Adjusted for year end adjustments the EBITDA was MEUR 5.3. A higher EBITDA was a result of cost reductions combined with higher revenue across all regions. EBITDA for Commercial Vehicles Systems was MEUR 2.8, which is MEUR 0.9 above comparable period last year. The EBITDA margin was up 2.7 % points. Adjusted for restructuring effects the EBITDA was MEUR 4.0. EBITDA for Power Products Systems was MEUR -2.0, a reduction of MEUR 4.3 compared to 4th quarter 2008. Adjusted for restructuring effects (MEUR 1.2) and year end adjustments (MEUR 2.1) the EBITDA in the 4 th quarter was MEUR 1.3. The revenues and EBITDA in 4 th quarter 2008 include the divested aviation product line which was sold end of March 2009. Page 6/13
Balance Sheet, Statement of changes in Equity and Cash Flow 4 th quarter 2009 Balance Sheet MEUR 31.12.09 31.12.08 Deferred tax asset 61.6 44.3 Intangible assets 255.6 282.8 Plant, building, and property 140.7 156.1 Other Non-current Assets 2.2 5.2 Total Non-Current Assets 460.2 488.4 Inventories 66.5 84.8 Account receivables 103.7 110.5 Other Short term receivables 25.1 18.2 Cash and cash equivalents 107.7 47.6 Current assets 303.0 261.1 Assets 763.2 749.5 Share Capital 24.4 3.3 Share premium reserve 202.8 55.5 Other Equity (54.7) 24.5 Minority interest 6.5 7.4 Total Equity 178.9 90.7 Interest bearing loans and borrowings 381.8 420.6 Other long term liabilities 55.2 58.1 Total Long term liability 437.0 478.7 Bank overdraft 4.2 24.4 Other short term liabilities, interest bearing 6.8 36.0 Accounts payable 79.5 67.9 Other short term liabilities 56.8 51.8 Short Term Liability 147.2 180.1 Total liability 584.2 658.8 Total Equity and Liabilities 763.2 749.5 The total assets have increased by MEUR 14 since year end 2008. By having a high focus the net working capital have been reduced by MEUR 36.7. There has been a reduction in intangibles due to the divestiture of some product lines as well as currency effects. The equity ratio per December 2009 was 23.4 %. The Net interest bearing debt was reduced from MEUR 433.4 at year end 2008 to MEUR 285.1 per end of December 2009. The capital expenditure in 2009 was MEUR 12.8 which represents a ratio to sales of 2.1 % The private placement and the subsequent offering carried out in September/October led to increased equity, improved liquidity and reduction of interest bearing liabilities. Page 7/13
Cash Flow YTD MEUR 31.12.09 31.12.08 EBITDA 0.5 45.8 Net cash effect financial items (35.4) (37.4) Tax Payable (2.2) 0.3 Change in Working Capital 36.7 28.4 Change in other items (*) (3.4) (9.5) Cash Flow from Operations (3.8) 27.6 Cash Flow from investing activities 9.3 (39.3) Cash Flow from financing activities 54.6 16.2 Net change in cash 60.1 4.5 (*) incl exchange rate differences Consolidated statement of changes in equity YTD MEUR 31.12.09 31.12.08 Equity as of start of period 90.7 68.5 Net profit for the period (27.5) (94.3) Other comprehensive income (35.3) 35.6 Total comprehensive income (62.8) (58.7) Foreign currency translation (5.2) 25.0 Issued new shares 151.0 55.0 Warranties (banks) 5.0 - Options contracts (employees) 0.2 0.9 Equity as of end of period 178.9 90.7 Page 8/13
Consolidated Statement of Comprehensive Income 4th Quarter Year MEUR 2009 2008 2009 2008 Revenues 176.9 179.6 622.8 905.9 Opex (172.9) (190.8) (622.2) (859.8) EBITDA 3.9 (11.3) 0.5 46.1 EBITDA % 2.2 % -6.3 % 0.1 % 5.1 % Deprecation and Amortization (11.6) (11.8) (46.8) (46.9) EBIT (7.7) (23.0) (46.3) (0.8) EBIT % -4.3 % -12.8 % -7.4 % -0.1 % Financial items (15.5) (88.1) 18.0 (141.1) Profit before taxes (23.2) (111.1) (28.2) (142.2) Taxes on ordinary profit 5.6 37.8 0.7 47.9 Net profit (17.6) (73.2) (27.5) (94.3) Foreign currency translation differences during the period -0.8 16.8-49 49.5 Tax on items taken directly to or transferred from equity 0.2-13.8 13.7-13.8 Total comprehensive income for the year (18.2) (70.2) (62.8) (58.7) Net profit attributable to: Equity holders (mother company) (17.4) (73.4) (27.1) (94.1) Non-controlling interests (0.3) 0.1 (0.4) (0.2) Total comprehensive income attributable to: Equity holders (mother company) (16.3) (73.3) (46.5) (61.4) Non-controlling interests (1.9) 3.1 (0.9) 2.7 Earnings per share: Basic earnings per share, Euros -0.04-1.14-0.18-1.70 Diluted earnings per share, Euros -0.04-1.14-0.17-1.70 Page 9/13
Operating segments assets and liabilities Assets and liabilities Automotive Systems Commercial Vehicles Systems Systems Goodwill 77.0 59.2 18.0 (0.2) 154.1 Other intangible assets 38.7 33.4 28.5 0.9 101.5 Property, plant and equipment 69.6 55.1 15.2 0.8 140.7 Inventories 34.0 16.4 16.5 (0.5) 66.5 Trade receivables 60.6 25.4 17.5 0.0 103.7 Segment assets 280.0 189.6 95.7 1.1 566.4 Unallocated assets - - - 196.7 196.7 Total assets 280.0 189.6 95.7 197.8 763.2 Trade payables 46.5 21.0 11.9 0.1 79.5 Unallocated liabilities - - - 504.8 504.8 Total liabilities 46.5 21.0 11.9 504.9 584.2 Capital expenditure 7.8 4.6 0.4 (0.0) 12.8 2009 Power Products Elim & other Group Assets and liabilities 2008 Automotive Systems Commercial Vehicles Power Products Elim & other Group Systems Systems Goodwill 75.7 66.4 19.7 (0.2) 161.6 Other intangible assets 46.8 41.4 32.7 0.3 121.2 Property, plant and equipment 83.2 54.6 17.2 1.0 156.1 Inventories 41.3 19.4 24.9 (0.8) 84.8 Trade receivables 55.6 32.5 22.2 0.2 110.5 Segment assets 302.6 214.3 116.7 0.5 634.2 Unallocated assets - - - 115.3 115.3 Total assets 302.6 214.3 116.7 115.8 749.5 Trade payables 40.2 14.8 12.6 0.3 67.9 Unallocated liabilities - - - 590.9 590.9 Total liabilities 40.2 14.8 12.6 591.2 658.8 Capital expenditure 18.7 14.7 3.8 2.1 39.3 Page 10/13
Segments - geographical location Operating revenues by geography Jan - Dec MEUR 2009 % 2008 % USA 148,2 23,8 % 182,3 20,1 % Germany 88,3 14,2 % 118,8 13,1 % Sweden 52,9 8,5 % 129,8 14,3 % France 52,4 8,4 % 77,9 8,6 % China 52,1 8,4 % 50,3 5,6 % Other 228,8 36,7 % 346,8 38,3 % Operating revenues 622,8 100,0 % 905,9 100,0 % Non-current assets by geopgraphy Jan - Dec MEUR 2009 % 2008 % USA 143.9 36.3 % 169.5 38.6 % UK 45.8 11.5 % 48.5 11.1 % Norway 35.5 8.9 % 31.3 7.1 % Germany 34.8 8.8 % 49.0 11.2 % Sweden 28.8 7.3 % 31.2 7.1 % Other 107.6 27.1 % 109.3 24.9 % Total Non-Current Assets (*) 396.3 100.0 % 438.9 100.0 % (*) Non-current assets by geographical location includes Intangible assets (incl. Goodwill) and Property, plant and equipment. Page 11/13
Note 1 Disclosures General information Kongsberg Automotive Holding ASA and its subsidiaries develop, manufacture and sell products to the automotive industry all over the world. Kongsberg Automotive Holding ASA is a limited liability company which is listed on the Oslo Stock Exchange. Basis of preparation This condensed consolidated interim financial information, ended 31 December 2009, has been prepared in accordance with IAS 34 Interim financial reporting. The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2008, which have been prepared in accordance with IFRS. Accounting policies The accounting policies are basically consistent with those of the annual financial statements for the year ended 31 December 2008, as described in those annual financial statements. Among new and amended standards adopted by the group in 2009, the implementation of IFRS 8 is considered to be the most significant one. IFRS 8, 'Operating segments' has replaced IAS 14, 'Segment reporting'. The new standard requires a 'management approach' under which segment information is presented on the same basis as that used for internal reporting purposes. The impact on the financial statements is limited, since the identified operational segments are viewed to be the same as identified according to previous IAS 14 and the new information requirements were more or less covered in previous reporting. Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings. Risks The Group s activities are exposed to different types of risks. Some of the most important factors are foreign-exchange rates, interest rates, raw material prices and credit risks, as well as liquidity risk. As the Company operates in many countries, it is vulnerable to currency risk. The greatest currency exposure is associated with EUR and USD, while raw material exposure is greatest in copper, zinc, aluminum and steel. The gearing level in the company is high, which influences the liquidity situation in the Group. A potential further drop in sales of vehicles is considered to be the biggest risk factor at the moment. The BoD and management continue to proactively address the risk factors described above. Seasonality The KA Group is to some extent influenced by seasonality. The seasonality is mainly driven by the vacation period in the 3 rd quarter each year having lower sales. Page 12/13
Other company information Kongsberg Automotive Holding ASA Dyrmyrgata 48 3601 Kongsberg, Norway Phone +47 32 77 05 00 www.kongsbergautomotive.com The Board of Directors: Curt Germundsson Tone Bjørnov Jürgen Harnisch Ulla-Britt Fräjdin-Hellqvist Eivind Holvik Tonje Sivesindtajet Kjell Kristiansen (Chairman) (Shareholder elected) (Shareholder elected) (Shareholder elected) (Employee elected) (Employee elected) (Employee elected) Executive Committee: Olav Volldal President & CEO Trond Stabekk Group Executive & CFO Hans Peter Havdal Group Executive & President of Automotive Systems Bård Klungseth Group Executive & President of Commercial Vehicles Systems Jim Ryan Group Executive & President of Power Product System Investor Relations Contact: Olav Volldal +47 982 14 014 Trond Stabekk +47 982 14 054 Ronny Lie +47 916 10 798 Financial Calendar Publication of the quarterly financial statements in 2010: Report distributed Presentation 1st Quarter 2010 28 April, 2010 29 April, 2010 2nd Quarter 2010 15 July, 2010 16 July, 2010 3rd Quarter 2010 20 October, 2010 21 October, 2010 4th Quarter 2010 TBD TBD Date for Ordinary general meeting TBD Page 13/13