Kontron AG publishes its results for the 2016 fiscal year

• Revenues € 385.1 million (-17.7 % on 2015: € 467.7 million)
• Order intake € 361.5 million (-7.7 % on 2015: € 391.8 million)
• Gross margin of 14.6 % burdened by impairments of inventories and capitalized development projects (-11.5 percentage points on 2015: 26.1 %)
• EBIT adjusted for restructuring cost and non-recurring costs comes to € - 58.8 million (2015: € 14.5 million)
• Further integration of Kontron in the S&T Group

Augsburg, April 06, 2017 – Kontron AG, a leading global provider of Embedded Computer Technology (ECT), presents its financial indicators for the 2016 fiscal year. These lie within the revised expectations issued in October 2016, but are significantly below the original guidance issued at the beginning of 2016.

Results 2016

Kontron’s revenues decreased by 17.7 % in the 2016 fiscal year to € 385.1 million (prior year: € 467.7 million). The decrease was seen in all three business units over the year. The revenues generated by the Industrial business unit fell 15.6 % to € 198.4 million in the reporting year (prior year: € 234.7 million). The Avionics/Transportation/Defense business unit generated revenues of € 96.6 million (prior year: € 127.2 million), down 24.3 % on the prior year. The performance of the Communication business unit was also below the prior year with revenues of € 90.1 million (prior year: € 105.8 million).

The order intake of € 361.5 million is 7.7 % down on the prior year (2015: € 391.8 million).

The gross margin deteriorated by 11.5 percentage points on the prior year to 14.6 % on account of non-recurring costs of approximately € 30 million due to impairments of inventories and capitalized development projects (prior year: 26.1 %). The impairment of goodwill and expenses relating to the restructuring program initiated in the second half of 2016 also impacted profits and resulted in EBIT of € -141.7 million (prior year:     € 6.2 million) and adjusted EBIT of € -58.8 million (prior year: € 14.5 million). Non-recurring effects from sale transactions led to cash inflows and in effect to positive cash flow of € 60.5 million (prior year: € 14.2 million).

“We are facing enormous challenges,” says Hannes Niederhauser, Kontron’s CEO. “The 2016 fiscal year was a difficult year for Kontron. The task now is to turn the ship around, with a lot of hard work, by keeping costs strictly under control and using innovative technologies. An important step in this direction is the merger between S&T Deutschland Holding AG and Kontron AG, a move that we will submit to our shareholders at this year's annual general meeting for approval.”

Synergies from future collaboration with S&T AG

The S&T Group has been Kontron AG’s biggest shareholder since November 2016, with a share of about 29.9 % of the voting rights and share capital. In February 2017, it was announced that the Management Board of Kontron AG and the Management Board of S&T Deutschland Holding AG, a wholly owned subsidiary of S&T AG, had signed a letter of intent providing for Kontron AG’s merger with S&T Deutschland Holding AG.

The two companies, Kontron and S&T, have a complementary portfolio of hardware, software and services, and also complement each other in terms of the markets in which they operate. Consequently, a number of positive effects and synergies such as the joint application of expertise in the field of research and development in order to develop innovative new products, solutions and services can be expected from the future partnership or merger with S&T.

Outlook 2017

Due to the decline in the order intake, revenues are forecast to remain comparable in the 2017 fiscal year to the 2016 fiscal year. The gross margin is anticipated to rise again to over 25 % on account of partnerships with Ennoconn and S&T.

Based on the current restructuring program, the Management Board expects annual savings of over € 15 million which will start to take effect from the second quarter of 2017. Thanks to these cost-savings and a higher gross margin a break-even result is expected for 2017.

Key figures for the 2016 fiscal year
 

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