Oslo, 13th. February 2008
Eirik S. Larsen, CEOKari Duestad, CFO
REACHING FURTHERTHROUGH PEOPLE ANDINNOVATION
Comrod Communication ASAQ4 Presentation
Increased profitability and strong growth
AGENDA
I. Q4 highlights and introduction II. Q4 FinancialsIII. Business Areas HighlightsIV. Summary
HIGHLIGHTS Q4
Strong growth during the fourth quarter
• Growth based on market foothold established over the last years.
• Trend confirmed during the first part of Q1 2008.
Significant results improvement
• EBIT of NOK 13.5 million in Q4 and NOK 29.5 million for 2007 in total
• All business areas are again profitable
Successful ramp up of production capabilities increases operational flexibility
Strengthened relations to key customers
Positive market outlook based on leading market position and new product launches
COMROD COMMUNICATION GROUP
No.1 globally on tactical antennas
Leading market positions within defense masts and power supplies
Preferred supplier to the major defense radio communication manufacturers
World wide sales to more than 60 countries.
Headquarter and main factory at Tau, Norway. Factory in France; Power division located in Asker
Current turnover about 300 million NOK and about 230 employees
COMPANY PROFILE
A leading player within the global markets for advanced tactical antennas, masts, power supply and related industrial products
BUSINESS MODEL AND STRATEGIC TARGET
Core competencies • Design and manufacturing of antennas• Antenna systems• Telescopic masts• Power supplies and battery chargers for defense applications
Product development
• Based on the rapid advances in radio communication technology as well as the specific needs of our key customers. Variants within a product concept is normally adapted specifically to the customers need
Key customers • Main defence communication equipment manufacturers
Customer relationships
• Long term• Based on proven track record, technical qualification and
rigorous performance testing
Contracts • Large defense communication programs lay behind most of the contracts
• These programs can be national or multinational and are funded by governmental money through the MODs. Typical timelines are 3-5 years and longer
Growth platform • Established market foothold• Recent successful launch of new products• New products in the pipeline for this year• Total market growing annually by 10 – 15%
Turnover target • NOK 500 million medium term is judged as a realistic target
AGENDA
I. Q4 highlights and introduction II. Q4 FinancialsIII. Business Areas HighlightsIV. Summary
HIGHLIGHTS OF THE FINANCIAL PERFORMANCE IN Q4
Substantial growth in turnover• 53 % in Q4• 47 % as of Q4
Significant growth in EBIT • 31 % in Q4• 52 % as of Q4
Q4 MAIN FINANCIAL RESULTS
Q4 2007 Q4 2006 D 06 -07
Total Sales 103 588 67 596 53,2 %
EBITDA 16 745 12 224 37,0 %
EBIT 13 577 10 394 30,6 %
EBIT % 13,1% 15,4%
Q4 MAIN FINANCIAL RESULTS
Q4 2007
YTD Q4 2006 YTD D 06 -07Q4 2006
Proforma YTD
Total Sales 290 138 151 273 91,8 % 197 523
EBITDA 41 404 24 544 68,9 % 29 241
EBIT 29 574 18 858 56,8 % 19 458
EBIT % 10,2% 12,5% 9,9%
SEGMENT INFORMATION: TURNOVER PER BUSINESS AREA
Q4 2007 Q4 2006 Q4 2007 YTD Q4 2006 YTDAntennas Proforma
Turnover 69 308 40 210 170 965 129 289 EBIT 9 957 11 363 18 792 20 816 EBIT % 14 % 28 % 11 % 16 %
MastsTurnover 17 231 14 665 54 398 27 186 EBIT 3 782 (1 576) 6 832 (2 699) EBIT % 22 % -11 % 13 % -10 %
Industrial Products Turnover 10 120 6 760 33 002 26 239 EBIT 771 (264) 2 374 (105) EBIT % 8 % -4 % 7 % 0 %
Power SupplyTurnover 8 544 5 962 33 516 14 809 EBIT 1 395 870 7 548 1 446 EBIT % 16 % 15 % 23 % 10 %
CASH FLOW STATEMENT
31.12.2007 31.12.2006
Profit before tax 18 153 11 732
Depreciation and write-downs 11 830 5 686
Change in net working capital -26 157 -9 059
Net cash flow from operations 3 826 8 360
Net cash flow from investment activities 11 974 -122 587
Net cash flow from financing activities -9 670 115 733
Net change in cash and cash equivalents 6 130 1 506
Cash and cash equivalents at start of period 3 184 1 678
Cash and cash equivalents at end of period 9 314 3 184
Credit facility 20 000 5 000
BALANCE SHEET
(All figures in 1000 NOK) 31.12.2007 31.12.2006
Total Capital 303 905 270 627
Equity 95 044 18 236
Net interest-bearing liabilities 113 990 183 581
Property, Plant and Equipment 61 981 57 878
Intangible assets 69 722 67 386
AGENDA
I. Q4 highlights and introduction II. Q4 FinancialsIII. Business Areas HighlightsIV. Summary
ANTENNAS – HIGHLIGHTS
Improved financial results driven by growth in turnover and improved efficiency
Increase in deliveries on contract with Harris Corporation in the US • The dominant position of Harris place Comrod in unique position
for further growth
New antenna contracts secured • New contract in October on new multiband antenna to major
NATO country; NOK 12,7 mill.• Contract with Norwegian Army in October on vehicle antennas;
NOK 6,7 million
Ramped up production at Tau factory; output capacity now doubled compared to 2006
Factory in Hungary acquired for added operational flexibility and to secure future profitability
High sales expected also in the first quarters of 2008
BUSINESS AREA
Comrod antennas for the defence/ military market and for civilian/commercial use.
MASTS – HIGHLIGHTS
Business Area Profit improvement through improved operations confirmed by Q4 excellent EBIT margins
New level for annual turnover established; 2007 turnover was twice the turnover of 2006
Agreement with THALES on streamlining supply chain
Increased use of systems related to Battle Field Surveillance and Line Of Sight main driver for the growth in the market for masts
Existing contracts and order book indicates continued good sales in first half of 2008
BUSINESS AREA
Telescopic, sleeve, man-pack, manual and motorized masts.
INDUSTRIAL PRODUCTS – HIGHLIGHTS
Improved profitability through 2007 by successful restructuring of production
Revenue growth related to the offshore application business
Production capacity is substantially increased for capturing on the high demand within offshore application products
Insulator products profitability improvement program started
BUSINESS AREA
Custom designed products for commercial and military applications
POWER SUPPLY – HIGHLIGHTS
Excellent financial results for 2007
First new contract with new customer secured; Contract on new 8 position battery chargers with Harris Corp in the USA.
• Contract value:• Start of deliveries:
Outlook medium term is good; short term reduction in turnover growth in a transition period between contracts may be seen first half of 2008
BUSINESS AREA
Experience from more than 130 OEM projects worldwide.
UMS NORWAY – UNMANNED SYSTEMS
Development and sales of UAVs (Unmanned Aerial Vehicles)
Targeting the rapidly increasing demand for tactical UAVs in the defense and civil markets
Investments to date are limited
Full scale prototype to be airborne within March this year, followed by a period of operational tests
Comrod Communication ASA - 70% of the shares in UMS
AGENDA
I. Q4 highlights and introduction II. Q4 FinancialsIII. Business Areas HighlightsIV. Summary
SUMMARY AND OUTLOOK
Significant improvement in EBIT for Q4 and for the year in total
Strong growth in turnover
Operational improvements achieved as planned and capacity flexibility established
Integration process is in good progress – motivation from achieving real results together
Strong market foothold and total market growth indicates high turnover levels also in 2008
REACHING FURTHER – THROUGH PEOPLE AND INNOVATION
Thank you for your attention, any questions are welcome.
www.comrod.com
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