Kongsberg Automotive (KOA) Q3 2024 earnings summary

Executive summary

• 2024 is positioned as a turnaround year, with cost reductions and operational efficiencies offsetting lower volumes and weak demand, leading to improved profitability.

• Q3 revenues fell 16.9% year-over-year to EUR 181.6 million due to lower automotive demand and customer order changes.

• Year-to-date EBIT margin improved to 2.9% from 0.1% last year, reflecting successful cost initiatives.

• Record new business wins year-to-date of EUR 1.23 billion support long-term growth ambitions, with a book-to-bill ratio above 1.5.

• Additional cost initiatives and workforce reductions announced to enhance competitiveness and efficiency.

Financial highlights

• Q3 EBIT was EUR 1.1 million, including a non-recurring provision for higher-than-expected warranty costs; YTD EBIT reached EUR 17.6 million.

• Free cash flow in Q3 was EUR -5.2 million; YTD free cash flow improved to EUR -24.5 million.

• Net income improved year-to-date from a loss of EUR 33 million last year to a loss of EUR 0.8 million.

• Liquidity reserve at end Q3 was EUR 95.2 million, down from EUR 219.2 million at year-end 2023.

• Currency effects negatively impacted Q3 results, with unrealized losses due to NOK and USD depreciation.

Outlook and guidance

• 2024 full-year revenue guidance revised to EUR 760–790 million; EBIT guidance set at EUR 18–23 million, including non-recurring costs and higher warranty expenses.

• New business wins guidance for 2024 maintained at over EUR 1.5 billion.

• Market expected to remain flat in H1 2025, with growth resuming thereafter, driven by aging fleets and emissions regulations.

• Ambitions for 2028: revenues above EUR 1 billion and EBIT margin at or above 8.5%.

• 85% of anticipated 2026 revenues and 70% of 2028 revenues are already booked or awarded.