Kongsberg Automotive (KOA) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue declined 10.9% year-over-year to EUR 190 million, mainly due to lower demand in Europe, North America, and China, but sequential revenue improved by 2.6% from Q4 2024.

• EBIT dropped to EUR 2.2 million (1.2% margin) from EUR 10.1 million (4.8% margin) in Q1 2024, impacted by lost revenue and absence of a prior one-time supplier settlement; free cash flow improved but remained negative at EUR -10.5 million.

• Cost-saving programs delivered EUR 17 million in annual savings, with a new overhead reduction program targeting EUR 10 million more by Q3 2025, including a reduction of 150 positions.

• New business wins in Q1 totaled EUR 136.6 million in average lifetime revenues, with major contract extensions in Flow Control and Drive Control Systems.

• Leadership changes include the appointment of Trond Fiskum as CEO and a new CFO, with a focus on cost reduction, restoring market confidence, and profitable growth.

Financial highlights

• Net income for Q1 was EUR -2.2 million, compared to EUR -0.4 million last year; adjusted EBITDA was EUR 11.3 million (5.9% margin) vs. EUR 17.7 million (8.4%).

• Pre-cash flow was negative at EUR 10.5 million, improved from EUR -14.9 million in Q1 2024.

• Leverage ratio increased to 3.1x adjusted EBITDA (EUR 41.5 million LTM), reflecting weaker earnings.

• Return on capital employed was 3.3%, up from -3.9% last year but down from 5.9% in Q4.

• Equity ratio stood at 32.5%, up from 30.9% a year ago.

Outlook and guidance

• Revenues expected to remain relatively unchanged in H1 2025 versus H2 2024, with potential upside in H2; EBIT margin guidance for 2025 remains positive, contingent on successful cost improvements.

• Cost-saving programs are on track, targeting EUR 10 million in annual savings by Q3 2025.

• Tariff and geopolitical uncertainties may impact future guidance and visibility for H2 2025 remains limited.