Kongsberg Automotive (KOA) Q3 2024 earnings summary

Executive summary

• 2024 is 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 order changes.

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

• Record new business wins YTD of EUR 1.23 billion support long-term growth ambitions, with a book-to-bill ratio of 2.0.

• 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 warranty provision; YTD EBIT at EUR 17.6 million (2.9% margin), up from 0.1% last year.

• Free cash flow improved YTD, with positive cash flow from operations, though Q3 was affected by negative currency effects.

• Net income YTD improved from a loss of EUR 33 million last year to a loss of EUR 5 million, but Q3 was negatively impacted by exchange rate effects.

• Overhead cost reductions of EUR 17 million in 2024, with an additional EUR 10 million annual savings expected from Q3 2025.

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

Outlook and guidance

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

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

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

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

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