Kitron: Swedish profitability after successful restructuring
The restructuring of Kitron's Swedish operations is completed. - We are now
seeing the results of the substantial actions we have taken in the last two
years to improve profitability, says Thomas LÃ¶fgren, head of Kitron's Swedish
(2012-02-11) The Swedish turnaround plays a central role in the rapid growth in
profitability for the Norwegian technology company Kitron ASA. The next
quarterly report, which will be published February 13th, will show a solid jump
in profitability in 2012 for the Swedish business after many years of low
- The last two years we have cut the cost of our Swedish operations by 35 per
cent while we have managed to keep the sales volume, continues LÃ¶fgren.
Kitron's main markets are Norway and Sweden, but most of Kitron's customers sell
their products globally. The Swedish operation accounts for about a quarter of
the Group's gross revenues, while revenues from customers in the Swedish market
accounts for about 40 per cent of total revenues.
- Sweden is important to us. We have now completed a successful restructuring of
the business that enables efficient operation and reduced costs, says Kitron CEO
JÃ¸rgen Bredesen, adding that the costs for the closure of the factory in
Karlskoga were included in the accounts for 2011, and that no further provisions
Located in JÃ¶nkÃ¶ping
All Swedish business is now concentrated in JÃ¶nkÃ¶ping. The closure of the
factory in Karlskoga was completed last autumn.
- We have transferred most customers from Karlskoga to JÃ¶nkÃ¶ping, says LÃ¶fgren.
Revenues at Karlskoga had decreased over a long period following a decline in
the Swedish defence industry, the main customer group of the Karlskoga factory.
While revenues from the defence segment have fallen, Kitron has experienced
growth in other segments in the Swedish market.
- The last few years we have seen growth in manufacturing, telecommunications
and medical equipment, LÃ¶fgren explains, pointing out that several of Kitron's
customers have experienced success with their products.
The Swedish listed Telecoms company Transmode is an example of this. With its
solutions for more efficient utilization of fibre optical networks, Transmode
enjoys the strong growth in network traffic. Kitron JÃ¶nkÃ¶ping delivers about 90
different products in the form of printed circuit boards, racks and box build
products to Transmode's system deliveries.
The Swedish industrial giant Atlas Copco has also contributed to the growth of
- "The choice of Kitron as a partner has been based on finding a supplier who
can live up to the very high standards we impose on a partner", said Henrik
Danielsson, Purchasing Manager, Atlas Copco Industrial Technique AB, when Kitron
JÃ¶nkÃ¶ping signed a strategic cooperation agreement with the company in 2010. The
agreement covers electronics manufacturing and assembly of industrial tools.
Increased profitability with global focus
In parallel with the restructuring of the Swedish business, Kitron has expanded
globally. New factories in China and the U.S. are established, and a smaller
German business has been bought. Most of the manufacturing for the German market
is performed by Kitron's factory in Lithuania.
- We believe in increased profitability. The new factories in the U.S. and China
and the streamlined operations in Europe play a crucial role in this, says
Bredesen, and reminds us that important milestones were reached in the third
quarter when Kitron China and Kitron Germany reached break-even. Revenues from
the Norwegian operation, with the factory in Arendal, are still by far the
biggest, accounting for about half of the groups gross revenues.
For further information please contact:
JÃ¸rgen Bredesen, CEO of Kitron ASA, tel. +47 48 25 25 84 or e-mail
Thomas LÃ¶fgren, Managing Director Kitron AB, tel. +46Â 708 89 53 26 or e-mail
Kitron is one of Scandinavia's leading electronics manufacturing services
companies for the Defence, Energy/Telecoms, Industry, Medical equipment and
Offshore/Marine sectors. The company is located in Norway, Sweden, Lithuania,
Germany, China and the United States. Kitron had revenues of about NOK 1.7
billion in 2011 and has about 1,200 employees. www.kitron.com
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Source: Kitron ASA via Thomson Reuters ONE