1ANNUAL REPORT 2022
KITRON IN BRIEF
Annual report 2022
Norway
Sweden
Denmark
Lithuania
Germany
Poland
Czech Republic
India
China
USA
2ANNUAL REPORT 2022
KITRON IN BRIEF
3ANNUAL REPORT 2022
CONTENT
Kitron in brief 4
Board of Directors’ report 6
Consolidated annual accounts and notes 12
Notes to the consolidated financial statements 18
Annual accounts and notes Kitron ASA 63
Notes to the financial statements Kitron ASA 67
Responsibility statement 90
Definition of Alternative Performance Measuress 91
Corporate governance 92
Shareholder information 99
Sustainability report 2022 102
Board and management 128
Articles of association 133
Addresses 134
Content
4ANNUAL REPORT 2022
KITRON IN BRIEF
Kitron is an international Electronics Manufacturing Services (EMS) company. The company is located in
Norway, Sweden, Denmark, Lithuania, Germany, Poland, the Czech Republic, India, China and the US and
has about 2800 employees. Kitron manufactures both electronics that are embedded in the customers’ own
products, as well as box-built electronic products. Kitron also provides high-level assembly (HLA) of complex
electromechanical products for its customers. It also increasingly provides various related services within
development, industrialisation, supply chain management, logistics and aftermarket services.
Kitron in brief
Connectivity Electrification Industry Medical
devices
Defence/
Aerospace
The group has a balanced sales mix among its market
sectors, which makes Kitron diversified and puts the group in
a good position to handle shifts in demand.
The company has strong, long-term relationships with large
multinational customers.
Flexible turnkey supplier
Kitron’s services range from development and design,
through industrialisation, sourcing and logistics, to
manufacturing, redesign and upgrading of products in
order to extend their lifespan. Kitron endeavours to achieve
seamless integration with customers and suppliers.
The company is working to further enhance its
competitiveness by expanding its range of services in those
parts of the value chain that demand high levels of expertise.
The group is constantly striving to optimise the sourcing
function, manufacturing process and logistics in order to
reduce its cost base.
Quality assurance
The group measures quality in all processes. Continuous
quality improvement is achieved through training and the
implementation of programs such as Six Sigma, LEAN
Manufacturing, 5S and 7W. Kitron is striving to achieve
superior quality and thereby create a competitive advantage
relative to other EMS companies.
Global sourcing
Kitron’s global sourcing is responsible for performing
sourcing activities for the whole group, working in close
connection with Kitron’s local sourcing. Kitron’s global
sourcing consists of dedicated specialists working directly
with carefully selected manufacturers and distributors.
Continuously monitoring the market globally, Kitron is able to
negotiate competitive prices and ensure a reliable supply of
components.
Kitron is most competitive within complex manufacturing processes that require niche expertise.
Kitron focuses its sales and marketing activities within five key sectors:
5ANNUAL REPORT 2022
KITRON IN BRIEF
Vision and values
Kitron’s vision is to provide solutions that deliver success for
its customers. Kitron shall contribute to develop customers’
businesses into leading companies within their respective
markets.
The company’s values are commitment, innovation and
engagement. We are committed to customers, suppliers,
shareholders, colleagues, sustainability and the environment,
we foster creativity, striving for even better processes,
services and solutions, benefiting both our customers and
employees, and individuals and teams are provided equal
opportunities for growth, development and realization of
their potentials.
Strategy
The group will continue to pursue profitable growth in the
Northern European, US and Chinese EMS markets, targeting
professional customers. Kitron’s current strategy contains
three key elements: accelerated organic growth, continuous
operational improvements and growth through targeted
acquisitions.
Accelerate organic growth
Kitron will continue to increase market shares in its Nordic
home markets by leveraging its key competences and
competitive edge. There will be a particular focus on
gaining market share in Northern Europe. Germany, China
& Asia and the US are large markets where Kitron sees
attractive opportunities. The German operation is focusing
on sales and technical services while the manufacturing will
be performed elsewhere, primarily in Lithuania and Poland.
Kitron has expanded its factory in Kaunas, Lithuania, and in
2019 production was started at a new site in Grudziądz in
Poland, further increasing capacity in Eastern Europe.
The company is also increasing service sales, contributing
both to increased revenues and margin expansion.
In addition to targeting new customers, Kitron sees
substantial opportunities in deepening its relationships
with existing customers, many of which are large, complex
multinationals with a number of different divisions with
potential for Kitron.
Continuous operational improvement
Kitron focuses on reducing the cost base through global
sourcing, increased manufacturing efficiency, system and
process improvements and transfer of manufacturing and
services to lower-cost countries. Within all these areas, there
are ongoing programs and clear targets. Kitron’s employees
and their competences are key factors in fulfilling the
company’s strategy. In the future, innovative use of advanced
manufacturing technology will increasingly determine the
competitiveness of Kitron.
Growth through targeted acquisitions
In December 2021, Kitron agreed to acquire the Danish
EMS company BB Electronics A/S. This added production
facilities in Denmark, China and the Czech Republic, and
gave Kitron a strong position in the Danish market.
The company intends to pursue further M&A activities
to grow and will explore M&A value creation to grow the
customer base, realize synergies and expand margins.
Kitron’s history
Kitron has its origin in companies which were established
in the 1960s in Arendal, Norway. The Kitron name was
established in the 1980s, and Kitron’s business idea changed
to providing services relating to the manufacturing and
assembly of electronics and industrial products. Kitron was
listed on the Oslo Stock Exchange in 1997.
In order to strengthen its market position and competence,
Kitron has carried out several mergers and acquisitions in
Norway, Sweden, Lithuania, Denmark and the US.
Based on this history, Kitron has developed into a leading
Scandinavian electronics manufacturing services company
with production facilities on three continents.
2800+
Employees
300+
Engineers
10
Locations
60+
Years of history
35+
SMT lines
100 000+
Sq. m. of manufacturing
area
6ANNUAL REPORT 2022
BOARD OF DIRECTORS’ REPORT
Kitron’s revenue for the year was NOK 6 486.7 million (NOK
3 711.4 million), which represented a 75 per cent increase
compared with 2021. The revenue growth reflects underlying
growth for all business units and the acquisition of Danish
EMS provider BB Electronics AS. EBIT for the group was NOK
459.6 million compared to NOK 240.8 million in 2021. Net
profit for the year amounted to NOK 287.1 million (NOK 152.8
million), corresponding to NOK 1.46 per share (NOK 0.85).
According to Kitron dividend policy, 20 to 60% of net profit
should be paid back to the shareholders as dividend. Taking
the company’s current financial position and investment
plans into consideration, the Board of Directors will, propose
to the Annual General Meeting a dividend of NOK 0.50 per
share for the financial year 2022, equal to 34% of EPS and up
from NOK 0.25 last year.
In the Annual Report 2021, Kitron indicated an expected
revenue range of between NOK 5 200 and 5 800 million and
an operating profit (EBIT) between NOK 330 and 430 million.
Both figures ended significantly higher than the indicated
ranges, reflecting increasing demand and easing of supply
constraints.
Board of Directors’ report
The business
Kitron’s business model is to provide manufacturing and
assembly services for products containing electronics.
The business model covers the whole value chain from
development, industrialization, purchasing, logistics and
maintenance/repair to redesign. For customers having
Kitron as their professional manufacturing partner, means
increased flexibility, reduced costs and improved quality. The
industry requires a focus on manufacturing efficiency and
cost reduction.
Hence, many OEMs choose to focus on their own core
competencies and partner with specialized EMS (Electronics
Manufacturing Services) providers such as Kitron. When
selecting an EMS partner, geographical proximity and access
to competitive manufacturing play a crucial role in the
customer’s choice of supplier. With its global presence, Kitron
is well-placed in this market.
The company has operations in Norway, Sweden, Denmark,
Lithuania, Germany, Poland, the Czech Republic, India, China
and the United States. All employees have been certified
in accordance with international quality standards for the
applicable manufacturing.
Revenue in NOK million Operating profit in NOK million
Record revenue, profits and order backlog
0
1000
2000
3000
4000
5000
6000
7000
2022202120202019201820172016
2 093
2 437
2 619
3 299
3 964
3 711
6 485
0
100
200
300
400
500
2022202120202019201820172016
216
149
156
201
313
241
460
7ANNUAL REPORT 2022
BOARD OF DIRECTORS’ REPORT
0
500
1000
1500
2000
Defence
& Aerospace
Medical
devices
IndustryElectrificationConnectivity
1694
1335
1904
755
798
and electrification. Examples are battery management, power
grid transmission, power and electric drive management,
charging and fuel cell technology. Kitron is involved with
electrification from the power grid to end-user products,
from control systems for offshore wind power to battery
management systems and charging stations. In the coming
years, Kitron expects above-average growth in this sector.
Industry
Revenue in the Industry sector increased by 118 per cent and
ended at NOK 1 904.4 million in 2022. The strong growth
is partly reflecting BB Electronics’ strong position in this
sector. The sector accounted for 29 per cent of the group’s
totalrevenues.
Within the Industry sector, Kitron operates and delivers a
complete range of services within industrial applications like
automation, environmental, material warehousing and security.
The Industry sector consists of three main product areas:
control systems, electronic control units and automation.
Medical devices
Revenue in the Medical sector increased by 19 per cent and
ended at NOK 754.5 million in 2022. The sector accounted
for 12 per cent of the group’s total revenues.
The medical device sector consists of the product areas
diagnostics, life support, surgical, hospital and home care.
Kitron is especially strong in ultrasound and cardiology systems,
respiratory medical devices and Lab/IVD (In-Vitro Diagnostics).
Defence/Aerospace
Revenue in the Defence/Aerospace sector increased by 5
per cent and ended at NOK 798.3 million in 2022. The sector
accounted for 12 per cent of the group’s total revenues.
Aerospace is mainly navigation and communication
equipment for civil and military avionics. Defence is primarily
communication, encryption, and surveillance systems. The
Defence/Aerospace sector is in general characterized by
project deliveries.
Market sectors
Kitron’s services are most competitive within complex
manufacturing processes that require niche expertise.
Kitron focuses its sales and marketing activities within five
key sectors: Connectivity, Electrification, Industry, Medical
devices and Defence/Aerospace.
The order backlog ended at NOK 6 097.8 million, an increase
of 116 per cent compared to last year, reflecting very strong
demand and the acquisition of BB Electronics. Compared to
last year, the order backlog grew within every market sector.
Connectivity
Revenue in the Connectivity sector increased by 269 per cent
and ended at NOK 1 694.0 million in 2022. The strong growth
is partly reflecting BB Electronics’ strong position in this
sector. The sector accounted for 26 per cent of the group’s
total revenues.
Kitron’s Connectivity sector is focused on connected devices.
Many of these devices are sensors, continuously feeding
data into increasingly advanced software, utilizing artificial
intelligence to make predictions and improve efficiency and
safety. Examples are multiplying, in everything from industrial
control systems to medical devices monitoring vital functions
and modern cars, containing many sensors communicating
with the Internet. Another part of the connectivity market
sector is communication, which supplies the backbone
for sensors and IOT. Typical products here are wireless
communication, optical transmission and networking
products. In the coming years, Kitron expects above-average
growth in this sector.
Electrification
Revenue in the Electrification sector increased by 36 per
cent and ended at NOK 1 335.5 million in 2022. The sector
accounted for 21 per cent of the group’s total revenues.
Kitron’s Electrification sector is focused on the megatrend
that sees the world increasingly moving to renewable energy
Revenue per market sector 2022, NOK million
8ANNUAL REPORT 2022
Important events in 2022
Supply chain constraints easing
The component supply situation was difficult in 2021 and
at the beginning of 2022. However, there was as clear
improvement throughout the year, especially in the second
half, substantially increasing Kitron’s ability to turn demand
into revenues and improving operational efficiency.
Acquisition of BB Electronics
In December 2021, Kitron announced an agreement to
acquire the Danish EMS company BB Electronics A/S, which
has production facilities in Denmark, China and the Czech
Republic. The acquisition was completed early in January
2022, and the BB Electronics business has performed above
expectations throughout the year.
Financial statements
The Board of Directors believes that the annual financial
statements provide a true and fair view of the net assets,
financial position and result of Kitron ASA and the Kitron
group for the year. The group’s consolidated financial
statements are presented in compliance with International
Financial Reporting Standards (IFRS) as adopted by the EU.
Profit and loss
Operating revenue for 2022 amounted to NOK 6 486.7 million
(NOK 3 711.3 million), which represented a 75 per cent
increase compared with 2021. The revenue growth reflects
underlying growth for all business units and the acquisition of
BB Electronics.
The order backlog at the end of 2022 amounted to NOK 6
097.8 million, compared to NOK 2 827.1 million at the end of
2021. Compared to last year, the order backlog grew within
every market sector. Kitron recognizes firm orders and four-
month customer forecasts in the order backlog, while frame
agreements and similar are not included (beyond the four-
month forecast).
The number of full-time equivalents (FTE) increased from 1
749 at the end of 2021 to 2 848 at the end of 2022. Of the
increase, 934 FTEs are related to BB Electronics. The group’s
payroll expenses increased and amounted to NOK 1 092.5
million in 2022 compared with 719.1 million in 2021. The
payroll expenses as a percentage of revenue decreased to
16.8 per cent (19.4 per cent in 2021). The decrease is partly
explained by improved efficiency due to the easing of supply
chain constraints.
Kitron performs development, industrialization and
manufacturing services for its customers and may
perform research services related to such projects. Kitron’s
development activities on the company’s own account are
limited and are primarily aimed at planning and implementing
productivity improvements, building competency and
enhancing quality. Such costs are expensed when incurred.
Net financial costs amounted to NOK 67.4 million. The
corresponding figure for 2021 was a net cost of NOK 36.6
million. Kitron’s pre-tax profit for 2022 amounted to NOK 392.2
million (NOK 204.2 million). All tax losses carried forward in
the businesses in Norway are capitalised by December. For the
US operation deferred tax assets of NOK 23.2 million related
to tax losses carried forward are not capitalized by the end of
December.
The group’s net profit for the year amounted to NOK 287.1
million (NOK 152.8 million). This corresponds to earnings per
share of NOK 1.46 (NOK 0.85). Diluted earnings per share were
NOK 1.43 (NOK 0.84).
The Board of Directors will, on this basis, propose to the
Annual General Meeting an ordinary dividend of NOK 0.50
per share for the financial year 2022. Last year, the ordinary
dividend was NOK 0.25.
Cash flow
In 2022, Kitron’s cash flow from operating activities was NOK
160.3 million (NOK 126.3 million). The difference between
cash flow from operating activities and operating profit is
mainly due to depreciation, net interest paid, income taxes
paid and changes in working capital items. Net cash flow
from investing activities in 2022 ended at negative NOK
960.5 million (negative NOK 46.0 million). Cash flow from
investing: The change is mainly related to the acquisition of BB
Electronics of NOK 863.9 million. Net cash flow from financing
activities was positive NOK 642.7 million (NOK 197.4 million).
The change is mainly related to financing of the acquisition of
BB Electronics. Kitron enters into financial leasing agreements
when applicable. The leasing obligation is recognised as debt.
In general, Kitron expects to generate sufficient cash to finance
the operation in the foreseeable future.
BOARD OF DIRECTORS’ REPORT
9ANNUAL REPORT 2022
Balance sheet and liquidity
Total assets on 31 December 2022 amounted to NOK 5
874.7 (NOK 3 309.4 million). Total assets and other balance
sheet items are substantially affected by the acquisition of
BB Electronics.
Equity amounted to NOK 1 506.5 million (1.228.0 million), and
the equity ratio was 25.8 per cent (37.1 per cent).
Inventories ended at NOK 1 815.5 million at the end of
the year (NOK 880.3 million). Contract assets ended at
NOK 624.6 million, compared to NOK 400.6 million last
year. Controlling inventory is a major focus area for the
company’s ongoing improvement program. Over the past
years, inventory levels were unusually high due to the supply
constraints, which are now easing.
Accounts receivable ended at NOK 1 508.2 million (NOK
864.6 million). Overdue receivables are low, and credit losses
were negligible during 2022.
Accounts payable ended at NOK 2 018.6 million (NOK 917.8
million).
On 31 December 2022, the group’s interest-bearing debt was
NOK 1 899.3 million (NOK 999.4 million). The debt consists
mainly of long-term bank debt, short-term bank debt,
factoring and leasing.
Cash and cash equivalents amounted to NOK 272.7 million at
the balance sheet date (NOK 428.0 million). NOK 0.6 million
was restricted deposits (NOK 10.5 million).
Risk factors and risk management
Kitron is exposed to financial risks and has consequently
implemented procedures for risk management that are
designed to reduce possible negative effects.
The group is exposed to fluctuations in currency exchange
rates. A strengthening of the NOK currency would have
positive impact on the group’s performance. However,
revenues and costs in foreign currencies are in general largely
balanced and exchange rate risk over time is consequently
limited.
The group is normally allowed to adjust sales prices with
customers when currencies fluctuate outside agreed upon
ranges. Other hedge agreements are usually not in use.
The credit risk for the majority of the company’s customers
is insured in accordance with the terms of the company’s
factoring agreement. The company is therefore only exposed
to credit risk on customers where the credit risk is uninsured.
Kitron has only incurred immaterial bad debt costs.
Kitron’s debt is a combination of long-term debt and short-
term debt related to factored accounts receivable. The latter
means that fluctuations in revenue impact the company’s
liquidity. The group has overdraft facilities that cover
expected liquidity fluctuations during the year. The Board
considers the group’s liquidity to be sufficient.
The group’s interest-bearing debt attracts interest cost at
the market-based rate. Kitron has no financial instruments
related to interest rates. The group does not hold any
significant interest-bearing assets.
Kitron has established Directors’ and Officers’ insurance
for personal liability of its Board members, CEO and other
management members.
Kitron consider the financial climate risk as being very limited
based firstly on our low climate impact and secondly the
climate related external negative impact is evaluated as low.
On the contrary, the Electrification shift drives substantial
growth.
Social responsibility
Kitron has implemented Ethical guidelines that reflect Kitron
core values and Kitron corporate social responsibility. Kitron
has implemented an ethical committee whose task is to
review and suggest updates of ethical guidelines, decide
and/or advise in ethical dilemmas, conduct risk analysis and
implement relevant actions and make periodical reviews.
Kitron’s Sustainability report for 2022 is presented in the
Annual report. The report is prepared in accordance with The
Oslo Stock Exchange Guidelines for Sustainability Reporting
and Euronext Guidelines to issuers for ESG reporting. The
report has been reviewed and approved by the Board.
The report on due diligence according to the Norwegian
Transparencey Act will be available on Kitron.com.
BOARD OF DIRECTORS’ REPORT
10ANNUAL REPORT 2022
Figure 1: Full time employees 2022,
Geographical description
Health, safety, security and environment (HSSE)
At the end of 2022, the group employed a total of 2 848
full-time equivalents. For further employee numbers, see
the sustainability report. The competence of our employees
represents a major asset and competitive advantage
forKitron.
There were no serious work-related accidents in 2022.
Sick leave was 4.4 per cent (3.3 per cent in 2021). The Board
considers the working environment to be good, and Kitron
participates in the Great Place to Work survey in order to
develop an even better working environment.
Kitron does not pollute the external environment to any
material extent. Several of the group’s manufacturing units
are certified in accordance with the NS ISO 14000 series of
environmental management standards.
Personnel and organisation
Kitron considers the competence of employees to be the
ultimate competitive advantage. Securing required and
relevant competence now and for the future is a fundamental
priority, and a Kitron competence roadmap has been outlined.
Individual career and competence development is part of
the current performance management process. The digital
learning platform, Kitron Academy, was launched in 2018,
and further developed and supplemented with learning and
development activities in the following years. The platform
offers the possibility to report on training activities per
individual and at group level. In 2022, 69 877 hours were
registered as spent on training, compared to 51 470 in 2021.
Equal opportunities
Kitron’s basic view is that people with different backgrounds,
irrespective of ethnicity, gender, religion, sexual orientation
or age, should have the same opportunities for work and
career development at Kitron. The company’s manufacturing
factories have traditionally employed a higher proportion
of women. Women represented 53 per cent of the Kitron
workforce in 2022. Out of 172 managers (managers having
direct reports) 31 per cent are female and 69 per cent are
male.
Kitron takes its social responsibility seriously. In addition
to ensuring that work is carried out safely, this involves
respecting the freedom of association and not accepting
any form of forced labour, child labour or work-related
discrimination.
The average pay for men and women varies due to
differences in job categories and years of service, not
because of gender. Women’s pay level compared to men’s
per location can be found in the sustainability report. No
gender-based differences exist with regard to working hour
regulations or the design of workplaces.
Indirect functions include management employees, staff and
other support functions. The employees in the subsidiary
management teams are predominantly male. The corporate
management team has 8 male members and 1 female
member.
The composition of the Board complies with the
requirements of the Norwegian Public Limited Companies
Act regarding gender balance.
The report on compensation based on the requirements
of the Norwegian Equality and Anti-Discrimination Act is
available in the Sustainability Report.
Nordics
761
CEE
1 239
Other
848
BOARD OF DIRECTORS’ REPORT
11ANNUAL REPORT 2022
Corporate governance
The Kitron Board has adopted policies for corporate
governance to safeguard the interests of the company’s
owners, employees and other stakeholders. These principles
and associated rules and practices are intended to create
increased predictability and transparency, and thus reduce
uncertainties connected with the business. The report on due
diligence according to the Norwegian Transparency Act will
be made available on the Kitron web site. Kitron endeavours
to have in place procedures that comply with the Norwegian
code for corporate governance. The Board’s review of
corporate governance is presented in the annual report.
Salaries and other remuneration to senior executives
The Board of Directors has a separate Remuneration
Committee, which deals with all significant matters related
to wages and other remuneration to senior executives before
the formal discussion and decision by the Board of Directors.
In line with the Norwegian Companies Act, the Board of
Directors has also prepared a report on remuneration to
senior executives that is available on the company’s website.
Net profit (loss) of the parent company
The Parent Company Kitron ASA recorded a profit of NOK
62.4 million for 2022 (NOK 133.8 million). The Board of
Directors proposes the following allocations for Kitron ASA:
Dividend NOK 98.8 million
Transferred from other equity NOK 36.4 million
Total allocations NOK 62.4 million
There have been no events to date in 2023 that significantly
affect the result for 2022 or valuation of the company’s
assets and liabilities at the balance sheet date. The
Board confirms that the conditions for the going concern
assumption have been satisfied and that the financial
statements for 2022 have been prepared on the basis of this
assumption.
Outlook
Demand continues to be strong, and EBIT margin and capital
efficiency are improving. For 2023, Kitron expects revenues
between NOK 6 700 and 7 300 million. Operating profit (EBIT)
is expected to be between NOK 450 and 550 million. Revenue
and EBIT are now expected to be in the higher end of the
ranges.
The Board emphasizes that every assessment of future
conditions necessarily involves an element of uncertainty.
Oslo, 22 March 2023
Tuomo Lähdesmäki
Chairman
Gro Brækken
Deputy Chairman
Michael Lundgaard Thomsen
Board Member
Espen Gundersen
Board Member
Petra Grandinson
Board Member
Maalfrid Brath
Board Member
Bjørn Gottschlich
Employee Elected Board
Member
Tanja Rørheim
Employee Elected Board
Member
Jarle Larsen
Employee Elected Board
Member
Lars Peter Nilsson
CEO of Kitron ASA
BOARD OF DIRECTORS’ REPORT
12ANNUAL REPORT 2022
CONSOLIDATED ANNUAL ACCOUNTS AND NOTES
Consolidated annual accounts
Consolidated income statement
NOK 1000 Note 2022 2021
Revenue
Revenues 5,6 6 486 734 3 711 373
Operating costs
Cost of materials 4 445 306 2 449 714
Payroll expenses 8,19,23,29 1 092 517 719 144
Depreciation and impairments 12,13,14 161 411 101 048
Other operating expenses 27,29 330 949 197 050
Total operating costs 6 030 183 3 466 956
Other gains/(losses) 7 3 038 (3 604 )
Operating profit/(loss) 459 589 240 813
Financial income and expenses
Finance income 9 17 406 3 878
Finance expenses 9 (84 760 ) (40 525 )
Net financial items (67 355 ) (36 648 )
Profit/(loss) before tax 392 234 204 165
Tax 10 105 087 51 323
Net profit/(loss) 287 147 152 843
Allocation
Shareholders 287 147 152 843
Earnings per share for that part of the net profit/(loss) allocated to the company’s shareholders (NOK per share)
Basic earnings per share 11 1.46 0.85
Diluted earnings per share 11 1.43 0.84
The notes on pages 18 to 61 are an integral part of the consolidated financial statement.
13ANNUAL REPORT 2022
CONSOLIDATED ANNUAL ACCOUNTS AND NOTES
Consolidated statement of comprehensive income
NOK 1000 Note 2022 2021
Net profit/(loss) 287 147 152 843
Other comprehensive income:
Items that will not be reclassified to profit and loss
Actuarial gain / losses pensions (162 ) (299 )
(162 ) (299 )
Items that may be subsequently reclassified to profit and loss
Gain / losses forward contract 5 829 (5 831 )
Gains of hedging 798 -
Exchange differences on translation 33 607 (10 588 )
Total other comprehensive income 40 072 (16 718 )
Total comprehensive income 327 219 136 125
Items in the statement above are disclosed net of tax. See note 10.
Allocation
Shareholders 327 219 136 125
The notes on pages 18 to 61 are an integral part of the consolidated financial statement.
14ANNUAL REPORT 2022
Consolidated balance sheet
NOK 1000 Note 31.12.2022 31.12.2021
Assets
Non-current assets
Goodwill 13 472 857 36 933
Intangible assets 14 318 491 44 917
Property, plant and equipment 12 359 910 212 940
Right of use assets 12 254 611 239 503
Deferred tax assets 22 91 659 73 989
Other receivables 15 10 410 10 316
Total non-current assets 1 507 939 618 598
Current assets
Inventory 16 1 815 489 880 297
Accounts receivable 15, 27 1 508 212 864 598
Contract assets 15 624 561 400 586
Other receivables 15, 27 145 770 117 302
Cash and cash equivalents 17 272 698 428 035
Total current assets 4 366 731 2 690 818
Total assets 5 874 670 3 309 417
The notes on pages 18 to 61 are an integral part of the consolidated financial statement.
CONSOLIDATED ANNUAL ACCOUNTS AND NOTES
15ANNUAL REPORT 2022
CONSOLIDATED ANNUAL ACCOUNTS AND NOTES
Oslo, 22 March 2023
Tuomo Lähdesmäki
Chairman
Gro Brækken
Deputy Chairman
Michael Lundgaard Thomsen
Board Member
Espen Gundersen
Board Member
Petra Grandinson
Board Member
Maalfrid Brath
Board Member
Bjørn Gottschlich
Employee Elected Board
Member
Tanja Rørheim
Employee Elected Board
Member
Jarle Larsen
Employee Elected Board
Member
Lars Peter Nilsson
CEO of Kitron ASA
Consolidated balance sheet (continued)
NOK 1000 Note 31.12.2022 31.12.2021
Equity and liabilities
Equity
Equity attributable to owner of the parent
Share capital 18 19 769 19 701
Share premium reserve 18 792 623 792 623
Equity unrecognised in the profit and loss 24 176 (16 308 )
Retained earnings 669 923 432 030
Total equity 1 506 491 1 228 046
Liabilities
Non-current liabilities
Deferred tax liabilities 22 66 366 4 223
Interest bearing debt 21 1 255 230 206 230
Pension commitments 23 5 243 5 557
Other liabilities 12 193 4 227
Total non-current liabilities 1 339 032 220 237
Current liabilities
Accounts payable 20, 27 2 018 591 917 779
Other payables 20, 27 301 055 131 057
Tax payable 65 399 19 050
Interest bearing debt 21 644 103 793 247
Total current liabilities 3 029 147 1 861 133
Total liabilities 4 368 179 2 081 370
Total liabilities and equity 5 874 670 3 309 417
The notes on pages 18 to 61 are an integral part of the consolidated financial statement.
16ANNUAL REPORT 2022
CONSOLIDATED ANNUAL ACCOUNTS AND NOTES
Consolidated statement of changes in equity
Equity attributable to owner of the parent
NOK 1000
Share
capital
Share
premium
reserve
Actuarial
gains and
losses
Exchange
gains/losses
unrecognised
in the profit
and loss
Other equity
unrecognised
in the profit
and loss
Retained
earnings
Total
Equity at 1 January 2021 17 910 456 058 (10 040 ) 15 829 1 336 404 560 885 654
Net profit 152 843 152 843
Paid dividends (125 373 ) (125 373 )
Issue of ordinary shares 1 791 336 565 338 356
Employee share schemes 5 243 5 243
Other adjustments (11 958 ) (11 958 )
Other comprehensive income (299 ) (16 419 ) - (16 718 )
Equity at 31 December 2021 19 701 792 623 (10 339 ) (590 ) (5 379 ) 432 030 1 228 046
Equity at 1 January 2022 19 701 792 623 (10 339 ) (590 ) (5 379 ) 432 030 1 228 046
Net profit 287 147 287 147
Paid dividends (49 254 ) (49 254 )
Issue of ordinary shares 68 - - 68
Termination of options against
cash consideration
(7 652 ) (7 652 )
Effect from option costs 8 064 8 064
Other comprehensive income (162 ) 40 265 (31 ) 40 072
Equity at 31 December 2022 19 769 792 623 (10 501 ) 39 675 (4 998 ) 669 923 1 506 491
The notes on pages 18 to 61 are an integral part of the consolidated financial statement.
17ANNUAL REPORT 2022
CONSOLIDATED ANNUAL ACCOUNTS AND NOTES
Consolidated statement of cash flow
NOK 1000 Note 2022 2021
Cash flows from operating activities
Cash flow from operations 25 279 193 183 357
Interest received 12 482 3 786
Interest paid (69 998 ) (20 011 )
Income taxes paid (61 363 ) (40 818 )
Net cash (outflow) from operating activities 160 314 126 314
Cash flows from investing activities
Aquisition of subsidiaries 30 (863 916 ) -
Paid for tangible fixed assets 12 (93 861 ) (39 309 )
Paid for intangible assets 14 (2 690 ) (6 665 )
Net cash (outflow) from investing activities (960 467 ) (45 974 )
Cash flows from financing activities
Proceeds from issuing ordinary shares 68 338 775
Proceeds from new loans 1 200 000 100 564
Bank overdraft (61 395 ) (27 991 )
Repayment of loans (389 467 ) (59 399 )
Repayment lease debt (57 230 ) (29 185 )
Dividends paid (49 254 ) (125 374 )
Net cash (outflow) from financing activities 642 722 197 390
Change in cash and cash equivalents (157 431 ) 277 730
Cash and cash equivalents at 1 January 17 428 035 152 573
Exchange gains (losses) on cash and cash equivalents 2 095 (2 269 )
Cash and cash equivalents at 31 December 272 698 428 035
The notes on pages 18 to 61 are an integral part of the consolidated financial statement.
18ANNUAL REPORT 2022
CONSOLIDATED ANNUAL ACCOUNTS AND NOTES
Notes to the consolidated
financial statements
Note 1 - General Information
Aerospace sectors. The group has operations in Norway, Sweden, Denmark, Lithuania, Germany, Poland, Czech Republic, India,
The consolidated accounts were considered and approved by the company’s board of directors on 22 March 2023.
19ANNUAL REPORT 2022
CONSOLIDATED ANNUAL ACCOUNTS AND NOTES
20ANNUAL REPORT 2022
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56ANNUAL REPORT 2022
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58ANNUAL REPORT 2022
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60ANNUAL REPORT 2022
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61ANNUAL REPORT 2022
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62ANNUAL REPORT 2022
KITRON IN BRIEF
63ANNUAL REPORT 2022
ANNUAL ACCOUNTS AND NOTES KITRON ASA
Annual accounts Kitron ASA
Income statement, Kitron ASA
NOK 1000 Note 2022 2021
Revenues
Sales revenues 1,2 134 308 118 029
Total revenues 134 308 118 029
Operating costs
Payroll expenses 2,3,4,5,6 88 545 71 706
Depreciation and impairments 7,8 6 173 5 760
Other operating expenses 6 80 907 70 714
Total operating costs 175 625 148 180
Operating profit / (loss) (41 317) (30 151)
Financial income and expenses
Intra group interest income 2 7 943 5 370
Other interest income 13 113 3 326
Other financial income 2,9 138 644 160 266
Interest expenses 42 791 7 182
Other financial expenses 9 32 581 1 993
Net financial items 84 328 159 787
Profit before tax 43 011 129 636
Tax 10 (19 430) (4 187)
Net profit / (loss) 62 441 133 823
64ANNUAL REPORT 2022
Balance sheet at 31 December, Kitron ASA
NOK 1000 Note 31.12.2022 31.12.2021
Assets
Fixed Assets
Intangible fixed assets
Deferred tax 10 40 571 31 505
Other intangible assets 8 34 953 39 229
Total intangible fixed assets 75 524 70 734
Tangible fixed assets
Machinery, equipment etc. 7,11 2 014 566
Financial fixed assets
Investment in subsidiaries 11,12 1 316 742 421 254
Intra-group loans 2,11,13 234 480 141 669
Total financial fixed assets 1 551 222 562 923
Total fixed assets 1 628 760 634 223
Current Assets
Receivables
Accounts receivables 2,11 135 230 69 733
Other receivables 2,11 308 861 185 793
Total receivables 444 091 255 526
Bank deposits, cash in hand etc. 14 43 055 348 790
Total current assets 487 146 604 316
Total assets 2 115 906 1 238 539
ANNUAL ACCOUNTS AND NOTES KITRON ASA
65ANNUAL REPORT 2022
Balance sheet at 31 December, Kitron ASA (continued)
NOK 1000 Note 31.12.2022 31.12.2021
Liabilities and equity
Equity
Paid-in equity
Share capital (197 014 389 shares at NOK 0,10) 15,16 19 769 19 701
Share premium reserve 15 579 392 579 392
Total paid-in equity 599 161 599 093
Other Equity 5,16 186 764 217 090
Total equity 785 925 816 183
Liabilities
Long-term liabilities
Pension commitments 4 5 243 5 557
Loans 17 1 065 614 54 000
Total long-term liabilities 1 070 857 59 557
Current liabilities
Loans 11,14,17 100 000 277 433
Accounts payable 2 25 566 13 395
Dividend 98 846 49 254
Other current liabilities 34 712 22 717
Total current liabilities 259 124 362 799
Total liabilities 1 329 981 422 356
Total liabilities and equity 2 115 906 1 238 539
ANNUAL ACCOUNTS AND NOTES KITRON ASA
Oslo, 22 March 2023
Tuomo Lähdesmäki
Chairman
Gro Brækken
Deputy Chairman
Michael Lundgaard Thomsen
Board Member
Espen Gundersen
Board Member
Petra Grandinson
Board Member
Maalfrid Brath
Board Member
Bjørn Gottschlich
Employee Elected Board
Member
Tanja Rørheim
Employee Elected Board
Member
Jarle Larsen
Employee Elected Board
Member
Lars Peter Nilsson
CEO of Kitron ASA
66ANNUAL REPORT 2022
Cash flow statement, Kitron ASA
NOK 1000 Note 2022 2021
Cash flows from operational activities
Profit before tax 43 011 129 636
Ordinary depreciation 6 173 5 760
Change in accounts receivables (65 497 ) (16 642)
Change in accounts payables 12 171 6 099
Change in pension funds/ obligations (476 ) (408 )
Option costs without cash effect
Cash effect from termination of options
8 064
(9817)
5 243
0
Change in other accrual items (140 629 ) (21 350 )
Net cash flow from operational activities (147 000 ) 108 338
Cash flows from investment activities
Acquisition of subsidiary (895 488)
Acquisition of fixed assets (3 345 ) (6 591 )
Net cash flow from investment activities (898 833 ) (6 591 )
Cash flows from financing activities
Net change in overdraft facilities (101 433 ) (42 075 )
Payment from new borrowings 1 200 000 100 000
Repayment of borrowings (309 283 ) (36 000 )
Issue of ordinary shares 68 338 775
Payment of dividend (49 254 ) (125 373 )
Net cash flow from financing activities 784 995 235 327
Net change in cash and cash equivalents (305 735 ) 337 074
Cash and cash equivalents at 1 January 348 790 11 716
Cash and cash equivalents at 31 December 43 055 348 790
ANNUAL ACCOUNTS AND NOTES KITRON ASA
67ANNUAL REPORT 2022
Accounting principles
The annual financial statements have been prepared in accordance with the Norwegian Accounting Act and Norwegian generally
accepted accounting principles (NGAAP). All amounts are in NOK 1 000 unless otherwise stated.
Revenue recognition
Income from the sale of goods and services is recognised at the time of delivery.
Classification and recognition of assets and liabilities
Assets intended for long-term ownership or use, are classified as fixed. Other assets are classified as current. Accounts receivable
which fall due within one year are always classified as current assets. Analogue criteria are applied in classifying liabilities. Current
assets are recognised at the lower of cost price and fair value. Current liabilities are recognised in the balance sheet at the nominal
value on the establishment date. Fixed assets are recognised at their acquisition cost. Tangible fixed assets which decline in value
are depreciated on a straight-line basis over their expected useful lifetime. Fixed assets are written down to their fair value where
this is lower than the cost price and the decline in value is not considered to be temporary. Long-term debt in Norwegian kroner,
with the exception of other provisions, is recognised at the nominal value on the establishment date. Provisions are discounted if
the interest element is significant.
Intangible fixed assets
Intangible fixed assets, excluding deferred tax benefit, consist of activated computer software costs. Costs associated with
maintaining computer software programmes are recognised as an expense as incurred. Development costs that are directly
attributable to the design and testing of identifiable and unique software products controlled by the group are recognised as
intangible assets when the following criteria are met:
■ it is technically feasible to complete the software product so that it will be available for use;
■ management intends to complete the software product and use it;
■ there is an ability to use the software product;
■ it can be demonstrated how the software product will generate probable future economic benefits;
■ adequate technical, financial and other resources to complete the development and to use the software
■ product is available; and
■ the expenditure attributable to the software product during its development can be reliably measured.
Computer software is depreciated on a straight-line basis to their residual value over their expected useful life, which is 7 years
Tangible fixed assets
Tangible fixed assets are recognised in the balance sheet and depreciated on a straight-line basis over their expected useful
lifetime if they have an expected lifetime of more than three years and a cost price which exceeds NOK 15 000. Maintenance
costs for tangible fixed assets are recognised as an operating expense as they arise, while upgrades or improvements are added
to the cost price of the asset and depreciated accordingly. The distinction between maintenance and upgrading/improvement is
calculated in relation to the condition of the asset when it was acquired. Leased fixed assets are recognised in the balance sheet
as tangible fixed assets if the lease is regarded as financial.
Subsidiaries
Subsidiaries are recognised in the company accounts using the cost method. The investment is written down to its fair value when
the fair value is lower than the cost price and this fall in value is not expected to be temporary
ANNUAL ACCOUNTS AND NOTES KITRON ASA
Notes to the annual accounts
Kitron ASA
68ANNUAL REPORT 2022
Accounts receivables
Accounts receivable from customers and other receivables are recorded at their nominal value after deducting a provision for bad
debts. The latter is based on an individual assessment of each receivable. An unspecified provision is made for minor receivables
to cover estimated bad debts.
Foreign currencies
Balance sheet items in foreign currencies are translated at exchange rate at 31 December. Transactions in foreign currency are
translated at exchange rate at transaction date.
Pensions
The company has both defined contribution- and defined benefit plan. From 2016 the company has defined benefit plan for
former CEO only. A defined contribution plan is one under which the company pays fixed contributions to a separate legal entity.
The company has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to
pay all employees the benefits relating to employee service in the current and prior periods. A defined benefit plan is one that is
not a defined contribution plan, and typically defines an amount of pension benefit an employee will receive on retirement. That
benefit is normally dependent on one or more factors such as age, years of service and pay. The liability recognised in the balance
sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date
less the fair value of plan assets. An independent actuary calculates the pension commitment annually. The present value of the
defined benefit obligations is determined by discounting the estimated future cash outflows using interest rates of high-quality
corporate bonds. Estimated payroll tax on the net pension commitment calculated by an actuary is added to the carrying amount
of the obligation. Changes in pension plan benefits are recognised immediately in the income statement. Actuarial gains and
losses are recognised in other comprehensive income. For defined contribution plans, the company pays contribution to publicly-
or privately administered pension insurance plans on an obligatory, contractual or voluntary basis. The company has no further
payment obligations once the contributions have been paid. The contributions are recognised as a payroll expense when they fall
due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is
available. The pension plan complies with the Norwegian mandatory service pension act.
Tax
Tax cost in the profit and loss account comprises the sum of tax payable for the period and changes to deferred tax or deferred
tax assets. Deferred tax is calculated at a rate of 22 per cent on the basis of temporary differences between accounting and tax
values, plus possible tax loss for carrying forward at the end of the fiscal year. Tax increasing and reducing temporary differences
which reverse or could reverse in the same period are eliminated and are recorded net in the balance sheet. Recognition of
deferred tax assets on net tax-reducing differences which have not been eliminated, and tax loss for carrying forward, is based on
expected future earnings. Deferred tax and tax assets which can be recognised in the balance sheet are stated net.
Tax on group contribution paid which is recognised as an increase in the cost price of shares in other companies, and tax on
group contribution received which is recognised directly against equity, is recognised directly against tax in the balance sheet
(against tax payable if the group contribution has an effect on tax payable and against deferred tax if the group contribution has
an effect on deferred tax).
Cash flow statement
The cash flow statement is prepared using the indirect method. Cash and cash equivalents include cash in hand, bank deposits
and other short-term liquid placements which immediately and with insignificant currency risk can be converted to known
amounts of cash and with a maturity which is less than three months from the acquisition date.
ANNUAL ACCOUNTS AND NOTES KITRON ASA
69ANNUAL REPORT 2022
Note 1 - Sales revenues
The business of Kitron ASA is administration of its subsidiaries, and revenues consist primarily of fees and group contributions.
Sales revenues by geographical area
NOK 1000 2022 2021
Norway 36 280 32 353
Sweden 24 068 21 390
Lithuania 48 244 42 768
Other 25 716 21 518
Total 134 308 118 029
Note 2 - Related parties
NOK 1000 2022 2021
Sales revenues
From subsidiaries
1
134 308 118 029
Purchase of goods and services
From subsidiaries
1
48 171 47 967
Remuneration of senior executives
Pay and other short-term benefits
2
29 834 12 100
Financial income
Interest income from subsidiaries
1
7 943 5 370
Dividend from subsidiaries 138 644 160 266
Total 233 233 165 636
Balance items at 31 December resulting from transactions with related parties
Receivables and loans
Subsidiaries
1
646 224 366 930
Total 646 224 366 930
Payables
Subsidiaries
1
19 697 5 459
Total 19 697 5 459
1) Revenues from subsidiaries consist primarily of fees and group contributions. Purchase and sales of goods and services from
subsidiaries consist primarily of services from corporate personnel employed in subsidiaries Interest income from subsidiaries
consist of interest on long-term loans
2) Senior executives comprise member of corporate management team employed in Kitron ASA. See table in note 13 for a more
extensive description of remuneration of senior executives.
ANNUAL ACCOUNTS AND NOTES KITRON ASA
70ANNUAL REPORT 2022
Note 3 - Payroll expenses
Payroll costs
NOK 1000 2022 2021
Pay 72 591 58 440
Payroll taxes 3 921 3 647
Pension costs 1 535 1 692
Other remuneration 10 498 7 927
Total 88 545 71 706
Average number of FTEs 69 70
Note 4 - Pensions and similar obligations
The pension obligation below includes life-long benefits to a former CEO. The pension plan is unfunded.
The AFP-scheme is a defined benefit multi-enterprise scheme, but is recognised in the accounts as a defined contribution scheme
until reliable and sufficient information is available for the group to recognise its proportional share of pension cost, pension liability
and pension funds in the scheme. The company’s liabilities are therefore not recognised as debt in the balance sheet.
Defined pension benefit plans
NOK 1000 2022 2021
Carrying amount of the obligation is determined as follows:
Present value of accrued pension commitments in unfunded benefit plans 5 243 5 557
+/- unrecognised actuarial gains and losses - -
Net commitments in unfunded defined benefit plans 5 243 5 557
Hereof payroll tax on the pension obligation 648 687
Pension costs comprise:
Interest costs 79 81
Net pension cost for unfunded plans 79 81
Net pension cost for contribution based pension plans 1 456 1 611
Net pension costs included in note 3 1 535 1 692
Cost recognised in equity
Actuarial losses pensions 209 383
The following assumptions have beenptions have been applied in
calculating pension commitments
Discount rate 3.2 % 1.5 %
Annual pension adjustment 3.5 % 2.25 %
Social security tax rate 14.1 % 14.
ANNUAL ACCOUNTS AND NOTES KITRON ASA
71ANNUAL REPORT 2022
Note 5 - Share-based payments
In 2018 the Board introduced a new share option program for executive management comprising of up to 5 000 000 shares. The
program is divided into four three-year subprograms, each with an allocation of 1 250 000 option, where the first program started
in 2019, followed by one program every year until 2023.
The share option program entails that executive management, on certain terms, may be granted a right to subscribe for shares in
Kitron at NOK 0.10 per share after a vesting period of three years. The number of options that are vested for each subprogram are
linked to the development of the market capitalization at Oslo Stock Exchange, adjusted for dividends and share buy-backs. For
each program to vest fully, the market capitalization adjusted for dividends and share buy-backs must increase 50 per cent. The
program starts to vest at an increase of 20 per cent and will vest linearly between 20 per cent to 50 per cent. Each subprogram
is capped at 200 per cent increase of the market capitalization, adjusted for dividends and share buy-backs. The program has a
clawback clause. Each of the subprograms has a lock up-period of one year and a down-sale period of two years
The Company utilizes a Monte Carlo simulation to determine the impact of stock option grants in accordance with IFRS 2, Share-
based payment, on the Company’s net income. The model utilizes certain information, such as the interest rate on a risk-free
security maturing generally at the same time as the option being valued, and requires certain assumptions, such as the expected
amount of time an option will be outstanding until it is exercised or it expires and the volatility associated with the price of the
underlying shares of common stock, to calculate the fair value of stock options granted. The model also estimate the likelihood
of performance fulfillment and takes this into account in the valuation.
During the period ended 31 December 2022, the Company has had share-based payment arrangements for employees, as
described below.
Granted 2019 2020 2021 2022
Type of arrangement Equity Settled Equity Settled Equity Settled Equity Settled
Dates of Grant 23/10/2019 10/07/2020 20/10/2021 25/10/2022
Options granted as of 31.12.2022 1 250 000 1 250 000 900 000
Options not granted as of 31.12.2022 - - 350 000
Contractual life 2.94 years 3.12 years 2.73 years 2.69 years
ANNUAL ACCOUNTS AND NOTES KITRON ASA
72ANNUAL REPORT 2022
Granted 2019 2020 2021 2022
Vesting conditions
100% of the options
will vest three years
after the start of the
second calendar
quarter of 2019.
The Employee must
remain an employee
of the Company or an
affiliated company at
the end of the vesting
period.
The market cap of the
Company must have
increased according
to specific criterias
during the vesting
period. The number
of options that are
vested is inter alia
linked linearly to the
development of the
share quote of the
Kitron shares at the
Oslo Stock Exchange,
adjusted for dividend
and share buy-backs.
The program has a
clawback clause.
The program was
exercised in 2022.
100% of the options
will vest three years
after the start of the
second calendar
quarter of 2020.
The Employee must
remain an employee
of the Company or an
affiliated company at
the end of the vesting
period.
The market cap of the
Company must have
increased according
to specific criterias
during the vesting
period. The number
of options that are
vested is inter alia
linked linearly to the
development of the
share quote of the
Kitron shares at the
Oslo Stock Exchange,
adjusted for dividend
and share buy-backs.
The program has a
clawback clause.
100% of the options
will vest three years
after the start of the
second calendar
quarter of 2021.
The Employee must
remain an employee
of the Company or an
affiliated company at
the end of the vesting
period.
The market cap of the
Company must have
increased according
to specific criterias
during the vesting
period. The number
of options that are
vested is inter alia
linked linearly to the
development of the
share quote of the
Kitron shares at the
Oslo Stock Exchange,
adjusted for dividend
and share buy-backs.
The program has a
clawback clause.
100% of the options
will vest three years
after the start of the
second calendar
quarter of 2022.
The Employee must
remain an employee
of the Company or an
affiliated company at
the end of the vesting
period.
The market cap of the
Company must have
increased according
to specific criterias
during the vesting
period. The number
of options that are
vested is inter alia
linked linearly to the
development of the
share quote of the
Kitron shares at the
Oslo Stock Exchange,
adjusted for dividend
and share buy-backs.
The program has a
clawback clause.
Expiry date 30/09/2022 30/09/2023 30/09/2024 30/09/2025
Fair value of Share Options granted is calculated using the Monte Carlo option pricing model. The weighted average inputs to
Monte Carlo model and Fair values per 31 December 2022 are listed below (calculated at grant):
Granted 2019 2020 2021 2022
Exercise price 0,10 0,10 0,10 0,10
Share price at grant date 9,14 13,90 20.15 19.70
Expected life from grant date 2.77 years 2.95 years 2,94 years 2,44 years
Volatility 29% 36% 35% 40%
Interest rate 1.19% 0.168% 1.12% 3.61%
Fair value per option 2.57 6.65 7.48 8.18
Expected volatility is based on historical volatility of the Company. The Company is listed on the Oslo Stock Exchange. Interest
rates used are quoted Norwegian government bonds and bills retrieved from Norges Bank. The total expensed amount in 2022
arising from the option plans are NOK 8 063 thousand, not including social security (2021: NOK 5 243 thousand). The total
carrying amount per 31 December 2022 is NOK 12 809 thousand, not including social security (2021: NOK 11 482 thousand).
Accrued social security at 31 December 2022 is NOK 6 586 thousand (2021: NOK 6 851 thousand).
ANNUAL ACCOUNTS AND NOTES KITRON ASA
73ANNUAL REPORT 2022
Quantity and weighted average prices
Activity Number of instruments Weighted Average Strike Price
Outstanding OB (01.01.2021) 2 500 000 0.10
Granted 1 190 000 0.10
Exercised - -
Forfeited -270 000 0.10
Expired - -
Outstanding CB (31.12.2021) 3 420 000 0.10
Vested CB -
Options not granted CB (31.12.2021) 330 000 0.10
Outstanding OB (01.01.2022) 3 420 000 0.10
Granted 1 175 000 0.10
Exercised - 1 170 000 0.10
Forfeited - 25 000 0.10
Expired - -
Outstanding CB (31.12.2022) 3 400 000 0.10
Vested CB
Options not granted CB (31.12.2022) 350 000 0.10
Outstanding instruments Vested instruments
Strike price
Number of
instruments
Weighted Average
remaining contractual life
Weighted Average
Strike Price
Vested instruments
31.12.2022
Weighted Average
Strike Price
0.10 3 400 000 1.65 0.10 0 -
Board Number of shares Number of options
2022 2021 2022 2021
Tuomo Lähdesmäki, chairman 291 668 277 796 - -
Gro Brækken, board member 51 280 46 380 - -
Espen Gundersen, board member 56 280 52 380 - -
Maalfrid Brath, board member 29 499 22 677 - -
Christian Jebsen, board member (until 27.04.2022) - 22 380 - -
Petra Grandinson 20 494 14 254 - -
Michael Lundgaard Thomsen (from 27.04.2022) 6 240 0
Jarle Larsen, employee elected board member 19 624 15 724 - -
Tanja Rørheim, employee elected board member 26 280 22 380 - -
Bjørn M. Gottschlich, employee elected board member 26 480 22 580 - -
ANNUAL ACCOUNTS AND NOTES KITRON ASA
74ANNUAL REPORT 2022
Management Number of shares Number of options
2022 2021 2022 2021
Peter Nilsson, CEO 2 471 102 2 287 182 905 000 1 030 000
Cathrin Nylander, CFO 1 035 249 955 627 295 000 370 000
Kristoffer Asklöv, COO 101 561 51 561 300 000 250 000
Stian Haugen, CTO 51 561 51 561 295 000 220 000
Mindaugas Sestokas,Vice President and Managing Director 418 978 316 978 295 000 370 000
Hans Petter Thomassen, Vice President and Managing
Director
470 062 387 460 295 000 370 000
Stefan Hansson Mutas, Managing Director 295 281 219 261 295 000 370 000
Zygimantas Dirse, Managing Director 535 122 452 622 295 000 370 000
Carsten Christensen, CEO BB Electronics (joined 10.01.2022) 51 561 51 561 300 000 0
Note 6 - Remuneration of senior executives, directors and auditors
NOK 1000 2022 2021
Remuneration of senior executives
Pay and other benefits
1
62 344 21 200
Balance items at 31 December resulting from
purchase/sale of goods and services
Payable to related parties:
Senior executives
1
16 257 -
Total 16 257 -
1) Senior executives comprise the corporate management team at Kitron ASA. See table in below for a more extensive description of
remuneration of senior executives. The amount at 31 December comprises accrued bonuses to corporate management team.
Remuneration of senior executives, directors and auditor
NOK 1000 2022 2021
Directors' fee: 3 016 2 834
- chairman 604 550
- board members 2 412 2 284
Auditors fee*) 1 985 1 455
- statutory audit 1 373 1 252
- audit related services 85 -
- tax related services 83 70
- other services 445 133
ANNUAL ACCOUNTS AND NOTES KITRON ASA
75ANNUAL REPORT 2022
Remuneration of senior executives:
Fixed remuneration Variable remun.
Name
Year
Base
salary
Other
benfits
1
Short-term
incentive
earned
2
Long-
term
incentive
3
Pension
expense
4
Total
remuneration
Proportion of
fixed/variable
Peter Nilsson
CEO
(01.01.2022-31.12.2022)
2022 3 125 295 2 629 6 413 1 503 13 965 35%/65%
2021 3 030 294 - - 1 502 4 826 100%/0%
Cathrin Nylander
CFO
(01.01.2022-31.12.2022)
2022 2 220 282 1 868 2 746 295 7 411 38%/62%
2021 2 153 282 - 294 2 729 100%/0%
Kristoffer Asklöv
COO
(01.01.2022-31.12.2022)
2022 2 308 113 1 938 845 354 5 558 50%/50%
2021 764 269 1 033 100%/0%
Israel L. Salvador
COO
(left 30.09.2021)
2022 - - - - - -
2021 1 726 121 - 204 2 051 100%/0%
Stian Haugen
CTO
(01.01.2022-31.12.2022)
2022 1 398 216 1 190 96 2 900 59%/41%
2021 1 217 172 - 73 1 461 100%/0%
Zygimantas Dirse
Managing Director,
Kitron Electronics
Manufacturing
(Ningbo) CO Ltd.,
China
(01.01.2022-31.12.2022)
2022 1 632 523 1 434 2 985 90 6 664 34%/66%
2021 1 738 327 - 78 2 144 100%/0%
Stefan H Mutas
Managing Director,
Kitron AB, Sweden
(01.01.2022-31.12.2022)
2022 1 616 81 1 416 2 757 785 6 655 37%/63%
2021 1 695 107 - 782 2 584 100%/0%
Mindaugas
Sestokas
Managing Director,
UAB Kitron, Lithuania
&VP Central Eastern
Europe
(01.01.2022-31.12.2022)
2022 2 092 62 1 757 2 985 6 897 31%/69%
2021 2 080 27 - 2 107 100%/0%
Hans Petter
Thomassen
Managing Director,
Kitron AS, Norway
& VP North America
(01.01.2022-31.12.2022)
2022 1 898 203 1 597 2 737 227 6 662 35%/65%
2021 1 840 198 - 227 2 265 100%/0%
Carsten Christensen
CEO BB Electronics
(joined 10.01.2022)
2022 2 904 301 2 428 5 632 57%/43%
2021
1) Other benefits include the value of any benefits or prerequisites, such as non-business or non-assignment related travel, medical, car,
education and training, residence or housing, credit cards and other benefits in kind or prerequisites.
2) Short-term incentive earned includes the total monetary value of annual bonuses from the short-term incentive program for the
financial year.
3) Long-term incentive program includes programs that have vested during the year and shows total benefit of shares and cash
consideration.
4) Pension expense includes contributions that effectively took place during the reported financial period to finance a fund or other
pension scheme for future pension payout for the senior executive.
ANNUAL ACCOUNTS AND NOTES KITRON ASA
76ANNUAL REPORT 2022
Name of Board
member
Position Type of remuneration 2022 2021
Tuomo Juhani
Lähdesmäki
(01.01.2022-
31.12.2022)
Chair
Total regular board remuneration 582 524
Amount of board remuneration paid in cash 342 313
Amount of board remuneration used for share acquisition 240 211
Remuneration for chair of the remuneration committee 23 26
Gro Merete Brækken
(01.01.2022-
31.12.2022)
Deputy
chairperson
Total regular board remuneration 268 262
Amount of board remuneration paid in cash 201 196
Amount of board remuneration used for share acquisition 67 66
Remuneration for member of the audit/remuneration committee 47 26
Espen Gundersen
(01.01.2022-
31.12.2022)
Board member
Total regular board remuneration 268 262
Amount of board remuneration paid in cash 201 196
Amount of board remuneration used for share acquisition 67 66
Remuneration for chair of the audit committee 90 37
Maalfrid Brath
(01.01.2022-
31.12.2022)
Board member
Total regular board remuneration 268 262
Amount of board remuneration paid in cash 201 196
Amount of board remuneration used for share acquisition 67 66
Remuneration for member of the remuneration committee 23 26
Christian Jebsen
(01.01.2022-
27.04.2022)
Board member
Total regular board remuneration 66 262
Amount of board remuneration paid in cash 66 196
Amount of board remuneration used for share acquisition - 66
Remuneration for member of the audit committee 20 32
Bjørn Martin
Gottschlich
(01.01.2022-
31.12.2022)
Board member
Total regular board remuneration 268 262
Amount of board remuneration paid in cash 201 196
Amount of board remuneration used for share acquisition 67 66
Tanja Rørheim
(01.01.2022-
31.12.2022)
Board member
Total regular board remuneration 268 262
Amount of board remuneration paid in cash 201 196
Amount of board remuneration used for share acquisition 67 66
Remuneration for member of the audit committee 54 32
Jarle Larsen
(01.01.2022-
31.12.2022)
Board member
Total regular board remuneration 268 262
Amount of board remuneration paid in cash 201 196
Amount of board remuneration used for share acquisition 67 66
Petra Grandinson
(01.01.2022-
31.12.2022)
Board member
Total regular board remuneration 268 262
Amount of board remuneration paid in cash 160 157
Amount of board remuneration used for share acquisition 108 105
Remuneration for member of the remuneration committee 23 35
Michael Thomsen
(27.04.2022-
31.12.2022)
Board member
Total regular board remuneration 203 -
Amount of board remuneration paid in cash 95 -
Amount of board remuneration used for share acquisition 108 -
Remuneration for member of the remuneration committee 9 -
No payroll tax is included in the tables above. Pension contribution includes paid contribution to the company’s pension scheme.
For employee representatives only board remuneration is declared.
The company has not given any loans or security for directors or senior executives at 31 December 2022.
For more information about remuneration of senior executives, see separate Remuneration Report available at www.kitron.com.
ANNUAL ACCOUNTS AND NOTES KITRON ASA
77ANNUAL REPORT 2022
Note 7 - Tangible fixed assets and depreciation
NOK 1000 Machinery and equipment
Acquisition cost at 1 January 18 830
Additions during the year 1 724
Disposal during the year -
Acquisition cost at 31 December 20 554
Accumulated depreciation 1 January 18 263
Depreciation during the year 277
Disposal during the year -
Accumulated depreciation at 31 December 18 540
Book value 31 December 2 014
Useful lifetime 3 - 5 years
Depreciation plan Linear
Annual lease of fixed assets unrecognised in the balance sheet
NOK 1000 Length of lease Annual rent
Premises >2023 994
Company cars >2022 640
Note 8 - Other intangible assets
NOK 1000 System software
Acquisition cost at 1 January 98 816
Additions during the year 1 620
Acquisition cost at 31 December 100 436
Accumulated depreciation at 1 January 59 587
Depreciation during the year 5 896
Accumulated depreciations at 31 December 65 483
Book value 31 December 34 953
Depreciation plan Linear
Useful lifetime 5-7 years
Note 9 - Items consolidated in the accounts
Other financial income
NOK 1000 2022 2021
Dividend 138 644 160 266
Currency gain -
Total other financial income 138 644 160 266
Other financial expenses
Currency loss 26 729 1 467
Other financial expenses 5 855 526
ANNUAL ACCOUNTS AND NOTES KITRON ASA
78ANNUAL REPORT 2022
NOK 1000 2022 2021
Total other financial expenses 32 581 1993
Note 10 - Taxes
NOK 1000 2022 2021
Tax cost for the year breaks down into:
Tax payable 0 0
Change in deferred tax (20 000) (8 294)
Deferred tax charged to equity 570 4 107
Total tax cost (19 430) (4 187)
Calculation of tax base for the year:
Profit before tax 43 011 129 636
Permanent differences *) (133 919) (167 947)
Change in temporary differences (8377) 10 077
Group contribution received 49 702 57 225
Change in tax loss carried forward 49 583 (28 991)
Tax base for the year 0 0
Overview of temporary differences
Fixed assets (65) (606)
Pensions (5 243) (5 557)
Other temporary differences (7 586) (15 123)
Gain and loss account 62 77
Total (12 832) (21 209)
Loss carried forward (171 582) (121999)
Total (184 415) (143 208)
Deferred tax asset (22%) 40 571 31 505
Explanation of why tax cost for the year does not equal 22% of pre-tax result
22% of loss before tax 9 462 28 520
Permanent differences 22% (29 462) (36 948)
Tax effect of actuarial gains and losses charged to equity 46 84
Tax effect of gains and losses on derivatives booked against equity (1644) 1 644
Tax effect of transaction costs booked against equity 8 2378
Tax effect of share options booked against equity 2160 0
Prior Year adjustments 0 135
Calculated tax cost (19 430) (4 187)
Effective tax rate **) (45.2 %) (3.2%)
* ) Includes non-tax-deductible costs such as entertainment, group contribution and dividend
**) Tax cost in relation to pre-tax result
ANNUAL ACCOUNTS AND NOTES KITRON ASA
79ANNUAL REPORT 2022
Note 11 - Mortages
NOK 1000 2022 2021
Debt secured by mortgages: 1165 614 331 433
Overview of existing security:
Pledge in machinery and plants 50 000 50000
Pledge in receivables 700 000 700000
Pledge in inventories 700 000 700 000
Carrying amount of assets provided as security:
Machinery and equipment 2 014 566
Receivables 678 571 397 195
The carrying amount of assets provided as security for the debt include assets in Kitron ASA only. In addition, the bank has
security in assets in other Norwegian and Swedish Kitron companies.
The group’s guarantee provider had provided guarantees at 31 December for leasing obligations and tax due but not paid. These
totalled NOK 0.5 million (2021: NOK 0.5 million) and NOK 5.0 million (2021: NOK 5.0 million) respectively.
Per 31 December 2022 Kitron ASA has granted the following parent company guarantees:
■ 16.2 million EUR related to lease obligations for the Polish subsidiary Kitron sp. z.o.o (2021: 14.3 million EUR)
■ 0.0 million EUR related to factoring agreement for the Polish subsidiary Kitron sp. z o.o (2021: 11.3 million EUR)
■ 350 million NOK related to bank financing for Kitron AS and Kitron AB (2021: 350 million NOK)
Note 12 - Investment in subsidiaries
NOK 1000 Country of incorporation Share-holding
Voting
share
Book
value
Kitron AS Arendal, Norway 100% 100% 243 737
Kitron AB Jönköping, Sweden 100% 100% 13 463
Kitron Hong Kong Ltd Hong Kong 100% 100% 1
Kitron GmbH Metzingen, Germany 100% 100% 30 194
Kitron Holding USA Inc Delaware, USA 100% 100% 69 433
UAB Kitron Real Estate Kaunas, Lithuania 100% 100% 12 422
UAB Kitron Kaunas, Lithuania 100% 100% 29201
Kitron sp. z o.o Grudziadz, Poland 100% 100% 22804
BB Electronics AS Horsens, Denmark 100% 100% 895 488
Total investment in subsidiaries 1316 742
ANNUAL ACCOUNTS AND NOTES KITRON ASA
80ANNUAL REPORT 2022
The Kitron Hong Kong Ltd subsidiary owns shares in the following subsidiaries:
NOK 1000 Country of incorporation Share-holding
Voting
share
Book
value
Kitron Electronics Manufacturing (Ningbo)
Co., Ltd.
Ningbo China 100% 100% 43 384
Kitron Electromechanical (Ningbo) CO. Ltd Ningbo, China 100% 100% 2 317
The Kitron Holding USA Inc subsidiary owns shares in the following subsidiaries:
NOK 1000 Country of incorporation Share-holding
Voting
share
Book value
Kitron Technologies Inc Delaware, US 100% 100% -
Kitron Systems Inc Delaware, US 100% 100% -
The BB Electronics AS subsidiary owns shares in the following companies:
NOK 1000 Country of incorporation Share-holding
Voting
share
Book
value
BB Electronics (Suzhou) C. Ltd Suzhou, China 100% 100% 49 430
BB Electronics, Wendell Holding a.s Lanskroun, Czech 100% 100% 86 009
BB TCBB ApS Horsens, Denmark 100% 100% 56
TCBB India Private Limited Chennai, India 100% 100% 509
BB Electronics (Suzhou) C. Ltd owns shares in the following companies:
NOK 1000 Country of incorporation Share-holding
Voting
share
Book
value
BB Trading (SIP) Co. Ltd Suzhou, China 100% 100% -
BB Electronics Wendell Holding a.s owns shares in the following companies:
NOK 1000 Country of incorporation Share-holding
Voting
share
Book
value
BB Electronics, Wendell Electronics a.s Lanskroun, Czech 100% 100% -
Note 13 - Receivables
NOK 234.5 million of the NOK 234.5 million in intra-group loans at 31 December 2022 falls due later than one year after the end
of the fiscal year.
NOK 1000 2022 2021
Kitron Technologies Inc 137 547 123 039
UAB Kitron Real Estate 19 599 18630
BB Electronics AS 77334 .
Total 234 480 141 669
Note 14 - Liquid assets
Kitron ASA has established a group account agreement with the company’s principal bank. This embraces Kitron ASA and its
Norwegian, Swedish, German, US, Polish and Danish subsidiaries. Unused credit lines amounted to NOK 199.9 million at the end of
2022 (2021: NOK 90.2 million).
ANNUAL ACCOUNTS AND NOTES KITRON ASA
81ANNUAL REPORT 2022
Note 15 - Equity
NOK 1000 Share capital Share premium fund Other equity Total equity
At 31 December 2021 19 701 579 392 217 090 816 183
Net profit - - 62 441 62 441
Termination of options against cash consideration (7652) (7652)
Effect from option costs - - 8 064 8 064
Actuarial gains and losses pensions - - (162) (162)
Issue of ordinary shares 68 68
Gain/(losses) on derivatives 5 829 5 829
Tax effect from costs charged to equity
Accrued dividend - - (98 846) (98 846)
At 31 December 2022 19 769 579 392 186 764 785 925
Note 16 - Shares and shareholders information
The company’s share capital at 31 December 2022 comprised 197 691 053 shares with a nominal value of NOK 0.10 each. Each
share carries one vote. There were 9 026 shareholders at 31 December 2022.
Shareholder Number Percentage
FOLKETRYGDFONDET 17 375 340 8.79%
VERDIPAPIRFOND ODIN NORGE 13 287 652 6.72%
VEVLEN GÅRD AS 12 500 000 6.32%
MP PENSJON PK 9 704 520 4.91%
The Northern Trust Comp, London Br 7 199 237 3.64%
AAT INVEST AS 7 000 000 3.54%
Danske Invest Norge Vekst 6 518 186 3.30%
J.P. Morgan SE 5 531 043 2.80%
VJ INVEST AS 5 182 686 2.62%
The Bank of New York Mellon SA/NV 5 000 000 2.53%
VERDIPAPIRFONDET HOLBERG NORGE 4 275 000 2.16%
The Bank of New York Mellon SA/NV 3 757 000 1.90%
Avanza Bank AB
1
3 412 612 1.73%
VARNER EQUITIES AS 3 039 674 1.54%
VERDIPAPIRFONDET EQUINOR AKSJER NO 2 849 448 1.44%
VPF FONDSFINANS NORDEN 2 500 000 1.26%
J.P. Morgan SE 2 470 540 1.25%
VERDIPAPIRFONDET DNB SMB 2 023 385 1.02%
HAUSTA INVESTOR AS 1 994 499 1.01%
VERDIPAPIRFONDET KLP AKSJENORGE IN 1 870 891 0.95%
Total 20 largest shareholders 117 491 713 59.43%
Total other shareholders 80 199 340 40.57%
Total outstanding shares 197 691 053 100.00%
1) Beneficial owner: CEO Peter Nilsson 2 471 102 shares (1.25 per cent)
ANNUAL ACCOUNTS AND NOTES KITRON ASA
82ANNUAL REPORT 2022
Authorization to the board to issue shares
Authorization to strengthen equity and incentive schemes
The ordinary general meeting of 27 April 2022 authorized the board of directors of Kitron ASA to increase the share capital in
accordance with the Norwegian Public Limited Liability Companies Act section 10-14 on the following conditions:
■ The share capital may, in one or more rounds, in total be increased with up to NOK 1,970,143.90.
■ The Board of Directors may not use the authorization if the total increase of the share capital approved by the Board of
Directors in accordance with this authorization together with the use of other authorizations to issue shares, in the period for
the authroization in item 3, exceeds NOK 3,940,287.80.
■ The authorization shall be valid until the Annual General Meeting in 2023, but no later than 30 June 2023.
■ The shareholders’ pre-emptive rights according to the Norwegian Public Limited Liability Companies Act section 10-4 may be
set aside.
■ The authorization is not intended for use to facilitate or obstruct the success of a take-over bid where Kitron is the target
company.
■ The authorization encompasses share capital increase by contribution in any kind and the right to incur Kitron ASA with
special obligations according to the Norwegian Public Limited Liability Companies Act section 10-2.
■ The authorization encompasses resolutions on merger according to the Norwegian Public Limited Liability Companies Act
section 13-5.
■ The authorization is limited to encompass capital requirements or issuance of consideration shares in relation to
strengthening of Kitron ASA’s equity, joint ventures or joint business operations, remuneration to members of the Board of
Directors of Kitron ASA, incentive schemes, and acquisition of property and business within Kitron ASA’s purpose
■ The Board of Directors is authorized to decide other terms and conditions of the subscription and is authorized to amend the
articles of association as implied by the use of this authorization.
■ This authorization replaces any previously granted authorizations for the Board of Directors to increase the share capital.
Strategic authorization
The ordinary general meeting of 27 April 2022 authorized the board of directors of Kitron ASA to increase the share capital in
accordance with the Norwegian Public Limited Liability Companies Act section 10-14 on the following conditions:
■ The share capital may, in one or more rounds, in total be increased with up to NOK 3,940,287.80.
■ The Board of Directors may not use the authorization if the total increase of the share capital approved by the Board of
Directors in accordance with this authorization together with the use of other authorizations to issue shares, in the period for
the authorization in item 3, exceeds NOK 3,940,287.80.
■ The authorization shall be valid until the Annual General Meeting in 2023, but no later than 30 June 2023.
■ The shareholders’ pre-emptive rights according to the Norwegian Public Limited Liability Companies Act section 10-4 may be
set aside.
■ The authorization is not intended for use to facilitate or obstruct the success of a take-over bid where Kitron is the target
company.
■ The authorization encompasses share capital increase by contribution in any kind and the right to incur Kitron ASA with
special obligations according to the Norwegian Public Limited Liability Companies Act section 10-2.
■ The authorization encompasses resolutions on merger according to the Norwegian Public Limited Liability Companies Act
section 13-5.
■ The authorization is limited to include strengthening of Kitron ASA’s equity and issuing of consideration shares in connection
with acquisition of other companies or enterprises within Kitron ASA’s purpose.
■ The Board of Directors is authorized to decide other terms and conditions of the subscription and is authorized to amend the
articles of association as implied by the use of this authorization.
ANNUAL ACCOUNTS AND NOTES KITRON ASA
83ANNUAL REPORT 2022
Authorization to the board to buy own shares
The ordinary general meeting on 27 April 2022 authorized the board of directors of Kitron ASA to acquire Kitron ASA’s own shares,
for the purpose of ownership or charge, in accordance with the Norwegian Public Limited Liability Companies Act sections 9-4 and
9-5 on the following conditions:
■ The Board of Directors may acquire shares in Kitron ASA, on one or several occasions, provided that the total combined
nominal value of the acquired shares after the acquisition must not exceed ten per cent of the share capital, i.e. up to a total
nominal value of NOK 1,970,143.90. The authorization also includes contract liens in the shares of Kitron ASA.
■ The authorization is not intended for use to facilitate or obstruct the success of a take-over bid where Kitron is the target
company.
■ Under this authorization the Board of Directors may pay minimum NOK 1 per share and maximum the prevailing market price
per share on the day the offer is made, provided, however, that the maximum amount does not exceed NOK 25 per share.
■ Any and all previous authorizations given to the Board of Directors to acquire own shares shall be, and hereby are, withdrawn
with effect from the date this authorization is registered with the Norwegian Register of Business Enterprises.
■ Shares acquired according to the authorization shall either be cancelled, used as remuneration to the members of the Board
of Directors of Kitron ASA, used in incentive schemes or be used as consideration in connection with acquisition of other
companies or businesses, joint ventures or joint business operations, and acquisition of property and business within Kitron
ASA’s purpose.
■ This authorization shall be valid until the 2023 annual general meeting, but not longer than 30 June 2023.
Note 17 - Information on long-term liabilities to financial institutions
The company has long-term bank loans of NOK 1 165.6 million at 31 December 2022 (NOK 90.0 million at 31 December 2021).
Of this is NOK 100.0 million short-term part and is due within one year. The group’s long-term and short-term bank financing
includes covenants relating to factors such as the company’s balance sheet values and earnings. The company complies with
these covenants at 31 December 2022.
Note 18 - Financial risk
Interest rate risk
Interest on the group’s interest-bearing debt is charged at the relevant market rate prevailing at any given time (base rate plus
interest margin). No interest rate instruments have been established in the company. The company does not have significant
interest-bearing assets except from inter-company loans, so that its income and cash flow from operational activities are not
significantly exposed to changes in the market interest rate.
Currency risk
Exchange rate developments represent a risk for the company both directly and indirectly. At 31 December 2022 the company had
no forward contracts.
Price risk
The business of Kitron ASA is administration of its subsidiaries, and revenues consist primarily of group contributions. The
company is not exposed to significant commodity price risk.
ANNUAL ACCOUNTS AND NOTES KITRON ASA
84ANNUAL REPORT 2022
INDEPENDENT AUDITOR’S REPORT
PricewaterhouseCoopers AS, Dronning Eufemias gate 71, Postboks 748 Sentrum, NO-0106 Oslo
T: 02316, org. no.: 987 009 713 MVA, www.pwc.no
Statsautoriserte revisorer, medlemmer av Den norske Revisorforening og autorisert regnskapsførerselskap
To the General Meeting of Kitron ASA
Independent Auditor’s Report
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Kitron ASA, which comprise:
• the financial statements of the parent company Kitron ASA (the Company), which comprise
the balance sheet as at 31 December 2022, the income statement and cash flow statement for
the year then ended, and notes to the financial statements, including a summary of significant
accounting policies, and
• the consolidated financial statements of Kitron ASA and its subsidiaries (the Group), which
comprise the balance sheet as at 31 December 2022, the income statement, statement of
comprehensive income, statement of changes in equity and statement of cash flow for the
year then ended, and notes to the financial statements, including a summary of significant
accounting policies.
In our opinion
• the financial statements comply with applicable statutory requirements,
• the financial statements give a true and fair view of the financial position of the Company as at
31 December 2022, and its financial performance and its cash flows for the year then ended in
accordance with Norwegian Accounting Act and accounting standards and practices generally
accepted in Norway, and
• the consolidated financial statements give a true and fair view of the financial position of the
Group as at 31 December 2022, and its financial performance and its cash flows for the year
then ended in accordance with International Financial Reporting Standards as adopted by the
EU.
Our opinion is consistent with our additional report to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of the Company and the
Group as required by relevant laws and regulations in Norway and the International Ethics Standards
Board for Accountants’ International Code of Ethics for Professional Accountants (including
International Independence Standards) (IESBA Code), and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit
Regulation (537/2014) Article 5.1 have been provided.
We have been the auditor of the Company for 18 years from the election by the general meeting of the
shareholders on 29 April 2005 for the accounting year 2005.
85ANNUAL REPORT 2022
INDEPENDENT AUDITOR’S REPORT
2 / 6
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Revenue from contracts with customers has the same characteristics and risks as in the prior year,
and therefore continues to be an area of focus this year. During 2022 the Company acquired BB
Electronic A/S, a subgroup in Denmark. The judgmental nature of purchase price allocation
calculations made us add Accounting for business combinations as a Key Audit Matters for our audit
of the 2022 financial statements.
Key Audit Matters
How our audit addressed the Key Audit Matter
Operating costs and percentage of
completion method
A
significant portion of revenues is
recognized over the contract period based
on estimated percentage of completion for
contracts
, based on the requirements in
IFRS 15.
We focused on
operating costs and the
percentage of completion method
because
calculating the cost incurred for partly
satisfied performance obligations and
estimating the percentage of completion
involves determining direct and indirect
production cost. The determination requires
management to use judgment to estimate
cost
s and production time. Further, it
requires, considering large amounts of data,
which adds a degree of complexity to the
estimation procedures.
See also
note 2 and 6 to the consolidated
financial statements where management
explain
s
how they account for revenue from
contracts with customers.
We reviewed management policy, which forms the
basis for calculation of cost incurred for partly
satisfied performance obligations and how
percentage of completion is estimated. We found
the policy to be in line with IFRS requirements. To
satisfy ourselves that internal controls related to
the accounting for costs were appropriate, we
evaluated and tested controls directed at the
accuracy of the cost price calculations.
We tested the accuracy of data used in the model
that calculated costs incurred by tracing the details
back to original sources. Our procedures included
reconciliation of input data towards management’s
estimates and recalculation of both direct and
indirect costs.
We also tested the estimates for reasonableness
by comparing the costing model with actual cost as
they occur. Through discussions with management
we were satisfied that no significant variances
were identified that triggered a need for additional
adjustments of the costing model.
No significant exception was noted from our work.
We assessed the appropriateness of the related
disclosures in notes and found them to
appropriately explain accounting for revenue and
to be in accordance with IFRS requirements.
86ANNUAL REPORT 2022
INDEPENDENT AUDITOR’S REPORT
3 / 6
Accounting for business combinations
During the year, Kitron acquired a sub
-
group in Denmark, BB Electronics A/S (the
acquired company).
Management prepared a purchase price
allocation (PPA) analysis in which the
difference between the net assets in the
acquired company and the purchase price
was allocated to identified assets from the
acquired company. Customer contracts and
goodwill were
among the identified assets.
We focused on this area due to the
judgmental nature of purchase price
allocation calculations
, and because
allocation of values may have a significant
impact on the Group’s assets, liabilities
,
and
future earnings
.
In
note 2 and 30 to the consolidated
financial statements, management
describes the
principles for accounting of
business combinations and valuation of
goodwill and customer contracts.
We obtained and reviewed the PPA and obtained
an understanding of how management identified
assets to which the purchase price was allocated,
including management’s calculation of related
goodwill.
We obtained and examined the acquisition
agreement, evaluated the terms of the agreement
and had discussions with management to deepen
our understanding of the transaction. We tested
the agreed cash considerations against bank
receipts.
To challenge management's judgement, we
examined the acquisition analysis with emphasis
on methods and assumptions used for identifying
and valuing intangible assets such as customer
contracts. We traced the information in the PPA to
the acquired company’s financial statements. We
tested the mathematical accuracy of the
calculations and challenged management`s
allocations based on our expectations from the
underlying business drivers in the acquired
company. Based on our audit procedures we found
the methods and assumptions to be reasonable.
We also read notes 2 and 30 and found the
information and explanations provided sufficient.
Other Information
The Board of Directors and the Managing Director (management) are responsible for the information
in the Board of Directors’ report and the other information accompanying the financial statements. The
other information comprises information in the annual report, but does not include the financial
statements and our auditor’s report thereon. Our opinion on the financial statements does not cover
the information in the Board of Directors’ report nor the other information accompanying the financial
statements.
In connection with our audit of the financial statements, our responsibility is to read the Board of
Directors’ report and the other information accompanying the financial statements. The purpose is to
consider if there is material inconsistency between the Board of Directors’ report and the other
information accompanying the financial statements and the financial statements or our knowledge
obtained in the audit, or whether the Board of Directors’ report and the other information
accompanying the financial statements otherwise appear to be materially misstated. We are required
to report if there is a material misstatement in the Board of Directors’ report or the other information
accompanying the financial statements. We have nothing to report in this regard.
87ANNUAL REPORT 2022
INDEPENDENT AUDITOR’S REPORT
4 / 6
Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors’ report
• is consistent with the financial statements and
• contains the information required by applicable statutory requirements.
Our opinion on the Board of Director’s report applies correspondingly to the statements on Corporate
Governance and Corporate Social Responsibility.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view in
accordance with the Norwegian Accounting Act and accounting standards and practices generally
accepted in Norway, and for the preparation and true and fair view of the consolidated financial
statements of the Group in accordance with International Financial Reporting Standards as adopted
by the EU, and for such internal control as management determines is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, management is responsible for assessing the Company’s and
the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern. The financial statements of the Company use the going concern basis of accounting insofar
as it is not likely that the enterprise will cease operations. The consolidated financial statements of the
Group use the going concern basis of accounting unless management either intends to liquidate the
Group or to cease operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
• identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error. We design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's and the Group's internal control.
• evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
88ANNUAL REPORT 2022
5 / 6
• conclude on the appropriateness of management’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Company's and the
Group's ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Company and the Group to cease to
continue as a going concern.
• evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions
and events in a manner that achieves a true and fair view.
• obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
We communicate with the Board of Directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the Audit Committee with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the Board of Directors, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.
INDEPENDENT AUDITOR’S REPORT
89ANNUAL REPORT 2022
INDEPENDENT AUDITOR’S REPORT
6 / 6
Report on Other Legal and Regulatory Requirements
Report on Compliance with Requirement on European Single Electronic Format (ESEF)
Opinion
As part of the audit of the financial statements of Kitron ASA, we have performed an assurance
engagement to obtain reasonable assurance about whether the financial statements included in the
annual report, with the file name Kitron Annual Report 2022 ESEF.zip, have been prepared, in all
material respects, in compliance with the requirements of the Commission Delegated Regulation (EU)
2019/815 on the European Single Electronic Format (ESEF Regulation) and regulation pursuant to
Section 5-5 of the Norwegian Securities Trading Act, which includes requirements related to the
preparation of the annual report in XHTML format, and iXBRL tagging of the consolidated financial
statements.
In our opinion, the financial statements, included in the annual report, have been prepared, in all
material respects, in compliance with the ESEF regulation.
Management’s Responsibilities
Management is responsible for the preparation of the annual report in compliance with the ESEF
regulation. This responsibility comprises an adequate process and such internal control as
management determines is necessary.
Auditor’s Responsibilities
For a description of the auditor’s responsibilities when performing an assurance engagement of the
ESEF reporting, see: https://revisorforeningen.no/revisjonsberetninger
Oslo, 22 March 2023
PricewaterhouseCoopers AS
Herman Skibrek
State Authorised Public Accountant
90ANNUAL REPORT 2022
We confirm to the best of our knowledge that:
■ the consolidated financial statements for 2022 have been prepared in accordance with IFRS as adopted by the EU as well as
additional information requirements in accordance with the Norwegian Accounting Act and that
■ the financial statements for the parent company for 2022 have been prepared in accordance with the Norwegian Accounting
Act and generally accepted accounting practice in Norway
and that
■ the information presented in the financial statements gives a true and fair view of the Company’s and Group’s assets liabilities
financial position and result for the period viewed in their entirety and that
■ the Board of Directors’ report gives a true and fair view of the development performance and financial position of the
Company and Group and includes a description of the principle risks and uncertainties.
Responsibility statement
Oslo, 22 March 2023
Tuomo Lähdesmäki
Chairman
Gro Brækken
Deputy Chairman
Michael Lundgaard Thomsen
Board Member
Espen Gundersen
Board Member
Petra Grandinson
Board Member
Maalfrid Brath
Board Member
Bjørn Gottschlich
Employee Elected Board
Member
Tanja Rørheim
Employee Elected Board
Member
Jarle Larsen
Employee Elected Board
Member
Lars Peter Nilsson
CEO of Kitron ASA
RESPONSIBILITY STATEMENT
91ANNUAL REPORT 2022
Kitron uses terms in the consolidated financial statements that are not anchored in the IFRS accounting standards. As being
an Electronics Manufacturing Services company, Kitron uses Alternative Performance Measures which are relevant for
understanding and evaluation of performance within manufacturing.
Our definitions and explanations of these terms follow below:
Order backlog
All firm orders and 4 months of committed customers forecast
at revenue value as at balance sheet date.
Foreign exchange effects
Group consolidation restated with exchange rates as
comparable period the previous year. Change in volume or
balance calculated with the same exchange rates for the both
periods are defined as underlying growth. Change based on
the change in exchange rates are defined as foreign exchange
effects. The sum of underlying growth and foreign exchange
effects represent the total change between the periods.
EBITDA
Operating profit (EBIT) + Depreciation and Impairments
EBIT
Operating profit
EBIT margin (%)
Operating profit (EBIT) / Revenue
Net working capital
Inventory + Contract assets + Accounts Receivables –
Accounts Payable
Operating capital
Other intangible assets + Tangible fixed assets + Net working
capital
Return on operating capital (ROOC) %
Annualised Operating profit (EBIT) / Operating Capital
Return on operating capital (ROOC) R3 %
(Last 3 months Operating profit (EBIT))*4) / (Last 3 months
Operating Capital /3)
Direct Cost
Cost of material + Direct wages (subset of personnel expenses
only to include personnel directly involved in production)
Days of Inventory Outstanding
360/ (Annualised Direct Costs/(Inventory + Contract assets))
Days of Inventory Outstanding R3
360/ ((Last 3 months Direct Costs *4) / (Last 3 months
Inventory and Contract assets/3))
Days of Receivables Outstanding
360/ (Annualised Revenue/Trade Receivables)
Days of Receivables Outstanding R3
360/ ((Last 3 months Revenue*4)/(Last 3 months Trade
Receivables/3))
Days of Payables outstanding
360/ ((Annualised Cost of Material + Annualised other
operational expenses) / (Trade Payables)
Days of Payables Outstanding (R3)
360/ (((Last 3 months (Cost of Material + other operational
expenses)*4) / (Last 3 months Trade Payables)/3))
Cash conversion cycle (CCC)
Days of inventory outstanding + Days of receivables
outstanding – Days of payables outstanding
Cash conversion cycle (CCC) R3
Days of inventory outstanding (R3) + Days of receivables
outstanding (R3) – Days of payables outstanding (R3)
Net Interest-bearing debt
- Cash and cash equivalents + Loans (Noncurrent liabilities) +
Loans (Current liabilities)
Interest-bearing debt
Loans (non-current liabilities) + Loans (current liabilities)
Inventory turns
Annualised direct costs / (Inventory + Contract assets)
Variable contribution
Revenue - Direct cost
Net gearing
Net interest bearing debt / Equity
Equity Ratio
The ratio of Equity to Total Assets
Definition of APMs
DEFINITION OF ALTERNATIVE PERFORMANCE MEASURES
92ANNUAL REPORT 2022
Kitron’s corporate governance principles clarify the division
of roles between shareholders, the Board of Directors
and the corporate management. The principles are also
intended to help safeguard the interests of shareholders,
employees and other stakeholders, such as customers and
suppliers, as well as society at large. The primary intention
is to increase predictability and transparency, and thereby
reduce uncertainties associated with the business.
It is Kitron’s intent to practice good corporate governance
in accordance with laws and regulations and the
recommendations of Oslo Børs under the ‘comply or
explain’ concept. This review has been prepared by the
board of Kitron based on Norwegian Code of Practice for
Corporate Governance dated 14 October 2021 (“the Code”).
The code is available at www.nues.no.
According to the Kitron’s own evaluation, Kitron deviates
from the code on the following points:
§6 General meetings
■ Vote separately on each candidate. For practical reasons
in the voting, the candidates are grouped into one vote.
■ All members of the Board of Directors, the Nomination
Committee and the auditor are present. The Chairman
of the Board and the auditor are always present to
respond to any questions. From the Group perspective,
this is considered sufficient.
■ Independent chairman for the general meeting. The
Chairman of the Board normally chairs the General
Meeting. The Board will make arrangements for an
independent chair if the setting so requires.
1. Report on Corporate Governance
The report follows the structure of the Code of Practice. The
Corporate Governance report is subject to annual evaluation
and discussion by the Board. The following report was
issued at the Board meeting on 22 March 2023.
2. Business
Kitron’s business purpose clause is stated in the company’s
articles of association: Kitron’s business purpose is
manufacturing, and development activities related to
electronics. The business includes purchase and sale of
shares and companies in the same or related business
sectors. The business may also include related consultancy
activities and other activities associated with the operation.
The company’s objectives, strategies and risk profiles
should be evaluated at least annually to create value for
shareholders.
The company’s main goals, strategies and risk profiles
are presented in the annual report, ESG report and on the
company’s website. It is the board’s opinion that these
objectives, strategies and risk profiles are within the
scope of the business purpose clause. The objectives
for the business are set with a view to creating value
for shareholders in a sustainable manner. The board of
directors has considered financial, social and environmental
factors when defining the company’s strategies, primary
objectives and risk profile.
Long term objectives, strategies and the risk profile are
evaluated once a year in connection with the work on
strategy, or as necessary in connection with major events or
structural changes.
Kitron’s vision is to provide solutions that deliver success for
its customers. Kitron’s core values to support the vision are
commitment, innovation and engagement.
The group’s current Ethical Code (Ethical Guidelines,
Supplier Guidelines and Anti-Bribery policy) was approved
by the Board in 2018. It is based largely on international
initiatives and guidelines related to social responsibility,
including the ILO conventions.
The Ethical Code includes topics such as human rights,
environment, relations with our customers and suppliers,
corruption and confidentiality.
The Code applies to all Kitron board members, elected
officers, permanent and temporary employees, hired staff,
consultants and agents acting in or on behalf of Kitron.
The Code also applies to all contractors, sub- contractors,
suppliers and sub-suppliers. It includes all companies in the
Kitron group.
3. Equity and dividends
The parent company’s share capital on 31 December 2022
amounted to NOK 19 769 105,30.
Total equity for the group on 31 December 2022 was NOK
1506.5 million, corresponding to an equity ratio of 25.6 per
cent. Considering the nature and scope of Kitron’s business,
the board considers that the company has adequate equity
and capital structure.
Existing mandates granted to the board, to issue shares and
to purchase its own shares, are presented in the shareholder
information section of the annual report. The mandates are
restricted to defined purposes and limited in time to no later
Corporate governance
CORPORATE GOVERNANCE
93ANNUAL REPORT 2022
than the date of the next Annual General Meeting but not
longer than 30 June that year.
Kitron’s dividend policy states: “Kitron’s dividend policy is
to pay out an annual dividend of 20 to 60 per cent of the
company’s consolidated net profit before non-recurring
items. When deciding on the annual dividend the company
will take into account the company’s financial position,
investment plans as well as the needed financial flexibility to
provide for sustainable growth.
4. Equal treatment of shareholders and
transactions with close associates
There is only one class of shares, and all shares have equal
voting rights. The nominal amount per share is NOK 0.10.
The articles of association place no restriction on voting
rights. Kitron has issued an insider manual with guidelines
and control procedures. According to the company’s ethical
guidelines, board members and the executive management
must notify the board if they have any direct or indirect
material interest in any transaction contemplated or entered
by the company.
5. Shares and negotiability
There are no provisions in the Company’s Articles of
Association that limit the right to own, trade or vote for
shares in the Company.
6. General meetings
Shareholders exercise the ultimate authority in Kitron
through the Annual General Meeting. All shareholders are
entitled to attend a general meeting as long as they are
recorded in the company’s share register no later than the
fifth business day before the date of the general meeting.
Representatives of the board, Chairman of the Nomination
Committee, the nomination committee, and the auditor are
present.
The notice of the meeting, the agenda and detailed and
comprehensive supporting information, including the
nomination committee’s justified recommendations, are
made available on Kitron’s website at least 21 days before
a general meeting takes place. At the same time the
notice and agenda are distributed to all shareholders. For
administrative purposes, the shareholders must give notice
of their attendance at the meeting minimum two working
days before the meeting.
The general meeting deals with such matters as required
by Norwegian law. Shareholders who cannot attend the
meeting in person can vote by proxy and voting instructions
can be given on each item on the agenda. In addition,
shareholders may vote in advance, either in writing or by
electronic means, up to 2 days prior to the general meeting.
The general meetings are opened by the chair of the board.
Normally, the board proposes that the chair of the board
shall also chair the general meetings. The board will propose
an independent chair for the general meeting if any of the
matters to be considered calls for such arrangement. The
notices and minutes of the general meetings are published in
Oslo Børs’ information system (www.newsweb. oslobors.no,
ticker: KIT) and on Kitron’s website.
7. Nomination committee
Kitron’s nomination committee is stated in the articles
of association. The committee shall have two or three
members, including the head of the committee. The general
meeting elects the head and the members of the nomination
committee and determines its remuneration. The general
meeting has resolved a mandate and stipulated guidelines
for the duties of the nomination committee that is compliant
with the Code. The members of the nomination committee
are elected for a period of up to two years.
The nomination committee shall propose and present to
the general meeting: Candidates for election to the board,
remuneration of the board, the nomination committee, and
new members of the nomination committee.
Composition
The committee shall have two to three members, including
the head of the committee. At the composition of the
nomination committee, the interests of the shareholders will
be considered, as well as the members’ independence of the
board and of the executive management.
The nomination committee members
After the Annual General Meeting 27 April 2022, the
nomination committee had the following members:
■ Ole Petter Kjerkreit, chairperson elected until the Annual
General Meeting in 2023
■ Christian Jebsen, elected until the Annual General
Meeting in 2023
■ The committee’s member Ole Petter Kjerkreit is independent
of the Kitron’s management and the Board. Christian
Jebsen was until the Annual General Meeting 2022 a
shareholder-elected member of the Kitron ASA board.
Submitting proposals to the nomination committee
The deadline for submitting proposals to the nomination
committee is four weeks prior to General Meeting Notice.
CORPORATE GOVERNANCE
94ANNUAL REPORT 2022
8. Board of directors: composition and
independence
According to the articles of association, the board shall
consist of 3 to 6 shareholder-elected members as resolved
by the general meeting. The board currently consists of six
shareholder-elected members and three members elected
by and among the employees.
Board members are elected for a period of up to two years.
The chairman of the board is elected by the general meeting.
There is no corporate assembly in Kitron.
The board’s composition shall ensure that it can effectively
and proactively perform its supervisory and strategic
functions. Furthermore, the board is composed to enable
it to always act independently of special interests. The
representation of shareholders was proposed by the
nomination committee and unanimously resolved by the
general meeting.
After the General Meeting 27 April 2022, the board of
directors consists of nine members and currently has the
following composition:
■ Tuomo Lähdesmäki (Chairman), re-elected until the
Annual General Meeting in 2023
■ Gro Brækken (Vice chairman), re-elected until the Annual
General Meeting in 2023
■ Espen Gundersen, re-elected until the Annual General
Meeting in 2023
■ Maalfrid Brath, re-elected until the Annual General
Meeting in 2023
■ Petra Grandinson, elected until the Annual General
Meeting in 2023
■ Michael Lundgaard Thomsen, elected until the Annual
General Meeting in 2023
■ Bjørn M. Gottschlich, elected by and among employees
■ Jarle Larsen, elected by and among employees
■ Tanja Rørheim, elected by and among employees
All shareholder-elected directors are considered independent
of the management. The same applies in relation to
important business relations and owners.
Board members who own shares in Kitron by 31 December
2022:
■ Tuomo Lähdesmäki - 291 668 shares
■ Gro Brækken - 51 280 shares
■ Espen Gundersen - 56 280 shares
■ Maalfrid Brath - 29 499 shares
■ Petra Grandinson - 20 494 shares
■ Michael L. Thomsen - 6240 shares
■ Tanja Rørheim – 26 280 shares
■ Bjørn M. Gottschlich – 26 480 shares
■ Jarle Larsen 19 624 shares in Kitron.
See presentation of board members for details.
As expressed in the Ethical Code of Conduct, Kitron
recognizes a balanced workforce as a strength, and this
extends to the board and its committees. At the General
Meeting on 27 April 2022, 3 male and 3 female board
members were nominated and elected by shareholders.
Of the employee-elected board members, 2 are male, and
1 is female. Both genders are represented on the audit
committee and the HR & remuneration committee. The
board includes members representing various age groups
as well as educational and employment backgrounds. Five
nationalities are represented on the board.
9. The work of the board of directors
The board has an overall responsibility for safeguarding
the interests of all shareholders and other stakeholders.
Furthermore, it is the board’s duty and responsibility to
exercise overall control of the company, and to supervise the
management and the company’s operations. The division
of roles between board and management is specified in
Kitron’s rules of procedure for the board. The board has
approved an annual meeting plan for its work, which includes
meetings with a special focus on strategy and budgeting.
The board conducts a self-evaluation once a year.
The rules of procedures for the board of directors also
include a statement on how the board of directors and the
senior management shall handle agreements with related
parties, including whether an independent valuation shall
be obtained. The board of directors shall include a report on
such agreements in the annual report.
Kitron’s board shall also serve as a constructive and qualified
discussion partner for the executive management. One of
the board’s key duties is to establish appropriate strategies
for the group. It is important in this context that the board, in
cooperation with the management, ensures that the strategies
are implemented, that the results are measured and evaluated
and that the strategies are developed in the most appropriate
way. Kitron has defined performance parameters for the
strategies and can thus measure its performance.
The board receives financial reports monthly from the
administration. The underlying data for these reports are
prepared at each reporting unit. The information is checked,
consolidated, and processed by the group’s corporate
financial staff to produce the consolidated reports that are
submitted to the board. The reports also include relevant
operational matters. The group does not have a separate
internal audit function. Account controls are exercised
through segregation of duties, guidelines and approval
procedures. The corporate financial staff is responsible
for establishing guidelines and principles. The corporate
financial staff handles the group’s financial transactions.
Each profit centre is responsible for the commercial
CORPORATE GOVERNANCE
95ANNUAL REPORT 2022
benefit of manufacturing contracts. Responsibility for the
commercial content of significant procurement contracts
rests with the corporate sourcing organisation.
The board conducts annual evaluations of the executive
managers and their performance. These evaluations also
cover an assessment of cooperation between the board and
the management. The results of these evaluations represent
an important element in the remuneration and incentive
programs, which are described in the notes to the financial
statements.
The board had 11 meetings during 2022 with 99 per cent
participation.
The board’s audit committee
The board’s audit committee is appointed by Kitron ASA’s
board of directors and is a sub-committee of the board.
The audit committee mandate was revised and updated
in 2020 in accordance with new regulations. The audit
committee will on behalf of the board supervise the financial
reporting process to ensure the integrity of the financial
statements. The audit committee will also go through: the
company’s internal supervisory/control routines and risk
management system, the external audit process including
a recommendation in the choice of an external auditor,
the company’s routines regarding compliance with laws
and regulations affecting the financial reporting and the
company’s code of conduct.
The role of the audit committee is to prepare matters
for consideration by the Board, to support the Board in
its supervisory responsibilities and to ensure that the
requirements made of the company in connection with its
listing on the stock exchange are complied with.
The committee consists of two shareholder-elected board
members and one employee-elected board member. The
independent auditor usually attends the meetings. During
2022 there were 5 audit committee meetings.
Members of the Audit Committee:
■ Espen Gundersen, voted chair of the audit committee
and re-elected until the Annual General Meeting in 2023
■ Gro Brækken, elected until the Annual General Meeting in
2023
■ Tanja Rørheim, re-elected by and among the employees
The board’s HR & remuneration committee
The HR & Remuneration Committee is appointed by Kitron
ASA’s board of directors and is a sub- committee of the
Board. The committee consists of three members elected
among the members of the board.
The HR & Remuneration committee will on behalf of the
board supervise remuneration and incentive schemes,
mainly related to the CEO and the Corporate Management
Team (CMT). The committee will oversee the company’s
management succession plan as well as the company’s
talent management. During 2022 there were 5 remuneration
committee meetings.
Members of the Remuneration Committee:
■ Tuomo Lähdesmäki, voted chair of the remuneration
committee and re-elected until the Annual General
Meeting in 2023
■ Maalfrid Brath, re-elected until the Annual General
Meeting in 2023
■ Petra Grandinson, elected until the Annual General
Meeting in 2023
■ Michael L. Thomsen, re-elected until the Annual General
Meeting in 2023
10. Risk management and internal control
Kitron’s business model is to provide manufacturing and
assembly of electronics and industrial products containing
electronics, including development, industrialisation,
purchasing, logistics, maintenance/ repair and redesign. The
board sees no unusual risks beyond normal business risks
that any light industry operation is exposed to.
EMS is a highly competitive industry, presenting the
company with an inherent business risk related to Kitron’s
ability, firstly, to attract and retain customers who are and
who will be predictable and successful in their respective
markets and, secondly, to make a fair profit margin on
its business. The group’s customer portfolio consists
of reputable companies operating in various segments.
Several of the group’s customers are world leaders in
their respective fields. It is Kitron’s perception that the
customer portfolio is robust and well balanced. Kitron’s
value proposition to its customers includes flexibility,
competence, quality, closeness and full value chain
capability. The board is confident that Kitron can maintain
a viable, leading and adaptive business. Kitron is organised
in distinct manufacturing sites, each fully accountable for
its own revenues, profitability and level of capital employed.
The structure facilitates closeness between management
and the operation, which in turn provides good overview and
adequate internal business control.
The group has established a decentralised management
model featuring delegated responsibility for profits. As a
result, the control function parallels the group’s management
model, and it is the individual unit’s responsibility to make
sure that it has the capacity and expertise it requires to carry
out responsible internal control. Governing management
CORPORATE GOVERNANCE
96ANNUAL REPORT 2022
documents have been adopted, describing the group’s
requirements for responsible internal control.
Management prepares monthly financial reports that are
sent to the Board of Directors. When the group’s quarterly
financial reports are to be presented, the Audit Committee
reviews the reports prior to the board meeting. The auditor
participates in the Audit Committee meetings, and meets
with the entire Board in connection with the presentation of
the annual financial statements.
The Board annually reviews the strategic plan. In addition, as
part of the preparation to the strategic discussion, the Board also
annually review the group risks. The group’s financial position
and risks are described in the Board of Directors’ Report.
The health, safety, and environmental risks are limited and
well managed, and Kitron’s ISO quality systems are certified
by certification agencies , inspected and approved by several
of the group’s customers.
Kitron’s customers are professional product-owning
companies, which purchase the manufacturing and related
services from Kitron. Kitron is not the product owner and the
group’s product liability risk are thus negligible.
The Board regularly reviews and amends the Group’s key
Governance documents. The group’s current Ethical Code
of Conduct was approved by the Board on 8 October 2018.
Combined with Kitron’s Supplier Code of Conduct and Anti-
Corruption policy, this forms the ethical guidelines for the
group’s business.
Kitron has established routines for notification and follow-up
on any alleged misconduct.
The Group has an Ethical Committee whose task it is,
on behalf of the management, to review Governance
documents, decide and/or advise in Ethical dilemmas and
conduct risk analysis and implement relevant actions.
11. Remuneration of the board of directors
The Annual General Meeting approves the remuneration
paid to the Board of Directors each year. The Proposal for
the remuneration is made by the Chair of the Nominating
committee.
The remuneration of the board members reflects
responsibility, expertise, time spent and the character of
Kitron’s business. The remuneration is not linked to the
company’s performance or share price. The remuneration
to the chairman is determined separately from the other
members. Additional remuneration is made to the members
of the board who are appointed to board committees, on a
per meeting basis.
Board members are not encouraged to perform special
assignments for the company in addition to their
directorship. Such assignments, if any, are reported to the
full board and disclosed in the annual report.
Information about each director’s remuneration, including
shares and subscription rights, is provided in the notes to the
annual financial statements.
The members of the Board are encouraged to own shares in
Kitron.
12. Remuneration of senior executives
The Norwegian Public Limited Liability Companies Act
established guidelines for the remuneration of the CEO and
other senior executives of the company. The remuneration
guidelines have been approved by the general meeting. The
remuneration guidelines shall be clear and understandable,
and shall contribute to Kitron’s business strategy, long-term
interests and financial sustainability. The arrangements
for salary and other remuneration shall be simple and shall
ensure convergence of the financial interests of the senior
executives and shareholders.
The remunerations consist of fixed annual compensation
that includes annual base salary and other possible benefits
(such as pension plan).
The total possible compensation also includes a short- term
incentive scheme (STI) and a long-term incentive scheme
(LTI).
Performance-related remuneration of the executive
personnel in the form of share options, bonus programs or
the like should be linked to value creation for shareholders
or the company’s earnings performance over time. Such
arrangements, including share option arrangements, should
incentivise performance and be based on quantifiable
factors over which the employee in question can have
influence. Performance-related remuneration should be
subject to an absolute limit.
Fixed compensation
The actual level of annual base salaries (ABS) is based on
market conditions and salary levels related to the actual
position in the country in question. Kitron uses the Hay
tool for determining market levels on an annual basis. The
executive positions are evaluated using the Hay positioning
grading tool.
Pension plans, based on defined contribution plans, are
CORPORATE GOVERNANCE
97ANNUAL REPORT 2022
in place following the practice and regulations in each
country. Other benefits are according to company policy and
regulations in country of residence.
The Board may grant specific purpose bonuses to members
of the senior executive management.
Short term incentive scheme
The STI system has specific targets and defined maximum
pay-outs and is set on annual basis. The possible maximum
pay-out is 85 per cent of annual basic salary. The STI system
is based on performance of Revenue growth, EBIT, Return on
Operating capital (ROOC) and ESG (sustainable energy at the
sites).
Long-term incentive scheme
The LTI system was established in 2013 as an option-based
program with a three-year validity (2013-2016), and in 2015
the Board continued the share option program for executive
management for another three-year period (2016-2019).
In 2018 the Board introduced a new share option program
for executive management comprising up to 5 000
000 shares. The program is divided into four three-year
subprograms, each with an allocation of 1 250 000 options,
where the first program started in 2019, followed by one
program every year until 2023.
The total program corresponds to approximately 3 per cent
of the market capitalization
Separate agreements describing the LTI systems and related
conditions are in place for each senior executive. Maximum
possible share options are defined per individual among
the senior executives. Any possible pay-out will depend on
the Kitron group share price at the start of the program in
comparison with the share price at the time of the expiry.
A more detailed description is provided in note 19 in the
Consolidated Financial statements.
Kitron reports all forms of remuneration received by the chief
executive and each of the other members of the executive
management.
Details about remuneration of the executive management
are provided in the separate Report on
Remuneration to senior executives and board members
for 2022 available at kitron.com and in note 27 in the
Consolidated Financial statements.
13. Information and communication
Kitron wants to maintain good communication with its
shareholders and other stakeholders. The information
practice is based on openness and will help to ensure
that Kitron’s shareholders and other stakeholders are able
to make a realistic assessment of the company and its
prospects. Guidelines have been established to ensure a
flow of relevant and reliable financial and other information.
The group endeavours to ensure that all shareholders have
access to the same information. Kitron complies with Oslo
Børs’ Code of Practice for IR, dated 1 March 2021.
All information distributed to the shareholders is published
on Kitron’s website (www.kitron.com) at the same time as it
is sent to the shareholders. Furthermore, all announcements
to the market are posted on Kitron’s website following
publication in Oslo Børs’ company disclosure system
www. newsweb.oslobors.no, ticker: KIT. Public, webcast
presentations are held quarterly in connection with the
interim reporting. Kitron presents a financial calendar every
year with dates for important events. Kitron’s guidelines
for reporting of financial and other information as well as
guidelines for the company’s contact with shareholders,
other than through the general meeting, are presented in the
shareholder information section in the annual report.
Kitron operates in accordance with a set of financial targets,
established by the board of directors. These targets govern
the Group’s operations within the financial year. The targets
which Kitron give annual guiding on are:
■ Revenue
■ EBIT
The aim is to communicate the targets for the financial
year in connection with either the fourth quarter, the annual
report, or later as soon as they are approved by the board of
directors.
Kitron emphasises that the target by their very nature
necessarily involves assumptions and uncertainty.
14. Takeovers
There are no defence mechanisms against take- over
bids in the Company’s Articles of Association, nor have
other measures been implemented to specifically hinder
acquisitions of shares in the Company.
The Kitron Board has established guiding principles in
respect of take-over bids.
CORPORATE GOVERNANCE
98ANNUAL REPORT 2022
In a bid situation, the Board and management have an
independent responsibility to help ensure that shareholders
are treated equally, and that the Company’s business
activities are not disrupted unnecessarily. The Board has
a particular responsibility to ensure that shareholders are
given sufficient information and time to form a view of the
offer.
The Board should not hinder or obstruct the possibility of
having take-over bids for the Company’s activities or shares.
The Board should actively seek other offers upon the receipt
of a take-over bid if considered to be in the best common
interest of the Company and its shareholders.
Agreements entered between the Company and the
bidder, or significant terms and conditions thereof, that
are material to the market’s evaluation of the bid shall be
publicly disclosed no later than at the same time as the
announcement that the bid will be made is published.
In the event of a take-over bid for the Company’s shares, the
Board should not exercise mandates or pass any resolutions
with the intention or effect of a disposal of the Company’s
activities, or material parts thereof, or otherwise obstructing
the take-over bid unless this is approved by the general
meeting following announcement of the bid.
The Board and management shall refrain from implementing
any measures intended to protect their personal interests
at the expense of the interests of shareholders following an
intention to make a take- over bid or announcement of a bid.
If an offer is made for the Company’s shares, the Board shall
issue a statement making a recommendation as to whether
shareholders should or should not accept the offer. The
Board’s statement on the offer should make it clear whether
the views expressed are unanimous, and if this is not the
case it should explain the basis on which specific members
of the board have excluded themselves from the Board’s
statement. The statement shall include information as set
out in section 6-16 of the Securities Act.
The Board should arrange for a valuation of the Company
from an independent expert. The valuation should include
an explanation and shall be made public no later than at the
time of the public disclosure of the Board’s statement.
15. Auditor
The Group’s auditor is elected by the General Meeting.
The auditor participates in the meetings of the Audit
Committee, to whom they present the main features of the
plan for the audit. The auditor also conducts a review of the
company’s internal control procedures, including identified
weaknesses and improvement proposals, which are
presented to the Audit Committee.
The auditor always participates in the meeting of the
Board that deals with the annual financial statements. In
this meeting the auditor discusses any changes to the
accounting principles, comments on any material estimated
figures and reports any material matters where there has
been a disagreement between the auditors and the executive
management.
The Board and the auditor will meet at least once a year
without the CEO or any other members of the executive
management present.
The auditor issues a written confirmation to the Board on
compliance with the Statutory Audit Independence and
Objectivity Requirements.
The Board of Kitron has established guidelines in respect
of the use of the auditor by the company’s executive
management for services other than mandatory audit.
The auditor annually provides the board with a summary
of all services that have been undertaken for Kitron for the
accounting year. The fees paid for audit work and fees paid
for other specific assignments are specified in the notes to
the financial statements.
PwC has been the company’s auditor since 2005.
CORPORATE GOVERNANCE
99ANNUAL REPORT 2022
SHAREHOLDER INFORMATION
Share capital
Kitron ASA (Kitron) has one class of shares. Each share
carries one vote at the company’s general meeting. The
shares are freely transferable pursuant to the company’s
articles of association.
Kitron’s registered share capital on 31 December 2022 was
NOK 19 769 105,30 divided between 197 691 053 shares
with a nominal value of NOK 0.10 each.
In 2018 the Board introduced a new share option program for
executive management comprising up to 5 000 000 shares.
The program is divided into four three-year subprograms,
each with an allocation of 1 250 000 options, where the first
program started in 2019, followed by one program every year
until 2023. The total program corresponds to approximately
3 per cent of the market capitalization.
The share option program entails that executive
management, on certain terms, may be granted a right to
subscribe for shares in Kitron at NOK 0.10 per share after
a vesting period of three years. The number of options that
are vested for each subprogram is linked to the development
of the market capitalization at the Oslo Stock Exchange,
adjusted for dividends and share buy-backs. For each
program to vest fully, the market capitalization adjusted for
dividends and share buy-backs must increase 50 per cent.
The program starts to vest at an increase of 20 per cent and
will vest linearly between 20 per cent to 50 per cent.
Each subprogram is capped at a 200 per cent increase of
the market capitalization, adjusted for dividends and share
buy-backs. The program has a clawback clause. Each of the
subprograms has a lock-up period of one year and a down-
sale period of two years.
In 2022, subprogram A vested, and 676 664 new shares
were issued to the option holders at a strike price of NOK
0.10 per share pursuant to the board authorisation resolved
in Kitron’s general meeting held 27 April 2022. In addition,
Kitron converted 493 336 exercised options under the share
incentive program against cash consideration. The cash
consideration was utilised to cover the tax cost for the option
holders which will be subject to advance tax deduction by
Kitron after exercise of the options.
Per 31 December 2022, 3 750 000 options have been
allocated to the executive management.
Stock market listing
The company’s shares are listed on the Oslo Stock Exchange
(ticker code: KIT) in the OB “Match” liquidity segment and
are since 1 December 2016 part of the Benchmark Index
(OSEBX).
Shareholder information
Kitron OSEBX
100ANNUAL REPORT 2022
SHAREHOLDER INFORMATION
During 2022, the share price moved from NOK 23.60 to NOK
28.05, an increase of 18.9 per cent. In addition, in 2022, the
company paid an ordinary dividend of NOK 0.25 per share
The Oslo Børs Main Index decreased by 1 per cent during
the same period. The share price has varied between NOK
16.94 and NOK 28.35. At the end of 2022, the company’s
market capitalisation was NOK 5545.2 million. A total of 93.4
million shares were traded during the year, corresponding to
a turnover rate of 47,3 per cent.
Shareholder structure
At the end of 2022, Kitron had 9 026 shareholders, compared
with 9 010 shareholders at the end of 2021. At the end of the
year, the foreign shareholding amounted to 27.4 per cent.
compared to with 27.9 per cent at the end of 2021.
At the balance sheet date, Folketrygdfondet was the largest
shareholder, holding 8.79 per cent of the Kitron shares,
followed Verdipapirfonden Odin Norge with 6.72 per cent and
Vevlen Gård AS with 6.32 per cent. The liquidity of the share
was 100 per cent. The 20 largest shareholders held a total
of 59.43 per cent of the company’s shares at the end of the
year.
Mandates
Authorization to the board to issue shares
The ordinary general meeting of 28 April 2022 authorized the
board of directors of Kitron ASA to increase the share capital
in accordance with the Norwegian Public Limited Liability
Companies Act section 10-14 on the following conditions:
Authorization to strengthen equity and incentive
schemes
The share capital may, in one or more rounds, in total be
increased with up to NOK 1,970,143.90.
The Board of Directors may not use the authorization if the
total increase of the share capital approved by the Board
of Directors in accordance with this authorization together
with the use of other authorizations to issue shares, in the
period for the authorization, exceeds NOK 3,940,287.80. The
authorization shall be valid until the Annual General Meeting
in 2023, but no later than 30 June 2023. The shareholders’
pre-emptive rights according to the Norwegian Public
Limited Liability Companies Act section 10-4 may be set
aside. The authorization is not intended for use to facilitate
or obstruct the success of a take-over bid where Kitron
is the target company. The authorization encompasses
share capital increase by contribution in any kind and the
right to incur Kitron ASA with special obligations according
to the Norwegian Public Limited Liability Companies Act
section 10-2. The authorization encompasses resolutions
on merger according to the Norwegian Public Limited
Liability Companies Act section 13-5. The authorization is
limited to encompass capital requirements or issuance of
consideration shares in relation to strengthening of Kitron
ASA’s equity, joint ventures or joint business operations,
remuneration to members of the Board of Directors of Kitron
ASA, incentive schemes, and acquisition of property and
business within Kitron ASA’s purpose. The Board of Directors
is authorized to decide other terms and conditions of the
subscription and is authorized to amend the articles of
association as implied by the use of this authorization. This
authorization replaces any previously granted authorizations
for the Board of Directors to increase the share capital. The
authorization was used by the board in 2022 to increase
share capital by NOK 67 666,40 to NOK 19 769 105,30.
Strategic authorization
The share capital may, in one or more rounds, in total
be increased with up to NOK 3,940,287.80. The Board of
Directors may not use the authorization if the total increase
of the share capital approved by the Board of Directors in
accordance with this authorization together with the use of
other authorizations to issue shares, in the period for the
authorization, exceeds NOK 3,940,287.80. The authorization
shall be valid until the Annual General Meeting in 2023,
but no later than 30 June 2023. The shareholders’ pre-
emptive rights according to the Norwegian Public Limited
Liability Companies Act section 10-4 may be set aside.
The authorization is not intended for use to facilitate or
obstruct the success of a take-over bid where Kitron is the
target company. The authorization encompasses share
capital increase by contribution in any kind and the right to
incur Kitron ASA with special obligations according to the
Norwegian Public Limited Liability Companies Act section
10-2. The authorization encompasses resolutions on
merger according to the Norwegian Public Limited Liability
Companies Act section 13-5. The authorization is limited to
include strengthening of Kitron ASA’s equity and issuing of
consideration shares in connection with acquisition of other
companies or enterprises within Kitron ASA’s purpose. The
Board of Directors is authorized to decide other terms and
conditions of the subscription and is authorized to amend
the articles of association as implied by the use of this
authorization. This authorisation was not used by the board
in 2022.
Authorization to the board to buy own shares
The ordinary general meeting on 27 April 2022 authorized
the board of directors of Kitron ASA to acquire Kitron ASA’s
own shares, for the purpose of ownership or charge, in
accordance with the Norwegian Public Limited Liability
Companies Act sections 9-4 and 9-5 on the following
conditions:
The Board of Directors may acquire shares in Kitron ASA, on
one or several occasions, provided that the total combined
nominal value of the acquired shares after the acquisition
101ANNUAL REPORT 2022
SHAREHOLDER INFORMATION
must not exceed ten per cent of the share capital, i.e. up to a
total nominal value of NOK 1,970,143.90. The authorization
also includes contract liens in the shares of Kitron ASA.
The authorization is not intended for use to facilitate or
obstruct the success of a take-over bid where Kitron is
the target company. Under this authorization the Board of
Directors may pay minimum NOK 1 per share and maximum
the prevailing market price per share on the day the offer
is made, provided, however, that the maximum amount
does not exceed NOK 25 per share. Any and all previous
authorizations given to the Board of Directors to acquire own
shares shall be, and hereby are, withdrawn with effect from
the date this authorization is registered with the Norwegian
Register of Business Enterprises. Shares acquired according
to the authorization shall either be cancelled, used as
remuneration to the members of the Board of Directors
of Kitron ASA, used in incentive schemes or be used as
consideration in connection with acquisition of other
companies or businesses, joint ventures or joint business
operations, and acquisition of property and business within
Kitron ASA’s purpose. This authorization shall be valid until
the 2023 annual general meeting, but not longer than 30
June 2023. The authority was used in 2022 to buy back 49
752 own shares. The shares acquired were used as part of
the remuneration to the board members for the period from
and including May 2022, and to and including April 2023, as
resolved by the annual general meeting on 27 April 2022.
Dividend policy
Kitron’s dividend policy is to pay out an annual dividend of
20 per cent to 60 per cent of the company’s consolidated
net profit before non-recurring items. When deciding on
the annual dividend the company will take into account the
company’s financial position, investment plans as well as the
needed financial flexibility to provide for sustainable growth.
Information and investor relations
Kitron wishes to maintain open communications with its
shareholders and other stakeholders. Shareholders and
stakeholders are kept informed by announcements to the
Oslo Børs and press releases. Kitron’s website www.kitron.
com provides information on Kitron’s business and financial
situation. Interim financial statements are presented at
meetings open to the general public and are available as
webcasts at www.kitron.com.
Kitron reports all manufacturing orders exceeding NOK 20
million. The group also reports smaller orders if these are of
strategic importance or significant in any other way.
The corporate management is responsible for
communication activities and investor relations, and also
facilitates direct contact with the chairman of the board and
other board members.
102ANNUAL REPORT 2022
KITRON IN BRIEF
Sustainability report
2022
Norway
Sweden
Denmark
Lithuania
Germany
Poland
Czech Republic
India
China
USA
103ANNUAL REPORT 2022
SUSTAINABILITY REPORT
105ANNUAL REPORT 2022
SUSTAINABILITY REPORT
Message from our CEO
106ANNUAL REPORT 2022
SUSTAINABILITY REPORT
As a leading electronics manufacturing services company
with operations in ten countries, Kitron is mindful of our
direct and indirect economic, social and environmental
impact on our surroundings and stakeholders.
This report outlines Kitron’s sustainability work, which
is based on the Kitron Ethical Code of Conduct, Kitron
Suppliers Code of Conduct and Kitron Anti-Corruption
Policy. The report is prepared in accordance with the Oslo
Stock Exchange Guidelines for Sustainability Reporting
and Euronext Guidelines to issuers for ESG reporting. We
are a UN Global Compact Signatory and support the UN
Sustainable Development Goals.
In this report, which is also our annual Communication on
Progress, we describe our actions to continually improve
the integration of the Global Compact and its principles into
our business strategy, culture and daily operations. We also
commit to sharing this information with our stakeholders
using our primary channels of communication.
We are committed to making the UN Global Compact and
its principles part of the strategy, culture and day-to-day
operations of our company and to engaging in collaborative
projects which advance the broader development goals
of the United Nations, particularly these Sustainable
Development Goals:
5 Gender Equality and women’s empowerment
9 Build resilient infrastructure, promote sustainable
industrialization and foster Innovation
12 Responsible consumption and production
13 Climate change
We also strive to engage on sustainability topics beyond
our direct value chain. I am pleased to confirm that Kitron
ASA reaffirms its support of the Ten Principles of the United
Nations Global Compact in the areas of Human Rights,
Labour, Environment and Anti-Corruption.
The company has set long-term goals and ambitions for its
sustainability work, with clearly defined milestones for the
short, medium and long-term work on environmental, social
and governance topics.
Improving data quality and implementing digitalized
reporting on KPIs for our internal work is also of continued
importance. Kitron has established an internal scorecard for
all our locations, reporting quarterly on KPI progress.
The acquisition of BB Electronics in January 2022 has
impacted the progress on some sustainability KPIs in 2022.
BB Electronics is being aligned with Kitron’s sustainability
ambitions, and these measures will increasingly take effect
in 2023.
Kitron has been monitoring the latest developments in the
EU Taxonomy and has analysed the group’s activities in light
of the Taxonomy criteria. Kitron is also preparing for the
EU’s Corporate Sustainability Reporting Directive (CSRD),
which will apply to Kitron and influence the company’s
sustainability reporting in the coming years.
At Kitron, we believe that running a sustainable business is
key to long-term success, and we hope this report illustrates
our efforts and commitments in this area.
Lars Peter Nilsson
CO of Kitron ASA
107ANNUAL REPORT 2022
About this report
For information about this report and its content, please
contact Kitron ASA CFO Cathrin Nylander.
This report is prepared for Kitron ASA in accordance with
The Oslo Stock Exchange Guidelines for Sustainability
Reporting and Euronext Guidelines to issuers for ESG
reporting from 2022.
The Sustainability report has been reviewed and approved by
the Board. The claims and data in this report have not been
audited by a third-party.
About Kitron ASA
Kitron is a leading Scandinavian Electronics Manufacturing
Services (EMS) company with operations in Norway,
Sweden, Denmark, Lithuania, Germany, Poland, the
Czech Republic, India, China and the United States. Kitron
manufactures and delivers anything from fully assembled
electronic circuit boards to complete end products for
customers globally.
Related technical services like prototyping, industrialization,
material analysing, and test development are also key
competencies offered by Kitron. In addition, Kitron is
currently developing expertise in Automotive Electronics with
a special focus on Autonomous Technologies.
Kitron is an ASA company listed on the Oslo Stock Exchange
(ticker: KIT).
Economic impact and tax information
Kitron creates value in countries in which we operate,
directly through the payment of direct and indirect taxes, the
payment of dividends to owners and wages to employees,
and indirectly by buying goods and services from suppliers.
Kitron impacts a large number of stakeholders, many of
them directly or indirectly involved in Kitron’s value creation.
Below is an overview of the values Kitron creates and the
main stakeholders.
Payroll and social security expenses 2022
In 2022, labour costs amounted to 1092,5 million (NOK 719.1
million) Payroll and social security expenses accounted for
16.8 (19.4) per cent of sales revenue.
Procurement of goods and services
Kitron purchased goods and services valued at roughly NOK
4776.3. million (2654.0 million) in 2022.
SUSTAINABILITY REPORT
108ANNUAL REPORT 2022
KITRON IN BRIEF
Figure 2: Revenue in NOK million, per market sector 2022
Connectivity
1 694
Electrification
1 335
Industry
1 904
Medical
devices
755
Defence &
Aerospace
798
Tax
The Group’s tax expenses for 2022 came to NOK 105.1
million (NOK 51.3.) million.
NOK million 2020 2021 2022
Norway 10.1 10.6 -4.9
Sweden 9.6 11.6 13.2
Denmark 0.0 0.0 22.9
Lithuania 12.0 12.9 16.3
Poland 0.0 0.0 -1.8
Czech 0.0 0.0 6.3
China 30.3 17.2 40.2
US -2.7 -15.3 8.3
Other 1.6 14.3 4.6
Tax expense 61.0 51.3 105.1
Table 1: Tax expense by country
Sectors served
Kitron’s core areas of expertise years are divided into in the
sectors Connectivity, Electrification, Industry, Medical devices,
Defence/ Aerospace.
Revenue
NOK million
109ANNUAL REPORT 2022
Our sustainability ambition
We believe responsible and sustainable business is the
future and provides added value for our customers. The
foundation of our work for sustainability and corporate
responsibility is enshrined in our Ethical Code of Conduct.
It obliges us to not only look after the well-being of
our employees, stakeholders, suppliers, and business
partners but also reduce the impact of our business on
the environment and the societies around us. Our focus
areas are based on stakeholder dialogue and materiality
assessment, to ensure we put our effort where it makes
a difference for our stakeholders and our business
impact. Therefore, we are proud to be a UN Global
Compact Signatory and support the UN Sustainable
DevelopmentGoals.
This report covers topics related to corporate responsibility
and sustainability that are of importance to Kitron and
Kitron stakeholders. Our approach to sustainability reporting
is based on the materiality assessment undertaken in
2017 according to the Oslo Stock Exchange Guidelines
on Sustainability Reporting. It is the cornerstone of our
sustainability efforts, allowing us to create an impactful
climate action. Kitron shall comply with applicable laws
and regulations, respect human rights and act in a socially
responsible manner. Our business activities and internal
operations are conducted with a high level of integrity and
with a clear ambition to be a socially responsible company
acting ethically and lawfully in all aspects of our value chain.
Quality standards
Thanks to our long history of satisfying a world of
demanding customers, we take pride in delivering the
quality best suited for the customer’s needs. Our quality
management includes effective systems, documented
improvement programs and risk management tools. Since
the early 60’s Kitron has lived by a simple philosophy: If our
customers succeed, we succeed.
That is why our sites are certified according to the following
internationally agreed quality management standards:
ISO 9001
ISO 13485
ISO 14001
ISO 45001
ISO/TS 22163
IATF 16949 (automotive standard)
EN9100:2018 (Technically equivalent to AS9100D and
JISQ 9100:2016)
21 CFR 820 Quality System Regulation
AQAP 2110 Edition D Version 1
Mine Refineries
& Smelters
Traders &
exchanges
Component
manufacturing
System
assembly
End-user
Product
end-of-life
Kitron’s supply chain
Figure 3: Kitron’s supply chain
SUSTAINABILITY REPORT
110ANNUAL REPORT 2022
UN Sustainable Development Goals
Sustainability is anchored in the core of our business. That is
why Kitron supports the UN Sustainable Development Goals
- an urgent call for action by all countries, businesses and
communities to unite and end poverty and inequality. The
UN has defined 17 Sustainable Development Goals the world
should resolve by 2030. Several of these goals can only be
achieved by acting on responsible supply chain practices
and ethical business initiatives.
The UN Sustainable Development Goals are an urgent call
for action by all countries - developed and developing - in a
global partnership. They recognize that ending poverty and
other deprivations must go hand-in-hand with strategies
that improve health and education, reduce inequality, and
spur economic growth – all while tackling climate change
and working to preserve our oceans and forests. The UN
Sustainable Development Goals have become a global
framework for sustainability efforts, and an important part of
the sustainability context for Kitron.
For us, it shows how our complex global value chain is
affected by and affects these global challenges. We have
identified which of the 17 goals are most relevant to Kitron,
where we can make a difference towards achieving the goal
and how they are linked to our material topics. By supporting
the UN SDGs, we hope we can contribute to improving the
societies we all live in.
Our main contributions are focused on the following goals.
5 Gender Equality and women’s empowerment
9 Build resilient infrastructure, promote sustainable
industrialization and foster innovation
12 Responsible consumption and production
13 Climate change
EU’s Taxonomy for sustainable activities
The EU taxonomy is a classification system, establishing
a list of environmentally sustainable economic activities. It
could play an important
role help the EU scale up sustainable investment and
implement the European green deal. The EU taxonomy
would provide companies, investors and policymakers with
appropriate definitions for which economic activities can be
considered environmentally sustainable.
A sustainable activity is defined as one that substantially
contributes to at least one of a defined set of six
environmental objectives, does not significantly harm any of
the other objectives, while at the same time complies with
social safeguards.
Kitron has been monitoring the process and analysed the
group’s activities in light of the Taxonomy criteria.
As Kitron manufactures products for customers within
several industries, there will be a mix of some revenue being
aligned with the Taxonomy criteria and some not being
aligned.
Therefor, the % aligned might vary based on the mix of
products sold.
A preliminary estimate indicates that about 20 percent of
revenues in 2022 were aligned. This percentage is slightly
down from 2021, when it was 23 percent.
Corporate Governance
Kitron shall comply with applicable laws and regulations,
respect human rights and act in a socially responsible
manner. Kitron’s business activities and internal operations
are conducted with a high level of integrity and with a clear
ambition to be a responsible company acting ethically and
lawfully in all aspects of our value chain. Kitron’s corporate
governance structure shall ensure a systematic approach to
sustainability and corporate responsibility.
Management approach
Kitron’s general system of governance is linked to the
Norwegian Code of Practice for Corporate Governance
(NUES).
Annual General Meeting (AGM)
The Annual General Meeting (AGM) is the Kitron Group’s
supreme governing body and where the shareholders can
influence how sustainability is practiced.
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The Board of Directors
The Group Board of Directors bears the ultimate
responsibility for Kitron’s Sustainability and the report on
Sustainability is discussed and approved by the Board.
Corporate Executive Management
Corporate Executive Management bears the
responsibility for the Group’s strategy, development and day-
to-day work. This means Corporate Executive Management
is responsible for compliance with legislation and
regulations and our Ethical Code of Conduct, as well as for
the implementation of appropriate and effective initiatives to
ensure that we reach our goals.
The Sites
The business areas are responsible for follow up and
compliance with policy, strategy, targets and governance
documents related to sustainability. The day-to-day
work with corporate responsibility and environmental
management is usually handled by the sites with support
from the Corporate Executive Management.
Ethics Committee
Kitron Ethics Committee’s mandate is to review and
suggest updates of guidelines, decide and/ or advise in
ethical dilemmas, conduct risk analysis and implement
relevant actions and make periodical reviews. The Ethics
Committee consists of members of the Corporate Executive
Management and Corporate Staff.
Kitron’s Stakeholders
Owners
Kitron’s owners are primary stakeholders and directly affect
the company’s priorities and strategic direction.
Employees
Kitron employees are directly affected by Kitron’s internal
policies and activities.
Suppliers
Kitron’s suppliers are economically affected by the company,
and their responsibility is indirectly affected by Kitron’s focus
on responsible practices and the expectations placed on
them by Kitron.
Customers
Kitron’s customers directly affect the company
economically, and customer expectations influence Kitron’s
sustainability priorities.
Civil Society
Civil society like governments and regulatory
authoritiesaffect Kitron and its operating conditions directly
and indirectly. Local communities are indirectly socially,
environmentally and economically affected by Kitron’s
activities such as job creation, contribution to local value
creation and environmental impacts.
See appendix 1 for complete list of stakeholders and arenas
for dialogue.
Employees Investors
Customers Authorities
Suppliers Civil-society
Figure 4: Kitron’s stakeholders
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Figure 5: Materiality assesment, Kitron’s business impact
Kitron’s business impact
Importance to stakeholders
Stakeholder Dialogue
To ensure a strategic approach to sustainability reporting
and to adhere to the intent of the Euronext Guidelines to
issuers for ESG reporting, Kitron has undertaken systematic
stakeholder dialogue in 2017 and keeps an ongoing dialogue
with key stakeholder groups.
Kitron’s ongoing conversation with its most relevant
stakeholders strengthens its relationship with the society
in which it operates. The stakeholder dialogue also benefits
the company by allowing Kitron to detect, investigate and
manage potential risks arising in its immediate surroundings.
In 2017 Kitron invited key stakeholders to give their view
on the key sustainability issues and how they perceive
Kitron and its relevant sustainability topics. This was done
by interviews, electronic surveys, and direct contact with
employees, customers and suppliers. The findings from
the stakeholder dialogue were gathered and structured for
discussion in Kitron’s Sustainability task force and used as
groundwork for the materiality assessment.
The stakeholder dialogue is both a means and an end, as
ongoing systematic stakeholder dialogue is a key objective in
the Euronext Guidelines to issuers for ESG reporting and GRI
Standards.
The findings from the stakeholder dialogue will be
continuously incorporated into the sustainability strategy
and will guide Kitron’s priorities in the materiality
assessment.
The materiality assessment
Sustainability begins in the everyday work we do, adding
value to the impact we have on our surroundings. This
impact comes with great responsibility and requires that
Kitron is in ongoing dialogue with our stakeholders and
constantly strives to deliver quality products while adhering
to the highest possible ethical standard.
As a result, The materiality assessment was established
in 2017 by the internal task force on sustainability based
on the stakeholder dialogue and information gathering
about where we have the most impact on the environment
and the societies in which we operate. The main goal of
the materiality assessment is to establish key reporting
topics for Kitron, reflecting the key risks and opportunities
created by Kitron’s business activities. Further, these topics
are included in the Kitron Sustainability report, describing
how the most important topics are included in general risk
management and strategy process and the measures
Kitron is taking to reduce risks associated with material
issues and how these are integrated into operational
management and corporate governance.
The materiality assessment concluded the following 4 core
areas and 6 materials topics for Kitron to report on:
Business ethics
Ethics and anti-corruption
Labour and human rights
Workers’ rights, diversity and non- discrimination
HSE, safety and security
Environment and climate
Responsible value chain
Supply chain and quality
Human rights and conflict minerals
Waste &
pollution
prevention
Local value
creation
Job creation
Taxes
Human rights
Diversity and
discrimination
Ethics
Anti-corruption
Worker’s rights
Cyber and
information
security
Quality
HSSE
Conflict
minerals
Material topics for Kitron ASA
Energy use
Chemical use
Hazardous substances
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Reporting on material topics
Our priorities and progress
Figure 6: Sustainability Road Map – 2030
Business ethics
Strengthen sustainability governance
Corruption and bribery prevention
Continue increasing security level/CMMC
Labour and human rights
Continue deployment of GPTW program
Work actively to increase diversity at all levels
Standardization of HSE process in all sites
Environment and climate
Create a plan for emissions reduction initiatives and possibilities
Action plan for EcoVadis and WASH pledge
Strategy for circular economy
Responsible value chain
Supplier risk management
Scope 1&2 CO
2
reporting from suppliers
Sustainable supplier management
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Business ethics
We continuously strive to be an ethical and responsible company. Our Ethical
Code of Conduct presents Kitron’s obligation and commitment to ethical business
practices and describes the standards and requirements which Kitron employees
must adhere to in their work.
The Ethical Code of Conduct provides a framework to ensure that Kitron complies
with relevant local and international legislation, acts in accordance with internal
policies and the company’s values and supports the UN’s initiatives on human
rights, children rights and labour conventions.
The Ethical Code of Conduct is complemented by the Kitron Anti-Corruption Policy,
which details and explains Kitron’s requirements for proper business conduct in
relation to anti-corruption. Kitron has also developed a separate Supplier Code of
Conduct that applies to Kitron’s suppliers.
Kitron has also developed a separate Supplier Code of Conduct that applies to
Kitron’s suppliers.
The challenge + relevant SDG
Ambition
Long-term targets (2030)
Zero incidents of corruption
Key KPIs monitored
Corporate governance
Corruption and bribery prevention
Information security
Results 2022
Annual Ethics and corruption awareness trainings was assigned to 1792.
85,4% of employees that was assigned the training, has completed and
passed.
Targets 2023
100% of employees shall be assigned the training.
90% shall complete and pass.
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Business ethics and corruption prevention
Kitron opposes any form for corruption and strives to prevent
corruption in and as a result of Kitron’s business activities.
Kitron Ethical Code of Conduct clearly expresses Kitron’s
obligation and commitment to ethical business practices
authorities.
Ethical Code of Conduct
Ethical Code of Conduct is essential for a sustainable
business, and we treat ethics as an integral part of our
activities. The Kitron Ethical Code of Conduct presents
Kitron’s obligation and commitment to ethical business
practices and describes the standards and requirements
that Kitron employees must adhere to in their work. The
current version of the was revised and approved by the
Board of Directors and published on December 21st, 2018.
The Code applies to all Kitron board members, elected
officers, permanent and temporary employees, hired staff,
consultants and agents acting in or on behalf of Kitron.
The Code also applies to all contractors, sub-contractors,
suppliers and sub-suppliers. It includes all companies in the
Kitron group.
Our work on anti-corruption
Kitron is directly affected by corruption risk in our operations
and indirectly affected by corruption risk through business
relationships and our supply chain. Kitron has operations in
industries and countries that are particularly susceptible to
the risk of corruption. Kitron also does business in countries
known for having problems associated with human rights,
child labour and environmental pollution.
We are aware that this presents challenges regarding our
sustainability, and that it can subject us to substantial
financial risk. To deal with our sustainability and minimize
our financial risk, we work systematically on Ethics and
Anti-corruption. Kitron Ethical Code of Conduct describes
several areas of importance for preventing corruption.
Kitron’s Anti-Corruption Policy clearly describes Kitron’s
work on anti-corruption, including risk analysis, monitoring,
responsibilities, follow-up and training.
Kitron is aware that suppliers, customers and other relevant
business partners, such as acquisition targets or agents
might expose Kitron to corruption risks. To reduce the risks,
Kitron has introduced routines for a risk-based evaluation
before entering such relationships. The Kitron Suppliers Code
of Conduct also defines Kitron’s expectations regarding the
suppliers’ anti-corruption activities. Kitron also has in- house
rules for gifts and representation as well as sponsorships. All
of this must be recognized as a basic requirement for doing
business with Kitron.
Kitron is aware that suppliers, customers and other relevant
business partners, such as acquisition targets or agents
might expose Kitron to corruption risks. To reduce the risks,
Kitron has introduced routines for a risk-based evaluation
before entering such relationships. The Kitron Suppliers Code
of Conduct also defines Kitron’s expectations regarding the
suppliers’ anti-corruption activities. Kitron also has in- house
rules for gifts and representation as well as sponsorships. All
of this must be recognized as a basic requirement for doing
business with Kitron.
Share of suppliers
per risk category
2020 2021 2022
Very low risk 32.2% 34.00% 29.4%
Low risk 23.3% 24.42% 28.5%
Moderate risk 44.4% 41.56% 42.1%
Increased risk 0.1% 0.02% 0.04%
Table 7: Supplier risk assessment results per risk category
Risk assessment
Kitron operates in countries and in lines of business that
are susceptible to corruption, and Kitron is also indirectly
subject to corruption risk and bribery risks through business
relationships. To reduce risk, Kitron does not use agents
or market representatives, as it constitutes a high risk for
corruption.
Every year, Kitron conducts a Corruption and Risk of Bribery
assessment on its existing suppliers. Active inventory
suppliers and non-inventory suppliers are screened for
corruption and bribery risk. Moreover, since 2019 all new
suppliers are screened for corruption and bribery risk as part
of the onboarding process.
Ethics training
We aim to ensure that our employees develop along with
the development of our business. All Kitron personnel are
required to attend periodic training in the Kitron Ethical
Code of Conduct to ensure that Kitron’s ethical values are
understood and implemented at all levels. In Kitron, the
Ethical Code of Conduct is available as an online training in 6
different languages.
Ethics Committee
Kitron has set up an Ethics Committee whose objective
is to ensure that Kitron maintains a high-level focus on
issues related to ethics and anti-corruption and a common
understanding and practice regarding how to best address
and follow-up on these issues.
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Firstly, the Committee oversees the policy document
itself and reviews or updates of the Kitron Ethical Code of
Conduct. Secondly, the committee is an advisory board
related to ethical dilemmas or questions from managers and
employees in the group on difficult borderline issues. It is
also in the main scope of the committee to perform regular
ethical audits mainly related to anti-corruption.
The Ethics Committee meets as needed but at least three
times a year. Head of the Ethics Committee reports to
CEO who in turn reports to the board of Kitron ASA. The
Chairman of the Ethics Committee has a direct reporting line
to the Audit Committee of the Board.
Reporting irregularities
Kitron’s goal is that illegal, unethical, or other misconduct
and breach of EU law as described in Directive (EU)
2019/1937, known as the “Whistleblower Directive”, should
not occur. If they do, they must be handled properly in
accordance with the directive, supplemented by local law.
Examples of concerns related to Kitron’s business practices
that may be reported include allegations such as:
Violations of Kitron’s Ethical Code of Conduct
Violation of corruption laws
Insider trading
Conflict of interest
Sexual harassment or other forms of harassment or
discrimination
Threats against life and health, e.g., safety deficiencies
at the workplace, violence and exposure or interaction
with dangerous materials etc.
Kitron staff have the right and duty to report any criminal
acts, harassment, discrimination or circumstances where life
or health might be in danger. As a main rule, a report shall be
made to the immediate superior. Environmental/workplace
safety related matters can be reported to HSE Manager
or the Company Health Service, Financial matters can be
reported to the Finance Manager.
Kitron also has its own contact persons for internal reports
which for all Kitron sites are the Managing Director, the
HR Manager and the (main) employee representative (if
applicable) for the site (jointly referred to as the “Local
Reporting Contacts”).
Number of cases 2020 2021 2022
Reported 2 0 1
Sanctioned 1 0 0
Table 8: Number of reported potential corruption cases and number of
sanctioned cases
If the worker does not obtain any appropriate response or
reaction or does not feel comfortable reporting the matter to
the immediate superior or persons as set above, the worker
can choose management, the worker may report to the
Chairman of the Audit Committee for Kitron ASA.
Kitron has a safe system, for reporting in a manner that
ensures the confidentiality of the reporting person and any
other party mentioned in the report. Reports can be made
anonymous, or workers can safely use their own identity.
Employees that report in good faith shall be protected
against any adverse treatment (retaliation).
At the end of 2022 the Ethics Committee received one
whistleblowing case, currently under review. Kitron is not
in and has not been in any legal proceedings related to
business ethics in 2022.
Information and cyber security
Information security
Kitron employees have a duty of confidentiality in respect
to all business matters and situations that could give
unauthorized people access to confidential information. All
information not made public is to be considered confidential.
Kitron has set up an organizational structure to handle the
tasks required by the GDPR. The structure is described in
the Personal Data Protection Policy for Kitron and consist
of a Personal Data Protection Committee, a Corporate Data
Protection Representative in addition to local Data Protection
Representatives in all European countries.
Cyber security
Kitron has clear requirements for cyber security
commitments. The company is NIST 800-171 and
CyberSecurity Maturity Model Certification (CMMC)
compliant.
The standards require several cyber security controls,
procedures and processes as well as physical protection.
Procedures includes intrusion tests, cyber security attack
simulation exercises, IT risk analysis to name a few. The
company has an IT charter and IT risks are presented
annually to the management.
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At Kitron, we want the working environment to be characterized by openness,
communication and respect for the individual.
Labour and
human rights
The challenge + relevant SDG
Ambition
The working environment in Kitron is characterized by openness, communication,
and respect for the individual. Diversity, and a balanced work force in terms of
gender, is recognized as strength and an advantage.
Long-term targets (2030) Zero accidents.
40% women across all levels of the Kitron organization
>90% of employees saying Kitron is a great workplace
Key KPIs monitored
Gender equality
Worker’s rights, diversity and non- discrimination
HSE, safety and security
Results 2022
53% of employees are women (same as in 2021). 31% of management level
employees are women (an increase from 27% in 2021)
Decreased number of lost time injuries
For the sites above 10% turnover 4 sites out of 5 reduced the emplyee
turnover.
Increased availability of trainings in Kitron academy.
72% of employees saying Kitron is a great workplace.
Targets 2023
74% of employees saying Kitron is a great workplace
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Workers’ rights, diversity and non-discrimination
Diversity and a balanced work force in terms of gender, is recognized as a strength and an advantage. Fair employment practices
following local norms, laws and collective bargaining agreements is the basic standard in all Kitron entities.
Health and safety in the working environment are very important to Kitron and is to be ensured to provide for each employee.
Kitron opposes discrimination in any form, e.g., due to race, nationality, gender, sexual orientation or religion. Kitron also opposes
any form of trafficking and purchase of sexual services. No form of discrimination, harassment or bullying is tolerated. We are
here to offer a working environment where it is possible to combine work, career, family life and spare time.
2021 2022
Average pay direct
women % of men
Average pay indirect
women % of men
Average pay direct
women % of men
Average pay indirect
women % of men
Norway 86% 84% 86% 85%
Sweden 98% 101% 99% 71%
Denmark 97% 85%
Lithuania 78% 81% 79% 82%
Poland 101% 78% 105% 81%
Czech 82% 58%
China 100% 49% 99% 71%
US 82% 50% 89% 73%
Average pay. total 62.50% 72.81 %
Table 9: Women’s percentage of men’s pay
The indirect workforce includes roles with significant difference in responsibility and pay. The Pay only depends on roles and
responsibilities not gender. We aim for an improved gender distribution across the positions and countries.
The Ethics Committee has received one concern regarding working environment. Investigations have been conducted and
resulted in actions; the case is considered closed.
Kitron participates in the Great Place to Work survey. Annually, results are analysed, and action plans developed and
implemented. We have made several improvements based on the previous surveys. It shows that our company’s culture is
moving forward.
The Great Place to Work® survey will continue to be the foundation for the continuous improvement of our working environment.
Based on the Norwegian Activity Duty for employers (Aktivitets- og redegjørelsesplikten, ARP), the company is reporting the
following employee data:
Location
No. of employees
2021
Payroll (NOK million)
2021
No. of employees
2022
Payroll (NOK million)
2022
Norway 368 285 367 307
Women 42 % 43 %
Men 58 % 57 %
Table 10: Permanent employees by gender, and payroll
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2021 (as per 31.12) 2022 (as per 31.12)
Organisation Men Women Total Men Women Total
Number of permanent employees 207 151 358 209 158 367
Temporarily hired 6 1 7 4 2 6
Part time employees 1 15 16 0 7 7
Newly hired
Total number of newly hired employees in 2020 21 16 37 24 18 37
Employee turnover
Number of employees who have left the company 6 1 7 22 6 15
Parental leave
Number of employees on parental leave 9 2 11 4 1 5
Table 11: Part-time employees, turnover, and parental leave
2021 2022
Men Women Men Women
Organisation total 214 154 209 158
Board of Directors 5 4 5 4
Executive level management 3 1 3 1
Non-executive level management 17 3 18 2
Table 12: Breakdown of employees and board members by gender
2021 2022
Under 30 30-49 50+ Under 30 30-49 50+
Organisation
total
60 137 171 50 127 190
Board of
Directors
0 2 7 0 1 8
Executive level
management
0 1 3 0 1 3
Non-
executive level
management
0 7 13 0 7 13
Table 13: Breakdown of employees and board members by age
Total Women
Average
pay women
Average
pay total Differnce Difference %
Production employees 201 123 472 474 -1 -0.28 %
Technicians, training officers 31 5 595 570 25 4.35 %
Purchasers, planners, IT employees, controllers,
accounting and payroll and personnel 24 15 630 664 -34 -5.10 %
Engineers and quality managers 50 7 657 640 17 2.64 %
Senior engineers and project leaders 22 0 0 751 0
Key Account Managers, department heads,
production managers and operational managers 16 4 853 830 23 2.75 %
Local Management Team 9 0 0 1 113 0
Corporate Management Team 4 1 5 433 6 240 -806 -12.92 %
Members of Kitron ASA board 10 4 305 302 3 1.06 %
Table 14: Average pay per category
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Career development and training
Kitron values the competences of employees, and sharing
knowledge and information is an area of priority, as is on-
the-job development. Individual career and competence
development are parts of the current performance
management process.
Kitron has implemented a digital learning management
system, LMS, to further strengthen individual development
and competence. In 2018, the new digital learning platform,
Kitron Academy, was launched and work since continued to
supplement Kitron Academy with learning and development
activities. The work continues to increase the number of
available trainings and track trainings within the digital
platform.
In 2022, the number of training hours were 69 877 compared
to 51 470 hours in 2021.
HSE, safety and security
Health and safety in the working environment are very
important to Kitron - we believe that prevention is the
key to a truly safe workplace. Kitron follows local and
international norms and relevant legislation to provide such
an environment.
Injuries and absence due to illness
Absence due to illness (as a percentage of total hours
worked) was 4.4 per cent for the group in 2022. This is
a slight increase from previous years. A good working
environment and the possibility to develop are important
factors to keep the absence due to illness at a low level.
Going forward, Kitron will continue the work to provide such
an environment for our employees.
Injuries and work-related accidents are registered at site level.
While the ambition of the company is to have zero accidents,
it is of critical importance to have full overview of any incident
or accidents at any of the Kitron sites to be able to work
on prevention and ensure a healthy and safe workplace.
Reporting incidents and accidents will be further streamlined
across the sites and handled through a digital tool. By
improving reporting routines, it is expected that the number of
incidents reported might increase temporary.
The Kitron work environment proposes risks to the employees
foremost in the manual mounting and in the processes where
chemical liquids, nitrogen or lead is involved as well as the
long- term risks associated with repetitive tasks. The most
important mitigation and prevention of accidents and injuries
is the workplace design, education of employees and routines
for safely handling chemicals.
All chemicals procured and applied at Kitron sites are
registered and handled according to relevant regulations.
To prevent negative effects of repetitive tasks, all sites has
implemented job rotation for certain tasks. In 2022, there
was no serious work-related accidents at Kitron sites. Kitron
will continue to monitor the working environment regarding
employee health and safety.
Absence and work-related injuries 2020 2021 2022
Absence due to illness 3.3 3.7 4,4
Number of fatal occupational injuries 0 0 0
Number of occupational injuries causing
permanent incapacity for work
0 0 0
Lost time injuries 13 14 9
Table 15: Absence and work-related injuries sanctioned cases
Turnover by site 2020 2021 2022
Norway 2.7% 4.9% 4.3%
Denmark 19,9 %
Sweden 6.1% 20.2% 14,1 %
Lithuania 14.6% 22.5% 15,8 %
Poland 18.6% 29.2% 19,0 %
Czech 26,3 %
China 29.5% 29.1% 27,4 %
USA 3.3% 46.3% 20.1%
Table 16: Employee turnover by site
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Focusing on a world without waste. We are committed to actively work on pursuing
sustainability and protecting the environment.
Environment
and climate
The challenge + relevant SDG
Ambition
The working environment in Kitron is characterized by openness, communication,
and respect for the individual. Diversity, and a balanced work force in terms of
gender, is recognized as strength and an advantage.
Long-term targets (2030) 50% cut in carbon emissions / net zero by 2050
50% of product portfolio is circular/ designed for recycling
100% Green energy
Zero waste in operations
Key KPIs monitored
Carbon emissions reduction
Effective energy consumption
Water security
Circular economy
Results 2022
Reduced C02 emissions expressed as energy efficiency factor by 2,6%.
Excluding the equisition of BB, Kitron sites improved by 56%.
Started reporting to CDP.
Green energy scope increased by 23% for Kitron, including BB green enegry
% reduced from 72% to 66%.
Water consumption for the whole group increased by 9,7% with revenue
growth of 95%.
Targets 2023
• Increase EcoVadis score by 10%.
• Reach 80% green energy from total use.
• Start report Scope 3 CO
2
.
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Environmental management
The main risks posed to the natural environment from
Kitron’s operations are direct emissions from the use of
chemical liquids, nitrogen, or lead in Kitron’s production
and indirect emissions from energy use in operations,
transportation and business travels.
As a manufacturing supplier, the Kitron internal value chain
does not pollute the external environment to any material
extent. The impact mainly comes from purchasing materials,
goods and services. Kitron Suppliers Code of Conduct
describes the requirements Kitron imposes on the suppliers
to minimize the adverse effects to community, environment
and natural resources while safeguarding the health and
safety of the public. Supplier shall obtain all required
environmental permits.
To further strengthen sustainability management Kitron
started to use Eco Vadis as a widely used Business
Sustainability Rating provider. In 2022 Kitron received a
“Silver” sustainability rating medal that puts us under the
TOP 25 per cent of the companies rated by Eco Vadis.
Climate emissions and climate risk
We will work systematically to reduce energy consumption
and GHG emissions, with special focus on material
consumption, energy consumption, effective communication
and transportation. We have set targets for the reduction of
CO
2
emissions for our in-house operations in accordance
with the obligations in the Paris Agreement.
Climate Risk and Opportunities
In 2022 Kitron has initiated activities to work towards
climate-related financial disclosures in accordance with
the TCFD recommendations. The aim is to enhance our
understanding and transparency about the exposure and the
strategies to stay ahead of any negative impact caused by
climate change and adaptation measures.
TCFD Roadmap
In order to enhance our understanding and transparency
Kitron has developed the below roadmap.
Several of the Kitron group’s manufacturing units are
certified in accordance with the NS ISO 14000 series of
environmental management standards created to help
reduce industrial waste and environmental damage.
2022 Planned 2023 Planned 2024
Governance and strategy Responsibility assigned to
executive level.
Initiated discussions on
executive level
Created quarterly climate
emission oversight and
tracking
Board level involvement
Increase emissions scope to
include Scope 3 emissions
for improved oversight and
risk mapping
Ongoing board and
management oversight
Submitting full TCFD
reporting
Risk management Risk assessment for
physical climate risk per site
completed and measures
implemented
Ongoing climate risk
monitoring as part of
company risk management
Metrics and targets GHG reporting: Baseline
measurement scope 1,2
Emission reduction targets
set
GHG reporting scope 1,2
and partial 3
Risk management for
identified medium to high
risk
GHG reporting scope 1,2
and 3
Risk mitigating activities
implemented for identified
medium to high risk
Table 17: Kitron TCFD roadmap
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Kitron’s CO
2
-emissions have been calculated in accordance
with the “Greenhouse Gas Protocol” published by the World
Business Council for Sustainable Development (WBCSD)
and World Resources Institute (WRI).
The statistical data on greenhouse gas emissions includes
the following sources of CO
2
emissions:
Scope 1 direct emissions: emissions from fuel
combustion on- site, transportation using company
owned vehicles and on-site generation of electricity,
heat or steam.
Scope 2 indirect emissions from electricity purchased:
emissions from the consumption of electricity
purchased. CO
2
emission factors used for electricity
are market based and calculated using IEA emission
factors.
Energy use 2021 2022
Gas (heating) 481,1 304,9
Petrol (company cars) 49 812 99 695
Electricity 15 500 22 018
Electricity from renewable
sources
11 265 14 629
Share of electricity from
renewable sources
72% 66%
Table 18: Energy use
Mwh 2021 2022
Norway 3 981 4 111
Sweden 1 258 1 293
Denmark 0 1 343
Lithuania* 4 380 4 185
Poland 2 152 2 432
Czech 1 273
China 2 481 6 221
US 1 247 1 160
Group total 15 499 22 018
Table 19: Electricity use per location in Mwh
* Lithuania 2022 193 mwh (2021 162 mWh) is own solar
power
CO
2
emissions tCO2e 2021 2022
Scope 1 663 835
Scope 2 market based 2 091 3 840
Group total (1+2) 2 754 4 675
Table 20: Group CO
2
emissions tCO2e
As a part of TCFD process, Kitron expand emissions Metrics
using Carbon Efficiency Index, calculated CO
2
t divided by
sales revenue in a year.
Carbon Efficiency Index allows to see results from
improvements implemented related to reduction of CO
2
emissions comparing with changes in the scope of operations.
Carbon efficiency 2020 2021 2022
Revenue MNOK 3 964 3 711 6 485
Carbon efficiency
(tCO
2
/Revenue MNOK)
0.83 0.74 0.72
Table 21: Carbon efficiency
Water consumption
cubic metres
2020 2021 2022
Norway 3 360 3 812 3 411
Sweden 1 910 1 808 2 118
Denmark 0 0 2 260
Lithuania 5 941 7 515 5 889
Poland 3 291 3 955 4 688
Czech 1 589
China 5185 2503 12 888
US 998 518 405
Total 20 685 20 111 33 248
Revenue MNOK 3 964 3 711 6 485
Water Consumption
m3 / Revenue MNOK 5.22 5.42 5.13
Table 22: Water consumption cubic meters
Kitron has signed the WBCSD Pledge (WASH) for Access to
Safe Water, Sanitation and Hygiene. We recognize that by
signing this Pledge Kitron commits to implementing access
to safe water, sanitation and hygiene at an appropriate level
of standard for all employees in all premises under our direct
control and supporting partners across our value chains and
communities that surround our workplaces, within three years.
Tons of waste 2020 2021 2022
Total waste 827 777 787
Recycled waste 525 549 689
Hazardous waste 42 63 95
Amount recycled waste 63% 70% 87.5%
Table 23: Tons of waste
SUSTAINABILITY REPORT
124ANNUAL REPORT 2022
Kitron’s success is based on close cooperation with our trusted supply partners.
Kitron’s customers are found within demanding markets sectors, and in order to
deliver on their expectations, we depend on high- quality suppliers. Across all areas
of sustainability, we have a focus on transparency to identify risks and opportunities
within our entire value chain.
Responsible
value chain
The challenge + relevant SDG
Ambition
All suppliers should adhere to Kitron’s supplier code of conduct, and support the
UN Declaration on Universal Human Rights.
Long-term targets (2030)
90% purchased value report CO
2
100% of suppliers in line with Kitron Supplier Code
All critical suppliers committed to become climate neutral (scope 1 and 2)
Key KPIs monitored
Ethics and anti- corruption
Human rights and conflict minerals
Environment in the supply chain
Supplier performance and risk assessment
Results 2022
Remained conflict minerals free.
Continued the work to on-board non-inventory suppliers using the RFI form.
Introduced risk-based requirements for registration and registered higher risk
non-inventory suppliers.
Made sure all sites used the new standardised RFI and digital quality
management system for gathering and storing RFI data. Reached over 90%
in 2022.
Targets 2023
15% purchased value report CO
2
(Scope 1 and Scope 2)
SUSTAINABILITY REPORT
125ANNUAL REPORT 2022
Supply chain and quality management
In Kitron we use the highest standards in selection of supply
partners. Our main promise to any customer is that we want
to be their long term, sustainable partner.
While the products and services we deliver are required
to meet the highest quality requirements, we are fully
committed to sustainable development; and we expect the
same from our supply partners. Kitron s goal is to minimize
negative environmental and social impacts from its supply
chain. We expect our suppliers to adhere to all applicable
laws and regulations, to the highest ethical standards
defined in the Kitron Code of Conduct, as well as to the
separate Suppliers Code of Conduct, which applies to all
suppliers. Delivering high quality products is key to Kitron’s
competitive advantage and of high importance to our
customers, employees and owners. Kitron affects quality
directly through our purchasing, supplier selection, and
quality management processes, as well as indirectly through
our business relationships.
Kitron s supply chain
Kitron production inputs can be divided into three parts:
electronic components, mechanical drawing parts and
PCB (Printed Circuit Boards), and the inputs are with few
exceptions sourced and produced outside of Norway.
Kitron s role in the supply chain
Electronic components: For this category, Kitron primarily
deals with distributors rather than with manufacturers.
However, during 2021 we started cooperating directly with
manufacturers too in order to better serve our customers
and ensure availability of production parts. On an annual
basis Kitron purchases components from close to 1200
manufacturers through approximately 1000 supply partners.
Kitron has established a Preferred Partner Program. In 2022
55.3 per cent of all electronic components (in value) were
procured from 9 Preferred Partners.
Mechanical drawing parts: This sub commodity includes a
wide variety of parts, from metal casting to machine parts,
injection molded plastic, sheet metal and aluminium die
casting. Due to the bulk and weight of this type of parts,
Kitron tends to purchase these components close to the
point of use and we continue to build mechanical parts
supply chain around our factories in different regions.
Printed Circuit Boards (PCB): Kitron buys most of the
PCBs from China (up to 70 per cent of the worldś PCBs are
produced in China), either directly from manufacturers or
through distributors, as with electronic components. In 2022
Kitron purchased 71.5 per cent of the PCBs from Preferred
Partners. In the case of PCBs, these Preferred Partners
include both distributors and manufacturers.
Supplier selection and onboarding
Kitron’s sourcing experts are located in Norway, Sweden,
Lithuania, Poland, China and United States, enabling us
to manage our global network of suppliers and ensure
an optimal flow of components and materials to our
manufacturing centres. Sourcing in Kitron is a shared
responsibility between the global sourcing team and local
sourcing managers.
New sales, new requests for information (RFI) and conflict
mineral reporting are handled by the global sourcing team
while local teams handle RFIs for existing suppliers, manage
supplier dialogue and supplier coordination with local
suppliers.
To ensure that the same supplier data is collected regardless
of category and country, Kitron has developed and
implemented a web based RFI (Request for information).
This data is then automatically uploaded into Kitron’s
Supplier Evaluation Model (SEM) and expanded and have
this suppliers assessment including additional suppliers’
sustainability rating.
To minimize supply chain risk, Kitron seeks to ensure that
Kitron’s spend with any specific supplier does not exceed 20
per cent of the total revenue of any single supplier and seeks
to diversify its sourcing strategy. Moreover, Kitron diligently
works at supplier consolidation, making sure that we work
only with the best possible supply partners. In 2022, Kitron
had 2739 active suppliers, up from 2032 the year before. The
number of active suppliers is affected by the number of new
customers and the general supply situation. Active supplier
means Kitron have placed a purchase order in the last 12
months.
Unique active suppliers
Unique active suppliers (12 month) – 2739
Share of active suppliers who have signed Code of Conduct
– 67.5%. Number reduced after acquisition of BB Electronics
and should improve going forward.
Unique active suppliers 2020 2021 2022
Unique active suppliers
(12 months)
1 973 2 032 2 739
Share of active suppliers
who has signed Code of
Conduct
90.1% 90.3% 71.0%
Table 24: Unique active suppliers
SUSTAINABILITY REPORT
126ANNUAL REPORT 2022
Human rights and conflict minerals
All units of Kitron comply with UN’s Universal Declaration on
Human Rights, The UN’s Convention on Rights of the Child
and International Labour Organization Conventions (ILO)
conventions. Kitron s approach to human rights protection
is guided by the Kitron Code of Conduct and the Supplier
Code of Conduct. Since 2018, Kitron has been a UN Global
Compact Signatory and supports the ten UN Global compact
principles. The ten UN Global compact principles are
embedded in Kitron’s Code of Conduct.
Kitron and Kitron suppliers shall comply with the human
rights in the ILO conventions, and specifically comply with the
labour rights and child labour avoidance conventions. Kitron
shall not engage in or support any kind of child labour. If a
young worker is employed, this needs to be controlled and
arranged according to legal requirements in terms of safety,
work hours and guidance and is not allowed to interfere with
applicable compulsory schooling. Kitron opposes all forms of
forced and compulsory labour.
Conflict minerals
Kitron’s suppliers shall have policies to reasonably assure
that the tantalum, tin, tungsten and gold in the products
they manufacture do not directly or indirectly finance or
benefit armed groups that are perpetrators of serious human
rights in the Democratic republic of Congo or an adjoining
country. Suppliers shall exercise due diligence on the source
and chain of custody of these minerals. All Kitron suppliers
are required to fill in the CFSI (now RMI) Conflict Minerals
Reporting Template (CMRT).
Conflict minerals * 2020 2021 2022
Conflict free 3TG+ NO 3TG
by value
79.1% 80.47 % 81.66%
Conflict free 3TG+NO 3TG
by number of parts
43 209 48 606 53 204
*This statistics does not include BB Electronics
Table 25: Conflict minerals by value and number of parts
SUSTAINABILITY REPORT
127ANNUAL REPORT 2022
KITRON IN BRIEF
Kitron is a Scandinavian Electronics Manufacturing Services company. The company has manufacturing facilities in
Norway, Sweden, Denmark, Lithuania, Poland, the Czech Republic, India, China and the US and has about 2 850 employees.
Kitron manufactures both electronics that are embedded in the customers’ own product, as well as box-built electronic
products. Kitron also provides high-level assembly (HLA) of complex electromechanical products for its customers.
Kitron offers all parts of the value chain: From design via industrialisation, manufacturing and logistics, to repairs.
Theelectronics content may be based on conventional printed circuit boards or ceramic substrates.
Kitron also provides various related services such as cable harness manufacturing and components analysis, and
resilience testing, and source any other part of the customer’s product. Customers typically serve international markets
and provide equipment or systems for professional or industrial use.
128ANNUAL REPORT 2022
BOARD AND MANAGEMENT
Board
Tuomo Lähdesmäki
Chairman of the board
Elected for the period 2022-2023
Tuomo Lähdesmäki was born in 1957 and is a Finnish citizen. He holds a Master of Science in
Engineering from Helsinki University of Technology, a Master of Business Administration from INSEAD
and has completed the Stanford Executive Program. He is a founding partner of Boardman Oy, “The
leading network developing active ownership and board work competences” in Finland, and he has
previously, inter alia, been President and CEO of Elcoteq Network Oyj and Leiras Oy, General Manager
at Swatch Group and Vice President at Nokia Mobile Phones. Mr Lähdesmäki serves as Vice Chairman
of the boards of Fondia Oyj and Meconet Oy and as a Member of the Board of Turku University
Foundation sr.
Mr Lähdesmäki was elected to the Kitron Board as Chairman in 2014 and is also Chairman of Kitron’s
remuneration committee. On December 31st, 2022, Mr Lähdesmäki owned 291 668 shares in Kitron.
Gro Brækken
Deputy chairman of the board
Elected for the period 2022-2023
Gro Brækken was born in 1952 and is a Norwegian citizen. She holds an MSc in Chemical Engineering
from the Norwegian University of Science and Technology in Trondheim. Ms Brækken has a long and
broad experience from top management of international companies and organizations with CEO,
line, and staff-management experience within oil and gas, refinery, shipbuilding, banking and the
Confederation of Norwegian Enterprise. Her previous position was as CEO of the Industry organization
Offshore Norge (the Norwegian Oil and Gas Association) and she is at present Secretary-General for
the Norwegian Institute of Directors. This background has given her in-depth industrial and political
competence and a broad network within politics, business and society in general. Gro Brækken also has
solid board experience as a member and chair of the boards of directors of national and international
companies and organizations within energy, industry, project management, health and NGOs.
Ms Brækken was elected to the Kitron board in 2015 and has since October 2015 been a member of
the remuneration committee. On December 31st, 2022, Ms Brækken owned 51 280 shares in Kitron.
Maalfrid Brath
Board member
Elected for the period 2022-2023
Maalfrid Brath was born in 1965 and is a Norwegian citizen. She holds an MSc degree from BI
Norwegian Business School in economics and business administration and an MSc degree from NHH
Norwegian School of Economics in professional accountancy. Ms Brath has since 2009 been Managing
Director of Manpower Group Norway and since 2019 she has also been Regional Managing Director of
Nordic & Baltics. From 1995 to 2009, she held various executive management positions at Storebrand
ASA, including EVP Business Development, EVP Retail, COO of Storebrand Livsforsikring and CEO of
Storebrand Fondsforsikring. Prior to 1995, she was Manager at Arthur Andersen. She sits on a number
of boards including The Confederation of Norwegian Enterprise.
Ms Brath was elected to the Kitron board in 2018. On December 31st, 2022, Ms Brath owned 29 499
shares in Kitron.
Board and Management
129ANNUAL REPORT 2022
BOARD AND MANAGEMENT
Petra Grandinson
Board member
Elected for the period 2022-2023
Petra was born in 1968 and is a Swedish citizen. She holds a Master of Science in Vehicle engineering,
System technologies from the Swedish Royal Institute of Technology (KTH) in Stockholm. Ms
Grandinson is currently a Vice President Supply Chain at Epiroc Rockdrills AB and has a combination
of operations and commercial experience, having worked with advanced electrical hand tools,
larger capital equipment and technology infrastructure products and solutions. This includes first-
hand knowledge as a customer of Electronic Manufacturing Services. She also brings international
experience, having lived in China for five years and the UK for four years. She has had significant
exposure to R&D organisations.
Ms Grandinson was elected to the Kitron board in 2020. On December 31st, 2022, Ms Grandinson
owned 20 494 shares in Kitron.
Espen Gundersen
Board member
Elected for the period 2022-2023
Espen Gundersen was born in 1964 and is a Norwegian citizen. He holds an MBA from the Norwegian
School of Management, Oslo. He is also a Certified Public Accountant from the Norwegian School of
Economics and Business Administration in Bergen. Mr. Gundersen has held several positions within the
Tomra Group from 1999 to 2022, including CFO from 2003 and Deputy CEO from 2009. Before joining
Tomra, he served as VP Business Development of Selmer ASA for five years. He started his career with
Arthur Andersen in 1989. He is currently a full-time non-executive board member, with board positions
in Scatec ASA, Hexagon Purus ASA and Kid ASA.
Mr Gundersen, the head of Kitron audit committee, was elected to the Kitron Board in 2017. On
December 31st, 2022, Mr Gundersen owned 56 280 shares in Kitron.
Michael Lundgaard Thomsen
Board member
Elected for the period 2022-2023
Michael was born in 1964 and is a Danish citizen. He holds a Master of Science in Manufacturing
Management and Systems from Aalborg University in Denmark. Mr. Lundgaard Thomsen is currently
Managing Director/CCO at Aalborg Portland A/S and brings more than 25 years of executive,
international experience in various functions within a number of different industries, including process
instrumentation, electronics, mobile hydraulics and IT. For the past 17 years, he has held executive
management positions as CEO and COO in three different companies and prior to joining Aalborg
Portland A/S, he spent seven years as CEO of Siemens Flow Instruments A/S, a role he was promoted
into after being Global Operations Manager overlooking production, supply chain management,
including customer service, product maintenance and product certification. He has also acted as a
Factory Manager/COO at Linak A/S, and during his just over ten years in various roles at Danfoss A/S,
he spent two years in the US, where he held the overall responsibility for the supply chain management.
In addition to his operational responsibilities, he holds several board member and chair positions in
various companies and institutions. In 2019 he was appointed as chairman of the climate partnership
for energy-intensive companies by the Danish Government.
Mr Lundgaard was elected to the Kitron Board in 2022. On December 31st, 2022, Mr Thomsen owned
6240 shares in Kitron.
130ANNUAL REPORT 2022
BOARD AND MANAGEMENT
Bjørn Gottschlich
Board member
Elected by and among the employees
Bjørn Gottschlich was born in 1966 and is a German citizen. He was employed as an unskilled
production worker in 1996. In 2000 he was elected as a full-time shop steward for Fellesforbundet (The
Norwegian United Federation of Trade Unions) at Kitron AS in Arendal. He is now half redeemed from
his position at Kitron to perform various duties in his trade union. Bjørn is chair of Fellesforbundet’s
local union branch in Arendal and is a board member of Industriaksjonen. He is also elected
representative at Fellesforbundet’s National Delegates’ Meeting and a member of LO’s General Council.
Mr Gottschlich has been on the Kitron board since 2012. On December 31st, 2022, Mr Gottschlich
owned 26 480 shares in Kitron.
Jarle Larsen
Board member
Elected by and among the employees
Jarle Larsen was born in 1973 and is a Norwegian citizen. He has a background as an Electronics
Engineer and joined Kitron AS in 2007. Mr Larsen works as a Senior Lean Engineer. In 2010 he was
elected as leader for Nito at Kitron AS (The Norwegian Society of Engineers and Technologists). He still
holds this position.
Mr Larsen was elected to the Kitron board in 2019. On December 31st, 2022, Mr Larsen owned 19 624
shares in Kitron.
Tanja Rørheim
Board member
Elected by and among the employees
Tanja Rørheim was born in 1972 and is a Norwegian citizen. She holds a certificate in electronics and
has been working as a production worker at Kitron AS in Arendal since 1993.
Ms Rørheim has been on the Kitron board since August 2015. On December 31st, 2022, Ms Rørheim
owned 26 280 shares in Kitron.
131ANNUAL REPORT 2022
BOARD AND MANAGEMENT
Management
Peter Nilsson
President & CEO
Born in 1964. CEO of Kitron since November 2014. Several senior and executive leadership positions for
Swedish and US companies. Mr Nilsson holds a degree in Industrial Management and is a Swedish citizen.
Cathrin Nylander
CFO
Born in 1967. Joined Kitron in 2013. Extensive experience as CFO in various industries such as
manufacturing, IT, food industry, and financial services. Ms Nylander holds a bachelor’s degree in social
science from Lund University in Sweden and is a Swedish citizen.
Kristoffer Asklöv
COO & Sales Director
Born in 1977. Joined Kitron in 2021. Mr Asklõv has more than 20 years of experience in electronics
production and has an Executive MBA in Leadership & Management and also an M.Sc in Product
Development / Industrial design from the University of Linköping. Kristoffer Asklöv is a Swedish citizen.
Zygimantas Dirse
Managing Director, Kitron Electronics Manufacturing (Ningbo) CO Ltd., China
Born in 1980. With Kitron since 2003. Mr Dirse has broad experience from different international
positions in the company and holds a Master of Science in Informatics Technology. Zygimantas Dirse is
a Lithuanian citizen.
Stian Haugen
CTO
Born in 1976 and is a Norwegian citizen. Mr. Haugen joined Kitron in 2013 managing the technology
department of Kitron AS, Arendal. He has extensive experience from international R&D and customer
support and holds a B.sc in computer science from Agder University, Norway.
132ANNUAL REPORT 2022
BOARD AND MANAGEMENT
Mindaugas Sestokas
Managing Director UAB Kitron, Lithuania & VP Central Eastern Europe
Born in 1971. He has been with Kitron since 2008 and is a Lithuanian citizen. He holds a Master
of Business Administration and has diverse experience from sales and marketing in the food and
beverage industry and general management of an appliance manufacturing company.
Stefan Hansson Mutas
Managing Director, Kitron AB, Sweden
Born in 1966. With Kitron since 2017. Mr Hansson Mutas has a background from management
positions at several electronics and EMS companies. Stefan Hansson Mutas is a Swedish citizen.
Hans Petter Thomassen
Managing Director, Kitron AS, Norway & VP North America
Born in 1965. He joined Kitron in 2012. Mr Thomassen has extensive experience within manufacturing
and logistics and has held several senior-level positions, included CEO. He also has experience from
commercial aviation. Hans Petter Thomassen is a Norwegian citizen.
Carsten Christensen
CEO of BB Electronics
Born in 1966. CEO of BB Electronics since 2013 and part of the Kitron management teams since
January 2022. Several senior leadership positions for German and US companies and over 20 years of
experience within the EMS Industry. Carsten Christensen is a Danish citizen and owns 51 561 shares
inKitron.
133ANNUAL REPORT 2022
ARTICLES OF ASSOCIATION
Latest updated 30 August 2022
§ 1
The company’s name is Kitron ASA . The company is a public
§ 2
The company’s registered office shall be located in the
municipality of Asker. The company may alsoconduct the
general meeting in the municipality of Oslo.
§ 3
Kitron’s business is manufacturing and development activities
related to electronics. The businessincludes purchase and
sale of shares and companies in the same or related business
sectors. Thebusiness may also include related consultancy
activities and other activities associated with the operation.
§ 4
The share capital of the company is NOK 19,769,105.30 divided
into 197,691,053 shares with face value NOK 0.10 each. The
company’s shares shall be registered at the Norwegian Central
SecuritiesDepository.
§ 5
The company’s board of directors shall have from 3 to 6
shareholder elected members for a period ofup to two years
as resolved by the general meeting. The chairman of the board
is elected by the general meeting. Two board members acting
jointly are authorised to sign on behalf of the company.The
board may grant power of attorney.
§ 6
The ordinary general meeting is held each year before the end of
the month of June. The ordinarygeneral meeting shall:
1. Consider and approve the annual report, the profit and loss
statement and the balance sheetfor the preceding year.
2. Consider and approve the application of profit or coverage
of deficit according to the adopted balance sheet, as well as
payment of dividend.
3. Consider and resolve other matters that pertain to the
general meeting according to Norwegian law.
§ 7
Kitron shall have a nomination committee. The nomination
committee shall have two or three members, including its
chairman. Members of the nomination committee shall be
elected for a term ofoffice of up to two years.
The annual general meeting of Kitron shall elect the chairman
and the members of the nominationcommittee. The mandate
of the nomination committee shall be determined by the
annual generalmeeting. The annual general meeting shall also
determine the committee’s remuneration.The nomination
committee shall submit proposals to the annual general
meeting in respect of the following matters:
• Propose candidates for election to the board of directors
• Propose candidates for election to the nomination
committee
• Propose the fees to be paid to the members of the board of
directors
• Propose the fees to be paid to the members of the
nomination committee
§ 8
Any issue that has not been resolved in these Articles of
Association shall be considered in accordance with the
regulations in the existing laws applicable to limited companies.
§ 9
Documents concerning matters to be considered at the general
meeting are not required to be sent to the shareholders if the
documents are made available for the shareholders at the
company’s websites.This also applies for documents that
pursuant to law shall be included in or attached to the notice
ofthe general meeting. A shareholder may nonetheless require
that documents concerning matters to be considered at the
general meeting are sent to him/her.
§ 10
Shareholders who want to participate at the general meeting
shall notify the company thereof within two days prior to the
general meeting.The right to participate in and vote at a general
meeting can only be exercised if the acquisition of theshares in
question has been recorded in the company’s share register no
later than the fifth businessday before the date of the general
meeting (the “record date”).
§ 11
Shareholders may vote in advance, either in writing or by
electronic means, up to 2 days prior to thegeneral meeting. The
board of directors determines further in the notice to the general
meeting howsuch voting shall be carried out.
(Office translation)
Articles of Association
134ANNUAL REPORT 2022
ADDRESSES
OFFICES
HEAD OFFICE
Kitron ASA
PO Box 97, NO-1375 Billingstad, Norway
Visiting address:
Tel: +47 66 10 00 00
GERMANY - SALES AND CUSTOMER SUPPORT OFFICE
Kitron GmbH
Carl-Zeiss-Str. 3, DE-72555 Metzingen, Germany
Tel: +49 7123 374122-00
BB ELECTRONICS
DENMARK
BB Electronics A/S
Ane Staunings Vej 21C
DK-8700 Horsens
Denmark
Tel: +45 7625 1000
Fax: +45 7625 1010
CHINA
BB Electronics
(Suzhou) Co., Ltd
Building 18# A&B,
Suchun Industrial
Estate, No. 428
Xinglong Street, Suzhou
Industrial Park, 215024
Suzhou, China
Tel: +86 512 6956 2880
CZECH REPUBLIC
Wendell electronics
a.s. (BB Electronics,
Czech)
Nádražní 1179
563 01 Lanskroun
Czech Republic
Tel: +420 465 670 038
INDIA
TCBB India Private
Limited ApS
Module 49 & 50, II nd
Floor, SDF-III Building
Phase -II, MEPZ SEZ,
NH 45, Tambaram,
Chennai TN 600045 IN
MANUFACTURING SITES
NORWAY
Kitron AS
P O Box 799 Stoa NO-4809
Arendal, Norway
Visiting address:
Tverrdalsøyveien 100, 4920 Staubø
Tel: +47 37 07 13 00
LITHUANIA
UAB Kitron, Užliedžiu site
Plento g. 6, LT-54305 Užliedžiai,
Lithuania
CHINA
Kitron Electronics Manufacturing
(Ningbo) Co., Ltd
No. 189, DongHui Road Nordic
Industrial Park Zhenhai District
Ningbo 315221, P. R. China Tel:
+86 574 8630 8600
Fax: +86 574 8630 8601
SWEDEN
Kitron AB
P O Box 1052, SE-551 10
Jönköping, Sweden
Visiting address:
Möbelvägen 5, 55652 Jönköping
Tel: +46 36 290 21 00
LITHUANIA
UAB Kitron, Administration
Perspektyvos g.22 LT-52119
Kaunas, Lithuania
USA
Kitron Technologies Inc.
345 Pomroys Drive Windber,
Pennsylvania 15963, USA
Tel: +1 814 467 7477
Fax: +1 815 301 8468
LITHUANIA
UAB Kitron, Taikos site
Taikos pr. 151, LT-52119 Kaunas,
Lithuania
Tel: +370 37 40 93 30
CHINA
Kitron Electromechanical (Ningbo)
Co., Ltd
No. 179, DongHui Road Nordic
Industrial Park Zhenhai District
Ningbo 315221, P. R. China Tel:
+86 574 8630 8600
Fax: +86 574 8630 8601
POLAND
Kitron Sp. z o. o.
ul. Droga Kurpiowska 75 86-300
Grudziądz, Poland
Tel: +48 56 642 58 80
Addresses
135ANNUAL REPORT 2022
KITRON ADDRESSES
136ANNUAL REPORT 2022
KITRON IN BRIEF
Kitron is a Scandinavian Electronics Manufacturing Services company. The company has manufacturing
facilities in Norway, Sweden, Denmark, Lithuania, Poland, the Czech Republic, India, China and the US and
has about 2 850 employees. Kitron manufactures both electronics that are embedded in the customers’
own product, as well as box-built electronic products. Kitron also provides high-level assembly (HLA) of
complex electromechanical products for its customers.
Kitron offers all parts of the value chain: From design via industrialisation, manufacturing and logistics, to
repairs. The electronics content may be based on conventional printed circuit boards or ceramic substrates.
Kitron also provides various related services such as cable harness manufacturing and components
analysis, and resilience testing, and source any other part of the customer’s product. Customers typically
serve international markets and provide equipment or systems for professional or industrial use.