Good morning, ladies and gentlemen, Welcome to Kitron's Q1 2015 Results Presentation. I'm Peter Nilsson, CEO, with me today is Cathrin Nylander, CFO. I'm happy to share our summary results with you. This is our fourth consecutive quarter of increased profitability. Our profit was close to NOK 21 million, coming in at NOK 20.8 million for Q1. All Kitron sites remain profitable. We're seeing revenue growth in multiple market sectors with a strong performance in Defence-related products. Our backlog remains stable sequentially, shows a more than a 20% growth compared to Q1 last year.
Increased sales, a strong demand in the Defence sector has continued to increase our net working capital, we're increasing now our efforts to get back to target levels. Our cash flow improvements are primarily due to increased profits. In the first quarter, the important orders primarily came from the defense side. We had two large contracts signed with the first one with Lockheed Martin on low-rate initial production for the F-35, where we will manufacture the Integrated Backplane Assembly in our factory in Arendal, Norway.
The contract value for this initial production is about $ 6,500,000 . We also received a very interesting contract with Northrop Grumman again for the F-35 Lightning, where we're awarded a four-year development program to develop test a test program set for evaluation and troubleshooting of the F-35 avionics. The contract value for this contract was about NOK 16 million. Looking at the improvements we've achieved over the past four quarters, where do they come from? Well, we have a shift now in our employee base.
More than 50%, actually 53% of our employees are now in low-cost countries. 46% was the value last year. Our payroll expenses are down 5% from 29% of sales to 24%. Our revenue per employee is up from NOK 369 to NOK 399,000 per employee. All our units, as I said before, are now profitable. Our Arendal downsizing with more than 80 people happened during last year. Currently, the Arendal plant is doing well. Our U.S. and China operations are both stable with sustainable volumes going forward. With that, I'd like to turn it over to Cathrin for some details.
Thank you. The financial statements for Q1 2015, we have a strong Defence/Aerospace and Industry growth in the quarter. The quarter ended at NOK 471 million, which is up 8% from NOK 436 million last year in the same quarter. We ended more or less on the same level as the fourth quarter in 2014. We have FX effects in translation building up to the 8%. The underlying growth is about 4.4%. If we look on the distribution between the different segments and the changes in volume, we can see that the Offshore/Marine is down 44.6% in the quarter compared to last year.
Medical is down 7.6%. Defence/Aerospace is up 49%. Energy/Telecoms at 9.4%, and Industry is up 29.7%. We now see a quite clear shift in how the revenue is distributed between the segments. Offshore is now at 9.7% compared to 19% last year. Medical is at 21.1% compared to 24.6% last year. Defence/Aerospace at 27.7% from 20.1% last year. Energy/Telecoms at 11.6% from 11.4%. Industry at 29.9%, up from 24.9% last year. If we look on the revenue by country, we see a continued strong growth outside of Scandinavia. Norway has a slight growth only, 2.1% from NOK 227 million - NOK 231 million.
Sweden is down 8.1% from NOK 107 million - NOK 98 million. Lithuania is up 18.5% from NOK 95 million- NOK 112 million, and the others containing China and the U.S. are up 111% from 41%- 86%. Also here, we see a shift then in distribution between the sites. Norway is now at 43.8%, and in the first quarter last year, they were at 48.3%. Sweden, 8.7% from 22.7%. Lithuania is 21.3% from 20.2%, and the others at 16.3% from 8.7%. EBIT, as Peter mentioned, this is the fourth consecutive quarter of improved profitability.
We show now a profit of NOK 20.8 million. Compared to NOK 2 million last year, a substantial improvement in profitability. We have the improvement both in nominal value as well as EBIT margin. The EBIT margin is at 4.4% compared to last year, 1.5%. The contributing factors here are that all units or sites are profitable. They all have a sustainable revenue. We have conducted personnel expense reductions during last year which show effect now.
We also in the quarter show a non-recurring gain of NOK 3.5 million booked in the quarter in Norway, whereas we last year in the same quarter had a non-recurring loss of NOK 2 million. The non-recurring gain is due to buyout of pensions and, I go to the next one, here we now see the EBIT by country. All sites are profitable. We like to say that again. Arendal show a profit for the month of NOK 12 million, including the non-recurring gain of NOK three and a half. It's clearly that cost reductions yield results. We had a loss of NOK 0.6 last year, now the profit margin is at 5.2%.
Sweden, slightly improved margins going from 2.8%-3.5% in EBIT margin and from NOK 3.0 million-NOK 3.4 million. Lithuania, we have a slight reduction in results due to higher indirect costs. It's a reduction in NOK from NOK 5.7 million-NOK 5.1 million and an EBIT margin of 4.5%. The others, China and U.S., they continue to contribute positively and now show a profit of NOK 6 million compared to a loss of NOK 1.6 million last year. Accumulatively, they have 6.9% of profit margin compared to a negative margin last year.
Look on the balance sheet. As Peter said, we have a cash flow improvement compared to last year. We have a positive cash flow NOK 35 million for the quarter. The positive cash flow in the quarter is primarily due to the fact that we have improved profits.
The net working capital, as you can see below here, is more or less the same since fourth quarter, and it has increased since last year in the same time, as Peter mentioned, due to increased sales, a shift in volume to a more inventory-driven segments, but as well we have some projects that are still in our balance sheet. The cash conversion cycle is at 106 and the same level as the fourth quarter last year. Needless to say, our working capital is on high attention for us. Okay, Peter, I leave it up to you.
I think, just a brief mention on the slight reduction of profit in Lithuania and, you know, the reasons for that. We've had some heavy investing in Lithuania, more than doubling the available square meters for production, so doubling the footprint of the plant then. Those are the costs we're seeing now and affecting the margin slightly. It will be made up in later in the year as we continue to ramp production in Lithuania. What about the market development? Briefly then, you know, I'd like to say we're stable on our backlog.
We had 868 in the fourth quarter, 855 in the first now, but up more than 20% compared to the first quarter last year. The seasonality here shows that we usually have with a weaker Q1, shows that we're looking at some at least a strong first half of the year. Backlog then is driven by the defense side, which we have an increase by more than 87% on from last year. At the same time, of course, we have a reduction on the oil and gas Offshore/Marine market sector. And as we comment that, you know, the outlook looking forward is, you know, that reduction seems to continue.
We're more stable now than we were before, but it is at a much lower level. The medical equipment saw a slight decline in the first quarter. Looking forward, I think it's a stable development for the year. We have a strong growth and a positive outlook on our Defence and Aerospace side. We have a stable backlog on Energy and Telecoms and a positive outlook on that market sector. The industry side continues to grow, and it's primarily fueled by our sales efforts in Germany, and that revenue is primarily targeted for our Lithuanian facility.
The total outlook for 2015, we continue to expect a growth and a clear improvement in profitability. Reiterating again, it's the Defence sector for the U.S. and Norwegian markets that is driving this increase, we're also seeing some strong growth in Energy, Telecoms and industry. We're continuing to see the reduction in oil and gas, we continue to monitor the very volatile currency markets and what effects they may have on our operations. Ladies and gentlemen, thank you very much.