Welcome to this presentation of the first quarter results for Kitron. My name is Dag Songedal, and I will do this presentation together with our CFO, Cathrin Nylander. Looking at the financial highlights for the first quarter, Kitron continued to show growth. We ended at a growth rate of 15% and ended at a revenue level of NOK 435.8 million. This is a solid growth. Part of the growth is explained by exchange rate development, but the underlying growth is more than 10% and shows a good positive development. However, the profitability level is not at a satisfactory level. We ended at the EBIT level of NOK 2 million, which is far below our expectations.
We experienced quite heavy margin pressure during the quarter, and we do have focus on customer profitability and also cost reduction initiatives, which I will go further into later in the presentation. The order backlog was slightly down and ended at NOK 707 million. Also the operating cash flow was down by NOK 17 million. Net working capital increased slightly and ended up NOK 487.9, which is up by 3.8%. Looking into customer contracts in the quarter, we signed 2 important agreement. One was with Sensys Traffic in Sweden, where we signed a 2-year frame agreement. The estimated value is between 10 and 30 million SEK over a 2-year period with options of prolonging. This is related to delivery of automatic speed surveillance systems and traffic light systems, and the manufacture will take place in Jönköping.
We also got late March, an important order from Kongsberg related to electronics for Kongsberg's Remote Weapon Station. The order was for NOK 30 million with an additional option of NOK 20 million. The manufacture will take place in Arendal, and this is important related to the defense segment. Also early April, after the quarter ended, we got an additional order from Kongsberg, which again strengthened the position within the defense segment. Looking into some of the actions we do in order to improve profitability, the main task this year will be related to downsizing of the operation in Arendal. We are in a situation where we, during 2014, will reduce the number of employees in Arendal with between 60 and 100 persons compared with the level we had in the start of the year.
Part of the reductions has been already executed late in the first quarter. Some of the remaining part will be done in the second quarter. We will also have actions related to this all through 2014. The re-reduction is a consequence of lower activity, partly due to transfer of products over a period of time to our sister companies in Lithuania and in China, but also due to a decline in revenue from the offshore segment, which we see will be the case in the end of 2014. We will also address the general cost base in Norway, mainly in Arendal, but also related to corporate cost in Norway. During the first quarter, we have done a reorganization of the sourcing activities.
We want to get cost savings from this part, and we also want a closer cooperation between the global sourcing activities and the local sourcing activities. We move sourcing people from high-cost countries to low-cost countries, and we believe we will both achieve cost reductions and improved effect of our sourcing work, better utilization of the sourcing resources across manufacturing sites. This reorganization have caused a one-off cost during the first quarter of 2 million NOK. We go into more into detail on the financial statements, and I leave the word to Cathrin.
Thank you, Dag. For the revenue, we have a strong development in the defense aerospace and energy telecom segments during the month. As Dag mentioned, we have an increase of 15.2% compared to first quarter last year, which was at NOK 378 million. We're having an increase of NOK 58 million. He also mentioned, we have an effect of the translation currency, the underlying growth is far bigger than the translation effect. The good thing here is that we have growth in all segments, but specifically in defense aerospace and energy telecom. What we can see is that the growth is by the existing customers mostly, and they're picking up specifically in the Swedish market, but in all markets as well.
When we now look into the revenue by country, we see that Norway has a bit less growth than the other one on 3.2% and from down to up to NOK 227 million. Now the Norwegian share is about 48.3 and below 50%. Sweden has increased from last year's with 26.4%, now with a share of 22.8 is up by 2% share from last year. When Norway's going down, Sweden is taking its share. Lithuania up 16% and about the same share as last year. The others, China and U.S., are also increasing, about 18%. Have a little less share than we have last year. What we have is a significant reduction in EBIT.
The first quarter is never a strong one, but we're only showing, as Dag Songedal mentioned, an EBIT of NOK 2 million compared to NOK 4 million last year. We have to mention here that we have the provision of NOK 2 million, so if that wasn't there, the income would be at the same level. The profitability in % is too low to compared to our expectations. What we do see in general, that we have a change in revenue mix and that the margin pressure on the contribution margin or the net margin is affecting us, both on the existing and new customers. The actions that we have taken into place is the downsizing of Arendal, which is quite substantial, and the sourcing.
As Dag Songedal said as well, we're looking into the cost base in Norway in general as well to counter-affect these reductions. Looking at the spread on the lands, we have or the countries. Norway now, this had a 1.6% EBIT last year, and 0.8% EBIT, is now at a loss of -NOK 0.6 million for the quarter, and a negative EBIT margin. It is a change in revenue mix and towards low margin products that's affecting it. Sweden, they're having a revenue increase and also increased profitability due to this, and they're going from 2% last year to 2.8% for this quarter. Lithuania is growing and growing at a high revenue, but their profitability in % is slightly lower, and it's due to new customers ramping up at local lower margins.
When we look at the other units, which is the US and China and the staffs, et cetera, they're improving from NOK 3.4 million minus EBIT last year to this year, minus NOK 1.6 million. That includes the accrual of NOK 2 million as well, so it's quite an improvement in that side. US and China are around break even. They're slightly below break even for the quarter as well. Looking into the cashflow, we have a seasonally low and a weak cashflow in the first quarter normally, and you might say that's about the same level as last year, a NOK 2 million difference. It is due to working capital increase, and especially in this case, the inventories, as you can see on the net working capital, which has gone from NOK 470 million to NOK 488 million.
It is primarily the inventory that is increasing, but on the good hand part is that the revenue's increasing and the inventory turns are improving. We are seeing effects of the work we're doing. However, the progress is slightly too slow to what we actually want it to be. I leave the word back to Dag.
Yeah. Going into the market development, first to look at the order backlog. We see a reduction in the order backlog compared with the same quarter last year, that is mainly within the defense, aerospace and offshore marine segments. It's primarily in Norway. We received a significant order early April, which will change the setting related to the defense side. As we have said, for the offshore segment, we see a decrease in the end of the year. Energy telecom and medical shows specifically high growth related to the in the order backlog, all sites except Norway show a growth in order backlog compared to last year. Looking into the different market sectors. For the offshore marine side, the main part of that is deliveries from Norway.
As we have said, we see a decline in that sector in the end of the year. In total, we see that the offshore segment will be less important for Kitron in the second half of this year. For the medical equipment, we see a positive development in Sweden. In the Swedish market we have growth from existing customers. We do also see a stable situation in the Norwegian market. In the defense aerospace sector, we see a strong growth, and that is kind of into all our markets. In the order backlog, we had a decrease in Norway, partly offset by increase in the US. As we said, we got this order early April that is also improving the order backlog in the Norwegian defense side.
energy telecom had a strongly growth in the first quarter, and we expect the growth to continue, and that is mainly due to increased demand from existing customers. We do also have increase in the order backlog for the Swedish market. Industry, we've had growth in the industry sector now for several quarters in row. We still see growth, but the growth will level as out compared with the rate through that has been growing over the latest quarters. If we look at the outlook for the year, we expect a positive development in the Swedish and German market, and this suggests growth for the factories in Sweden and Lithuania. We have growth, strong growth in the first quarter, and we expect the growth to continue during the year.
We do also see growth in China and in the US, but for the Norwegian operation, we see a decline in revenue for 2014 compared with 2013. Overall, Kitron expects growth in revenue in 2014. It's partly explained by development in the foreign currency exchange rates, but we also have an underlying strong growth. As a result of the reorganization we are doing in the Norwegian operation and also other actions related to the cost side, we do expect improved profitability during 2014. Thank you for joining this webcast, and have a nice day