NKT A/S Q2 2019: Financial results in line with expectations and outlook unchanged

15 August 2019
Company Announcement no. 9

NKT A/S Q2 2019: Financial results in line with expectations and outlook unchanged  

CEO Alexander Kara joined on 1 August 2019 and states:
- I have been excited to take up the position as CEO of NKT. I believe that we as a company are well positioned in supporting the transition towards increased use of renewable energy sources. This trend is one of the strategic fundamentals to improve our financial and business performance in the years to come. I have long-term experience from the power cables business and I am enthusiastic about the opportunities in the industry.

CFO Roland M. Andersen comments on the performance in Q2 2019:
- Our financial results for Q2 2019 were in line with our expectations. Our revenue and earnings in NKT decreased as a result of the expected reduced level of activity in our Solutions business line, but we see continued tender activity in the high-voltage power cables market. In NKT Photonics, the positive financial development continued as we realized a very satisfactory EBITDA.

Q2 2019 financial highlights

* Std. metal prices

2019 financial outlook
The 2019 financial outlooks for NKT and NKT Photonics are unchanged from Company Announcement No. 2 of 28 February 2019.

For NKT, revenue (std. metal prices) is still expected to be approx. EUR 0.9–1.0bn. The operational EBITDA is still expected to be approx. EUR 10–30m.

For NKT Photonics, revenue is still expected to grow by approx. 15–20% organically. The EBITDA margin is still expected to increase to approx. 15–20%.

NKT: Financial performance in Q2 2019 was in line with expectations, reflecting a low level of activity in Solutions
The revenue (std. metal prices) in Q2 2019 amounted to EUR 245.0m, compared to EUR 306.4m in Q2 2018. The decrease was primarily due to reduced level of activity in Solutions. The total organic growth was -17%, with -29% in Solutions, -8% in Applications and 9% in Service & Accessories. As expected, the reduced activity level in Solutions impacted earnings with the operational EBITDA decreasing to EUR 9.4m in Q2 2019 from EUR 32.1m in Q2 2018.

Tender activity has continued in the high-voltage power cables market, and NKT won a few smaller orders during Q2 2019. In addition, in July, NKT was awarded an approx. EUR 90m contract for the Viking Link interconnector project. At end-Q2 2019, the high-voltage order backlog totalled EUR 1.05bn (EUR 0.94bn in std. metal prices), which was largely on par with end-Q1 2019.

In Applications, the profitability remained unsatisfactory. In order to accelerate improvements, Applications was reorganized into a full operational value chain with the appointment of a new head for the business line in April 2019.

NKT Photonics: Organic growth of 1% in Q2 2019 in line with expectations, and best quarterly EBITDA recorded outside of the historically high Q4 results
In Q2 2019, the financial results were in line with expectations. NKT Photonics generated revenue of EUR 17.9m, compared to EUR 17.6m in Q2 2018. The organic growth was 1%, and a higher growth rate is expected in 2nd half 2019. The EBITDA increased to EUR 3.9m in Q2 2019 from EUR 1.0m in Q2 2018 and was the best quarterly EBITDA outside of the historically high Q4 results. The growth in EBITDA was driven by improved profitability of certain projects and effective cost containment.

The order intake grew 4% in Q2 2019. The amount of orders continued to be higher than absolute revenue in EUR terms, supporting future growth.

Teleconference
NKT A/S hosts a teleconference for investors and financial analysts at 9:00 am CET today, and it can be accessed at investors.nkt.com. The presentation for the call will be available shortly after this release. To attend, please dial in from (confirmation code: 2188209): 

Denmark: +45 3272 8042
UK: +44 207 192 8000
US: +1 631 510 7495

Contacts
Investor Relations: Michael Nass Nielsen, Head of Investor Relations, tel: +45 2494 1654
Media Relations: Helle Gudiksen, Head of Group Communications, tel: +45 2349 9098

Attachment

• NKT_Interim_Report_Q2_2019

Attachments