Company Announcement
15 August 2018 Announcement No. 8
NKT A/S Q2 2018: Double-digit organic growth in NKT and NKT Photonics
President & CEO Michael Hedegaard Lyng comments: - In Q2 2018, revenue growth in NKT has been satisfactory with 12% organic growth. The operational EBITDA was lower than in Q2 2017, which reflects the composition of projects, and that we are in the implementation phase of initiatives to improve performance in our Applications business line. No significant high-voltage orders were awarded in the relevant high-voltage markets during Q2 2018, while we were awarded a contract for the Hornsea 2 project in July 2018. NKT Photonics realized 25% organic growth and increased EBITDA compared to Q2 2017.
Q2 2018 financial highlights
| EURm | NKT | NKT Photonics | ||
| Revenue | 306.4* | 17.6 | ||
| Organic growth | 12% | 25% | ||
| Operational EBITDA | 32.1 | 1.0 | ||
| Operational EBITDA margin | 10.5%* | 5.7% | ||
* Std. metal prices
2018 financial outlook adjusted The financial outlook for NKT has been updated, whereas for NKT Photonics, it is unchanged from Company Announcement No. 1 of 27 February 2018. For NKT, revenue* is still expected to be approx. EUR 1.0–1.1bn. The operational EBITDA is now expected to be in the lower end of the previously announced range of approx. EUR 90–110m. For NKT Photonics, revenue is still expected to be approx. EUR 65–70m and the EBITDA is still expected to be approx. EUR 10m.
NKT: Revenue increased, while operational EBITDA was lower than Q2 2017. During 1st half 2018, no significant projects were awarded in the relevant high-voltage markets The revenue (std. metal prices) for Q2 2018 amounted to EUR 306.4m, corresponding to organic growth of 12%. This compares to EUR 288.1m for Q2 2017. The performance reflected increased revenue in all three business lines. The operational EBITDA amounted to EUR 32.1m in Q2 2018. This was a decline of EUR 10.8m against Q2 2017, but an improvement of EUR 11.7m on Q1 2018. The lower level compared to Q2 2017 reflected the composition of projects during the period and a lower profitability level for the Applications business line. The working capital at end-Q2 2018 amounted to EUR 14.8m, down from EUR 28.7m at end-Q1 2018. The improvement was mainly driven by positive development in the Solutions business line.
During 1st half 2018, no significant projects were awarded in the relevant high-voltage markets, and consequently NKT was not awarded any significant orders either. Subsequently, in July 2018, NKT was awarded a contract for the Hornsea 2 offshore AC cable project.
NKT Photonics: Organic growth of 25% and increased EBITDA NKT Photonics posted revenue of EUR 17.6m in Q2 2018, which was EUR 6.4m up on Q2 2017. The organic growth for Q2 2018 was 25%. The positive development was broad-based across product categories as all three business segments delivered solid performance. The higher revenue led to improved EBITDA. In Q2 2018, EBITDA amounted to EUR 1.0m, which was up EUR 0.3m on Q2 2017. The improved earnings performance was achieved despite continued investments in creating a stronger platform for the future.
The healthy order pipeline in the photonics market translated into several new orders for NKT Photonics in Q2 2018. The order intake during the period increased by 75% compared to Q2 2017, and was driven by all segments. 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: Denmark: +45 3515 8049 UK: +44 330 336 9126 US: +1 929 477 0324
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
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