NASDAQ OMX Copenhagen
Nikolaj Plads 6
DK - 1007 Copenhagen K
14 May 2014
Announcement no. 10
In Q1 2014 NKT realised organic growth in all business areas. Earnings increased and cash flow improved significantly. Expectations for the full-year 2014 are maintained.
Q1 financial highlights
- 8% organic growth based on a revenue of 3,179 mDKK (std. metal prices)
- Operational EBITDA increased to 254 mDKK, up 37 mDKK from Q1 2013
- Operational EBITDA margin (std. metal prices) increased to 8.0% from 7.6% in Q1 2013
- Cash flow from operating activities increased to 199 mDKK, up 720 mDKK from Q1 2013
NKT's Group Executive Director & CFO, Michael Hedegaard Lyng, commenting on Q1 developments:
- NKT has had a very good start to the year with good growth and increased earnings. In terms of earnings Nilfisk-Advance realised the best first quarter yet. In NKT Cables, operations developed positively but earnings were negatively impacted by bad debt provisions in China. Looking forward, the cost savings from the DRIVE programme will positively impact earnings when the effects of the initiatives become established. NKT’s positive development is also visible in significantly improved cash flow as a result of the increased earnings and strong net working capital performance. All in all, I believe we can say that NKT has demonstrated a very solid performance this quarter.
DRIVE efficiency improvement programme on track
In NKT Cables, execution of DRIVE is well under way. The focus is to deliver increased earnings of around 300 mDKK at EBITDA level by reducing costs. The effects of DRIVE will have full impact entering 2016.
- The DRIVE programme is on track. Originally we identified more than 80 cost-saving initiatives and 18 have now been fully implemented while 59 are in progress. In Q1 we realised around 20 mDKK in cost improvements and we have just started. In the coming months DRIVE will gain even greater impetus and we are confident of reaching both the 2014 target of 100 mDKK in cost savings and the total savings target of 300 mDKK by 2016, says Michael Hedegaard Lyng.
Nilfisk-Advance realised strong organic growth of 9%
The growth was based on progress in all three regions. EMEA and the Americas both realised 8% growth, while APAC was up 14%, reflecting a return to positive development in this region that was partly driven by a 25% growth increase in the Chinese market. The operational EBITDA margin (YOY) was 12.3%, an increase of 0.9% points from Q1 2013.
NKT Cables recorded 6% organic growth despite the expected lower revenue in Projects
The growth was driven by Products which realised organic growth of 22%. Projects realised - as expected - lower revenue due to changes in the type of projects executed, resulting in a negative growth of 7%. Organic growth for APAC was 17% down on Q1 2013 where performance was positively impacted by the execution of a major project. Operational EBITDA margin in std. metal prices was 3.6% and 5.7% after adjustment for the negative effect of bad debt provisions in China.
Photonics Group continued its upward trend realising 19% organic growth
Photonics Group continued the positive development from Q4 2013 with growth attributable to Sensing and Fiber Processing up 35% and 25% respectively.
Expectations for full-year 2014 maintained
NKT's expectations for full-year 2014 presented in the 2013 Annual Report are maintained with consolidated organic growth of 0-3% and an operational EBITDA margin of 9-9.5% (std. metal prices).
Please address any questions to the undersigned on telephone +45 4348 2000.
Yours sincerely
NKT Holding A/S
Michael Hedegaard Lyng
Group Executive Director & CFO
