NKT Q3 2015: Results as expected. 2015 outlook updated

Nasdaq Copenhagen
Nikolaj Plads 6
DK - 1007 Copenhagen K

12 November 2015
Announcement No. 20

NKT Q3 2015: Results as expected. 2015 outlook updated

Group Executive Director, Michael Hedegaard Lyng, commenting on the results:

- Overall, third-quarter results were in line with expectations, and year-to-date operational EBITDA increased by 18% and organic growth by 2%. In Nilfisk earnings were below expectations during the quarter, and remained impacted by low organic growth and significant investments in sales and service. As expected, Q3 results in NKT Cables were impacted by lower revenue and earnings in the Projects business due to production timing of offshore cables. 

Financial highlights for Q3 (and for first nine months of 2015)

• Operational EBITDA increased to DKK 276m (DKK 1,000m). Operational EBITDA margin (std. metal prices) was 8.4% (9.6%)
• Organic growth was -4% (2%) and revenue amounted to DKK 3,900m (DKK 12,535m)
• Return on Capital Employed, (LTM), rose by 3.1%-points to 11.2%
• Net working capital lowered by 18%, driven by NKT Cables

Updated outlook for 2015
For 2015 overall, NKT continues to expect organic growth of around 3%. Operational EBITDA is expected to amount to approx. DKK 1,300m, corresponding to operational EBITDA margin (std. metal prices) of around 9.2%. The updated earnings projection is due to the impact of Nilfisk’s higher distribution costs, investments in sales and service and implementation of the Commercial Excellence programme. For further details on the updated 2015 outlook, please refer to NKT's Q3 Interim Report 2015, page 6.

Nilfisk: Q3 organic growth as expected, but lower profitability. Acquisition of US high-pressure washer manufacturer
Overall, Nilfisk realised 3% organic growth driven by EMEA and APAC. Operational EBITDA margin was 9.3%, which was lower than expected. Nilfisk’s position within the US commercial high-pressure washer market was strengthened by the acquisition of Hydro Tek Inc., a leading manufacturer in this segment.

NKT Cables: Q3 impacted by timing of production in the Projects business  
NKT Cables achieved -12% organic growth. This development was driven by the Projects business which, as expected, was impacted by timing of production. Operational EBITDA was DKK 109m, impacted by lower revenue in the Projects and APAC businesses.

Photonics Group: Financial performance significantly improved. Fiber Processing divested
Organic growth was 31%, driven by progress in all segments. EBITDA was significantly improved, up by DKK 13m. Fiber Processing operations were divested with effect from 1 September 2015.

Teleconference
A teleconference for investors and financial analysts will be hosted by NKT at 10:00 AM CET today and can be accessed at www.nkt.dk. The presentation for the call will be available shortly after this release. To attend, please dial in from:

Denmark: +45 3544 5583
UK: +44 203 194 0544
US: +1 855 269 2604