NKT Q1 2016 performance in line with expectations

Nasdaq Copenhagen
Nikolaj Plads 6
DK-1007 Copenhagen K 

12 May 2016
Announcement No. 21

NKT Q1 2016 performance in line with expectations

Group Executive Director, Michael Hedegaard Lyng states:
- Overall, our first-quarter performance was in line with expectations. We improved earnings despite lack of organic growth, a development which was seen in both Nilfisk and NKT Cables. Nilfisk increased earnings driven by an improved gross margin, while growth was impacted by fewer working days, but the five acquisitions made last year were seen to contribute positively. In NKT Cables, the Products business continued the positive trend and impacted earnings positively, while as expected the Projects business saw downwards organic growth. 

Q1 2016 financial highlights

• Operational EBITDA increased to EUR 38.3m, and operational EBITDA margin (std. metal prices) was 9.0%, up 0.9%-points
• Organic growth was -12%, in line with expectations, and revenue amounted to EUR 485.6m
• Working capital was EUR 307.9m, a reduction of EUR 48.2m from Q1 2015
• Return on capital employed (RoCE), LTM, improved by 0.3%-points to 10.0% 

2016 outlook maintained
NKT’s expectations for 2016 are unchanged at flat consolidated organic growth and operational EBITDA margin (std. metal prices) on par with 9.4% realised in 2015. Details on the 2016 outlook are available in NKT's 2015 Annual Report, page 6.

Nilfisk: Operational EBITDA margin improved, while organic growth declined
In Nilfisk, operational EBITDA margin increased to 10.7%, driven by improved gross margin. Nominal growth was 6%, driven by acquisitions, while organic growth was -1%. EMEA particularly was impacted by the early Easter, which meant two fewer business days compared with Q1 2015, and by a cold spring impacting the DYI business. Roll-out of Commercial Excellence continued and further selected investments in sales and service were made.  

NKT Cables: Operational EBITDA margin increased due to Products. Organic growth as expected
NKT Cables improved operational EBITDA margin (std. metal prices) to 7.4% mainly driven by improved gross margins in the Products business. Organic growth was -24%, as expected impacted by the Projects business, while Products achieved 1% organic growth. The scale of the quality issues detected early 2016 was identified and found to be smaller than first anticipated. NKT Cables won a major offshore contract for the Hornsea Project One and a contract for an Ellevio utility project in Sweden, cf. page 13 in the Q1 2016 Interim Report.  

NKT Photonics: Satisfactory organic growth. Acquisition of Fianium completed
NKT Photonics achieved organic growth of 11%, driven by all segments, and both order intake and backlog were strong. NKT Photonics acquired Fianium to strengthen its global market position and to gain commercial scale. The company received its largest ever 24-month frame contract to supply fibers for ultrafast lasers.

Teleconference
NKT will host a teleconference for investors and financial analysts at 10:00 CET today, and it 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