NKT Holding A/S
24 August 2010
Announcement No. 18
Interim Report 2nd Quarter 2010
With Group revenue of 3,635 mDKK for 2nd quarter, corresponding to organic
growth of 5%, the positive trend from 1st quarter 2010 continued. Positively
influenced by Nilfisk-Advance, operational EBITDA for 1st half was 517 mDKK,
while developments at NKT Cables' new factory in Cologne not yet has led to a
satisfactory productivity
Summary
NKT experienced overall a satisfactory 2nd quarter, maintaining the organic
growth of 5% realized in the 1st quarter, and organic growth for 1st half 2010
was also 5%. The performance of Nilfisk-Advance was particularly noteworthy,
with 10% organic growth, while NKT Cables did not effect the expected high
voltage production in Cologne and therefore did not achieve satisfactory growth
and earnings.
Operational EBITDA decreased in 2nd quarter 2010 by 12 mDKK compared with 2nd
quarter 2009 and amounted to 517 mDKK for 1st half 2010, an increase of 76 mDKK
(1st half 2009: 441 mDKK). On a rolling 12-month basis (LTM), operational
EBITDA was 1,011 mDKK at 30 June 2010 (31 March 2010: 1,023 mDKK),
corresponding to an EBITDA margin of 9.8% (31 March 2010: 10.1%).
Expectations relating to Group revenue and operational EBITDA remain in line
with the initial announcements and comprise organic growth of approx. 6-10% and
operational EBITDA of approx. 1 bnDKK, respectively. The assumptions are based
on the expectation of a stronger result for Nilfisk-Advance than initially
anticipated, balanced however by a poorer than expected result for NKT Cables.
As expected, working capital increased in the 2nd quarter and at 30 June 2010
amounted to 2,812 mDKK or 17.4% LTM (31 March 2010: 16.6%).
NKT Cables realized an increase in organic growth of 1% in 2nd quarter 2010
compared with 2nd quarter 2009 (1st half 2010: 2%). The high voltage/submarine
cable segment and the medium voltage segment grew by 16% and 14% respectively,
while negative growth of 1% was realized for the low voltage segment.
Developments for other segments were as expected. The quarter was influenced by
unsatisfactory productivity development in Cologne which impact negatively on
both growth and earnings for the period. EBITDA margin (LTM) was 7.4%,
corresponding to quarterly earnings of 81 mDKK (1st half 2010: 141 mDKK).
Nilfisk-Advance realized organic growth of 10% in 2nd quarter 2010 compared
with 2nd quarter 2009 (1st half 2010: 8%). This positive development was
distributed by region: EMEA 11%, Americas 10% and Asia/Pacific 9%. At the same
time the gross profit margin increased to 43%, which together with continued
tight cost control led to an increase in EBITDA margin (LTM) of 11%, a rise of
0.8%-points. This corresponds to operational EBITDA for the quarter of 191 mDKK
(1st half 2010: 363 mDKK).
NKT Flexibles and Photonics Group both lived up to expectations in the 2nd
quarter with an EBITDA margin of 16% (1st half 2010: 17%) for NKT Flexibles,
and an improvement in EBITDA of 7 mDKK to -5 mDKK (1st half 2010: -11 mDKK) for
Photonics Group.
