NKT A/S Q2 2024 Interim Report: 29% organic growth and record quarterly EBITDA | 16.08.24

Company announcement

August 16, 2024
Announcement No. 28

NKT A/S Q2 2024 Interim Report: 29% organic growth and record quarterly EBITDA

NKT CEO Claes Westerlind says:

– In Q2 2024, we continued to execute on our high-voltage order book and continued investments across all business lines, while delivering continued double-digit revenue and EBITDA growth. Furthermore, we made strong strategic progress by successfully divesting NKT Photonics and completing the acquisition of Portuguese cable manufacturer SolidAl. NKT’s position as a pure-play cable manufacturer has been strengthened by this acquisition and we remain well positioned to benefit from robust demand in our electricity transmission and distribution businesses.

Financial highlights

* Standard metal prices

Financial outlook for 2024
The financial outlook has been updated in Company Information Note No. 20 dated July 11, 2024.

Revenue (in standard metal prices) is expected to be approximately EUR 2.33-2.43 billion (previously EUR 2.21-2.36 billion) and operating EBITDA is expected to be approximately EUR 310-345 million (previously EUR 285-335 million).

The financial outlook is based on several assumptions, including:

• Satisfactory implementation and development of high-voltage investments and projects without major disruptions
• Stable market conditions in applications
• Sufficient offshore energy cable repair work
• Stable development of the world economy
• Stable supply chain with limited disruptions and access to necessary labor, materials and services
• Stable development in foreign currency and metal prices

Revenue growth across all industries and record quarterly operational EBITDA
In Q2 2024, NKT’s revenue (in standard metal prices) increased by EUR 137 million compared to Q2 2023, representing 29% organic growth. Previous investments in capacity and capabilities within Solutions and satisfactory execution drove the majority of the growth. Applications and Service & Accessories also contributed to higher revenue compared to Q2 2023.

Driven by strong revenue growth, Operating EBITDA increased to EUR 86 million in Q2 2024, up from EUR 28 million compared to Q2 2024. The higher profit level came mainly from Solutions, as well as a record high quarterly contribution from Applications. This was partly offset by a slight decline in Service and Accessories, as well as a higher cost base as NKT continued to expand across its business lines.

At the end of Q2 2024, the high-voltage order backlog amounted to EUR 11.3 billion (EUR 9.9 billion in standard metal prices). During the quarter, NKT supplemented its high-voltage order backlog with a number of relatively smaller orders, including variation orders on existing projects.

Free cash flow amounted to EUR 398 million in Q2 2024, driven by a higher quarterly profit contribution and a favorable working capital development in Solutions. Excluding acquisitions and divestments, free cash flow increased to EUR 542 million in Q2 2024.

In May 2024, NKT successfully completed the sale of NKT Photonics to Hamamatsu Photonics KK. The final enterprise value was EUR 254 million. With this, NKT took the final step in its development into a company focused on electrical cable solutions.

In June 2024, NKT acquired Portuguese power cable manufacturer SolidAl for an ultimate enterprise value of EUR 192 million. The acquisition immediately enhances NKT’s ability to serve electricity transmission and distribution companies with end-to-end network solutions; while also providing an attractive platform for future growth.

Progress on NKT’s approximately EUR 1 billion investment programme in Karlskrona continued in the second quarter of 2024. Foundation work progressed according to plan, allowing the successful start of tower construction at the end of July 2024. Execution of the investment programme remains the highest priority, including managing risks and opportunities that have and will continue to arise.

Teleconference
NKT A/S will host a conference call for investors and financial analysts at 10:00 CEST on August 16, 2024. The presentation used during the call will be available prior to the start of the conference call. To participate, please register and go to investors.nkt.com

Contacts

Investors
Jacob Johansen, Head of Investor Relations
+45 2169 3591 / [email protected]

Press
Louise W. Naldal, Head of Group Communications
+45 2982 0022 / [email protected]

• NKT_Q224_Final
• Application_Letter_Q2_2024_UK_final