15.05.2018 07:32:18
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NKT A/S Q1 2018: Increased revenue and earnings
15 May 2018
Company Announcement No. 5
NKT A/S Q1 2018: Increased revenue and earnings
President & CEO Michael Hedegaard Lyng comments:
- It is satisfactory to report revenue and earnings growth for both NKT and NKT Photonics in Q1 2018. In the cables business, organic growth was realised in all three business lines. In terms of earnings, the recently established business line Service & Accessories demonstrated its potential, whereas Application’s profitability was negatively impacted by colder than normal weather. In our Solutions business, we currently have a lower high-voltage order backlog, and while no material tenders were won or lost during the quarter, we are still confident that the long-term market potential is attractive. In NKT Photonics, our revenue growth was driven by all business segments.
Q1 2018 financial highlights
EURm | NKT | NKT Photonics |
Revenue | 254.5* | 12.4 |
Organic growth | 7% | 18% |
Operational EBITDA | 20.4 | -1.5 |
Operational EBITDA margin | 8.0%* | neg. |
* Std. metal prices
2018 financial outlook unchanged
The financial outlook for 2018 for NKT and NKT Photonics is unchanged from Company Announcement No. 1 of 27 February 2018.
For NKT, revenue (std. metal prices) is expected to be approx. EUR 1.0-1.1bn and the operational EBITDA is expected to be approx. EUR 90-110m.
For NKT Photonics, revenue is expected to be approx. EUR 65-70m and the EBITDA is expected to be approx. EUR 10m.
NKT: Increase in revenue and operational EBITDA. No material high-voltage order awards, nor were any tenders lost
The operational EBITDA in Q1 2018 increased to EUR 20.4m from EUR 17.8m in Q1 2017. From Q1 2018, NKT has introduced a new segment reporting structure comprising three business lines: Solutions, Applications and Service & Accessories. The financial performance in Solutions was satisfactory, and strong performance was reported in the Service & Accessories business, demonstrating its earnings potential. The profitability was not satisfactory in Applications with sales in Scandinavia negatively impacted by colder than normal weather and an increase in costs to support initiatives to improve the operating platform.
NKT was not awarded material high-voltage orders in Q1 2018, nor were any tenders lost. The interconnector market remained impacted by project postponements and timing uncertainty, while the long-term market potential remains attractive. Driven by the current lower high-voltage order backlog, and to further accelerate acquisition synergies and the journey towards excellence, NKT has initiated a process to reduce its cost base by adjusting the organization in the coming months. NKT will still prioritize to make the necessary investments to further drive excellence.
NKT Photonics: Organic growth of 18% and increased order intake
In Q1 2018, NKT Photonics increased revenue by EUR 4.9m to EUR 12.4m compared to Q1 2017, which equalled organic growth of 18% with all business segments contributing. The EBITDA amounted to EUR -1.5m, an improvement of EUR 0.6m on Q1 2017. NKT Photonics continued to invest in realising the growth potential in the market.
Business conditions in the photonics markets remain positive and developed favourably in Q1 2018. NKT Photonics performed well under these market conditions, and the order intake improved by 45% compared to the same period in 2017.
Teleconference
NKT A/S hosts a teleconference for investors and financial analysts at 10:00 am CET today, and it can be accessed at investors.nkt.com. The presentation for the call will be available shortly after this release. To attend, please dial in from:
Denmark: +45 3515 8121
UK: +44 330 336 9411
US: +1 323 794 2551
Contacts
Investor Relations: Michael Nass Nielsen, Head of Investor Relations, tel: +45 2494 1654
Media Relations: Helle Gudiksen, Head of Group Communications, tel: +45 2349 9098
Attachment
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