Nkt A/s · OMXCOP:NKT
Nkt A/s — FY2013 Earnings Presentation
41 slides from Nkt A/s's earnings presentation, Feb 28, 2014
Slide 1: NKT Annual Report 2013
NKT I IR presentation I Annual Report 2013 28 February 2014 I 1 NKT Annual Report 2013 Webcast, 28 February 2014 at 9:00 am CET
Slide 2: Forward looking statements
NKT I IR presentation I Annual Report 2013 28 February 2014 I 2 Forward looking statements This presentation and related comments contain forward-looking statements. Such statements are subject to many uncertainties and risks, as various factors of which several are beyond NKT Group’s control, may c
Slide 3: Introducing today's participants
NKT I IR presentation I Annual Report 2013 28 February 2014 I 3 Introducing today’s participants NKT Holding Nilfisk-Advance NKT Cables Photonics Group Michael Hedegaard Lyng Jonas Persson Marc van’t Noordende Søren Isaksen Group Executive President & CEO President & CEO Chairman Director & CFO
Slide 4: Agenda
NKT I IR presentation I Annual Report 2013 28 February 2014 I 4 Agenda Highlights 2013 Group financials Q4 and FY2013 Business areas Nilfisk-Advance NKT Cables Photonics Group Expectations 2014 Questions & Answers
Slide 5: Highlights
NKT I IR presentation I Annual Report 2013 28 February 2014 I 5 Highlights Strong Q4 secured full year results to fulfil expectations • FY 2013 revenue of 15.809 mDKK (4% organic growth) and operational EBITDA of 1.085 mDKK , 8,4% (Std. metal prices) • Strong cash flow from operating activities in Q
Slide 6: Agenda
NKT I IR presentation I Annual Report 2013 28 February 2014 I 6 Agenda Highlights 2013 Group financials Q4 and FY2013 Business areas Nilfisk-Advance NKT Cables Photonics Group Expectations 2014 Questions & Answers
Slide 7: Group financials Q4 and 2013
NKT I IR presentation I Annual Report 2013 28 February 2014 I 7 Group financials Q4 and 2013 Q4 Revenue 4.186 mDKK (Q4 2012: 4.002 mDKK) Q4 Profit after tax amounts to 99 mDKK (Q4 2012: 93 mDKK) FY2013 Revenue 15.809 mDKK (FY2012: 15.253 mDKK) Organic growth 3% in Q4 2013 and 4% FY2013 FY2013 Profit
Slide 8: Expectations for 2013 fulfilled
NKT I IR presentation I Annual Report 2013 28 February 2014 I 8 Expectations for 2013 fulfilled Original expectations Updated Realised mDKK 2013 Q3 2013 2013 Revenue, std. metal prices ~12.148 12.843 Organic growth 0% 2-4% 4% Operational EBITDA ~1.039 1.085 Cash flow from investments (excl. acquisit
Slide 9: Q4 continued the positive trend in earnings
NKT I IR presentation I Annual Report 2013 28 February 2014 I 9 Q4 continued the positive trend in earnings although small decline on marginal level Operational EBITDA, LTM mDKK Q4 Operational EBITDA of • Negative organic 1.200 10% 332 mDKK, increased LTM growth of 2% for 2012 to 1.085 mDKK • EBITDA
Slide 10: Changes Q4 2013 vs. Q4 2012
NKT I IR presentation I Annual Report 2013 28 February 2014 I 10 Changes Q4 2013 vs. Q4 2012 mDKK Q4 2013 Q4 2012 Change 01 mDKK Revenue increased by 184 Revenue 4.186 4.002 184 *01 Metal prices -75 Revenue, std. metal prices 3.438 3.227 211 FX changes -91 Acquisitions 262 Operational EBITDA 332 320
Slide 11: Changes FY2013 vs. FY2012
NKT I IR presentation I Annual Report 2013 28 February 2014 I 11 Changes FY2013 vs. FY2012 mDKK FY2013 FY2012 Change 01 mDKK Revenue increased by 556 Revenue 15.809 15.253 556 *01 Metal prices -236 Revenue, std. metal prices 12.843 12.148 695 FX changes -218 Acquisitions 567 Operational EBITDA 1.085
Slide 12: Working capital in slight rebound vs. last year low
NKT I IR presentation I Annual Report 2013 28 February 2014 I 12 Working capital in slight rebound vs. last year low Working capital (in % of revenue) Q3 2013 Q4 2013 WC increased to 20,2% 24,0% 19,8% 20,2% vs. 19,8% end Q4 2012 (LTM) 3.272 mDKK 2.812 mDKK 23,0% NKT Cables increased to 22,0% 20,7% v
Slide 13: Working capital change tied to project work in NKT Cables
NKT I IR presentation I Annual Report 2013 28 February 2014 I 13 Working capital change tied to project work in NKT Cables - and conceals general improvements Working capital by business area (mDKK) mDKK Nilfisk-Advance 3.500 working capital slightly up with increase in revenue 3.000 399 4 126 NKT C
Slide 14: Capex continues to decrease towards maintenance levels
NKT I IR presentation I Annual Report 2013 28 February 2014 I 14 Capex continues to decrease towards maintenance levels Investments in Property, Plant & Equipment (gross, LTM) mDKK Investments, PPE 2013 of 279mDKK (2012: 366) 1.000 10% 6% 900 Investments 1,6% 9% 800 of revenue, LTM 8% 700 7% 32% 62%
Slide 15: Cash conversion rate adversely impacted by working capital change
NKT I IR presentation I Annual Report 2013 28 February 2014 I 15 Cash conversion rate adversely impacted by working capital change Cash conversion, LTM mDKK Q4 2012 Q4 2013 1.500 108% 50% 200% As of December 2013 cash conversion rate was 50%, LTM (Q3 2013: 77%) 150% 1.000 100% 500 50% 0 0% -50% -500
Slide 16: Strong Q4 cash flow from decreasing working capital
NKT I IR presentation I Annual Report 2013 28 February 2014 I 16 Strong Q4 cash flow from decreasing working capital mDKK Q4 2013 Q4 2012 FY2013 FY2012 Earnings, EBITDA 366 313 1.103 1.009 Q4 saw decrease in Interest, net -36 -41 -160 -196 working capital of 468 Change in working capital 468 722 -22
Slide 17: Leverage ratio significantly below threshold
NKT I IR presentation I Annual Report 2013 28 February 2014 I 17 Leverage ratio significantly below threshold Net interest bearing debt (x Oper. EBITDA) Q3 2013 Q4 2013 mDKK NIDB of 2.111 mDKK (1,9x 5.000 4.500 2,6x 1,9x 6,0x Operational EBITDA) vs. 1.909 mDKK (1,8x Operational EBITDA) 2.753 mDKK 2.
Slide 18: Long term funding in place with recent refinancing
NKT I IR presentation I Annual Report 2013 28 February 2014 I 18 Long term funding in place with recent refinancing bnDKK 31.12.13 30.09.13 31.12.12 Refinancing of bank facilities going into 2014 provide a substantial financial flexibility Committed (>3 years) 1,9 0,4 3,6 Committed (1-3 years) 3,8 3
Slide 19: Agenda
NKT I IR presentation I Annual Report 2013 28 February 2014 I 19 Agenda Highlights 2013 Group financials Q4 and FY2013 Business areas Nilfisk-Advance NKT Cables Photonics Group Expectations 2014 Questions & Answers
Slide 20: Nilfisk-Advance
NKT I IR presentation I Annual Report 2013 28 February 2014 I 20 Nilfisk-Advance ‘We enable sustainable cleaning worldwide to improve quality of life’
Slide 21: Jonas Persson, New CEO of Nilfisk-Advance
NKT I IR presentation I Annual Report 2013 28 February 2014 I 21 Jonas Persson, New CEO of Nilfisk-Advance First impression on Nilfisk-Advance Jonas Persson (1969) President & CEO • Nilfisk-Advance is a well run company with many competent people • Internal processes are good • Nilfisk-Advance has a
Slide 22: Nilfisk-Advance overview
NKT I IR presentation I Annual Report 2013 28 February 2014 I 22 Nilfisk–Advance overview Sales entities Manufacturing companies 5% 11% 11% 9% 19% 64% 43% 57% 25% 32% 24% Sales by products Sales by geography Sales by customers Floor care EMEA Commercial market Vacuum cleaners Americas Industrial mar
Slide 23: Growth higher than expected and earnings stable
NKT I IR presentation I Annual Report 2013 28 February 2014 I 23 Growth higher than expected and earnings stable Nilfisk-Advance - Operational EBITDA, LTM Higher than expected organic 11,9% 250 14% growth of 3% in 2013 (Q4: 1%) 11,9% 11,9% 11,7% 10,5% 11,7% 11,8% 11,6% 11,0% 10,6% • EMEA 5% (Q4: 5%)
Slide 24: Limited growth in Q4, but strong EBITDA margin
NKT I IR presentation I Annual Report 2013 28 February 2014 I 24 Limited growth in Q4, but strong EBITDA margin Financial Highlights Q4 FY mDKK 2013 2012 2013 2012 • EMEA: Strong growth. Double digit growth in Turkey and Russia Revenue 1.609 1.645 6.561 6.491 (Sochi Olympics contributing) - Org. gro
Slide 25: Reduced overhead costs compensate lower gross profit
NKT I IR presentation I Annual Report 2013 28 February 2014 I 25 Reduced overhead costs compensate lower gross profit Gross margin and Overhead costs, LTM (%) Gross margin decline from changed product mix towards higher share of DIY 45% sales 43% 41% Overhead costs improved 39% by continuous 37% imp
Slide 26: NKT Cables
NKT I IR presentation I Annual Report 2013 28 February 2014 I 26 NKT Cables ‘NKT Cables is creating value for its customers by providing solutions with cables’
Slide 27: NKT Cables overview
NKT I IR presentation I Annual Report 2013 28 February 2014 I 27 NKT Cables overview Sales entities Manufacturing companies and Sales companies 15% 7% 28% 28% 33% 28% 43% 16% 21% 57% 24% Sales by Business Unit Sales by geography Sales by fields of application BU Projects Denmark Utilities BU Product
Slide 28: Q4 provided growth and earnings improvement but still not satisfactory
NKT I IR presentation I Annual Report 2013 28 February 2014 I 28 Q4 provided growth and earnings improvement but still not at satisfactory levels NKT Cables - Operational EBITDA, LTM 7,4% 160 14% Realised 4% organic growth in 140 2013 (Q4: 4%) 5,6% 12% 5,3% 5,5% Oper. EBITDA (mDKK) 120 4,8% 8,9% 10%
Slide 29: Satisfactory growth of 4% in Q4 and FY2013, DRIVE initiated
NKT I IR presentation I Annual Report 2013 28 February 2014 I 29 Satisfactory growth of 4% in Q4 and FY2013, DRIVE initiated Financial Highlights Q4 FY 2013 2012 2013 2012 • DRIVE 1st phase cost reduction initiated and in full Revenue 2.491 2.283 8.983 8.526 implementation Revenue, std. prices 1.744
Slide 30: Why has DRIVE been initiated now?
NKT I IR presentation I Annual Report 2013 28 February 2014 I 30 Why has DRIVE been initiated now? Power cable market continues to be under pressure • Longer-lasting and more severe downturn than originally expected • Many opportunities exist in BU Projects, but markets are still with low visibility
Slide 31: DRIVE to transform performance and value creation
NKT I IR presentation I Annual Report 2013 28 February 2014 I 31 DRIVE to transform performance and value creation - first phase focuses on reducing costs DRIVE - First phase 2016/17+ 2015/16 III 2014/15 II I ‘Get fit’ ‘Be excellent’ ‘Grow for value’ Reduce costs Improve sales and margins Introduce
Slide 32: Examples of DRIVE initiatives
NKT I IR presentation I Annual Report 2013 28 February 2014 I 32 More than 80 initiatives identified within 5 focus areas Manufacturing & External Spend Organisational Portfolio Working Capital supply chain • Enhanced Lean • Optimisation of bill • Increase • Closure of signal • Reduction of program;
Slide 33: DRIVE 1st phase cost improvement in 2014, full impact in 2016
NKT I IR presentation I Annual Report 2013 28 February 2014 I 33 DRIVE 1st phase with 100 mDKK cost improvement in 2014 - Full impact in 2016 of 300 mDKK Cost FTE reduction One-off costs Capex improvements 2014 impact ~100 mDKK ~200 FTE ~180 mDKK ~50 mDKK (Run rate: 180 mDKK) * Full impact 400-450 F
Slide 34: Photonics Group
NKT I IR presentation I Annual Report 2013 28 February 2014 I 34 Photonics Group ‘To lead the way in transforming the Photonics Industry’
Slide 35: Photonics Group overview
NKT I IR presentation I Annual Report 2013 28 February 2014 I 35 Photonics Group overview Sales by products 19% Imaging Sensing 44% Fiber Processing 37% HQ NKT Photonics HQ Lios Technology HQ Vytran All data based on FY 2013
Slide 36: Another quarter with satisfactory growth of 17%
NKT I IR presentation I Annual Report 2013 28 February 2014 I 36 Another quarter with satisfactory growth of 17% Photonics Group - Revenue, LTM 300 Q4 2013 realised 17% growth with all three areas contributing 250 positively 200 Imaging continues strong performance within both revenue 150 growth and
Slide 37: Photonics Group sees continued growth of 10-20%
NKT I IR presentation I Annual Report 2013 28 February 2014 I 37 Photonics Group sees continued growth of 10-20% primarily from Imaging and Sensing Financial Highlights Q4 FY • Imaging: Secured biggest contract ever in Photonics Group mDKK 2013 2012 2013 2012 Revenue 87 75 266 237 ‐ Breakthrough in
Slide 38: Agenda
NKT I IR presentation I Annual Report 2013 28 February 2014 I 38 Agenda Highlights Group financials Q4 and FY2013 Business areas Nilfisk-Advance NKT Cables Photonics Group Expectations 2014 Questions & Answers
Slide 39: Expectations 2014
NKT I IR presentation I Annual Report 2013 28 February 2014 I 39 Expectations 2014 Planning 2014 Assumptions NKT In 2014, NKT expects a consolidated - Organic growth 0 - 3% organic growth of around 0-3% - Operational EBITDA, % std. metal prices 9 – 9,5% Nilfisk-Advance Operational EBITDA margin in s
Slide 40: Questions & Answers
NKT I IR presentation I Annual Report 2013 28 February 2014 I 40 Agenda Highlights Group financials Q4 and FY2013 Business areas Nilfisk-Advance NKT Cables Photonics Group Expectations 2014 Questions & Answers
Slide 41: Financial calendar
NKT I IR presentation I Annual Report 2013 28 February 2014 I 41 Financial calendar 2014 25 March Annual General Meeting 14 May Interim Report Q1 20 August Interim Report Q2 13 November Interim Report Q3 2015 27 February Annual Report 2014