Nkt A/s · OMXCOP:NKT
Nkt A/s — Investor Day (September 2015)
26 slides from Nkt A/s's investor day presentation, Sep 23, 2015
Slide 1: NKT Capital Markets Day 2015
NKT I Capital Markets Day 2015 23 September 2015 I 18
Slide 2: Introduction
NKT I Capital Markets Day 2015 23 September 2015 I 19 Introduction Michael Hedegaard Lyng President & Chief Executive Officer Oliver Schlodder Executive Vice President Strategy & Specialties
Slide 3: NKT Cables Group Management team
NKT I Capital Markets Day 2015 23 September 2015 I 20 NKT Cables Group Management team Michael Hedegaard Lyng Roland Andersen Detlev Waimann Lika Thiesen Oliver Schlodder President & CEO EVP & CFO EVP EVP EVP High voltage & Projects Human Resources Strategy & Specialties Joined NKT Holding 2
Slide 4: Transformation started in 2013, EXCELLENCE 2020 covers next two phases
NKT I Capital Markets Day 2015 23 September 2015 I 21 Transformation started in 2013, EXCELLENCE 2020 covers next two phases 2016/17+ 2015/16+ III 2014/15+ II I 'Get fit' 'Be excellent' 'Accelerate growth' Main focus: Main focus: Main focus: Cost (DRIVE) Profitability Targeted growth EXCELLENCE 2020
Slide 5: DRIVE has outperformed original expectations
NKT I Capital Markets Day 2015 23 September 2015 I 22 DRIVE has outperformed original expectations DRIVE impact, marginal run-rate effect DKKm ~50 ~450 ~150 • DRIVE has already shown strong impact, full effect of DKK 450m expected from 2017 250 250 • DRIVE reporting to be replaced after Q4 2015 • DR
Slide 6: Financial performance is significantly improved
NKT I Capital Markets Day 2015 23 September 2015 I 23 Financial performance is significantly improved NKT Cables revenue and operational EBITDA margin, std. metal prices DKKm 7,500 14% +5% 6,017 6,055 12% 5,635 5,421 ~9.0% 10% 5,000 8.0% 8% 5.3% 5.6% 6% 2,500 3.2% 4% 2% 0% 0 2011 2012 2013 2014 2015
Slide 7: Strong progress achieved despite negative market development
NKT I Capital Markets Day 2015 23 September 2015 I 24 Strong progress achieved despite negative market development European power cable demand, annual growth In %, based on gross cable weight1 CAGR 2.6% -1.7% 0.5% -0.4% -5.0% 2012 2013 2014 2015 estimate Source: Integer's Global Wire Data - Energy C
Slide 8: Today, NKT Cables is among global top in power cables
NKT I Capital Markets Day 2015 23 September 2015 I 25 Today, NKT Cables is among global top 20 in power cables Total cable revenues 2014, market prices DKKbn 54.2 44.5 33.6 33.5 25.3 23.2 21.3 16.3 14.6 11.9 11.6 10.1 9.8 9.6 9.3 9.0 8.5 7.8 7.7 7.5 7.4 6.8 6.6 6.6 6.5 6.5 6.2 5.6 5.5 5.5 Jiangsu Sh
Slide 9: Solid portfolio with strong market positions
NKT I Capital Markets Day 2015 23 September 2015 I 26 Solid portfolio with strong market positions High voltage onshore ~13% of revenue Offshore ~18% of revenue High-quality supplier with unique Acknowledged premium player products and production capabilities in offshore wind market Railway ~6% of r
Slide 10: Many strengths to build on, but also areas to be developed further
NKT I Capital Markets Day 2015 23 September 2015 I 27 Many strengths to build on, but also areas to be developed further Strengths Development areas • Strong brand and reputation for quality • Still, improvement potential in operational performance • Stronghold businesses in Building wire, Low volta
Slide 11: Yet, we face a number of challenges in the industry
NKT I Capital Markets Day 2015 23 September 2015 I 28 Yet, we face a number of challenges in the industry Slow growth in traditional core business Decreasing potential to differentiate Harsh outlook for utilities EXCELLENCE 2020 addresses main industry New material technologies trends to overcome ch
Slide 12: Comprehensive four-month strategy process
NKT I Capital Markets Day 2015 23 September 2015 I 29 Comprehensive four-month strategy process Ambition Fundamentals Fact pack Strategic options Mid March Portfolio roles Adjacency scan Strategic initiatives Financials Strategy challenge Risk assessment SWOT Strategy 2020 August
Slide 13: New strategy
NKT I Capital Markets Day 2015 23 September 2015 I 30 New strategy
Slide 14: EXCELLENCE 2020 strategy has a strong foundation
NKT I Capital Markets Day 2015 23 September 2015 I 31 EXCELLENCE 2020 strategy has a strong foundation NKT Cables Power House Vision • Where we want to go as a company • What we will focus on in each business segment Segment Initiatives • The cross-organisational battles we must win Group Must-Win B
Slide 15: Our vision
NKT I Capital Markets Day 2015 23 September 2015 I 32 Our vision “By driving “excellence” we will be the best power cable company by 2020 in the eyes of our customers and our people”
Slide 16: This is how we measure EXCELLENCE 2020
NKT I Capital Markets Day 2015 23 September 2015 I 33 This is how we measure EXCELLENCE 2020 Be the best… in the eyes of our customers …and our people RoCE Customers' Trust index >15% preferred >80% choice
Slide 17: Four group-wide must-win battles
NKT I Capital Markets Day 2015 23 September 2015 I 34 Four group-wide must-win battles • Safe workplace and environment Safety, People & • Lean and agile organisation Organization • Excellent leadership skills Operational & • Lean operations, admin and support functions Commercial Excellence • Best-
Slide 18: Clear strategic initiatives for each segment
NKT I Capital Markets Day 2015 23 September 2015 I 35 Clear strategic initiatives for each segment Develop and grow Focus on profitability Turnaround Attractive markets with growth potential: Fragmented commodity markets under price Markets we believe in, but with a need to • Focus on innovation and
Slide 19: Achieving Operational and Commercial Excellence are key for success
NKT I Capital Markets Day 2015 23 September 2015 I 36 Achieving Operational and Commercial Excellence are key for success Operational Excellence Commercial Excellence • Further improvement of manufacturing efficiency, • Increase sales force effectiveness, hereunder hereunder capacity, scrap rate, FT
Slide 20: Offshore: Attractive market outlook to support strong NKT Cables position
NKT I Capital Markets Day 2015 23 September 2015 I 37 Offshore Attractive market outlook to support strong NKT Cables position European offshore market outlook NKT Cables well-positioned for growth European High voltage AC market, cable demand core km • NKT Cables well-positioned with a market share
Slide 21: High voltage onshore: Lower end of market under pressure, but attractive opportunities above 220kV
NKT I Capital Markets Day 2015 23 September 2015 I 38 High voltage onshore Lower end of market under pressure, but attractive opportunities above 220kV HV Supply, below 220kV HV Projects, above 220kV • Low/medium degree of consolidation • High barriers of entry • Increasingly commoditised and price-
Slide 22: Medium voltage: Commoditisation and overcapacity increase focus on cost and efficiency
NKT I Capital Markets Day 2015 23 September 2015 I 39 Medium voltage Commoditisation and overcapacity increase focus on cost and efficiency Limited market growth within Europe... ...in highly fragmented markets NKT Cables to focus on profitability MV demand North and Central Europe Market shares in
Slide 23: EXCELLENCE 2020 will drive RoCE >15%
NKT I Capital Markets Day 2015 23 September 2015 I 40 EXCELLENCE 2020 will drive RoCE >15% Building blocks of RoCE improvement RoCE, % ~10% ~6% >15% RoCE >15% will bring ~4% NKT Cables on par with top ~7% industry performers RoCE estimate Group Must-Win Battles Segment Initiatives RoCE after (FY2015
Slide 24: Key messages
NKT I Capital Markets Day 2015 23 September 2015 I 41 Key messages EXCELLENCE 2020 defines journey to reach >15% RoCE target • Transformation off to a good start with success of DRIVE • EXCELLENCE 2020 defines the roadmap for the next phases of the transformation • Strong market position in several
Slide 25: Our purpose
NKT I Capital Markets Day 2015 23 September 2015 I 42 Our purpose “Our passion brings power to life”
Slide 26: Questions & answers
NKT I Capital Markets Day 2015 23 September 2015 I 43 Questions & answers