Nkt A/s · OMXCOP:NKT

Nkt A/s — Non-Deal Roadshow (April 2016)

54 slides from Nkt A/s's roadshow presentation, April 2016

  1. Slide 1: Paris Roadshow - Danske Bank

    NKT I Paris Roadshow - Danske Bank April 2016 I 1 6 Paris Roadshow - Danske Bank April 2016

  2. Slide 2: Forward looking statements

    NKT I Paris Roadshow - Danske Bank April 2016 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 cause that t

  3. Slide 3: Agenda

    NKT I Paris Roadshow - Danske Bank April 2016 I 3 Agenda Introduction to NKT Highlights 2015 Business units • Nilfisk • NKT Cables • Photonics Group Outlook 2016 Questions & Answers

  4. Slide 4: Industrial conglomerate with global presence...

    NKT I Paris Roadshow - Danske Bank April 2016 I 4 Industrial conglomerate with global presence... NKT Holding A/S Business area Key Products Geographic coverage Revenue Employees • Low & medium voltage cables North, Central and • High voltage cables EUR 1,212m NKT Cables • Submarine cables Eastern E

  5. Slide 5: ... and a strong European position

    NKT I Paris Roadshow - Danske Bank April 2016 I 5 ... and a strong European position Sales and manufacturing facilities Nilfisk NKT Cables NKT Photonics 2% 10% 13% EUR EUR 44% 2,224m 54% 2,224m 77% Sales by business unit Sales by geography Nilfisk EMEA NKT Cables Americas NKT Photonics APAC FY 2015

  6. Slide 6: Unique governance model with hands-on involvement by the Board of Directors

    NKT I Paris Roadshow - Danske Bank April 2016 I 6 Unique governance model with hands-on involvement by the Board of Directors ​NKT Holding Board committees NKT Holding Board of Directors Photonics Nilfisk NKT Cables Audit Remuneration Nomination Group Committee Committee Committee Committee Committe

  7. Slide 7: Clear strategic themes defined for each business unit

    NKT I Paris Roadshow - Danske Bank April 2016 I 7 Clear strategic themes defined for each business unit ​ Strategic themes ​ROCE 2013-15 ​Long-term target 17.5 17.6 12.9 • Front-end investments • Commercial Excellence 18-19%* 2013 2014 2015 • Consolidation through M&A 8.2 • Focus on profitable marke

  8. Slide 8: Agenda

    NKT I Paris Roadshow - Danske Bank April 2016 I 8 Agenda Introduction to NKT Highlights 2015 Business units • Nilfisk • NKT Cables • Photonics Group Outlook 2016 Questions & Answers

  9. Slide 9: Highlights 2015

    NKT I Paris Roadshow - Danske Bank April 2016 I 9 Highlights 2015 ​Performance in line with expectations • Organic growth as expected (3%) • RoCE improved by 0.7% (to 10.1%) • Proposed dividend per share of DKK 4 • Operational EBITDA margin in line with • NIBD decreased securing strong financial • I

  10. Slide 10: 2015 financial performance in line with expectations

    NKT I Paris Roadshow - Danske Bank April 2016 I 10 2015 financial performance in line with expectations 2015 Original Update Q2 Update Q3 Realised NKT - Organic growth Up to 3% ~3% ~3% 3%  Increase of ~1.0%-point Increase of ~0.5%-point 9.2% 9.4% - Operational EBITDA, %* (from 9.6%) (from 9.6%) EUR

  11. Slide 11: Financial highlights

    NKT I Paris Roadshow - Danske Bank April 2016 I 11 Financial highlights Q4 Revenue EUR 541.1m (Q4 2014: EUR 540.3m) Impairment APAC EUR 48.6m incl. tax and divestment of Fiber Processing EUR 2.6m, adjusted in operational EBIT 2015 Revenue EUR 2,223.6m (2014: EUR 2,129.4m) Profit after tax EUR 1.2m (

  12. Slide 12: Operational EBITDA increased by 3% to EUR 175m

    NKT I Paris Roadshow - Danske Bank April 2016 I 12 Operational EBITDA increased by 3% to EUR 175m ​Operational EBITDA, LTM EURm 9.4% 200 12% 9.6% 180 Strong upward trend across 8.4% 8.6% 160 10% 2012-2015 140 120 Oper. EBITDA increase in 100 8% 2014-15 driven mainly by NKT 80 Cables 60 6% 40 Peak in

  13. Slide 13: Changes 2015 vs. 2014

    NKT I Paris Roadshow - Danske Bank April 2016 I 13 Changes 2015 vs. 2014 EURm 2015 2014 Change 01 EURm Revenue increased by 94.2 Revenue 2,223.6 2,129.4 94.2 *01 Metal prices -5.8 Revenue, std. metal prices 1,869.2 1,769.2 100.0 FX changes 54.3 Acquisitions 4.6 3% organic growth 41.1 Operational EBI

  14. Slide 14: Strong free cash flow driven by working capital change

    NKT I Paris Roadshow - Danske Bank April 2016 I 14 Strong free cash flow driven by working capital change EURm Q4 2015 Q4 2014 FY 2015 FY 2014 Earnings, EBITDA 32.5 42.6 152.0 142.6 Financial items, net -2.0 -3.1 -6.1 -13.1 Change in working capital 85.3 108.8 31.4 76.8 Other 3.6 5.5 -4.1 6.1 Cash f

  15. Slide 15: Working capital improvement continues and reaches new low level

    NKT I Paris Roadshow - Danske Bank April 2016 I 15 Working capital improvement continues and reaches new low level ​Working capital development % of revenue , LTM End-2014 End-2015 ​NKT Group working capital ratio 18.1% 15.9% improved to 15.9% (End-2014: 18.1%) EUR 300.6m EUR 269.2m ​NKT Cables work

  16. Slide 16: High historical Capex spending enabling low maintenance levels

    NKT I Paris Roadshow - Danske Bank April 2016 I 16 High historical Capex spending enabling low maintenance levels Investments in Property, Plant & Equipment (gross, LTM) Investments, PPE 2015 EUR 39.1m EURm (2014: EUR 32.7m) 160 10% 2% Investments 1.8% 9% 140 of revenue, LTM 56% 8% 120 7% 100 6% 42%

  17. Slide 17: Financial strength to fully support strategic agenda

    NKT I Paris Roadshow - Danske Bank April 2016 I 17 Financial strength to fully support strategic agenda ​Net interest-bearing debt EURm End-2014 End-2015 700 0.9x 0.5x 5.0x Financial strength to drive strategic agenda with cash resources of EUR 600 EUR 152.4m EUR 88.9m 604m 4.0x 500 3.0x 400 Capital

  18. Slide 18: Proposed distribution of EUR 87m to shareholders in 2016

    NKT I Paris Roadshow - Danske Bank April 2016 I 18 Proposed distribution of EUR 87m to shareholders in 2016 Distribution to shareholders EURm 87 Initiation of share buyback programme, EUR 74m 74 Proposed dividend of DKK 4 per share, EUR 13m, ~34% payout ratio 25 17 11 13 6 6 Dividend policy of 33% p

  19. Slide 19: Agenda

    NKT I Paris Roadshow - Danske Bank April 2016 I 19 Agenda Introduction to NKT Highlights 2015 Business units • Nilfisk • NKT Cables • Photonics Group Outlook 2016 Questions & Answers

  20. Slide 20: Nilfisk

    NKT I Paris Roadshow - Danske Bank April 2016 I 20 Nilfisk

  21. Slide 21: Nilfisk overview on geographies and segments

    NKT I Paris Roadshow - Danske Bank April 2016 I 21 Nilfisk overview on geographies and segments Sales entities Manufacturing companies 11% 10% EUR EUR 63% 972m 972m 26% 90% Sales by geography Sales by customers EMEA Professional Americas Consumer APAC FY 2015 data

  22. Slide 22: Floorcare and vacuums are strongholds in the industry's widest product range

    NKT I Paris Roadshow - Danske Bank April 2016 I 22 Floorcare and vacuums are strongholds in the industry's widest product range Floorcare incl. Outdoor Vacuum cleaners Pressure cleaners Other • Scrubbers and sweepers • Commercial • Professional • Service and maintenance • Outdoor • Industrial • Cons

  23. Slide 23: Asset-light production setup through assembly-only

    NKT I Paris Roadshow - Danske Bank April 2016 I 23 Asset-light production setup through assembly-only Hungary (2 sites) ~30% of global production US ~10% of global production China (2 sites) Mexico ~30% of global production ~10% of global production Italy (2 sites) ~10% of global production Note: Re

  24. Slide 24: Growth targets defined as 2-3% above GDP growth

    NKT I Paris Roadshow - Danske Bank April 2016 I 24 Growth targets defined as 2-3% above GDP growth Nilfisk, Historical annual growth Nilfisk, Expected annual growth Growth 2007-2014, %, Growth target 2015-2018, % 2-3% 6-8% • Nilfisk's annual total growth has historically been 2-3% around 3% 1.9% 3.3

  25. Slide 25: Accelerate strategy rolled out in 2015

    NKT I Paris Roadshow - Danske Bank April 2016 I 25 Accelerate strategy rolled out in 2015 Grow • Five acquisitions improving high-end position market share • Viper introduced 200 new dealers globally to grow mid-market Strengthen • Commercial Excellence launched in 10 countries (60% of revenue) fron

  26. Slide 26: Nilfisk realised flat organic growth for 2015

    NKT I Paris Roadshow - Danske Bank April 2016 I 26 Nilfisk realised flat organic growth for 2015 Positive growth in EMEA offset by APAC Organic growth 2012 2013 2014 2015* - Quarterly (Y/Y) 4% 1% -4% 1% 1% 4% 7% 1% 9% 4% 0% 9% 0% 0% 4% -2% - Annually 0% 3% 6% 0% Americas* EMEA APAC Q4 2015 -2% Q4 20

  27. Slide 27: Operational EBITDA margin diluted by delayed impact from sales investments

    NKT I Paris Roadshow - Danske Bank April 2016 I 27 Operational EBITDA margin diluted by delayed impact from sales investments Operational EBITDA EURm 120 14% 115 ​Oper. EBITDA margin, LTM, 11.7% 11.9% 13% reduced to 10.1% due to 11.9% 110 • Lower organic growth than 12% expected 10.1% 105 100 11% •

  28. Slide 28: Product mix and inflation on sourcing and salary decreased gross margin

    NKT I Paris Roadshow - Danske Bank April 2016 I 28 Product mix and inflation on sourcing and salary decreased gross margin ​Gross margin development ​2015 main effects Gross margin, LTM, % • Price increases 41.1 • Procurement initiatives 40.9 • Product mix 40.4 • Sourcing and salary inflation driven

  29. Slide 29: Distribution cost ratio temporarily increased due to delivery issues

    NKT I Paris Roadshow - Danske Bank April 2016 I 29 Distribution cost ratio temporarily increased due to delivery issues ​Overhead cost ratio development* Index = 100 114 110 Distribution cost ratio Selling cost ratio 105 Distribution cost increased in 2015 due to delivery issues 101 100 Total overhe

  30. Slide 30: 2016 Management agenda

    NKT I Paris Roadshow - Danske Bank April 2016 I 30 2016 Management agenda ACCELERATE PRIORITY ACTIONS • Strengthen high-end position and grow mid-market share Grow market share • Drive consolidation proactively • Finalise ComEx roll-out and leverage increased sales force RESTORE GROWTH Strengthen fr

  31. Slide 31: Accelerate strategy launched in 2015 and execution to continue in 2016

    NKT I Paris Roadshow - Danske Bank April 2016 I 31 Accelerate strategy launched in 2015 and execution to continue in 2016 ​Financials Highlights and summary Q4 FY EURm 2015 2014 2015 2014 • Accelerate - growth strategy launched in Q1 Revenue 246.8 238.5 971.5 917.6 • Nilfisk - new company name and b

  32. Slide 32: NKT Cables

    NKT I Paris Roadshow - Danske Bank April 2016 I 32 NKT Cables

  33. Slide 33: NKT Cables overview on divisions and geographies

    NKT I Paris Roadshow - Danske Bank April 2016 I 33 NKT Cables overview on divisions and geographies Sales entities Manufacturing companies and sales companies 8% 23% 19% 27% EUR EUR 1,212m 1,212m 23% 27% 65% 8% Sales by Business segment Sales by geography Projects Nordic Products Germany APAC APAC E

  34. Slide 34: Transformation started in 2013 EXCELLENCE 2020 covers next two phases

    NKT I Paris Roadshow - Danske Bank April 2016 I 34 Transformation started in 2013 EXCELLENCE 2020 covers next two phases 2016/17+ 2015/16+ 3 2014/15+ 2 1 ‘Accelerate profitable growth' 'Be excellent' ‘Get fit’ • Focused portfolio • Revitalised product development • Project DRIVE to reduce cost • Foc

  35. Slide 35: EXCELLENCE 2020 strategy has a strong foundation

    NKT I Paris Roadshow - Danske Bank April 2016 I 35 EXCELLENCE 2020 strategy has a strong foundation NKT Cables Power House Strategy elements ROCE • VISION: "By driving 'excellence' we will be the best 2020: >15% power cable company by 2020 in the eyes of our customers and our people” • SEGMENT INITI

  36. Slide 36: 4% growth driven by strong performance in Projects and Products

    NKT I Paris Roadshow - Danske Bank April 2016 I 36 4% growth driven by strong performance in Projects and Products APAC with focus on profitability Organic growth 2012 2013 2014 2015 - Quarterly (Y/Y) -13% -4% 0% 0% 4% 10% -2% 4% 6% -11% 1% -12% 16% 13% -12% 2% - Annually -4% 4% -5% 4% Projects Prod

  37. Slide 37: Highlights: Offshore outlook is promising

    NKT I Paris Roadshow - Danske Bank April 2016 I 37 Highlights: Offshore outlook is promising Growth potential for Products continues Projects Products APAC • Two major offshore orders in 2015 • Central Europe delivered strong • Decreasing revenue in APAC due to • Stable onshore market organic growth

  38. Slide 38: Operational EBITDA positively impacted by DRIVE and Products

    NKT I Paris Roadshow - Danske Bank April 2016 I 38 Operational EBITDA positively impacted by DRIVE and Products Operational EBITDA EURm Before DRIVE After DRIVE 100 12% Oper. EBITDA, LTM, 9.0% 90 10% EUR 77m, increase of EUR 12m 8.0% 80 70 (2014: EUR 65m) driven by 8% Products and DRIVE 5.6% 5.3% 60

  39. Slide 39: Products' improved profitability expected to offset decline in Projects in 2016

    NKT I Paris Roadshow - Danske Bank April 2016 I 39 Products' improved profitability expected to offset decline in Projects in 2016 Business unit profitability development* Index = 100 Products showed strong improvement in 2014 and 2015 and is expected to improve profitability further in 2016 Project

  40. Slide 40: DRIVE run-rate of EUR 60m successfully achieved

    NKT I Paris Roadshow - Danske Bank April 2016 I 40 DRIVE run-rate of EUR 60m successfully achieved Cost improvements FTE reduction One-off costs Capex Q4 2015 realised EUR 12.8m 36 FTE EUR 9.8m EUR 0.1m Full-year 2015 EUR 54.2m 110 FTE EUR 23.2m EUR 0.9m EUR 60.5m Project to date 381 FTE EUR 50.1m E

  41. Slide 41: 2016 Management agenda

    NKT I Paris Roadshow - Danske Bank April 2016 I 41 2016 Management agenda EXCELLENCE 2020 PRIORITY ACTIONS • Secure new offshore projects Develop & grow • Accelerate in-house DC development • Execute on newly gained railway orders • Secure key frame contacts in medium-voltage segment SEGMENT INITIAT

  42. Slide 42: Transformation of NKT Cables continues with EXCELLENCE 2020

    NKT I Paris Roadshow - Danske Bank April 2016 I 42 Transformation of NKT Cables continues with EXCELLENCE 2020 ​Financials Highlights and summary Q4 FY • Launch of EXCELLENCE 2020 strategy EURm 2015 2014 2015 2014 • DRIVE efficiency improvement programme reached EUR 60m annual savings target (run ra

  43. Slide 43: NKT Photonics

    NKT I Paris Roadshow - Danske Bank April 2016 I 43 NKT Photonics

  44. Slide 44: NKT Photonics operates as one management entity with world-wide reach

    NKT I Paris Roadshow - Danske Bank April 2016 I 44 NKT Photonics operates as one management entity with world-wide reach Integration across sales, marketing and engineering. Further synergies in 2016 Annual EUR 400k cost synergies expected with possible upside Americas EMEA APAC 38% 46% 16% Manufact

  45. Slide 45: Financial aspirations 2015-2018

    NKT I Paris Roadshow - Danske Bank April 2016 I 45 Financial aspirations 2015-2018 Growth EBIT % RoCE % >10% annual organic growth ~15% in 2018 ~6%-points per year realising + Acquisitive growth ~20% in 2018 ~ 20% ~ 13% ~7% 2016 2017 2018

  46. Slide 46: NKT Photonics' products focus on distinct segments

    NKT I Paris Roadshow - Danske Bank April 2016 I 46 NKT Photonics' products focus on 3 distinct segments Imaging & Metrology Sensing & Energy Material Processing Focus growth area Established area New growth area SuperK Lios LHD aeroPULSE White light laser Linear Heat Detection Ultrafast pulsed laser

  47. Slide 47: Growth expected across all segments

    NKT I Paris Roadshow - Danske Bank April 2016 I 47 Growth expected across all segments Imaging & Metrology Sensing & Energy Material Processing Focus growth area Established area New growth area • Strong 2015 revenue growth, flat Q4 • Robust Q4 pipeline security market • Fibers and modules for ultra

  48. Slide 48: Operational EBITDA margin increased to 9.6%

    NKT I Paris Roadshow - Danske Bank April 2016 I 48 Operational EBITDA margin increased to 9.6% Operational EBITDA EURm 9.6% 4 12% 7.2% 10% 3 ​Oper. EBITDA margin, LTM, 8% 9.6%, increase of 2.4%-points 2 6% continuing NKT Photonics' strong trend 3.7% 2.3% 4% 1 Oper. EBITDA of EUR 3.7m, a 2% increase

  49. Slide 49: 2016 Management agenda

    NKT I Paris Roadshow - Danske Bank April 2016 I 49 2016 Management agenda DRIVER PRIORITY ACTIONS • Integrate Lios Technology business into NKT Photonics Focus on core business • Realise sales and R&D synergies • Increase number of long-term customer contracts GAIN Secure profitable growth • Activel

  50. Slide 50: Significant organic growth in Q4 of 22% driving operational EBITDA increase

    NKT I Paris Roadshow - Danske Bank April 2016 I 50 Significant organic growth in Q4 of 22% driving operational EBITDA increase Financials ​Highlights Q4 FY • Good growth in all segments (11% on continuing EURm 2015 2014 2015 2014 business) Revenue 12.7* 12.6 40.6 39.1 - Org. growth (Y/Y) 22%* 5% 9%

  51. Slide 51: Agenda

    NKT I Paris Roadshow - Danske Bank April 2016 I 51 Agenda Introduction to NKT Highlights 2015 Business units • Nilfisk • NKT Cables • Photonics Group Outlook 2016 Questions & Answers

  52. Slide 52: Outlook 2016

    NKT I Paris Roadshow - Danske Bank April 2016 I 52 Outlook 2016 Consolidated flat Operational EBITDA margin * organic growth on par with 2015 (9.4%) Nilfisk 0 - 5% Nilfisk 10 - 11% NKT Cables ~ neg. 5% NKT Cables 8 - 9%* NKT Photonics ~ 10% NKT Photonics 12 - 14% NKT Cables • Potential effects of qu

  53. Slide 53: Agenda

    NKT I Paris Roadshow - Danske Bank April 2016 I 53 Agenda Introduction to NKT Highlights 2015 Business units • Nilfisk • NKT Cables • Photonics Group Outlook 2016 Questions & Answers

  54. Slide 54: Financial calendar

    NKT I Paris Roadshow - Danske Bank April 2016 I 54 Financial calendar 2016 31 March Annual General Meeting 12 May Interim Report, Q1 18 August Interim Report, Q2 11 November Interim Report, Q3 2017 1 March 2016 Annual Report For list of Investor Relations events, go to www.nkt.dk

NKT — Non-Deal Roadshow (April 2016) on 6ix