Nkt A/s · OMXCOP:NKT
Nkt A/s — Q3 2015 Earnings Presentation
39 slides from Nkt A/s's earnings presentation, Nov 12, 2015
Slide 1: NKT Interim Report Q3 2015
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 1 NKT Interim Report Q3 2015 Webcast, 12 November 2015, 10:00 CET
Slide 2: Forward looking statements
NKT I Interim report Q3 2015 I Webcast 12 November 2015 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 ca
Slide 3: Today's presenters
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 3 Today’s presenters Michael Hedegaard Lyng Jonas Persson Basil Garabet NKT Holding NKT Cables Nilfisk Photonics Group Group Executive President President President Director & CEO & CEO & CEO
Slide 4: Agenda: Highlights Q3 2015
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 4 Agenda Highlights Q3 2015 Business units • Nilfisk • NKT Cables • Photonics Group Outlook 2015 Questions & Answers
Slide 5: Highlights Q3 2015
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 5 Highlights Q3 2015 NKT Q3 overall performance as expected Slightly increased operational EBITDA 2015 outlook updated: organic growth Successful Capital Markets Day held on 23 margin despite organic growth declining continues to be expected
Slide 6: Financial highlights Q3 2015
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 6 Financial highlights Q3 2015 Revenue DKK 3,900m (Q3 2014: DKK 3,946m) Profit after tax DKK 72m (Q3 2014: DKK 60m) Organic growth Q3 2015 YTD 2015 Working capital amounted to DKK 2.6bn and LTM at 16.4% (Q3 2014: DKK 3.0bn and 18.7%) NKT -4%
Slide 7: Operational EBITDA slightly improved
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 7 Operational EBITDA slightly improved Operational EBITDA, LTM DKKm 1,500 12% 1,200 10% Oper. EBITDA, LTM, increased 900 to DKK 1,421m 8% (end-June 2015: DKK 1,415m) 600 Oper. EBITDA margin, LTM, 6% 300 increased to 10.3% (end-June 2015:
Slide 8: Changes Q3 2015 vs. Q3 2014
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 8 Changes Q3 2015 vs. Q3 2014 DKKm Q3 2015 Q3 2014 Change 01 DKKm Revenue decreased by -46 Revenue 3,900 3,946 -46 *01 Metal prices -46 Revenue, std. metal prices 3,268 3,281 -13 FX changes 92 Acquisitions 42 Operational EBITDA 276 270 6 *02
Slide 9: Working capital improvement continues and at lowest level since 2010
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 9 Working capital improvement continues and at lowest level since 2010 Working capital Q3 2014 Q3 2015 % of revenue 18.7% 16.4% In NKT Cables, working capital ratio, LTM, continued to decline 23.0% DKK 3,049m* DKK 2,641m* to 13.0% from 14.0
Slide 10: Free cash flow increased due to lower working capital and divestment
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 10 Free cash flow increased due to lower working capital and divestment DKKm Q3 2015 Q3 2014 YTD 2015 YTD 2014 FY2014 Earnings, EBITDA 240 226 892 744 1,061 Interest, net -26 -21 -31 -73 -99 Change in working capital 61 -16 -33 -127 760 Other
Slide 11: Solid capital structure assures flexibility
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 11 Solid capital structure assures flexibility Net interest-bearing debt DKKm Q3 2014 Q3 2015 5,000 4.5x • Capital structure targets unchanged 4,500 4,000 1.8x 0.9x - Debt ratio 2,5x operational EBITDA DKK 2,089m DKK 1,248m 3.5x (Q3 2015: 0.
Slide 12: Change of presentation currency
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 12 Change of presentation currency Change from DKK to EUR • NKT's Board of Directors has decided to change NKT's presentation currency from DKK to EUR • Decision due to main business activities being denominated in EUR and all internal repor
Slide 13: Agenda: Business units
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 13 Agenda Highlights Q3 2015 Business units • Nilfisk • NKT Cables • Photonics Group Outlook 2015 Questions & Answers
Slide 14: Nilfisk
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 14 Nilfisk
Slide 15: Nilfisk realised 3% growth in Q3 driven by EMEA and APAC
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 15 Nilfisk realised 3% growth in Q3 driven by EMEA and APAC Americas still not satisfactory Nilfisk Organic growth 2012 2013 2014 2015 - Quarterly (Y/Y) 4% 1% -4% 1% 1% 4% 7% 1% 9% 4% 0% 9% -2% 0% 3% - Annually 0% 3% 6% 0% (YTD) Americas EMEA
Slide 16: Operational EBITDA margin remain below expectations
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 16 Operational EBITDA margin remain below expectations Nilfisk - Operational EBITDA DKKm 11.7% 11.7% 12.0% 11.9% 11.9% 11.7% 12.1% 11.9% 10.9% 250 14% 11.8% 11.7% Oper. EBITDA margin, Q3, 11.8% 11.1% 13% 11.7% 200 of 9.3% (end-June 2015: 11.
Slide 17: Accelerate strategy continued with launch of new initiatives
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 17 Accelerate strategy continued with launch of new initiatives Accelerate Growing our company to lead the industry Grow market share Strengthen Drive competitive Build strong Power front-end offerings brands supply chain performance Agile an
Slide 18: Strengthen front-end: Actively consolidating the industry
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 18 Strengthen front-end M&A agenda: Actively consolidating the industry Recent Nilfisk acquisitions, last 12 months Contractor (UK) Leading floorcare service company Three focus areas 1. Market access and Gesco (B) service capabilities Broad-
Slide 19: M&A case: US acquisition opens up new market opportunities
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 19 Strengthen front-end M&A case: US acquisition opens up new market opportunities Hydro Tek • Founded 1985, California, US • Manufacturing and sales of commercial high pressure washers Acquisition of Hydro Tek • Cold and hot water functional
Slide 20: Power supply chain performance
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 20 Power supply chain performance Supply chain delivery back on track, but distribution cost remain high Status on temporary delivery issues • Strong supply chain performance in Q3 • On-time delivery at all-time-high levels • Global Supply C
Slide 21: Drive competitive offerings
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 21 Drive competitive offerings Four strong product launches in Q3 and award won Steffen: Update text accordingly to picture Highlight - Two new upright scrubber dryers Award won - VP600 commercial vacuum cleaner • “Nilfisk SC100” and “Nilfi
Slide 22: Nilfisk realised organic growth of 3% in Q3
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 22 Nilfisk realised organic growth of 3% in Q3, driven by EMEA and APAC regions Operational EBITDA margin below expectations Financials Highlights and summary Q3 YTD DKKm 2015 2014 2015 2014 • Sales: Q3 growth (3%) driven by EMEA (4%). Posit
Slide 23: NKT Cables
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 23 NKT Cables
Slide 24: NKT Cables Group Management Team strengthened
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 24 NKT Cables Group Management Team strengthened Michael H. Lyng Roland Andersen Detlev Waimann Lika Thiesen Oliver Schlodder President & CEO EVP & CFO EVP EVP EVP High voltage & Projects Human Resources Strategy & Specialties Joined
Slide 25: Growth impacted by production timing in Projects
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 25 Growth impacted by production timing in Projects APAC impacted by lower railway sales NKT Cables 2012 2013 2014 2015 Organic growth - Quarterly (Y/Y) -13% -4% 0% 0% 4% 10% -2% 4% 6% -11% 1% -12% 16% 13% -12% - Annually -4% 4% -5% 5% (YTD)
Slide 26: Operational EBITDA of DKK 109m impacted by lower revenue
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 26 Operational EBITDA of DKK 109m impacted by lower revenue NKT Cables - Operational EBITDA DKKm 10.2% 10.3% 300 12% 8.6% 250 10% 8.0% Oper. EBITDA of DKK 109m, 6.6% a decrease of DKK 25m 5.7% 200 8% 5.5% 6.1% 5.6% (Q3 2014: DKK 134m) driven
Slide 27: DRIVE has achieved DKK 308m in cost improvements year to date
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 27 DRIVE has achieved DKK 308m in cost improvements year to date Cost improvements FTE reduction One-off costs Capex Q3 2015 realised DKK 111m 26 FTE DKK 36m DKK 0m Year to date DKK 308m 74 FTE DKK 100m DKK 6m DKK 425m Project to date 345 FTE
Slide 28: Transformation started in 2013
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 28 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 EXCELLENC
Slide 29: EXCELLENCE 2020 strategic targets
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 29 EXCELLENCE 2020 Strategic targets to measure improvement Be the best… in the eyes of our customers …and our people RoCE Customers' Employee trust index >15% preferred >80% choice
Slide 30: EXCELLENCE 2020 Four group-wide must-win battles
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 30 EXCELLENCE 2020 Four group-wide must-win battles • Safe workplace and environment Safety, people & • Lean and agile organisation organisation • Excellent leadership skills Operational & • Lean operations, admin and support functions commer
Slide 31: EXCELLENCE 2020 Clear strategic initiatives for each segment
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 31 EXCELLENCE 2020 Clear strategic initiatives for each segment Develop and grow Focus on profitability Turnaround Attractive markets with growth potential: Fragmented commodity markets under Markets we believe in, but with a need to • Focus
Slide 32: Growth and margin impacted by production timing in Projects
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 32 Growth and margin impacted by production timing in Projects Financials Highlights and summary Q3 YTD • New EXCELLENCE 2020 business strategy: Defines DKKm 2015 2014 2015 2014 roadmap towards RoCE >15% Revenue 2,102 2,322 6,928 6,583 • New
Slide 33: Photonics Group
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 33 Photonics Group
Slide 34: Both Imaging and Sensing business areas experienced significant growth
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 34 Both Imaging and Sensing business areas experienced significant growth Imaging Sensing • Solid growth in Q3 • Good order intake despite oil & gas market setback • OEM sponsored manufacturing development projects on • Pipeline security ma
Slide 35: Significant organic growth in Q3 driving improvement in operational EBITDA
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 35 Significant organic growth in Q3 driving improvement in operational EBITDA Financials Highlights Q3 YTD • High growth: Imaging and Sensing both experience high DKKm 2015 2014 2015 2014 organic growth in Q3 Revenue 81 65 208 197 - Org. gro
Slide 36: Agenda: Outlook 2015
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 36 Agenda Highlights Q3 2015 Business units • Nilfisk • NKT Cables • Photonics Group Outlook 2015 Questions & Answers
Slide 37: Outlook for 2015 updated
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 37 Outlook for 2015 updated Outlook 2015 Original Update in Q2 Update in Q3 NKT - Organic growth Up to 3% ~3% Unchanged For full year 2015, NKT expects - Operational EBITDA Increase of up to Increase of DKK ~1,300m • Organic growth around 3%
Slide 38: Agenda: Questions & Answers
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 38 Agenda Highlights Q3 2015 Business units • Nilfisk • NKT Cables • Photonics Group Outlook 2015 Questions & Answers
Slide 39: Financial calendar
NKT I Interim report Q3 2015 I Webcast 12 November 2015 I 39 Financial calendar 2016 26 February 2015 Annual Report 3 March Deadline for receipt of resolutions for the AGM 31 March Annual General Meeting 12 May Interim Report, Q1 18 August Interim Report, Q2 11 November Interim Report, Q3 2017 1 Mar