Nkt A/s · OMXCOP:NKT
Nkt A/s — Non-Deal Roadshow (December 2015)
52 slides from Nkt A/s's roadshow presentation, Dec 15, 2015
Slide 1: NKT Carnegie - Frankfurt Roadshow
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 1 NKT Carnegie - Frankfurt Roadshow Frankfurt, 15 December 2015
Slide 2: Forward looking statements
NKT I Carnegie - Frankfurt Roadshow 15 December 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 cause
Slide 3: Agenda
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 3 Agenda Introduction to NKT Highlights Q3 2015 Business units • Nilfisk • NKT Cables • Photonics Group Outlook 2015 Questions & Answers
Slide 4: Industrial conglomerate with global presence...
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 4 Industrial conglomerate with global presence... NKT Holding A/S Business area Key Products Geographic coverage Revenue Employees • Low & medium voltage North, Central and • High voltage cables DKK 8,738m NKT Cables • Submarine cables Eastern E
Slide 5: ... and a strong European position
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 5 ... and a strong European position Sales and manufacturing facilities NKT Cables Nilfisk Photonics Group 2% 11% 11% DKK DKK 43% 15,864m 55% 15,864m 78% Sales by business area Sales by geography NKT Cables EMEA Nilfisk Americas Photonics Group
Slide 6: Unique governance model with hands-on involvement by the Board of Directors
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 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 C
Slide 7: Clear value creation themes defined for each business unit
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 7 Clear value creation themes defined for each business unit GROWTH PROFITABILITY COMMERCIAL SCALE • Commercial Excellence • DRIVE cost programme • Execution on core • Front-end investments • Transformation business strategy • Consolidation via
Slide 8: Overall target to reach ROCE of >15%
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 8 Overall target to reach ROCE of >15% Return on capital employed ROCE, % Q4 2013 Q3 2015 6.7% 11.2% 20 17.5 17.6 14.8 >15% ROCE target 15 Nilfisk • Leverage Nilfisk machine 11.2 9.4 9.0 NKT Group for further investments 10 6.7 NKT Cables • Brin
Slide 9: Agenda
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 9 Agenda Introduction to NKT Highlights Q3 2015 Business units • Nilfisk • NKT Cables • Photonics Group Outlook 2015 Questions & Answers
Slide 10: Highlights Q3 2015
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 10 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 a
Slide 11: Financial highlights Q3 2015
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 11 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% 2%
Slide 12: Operational EBITDA increased ~55% since 2012
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 12 Operational EBITDA increased ~55% since 2012 Operational EBITDA, LTM DKKm 1,500 12% 1,200 10% Operational EBITDA, 900 increased to DKK 1,421m 8% (2012 Q1: DKK 914m) 600 Operational EBITDA margin 6% 300 increased to 10.3% (2012 Q1: 7.6%) 1,03
Slide 13: Changes Q3 2015 vs. Q3 2014
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 13 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 -4
Slide 14: Free cash flow increased due to lower working capital and divestment
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 14 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 -9
Slide 15: Working capital improvement continues and at lowest level since 2010
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 15 Working capital improvement continues and at lowest level since 2010 Working capital Q3 2014 Q3 2015 % of revenue Working capital reduced 23.0% 18.7% 16.4% significantly from 22.0% to 16.4% DKK 3,049m* DKK 2,641m* Long-term expected Workin
Slide 16: High historical Capex spending enabling low maintenance levels
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 16 High historical Capex spending enabling low maintenance levels Investments in Property, Plant & Equipment (gross, LTM) Investments, PPE Q3 2015 of DKK 58m (Q3 2014: DKK 73m) 1% 1,000 Investments 1.4% 10% 41% of revenue, LTM 900 9% 800 8% 700
Slide 17: Solid capital structure assures strategic flexibility
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 17 Solid capital structure assures strategic flexibility Net interest-bearing debt DKKm Q3 2014 Q3 2015 5,000 4.5x 4,500 4,000 1.8x 0.9x • Capital structure targets - Debt ratio 2,5x operational EBITDA DKK 2,089m DKK 1,248m 3.5x 3,500 (Q3 2015:
Slide 18: Agenda
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 18 Agenda Introduction to NKT Highlights Q3 2015 Business units • Nilfisk • NKT Cables • Photonics Group Outlook 2015 Questions & Answers
Slide 19: Nilfisk
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 19 Nilfisk
Slide 20: Nilfisk overview on geographies and segments
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 20 Nilfisk overview on geographies and segments Sales entities Manufacturing companies 11% 10% DKK DKK 6,836m 65% 6,836m 56% 24% 34% Sales by geography Sales by customers EMEA Commercial market Americas Industrial market APAC Private consumer ma
Slide 21: Floorcare and vacuums are strongholds in the industry's widest product range
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 21 Floorcare and vacuums are strongholds in the industry's widest product range Floorcare equipment Vacuum cleaners High-pressure washers Service • Scrubbers and sweepers • Commercial • Professional • Service and • Outdoor • Industrial • Consume
Slide 22: Asset-light production setup through assembly-only
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 22 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 N
Slide 23: 2015 has been a transition year with flat growth
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 23 2015 has been a transition year with flat growth Americas 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 APAC Q3 2015 -3%
Slide 24: Short-term margin dilution from investments in front-end
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 24 Short-term margin dilution from investments in front-end 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% 11.7% 13% 10.9% 200 of 9.3% (end-June 2
Slide 25: Accelerate strategy continued with launch of new initiatives
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 25 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 and c
Slide 26: Strengthen front-end: Improved sales models and introduction of new tools
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 26 Strengthen front-end Improved sales models and introduction of new tools SALES MODELS DIRECT SALES INDIRECT SALES Focus on high-potential opportunities and Attractive dealer collaboration models full-share of wallet TOOLS INCENTIVES SYSTEMS &
Slide 27: Commercial Excellence now covers more than 50% of revenues
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 27 Strengthen front-end Commercial Excellence now covers more than 50% of revenues Already implemented Full-scale roll-out Ongoing implementation Full-scale roll-out Planned Light-scale roll-out
Slide 28: Increased focus on mid-market segment will support growth
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 28 Strengthen front-end Increased focus on mid-market segment will support growth Market value Customer Nilfisk's 'Accelerate' DKKbn1 demands historical position strategy 22-27 • High reliability and long • Strong • Strengthen High-end (~45%) du
Slide 29: M&A agenda: Actively consolidating the industry
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 29 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-ran
Slide 30: Supply chain delivery back on track, but distribution cost remain high
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 30 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 Chai
Slide 31: Four strong product launches in Q3 and award won
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 31 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 “Nilfisk-
Slide 32: Nilfisk realised organic growth of 3% in Q3, driven by EMEA and APAC
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 32 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%). Positive
Slide 33: NKT Cables
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 33 NKT Cables
Slide 34: NKT Cables overview on divisions and geographies
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 34 NKT Cables overview on divisions and geographies Sales entities Manufacturing companies and sales companies 10% 22% 19% 25% DKK DKK 8,738m 8,738m 11% 26% 65% 22% Sales by Business Unit Sales by geography Projects Denmark Products Germany APAC
Slide 35: Transformation started in 2013: EXCELLENCE 2020 covers next two phases
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 35 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 cos
Slide 36: Operational EBITDA improved due to DRIVE programme
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 36 Operational EBITDA improved due to DRIVE programme NKT Cables - Operational EBITDA DKKm Before DRIVE After DRIVE 10.2% 10.3% 300 12% 8.6% 250 10% 8.0% Oper. EBITDA of DKK 109m, 6.6% 5.7% 200 8% a decrease of DKK 25m 5.5% 6.1% 5.6% (Q3 2014:
Slide 37: DRIVE has achieved DKK 308m in cost improvements year to date
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 37 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 DK
Slide 38: Growth impacted by production timing in Projects
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 38 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) Pro
Slide 39: Strategic targets to measure improvement
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 39 Strategic targets to measure improvement of Be the best… in the eyes of our customers …and our people RoCE Customers' Employee trust index >15% preferred >80% choice
Slide 40: EXCELLENCE 2020: Four group-wide must-win battles
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 40 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 commercia
Slide 41: EXCELLENCE 2020: Clear strategic initiatives for each segment
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 41 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 on
Slide 42: EXCELLENCE 2020 will drive RoCE >15%
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 42 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 (FY
Slide 43: Growth and margin impacted by production timing in Projects
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 43 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 re
Slide 44: Photonics Group
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 44 Photonics Group
Slide 45: Photonics Group has a worldwide reach
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 45 Photonics Group has a worldwide reach Americas EMEA APAC 22% 58% 20% Headquarters Sales office Distributor % Revenue split Note: Split of Photonics Group revenue, FY2014
Slide 46: Photonics Group's main markets are currently Imaging and Sensing
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 46 Photonics Group's main markets are currently Imaging and Sensing Imaging Sensing Material Processing Photonics Group's revenue split ~50% ~40% ~10% Focus growth area Established area New growth area Note: FY2014 revenue
Slide 47: Financial aspirations 2015-2018
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 47 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
Slide 48: Significant organic growth in Q3 driving improvement in operational EBITDA
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 48 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. growth
Slide 49: Agenda
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 49 Agenda Introduction to NKT Highlights Q3 2015 Business units • Nilfisk • NKT Cables • Photonics Group Outlook 2015 Questions & Answers
Slide 50: Outlook for 2015 updated
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 50 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% 1%-
Slide 51: Agenda: Questions & Answers
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 51 Agenda Introduction to NKT Business units • Nilfisk • NKT Cables • Photonics Group Outlook 2015 Questions & Answers
Slide 52: Financial calendar
NKT I Carnegie - Frankfurt Roadshow 15 December 2015 I 52 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 March