Nkt A/s · OMXCOP:NKT
Nkt A/s — Enskilda Securities Nordic Small & Mid Cap Seminar (January 2005)
37 slides from Nkt A/s's conference presentation, Jan 20, 2005
Slide 1: Enskilda Securities Nordic Small & Mid Cap Seminar
Enskilda Securities Nordic Small & Mid Cap Seminar Thursday, January 20th, 2005 Presentation by Tom Knutzen President & CEO NKT Holding A/S www.nkt.dk
Slide 2: Agenda
Agenda Overview Strategy “Upgrade to next level” Outlook – valuation – share price Companies Nilfisk-Advance Group NKT Cables Group NKT Photonics Group NKT Flexibles Priorparken Management agenda Q & A
Slide 3: Strategy 2004-2008 - Upgrade to next level: Brief overview
Strategy 2004-2008 - Upgrade to next level Brief overview Listed on the Copenhagen Stock Exchange – since 1898 Present market cap approximately 4 bnDKK (share price 163) Expected turnover 2004 > 7,5 bnDKK Three main business areas Nilfisk-Advance (professional cleaning equipment - global) NKT Cables
Slide 4: Strategy 2004-2008 - Upgrade to next level
Strategy 2004-2008 - Upgrade to next level NKT is a growth and development oriented industrial group with three main business areas : Nilfisk-Advance Group NKT Cables Group NKT Photonics Group Strategy 2004-2008: Upgrade to next level Prioritized Exit life science Vision 2005 1999 2000 2001 2002 200
Slide 5: Strategy 2004-2008 - Rationale and main elements
Strategy 2004-2008 - Upgrade to next level Rationale and main elements: NKT Holding is the best owner of the three main activities Key words are Stability Controlled expansion Value creation Target is a growth in the annual turnover of 8 – 12 % in the strategy period (on average) Organic growth Acqu
Slide 6: Strategy 2004-2008 - Summary
Strategy 2004-2008 - Summary - Upgrade to next level Consensus 8,5 to 10,0 bnDKK 5.824 mDKK Annual growth 8 – 12 % on average Organic and acquisitive growth 8,5 bnDKK Turnover ~6 % 2,5 % 4,6% EBITA-margin Capital structure 61 % Solvency ratio ~40 % 48% (15) % Gearing max. 40 % 10% Yearly dividend of
Slide 7: Strategic status and development 2004
Strategic status and development 2004 Nilfisk-Advance & NKT Cables 2004 Achieve Show Achieve Acquisitions stability profitability growth Quality of Cost efficiency Channel In harmony processes at all levels and management with present actions business Logistics and Segment focus flow Limit capital e
Slide 8: Strategic steps 2004 y-t-d
Strategic steps 2004 y-t-d • Announcement strategy “Upgrade to next level” • Acquisition Ecologica, Italy • Acquisition G-Power, Australia • Acquisition ALTO Group • Establishment of two new plants in China • Distributor in Sweden and Hungary acquired (effect 2005) • 100% ownership of NKT Cables, Ch
Slide 9: The NKT Group structure
The NKT Group structure NKT Holding A/S Nilfisk- NKT NKT Advance Cables Photonics Group Group Group • Europe • Denmark • NKT Integration *) • USA • Germany • Crystal Fibre • Asia/Pacific • Austria • KOHERAS • Poland • LIOS Technology • Czech Rep. • NKT Research & • China Innovation • Nanon Revenue 0
Slide 10: Organic growth in turnover
Organic growth in turnover - Jan-Sep 2004 vs. Jan-Sep 2003 Company Nominal growth Real growth *) Nilfisk-Advance 46% 7% NKT Cables 20% 6% NKT Photonics Group 18% 18% NKT Flexibles (51%) (41%) (41%) NKT Group 28% 4% *) Approx. - adjusted for exchange rates, metal prices and acquisitions
Slide 11: Net Interest Bearing Asset / (Debt)
Net Interest Bearing Asset / (Debt) (mDKK) 600 400 2004 200 0 -200 -400 -600 -800 -1000 -1200 Actual Budget Forecast Latest guidance: NIBD to be slightly above 400 mDKK at year-end
Slide 12: Expectations 2004
Expectations 2004 Revenue over 7,5 bnDKK EBITDA ~600 mDKK Result after minorities and taxes in the level of 275 mDKK Net interest bearing debt at year-end slightly over 400 mDKK mDKK Guidance March 04 ~ 100 Divestment of real estate ~ 175 ALTO ~ (15) Wind-up costs NKT Integration ~ (20) Write down N
Slide 13: NKT Holding A/S - development in share price since beginning 2004
NKT Holding A/S - development in share price since beginning 2004 (18.1.2005) Shareholders 160 Potagua 20% ATP 12% 24 institutional investors 32% 150 BoD / Management 2% Others (~10.000 shareholders) 34% 140 130 120 110 NKT Holding KFX rebased 100 13.1.04 27.1.04 10.2.04 24.2.04 9.3.04 23.3.04 6.4.0
Slide 14: Consensus 2005 - Value Drivers vs. Enterprise Value
Correlation – Value Drivers vs. Enterprise Value mDKK 657 EV/EBITDA 600 Valuation 517 EV/EBITDA LTM (excl. tech. buss.) 498 500 451 9,0x 445 412 8,0x 400 358 366 300 308 314 7,0x 289 292 300 6,0x 200 5,0x 100 4,0x 3,0x 0 (15) (100) (75) (79) (73) Consensus 2005 (95) (85) (80) (117) (130) (122) (116)
Slide 15: NKT shares, development in daily turnover from 2002
NKT Holding A/S - NKT shares, development in daily turnover from 2002 mDKK 12,0 10,0 20 days moving average 60 days moving average 8,0 Since 1/1/2004 6,0 6,3 mDKK/day in average 4,0 2,0 - 02.01.2002 02.01.2003 02.01.2004 02.01.2005
Slide 16: Agenda
Agenda Overview Strategy “Upgrade to next level” Outlook – valuation – share price Companies Nilfisk-Advance Group NKT Cables Group NKT Photonics Group NKT Flexibles Priorparken Management agenda Q & A
Slide 17: Nilfisk-Advance
el ; ; Nilfisk-Advance Ravaeoe setting standards
Slide 18: Nilfisk-Advance
Nilfisk-Advance Consumer After sales A/P 10% 15% 8% Floorcare Industry 40% 30% HPW US 30% 20% EU 62% Commercial Vacuums 60% 25% Run-rate turnover annualized approx. 4,7+ bnDKK ~3.700 employees Sales companies in > 30 countries Manufacturing sites - Denmark (3), Sweden, Italy (2), Hungary, US (3), Ch
Slide 19: Nilfisk-Advance Group (as of Q3)
Nilfisk-Advance Group (as of Q3) - development as planned Total growth 46 % unadjusted year-to-date Organic growth year-to-date 7 % adjusted for exchange rates and acquisitions Growth in all geographical regions ALTO sales stable, but going into low season in Q4 High investment level in new products
Slide 20: Nilfisk-Advance - Revenue trend
Nilfisk-Advance – Revenue trend (bnDKK) - excl. ALTO Revenue (Latest Exchange rates) Trailing 12 months revenue 2,8 2,7 2,6 2,5 Dec Jul Sep Nov '99 '01 '01 '01 2002 2003 2004 Organic growth 5% 7% US 10% 12% Europe 2% 5% Asia/Pacific 9% 8%
Slide 21: Nilfisk-Advance - EBITDA trend
Nilfisk-Advance (excl. ALTO) - EBITDA-trend 100 10,4% 10,6% 10,8% 12,0% 10,2% EBITDA% (rolling 12 months) 9,6% 9,7% 90 9,0% 10,0% 80 7,8% EBITDA (mDKK) 70 6,7% 8,0% 60 6,0% 50 40 4,0% 30 2,0% 20 56 60 70 72 59 75 77 84 69 10 0,0% Q2-03 Q3-03 Q4-03 Q1-04 Q2-04 Q3-02 Q4-02 Q1-03 Q3-04 ALTO EBITDA-marg
Slide 22: Nilfisk-Advance - management agenda
Nilfisk-Advance - management agenda Long term Profitability target EBITA ~10% (equal to 12 % EBITDA margin) 6 % organic growth p.a. over a business cycle Medium term Integration of ALTO - realize ~150 mDKK synergy potential end 2006 (restructuring costs ~175 mDKK) Maintain organic growth (products &
Slide 23: NKT Cables
ankt cab
Slide 24: NKT Cables Group
NKT Cables Group Turnover by customer segment : 30% wholesalers 40% utilities 7% telecom 23% industry and others Main focus on Central / Eastern Europe and Scandinavia Energy cables are given focus and priority HQ in Cologne, Germany 10 manufacturing sites ~2.200 employees
Slide 25: NKT Cables Group
NKT Cables Group Others Others Denmark OPGW, Trolley / 7% High / 14% 22% Enameled Medium Asia wire, 16% 33% Voltage 5% 6% 7% Austria 27% 14% Telecom 12% Germany 37% Czech Poland Low Voltage
Slide 26: NKT Cables Group - copper price development
NKT Cables Group - copper price development USD/ton Increase by 46% in EUR from 2003 til 2004
Slide 27: NKT Cables Group (as of Q3)
NKT Cables Group (as of Q3) - continued stability Total growth 20 % unadjusted year-to-date Organic growth year-to-date ~5 % adjusted for exchange rates and metal prices Margins under pressure due to metal price increases Enamelled wire business sold as of January 1st, 2005 Small company bought in N
Slide 28: NKT Cables Group - EBITDA trend
NKT Cables Group – EBITDA-trend 100 6,1% 6,0% 6,2% 6,1% 7,0% EBITDA% (rolling 12 months) 5,9% 90 6,0% 80 4,7% 4,7% EBITDA (mDKK) 4,2% 5,0% 70 3,9% 60 4,0% 50 3,0% 40 2,0% 30 20 35 28 18 49 66 33 64 70 1,0% 22 10 0,0% Q2-04 Q2-03 Q3-03 Q4-03 Q1-04 Q3-02 Q4-02 Q1-03 Q3-04
Slide 29: NKT Cables Group - management agenda
NKT Cables Group - management agenda Continued focus on energy cables through focus of product portfolio Exploit growth opportunities with priority in Eastern Europe through selective investments in existing manufacturing facilities through acquisitions if value creating Continued focus on improved
Slide 30: NKT Photonics Group
NKT Photonics Group Discontinued ~60 employees Sold to Ignis, Norway on January 17th, 2005 ~100 employees
Slide 31: NKT Photonics Group (mDKK)
NKT Photonics Group (mDKK) Turnover and EBITDA January -September 2004 60 (56) 7 (34) 53 NKT Integration Other NKT Photonics (21) Group companies Turnover EBITDA Full year guidance: EBITDA excl. one-offs slightly over (70) mDKK One-offs ~(20) mDKK
Slide 32: NKT Flexibles
NKT Holding Stolt Offshore 51% 49% NKT Flexibles Risers Jumpers Flow Lines
Slide 33: NKT Flexibles - Year-to-date (as of Q3)
Year-to-date (as of Q3) Turnover 135 mDKK – down 41 % EBITDA (16) mDKK vs. 2 mDKK last year Low beginning backlog, competition, raw material prices, postponed order execution Order intake year-to-date: 243 mDKK (vs. 188 mDKK last year) Backlog 152 mDKK end Q3 2004 (44 mDKK beginning 2004) Expectatio
Slide 34: Sale of real estate - New NKT Holding HQ
Sale of real estate - New NKT Holding HQ Sold during 2004 – 343 mDKK Not sold – book value 15 mDKK Strategy fulfilled: • Organization discontinued • Priorparken will not report as a separate unit as of January 1st, 2005
Slide 35: Agenda
Agenda Overview Strategy “Upgrade to next level” Outlook – valuation – share price Companies Nilfisk-Advance Group NKT Cables Group NKT Photonics Group NKT Flexibles Priorparken Management agenda Q & A
Slide 36: Management agenda
Management agenda Maintain established momentum in Nilfisk-Advance and NKT Cables Integration of ALTO Organic growth Value creating acquisitions Gradual improvement of profitability Develop NKT Photonics Group gradually Reach EBITDA break even in 2006 Consider smaller add-on acquisitions medium term
Slide 37: Annual Accounts 2004 to be published on March 7th, 2005
Annual Accounts 2004 to be published on March 7th, 2005 www.nkt.dk
NKT Holding — Enskilda Securities Nordic Small & Mid Cap Seminar (January 2005) on 6ix