NKT – NKT financial results for Q2 2024: Continued strong performance
NKT has released its interim report for Q2 2024 showing 29% organic growth and record quarterly EBITDA.
NKT CEO Claes Westerlind says:
– In Q2 2024, we continued to execute on our high-voltage order backlog and ongoing investments across business lines, while also delivering continued double-digit growth in revenue and EBITDA. Furthermore, we made strong strategic progress, successfully divesting NKT Photonics and completing the acquisition of Portuguese cable manufacturer, SolidAl. NKT’s position as a pure-play cable manufacturer has been strengthened by this acquisition and we remain well positioned to benefit from robust demand across our power transmission and distribution businesses.
Financial Highlights
In Q2 2024, NKT’s revenue (in std. metal prices) increased by EUR 137m compared to Q2 2023, corresponding to 29% organic growth. Previous investments in capacity and capabilities within Solutions and satisfactory execution drove the majority of growth. Applications and Service & Accessories also contributed with higher revenue compared to Q2 2023.
2024 financial outlook
The financial outlook was updated in Company Announcement No. 20 of 11 July 2024.
Revenue (in std. metal prices) is expected to be approximately EUR 2.33-2.43bn (previously EUR 2.21-2.36bn) and operational EBITDA is expected to be approximately EUR 310-345m (previously EUR 285-335m). The updated outlook for 2024 reflects an expected continuation of the strong execution during first half as well as the acquisition of SolidAl and its expected financial contribution for the remainder of the year.
The financial outlook is based on several assumptions including:
- Satisfactory execution and development of high-voltage investments and projects without major disruptions
- Stable market conditions in Applications
- Satisfactory offshore power cable repair work activity
- Stable development of the global economy
- Stable supply chain with limited disruptions and access to the required labour, materials and services
- Stable development in foreign currency and metal prices
Revenue growth across business lines and record quarterly operational EBITDA
In Q2 2024, NKT’s revenue (in std. metal prices) increased by EUR 137m compared to Q2 2023, corresponding to 29% organic growth. Previous investments in capacity and capabilities within Solutions and satisfactory execution drove the majority of growth. Applications and Service and Accessories also contributed with higher revenue compared to Q2 2023.
Driven by strong revenue growth, operational EBITDA increased to EUR 86m in Q2 2024, up by EUR 28m from Q2 2024. The higher earnings level came primarily from Solutions, as well as a record-high quarterly contribution from Applications. This was partially offset by a slight decrease in Service and Accessories, as well as a higher cost base as NKT continued to expand across business lines.
At end-Q2 2024, the high-voltage order backlog was EUR 11.3bn (EUR 9.9bn in std. metal prices). During the quarter, NKT supplemented its high-voltage order backlog with a number of relatively smaller orders, including variation orders to existing projects.
Free cash flow amounted to EUR 398m in Q2 2024, driven by a higher quarterly earnings contribution and a favourable development in working capital in Solutions. Excluding acquisitions and divestments, free cash flow increased to EUR 542m in Q2 2024.
In May 2024, NKT successfully completed the divestment of NKT Photonics to Hamamatsu Photonics K.K. for a final enterprise value of EUR 254m marking the final step on NKT’s journey of becoming a focused power cable solutions company.
In June 2024, NKT acquired Portuguese power cable manufacturer, SolidAl, for a final enterprise value of EUR 192m. The acquisition immediately enhances NKT’s ability to serve power transmission and distribution operators with end-to-end grid solutions; while also providing an attractive platform for future growth.
Progress of NKT’s approximately EUR 1bn investment program in Karlskrona continued throughout Q2 2024. Foundation work advanced according to plan, which enabled the successful start of tower construction at the end of July 2024. Executing on the investment program continues to have highest priority including managing risks and opportunities that have and will arise continuously.
Teleconference
NKT A/S hosts a teleconference for investors and financial analysts at 10:00am CEST on 16 August 2024. The presentation to be used during the call will be available before the start of the teleconference. To attend, please register and access on investors.nkt.com
SourceNKT
EMR Analysis
More information on NKT: See the full profile on EMR Executive Services
More information on Claes Westerlind (President and Chief Executive Officer, NKT): See the full profile on EMR Executive Services
More information on Line Andrea Fandrup (Executive Vice President, Chief Financial Officer, NKT): See the full profile on EMR Executive Services
More information on NKT Photonics: https://www.nktphotonics.com/ + NKT Photonics is the leading supplier of high-performance fiber lasers and photonic crystal fibers. Our main markets are Medical & Life Science, Industrial, Aerospace & Defense, and Quantum & Nano Technology. Our products include supercontinuum white light lasers, low noise fiber lasers, ultrafast lasers, and a wide range of specialty fibers. NKT Photonics has its headquarters in Denmark with sales and service worldwide. NKT Photonics is wholly owned by NKT A/S.
More information on Basil Garabet (President and Chief Executive Officer, NKT Photonics): https://www.nktphotonics.com/about-us/management-team/ + https://www.linkedin.com/in/basil-garabet-8071b87/
More information on Photonics Management Europe S.R.L by Hamamatsu Photonics K.K, Japan: https://www.hamamatsu.com/eu/en/our-company/corporate-profile.html
More information on Hamamatsu Photonics K.K, Japan: https://www.hamamatsu.com/jp/en.html + Hamamatsu Photonics specialize in optical sensors, electric light sources, and other optical devices and instruments for scientific, technical, and medical use.
Our mission is to benefit society through the development of technologies that capture, measure, and generate various types of light.
That’s why we re-invest at least 9% of our yearly revenue into research and development – to maintain cutting-edge quality across 90 types of image sensors, light sources, components, and systems with capabilities that span the spectrum from x-ray to infrared.
- Revenue: 221,445 Million Yen for the fiscal year ended 9/30/2023
- Products: 15,000+ devices, units & Systems
- Shipping destinations: 100+
- Established: 1953
- Employees: 4,071
More information on Akira Hiruma (Director and Chairman, Hamamatsu Photonics): https://www.hamamatsu.com/eu/en/our-company/corporate-profile.html
More information on Tadashi Maruno (Representative Director and President and Chief Executive Officer, Hamamatsu Photonics): https://www.hamamatsu.com/eu/en/our-company/corporate-profile.html
More information on SolidAl by NKT: https://www.solidal.pt/ + Solidal is a leading manufacturer of power cables, conductors and integrated solutions for energy transmission and distribution from 1 kV up to 400 kV.
Our clients are international utilities, wholesalers and contractors who rely on us for a wide product range and integrated technical solutions
The company has over 50 years of experience delivering power cables (including High Voltage, Medium Voltage, Low Voltage, ACSR and Aluminium Conductors) for projects across over 40 countries.
- Founded in 1970
- Revenue: ~ 150 m€
- Markets: 40
- Employees: 430
Quintas & Quintas group was founded in 1925. Solidal was founded in 1970 and integrated Quintas & Quintas group in 1987.
In January 2019, Njord Partners LLP (with its affiliated entities and managed funds “Njord”) acquired a majority (87,5%) shareholding in Solidal – Condutores Eléctricos, S.A. The Quintas family maintains a participation of 12,5%.
More information on François Moufflet (Group Chief Executive Officer, SolidAl, NKT): See the full profile on EMR Executive Services
EMR Additional Financial Notes:
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- Revenue at standard metal prices for copper and aluminium is set at EUR/tonne 1,550 and EUR/tonne 1,350 respectively.
- The NKT H1 2024 Interim Report can be found here: https://ml-eu.globenewswire.com/Resource/Download/3e4cb01e-9015-4a28-ae4d-479223611074
- The NKT 2023 Annual Report can be found here: https://nkt.widen.net/content/6vmbyw4i2l/pdf/NKT_Annual_Report_2023.pdf?u=gj0n1y
- The NKT 2023 Sustainability Report can be found here: https://nkt.widen.net/content/2lf3qw41j3/pdf/NKT_Group_Sustainability_Report_2023.pdf?u=gj0n1y
- The NKT 2022 Annual Report can be found here: https://nkt.widen.net/content/ixndzk8nig/pdf/NKT_Annual_Report_2022_final.pdf?u=gj0n1y
- The NKT 2022 Sustainability Report can be found here: https://nkt.widen.net/content/jimwosnkib/pdf/NKT_Group_Sustainability_Report_2022.pdf?u=gj0n1y