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17 August 2021
Announcement no. 13
NKT A/S Q2 2021: Earnings increase driven by satisfactory growth in all businesses
NKT CEO Alexander Kara confirms the preliminary Q2 2021 performance update provided on 16 July 2021:
- We have had a strong 1st half 2021 and the improved financial performance was driven by broad-based growth in both NKT and NKT Photonics. It is satisfying to see that we continue to benefit from the green transformation and successful implementation of improvement initiatives. In the power cable business, we delivered a 1st half 2021 operational EBITDA higher than we expect for the 2nd half. This is mainly due to the anticipated mix of projects in the Solutions business line and to the completion of an exceptionally high amount of service repair work in the first part of the year.
Operational EBITDA margin
* Std. metal prices
2021 financial outlook
The financial outlooks are unchanged from Company Announcement No. 12 of 16 July 2021.
In NKT, revenues (std. metal prices) are expected to be in the upper end of approx. EUR 1.1–1.2bn (previously approx. EUR 1.1–1.2bn) and the operational EBITDA is expected to be in the upper end of approx. EUR 80–110m (previously approx. EUR 80–110m).
In NKT Photonics, the organic revenue growth is expected to be approx. 8-15% (previously upper end of approx. 0-10%) and the EBITDA margin is expected to be approx. 6-8% (previously upper end of approx. 3-7%).
The financial outlooks for both NKT and NKT Photonics remain subject to uncertainty due to the general market situation of constrained access to both raw materials and materials for the production as well as the continued unknown development of the COVID-19 pandemic.
NKT: Highest quarterly operational EBITDA since 2017
NKT increased revenue (std. metal prices) from EUR 278m in Q2 2020 to EUR 344m in Q2 2021, corresponding to 21% organic growth with positive contribution from all three business lines. Operational EBITDA also increased for all three business lines, and went up from EUR16.0m in Q2 2020 to EUR 42.4m in Q2 2021. The quarter was characterized by a high level of activity across power cable types in Solutions, by record-high performance in Service & Accessories with a high level of repair work, and with Applications continuing to restore the profitability level.
At end-Q2 2021, NKT's high-voltage order backlog totalled a record high EUR 3.16bn (EUR 2.66bn in std. metal prices). This was an increase of more than EUR 200m compared to end-Q1 2021. During the quarter, NKT was awarded two larger orders; one turnkey order worth approx. EUR 95m (approx. EUR 85m in std. metal prices) to provide power from shore to Troll West in Norway, and the order for the Dogger Bank C offshore wind farm project with a contract value of approx. EUR 280m (approx. EUR 230m in std. metal prices).
NKT Photonics: Highest ever Q2 revenue
NKT Photonics’ revenue in Q2 2021 amounted to EUR 18.3m, up from EUR 14.6m in Q2 2020. This corresponded to organic growth of 28%. Industrial, the segment most heavily impacted by the COVID-19 pandemic in Q2 2020, recovered to become the main growth contributor in Q2 2021. The two smaller segments; Medical & Life Science and Aerospace & Defence reported modest growth in Q2 2021. Supported by the higher revenue, EBITDA increased from EUR -0.8m in Q2 2020 to EUR 0.0m in Q2 2021, while negatively impacted by redundancy costs of EUR 0.4m.
As informed in Company Announcement No. 12 of 16 July 2021, the Board of Directors decided to resume the review of strategic alternatives for NKT Photonics, with the objective of maximizing value creation.
NKT A/S hosts a teleconference for investors and financial analysts at 10:00 am CEST on 17 August 2021. It can be accessed at investors.nkt.com. The presentation for the call will be available before the teleconference.
To attend, please dial in from (confirmation code: 6594509):
DK +45 32 72 04 17
UK +44 (0) 207 192 8338
US +1 646 741 3167
Investor Relations: Michael Nass Nielsen, Head of Investor Relations, tel: +45 2494 1654
Media Relations: Helle Gudiksen, Head of Group Communications, tel: +45 2349 9098