NKT A/S May 2024
Q1 2024 Interim Report
Webcast Presentation
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 A/S' control, may cause that the actual development and results differ materially from the expectations.
NKT A/S | Interim Report Q1 2024 | Webcast | May 2024 | 2
Today's presenting team
Claes Westerlind | Line Andrea Fandrup |
President & CEO | CFO |
NKT A/S | Interim Report Q1 2024 | Webcast | May 2024 | 3
Key messages Q1 2024
Continued double-digit growth driven by Solutions, and two investments of approximately EUR 100m each announced
Organic revenue* growth of 27% driven by satisfactory execution of record-highorder backlog in Solutions
High-voltage order backlog at a new record- level of EUR 11.5bn after
project awards of EUR ~1.2bn from Amprion
Operational EBITDA of EUR 75m, margin* improved to 14.1%
NKT will invest further in Solutions and Applications to support
green transition and the ongoing electrification of society
* Std. metal prices. | NKT A/S | Interim Report Q1 2024 | Webcast | May 2024 | 4 |
Update of divestment of NKT Photonics
- In June 2022, NKT entered into an agreement to divest NKT Photonics to Photonics Management Europe S.R.L, a 100% owned subsidiary of Hamamatsu Photonics K.K.
- Required regulatory approvals was obtained from authorities in Germany, the United Kingdom, and the United States
- However, in May 2023, NKT received notification that the Purchaser has been denied the authorization under the Danish Investment Screening Act needed for the Purchaser to proceed to complete the transaction and acquire NKT Photonics
- In July 2023, the Purchaser refiled the application with the Danish Business Authority and was granted the authorization in May 2024
- NKT expects the transaction to be completed within Q2 2024
- NKT Photonics has been presented as discontinued operations and assets held for sale since the agreement was entered in 2022
NKT A/S | Interim Report Q1 2024 | Webcast | May 2024 | 5
Agenda
- Business highlights
- Financial highlights
- Questions & Answers
NKT A/S | Interim Report Q1 2024 | Webcast | May 2024 | 6
Financial performance in Q1 2024
Continued double-digit growth in revenue and operational EBITDA driven by Solutions
Key developments in Q1 2024
- Double-digitgrowth in revenue and operational EBITDA in Solutions, driven by satisfactory execution, continued high activity, and increased capacity from investments conducted in recent years
- Applications continued to benefit from positive developments in the power distribution grid segment, operational EBITDA margin* at a satisfactory level of 10.5%
- Service & Accessories increased revenue due to higher offshore repair activity, driven by work related to one legacy service agreement which was executed at unusually low profitability margin. Operational EBITDA margin flat compared to Q1 2023
Key financial highlights (EURm)
Revenue* | ||||||
27% | ||||||
112 | ||||||
422 | 534 | |||||
2023 | Q1 | 2024 | ||||
Organic growth | ||||||
Revenue* | ||||||
Operational EBITDA | ||||||
13.5% | 14.1% | |||||
18 | ||||||
57 | 75 | |||||
2023 | Q1 | 2024 | ||||
Operational EBITDA | Margin* | |||||
* Std. metal prices | NKT A/S | Interim Report Q1 2024 | Webcast | May 2024 | 7 |
Solutions - Q1 2024
NKT
Solutions | Applications | Serv. & Acc. |
High organic growth in revenue and operational EBITDA
Customer
offerings | ▪ High-voltage AC/DC off-/onshore power cable |
solutions |
Q1 2024 financial highlights
321m50%52m
Development
during Q1 2024
- Revenue and operational EBITDA increases driven by satisfactory execution, continued high activity, and increased capacity
- Continued progress on several projects through varying stages of execution including Baltic Power, BorWin 5, Champlain Hudson Power Express, Dogger Bank C, Draugen, Hornsea 3, SuedLink, and SuedOstLink
- Investment program in Karlskrona progressing according to plan, and new investment launched in Cologne to support future profitable growth
Revenue*, EUR | Organic growth | Oper. EBITDA, EUR |
(Q1 2023: EUR 215m) | (Q1 2023: 47%) | (Q1 2023: EUR 35m) |
* Std. metal prices | NKT A/S | Interim Report Q1 2024 | Webcast | May 2024 | 8 |
Note: AC = Alternating Current and DC = Direct Current |
High-voltage market development
NKT
Solutions | Applications | Serv. & Acc. |
Continued high level of market activity to start 2024
Key developments
- NKT estimates that the value of projects awarded in its addressable high-voltage power cable market exceeded EUR 9bn in Q1 2024, majority based on DC technology
- This primarily consisted of projects that were converted into firm orders after being previously allocated as long-term booking commitments in 2023
- NKT was awarded two high-voltage onshore power cable projects with a combined value of around EUR 1.2bn in Q1 2024 by German Transmission System Operator Amprion
- NKT anticipates that its average addressable high-voltage market will be above EUR 10bn per year between 2024 and 2030. In 2024, the market size could be higher than the anticipated average, depending on the timing and development of sizeable projects and large, multi-yearframework agreements
Recent notable order wins for NKT
Size | |||
Name | Announced | (EURm) | Type |
Korridor-B V48 | |||
& | Mar 2024 | ~1,200 | Interconnector |
Rheinquerung | |||
50Hertz HVDC | Sep 2023 | ~3,500 | Interconnector/ |
Projects | offshore wind | ||
Baltic Power | Jun 2023 | >120 | Offshore wind |
East Anglia | Jun 2023 | >250 | Offshore wind |
Three | |||
Biscay Gulf | May 2023 | >600 | Interconnector |
NKT A/S | Interim Report Q1 2024 | Webcast | May 2024 | 9
High-voltage order backlog composition
NKT
Solutions | Applications | Serv. & Acc. |
Diversified customer and project portfolio provide strong earnings visibility
High-voltage order backlog (EURbn)
High-voltage order backlog by customer (%)
Other
<20%
Key developments:
▪ Order backlog of EUR 11.5bn provides |
strong earnings visibility |
>2.5
>2.5
>80%
European Transmission System Operator
▪ Over 80% of projects in order backlog are with large |
European Transmission system operators |
▪ Approximately 55% of order backlog are |
interconnector projects |
10.8 | 11.5 | |||
3.1 | 2.9 | 4.7 | ||
Dec. | Dec. | Dec. | Dec. | Mar. |
2020 | 2021 | 2022 | 2023 | 2024 |
Booking commitments Projects in backlog
High-voltage order backlog by application (%)
Power-from-shore
<5%
Offshore wind ~40% | ~55% Interconnector |
- At end-Q1 2024, NKT had more than EUR 2.5bn in capacity reservations that were not included in order backlog
- Three contracts under the framework agreement with TenneT for EUR ~1.5bn
- Two projects with SSEN Transmission for EUR >1.0bn
Backlog breakdown by project and customer are approximate figures as of 31 March 2024. | NKT A/S | Interim Report Q1 2024 | Webcast | May 2024 | 10 |
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NKT A/S published this content on 08 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 May 2024 07:24:01 UTC.
