Nkt A/s · OMXCOP:NKT
Nkt A/s — Investor Day (September 2012)
30 slides from Nkt A/s's investor day presentation, Sep 19, 2012
Slide 1: Capital Market Day
Capital Market Day Marc van’t Noordende September 19, 2012 CMD 19-09-2012 │ 1
Slide 2: Agenda
Agenda Recap CMD 2011 Successes since last CMD Disappointments since last CMD Operational excellence and strategy review Conclusions CMD 19-09-2012 │ 2
Slide 3: A lot of challenges have been taken on during the last couple of years
A lot of challenges have been taken on during the last couple of years … Entering the offshore business and building a dedicated new plant in Cologne Acquiring an HV production site in China, significantly upgrading it and implementing Western standards on safety and housekeeping Acquiring Aus
Slide 4: Whilst the logic behind the individual decisions seems strong, with hindsight one can say that
Whilst the logic behind the individual decisions seems strong, with hindsight one can say that … ... the combination of these developments probably was over-ambitious ... it has left the Group stretched in its resources ... as a consequence we sometimes allowed ‘hope’ to take the lead over ‘fa
Slide 5: Agenda
Agenda Recap CMD 2011 Successes since last CMD Disappointments since last CMD Operational excellence and strategy review Conclusions CMD 19-09-2012 │ 5
Slide 6: Operational Excellence drive started with making nkt cables a safe place to work
Our Operational Excellence drive started with making nkt cables a safe place to work … 64% reduction of the number of accidents CMD 19-09-2012 │ 6
Slide 7: … and we are making progress on material efficiency
100% 90% 91% 92% 93% 95% 96% 97% 98% 99% 94% 2008 jun 09 jul 09 aug 09 sep 09 okt 09 nov 09 dec 09 jan 10 feb 10 mar 10 apr 10 maj 10 jun 10 jul 10 efficiency aug 10 sep 10 okt 10 nov 10 dec 10 jan 11 feb 11 mar 11 apr 11 maj 11 jun 11 jul 11 aug 11 sep 11 okt 11 nov 11 dec 11 jan 12 feb 12 mar 12 a
Slide 8: The commissioning of the new plant in Cologne is largely completed
The commissioning of the new plant in Cologne is largely completed • In the commission plan of Q3 last year 116 top-priority action points were defined Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec still Total 11 12 12 12 12 12 12 12 12 12 12 12 12 2013 open 116 97 2 2 1 7 5 2 • Status today:
Slide 9: The operational improvements at the new plant are confirmed in interviews with operators
The operational improvements at the new plant are confirmed in interviews with operators … function completeness: average appr. 100% availability: average appr. 98% process stability: average appr. 98% remaining gaps: Optimization M104 spare parts for steel tube forming tools new weldi
Slide 10: … as well as by increasing output volumes
… as well as by increasing output volumes Production Volume Cables Output in t 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 CMD 19-09-2012 │ 10
Slide 11: The new plant lives up to the design efficiency parameters
Finally, the new plant lives up to the design efficiency parameters Consumption of natural gas (m3) Consumption of tap water (m3) CMD 19-09-2012 │ 11
Slide 12: Since Baltic 1 we now deliver and execute projects profitably
Since Baltic 1 we now deliver and execute projects profitably Year Customer Project Cable design HV/MV Length 2010 EnBW Baltic Sea – Windfarm Baltic 1 Infield 3 x 120 mm²/240mm² Cu 30 kV 21,0 km 2011 50 Hertz Baltic Sea – Windfarm Baltic 1 Export 3 x 1200 mm² Cu 150 kV 61,0 km 2010 Dong Irish Sea –
Slide 13: The Anholt turn-key project in Denmark was successfully completed
The Anholt turn-key project in Denmark was successfully completed in May of this year Project: World‘s largest HVAC Submarine Cable (d 270 mm) Biggest Danish Offshore Wind Farm (400 MW) Export cable: 25,5 km 245 kV 3-core HV Submarine Cable Location: Denmark, Kattegat Scope of work: Engineering, Cab
Slide 14: The Gwynt y Môr cables were successfully delivered
The ‘Gwynt y Môr’ cables were successfully delivered onto the laying ship in June/July of this year Project: The world‘s 2nd biggest Offshore Wind Farm (576 MW) Export cable: 85,2 km 132 kV 3-core HV Submarine Cable Location: Great Britain, Irish Sea Scope of work: Engineering, cables, accessories P
Slide 15: Construction of a logistics center in the port of Rotterdam
The construction of a logistics center in the port of Rotterdam will be completed by yearend 2012 nkt cables Offshore Cable Systems North 2000t Sea River Rhine Storage and jointing Cable production 3600t TT TT 4600t 9000t Cologne Rotterdam CMD 19-09-2012 │ 15
Slide 16: The order book for Cologne remains strong
The order book for Cologne remains strong Orders on Hand for Cologne OoH in mEUR (MP) 507 491 CMD 19-09-2012 │ 16
Slide 17: And finally, we focus on cash
And finally, we focus on cash mEUR H1 2012 H1 2011 EBITDA 11 5 Change in WC -24 -57 Capex -19 -24 Including 4m for the commissioning of the new Operational CF -31 -77 Cologne plant Opex 111 114 Including 4m for Headcount (FTE) 3.465 3.695 turntables at the new logistics center in port Operational WC
Slide 18: Agenda
Agenda Recap CMD 2011 Successes since last CMD Disappointments since last CMD Operational excellence and strategy review Conclusions CMD 19-09-2012 │ 18
Slide 19: Room for further operational improvement in project results
There is room for further operational improvement in project results by continuing our experience curve • We are still often producing cable types for the first time • We still often need development work before order execution can start • We still often need approval and/or type testing before orde
Slide 20: The European economy is slowing down more than anticipated
The European economy is slowing down more than anticipated… Difference from GDP growth Projections April 2012 WEO Projections 2010 2011 2012 2013 2012 2013 Europe, Advanced Economies Euro Area 1,9 1,5 -0,3 0,7 0,0 -0,2 Germany 3,6 3,1 1,0 1,4 0,4 -0,1 France 1,7 1,7 0,3 0,8 -0,1 -0,2 Italy 1,8 0,4 -
Slide 21: The Chinese economy has been cooling off substantially
Additionally, the Chinese economy has been cooling off substantially … Chinese macro economic indicators (GDP% and PMI index) CMD 19-09-2012 │ 21
Slide 22: Resumption of railway construction in China slower than anticipated
… and the resumption of railway construction in China was slower than anticipated Total volumes of catenary wires (mt) sold in the Chinese market CMD 19-09-2012 │ 22
Slide 23: Latest status on the Chinese railway sector
Latest status on the Chinese railway sector • The government confirmed several times that railway investments will return to a ‘reasonable’ level, specified as 400 bRMB per year for the coming 5 years (compared to 700 bRMB in top year 2010) • The commissioning of many projects was postponed to 2013.
Slide 24: Agenda
Agenda Recap CMD 2011 Successes since last CMD Disappointments since last CMD Operational excellence and strategy review Conclusions CMD 19-09-2012 │ 24
Slide 25: Operational Excellence remains at the top of the priority list
Operational Excellence remains at the top of the priority list … Progress To be improved The new Management operates as a team, but… − … still needs to develop a joint track record The integrated organization works, but… − … there is insufficient bottom-line emphasis Group HR initiatives start
Slide 26: The importance of our Operational Excellence program
… hence the importance of our Operational Excellence program Sep 2011 Dec 2011 2012 Set-up, analysis and planning according Implementation according to individual to generic program timeline project plans • The program was designed in the fall of 2011 • It consists of 28 individual projects centered
Slide 27: Validating our long term strategy
Separately we are validating our long term strategy to address important challenges and opportunities • To develop a sustainable position based on a competitive advantage • To define the common denominator of our portfolio of activities • To participate in the further consolidation of the industry •
Slide 28: Agenda
Agenda Recap CMD 2011 Successes since last CMD Disappointments since last CMD Operational excellence and strategy review Conclusions CMD 19-09-2012 │ 28
Slide 29: Many initiatives to improve the financial results are on-going or defined
Many initiatives to improve the financial results are on-going or have been defined • On-going: Continue to build our project pipeline and evaluate possibilities to expand capacity at the new plant in Cologne • On-going: Continue our efforts to reduce scrap rates and increase material efficiency • 2
Slide 30: We have turned the corner, however …
We have turned the corner, however …. • At this stage, nkt cables is still unfinished business • There still is room for substantial improvement in project execution • Developing our human capital and focussing on a strong bottom- line culture are new priorities • We need to finalize our strategic a